Author: ELJME

The Winds of Change: Investing in Floating Offshore Wind Development

The Winds of Change: Investing in Floating Offshore Wind Development

By Cole Jermyn, Editor-in-Chief at Harvard Environmental Law Review.  This post is part of the Environmental Law Review Syndicate. Read the original here and leave a comment.  Introduction The offshore wind power industry in the United States is at an inflection point. Only two projects…

The Origins of Federal Wildlife Regulation Under the Commerce Clause

The Origins of Federal Wildlife Regulation Under the Commerce Clause

By Kathryn E. Kovacs, Professor at Rutgers Law School, The State University of New Jersey. This post is part of the Environmental Law Review Syndicate. Read the original here and leave a comment. June 8, 2020, marked the eightieth anniversary of the Bald Eagle Protection…

Flying the Coop: The Trump Administration’s (Mis)Interpretation of the Migratory Bird Treaty Act

Flying the Coop: The Trump Administration’s (Mis)Interpretation of the Migratory Bird Treaty Act

By Alexander Liguori, Managing Editor at N.Y.U. Environmental Law Journal.

This post is part of the Environmental Law Review Syndicate.


Any good survey of our nation’s bedrock environmental laws will likely cover the Clean Air Act and Clean Water Act, but hardly any would find time for the Migratory Bird Treaty Act (“MBTA”). Passed in 1918 to curb exploding commercial trade in bird feathers, the MBTA’s strict liability regime makes it one of the nation’s strictest environmental laws. While the MBTA is the product of a bygone era of bipartisan cooperation to protect the environment, it is still on the books, serving a key role not only in the protection of birds but in the responsible development of land throughout the country. In late 2017, the Trump administration proposed a new interpretation of the MBTA that threatened to strip the law of its protective powers, by limiting prosecution under the Act to affirmative and intentional efforts to kill birds.[1] Environmental groups sued, and recently won a powerful victory in the Southern District of New York vacating the administration’s interpretation.[2] However, the threat of future appeal and efforts to undermine the Act still loom.

This Essay agrees with the recent SDNY opinion and provides further arguments that the Trump administration’s revised interpretation of the MBTA was illogical, illegal, and contrary to public policy. In Part I, I will provide a brief overview of how the MBTA works and its enforcement history. In Part II, I will summarize and refute the Trump administration’s arguments in favor of its new enforcement scheme. The administration claims that (1) the new scheme aligns better with the text of the statute, (2) the new reading is more consistent with the MBTA’s legislative history, and (3) the new interpretation is required by the Constitution and (4) by prior precedent. In Part III, I will conclude by offering recommendations about how the Biden administration could preserve the MBTA’s enforcement scheme, which has successfully protected birds while allowing responsible land use.

The Migratory Bird Treaty Act Protects Birds Through a Strict Liability Regime

 The MBTA prohibits “by any means or in any manner,” the hunting, taking, capturing, killing or otherwise harming of listed species, of which there are more than a thousand.[3] Historically, the Fish & Wildlife Service (“FWS”) has applied the Act using strict liability, meaning parties can be held responsible for killing birds whether or not they intended to do so.[4] With penalties of up to $15,000 per bird death, the law’s potential for preserving the environment and punishing those who harm it is almost unprecedented in the scope of American environmental regulation.

Applying the law as written would create an untenable situation where daily activities like driving or owning a house become criminalized in the event of an accidental bird death. To avoid this result, the FWS has typically only enforced the criminal provisions of the law during egregious violations like oil spills.[5] In all other situations, the law has served both a deterring and mitigating function by encouraging developers to avoid actions that threaten birds and undertake remedial actions when deaths are inevitable.[6] For example, when building a bridge, the state of Virginia sought to mitigate the destruction of seabird nesting grounds by building an artificial island where birds could return in the warmer months.[7]

This reliance on prosecutorial discretion and voluntary mitigation has worked, creating a rare state of relative harmony for industry, environmental advocates and wildlife.[8] The National Audubon Society’s (NAS) position on wind power effectively illustrates this equilibrium. NAS recognizes the threat that a proliferation of wind turbines poses to the nation’s birds but supports the transition to renewable energy.[9] To that end, they advocate for “properly sited wind power” that minimizes harm to birds and other wildlife.[10] In the past, NAS has had success working with developers, and has made clear that proper enforcement of the nation’s wildlife protection laws, including the MBTA, is essential to get companies to play ball with environmentalists, government regulators and other advocates of responsible development.[11] Indeed, with the threat of enforcement and the increased cooperation of private actors on voluntary programs to save birds, NAS estimates the MBTA has saved millions of birds[12] while creating the potential for wind power to “generate 20 percent of the nation’s electricity.”[13] FWS’ administration of the MBTA then, has come to represent a success story of environmental law in the United .

The Trump Administration’s Proposed Reinterpretation of the MBTA

In late 2017, the Trump administration issued an opinion that reinterprets the MBTA, turning the law and its successful enforcement scheme on its head.[14] The reinterpretation concludes that “the statute’s prohibitions . . . apply only to affirmative actions,” not incidental or accidental ones.[15] This reinterpretation effectively ends the threat of prosecution for incidental bird deaths, removing any leverage the government had to work with private actors to mitigate deaths associated with development. The impact of this loss of leverage is substantial and illustrated by the outcome of the mitigation project in Virginia discussed above: following the administration’s opinion, the State halted work on the replacement habitat, depriving over twenty-five thousand birds of their summer home.[16]

The Trump administration based its reinterpretation of the MBTA on three primary arguments: the MBTA’s language, its legislative history, and constitutional issues with its enforcement scheme. Seeking to stop the new interpretation, a coalition of states and advocacy groups filed suit, alleging that the administration’s new approach is arbitrary and capricious under the Administrative Procedure Act (APA).[17] Undeterred, the administration proceeded and published a proposed rule to codify their new interpretation of the MBTA,[18] which the states and advocacy groups again challenged via the notice and comment process.[19] The following section will provide an overview of the administration’s proposed changes to the enforcement of the Act and refute them. Although the rule has already been struck down at the district court level as contrary to law,[20] the following analysis provides alternative arguments against the rule that could become important in the event the case is appealed.

Statutory Language

The Proposed Rule seizes on the MBTA’s language to argue that the enacting Congress never meant to criminalize incidental deaths. Citing the noscitur a sociis canon of construction, FWS claims that the inclusion of “deliberative action words” such as “pursue”, “hunt”, and “capture” mean that the other words in the MBTA’s preamble, including “kill” and “take” are meant only to apply to actions intended to achieve that result.[21] This reading of course, ignores the broad language of the preceding clause—“It shall be unlawful at any time, by any means or in any manner.”[22] The Proposed Rule dismisses this clause out of hand, arguing that it, “simply clarifies that activities directed at migratory birds, such as hunting and poaching, are prohibited whenever and wherever they occur and whatever manner is applied, be it a shotgun, a bow, or some other creative approach to deliberately taking birds.”[23]

The administration ostensibly bases this improbable use of the noscitur canon on the fact that there are three deliberate words that can be construed as either deliberate or incidental versus two that cannot. But this interpretation selectively avoids using another common canon, ejusdem generis, which counsels that a catchall phrase should be applied to every word in an ensuing or preceding list. Here, the FWS should apply the broad language of the opening clause to the verbs in the second clause, which would result in an all-encompassing reading of how to apply the Act. From a rational point of view, this makes far more sense than changing an entire regulatory regime based on a sentence that has three deliberate sounding words as opposed to two incidental sounding words. 

Legislative History

The administration dives deep into the legislative history of the Act to exclude incidental takings from its scope. Citing statements from legislators who supported the bill, FWS hones in on a single, narrow purpose of the MBTA: “to regulate the hunting of migratory birds in direct response to the extreme over-hunting . . . that had occurred over the years.”[24] The agency reaches this conclusion even while acknowledging that Congress understood habitat destruction, which is largely perpetuated by incidental take, to also be within the purpose of the law.[25] Instead, they claim that the passage of the Migratory Bird Conservation Act (MBCA) in 1929, which specifically allows the federal government to “purchase or rent land for migratory birds,” works in tandem with the MBTA.[26] In other words, if the MBTA covered the incidental take associated with habitat destruction, passage of the MBCA would have been “largely superfluous.”[27]

But might the acts have different means of achieving the same purpose? To that end, allowing the government to take preemptive action to conserve bird habitats reflects congressional intent to provide another, proactive way to prevent incidental bird deaths, which is hardly superfluous. Instead, both statutes reflect an overall congressional goal, which is echoed in the States’ comments on the proposed rule: “to protect migratory birds.”[28]

To be sure, the legislative history of the Act cited in the Proposed Rule does reflect an initial focus on reducing bird deaths associated with hunting,[29] but this also makes sense in light of an overall congressional purpose to protect birds. While hunting may have been the leading threat to migratory birds at the time of the MBTA’s passage, that threat has diminished as the country has transitioned to a more urban society. Now, incidental deaths that occur as a side-effect of development are the leading threat to birds in the U.S.[30] In line with the Act’s purpose, then, it is unsurprising that enforcement of the MBTA looks different now than it did in 1918. By criminalizing the killing of birds “at any time, by any means or in any manner,” Congress made an unequivocal determination that the Act’s provisions would last the test of time, even if new threats beyond hunting emerged.

Constitutional Issues

FWS further claims that its reinterpretation of the MBTA is necessary because the previous interpretation tramples on the constitutional rights of Americans.[31] Specifically, the agency worries that relying on prosecutorial discretion does little to prevent criminalizing everyday activities like driving and home-owning, that kill birds incidentally.[32] This does raise concerns of fair notice under the Fifth Amendment, but FWS’ argument completely ignores that the use of prosecutorial discretion in enforcement of the MBTA managed to both punish egregious incidental violations and deter unnecessary bird deaths, all while avoiding criminalizing Americans for living their everyday lives.[34] FWS’ inability to show their new interpretation of the Act offers a more legally sound and practically better approach means the Proposed Rule is more indicative of shifting political preferences, rather than a vital remedy for the American people as they claim.

Prior Precedent

Finally, FWS props up its statutory language and legislative history arguments on the Fifth Circuit’s opinion in United States v. CITGO Petroleum Corp., which held that “the MBTA’s ban on ‘takings’ only prohibits intentional acts (not omissions) that directly kill migratory birds.”[35] FWS argues that the only way to “reduce uncertainty and have a truly national standard,” is to follow this approach.[36] But this ignores key opinions from the Second and Tenth Circuits. The Second Circuit affirmed a conviction under the MBTA for inadvertent bird deaths caused by accidental exposure to toxic wastewater,[37] while the Tenth Circuit has upheld convictions for activities that directly and foreseeably lead to migratory bird deaths, such as leaving harmful oil field equipment exposed.[38] It also ignores the fact that the Act has been consistently interpreted to cover incidental deaths for over forty years.[39] The revised interpretation, then, attempts to resolve a circuit split in favor of one position based on language that has been interpreted to say the opposite of what FWS says it means. This dispute is beyond the scope of FWS’ responsibilities and should be left to the Supreme Court to resolve.

Conclusion and Recommendation

The real tragedy of the administration’s efforts is that their stated reasons for the reinterpretation—clarity, consistency, and adherence to congressional intent—could still be achieved while avoiding the needless killings of thousands of birds. In the Proposed Rule, FWS explains, “the MBTA does contemplate the issuance of permits authorizing the taking of wildlife.”[40] Indeed, under the prior interpretation of the Act, FWS granted permits to developers as long as projects were sited and constructed in ways that minimized bird deaths.[41] This solution simultaneously allowed for the growth of industry while protecting birds and simplifying the regulatory scheme: developers must get a permit or mitigate their impact on bird deaths or otherwise face potential prosecution.

A return to the permitting solution marks the best-case scenario for all parties, human and otherwise, and can be achieved at a low political cost. To entrench this enforcement scheme, the Biden administration should issue a regulation that codifies the previous permitting scheme. Such a move would likely find support from industry, which has asked for more clarity, as well as environmental advocates, who favor the old carrot-and-stick approach’s incentives for responsible development. In fact, some developers have continued to follow the previous scheme even as their regulatory responsibilities have been lifted.[42] Instead of implementing a workable solution that satisfies all, FWS has gone overboard, angering stakeholders such as environmental advocates and the States, and confusing industry, which now fears a public relations backlash due to preventable bird deaths. In this area of environmental law, a return to the past makes the most sense for humans and the earth they have been charged with protecting.

[1] See U.S. Dep’t of Interior, Office of the Solicitor, Opinion Letter M-37050 (Dec. 22, 2017).

[2] See Nat. Res. Def. Council, Inc. v. U.S. Dep’t of Interior, 2020 WL 4605235 (S.D.N.Y. 2020).

[3] Migratory Bird Treaty Act, 16 U.S.C.A. § 703 (1918).

[4] See David J. Hayes & Lynn Scarlett, A Free Pass to Kill Migratory Birds, N.Y. Times (Jun. 7, 2018),

[5]See id.

[6] See id.   

[7] See Lisa Friedman, A Trump Policy “Clarification” All but Ends Punishment for Bird Deaths, N.Y. Times (Dec. 24, 2019),

[8] See Hayes & Scarlett, supra note 4.

[9] See Audubon’s Position on Wind Power, Nat’l Audubon Soc.,

[10] Id.

[11] See id.

[12] See The Migratory Bird Treaty Act, Explained, Nat’l Audubon Soc. (Jan. 16, 2018),

[13] Audubon’s Position on Wind Power, supra note 9.

[14] See U.S. Dep’t of Interior, Office of the Solicitor, Opinion Letter M-37050 (Dec. 22, 2017).

[15] Id. at 2.

[16] See Friedman, supra note 7.

[17] The cases are Nat’l Audubon Soc. v. U.S. Dep’t of Interior, No. 1:18-cv-04601-VEC (S.D.N.Y. May 24, 2018) and New York v. U.S. Dep’t of Interior, 1:18-cv-08084-VEC (S.D.N.Y Sep. 5, 2018).

[18] See Regulations Governing Take of Migratory Birds, 85 Fed. Reg. 5915 (proposed Feb. 3, 2020) (to be codified at 50 C.F.R. pt. 10).

[19] See New York et. al., Comments on Proposed Rule to Limit the Scope of the Migratory Bird Treaty Act’s Prohibitions to Actions Directed at Migratory Birds (Mar. 19, 2020),

[20] See Nat. Res. Def. Council, Inc., 2020 WL 4605235 at *8-*9.

[21] Regulations Governing Take of Migratory Birds, 85 Fed. Reg. at 5916.

[22] Id. at 5917.

[23] Id.

[24] Id. at 5918.

[25] See id.

[26] Id.

[27] Id. at 5918-19.

[28] New York et. al. supra note 19 at 2.

[29] See Regulations Governing Take of Migratory Birds, 85 Fed. Reg. at 5918-19.

[30] See id.  at 5921.

[31] See id. at 5920.

[32] See id. at 5921.

[33] The last interpretive guidance document issued under the old scheme was suspended and withdrawn by the Trump administration’s new guidance discussed above. See U.S. Dep’t of Interior, Office of the Solicitor, Opinion Letter M-37041 (Jan. 10, 2017) (suspended and withdrawn by Opinion Letter M-37050 (Dec. 22, 2017)). For a brief history of the FWS’ interpretation of the MBTA and its enforcement of the Act, see Jesse Greenspan, The History and Evolution of the Migratory Bird Treaty Act, Nat’l Audubon Soc. (May 22, 2015),

[34] See Friedman, supra note 7.

[35] 801 F.3d 477, 494 (5th Cir. 2015).

[36] Regulations Governing Take of Migratory Birds, 85 Fed. Reg. at 5923.

[37] See United States v. FMC Corp. 572 F.2d 902, 904 (2d Cir. 1978).

[38] See United States v. Apollo Energies, Inc., 611 F.3d 679, 684-90 (10th Cir. 2010).

[39] See New York et. al. supra note 19 at 1; Greenspan, supra note 33.

[40] Regulations Governing Take of Migratory Birds, 85 Fed. Reg. at 5922.

[41] See e.g. Pub. Emps. For Env’t Responsibility v. Hopper, 827 F.3d 1077, 1088 n. 11 (D.C. Cir. 2016) (declining to address claims under the MBTA because developers intended to apply for a permit).

[42] See Friedman, supra note 7.

ELRS Post: Week of December 21, 2020

ELRS Post: Week of December 21, 2020

This week’s post, Introducing a Voluntary Extended Producer Responsibility Scheme for the New Plastics Economy, was written by Hannah Yang, a third-year student at New York University School of Law and an Articles Editor of the New York University Environmental Law Journal. Read the post here.

Introducing a Voluntary Extended Producer Responsibility Scheme for the New Plastics Economy

Introducing a Voluntary Extended Producer Responsibility Scheme for the New Plastics Economy

By Hannah Yang, Articles Editor at N.Y.U. Environmental Law Journal. This post is part of the Environmental Law Review Syndicate. Introduction Ocean plastic pollution is a large-scale problem that stems from multiple points of the plastics life cycle, ranging from design, production, use, disposal, and…

“A Great Deal of Discretion”: <i>Bostock</i>, Plain Text, and the Future of Climate Jurisprudence

“A Great Deal of Discretion”: Bostock, Plain Text, and the Future of Climate Jurisprudence

By Grace Weatherall, Managing Editor at the Harvard Environmental Law Review.

This post is part of the Environmental Law Review Syndicate. Read the original here and leave a comment.


Bostock v. Clayton County was marked for a place among landmark Supreme Court jurisprudence as soon as it arrived.1. The decision protected LGBTQ+ employees from discrimination based on their sexual orientation or gender identity,2 and LGBT activists and allies rightly celebrated it as an affirmation of basic human rights and dignity. But amidst this celebration, excitement arose from a different, surprising, quarter: climate change activists.

Before the ink had dried on Bostock—or, more accurately, before many readers had managed to battle through the download delay that Justice Alito’s unwieldy dissent caused the Court’s servers3—various climate scholars were already arguing that the language and reasoning that Justice Gorsuch employed in his majority decision could have major implications for climate regulation under the federal Clean Air Act (CAA).4 Specifically, scholars posited that Gorsuch’s use of progressive textualism, and his specific acknowledgment that old statutes may be used to address new problems,5 bodes well for the durability of future climate change policymaking under CAA authority.6 Following the Bostock framework, climate litigants could, in theory, argue that the text of the CAA must allow for broad regulation of greenhouse gas as a pollutant, despite Congress’s failure to address greenhouse gases or climate change directly.

Climate advocates and policymakers are certainly justified in searching for a silver bullet of legal theory to convince the Supreme Court to uphold a major CAA climate rulemaking. Climate scientists across the globe are warning policymakers that time is running out to save the world from climate disaster,7 and lacking climate-specific legislation, it seems more important than ever that the Environmental Protection Agency (EPA) undertake significant action under its existing authority. I have suggested elsewhere that EPA should institute National Ambient Air Quality Standards (NAAQS) for greenhouse gases (GHGs) under CAA sections 108–10, in order to activate broad federal power over state implementation plans (SIPs) for emissions reduction.8 Similarly, several scholars have argued stridently for the implementation of a GHG SIPs program under section 115.9 Either way, regulating GHGs through SIPs represents the broadest possible approach to GHG regulation under the existing CAA,10 but represents a difficult legal argument to make to the Supreme Court. Moreover, the Court has already demonstrated wariness of EPA attempts to address climate change under the CAA,11 and climate litigants can expect this wariness to increase as the conservative wing of the Court grows.12 Since a successful EPA climate rule must survive judicial review, in this article I examine whether Justice Gorsuch’s Bostock framework could indeed aid EPA in future climate rulemaking and advocacy before the Court.

Ultimately, I conclude that Bostock is not the legal silver bullet that climate activists seek.13 As attractive as the Bostock framework is, it cannot save climate change policymaking under the CAA from a textualist standpoint because interpretation of the word “pollutant” in the  CAA, unlike “sex” in the Civil Rights Act, involves deference to an agency head. Thus, the battle for CAA GHG regulation must be fought on the fields of reasonability analysis, not textualism. And this raises a second problem for EPA. In a future climate case, the Court may reject Chevron deference entirely and instead utilize either the deregulatory “major questions” doctrine, or the Schechter-era nondelegation doctrine—and in either case, Bostock offers no useful tool to climate litigants. I do not argue that EPA has no chance of enacting climate policy under the CAA, nor that the agency should not attempt to do so. On the contrary, I feel strongly that EPA is morally obligated to make every effort possible to enact significant GHG regulation. I conclude, however, that future climate jurisprudence will be governed not by precise textualism, but by broad judicial and political philosophy—and that realistically, climate advocates’ best bet is to pursue the appointment of as many liberal justices to the Supreme Court as possible.


I. Overview of Bostock v. Clayton County and Its Potential Relevance to Climate Litigation
A. Bostock v. Clayton County

Bostock v. Clayton County began in its life in Clayton County, Georgia, when Gerald Bostock, a county employee with an excellent work performance record,14 joined a gay softball league and was promptly fired for “conduct unbecoming a county employee.”15 Bostock sued, alleging that the county had violated Title VII of the Civil Rights Act of 1964.16 The district court ruled against Bostock,17 and the Eleventh Circuit agreed, holding that Title VII’s prohibition of discrimination “on the basis of sex” did not apply to sexual orientation.18 The Supreme Court reversed.19

Justice Gorsuch, writing for a six-three majority, announced in the first paragraph of his seventeen-page opinion that the phrase “discrimination . . . on the basis of . . . sex” included discrimination on the basis of sexual orientation because sexual orientation itself depends on sex.20 “An employer who fires an individual for being homosexual or transgender,” Justice Gorsuch explained, “fires that person for traits or actions it would not have questioned in members of a different sex,”21 and thus “[s]ex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.”22 In the following pages, Justice Gorsuch also rejected protests that Title VII cannot be used to protect LGBT employees because such a result is at odds with the “expected applications” of the law.23 Such an application of purposivism, Gorsuch insisted, has no place in Supreme Court jurisprudence today.24 Instead, he reasoned, the ordinary public meaning of the word “sex,” and its use in the statute,25 requires the Court to recognize protections for gay and transgender individuals—and it has always done so.26 Ultimately, Gorsuch declared, the fact that the framers of the statute may not have realized that such protections existed was no reason to deny these protections now, because “the limits of the drafters’ imagination supply no reason to ignore the law’s demands.”27

Moreover, Justice Gorsuch specifically forestalled potential objections on “elephants in mouseholes” grounds.28 While Gorsuch acknowledged the late Justice Scalia’s adage that Congress “does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions,”29 Gorsuch insisted that this canon “ha[d] no relevance” in the Bostock case, because while the policy implications of Gorsuch’s interpretation are sweeping—an indisputable “elephant”—Title VII’s prohibition against sex discrimination is hardly a “mousehole.”30 Instead, Gorsuch wrote, the prohibition is “written in starkly broad terms,” which necessarily, according to the ordinary public meaning of the word “sex,” include sexual orientation discrimination.31

B. Parallels to Climate Rulemaking and Litigation

The implications of Bostock to future climate litigation and jurisprudence are complex, but a series of parallels can be identified as follows. First, it can be argued that a prohibition against “discrimination on the basis of sex” is to LGBT employee protections under the Civil Rights Act—a statute that never mentions sexual orientation—as “air pollutant” is to GHGs under the Clean Air Act—a statute that never mentions climate change, but which empowers EPA to broadly regulate “air pollutants”32 for the protection of the “public health and welfare.”33 In other words, both phrases explicitly identify a general issue that their statute is designed to address, and thus both should implicitly include specific aspects of that broader issue in the same way: sexual orientation discrimination is a type of sex-based discrimination (and civil rights violation), as climate change-causing GHG is a type of air pollutant (and a threat to public health and welfare). Second, climate change and sexual orientation discrimination are both issues that have been neglected by most national politicians until relatively recently,34 despite decades of advocates’ efforts, and both seem ripe for regulation under an old statute that was designed to address a general issue but that did not directly acknowledge this specific problem. Third, Gorsuch’s choice in Bostock to brush aside “elephants in mouseholes” concerns, despite the broad policy implications of his holding, is encouraging to climate activists because the Supreme Court has made clear in past climate cases that it considers broad GHG regulation programs to constitute an elephantine effect on national industry.35

C. Overview of Relevant Climate Jurisprudence

For those hoping for a friendly judicial reception to climate change regulation, Justice Gorsuch’s Bostock arguments are tantalizing. I am convinced, however, that the series of parallels outlined above will not, alone, be enough to ensure the protection of an ambitious Clean Air Act GHG regulation scheme. In order to understand why not, we must first understand the history of the three Supreme Court cases that have addressed GHG regulation under the CAA thus far: Massachusetts v. EPA (Mass. v. EPA),36 American Electric Power Co. v. Connecticut (AEP v. Connecticut),37 and Utility Air Regulatory Group v. EPA (UARG v. EPA).38

1. Massachusetts v. EPA and the Origins of Greenhouse Gas Regulation Under the Clean Air Act

 The Supreme Court first addressed GHG regulation under the CAA in 2007, in Mass. v. EPA. Today, this case represents the basis for EPA regulation of GHGs as pollutants. Mass. v. EPA began in 2003 when EPA made an official determination declaring that it lacked authority under the CAA to regulate GHGs as pollutants in the context of climate change.39 A coalition of states, cities, and environmental organizations brought suit, arguing that section 202 of the CAA—requiring EPA to set emissions standards for “any air pollutant” produced by vehicles—included GHGs.40 The Supreme Court agreed, finding that GHGs “fit well within the Clean Air Act’s capacious definition of ‘air pollutant.’”41 Accordingly, in 2009, EPA under the newly-elected President Obama made an “endangerment finding” officially establishing that the six primary “well-mixed” greenhouse gases together constituted a singular “air pollutant” under section 202.42

2. AEP v. Connecticut, Stationary Source Regulation, and the Potential for Future Rulemaking

 AEP v. Connecticut, decided in 2011, subsequently expanded EPA’s ability to regulate GHGs as an air pollutant beyond section 202 (vehicle regulation) to include subsections 111(b) and (d) (stationary source regulation). AEP v. Connecticut began when an alliance of states and environmental interests sued a group of energy companies, attempting to use federal common law authority to force the companies to reduce GHG emissions from their power plants.43 The Supreme Court dismissed the case.44 Writing for a 6-0 majority,45 Justice Ginsburg held that the CAA had foreclosed common law litigation on matters of interstate air pollution, because the Act “speaks directly” on this issue46—and after Mass. v. EPA, it was “plain that emissions of carbon dioxide qualify as air pollution subject to regulation under the Act.”47 Significantly, in addition to confirming EPA GHG regulatory authority under sections 202 and 111, Justice Ginsburg also left the door open for GHG rulemaking under other sections of the CAA, including the NAAQS program.48 “The Act,” she wrote, “provides multiple avenues for enforcement, [and i]f EPA does not set emissions limits for a particular pollutant or source of pollution, States and private parties may petition for a rulemaking on the matter.”49

3. UARG v. EPA and the GHG Regulation – Textualism Mismatch

 Mass. v. EPA and AEP together constitute an essential foundation to federal GHG regulation, but UARG v. EPA, decided in 2014, provides the most relevant precedent for future attempts at ambitious GHG regulatory policy. UARG began in 2010, when EPA, reacting to Mass. v. EPA, determined that it must regulate GHG emissions under the “prevention of significant deterioration”50 (PSD) and Title V programs, which require emissions permits for “major sources.”51 Per the statute, a “major source” is any source emitting 250 tons of “any air pollutant” each year52––but many sources emit GHGs in such vast amounts that millions of nontraditional sources, including residences, would count as “major sources” if GHGs were considered “air pollutants” under these programs.53 Seeking to avoid unmanageable permitting responsibilities, EPA designed the “Tailoring Rule,” which specified that sources would be considered “major” due to their GHG emissions alone only if they emitted at least 100,000 tons of GHGs each year.54

Energy interests challenged the Tailoring Rule in the D.C. Circuit, and the Supreme Court struck it down.55 Writing for a deeply divided plurality which only Chief Justice Roberts and Justice Kennedy joined in full,56 Justice Scalia held that EPA had been wrong to “tailor” a statutory provision this way.57 In writing a rule that purported to recognize GHG sources as “major” for purposes of regulation only if they emitted at least 100,000 tons per year, Scalia wrote, EPA had illegally “revise[d] statutory terms.”58 The only solution to the legal and practical problem at hand, Scalia held, was to read an implicit exemption into the phrase “any air pollutant” in the context of the PSD and Title V programs.59 Thus, according to Justice Scalia, GHGs are officially not “air pollutants” under sections 165, 169, or 171–73 of the CAA.60

Justice Breyer, meanwhile, argued in a partial concurrence that the Court had misplaced its implicit exemption. While Scalia had decided that the term “any air pollutant” must be read to exclude “non-traditional” pollutants like GHGs, Breyer argued that it would instead be possible to read the term “any major source” to exclude those sources, like private residences, which are unsuited to Title V permitting.61

Finally, Justice Alito argued in a separate partial concurrence that EPA should not be allowed to regulate GHGs under the CAA at all.62 Alito argued that GHGs are fundamentally unsuited to regulation under the CAA and that while EPA had attempted to gloss over the problems of GHG regulation under the CAA by arguing that the Act grants the agency “a great deal of discretion,” ultimately “[t]hat is not what the Clean Air Act contemplates.”63

This, then, is the state of Supreme Court climate jurisprudence after ten years of EPA GHG regulation and climate cases before the Court. After UARG, the Court’s conservative wing has made its suspicion of ambitious GHG regulation clear––but the door is not closed to climate rulemaking entirely. Would-be climate policymakers and litigants, anticipating a possible Biden presidency, will keep all this in mind as they seek a successful legal framework for ambitious policy.

II. Textualism, Deference, and the Nondelegation Doctrine: What Bostock Does and Does Not Mean for the Future of Climate Jurisprudence

Based on the precedent outlined above, it appears that the Bostock textualist approach cannot be used as a template for climate litigation. This is true both because the Court has already held that “any air pollutant” does not actually mean “any,” and because interpretation of the term “pollutant” in the context of the CAA fundamentally involves relative deference to the EPA administrator. In theory, litigants could argue that the plain text of the CAA mandates full deference to the EPA Administrator in identifying those pollutants that endanger public health or welfare and are thus subject to CAA regulation. Realistically, however, the battle for climate regulation will depend not on textualism, but on the broader questions of reasonability and deference. And unfortunately for EPA, this Court is likely to forego Chevron altogether and dismiss a climate rule either on major questions grounds, or, in a worst-case-scenario situation, through the revival of the nondelegation doctrine. This unfortunate possibility is now more likely than ever in light of Justice Ginsburg’s death and likely replacement with conservative judge Amy Coney Barrett.64

A. The Textualist Mismatch Between Title VII’s “on the Basis of Sex” and the Clean Air Act’s “Any Air Pollutant”

Despite Bostock’s progressive textualist appeal, it is unlikely that the Bostock framework will aid a future EPA in establishing GHGs as “any air pollutant” throughout the Clean Air Act. As noted above, Justice Gorsuch in Bostock put forth a compelling argument for the inclusion of an implicit, specific issue within an explicit, general statutory term and mandate. The Civil Rights Act’s prohibition against “discrimination on the basis of sex”, Gorsuch insisted, must include a prohibition against sexual orientation discrimination.65 It is tempting to conclude by the same logic that the CAA’s reference to “any air pollutant” must include GHGs––but this does not necessarily follow from likely Supreme Court reasoning, for two reasons.

First, it is important to note that Bostock itself overturned no Supreme Court precedent—instead, it announced the existence of a previously unrecognized inherent meaning in the phrase “discrimination…on the basis of sex.”66 By contrast, the Supreme Court has already addressed the question of whether the term “air pollutant” could include GHGs, and purports to have settled the matter under more than one section of the CAA. According to Mass. v. EPA and AEP v. Connecticut, GHGs are air pollutants under sections 202 and 111.67 But according to UARG, GHGs are not air pollutants under section 169.68 It is already clear, then, that the Court does not believe that the phrase “any air pollutant” must always include GHGs.

Second, both sides of the ideological spectrum have already exhibited an aversion to a plain text approach in the context of climate change. In UARG, Justice Scalia and Justice Breyer’s majority and dissenting opinions are opposite in function but identical in form: both engage in a textualist approach of a sort, yet explicitly reject the bounds of plain meaning. Each Justice notes that the term “any” need not mean “any in the universe,”69 and each acknowledges the need to read an implicit exemption into the text—accordingly, Scalia proposes to read the relevant line as “any air pollutant except greenhouse gases,”70 and Breyer proposes “any major source except non-traditional sources.”71 In advancing a plain text approach to support GHG regulation throughout the CAA, litigants would need to convince the Supreme Court to both overturn decided precedent and abandon longstanding methods of interpretation. Neither proposition is likely to succeed.

B. A Textualist Obligation to Afford Deference?

Certainly, the status of greenhouse gases as air pollutants remains unsettled under several thus-far unlitigated sections of the Clean Air Act—including, notably, the NAAQS program. The NAAQS program empowers the EPA Administrator to identify a list of ambient air pollutants which she feels may “endanger public health or welfare”72 and develop national standards for these pollutants, and it provides an excellent example of why the Supreme Court has good reason to eschew a plain text approach in interpreting “any air pollutant” under the CAA. Despite Justice Alito’s protestations, the CAA does indeed grant EPA “a great deal of discretion”73—in particular, regarding which substances to regulate as pollutants. The Administrator’s choice of pollutant under the NAAQS program is of course reviewable in theory, but thus far the Court has essentially granted EPA free reign in identifying criteria pollutants74—cabined by the traditional “reasonableness” metric for evaluating agency discretion.75

Arguably, this means that despite the clear failure of a plain text approach to defining the term “any air pollutant,” there may still be hope for a plain text argument in support of deference to the EPA Administrator. The NAAQS program demands that the Administrator be allowed to exercise her “judgment” in identifying and listing criteria pollutants.76 Thus climate advocates could adopt a sort of Bostock framework and argue that the CAA has always given EPA the ability to regulate any substance which can reasonably be said to endanger health or welfare, regardless of cost or regulatory reach.77 I have argued elsewhere that under the NAAQS program at least, EPA is clearly authorized to regulate GHGs as an air pollutant, in part because of the broad discretion granted to the Administrator in the stark language of the CAA.78 Under this theory, the Court would be required to accept EPA’s identification of GHGs as a pollutant, and subsequently engage in the traditional reasonability and arbitrary and capriciousness analysis of whatever the resulting rule may be.

C. Major Questions, New Tricks, and the Court’s Evolution Away from Deference

As noted above, while an intellectually honest textualist approach may in theory require the Court to grant EPA the discretion to regulate GHGs as a pollutant throughout the CAA, in practice it is unlikely that defending a massive GHG regulatory program will be as simple as a text-based argument for EPA discretion. Furthermore, this Court is likely to forego a Chevron reasonability analysis altogether, and instead either invoke its “major questions” doctrine to bar EPA’s regulatory authority over GHGs for lack of a “clear statement,”79 or use a major climate rule as a vehicle to revisit the Schechter-era nondelegation doctrine.80

First, the Supreme Court could invoke its “major questions” jurisprudence, used to great effect in UARG,81 and declare that EPA cannot, for example, regulate GHGs as a pollutant under the NAAQS program without a “clear statement” from Congress authorizing it to do so—because GHGs are not “conventional” pollutants,82 and because any major climate rule would surely have a transformative effect on industry. Justice Scalia, of course, is no longer on the Court, but other justices seem eager to pick up his mantle on this point.83 Justice Kavanaugh, for instance, has already demonstrated his fondness for the major questions principle on environmental and administrative law issues in particular.84 In oral argument for West Virginia v. EPA, the 2016 D.C. Circuit case regarding the legality of the Obama EPA’s ambitious Clean Power Plan, then-Judge Kavanaugh pressed government counsel on major questions grounds.85 It is not difficult to imagine that Kavanaugh and like-minded justices would be swift to invoke the “major questions” rule in a major climate case to bar EPA from regulating GHGs as a pollutant under major sections of the CAA.

More troubling still, the Court’s conservative wing has recently been sending signals that it is eager to move away from the Chevron tradition altogether in favor of the nondelegation doctrine of the Schechter era, which could require Congress to outline a highly specific “intelligible principle” before agencies may develop regulatory schemes.86 This shift was most recently demonstrated in Gundy v. United States,87 a case addressing whether the Sex Offender Registration and Notification Act, in stating that the Attorney General has “the authority to specify the applicability of the requirements of [the Act] to sex offenders convicted before [its] enactment,” fails to establish an intelligible principle cabining the Attorney General’s authority and thus violates the nondelegation doctrine.88 Although Justice Kagan’s plurality opinion did not alter Supreme Court precedent on the matter, the conservatives in dissent made their displeasure with this result clear.89 Indeed, those heralding the Bostock decision as a harbinger of friendly climate jurisprudence may find reason to be concerned with the fact that Justice Gorsuch himself wrote a dissenting Gundy opinion, joined by the Chief Justice, Justice Kavanaugh, and Justice Thomas. Specifically, Gorsuch argued that Gundy would have been an opportunity to revisit the nondelegation doctrine because the statute in question inappropriately “hand[ed] off to the nation’s chief prosecutor the power to write his own criminal code.”90 It is not difficult to imagine that Justice Gorsuch might feel the same way about the argument that the CAA grants EPA the power to identify and regulate any pollutants that endanger health or welfare in any way. And Justice Gorsuch would likely find particular reason to be concerned if EPA applied this reasoning to the regulation of GHGs because GHGs are well-mixed, globally dispersed, dangerous only on an international scale, and impossible to effectively control without a significant shift in the American energy industry.91

In response to this concern, climate advocates may cite the second significant Bostock finding: the idea that old statutes can perform new tricks, regardless of their framers’ intent.92 Certainly, this holding may help to defeat an “elephants in mouseholes” challenge, following Justice Gorsuch’s Bostock reasoning, because while deference to EPA in regulating GHGs as pollutants is certainly an elephant, the text of the Clean Air Act grants EPA the authority to identify and regulate pollutants that endanger public health and welfare—and thus no “mousehole” exists.93 Ultimately, however, I fear that in light of the Court’s shift toward the major questions and nondelegation doctrines,94 this is but a hollow victory.


Having considered the future of climate jurisprudence in light of Bostock, relevant climate cases, and the Court’s current trend toward nondelegation, I conclude that the problem with climate advocates’ search for a silver bullet may not be that no such bullet exists, but rather that the Court is unlikely to acknowledge one. It may be true, in theory, that the text of the Clean Air Act demands deference to the EPA Administrator in identifying pollutants for regulation, but the Court may refuse to acknowledge this, either by citing major questions or by announcing a revival of the intelligible principle requirement. Ultimately, I do not suggest that climate advocates and a theoretical Biden EPA should cease regulatory attempts under the Clean Air Act. For one thing, I believe that the Act provides a clear mandate for EPA action in identifying pollutants that endanger public health or welfare and regulating emissions of those pollutants. And despite the challenges, I do not think it is impossible that Justice Roberts or Gorsuch could be persuaded to support a new significant climate rulemaking. In the end, however, it is clear that climate advocates’ best bet is not to craft a brilliantly reasoned rulemaking to impress this Court, but instead to elect a President who will appoint one or two climate-friendly justices—and perhaps, given recent events on the Court, even to initiate a Court-packing plan. Time, after all, is running out.


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Mitigating Greenhouse Gas Emissions in the Northeast and Mid-Atlantic Transportation Sector: A Cap-and-Invest Approach

Mitigating Greenhouse Gas Emissions in the Northeast and Mid-Atlantic Transportation Sector: A Cap-and-Invest Approach

By James D. Flynn

James Flynn is an LL.M. candidate at New York University School of Law and the graduate editor of the NYU Environmental Law Journal.

This post is part of the Environmental Law Review Syndicate.

I. Introduction

In recent years, states in New England and the mid-Atlantic region have made significant progress in reducing climate change-inducing greenhouse gas (GHG) emissions from the electricity generation sector.[1] Several factors–including the effects of the economic recession, shifts in energy markets from coal to natural gas and renewable energy sources, and carbon pollution mitigation and clean energy programs like renewable portfolio standards–have been identified as principal drivers of these reductions.[2] Another is the Regional Greenhouse Gas Initiative (RGGI), a cooperative effort among nine northeastern and mid-Atlantic states to reduce carbon dioxide (CO2) emissions from the power sector.[3] RGGI employs a cap-and-invest approach in which the participating states set a regionally uniform, decreasing cap on CO2 emissions from covered power plants, periodically auction off emission allowances, and invest auction proceeds in other programs including end-use energy efficiency, renewable energy, greenhouse gas abatement, and direct customer electric bill assistance.[4] One study estimates that CO2 emissions in the RGGI region would have been approximately 24 percent higher in 2015 but for the program, which took effect in 2009.[5] At the same time, it is estimated that through 2015, RGGI generated approximately $2.9 million in net economic benefits,[6] and that the investment of RGGI allowance auction proceeds in 2015 alone will return $2.31 billion in lifetime energy bill savings for consumers.[7]

Over approximately the same period of time, however, CO2 emissions from the transportation sector in RGGI states have remained relatively level or have increased. Transportation accounts for 44 percent total CO2 emissions in the region, more than any other sector.[8] Each RGGI member state has adopted a long-term GHG reduction goal, set by statute or executive order, or in climate- or energy-related plans, “generally consistent with achieving an 80 percent reduction of GHG emissions by 2050 from 1990 levels.”[9] Most states’ goals do not include sector-specific emission targets, but because transportation is the largest source of emissions in the region, shifting to a cleaner transportation system is a “critical component of the action needed to meet economy-wide goals and to avoid further catastrophic harms of climate change.”[10] RGGI states already employ a variety of policy mechanisms aimed at decarbonizing transportation,[11] but have been considering whether to employ a cap-and-invest approach similar to RGGI or California’s multi-sector cap-and-invest program, which includes the state’s transportation sector.[12]

This paper first discusses the mechanics of RGGI and California’s cap-and-invest program generally, including how auction proceeds are invested. It then discusses the potential to use a cap-and-invest approach to mitigate GHG emissions from transportation in the Northeast and mid-Atlantic and addresses two key policy considerations: the type of fuels to be covered and the point of regulation. It concludes that, if properly designed, a cap-and-invest approach could achieve significant GHG reductions from transportation in the region and generate substantial funds for other GHG mitigation and climate change adaptation initiatives.

II. The Cap-and-Invest Model

Cap-and-trade programs generally operate as follows.[13] The government sets an overall emissions target–the cap–and determines which facilities will be covered. Emission allowances, each generally equal to one ton of emissions, are periodically auctioned or distributed without cost—or both—to covered facilities.[14] The total number of allowances is equivalent to the cap number, which decreases over time.[15] A market is created in which covered facilities may purchase or sell allowances from other covered facilities. Covered facilities are required to hold enough allowances to cover their emissions at the end of a compliance period, which may range from one to three years.[16] If a facility lacks sufficient allowances, it will be assessed a monetary penalty in addition to having to purchase enough allowances to cover the shortfall.

This market-based approach provides covered facilities three options: (1) they may reduce their emissions to meet the number of allowances they purchase or receive; (2) they may purchase additional allowances on the market and emit more; or (3) they may reduce their emissions below the allowances they hold and sell the remainder on the market.[17] The advantage of cap-and-trade programs is that facilities that can reduce their emissions more cost-effectively will do so, while those that face higher emissions reduction costs will purchase additional allowances at auction or on the market.[18] Accordingly, cap-and-trade schemes provide firms with flexibility to design cost-effective, tailored emissions plans, and the regulator achieves its policy objective by means of the overall emissions cap.[19] “Cap-and-invest” refers to cap-and-trade programs that invest their proceeds into other policy initiatives intended to address the pollutant or its effects.


RGGI is the first market-based regulatory program in the United States designed to reduce GHG emissions.[20] It is a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to cap and reduce CO2 emissions from the electricity generation sector.[21] RGGI is composed of individual CO2 budget trading programs implemented in each participating state. Through independent regulations, each state’s CO2 budget trading program limits emissions of CO2 from electric power plants with the capacity to generate 25 megawatts or more (some 164 facilities), issues CO2 allowances, and establishes participation in regional CO2 allowance auctions.[22]

RGGI began with discussions among the governors of seven New England and mid-Atlantic states, which led to a 2005 Memorandum of Understanding that outlined the program.[23] In 2008, the RGGI states issued a Model Rule that participating states could use as guidance to establish and implement their individual programs.[24] RGGI’s designers expected the initial program might be expanded in the future by covering other emission sources, sectors, GHGs, or states.[25] CO2 emissions from covered facilities in RGGI states account for approximately 20 percent of GHG emissions in the region.[26]

At the end of each three-year compliance period, covered facilities must surrender one allowance for each ton of CO2 emissions generated during the period.[27] Covered facilities are permitted to bank an unlimited number of emission allowances for future use.[28] Over 90 percent of allowances are distributed through periodic auctions, and a reserve price sets a price floor for allowances.[29] RGGI employs a “cost containment reserve” that allows for additional allowances to be auctioned if certain price thresholds are met.[30] In limited circumstances, covered facilities may also submit offsets, which are measurable reductions, avoidances, or sequestrations of emissions from non-covered sources, in lieu of emission allowances.[31] The RGGI states agreed that each would use at least 25 percent of its individual auction proceeds “for a consumer benefit or strategic energy purpose.”[32]

Member states invest the proceeds from allowance auctions in a variety of consumer benefit programs at scale.[33] In October 2017, RGGI, Inc. (the corporate entity that administers RGGI) released a report that tracks the investment of RGGI auction proceeds in 2015 and the benefits of these investments throughout the region.[34] The report estimates that “[t]he lifetime effects of these investments are projected to save 28 million MMBtu of fossil fuel energy and 9 million MWh of electricity, avoiding the release of 5.3 million short tons [4.8 million metric tons] of carbon pollution.”[35] The report also notes that “RGGI investments in 2015 are estimated to return $2.31 billion in lifetime energy bill savings to more than 161,000 households and 6,000 businesses which participated in programs funded by RGGI investments, and to 1.5 million households and over 37,000 businesses which received direct bill assistance.”[36] RGGI states have discretion as to how they invest RGGI proceeds.

The report breaks down these investments into four categories. Energy efficiency makes up 64 percent of investments. Funded programs are expected to return $1.3 billion in lifetime energy bill savings to over 141,000 participating households and 5,700 regional businesses.[37] Clean and renewable energy makes up 16 percent of investments, and investments in these technologies are expected to return $785.8 million in lifetime energy bill savings to 19,600 participating households and 122 regional businesses.[38] Greenhouse gas abatement makes up 4 percent of investments and are expected to avoid the release of 636,000 short tons of CO2.[39] Finally, direct bill assistance makes up 10 percent of investments accounting for $40.4 million in bill credits and assistance to consumers.[40] One independent report notes that while RGGI states each have their own unique auction revenue investment programs, “[o]verall, greater than 60 percent of proceeds are invested to improve end-use energy efficiency and to accelerate the deployment of renewable energy technologies,”[41] which far exceeds the 25 percent investment “for a consumer benefit or strategic energy purpose” required by the Model Rule.

Whether or not RGGI has been successful is the subject of debate. As designed, it applies only to CO2 and only to emissions from some 164 power plants with the capacity to generate twenty-five megawatts or more.[42] Since CO2 accounts for only 20 percent of total GHG emissions in the RGGI states, and electricity generation accounts a fraction of total CO2 emissions, RGGI’s potential is limited.[43] The Congressional Research Service has thus described the initiative’s contribution to global GHG reductions to be “arguably negligible.”[44] In addition, RGGI significantly overestimated emissions from member states for its first compliance period and set an initial emissions cap that was actually above realized emissions levels.[45] This limited participation in the program and allowed participating facilities to bank substantial amounts of unused allowances. After the 2012 program review, RGGI lowered the cap by 45 percent between 2014 and 2020.[46] And after the most recent review in 2016, RGGI lowered the cap by an additional 30 percent between 2020 and 2030.[47] The extent to which these adjustments will hasten emissions reductions to be seen. On the other hand, several studies have shown that the combination of the price signal created by RGGI and the investment of allowance auction proceeds in other environmental programs has been the dominant driver of the recent emissions decline in the region.[48]

b. California’s Cap-and-Invest Program

In 2006, California enacted its landmark climate change law, the Global Warming Solutions Act, also known as AB (“assembly bill”) 32.[49] The statute established an aggressive goal of reducing GHG emissions to 1990 levels by 2020, and an 80 percent reduction from 1990 levels by 2050, across multiple sectors of the state’s economy.[50] AB 32 directed the California Air Resources Board (CARB), the state’s air pollution regulator, to implement a cap-and-trade program, which went into effect in 2013.[51]

According to CARB, the program, which covers approximately 450 entities, “sets a statewide limit on sources responsible for 85 percent of California’s greenhouse gas emissions, and establishes a price signal needed to drive long-term investment in cleaner fuels and more efficient use of energy.”[52] It is “designed to provide covered entities the flexibility to seek out and implement the lowest-cost options to reduce emissions.”[53] The 2013 cap was set at about 2 percent below the emissions level forecast for 2012, declines an additional 2 percent in 2014, and declines 3 percent annually from 2015 to 2020.[54]

Unlike RGGI, California’s program distributes free allocations of emission allowances earlier in the program, but those allocations decrease over time as the program transitions to an auction process.[55] The allocation for most industrial sectors is set at approximately 90 percent of average emissions and is updated annually based on each facility’s production.[56] Electrical distribution and natural gas facilities receive free allowances on the condition that the value of allowances must be used to benefit ratepayers and achieve GHG emission reductions.[57] The allocation for electrical distribution utilities is set at about 90 percent of average emissions, and for natural gas utilities, is based on natural gas supplied in 2011 to non-covered entities.[58] The program includes cost containment measures and allows for the banking of allowances, has a three-year compliance period with an annual obligation to surrender 30 percent of their previous year’s emissions, and allows for offsets of up to 8 percent of a facility’s compliance obligation.[59] AB 32 also employs a substantial penalty mechanism for facilities that fail to meet their compliance obligations: “If the compliance deadline is missed or there is a shortfall, four allowances must be provided for every ton of emissions that was not covered in time.”[60]

California’s cap-and-trade program became linked with Québec’s cap-and-trade system on January 1, 2014 and became linked with Ontario’s cap-and-trade program on January 1, 2018.[61] All allowances issued by the California, Québec, and Ontario programs before and after the linkage can be used for compliance interchangeably across jurisdictions.[62] The three jurisdictions also hold joint allowance auctions.

On January 1, 2015, suppliers of transportation fuels, including gasoline and diesel fuel, became covered under the program.[63] A fuel supplier is defined as “a supplier of petroleum products, a supplier of biomass-derived transportation fuels, a supplier of natural gas including operators of interstate and intrastate pipelines, a supplier of liquefied natural gas, or a supplier of liquefied petroleum gas.”[64] All fuel suppliers that deliver or import 10,000 metric tons or more of annual CO2 equivalent emissions are subject to a reporting requirement, but only suppliers that reach a 25,000 metric ton threshold are covered by the cap-and-trade program.[65]

Proceeds from the allowance auctions are deposited in the state’s Greenhouse Gas Reduction Fund and are appropriated by the state legislature for “investing in projects that reduce carbon pollution in California, including investments to benefit disadvantaged communities, recycling, and sustainable transit.”[66] As of 2017, some $3.4 billion had been appropriated to state agencies implementing GHG emission reduction programs and projects, collectively referred to as the California Climate Investments.[67] Of that amount, $1.2 billion has been expended on projects “expected to reduce GHG emissions by over 15 million metric tons of carbon dioxide equivalent.”[68]

III. Applying a Cap-and-Invest Approach to Northeast and Mid-Atlantic Transportation Sector

Under business-as-usual trends, carbon emissions in RGGI states will be 23 percent below the 1990 baseline in 2030.[69] These states must achieve much deeper emissions reductions across multiple economic sectors in order to achieve their “greenhouse gas emission reduction targets for 2030 that range from 35 to 45 percent, centered around a 40 percent reduction from 1990 levels.”[70] Since transportation represents the largest share of GHG emissions in the RGGI states, that sector should be a primary focus of policymakers’ attention.

One study finds that the levels of emissions reductions necessary to meet the GHG reduction goals of the states in the region could be accomplished “through a suite of clean transportation policies” including financial incentives for the purchase of clean vehicles, such as electric and hybrid light-duty vehicles and natural gas powered heavy-duty vehicles; investments in public transit expansion including bus rapid transit, light rail, and heavy rail; promotion of compact land use; investment in bicycle infrastructure; support for travel demand management strategies; investment in system operations efficiency technologies; and investment in infrastructure to support rail and short-sea freight shipping.[71]

One potential mechanism for achieving the levels of reductions necessary for the RGGI states to meet their targets “would be to implement a transportation pricing policy, which could both achieve GHG reductions and generate proceeds that could be used to fund clean and resilient transportation solutions.”[72] For example, “carbon-content-based fees, mileage-based user fees, and motor-fuel taxes” could “generate an average of $1.5 billion to $6 billion annually in the region.”[73] A mid-range pricing policy that generated approximately $3 billion annually “would create a price signal that would promote alternatives to single-occupancy vehicle travel and result in modest additional emission reductions. It would also raise a cumulative $41 billion to $46 billion for the region during 2015-2030.”[74] Proceeds from such a pricing policy would offset projected declines from existing state and federal gasoline taxes and could be used to fund other clean transportation initiatives.[75]

A hypothetical regional cap-and-invest program for vehicle emissions might be structured as follows. Member states would establish a mandatory regional cap on GHG emissions from the combustion of fossil transportation fuels calculated using volumetric fuel data and fuel emission factors available from the Environmental Protection Agency.[76] The cap would decline over time. States would auction allowances equal to the cap and establish an entity like RGGI, Inc. to administer the program, auction platform, and allowance market.[77] Regulated entities would achieve compliance by purchasing allowances at auction or from other market participants, and possibly with offsets earned from reductions in other aspects of their operations.[78] As with RGGI, individual member states would commit to invest a percentage of their auction proceeds into other initiatives aimed at reducing GHG emissions, including from transportation, and could retain the discretion to decide individually how to allocate those funds.[79]

Because power plants are stationary and relatively few in number, their GHG emissions can be regulated directly, i.e., at the stack. Vehicles, however, are mobile and far more numerous. To regulate the emissions from every fossil fuel powered vehicle at the tailpipe would entail a substantial and possibly prohibitive administrative burden, and would likely be politically unpalatable. An alternative is to use transportation fuel as the point of regulation. Determining which types of fuels and which entities in the fuel supply chain to cover under the cap-and-invest program will be critical.

Transportation fuels that could be covered include gasoline, on-road and off-road diesels, aviation fuels, natural gas, propane/butane, and marine fuels.[80] Considering both the volume of each type of fuel consumed and the comparative emissions resulting from its consumption, the program should cover, at a minimum, gasoline and on-road diesel, which account for approximately 85 percent of carbon emissions from transportation in the region.[81] Other fuels may make up too small a portion of total emissions to justify the additional technical and regulatory burden of covering them.[82] In addition, because all states in the region currently require reporting on gasoline and on-road diesel, the most straightforward approach would be to regulate those fuels. Covering other fuels would require at least some states that do not already require reporting of these fuels to establish new reporting requirements.[83]

Another key design choice is the point of regulation: which entities within the transportation fuel supply chain should be subject to the regulatory obligation to hold sufficient allowances. Because all states in the region have existing reporting and enforcement mechanisms for gasoline and on-road diesel (and many also tax off-road diesel and aviation fuel), one option would be to regulate existing state points of taxation for these fuels.[84] However, state points of taxation are not uniform throughout the region. They can include many different types of entities in the supply chain and in some states the point of taxation is different for different fuels.[85] State regulations also differ with respect to what actions by covered entities trigger the reporting requirement.[86] Many states have points of regulation low in the supply chain, such as entities that purchase fuel from the terminal rack and distribute it to retailers.[87] Thus, while using existing state points of taxation to regulate transportation fuels would make use of existing state regulatory mechanisms, it would also require regulating over one thousand entities across the region, many of which are smaller distributors.[88]

Another possible point of regulation would be one that is as far upstream as possible, i.e., entities that refine fuel in the region for use in the region, and those that import fuel into the region for use in the region.[89] This would include refineries, and for fuels refined outside the region, the first importers into the region.[90] Eight refineries in the region and an unknown number of first importers, including foreign suppliers and suppliers from U.S. states outside the region, would be subject to regulation.[91] This option would require reporting of the destination of all fuel produced in or that enters the region to ensure that a fuel to be used outside the region is not inadvertently covered.[92] While the Energy Information Administration (EIA) and the Environmental Protection Agency generally require destination data from refiners and importers into the U.S. and from interstate suppliers, the agencies do not publicly disclose this data.[93] Thus, regulating refiners and importers would likely cover many fewer entities as compared to existing state points of taxation, most of which would be large petroleum companies.[94] However, because only three states in the region have refineries within their borders, and because importers are not systematically tracked throughout the region, accounting for fuels that are transported through states to prevent double-counting would likely require the establishment of new regional reporting requirements that would include points of origin and destination.[95]

A third possible point of regulation would be entities known as prime suppliers, defined by the EIA as “suppliers who produce, import, or transport product across state boundaries and local marketing areas and sell to local distributors, local retailers, or end-users.”[96] For the region, this includes approximately 30 refiners, other producers of finished fuel, interstate resellers and retailers, and importers.[97] EIA requires these entities to report the amount of fuel, including gasoline, diesel, and aviation fuel, sold or transferred for end use by state on a monthly basis.[98] Although EIA does not publicly provide disaggregated prime supplier data because of statutory privacy restrictions, organizations may enter into data-sharing arrangements with EIA to obtain individual prime supplier data.[99] Thus, while the prime supplier group would include a larger number of regulated entities than importers and refiners, it would provide a consistent definition of a point of regulation already understood by the regulated entities.[100] Regulating prime suppliers, most of which are higher in the supply chain than existing state points of taxation, would also relieve most smaller entities of compliance obligations.[101]

IV. Conclusion

States in states in New England and the mid-Atlantic region must make much deeper emissions reductions in the transportation sector in order to meet their overall GHG emission reduction targets. Recognizing this reality, representatives from Connecticut, Delaware, Maryland, Massachusetts, New York, Rhode Island, Vermont, and Washington, D.C., at the 2017 Conference of the Parties to the United Nations Framework Convention on Climate Change, signed a joint statement affirming their commitment to reducing GHG emissions from the transportation sector. In that statement, they identified “market-based carbon mitigation strategies” as potential pathways to achieving needed emissions reductions.[102]

Despite its early struggles, the cap-and-invest approach to mitigating emissions in the northeast and mid-Atlantic electricity generation sector has achieved, at a minimum, some emissions reductions, substantial investment in other GHG mitigation efforts, and overall net benefits within the region. California has achieved substantial GHG emissions reductions across multiple sectors, including transportation, and has invested substantial sums in a suite of other green programs. These examples demonstrate the potential of using a cap-and-invest approach to accomplish environmentally and economically sound policy objectives, both within the RGGI region and in the context of transportation. If properly structured, such an approach could achieve significant emissions reductions in the region and raise substantial funds for other GHG mitigation and climate change adaptation initiatives.

How would a cap-and-invest approach to transportation emissions be structured? The fundamental aspects of RGGI and California’s cap-and-invest program are similar in most respects. California occupies a unique position in federal regulation of automobile emissions and had the benefit of constructing a program applicable only to itself, although its program is now linked with programs in other jurisdictions. RGGI already covers much of the Northeast and mid-Atlantic region, could be expanded to include other sectors of those states’ economies, including transportation, and could be linked with the California-Québec-Ontario cap-and-invest system to create a larger and more efficient allowance market.

Owing to the practical differences between directly regulating emissions from power plants and indirectly regulating transportation emissions by fuel type and supply chain point, the mechanics of using a cap-and-invest approach to mitigate transportation emissions, especially across jurisdictions, poses some potentially challenging design issues. The program should cover, at a minimum, gasoline and on-road diesel. Identifying the appropriate point of regulation will require policymakers to consider a host of technical, administrative, and policy issues. Existing state points of taxation are numerous and vary by jurisdiction and by fuel type within jurisdictions. Upstream refiners and importers are far fewer in number but regulating these entities would likely require the development of new regional reporting mechanisms that might make this option administratively undesirable. While the prime suppliers group is larger in number than refiners and importers, regulating prime suppliers would provide a consistent state-based definition of a point of regulation already understood by the regulated entities, and would not subject most smaller entities to compliance obligations.

[1] See Energy Information Administration, State Carbon Dioxide Emissions Data (last visited Feb. 10, 2018),

[2] See Gabe Pacyniak, et al., Reducing Greenhouse Gas Emissions from Transportation: Opportunities in the Northeast and Mid-Atlantic, Georgetown Climate Center 8 (2015),

[3] Regional Greenhouse Gas Initiative, Welcome (last visited Feb. 10, 2018),

[4] Regional Greenhouse Gas Initiative, RGGI Benefits (last visited Feb. 10, 2018),

[5] Brian C. Murray and Peter T. Maniloff, Why have greenhouse emissions in RGGI states declined? An econometric attribution to economic, energy market, and policy factors, Energy Economics 51, 588 (2015).

[6] See Paul J. Hibbard, et al., The Economic Impacts of the Regional Greenhouse Gas Initiative on Nine Northeast and Mid-Atlantic States, Analysis Group 5 (July 14, 2015),; Ceres, The Regional Greenhouse Gas Initiative: A Fact Sheet (2015),

[7] Regional Greenhouse Gas Initiative, The Investment of RGGI Proceeds in 2015 3 (Oct. 2017),

[8] See Energy Information Administration, supra note 1; Gerald B. Silverman and Adrianne Appel, Northeast States Hit the Brakes on Carbon Emissions From Cars, BNA (Oct. 16, 2017),

[9] Pacyniak, supra note 2.

[10] Id.

[11] See Gabe Pacyniak, et al., Reducing Greenhouse Gas Emissions from Transportation: Opportunities in the Northeast and Mid-Atlantic, Appendix 3: State GHG Reduction Goals in the TCI Region, Georgetown Climate Center 4-13 (2015),

[12] See, e.g., Center for Climate and Energy Solutions, California Cap and Trade (last visited Feb. 10, 2018),

[13] See Joel B. Eisen, et al., Energy, Economics and the Environment 326 (4th ed. 2015).

[14] Id.

[15] Id.

[16] See id.

[17] Id.

[18] See id.

[19] See id.

[20] See Regional Greenhouse Gas Initiative, supra note 3.

[21] See id.

[22] Regional Greenhouse Gas Initiative, Program Design (last visited Feb. 10, 2018),

[23] Regional Greenhouse Gas Initiative, A Brief History of RGGI (last visited Feb. 10, 2018),

[24] Id.

[25] Jonathan L. Ramseur, The Regional Greenhouse Gas Initiative: Lessons Learned and Issues for Congress,

Congressional Research Service 3 (May 16, 2017),

[26] Id.

[27] Id.

[28] Id.

[29] Id.

[30] Id.

[31] Id. at 4.

[32] Id. at 3.

[33] See Brian M. Jones, Christopher Van Atten, and Kaley Bangston, A Pioneering Approach to Carbon Markets: How the Northeast States Redefined Cap and Trade for the Benefit of Consumers, M.J. Bradley & Associates 4 (Feb. 2017),

[34] Regional Greenhouse Gas Initiative, The Investment of RGGI Proceeds in 2015 (Oct. 2017),

[35] Id. at 3.

[36] Id.

[37] Id.

[38] Id.

[39] Id.

[40] Id.

[41] Jones, supra note 33.

[42] Id.

[43] See id. at 3.

[44] Id. at 17.

[45] Id. at 4.

[46] Regional Greenhouse Gas Initiative, Elements of RGGI (last visited Feb. 10, 2018),

[47] Regional Greenhouse Gas Initiative, Summary of RGGI Model Rule Updates 1 (Dec. 19, 2017),

[48] See Murray, supra note 5 at 25-26; Man-Keun Kim and Taehoo Kim, Estimating impact of regional greenhouse gas initiative on coal to gas switching using synthetic control methods, Energy Economics 59, 334 (2016).

[49] California Air Resources Board, Assembly Bill 32 Overview (last visited Feb. 10, 2018),

[50] Id.

[51] Id.

[52] Id.

[53] California Air Resources Board, Overview of ARB Emissions Trading Program 1 (last visited Feb. 10, 2018),

[54] Id.

[55] Id.

[56] Id.

[57] Id.

[58] Id.

[59] Id. at 2.

[60] Id.

[61] California Air Resources Board, Facts About The Linked Cap-and-Trade Programs 1 (updated Dec. 1, 2017),

[62] Id.

[63] California Air Resources Board, Information for Entities That Take Delivery of Fuel for Fuels Phased into the Cap- and-Trade Program Beginning on January 1, 2015 1 (last visited Feb. 10, 2018),

[64] Id. at 2.

[65] Id.

[66] California Air Resources Board, 2017 Report to the Legislature on California Climate Investments Using Cap-And-Trade Auction Proceeds i (2017),

[67] Id.

[68] Id. at v.

[69] Elizabeth A. Stanton, et al., The RGGI Opportunity, Synapse Energy Economics, Inc. 3 (revised Feb. 5, 2016), Notably, this study took into account the anticipated effect of the Clean Power Plan, which President Donald Trump and Environmental Protection Agency Administrator Scott Pruitt propose to repeal. See id. at 4.

[70] Id. at 2.

[71] Pacyniak, supra note 2 at 22. The Georgetown Climate Center serves as the facilitator for the Transportation Climate Initiative, which is “a collaboration of the agency heads of the transportation, energy, and environment agencies of 11 states and the District of Columbia, who in 2010 committed to work together to improve efficiency and reduce greenhouse gas emissions from the transportation sector throughout the northeast and mid-Atlantic region.” Id. at i.

[72] Id. at 25.

[73] Id.

[74] Id.

[75] Id. at 26-27.

[76] Drew Veysey, Gabe Pacyniak, and James Bradbury, Reducing Transportation Emissions in the Northeast and Mid-Atlantic: Fuel System Considerations, Georgetown Climate Center 7 (Nov. 13, 2017),

[77] Id.

[78] Id.

[79] See id.

[80] Id. at 9.

[81] See id. at 11-13.

[82] See id. at 33.

[83] Id. at 20.

[84] Id.

[85] Id. at 16.

[86] Id.

[87] Id. at 17.

[88] Id. at 33.

[89] Id. at 21.

[90] Id.

[91] Id.

[92] Id. at 22.

[93] Id.

[94] Id. at 33.

[95] Id.

[96] Id. at 24.

[97] Id.

[98] Id.

[99] Id. at 25.

[100] Id. at 33

[101] Id.

[102] See Transportation and Climate Initiative, Northeast and Mid-Atlantic States Seek Public Input As They Move Toward a Cleaner Transportation Future (Nov. 13, 2017),; Sierra Club, Northeast and Mid-Atlantic Governors Lauded for Announcement on Transportation and Climate, Press Release (Nov. 13, 2017),

ELRS Post: Updates from Last Semester

ELRS Post: Updates from Last Semester