A Collective Action Perspective on Ceiling Preemption By Federal Environmental Regulation: The Case of Global Climate Change

In an era of regulatory skepticism, proponents of regulation in general and environmental regulation in particular face a number of new political and legal hurdles, particularly at the federal level. Frustrated with federal inaction or weak federal regulation, it is increasingly common for states and local governments to adopt environmental laws that seek to provide greater environmental protection. The critical question is when federal environmental law provides a ceiling, preempting such state regulatory programs. In this article, which is part of a forthcoming symposium on federal preemption in the Northwestern Law Review, Professors Glicksman and Levy develop a framework for evaluating ceiling preemption issues in the environmental law arena and then apply it to the specific problem of state regulation of greenhouse gas (GHG) emissions that contribute to global climate change. Traditional preemption doctrine emphasizes the purpose of federal laws, which is relevant to all three major forms of preemption: express, occupation of the field, and conflict preemption (including state laws that are an obstacle to the accomplishment of the object and purpose of federal law). Few environmental statutes expressly preempt more stringent state laws. The values of federalism, political process theory, and textualism support a presumption against implied preemption that should only be overcome if there is a direct conflict between federal and state law or state regulation would compromise a clear and primary purpose of a federal statute. The question then becomes which environmental purposes might provide sufficient justification to overcome the presumption and support ceiling preemption. Federal environmental law emerged largely as a response to various collective action problems that tended to prevent states, acting individually, from adopting appropriate environmental laws. Such concerns included negative externalities, the need for resource pooling, the "race to the bottom" phenomenon, the rationalization of standards (uniformity), and the so-called NIMBY (not in my back yard) problem. In considering the problem of ceiling preemption, then, it makes sense to ask whether the collective action problem in question is implicated by state regulation that is more protective of the environment than federal regulation. In general terms, negative externalities, resource pooling issues, and the race to the bottom can be expected to cause underregulation by states, and thus do not support ceiling preemption. In contrast, uniformity and NIMBY concerns would tend to support ceiling preemption. Using this basic framework, the article offers a detailed analysis of state regulation of GHG emissions, which industry has argued is preempted by federal law, including the Clean Air Act. This analysis suggests that the primary purposes of the Act, which include controlling negative externalities, taking advantage of resource pooling, and preventing a race to the bottom, do not generally support ceiling preemption. Although resource pooling might support ceiling preemption as a means of strengthening the bargaining position of the Unites States vis-a-vis other countries, this purpose was not a significant concern when the Act was adopted. The need for uniformity supports limited ceiling preemption for mobile sources of emissions (i.e., cars and trucks), which are subject to express preemption provisions. Uniformity concerns are less significant for stationary sources, and there is little evidence to support broad ceiling preemption on this basis. Finally, NIMBY concerns were not an important factor in the adoption of the Clean Air Act. The article also considers the implications of the framework for preemption under a cap and trade program, which is the likely form that any federal regulatory program for GHG emissions would take.