The Clean Air Act, Pigouvian Pricing, and Climate Governance

• Date: 01 December 2019

12-2019 NEWS & ANALYSIS 49 ELR 11103

COMMENT

The Clean Air Act, Pigouvian

Pricing, and Climate Governance

by Ross Astoria

Ross Astoria, J.D./Ph.D., is an Associate Professor at the University of Wisconsin, Parkside.

Two carbon pricing bills were introduced during the

115th Congress. Reps. Ca rlos Curbelo (R-Fla.) and

Brian Fitzpatrick (R-Pa.) introduced the MAR-

KET CHOICE Act (MCA) during the summer of 2018.1

Reps. Ted Deutsch (D-Fla.) and Francis Rooney (R-Fla.)

introduced the Energy Innovation and Carbon Dividend

Act (Energy Innovation Act) in November 2018,2 and

reintroduced it early in the 116th Congress, where it pres-

ently has more than 65 cosponsors.3 By dierent methods

and with dierent comprehensiveness, both of these bills

place a Pigouvian tax on greenhouse g as (GHG) emissions.

Among other things, they a re notable for attracting Repub-

lican cosponsors and amending t he Clean Air Act (CA A)4

to temporarily suspend certain of the U.S. Environmental

Protection Agency’s (EPA’s) authority over GHGs.

Many climate advocates (including this author) would

prefer that climate legislation leave the CA A unaltered.

e urgency of coalition-forming across political parties,

however, has brought the CAA into the policy discussion.

In this context, to prevent against the accidental inclusion

of overly expansive and damaging la nguage, climate advo-

cates shou ld attend closely to the lega l and polic y implica-

tions of any language a mending the CAA . Once the legal

implications are accurately assessed, suspension of CAA

programs vis-à-vis a Pigouvian price on ca rbon can be eval-

1. Modernizing America With Rebuilding to Kickstart the Economy of the

Twenty-First Century With a Historic Infrastructure-Centered Expansion

Act, or the MARKET CHOICE Act, H.R. 6463, 115th Cong. (2018). Co-

sponsored by Reps. Brian Fitzpatrick (R-Pa.) and Francis Rooney (R-Fla.).

Representative Fitzpatrick reintroduced the MCA at the end of September

2019 (H.R. 4520, 116th Cong. (2019)).

2. Energy Innovation and Carbon Dividend Act of 2018, H.R. 7173, 115th

Cong. (2018). Sens. Chris Coons (D-Del.) and Je Flake (R-Ariz.) intro-

duced a companion bill to the Energy Innovation and Carbon Dividend

Act during the closing days of the 115th Congress. S. 3791, 115th Cong.

(2018).

3. Energy Innovation and Carbon Dividend Act of 2019, H.R. 763, 116th

Cong. (2019).

4. 42 U.S.C. §§7401-7671q, ELR S. CAA §§101-618.

uated and, furt her, can be eva luated in the context of other

state and federal policies that attend climate governance.

e rst part of this Comment analyzes the legal impli-

cations of the CA A amendments found in the Energy Inno-

vation Act.5 e goal here is to specify which existing EPA

GHG programs would be retained and suspended, as well

as which prospective GHG programs would be precluded.

Drawing out these legal and policy implications allows cli-

mate advocates to alter the langua ge of a ny proposed CA A

amendments so as to avoid unintended consequences. e

rst solicitation of this piece, then, is the correction and

expansion of this legal a nalysis.

With the legal analysis as a basis, the second part of this

Comment conducts a comparative evaluation of a selection

of CAA programs vis-à-vis Pigouvian pricing. Part II.A.

summarize s how independent economic analysi s concludes

that the Energy Innovation Act’s choice of which regula-

tions to suspend aligns with prescriptions of economic

eciency: the suspended CA A progra ms are redundant to

suciently stringent Pigouvian pricing and those reta ined

complement Pigouvian pricing.

However, besides ecient mitigation, a variety of other

climate governance values might be pursued with legis-

lation, and these values are introduced in Part II.B. a nd

brought into the evaluative framework. e CA A pro-

grams and Pigouvian pricing are briey compared with

these additional values and considerations. e second

solicitation of this Comment, then, is the further devel-

opment of the comparative analysis of the relationship of

the CAA, Pigouvian pricing, and other climate policies,

in anticipation of the formulation of a federal climate bill.

5. e CAA-amending language in the Energy Innovation Act and the MCA

are substantially the same. However, at this time, the Energy Innovation Act

is “in play” and thus is the subject of analysis. roughout this Comment,

however, some of the important dierences between the MCA and Energy

Innovation Act are agged in footnotes.

Author’s Note: All views expressed herein are solely the author’s and

not necessarily those of any of his institutional aliations.

Copyright © 2019 Environmental Law Institute®, Washington, DC. Reprinted with permission from ELR®, http://www.eli.org, 1-800-433-5120.