Wednesday, June 27, 2012

D.C. Circuit Upholds EPA Greenhouse Gas Regulations

Yesterday the D.C. Circuit rejected a challenge by industry groups to the U.S. EPA's regulation of stationary sources' greenhouse gas emissions under the Clean Air Act.  The D.C. Circuit summarizes its opinion as follows:

Following the Supreme Court’s decision in Massachusetts v. EPA, 549 U.S. 497 (2007)—which clarified that greenhouse gases are an “air pollutant” subject to regulation under the Clean Air Act (CAA)—the Environmental Protection Agency promulgated a series of greenhouse gas-related rules. First, EPA issued an Endangerment Finding, in which it determined that greenhouse gases may “reasonably be anticipated to endanger public health or welfare.” See 42 U.S.C. § 7521(a)(1). Next, it issued the Tailpipe Rule, which set emission standards for cars and light trucks. Finally, EPA determined that the CAA requires major stationary sources of greenhouse gases to obtain construction and operating permits. But because immediate regulation of all such sources would result in overwhelming permitting burdens on permitting authorities and sources, EPA issued the Timing and Tailoring Rules, in which it determined that only the largest stationary sources would initially be subject to permitting requirements.

Petitioners, various states and industry groups, challenge all these rules, arguing that they are based on improper constructions of the CAA and are otherwise arbitrary and capricious. But for the reasons set forth below, we conclude: 1) the Endangerment Finding and Tailpipe Rule are neither arbitrary nor capricious; 2) EPA’s interpretation of the governing CAA provisions is unambiguously correct; and 3) no petitioner has standing to challenge the Timing and Tailoring Rules. We thus dismiss for lack of jurisdiction all petitions for review of the Timing and Tailoring Rules, and deny the remainder of the petitions.

Ann Carlson has provided an excellent overview of the opinion in its broader context and a discussion of standing issues.  The opinion is also interesting when viewed as an example of climate change litigation's role in shaping the U.S. regulatory path (an issue that has long been of interest to me and on which I'm doing some new comparative work with Jacqueline Peel of the University of Melbourne).  In the context of these regulations in particular, the courts have repeatedly served in multiple roles.  The U.S. Supreme Court, through its finding in Massachusetts v. EPA that the EPA abused its discretion in its approach to failing to regulate greenhouse gases, engaged in statutory interpretation which served as the basis for EPA's subsequent action.  The Court reinforced the appropriateness of ongoing litigation over EPA's use of its regulatory authority in this context while closing the federal public nuisance pathway in AEP v. Connecticut.  In this case, the D.C. Circuit helped to resolve such a challenge and further clarify standing issues; time will tell whether an en banc D.C. Circuit or the Supreme Court will uphold this resolution if there are further appeals.  Moreover, this decision occurs in the context of a wide range of other lawsuits regarding climate change, some focused directly on regulation and many others on building/expanding/permitting coal-fired power plants.  Especially because the Congress looks unlikely to pass comprehensive climate change litigation anytime soon, these lawsuits play a critical role in constituting and shaping the U.S. regulatory approach to this problem in general and in clarifying the Clean Air Act's role in particular.

Hari Osofsky

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