The Nickel Report

Throughout the Obama administration, federal officials from the President on down touted an “all of the above” approach to energy policy.  At the same time, they pressed forward with environmental regulations—climate change rules in particular—that would have made a seismic shift in the role fossil fuels play in the nation’s energy mix.

We all know the Trump administration is poised to make major changes.  A shakeup for the EPA was a consistent theme of the Trump campaign. The President made things official in March when he signed an executive order that, among other things, called for a “review” of the Clean Power Plan (CPP), the EPA’s program to regulate greenhouse gas emissions from existing power plants, and a proposed rule regarding the CPP is now under review at the White House Office of Management and Budget. The administration has also announced plans to cut the EPA’s budget, to take a new “red team-blue team” approach to climate change science, and to pull the U.S. out of the Paris climate accord. That’s quite a lot of activity for an administration that is often accused of moving too slowly.

The administration’s actions have triggered a resurgence of activity by state and local governments to address climate change. Days after the administration announced the U.S. withdrawal from the Paris agreement, 350 mayors pledged to uphold the accord. In the wake of the CPP’s rumored departure, Virginia’s governor issued an executive order directing state regulators to develop a greenhouse gas cap-and-trade program. Additional state and local actions are inevitable. What form they will take is less certain.

In the past, when climate activists believed action to address the issue to be lacking, they engaged in what can be called a “see what sticks” approach to climate change policy at the state and local level. There were publicly funded green energy initiatives, new energy efficiency programs, regional cap-and-trade agreements, fuels programs and even outright bans on power produced with a particular carbon footprint. Some of these programs were successfully challenged in court; some didn’t make it through the political process; but a number survived, serving in some cases as proof-of-concept regulation, like the Regional Greenhouse Gas Initiative (RGGI), and often as irresistible sources of revenue for state and local governments.

Aggressive federal action on climate-change policy during the Obama administration took the life out of most state and local initiatives. New rules failed to materialize. Existing state and local greenhouse gas programs plodded along but rarely, if ever, drove real emission reductions. Litigation based on common law largely disappeared.

But, a new “see what sticks” era is imminent. Some states may press forward with plans like those that would have been needed to implement the CPP. Programs like RGGI and California’s cap-and-trade regime could be revised to clamp down on greenhouse gas emissions and to target a broader range of industries, and more states may join with those programs. Discussions about the feasibility of carbon taxes may be given new life. Keeping track of these new initiatives will not be easy. Industries will need to look beyond programs that directly apply to them and watch actions even in states where they do not operate. New climate policies will undoubtedly contain many misfires, but once something sticks, it very well could grow and be replicated in other locales.