This paper explicates the four building blocks underlying emission standard guidelines in the U.S. EPA's proposed clean power plan for reducing carbon dioxide emissions from the U.S. electric power sector. It critically analyzes the methodology by which EPA has assessed the cost and effectiveness of each building block. This explication of the four building blocks reveals that the clean power plan is fundamentally inconsistent with how Congress has allocated state versus the federal regulatory authority under the Clean Air Act. Under the CAA vision of federalism, the federal EPA's presumed centralized expertise in matters of climate change policy would be coupled with a productive delegation of authority to state regulators to utilize their superior knowledge of state power sectors in finding ways to reduce CO2 emissions. Under the clean power plan, the EPA has set state-specific CO2 emission reduction targets on the basis of the stylized facts of estimated average state performance. Thus rather than standards based on federal expertise, implemented by state regulators with state-specific knowledge, the clean power plan sets standards based on federal guesswork about state realities that may leave state regulators with few feasible or cost effective compliance options.

Jason S. Johnston, The False Federalism of EPA’s Clean Power Plan (2015).