Prevailing Academic View on Compliance Flexibility Under § 111 of the Clean Air Act

Abstract

EPA will soon propose performance standards under Section 111 of the Clean Air Act for greenhouse gas pollution from the two largest emitting stationary source sectors — fossil-fueled power plants and petroleum refineries. The form these standards will take remains unclear. A key issue that will shape the effectiveness of the regulations is the degree to which they enable regulated entities to use flexible approaches to achieve the standards. This discussion paper provides the content of a letter to EPA Administrator Jackson that describes areas of general academic agreement on the EPA’s authority to use compliance flexibility options under Section 111 of the Clean Air Act in the development of performance standards for greenhouse gas emissions.

Keywords: source category, existing sources, state implementation plan, new sources, tradable performance standards

JEL Classification: K32, Q54, Q58