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Will U.S.Supreme Court Review EPA’s Greenhouse Gas Regulations?

Marlo Lewis,

The EPA’s greenhouse regulatory surge is not yet ‘settled law.’ Recent strong dissenting opinions by two D.C. Circuit Court of Appeals judges may persuade the Supreme Court to review one or more of the agency’s GHG rules.

Powerful dissenting opinions can sometimes persuade a higher court to review a lower court’s ruling. Massachusetts v. EPA (2007), the Supreme Court decision empowering the EPA to act as a super legislature and ‘enact’ climate policy, is a prime example.

In 2005, the D.C. Circuit Court of Appeals held that the Bush administration EPA properly exercised its discretion when it denied a petition by eco-litigation groups to regulate greenhouse gas (GHG) emissions from new motor vehicles under §202 of the Clean Air Act (CAA). I remember feeling relieved but disappointed. The 2-1 majority ducked the central issue, namely, whether the CAA authorizes the EPA to regulate GHGs as climate change agents. In contrast, Judge David Tatel’s dissent made a strong argument that the EPA does have the power to regulate GHGs and, consequently, has a duty to determine whether GHG emissions endanger public health or welfare. Tatel’s opinion was a key factor persuading the Supreme Court to hear the case.

The Court in Massachusetts ruled in favor of petitioners, setting the stage for the EPA’songoing, ever-expanding regulation of GHG emissions from both mobile and stationary sources.

The EPA’s greenhouse regulatory surge, however, is not yet ‘settled law.’ Recent strong dissenting opinions by two D.C. Circuit Court of Appeals judges may persuade the Supreme Court to review one or more of the agency’s GHG rules — or even reassess its ruling in Mass. v. EPA.

Mass. v. EPA and its Aftermath: A Refresher

In Mass. v. EPA, the Supreme Court ruled that: (1) GHGs are “air pollutants” for regulatory purposes under the CAA; (2) the EPA must determine whether GHG emissions endanger public health and welfare (unless the agency provides statutory reasons why it cannot or will not undertake such an analysis); and (3) the agency must regulate GHG emissions from new motor vehicles if it determines such emissions endanger public health or welfare.

The rest, as they say, is history. The EPA issued its endangerment determination in December 2009, compelling itself to regulate GHG emissions from new cars, and in May 2010, issued itsGHG tailpipe rule. The EPA has long held that once any air pollutant from any source is regulated under any part of the CAA, major stationary sources become “subject to regulation” under the Act’s Title I Prevention of Significant Deterioration (PSD) pre-construction permitting program and Title V operating permits program. The EPA reaffirmed that interpretation in its April 2010 triggering rule.

Those rules, however, threatened to create a politically-explosive administrative quagmire. Literally millions of non-industrial facilities emit enough carbon dioxide (CO2) to qualify as “major” sources under the Act’s statutory definitions (250 tons per year for PSD, 100 tons per year for Title V). The EPA estimated that applying the Act’s permitting programs to GHGs under the statutory definitions of “major” source would require the EPA and its state counterparts to process an estimated 81,000 PSD permits annually (instead of 280) and 6.1 million Title V permits annually (instead of 15,000). To handle this workload, agencies would have to hire an additional 320,000 full-time employees at a cost of $21 billion per year. Otherwise, ever-growing bottlenecks and delays would paralyze environmental enforcement and economic development alike.

To avoid such “absurd results,” the EPA in July 2010 issued a tailoring rule exempting small CO2 emitters from the permitting programs. The rule decrees that for GHGs, a “major” source is one that emits 100,000 tons per year, not 100/250 tons per year, as specified for “air pollutants” in the statute. Although agencies should have some interpretative discretion when statutory language is ambiguous, there is nothing unclear about “100 tons” or “250 tons”.Tailoring is bureauspeak for amending. The irony, of which the EPA seems unaware, is that tailoring is itself an “absurd result,” because agencies have no power under the U.S. Constitution to amend statutes.

In 2011 a coalition of industry groups, states, and non-profits petitioned the D.C. Circuit Court of Appeals to overturn all four GHG rules: endangerment, tailpipe, triggering, and tailoring. In June 2012, a 3-judge panel decided the case, Coalition for Responsible Regulation v. EPA, in favor of the agency, upholding all four GHG rules. In August, coalition members petitioned for an en banc (full court) rehearingOn December 20, the court voted 5-2 to deny the petitions. However, the dissenting opinions of Judges Janice Rogers Brown and Brett Kavanaugh are so cogently argued that the Supreme Court may decide to review the case. The Court might even reassess its ruling in Mass. v. EPA.

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