A Cost-Benefit Analysis–Based Interpretation of Reciprocity Under Clean Air Act Section 115(c)

Section 115 of the Clean Air Act provides for the regulation of international pollutants, and has been considered as a potential source of authority for regulating greenhouse gas emissions. In order to trigger the authority of the Environmental Protection Agency (“EPA”) to regulate under Section 115, EPA’s Administrator must determine that the relevant foreign countries have given the United States “essentially the same rights” as Section 115 gives those countries. This Note proposes a novel interpretation of this reciprocity requirement based on cost-benefit analysis (“CBA”). On this CBA-based interpretation, the reciprocity requirement is satisfied where the benefits that the United States receives from all countries’ emission reductions outweigh the costs of reducing its own emissions.

The CBA-based interpretation is consistent with trends in administrative law toward requiring agencies to consider the costs and benefits of regulation, and with a plausible reading of Section 115 as giving foreign countries the right to mutually beneficial emission reductions. The CBA-based interpretation also has legal and policy advantages: it may help avert challenges to regulation of greenhouse gas emissions under Section 115 based on the major questions doctrine, it may show that climate regulation is cost justified based on domestic climate benefits even if ancillary benefits and foreign benefits are not considered, and it may represent a rational strategy for approaching international environmental negotiations that could lead to an efficient outcome in the case of climate change if adopted by all parties.

This Note illustrates the CBA-based interpretation of reciprocity by applying it to the United States’ pledge under the Paris Climate Agreement.