Abstract

Through the imposition of mandates on what sorts of energy may be produced or sold, state regulatory efforts have imposed burdens on interstate energy markets. In some cases, these burdens are explicit, as when states have privileged in-state energy sources at the expense of out-of-state producers or sellers. In other cases, these burdens are the inevitable consequence of state efforts to reduce the environmental impacts of energy consumed within the state. Such restrictions, and their associated burdens on interstate commerce, raise serious constitutional questions. Under the so-called "Dormant Commerce Clause," state regulations that discriminate against out-of-state actors are presumptively unconstitutional, as are state regulations that seek to extra-territorialize a state’s regulatory choices. Even purportedly nondiscriminatory measures may be suspect if they impose an excessive burden on interstate commerce in relation to the in-state benefits they produce.

Advocates of these policies argue that such effects are the necessary consequence of state efforts to reduce GHG [green house gas] emissions. Climate change, after all, is a “super wicked” problem, and GHG emissions are ubiquitous. Mitigating the threat of climate change requires aggressive measures, including the comprehensive regulation of energy production, distribution, and use. If states are to be effective in trying to address climate change, advocates argue that incidental burdens on interstate commerce are inevitable. Yet, given that climate change is a global problem, no state on its own has the ability to have any meaningful effect on projected changes to the earth’s climate. Even if every state in the nation were to adopt these sorts of policies, projections of future warming due to anthropogenic emissions of GHGs would remain largely unchanged. Nevertheless, should every state adopt such policies, the nation’s energy markets could become quite balkanized. Whether states can proceed on their current course will be determined by courts’ willingness to enforce traditional constitutional constraints on discriminatory and extraterritorial state legislation.

Part I of this Article briefly surveys the state role in energy regulation. Part II outlines the constitutional constraints that may limit such regulation by states, including the Dormant Commerce Clause. Part III discusses how courts have applied the Dormant Commerce Clause to energy-related regulation by states. Part IV looks at contemporary state policies that may raise particular Dormant Commerce Clause concerns due to privileging in-state interests and discriminating against out-of-state energy producers. In the end, the extent to which the Dormant Commerce Clause constrains state energy and climate policies will depend upon the level of enthusiasm the Supreme Court retains for enforcing traditional norms against anti-competitive state action.

This abstract has been adapted from the author's introduction.

Document Type

Article

Publication Date

Fall 2014

Publication Information

3 LSU Journal of Energy Law and Resources 153-193 (2014)

Comments

Written for the forum "Energy Policy: Political, Legal, and Economic Issues" (2013) at Lone Mountain Ranch.

Download

Share

COinS