Feb 18 2016

The climate debate throws a spotlight on the role of states

A focus on the role and rights of state governments in tackling climate change has recently come from two very disparate sources – Victoria’s independent review of its Climate Change Act and the US Supreme Court’s decision to delay the implementation of the Obama Administration’s Clean Power Plan.

The independent review committee which looked at Victoria’s Climate Change Act 2010 referred to the state’s “objective to be a leader in climate change action”[i], and argues that states have a critical role to play on climate change. Indeed, one recommendation was for Victoria to establish its own emissions trading scheme. Across the Pacific, a core argument against the Clean Power Plan has been the right of states to manage their power systems, while a key rationale for the Plan is to provide “national consistency”[ii].

Victoria’s Independent Review

Victoria’s Climate Change Act 2010 has just undergone its second independent review. The committee was chaired by Martijn Wilder, head of law firm Baker and McKenzie’s Global Environmental Markets practice. The other committee members were Anna Skarbek, CEO of ClimateWorks Australia and Professor Rosemary Lyster, Professor of Climate and Environmental Law and Sydney University’s Law School.

In all they made 33 recommendations, including the recommendation to introduce a state-based ETS, which was quickly ruled out by the State Government on the basis that it “is a Commonwealth responsibility”. It also ruled out a shadow carbon price[iii].

On emissions reduction measures, the IRC review recommended that the act “should vest in the Minister a clear legal power to implement measures to reduce GHG emissions at source, particularly from high emitting sectors, to achieve the long-term emissions reduction target.”

This would, it said, include power to impose limits under EPA licences, establishing a state-based emissions trading scheme, which could link to other state or international schemes, adopting carbon taxes or other targeted financial incentives or charges and the accelerated phase-out or upgrade of high GHG emitting facilities.

On the powers of the Victorian Environment Protection Authority (EPA), the committee recommended the government should:

  • reinstate the EPA’s power to regulate GHG emissions from those facilities that the authority regulates for the purposes of achieving a long-term emissions reduction target for Victoria;
  • make it clear that the EPA’s ability to regulate waste would include GHG emissions through a state-based emissions trading scheme, which could be linked to other states in Australia or internationally; and,
  • consider enabling the EPA to use its powers to issue and amend licences to achieve significant reductions in GHG emissions.

Aside from the call for a Victorian ETS, key recommendations from the review include enshrining a long-term emissions reduction target in the act to “deliver an internal signal to the rest of government…. (so that the) political pressure to achieve them will be increased… (and) an external signal of the seriousness of the government’s intent”. It recommended the setting of five yearly interim targets to reach the long-term goal.

Other key recommendations included:

  • that a charter of climate change objectives and principles be introduced to the Act;
  • that the government consider reducing barriers to carbon sequestration on public and private land and consider making public land more accessible.

In explaining the need for state-based action on climate change, the IRC noted that when it comes to climate change “attention is inevitably focused on what national governments are doing and saying. However, states and other sub-national government also have a critical role to play in climate change mitigation and adaptation, indeed many of the sectoral policy responses are in state rather than federal powers.” The IRC contends that the trend for action at a sub-national level will continue to increase over time.

The Victorian Government is considering the recommendations and will release its response “shortly”.

West Virginia et al VS. the EPA et al

In the US, 29 states and state agencies and utilities contesting the Obama Administration’s efforts to limit emissions from coal-fired power plants have done so on the basis of state’s rights.

Arguments for a stay of the plan included that the states would suffer “irreparable harm to their sovereignty” and that they have “expended and will continue to expend significant and unrecoverable resources”.

The motion states that “The states are being immediately and irreparably harmed by the EPA’s illegal effort to force States to reorder their electrical generation systems.

“This case involves an unprecedented, unlawful attempt by an environmental regulator to reorganise the nation’s energy grid.”[iv]

The opponents of the plan generally argue that the EPA is overstepping its authority under section 111(d) of the Clean Air Act to regulate sections of the economy. The Plan is aiming to reduce carbon pollution by 32 per cent below 2005 levels by 2030. States must develop and implement plans that ensure their power plants can meet the target. Plans were expected to be submitted in September this year. The first deadline for power plants to reduce their emissions is 2022, with full compliance by 2030.[v]

The litigation could be prolonged with the timeline potentially clouded by the Presidential election, as well as the need to appoint a justice following the death of conservative Supreme Court justice, Antonin Scalia.

The 5-to-4 vote, with the court’s four liberal members dissenting, was described as “unprecedented” by the New York Times, which pointed out that the Supreme Court had never before granted a request to halt a regulation before review by a federal appeals court.[vi]

The EPA and the Obama Administration believe the plan will be upheld. The EPA says that “For the states that choose to continue to work to cut carbon pollution from power plants and seek the agency’s guidance and assistance, EPA will continue to provide tools and support. We will make any additional information available as necessary.”[vii] 

The EPA describes the plan as having strong “but achievable standards for power plants, and customised goals for states”, providing national consistency, accountability and a level playing field, “while reflecting each state’s energy mix”. It also showed the world that the United States is committed to leading global efforts to address climate change.


[ii] http://www.epa.gov/cleanpowerplan/fact-sheet-overview-clean-power-plan

[iii] http://www.premier.vic.gov.au/climate-change-act-review-recommendations-tabled/

[v] http://www.epa.gov/cleanpowerplan/regulatory-actions

[vi] http://www.nytimes.com/2016/02/10/us/politics/supreme-court-blocks-obama-epa-coal-emissions-regulations.html?_r=0

[vii] http://www.epa.gov/cleanpowerplan/regulatory-actions

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