Four EPA actions found legal
To many observers, the U.S. Supreme Court’s historic 2007 environmental opinion in Massachusetts v. EPA ended the debate over whether greenhouses gases (GHGs) are a pollutant subject to regulation under the Clean Air Act (CAA). But, in fact, major disagreements continued over how the EPA is exercising its authority as affirmed by the high court. Industry and some states launched judicial petitions to a series of federal actions the EPA took to implement the Supreme Court’s ruling. Many of those petitions were consolidated by the U.S. Appeals Court for the D.C. Circuit in Coalition for Responsible Regulation, Inc. et al. v. EPA. In its June 2012 opinion in that case, the D.C. Circuit stated time and time again that it was unmoved by those challenges.
Petitioners had assembled arguments against four EPA actions: the GHG Endangerment Finding, which found that motor-vehicle emissions of GHGs contribute to total GHG air pollution and thus to climate change, which is reasonably anticipated to endanger public health and welfare; the Tailpipe Rule, which set GHG emissions standards for cars and light trucks; the Timing Rule, which stated that an air pollutant becomes subject to regulation under the CAA–and thus subject to the Prevention of Significant Deterioration (PSD) and Title V permitting–only after a regulation requiring control of that pollutant takes effect; and the Tailoring Rule, in which the EPA stated that only the largest stationary sources would initially be subject to the PSD permitting requirements.
In each instance, the D.C. Circuit upheld EPA’s actions. Details follow.
Endangerment Finding
The petitioners challenged the validity of the Endangerment Finding in six areas, including:
- Failure of the EPA to consider the benefits of activities that generate GHGs. The D.C. Circuit noted that the CAA requires that the Endangerment Finding be based only on answers to two questions: whether GHGs may reasonably be anticipated to endanger public health or welfare and whether motor-vehicle emissions cause or contribute to the endangerment. According to the D.C. Circuit, the Supreme Court already described other factors (including the effect of regulation on the president’s ability to negotiate with developing nations) as “policy judgments” that had nothing to do with whether GHG emissions cause or contribute to climate change. Thus, the D.C. Circuit did not agree that the EPA was required to consider the benefits of activities that generate GHGs.
- Weakness of the scientific record on which the EPA based its decision. The D.C. Circuit disagreed, stating that thEPA’s scientific record was substantial and that the Agency may make an endangerment finding in the presence of residual uncertainty. The petitioners also said that by basing its decision on work performed by the Intergovernmental Panel on Climate Change, the U.S. Global Climate Research Program, and the National Research Council, the EPA improperly “delegated” its judgment to these bodies. The D.C. Circuit termed this argument a “semantic trick,” adding that the EPA simply did here what it and other decision makers often must do to make a science-based judgment–it sought out and reviewed existing scientific evidence to determine whether a particular finding was warranted.
- The absence in EPA’s action of a quantification of the risk of endangerment to public health and welfare created by climate change. Specifically, the petitioners charged that the Endangerment Finding is arbitrary and capricious because the EPA did not define, measure, or quantify either the atmospheric concentration at which GHGs endanger public health or welfare, the rate or type of climate change that it anticipates will endanger public health or welfare, or the risks or impacts of climate change. Not so, responded the D.C. Circuit. “[The EPA’s] failure to distill this ocean of evidence into a specific number at which greenhouse gases cause ‘dangerous’ climate change is a function of the precautionary thrust of the CAA and the multivariate and sometimes uncertain nature of climate science, not a sign of arbitrary or capricious decision-making.”
Tailpipe Rule
The primary argument lodged by the petitioners against the Tailpipe Rule was that the EPA acted in an arbitrary and capricious manner by not considering the cost impacts of its conclusion that the rule triggers stationary-source regulation. Had the EPA made such a consideration, the petitioners say, it would have been forced to exclude CO2 from the scope of the emissions standard, to decline to issue GHG emissions standards at all, or to interpret the statute so as not to automatically trigger stationary-source regulation.
The D.C. Circuit notes first that the CAA imposes a nondiscretionary duty on the EPA to prescribe standards for emissions of pollutants from motor vehicles, which may reasonably be anticipated to endanger public health or welfare. This refutes, says the court, the contention by the petitioners that the EPA had the flexibility to defer promulgation of the Tailpipe Rule because it activated the requirement to issue stationary-source permitting requirements under the PSD and Title V programs.
Second, the petitioners contended that the EPA also had the discretion to defer issuing the Tailpipe Rule because the National Highway Transportation Safety Administration (NHTSA) took independent action to regulate fuel economy. The D.C. Circuit referred back to Massachusetts v. EPA, in which the Supreme Court pointed out that the EPA had no license to shirk its duty to issue vehicle emissions standards because the DOT sets mileage standards. In other words, the actions and authority of the NHTSA do not give the EPA the right to either refuse to regulate or defer regulation of tailpipe emissions.
Third, according to the petitioners, the EPA neither quantified the dangers of GHGs nor showed that its required control measures would meaningfully mitigate the alleged endangerment. Here, the D.C. Circuit allied itself with an earlier ruling that rejected an argument that regulations had to be premised on factual proof of harm and instead deferred to EPA’s “reasonable” interpretation that regulations could be based on a significant risk of harm. The D.C. Circuit also cited EPA’s estimate that the Tailpipe Rule would result in a reduction of about 960 million metric tons of CO2-equivalent emissions over the lifetime of model year 2012 to 2016 vehicles affected by the rule. Thus, the court agreed with EPA’s belief that the rule would result in meaningful mitigation.
Fourth, petitioners said that the EPA failed to comply with CAA Section 202(a)(1), which indicates that compliance costs must be considered in the regulation of motor vehicle emissions. The court refuted this by pointing to its own 1979 ruling in Motor & Equip. Mfrs. Ass’n, Inc. v. EPA, which stated that the Section 202(a)(2) reference to compliance costs encompasses only the cost to the motor-vehicle industry to come into compliance with the new emissions standards and does not mandate consideration of costs to other entities not directly subject to the proposed standards.
PSD and Title V
In the Tailoring Rule, the EPA changed the PSD and Title V permitting thresholds from either 100 tons per year (tpy) or 250 tpy of a regulated pollutant, depending on the source category, to 100,000 tpy for a construction project or 75,000 tpy for a modification project. Absent these changes, the Agency explained, state and federal permitting authorities would be overwhelmed with requirements to process permit applications from up to 80,000 sources annually. For each pollutant regulated under the CAA, the PSD program requires that sources install the best available control technology (BACT).
The Tailoring Rule was preceded by EPA’s Timing Rule, in which the Agency concluded that an air pollutant becomes subject to PSD and Title V permitting only after a regulation requiring control of that pollutant (i.e., the Tailpipe Rule) takes effect. The petition also challenged the Timing Rule.
Generally, the petitioners contended that the CAA did not intend the PSD permitting program to apply to GHGs. For example, they stated that the PSD program was written by Congress to cover only emissions that polluted locally, thereby disqualifying global GHG emissions. The D.C. Circuit dismisses this argument by citing statutory text that provides “without qualification” that covered sources must install the BACT for each pollutant subject to regulation under theCAA. “Because greenhouse gases are indisputably a pollutant subject to regulation under the Act, it is crystal clear that PSD permittees must install BACT for greenhouse gases,” stated the court.
The petitioners also submitted that the congressional insertion in the PSD program of the phrase “in each region” indicated a concern about local, not global, effects of air pollution caused by GHGs. The D.C. Circuit first points out that in Massachusetts v. EPA, the Supreme Court rejected a similar argument and emphasized that the CAA uses the phrase “the ambient air” without distinguishing between atmospheric layers.
The D.C. Circuit expands on this by highlighting the congressional declaration of purpose, which provides that the PSD program is intended “to protect public health and welfare from any actual or potential adverse effect from air pollution” (emphasis added). “Nothing in this section limits the PSD program to adverse effects on local air quality,” states the court. “[To] the contrary, the word ‘any’ here gives this clause an ‘expansive meaning,’ which we see ‘no reason to contravene.’”
Perhaps the strongest argument presented by the petitioners is that the intent of the PSD program is to ensure that specific areas of the country are in attainment with the NAAQS criteria air pollutants. Under PSD, any source that emits a threshold amount of a criteria air pollutant must install BACT for each pollutant subject to regulation. But the EPA declined to make GHGs a criteria air pollutant. The key point made here by the petitioners is that sources emitting only threshold amounts of GHGs–but not threshold amounts of a NAAQS criteria air pollutant–should escape PSD permitting requirements.
The D.C. Circuit notes that the petitioner’s argument revolves around an interpretation of the phrase “any pollutant” as it is used to define the term “major emitting facility” in the section of the CAA that describes the PSD program. According to the petitioners, this phrase must mean any NAAQS pollutant, thereby excluding from PSD permitting any facility that emits only GHGs. But the court points to another section of the CAA wherein Congress was explicit in promulgating a “narrow, pollutant-specific definition of ‘any air pollutant.’” The fact that Congress did not provide a similarly narrow meaning for “any air pollutant” for the PSD program indicates to the court that the phrase was meant to be applied broadly. On that basis, the D.C. Circuit rejected the argument that GHGs emissions may not serve as a PSD trigger.
The Tailoring Rule
Finally, the petitioners took issue with EPA’s decision to establish alternative permitting thresholds in the Tailoring Rule, an action, they claimed, that5 exceeded the Agency’s authority. The D.C. Circuit rejected this contention on multiple grounds. Mainly, the court said that the argument fails because the petitioners cannot show that the Tailoring Rule caused them “injury in fact,” which the court reminds us is needed to establish standing in a judicial petition.
“Indeed, the Timing and Tailoring Rules actually mitigate Petitioners’ purported injuries,” the court states. “Without the Tailoring Rule, an even greater number of industry and state-owned sources would be subject to PSD and Title V, and state authorities would be overwhelmed with millions of additional permit applications. Thus, Petitioners have failed to ‘show that, absent the government’s allegedly unlawful actions, there is a substantial probability that they would not be injured and that, if the court affords the relief requested, the injury will be removed.’ If anything, vacatur of the Tailoring Rule would significantly exacerbate Petitioners’ injuries.”
Read the D.C. Circuit’s opinion in Coalition for Responsible Regulation, Inc. et al. v. EPA.
William C. Schillaci
BSchillaci@blr.com