November 2006
Enviro Defense v Duke Energy Corp
There is a case being heard at the United States Supreme Court which will set the environmental agenda in the country for years to come.
Lord Stern, in his report on climate change informed the world that " science tells us that GHG [Green House Gas] emissions are an externality; in other words, our emissions affect the lives of others. When people do not pay for the consequences of their actions we have market failure. This is the greatest market failure the world has seen. ";
Thus Environmental Defense v. Duke Energy Corp (05-848, Supreme Court)is a name that we should become familiar with.
The facts of the case are as follows:
In 2000, the Environmental Protection Agency sued Duke Energy Corporation for making a number of upgrades to its power plants without filing for permits under the Prevention of Significant Deterioration ("PSD";) program. The PSD program, which was added to the Clean Air Act in 1977, regulates "major modifications"; to existing power plants. Duke Energy first argued that the 1971 New Source Performance Standards ("NSPS";) provide a definition of "modification"; that governs the PSD program; Duke then argued that the changes to its plants do not fall within the NSPS definition of "modification."; In 1980 the EPA promulgated regulations providing a more stringent definition of "modification,"; and Environmental Defense, which has stepped in as a plaintiff in the case, maintains that this more stringent definition applies to the PSD. The Court of Appeals for the Fourth Circuit agreed with Duke Energy, holding that the NSPS definition of "modification"; must be applied to the PSD program. However, this decision has been appealed and is being heard by the Supreme Court.
Crucially, Duke’s modifications enabled its power plant to function for extended hours at the same level of pollutant output. Duke have claimed that under PSD definitions, this does not constitute a major modification, as it is merely increasing operating hours, rather than output and is as such covered by the existing definition. This is because Duke had been using the PSD measurement of pollutants emitted per hour rather than the stricter NSPS measure of total pollutants emitted annually. In fact, this represents one of the very reasons the NSPS standards were introduced. Duke is arguing the case on the basis of the previous record of EPA interpretation of the regulations which took a permissive approach. However, a change in attitude at the EPA has lead to stricter enforcement and the test case of Duke. Meanwhile, in the background hovers the spectre of relaxing this environmental protection regime because of the Bush administration’s hostility towards global warming science.
The basis of this case is two fold. The first strut is based upon the jurisdictional competence of a junior court in making an earlier ruling on the case. The second is an interpretational aspect of federal law relating to environmental protection (in this case, the Clean Air Act).
These two points have important consequences. The jurisdictional question will have a direct impact upon the uniformity of interpretation and application of the act. That is to say, if multiple courts are free to interpret the same provisions, there could not be any coherent enforcement of the act. Legislative uncertainty of this kind in business areas encourages a "race to the lowest common denominator";, whereby companies will seek out states with minimal safeguards and protection regimes, allowing profit maximisation. Moreover, the effect is to render such legislation totally impotent.
The interpretational aspect in this case revolves around which agency or standardised definition the word "modification"; should be adjudged. This requires an investigation of original intent and subsequent interpretation of the term in relation to Congress’ intention in the extent to which it wanted to protect the environment.
If the Supreme Court finds in favour of the less strict, PSD definition this would have a doubly damaging effect on attempts to protect the environment. Primarily, the judicial agenda of the court with regard to environmental protection would be cemented. Already a conservative, pro-business, insular court, prospects for a favourable decision are not promising. Secondly, federal and state agencies would be much more circumspect in bringing environmental transgressors to court because of budgetary and political constraints in the enforcement process where there would be a much lesser chance of success following an unfavourable decision in Duke. Moreover, the lax standard promulgated by the PSD definition provides no incentive, through fear of penal or economic sanction to improve pollution emissions or controls from their current high levels.
Potentially, if both the incumbent administration and the highest court in the United States began marching in step on plans for de minimis environmental regulation through relaxation of the law and judicial hostility to environmental protection, it may be too late to do anything for our planet.
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