After a Federal Climate Policy Retreat, States Should Proceed With Caution

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State and local governments must consider the potential legal risks of their climate change policies.

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Craig Segall and David Hults have thoughtfully advanced the most hopeful case for state and local climate action, and we appreciate their constructive engagement in this dialogue.

Readers who have reached this point in our colloquy presumably have noticed important points of agreement between us. We all agree that federal action on climate change would be highly valuable, if not indeed preferable. We also agree that, absent any realistic prospects for federal action in the near term, state and local policies are the only game in town. “We must start somewhere,” write Segall and Hults. Or as we put it, “something is better than nothing.”

These points of agreement will likely be apparent on even the most casual reading of our exchange. What might be less evident, though, is where exactly Segall and Hults stand on the main thrust of our original essay: namely, that state and local climate action poses distinct legal risks that public officials ignore only at their peril. Segall and Hults do not dispute the existence of these legal risks—and we would have been surprised if they had, as they are both attorneys working for a state agency (even though they write in their personal capacities).

As we pointed out in our original essay, state and local officials “can expect one or more of at least six potential legal challenges” to their climate policies, including challenges based on federal preemption, the dormant Commerce Clause, state utility law, and more. We detailed each of these legal vulnerabilities in specific terms and made clear that a “necessary condition for success of subnational regulation will be careful attention to larger legal constraints.”

In our first reply to Segall and Hults, we again reiterated that “the legal risks accompanying subnational action should not be overlooked” and that we saw “no reason to assume that such legal risks will not manifest themselves in the years ahead.”

In reacting to both of our essays, Segall and Hults have never denied these legal risks, nor have they offered any reasons why public officials should not be seriously concerned about them. On the contrary, they admit in their last essay that “legal and political challenges exist…to be sure.”  They even urge “policy development that recognizes some of the risks”—our emphasis added—although they never say which risks to recognize nor why some other risks can apparently be ignored.

In the end, all they really say in response to concerns about legal challenges is that “subnational governments have proven capable of overcoming many such challenges.”

Perhaps so. But even at that, overcoming “many” of these challenges is obviously not the same as overcoming all of them. Moreover, as we have highlighted, the only realistic way to overcome any of these challenges is to confront them with eyes wide open—and not to get caught up in unhelpful, one-sided rhetoric extolling the virtues of what state and local leaders can do in the absence of federal policy.

After all, eager and ambitious leaders in Albuquerque, New Mexico thought of themselves as climate leaders when they adopted stringent local energy efficiency standards in 2007. Yet they ultimately found their city on the losing end of a drawn-out legal battle waged by national-level business groups.

As we noted in our original essay, Albuquerque’s legal loss likely could have been prevented had city leaders taken the approach of legislators in Washington State. Washington crafted its green building codes carefully so as to avoid creating federal preemption problems—and they ultimately won an industry-filed court challenge similar to the one filed against Albuquerque.

Segall and Hults have said nothing to deny that Albuquerque’s experience provides an important cautionary tale.

We differ with Segall and Hults, then, not necessarily in ultimate goals, or even possibly in certain tactics, but rather in our emphasis that, in the wake of a federal retreat, subnational governments still must proceed with caution, giving full consideration to potential legal risks. Our point remains that state and local leaders should not get caught up in subnational policy advocates’ exuberance and act in ways that find themselves with outcomes like the one Albuquerque experienced.

Such exuberance appears to have led Segall and Hults to spend a good bit of their last essay arguing not against our principal message concerning legal risk, but against a straw position of a “uniform” federal policy. Why must federal policy necessarily be equated with uniformity or otherwise taken to impede diverse, bottom-up innovations? The two federal policies we mentioned in our last essay—a carbon tax and an upstream cap-and-trade—would not impede bottom-up action.

On the contrary, those policies would accelerate bottom-up action—and do so across the entire country. Segall and Hults are simply mistaken or misleading if they are read to imply that the only way to foster innovation and diversity in climate responses is through state and local action made either in the absence of federal policy or in the presence of a federal regulatory framework akin to the Clean Air Act’s state implementation plans.

State and local leaders need to hear something other than unbridled optimism not merely because a subnational approach to climate policy will be inherently limited in its substantive impact, for all the reasons we have previously outlined. They also need to face up to the limitations of subnational action because of what it means for legal risk. The possibility of an emerging regulatory patchwork over climate change not only might slow down and stifle the diffusion and scaling of innovative ideas from the bottom up. It also provides the motivation for business groups and others to challenge state and local climate action in court—and then gives them fodder for their legal arguments under preemption and Commerce Clause doctrines, among others.

We have not argued that subnational policies or bottom-up solutions are never viable approaches to address environmental problems in general. As we have made clear, despite all their inherent limitations, state or local policies may at times be the only meaningful alternatives available, especially when a national government lacks political willingness or regulatory capacity. Yet subnational action on climate change in the United States needs to be crafted and coordinated carefully, both to maximize its substantive impact and to manage the undisputed litigation risks associated with such regulation.

Cary Coglianese

Cary Coglianese is the Edward B. Shils Professor of Law and Political Science at the University of Pennsylvania, where he is also the Director of the Penn Program on Regulation and the faculty advisor to The Regulatory Review.

Shana Starobin

Shana Starobin is Assistant Professor of Government and Environmental Studies at Bowdoin College and a former Fellow of the Penn Program on Regulation at the University of Pennsylvania Law School.

This essay is part of a five-part series, entitled State and Local Regulation of Climate Change.