The future direction of climate change regulation in the United States will turn on the decision of the U.S. Court of Appeals for the District Court of Columbia (D.C. Circuit) following two days of oral argument.  A decision is expected as soon as this June..  There is no doubt that this may be the most significant environmental decision since the Supreme Court’s ruling in Massachusetts v. EPA in which the Court determined CO2 and other greenhouse gases (GHGs) were a "pollutant" under the Clean Air Act.

EPA Climate Change Strategy

Following the Supreme Court’s decision, EPA launched a major regulatory effort pertaining to control and reduction of greenhouse gases. Those regulations include:

  • Endangerment Finding-  EPA’s determination that GHGs are a threat to public health and welfare and, therefore, should be regulated under the Clean Air Act
  • Tailpipe Rule- establishes GHG emission standards for light-duty vehicles
  • Application of GHG to federal permitting requirements– inclusion of GHGs as a pollutant to be considered in federal permitting such as New Source Review (NSR)
  • "Tailoring Rule"–  EPA’s attempt to reduce the number of sources covered under the federal permitting requirements for GHGs by raising the trigger thresholds

All of the industry challenges to U.S. EPA’s major rulemaking efforts were consolidated into a single appeal- Coalition for Responsible Regulation Inc. v. EPA.  The coalition includes oil & gas, manufacturing, construction, chemical industry, other industry and select states. 

The two most significant challenges relate to the Endangerment Finding and EPA’s Tailoring Rule.

Argument Involving the Endangerment Finding

In order for EPA to regulate GHGs through tailpipe emission standards, the Agency first had to make the determination that GHGs threaten public health and welfare. (i.e. the "Endangerment Finding").  The Coalition challenged EPA finding which goes to the core of whether EPA should be regulating GHGs under the Clean Air Act.

Comments from the Judges during the argument would suggest that industry has an uphill battle in successfully challenging EPA’s decision. 

The attorney representing the Chamber argued that EPA should have considered the fact that people will simply adapt by migrating to cooler climates.  He argued that if people migrate there may be no danger to public health. 

Judge Tatel responded "How can the they [EPA] predict that migration patterns would be sufficient to overcome danger."  He also suggested that under the theory offered, EPA shouldn’t regulate pollutants as a carcinogen because some day there may be a cure for cancer.

 It seems unlikely the Court is going to second guess the Agency’s evaluation of the science behind the endangerment finding.

Arguments over Tailoring Rule

 If the challenge to the Endangerment finding goes at the science behind EPA’s regulations, the challenge to EPA’s tailoring rule goes to how the Agency proposes to implement its regulations.  As discussed on this blog before, while the challenge to EPA Tailoring Rule may be strong, it is a high-stakes gamble due to the uncertainty if the Coalition wins.

The argument is strong because the Clean Air Act itself contains the trigger for when a emissions of a pollutant are high enough to fall under federal air permitting regulations such as NSR.  The standard is 250 tons per year.

If 250 tons per year were to be applied to GHGs, thousands of sources would be regulated.  Even office buildings could require a federal air permit due to their energy use. 

EPA recognizing the "absurd" results of using the 250 ton per year threshold for GHGs, tailored the trigger level through rulemaking.  EPA said it will only initially regulate sources that emit between 75,000 to 100,000 tons per year of GHGs.  EPA said overtime it would slowly ratchet down the trigger level through rulemaking until it is in sync with the 250 tons per year standard appearing in the Clean Air Act.

The Coalition lawyers argued that EPA’s attempt to re-write the Clean Air Act was clear evidence the Act was not suited to regulate GHGs.  The Coalition argued the EPA re-write was illegal and should be thrown out.

Judge Sentelle said in response " The harm you allege is regulatory burden.  The remedy you seek is a heavier regulatory burden.  That doesn’t even make good nonsense."

High Stakes Gamble

The Coalition may be on the right side of the law when it says EPA does not have the power to rewrite the Clean Air Act.  However, they are gambling that this will force Congress to Act to address the Supreme Court’s decision in Massachusetts v. EPA.  The Coalition wants Congress to remove GHGs as a pollutant under the Clean Air Act.

With gridlock in Washington it just seems very unlikely that this will happen.  What could be left if the challenge to EPA’s Tailoring Rule is successful, is a 250 ton per year standard that applies to GHGs.  This is something even the EPA was desperately trying to avoid.