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A little dirt on the Clean Power Plan

Environmental Protection Agency aggression fostered an unlikely contingent seeking federal court relief: The American Iron & Steel Institute and American Wood Council joined Portland Cement Association, Brick Industry Association, National Lime Association and 13 other business or industry groups late last month in a National Association of Manufacturers (NAM) legal effort to stop implementation of the Clean Power Plan. Through it, the EPA seeks sharp reductions in carbon dioxide emissions—32 percent by 2030 against 2005 level baseline—from utilities and energy-intensive operations.

The NAM Manufacturers’ Center for Legal Action filed in the U.S. Court of Appeals for the District of Columbia Circuit a Petition for Review of the Clean Power Plan, formally titled “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units.” EPA published a final rule on the plan in the Federal Register, triggering a petition in which the Manufacturers’ Center characterizes the final rule as “arbitrary and capricious, contrary to the United States Constitution and the Clean Air Act and regulations promulgated there under,” and requests “this Court hold unlawful, vacate, enjoin, and set aside the final rule.”

Critics cite the likelihood of higher energy prices and premature retirement of coal-fired power generating stations among Clean Power Plan pitfalls. In a statement on the petition, NAM Senior Vice President and General Counsel Linda Kelly notes: “Manufacturers need abundant and reliable supplies of energy and reasonable and predictable policies that allow for continued investment and growth. This plan restricts resources and reduces reliability, while setting a dangerous precedent for future regulation of other sectors.”

In “The EPA Deserves a Stay,” a blistering assessment of the Clean Power Plan in the October 30 edition, Wall Street Journal editors hit home on one of those ‘other sectors.’ “Under the pretext of regulating power plants, can the EPA instruct states to adopt green-city building codes that curtail the use of CO2-heavy cement?,” they ponder, while confirming the NAM contingent is not alone in seeking federal court relief from the onerous Clean Power Plan.

Immediate action from the bench would resonate far and wide. The CO2 emissions reduction goals in the Clean Power Plan will reinforce U.S. delegation posturing at the United Nations Climate Change Conference, November 30–December 11 in Paris. Participants seek an international agreement on reduction of CO2 and other greenhouse gas emissions under the pretense of helping avert global warming. One likely conference topic is a carbon tax, which has failed in foreign countries, and domestically was the subject of a bill the House of Representatives passed in 2009, but never had a prayer in the Senate.

Without specifically endorsing a carbon tax or advancing a particular position on global warming theory, the world’s new cement, aggregates and concrete leader entered the U.N. Conference discussion just prior to the Clean Power Plan final rule. Zurich-based LafargeHolcim Ltd. signed a statement, “In Support of a Paris Climate Agreement,” from the policy-driven Center for Climate and Energy Solutions (C2ES), based in Arlington, Va., and headed by an EPA veteran who served as a deputy administrator during the Obama administration’s first five years.

The “Paris Climate Agreement” signing a) positions recently formed LafargeHolcim as the heavy building materials equivalent of four other signatories in energy and mining—BP, Shell, BHP Billiton and Rio Tinto; and, b) reminds investors and government officials around the world that the company prioritizes greenhouse gas emissions reduction. The statement calls for regulatory certainty, no small matter for a major public company charged with sound capital allocation and strategic planning, and bound by strict investor guidance rules.

The Clean Power Plan sows uncertainty in one of LafargeHolcim’s principal markets. Congress would never have approved it, not even during the 2009-10 peak of Obama administration influence on Capitol Hill. As a regulation that will drive up the cost of electricity, disrupt industries that employ millions, and set the stage for a prospective carbon tax on products like portland cement, the Clean Power Plan deserves a thick, perpetual fog.