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In June 2013, President Obama issued a memorandum directing the Environmental Protection Agency (EPA) to use its authority under Sections 111(b) and 111(d) of the Clean Air Act to address carbon pollution from new and existing power plants. Over two years later, the EPA issued the final rule, known as the Clean Power Plan, and a proposed federal plan that will be implemented in states that do not submit their own plan under the Clean Power Plan. Both the Clean Power Plan and the EPA’s proposed federal plan rely heavily on emissions trading programs to reduce carbon emissions in a cost-effective manner. Emissions trading programs set a cap on the total amount of a pollutant permitted and allow sources to buy and sell allowances based on how much of the pollutant each source is reducing or emitting. Opponents of the Clean Power Plan and its trading provisions are challenging the rule on the grounds that it is beyond the EPA’s authority under the Act.

This Note suggests that these emissions trading provisions are valid for two related reasons: first, the EPA has successfully implemented emissions trading programs under Section 110 of the Act in the past that demonstrate the agency’s longstanding history of using these programs; and second, emissions trading has been upheld by the Supreme Court as permissible under Section 110, and Section 111(d)—under which the Clean Power Plan was promulgated—contains two substantive references to Section 110. Taken together, the EPA’s past use of emissions trading programs and the statutory references in Section 111 suggest that the trading provisions in the Clean Power Plan and the proposed federal plan are a permissible exercise of the EPA’s authority.