More on flexible carbon standards from RFF

Nathan Richardson and Clayton Munnings at Common Resources:

Reading agency intentions is hard, but until recently the EPA seemed likely to pursue an inflexible (but more legally defensible) approach. The President’s post-speech memo to EPA suggests this may be changing. It calls for “approaches that allow the use of market-based instruments, performance standards, and other regulatory flexibilities.” That’s good news, and may be the most important policy change this week, rather than anything in the speech itself. We as researchers have long advocated a bold approach from EPA, despite reservations about legal defensibility of some options.

A tradable performance standard or similar flexible approach would show ambition to squeeze substantial GHG reductions out of the CAA. The legal risks associated with this approach are real, but can be minimized. One option is to make more ambitious elements of the standards severable, so that a court can reject them without eviscerating the entire program. Another is to leave flexibility decisions to states, which play a major role in existing-source rules under the law.

Here is my previous post on this subject.