The U.S. Supreme Court has agreed to hear an important case challenging the EPA’s authority to regulate greenhouse gas emissions from new and modified major stationary sources under the Clean Air Act (CAA).
In April 2007, the U.S. Supreme Court ruled in Massachusetts v. EPA, 549 U.S. 497 (2007), that greenhouse gases (GHG), including carbon dioxide, are “air pollutants” that can be regulated by EPA under the CAA. The court further ruled that the EPA was required to determine whether emissions of GHGs from new motor vehicles cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare. The EPA subsequently made such an endangerment finding. Once EPA issued the endangerment finding, it promulgated GHG standards for light-duty vehicles – the “tailpipe rule.”
This in turn triggered CAA permitting requirements for stationary sources since the EPA has typically expanded its regulation of any single type of air pollution to all that pollution’s sources. The EPA argues the plain language of the CAA necessitates this expansion of power because the agency is to regulate “any air pollutant.”
This power – EPA’s ability to jump from regulating one source (vehicles) of a specific air pollutant (GHGs) to all sources of GHGs (including stationary sources such as power plants and factories) is what the court is taking up. The Court has phrased the question in this way:
“Whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.”
The question under review actually has two possible interpretations, one broader than the other. As the legal filings in the case are sent in over the next few months, lawyers on both sides probably will make arguments on both variations.
The broad version is whether EPA can bootstrap regulation of one form of air pollution into authority to issue rules for all — that is, the broad policy that dates from 1980. If the Court gives a clear-cut answer to that sweeping question, it would either significantly enhance EPA’s global warming powers, or sharply curtail them.
The narrower version is whether EPA was allowed even to use the “trigger” to start regulating stationary sources, since it did so only after claiming the power to modify the threshold for air pollution that the Clean Air Act spells out if stationary sources are to be put under federal controls at all.
The Act explicitly says that such sources must get permits from EPA if they put out 250 tons of a pollutant every year, for larger entities, or 100 tons a year, for smaller ones. Permits are required to build a new stationary source, or change an existing one in a significant way, or to continue operating a “major source.” EPA said that, if it used that threshold, it would expand the number of facilities it would be regulating far beyond what Congress intended, from 15,000 to 6.1 million, costing it $22.5 billion in paperwork, and costing industry many more billions to comply. So EPA set the thresholds at 100,000 tons a year for large sources and 75,000 for smaller ones.
If the Court were to find that EPA should not have made that change, it could undercut EPA’s current program for regulating stationary sources, and at least pose a major policy dilemma on what to do. The thresholds set in the Act itself would oblige EPA to regulate even apartment buildings or hospitals, for example, because they usually do emit beyond the threshold. If, however, the Court were to allow that switch, then EPA could proceed as it planned, and pare down the regulatory regime to a manageable level.
Notably, the Court chose not to hear challenges to EPA’s endangerment finding or the tailpipe rule. The Court’s decision not to take up these related issues typically means the Court views these points of law as settled.
The law firm Van Ness Feldman adds:
…a Supreme Court decision confined exclusively to EPA’s authority under the PSD permitting provisions of the Clean Air Act appears unlikely to affect EPA’s more recent initiatives to establish GHG performance standards for power plants. The latter initiatives are based on the agency’s authority under a wholly separate provision of the Act: section 111… These section 111 standards are different from the PSD permitting requirements that are subject to review in the Supreme Court. To be sure, some element of a Supreme Court decision on the PSD provisions could impose a new wrinkle, requirement, or limitation that would impact EPA’s section 111 rules, but such impacts are difficult to anticipate from the relatively narrow question on which the Court granted certiorari.
Wisconsin Manufacturers and Commerce is participating in this case as a challenger to the EPA regulations.