Greenhouse gas dissonance: the history of EPA's regulations and the incongruity of recent legal challenges.

• Author: Moreno, Robert B.

1. INTRODUCTION II. HISTORY OF GREENHOUSE GAS REGULATIONS-WHO WHO INVOLVED AND HOW? A. EPA Issues Legal Opinion Confirming its Authority over Carbon Dioxide B. Bush Administration EPA Disavows GHG Regulation C. D.C. Circuit Upholds Bush EPA's Decision Not to Regulate GHG Emissions From New Motor Vehicles D. The Supreme Court's First Move: Elucidating Parameters Governing Executive Branch Action on GHGs in Massachusetts v. EPA E. Senate Sub-committee Testimony Addresses Uncertainty in a Post-Massachusetts v. EPA World F. EPA Administrator Determines EPA Must Issue Positive Endangerment Finding but OMB Refuses to Open E-mail Containing Proposed Endangerment Finding G. Bush EPA Issues Advanced Notice of Proposed Rulemaking to Solicit Comments on Regulating GHGs Under the Act H. Change of President, Change of EPA Guard: Obama-Appointed EPA Administrator Lisa Jackson Signals GHG Regulation I. The Supreme Court's Second Move: Reaffirming CPA's Authority to Regulate GHGs under the Act in ALP v. Connecticut III. CPA's GHG REGULATIONS AND THEIR UNDERLYING THEMES A. EPA Move Number One: A Science-Based Assessment of Endangerment B. EPA Move Number Two: Improving Fuel Economy with the Vehicle Rule 1. Efficiency of Compliance for Vehicle Manufacturers 2. Benefits for Consumers 3. Improving Energy Security C. EPA Move Number Three: Exempting Small Sources Through the Tailoring Rule D. EPA Move Number Four: Facilitating State Implementation with the Greenhouse Gas SIP Call IV. CHALLENGES TO CPA's RULES ARE DISPROPORTIONATE AND OFTEN DISCONNECTED FROM THESE RULES' ACTUAL IMPACTS A. The Non-Profit Coalition for Responsible Regulation and the Endangerment Finding B. States and the Vehicle Rule C. Large Emitters and the Tailoring Rule D. Texas and the GHG SIP Call V. CURRENT STATE OF THE LITIGATION CHALLENGING THE GHG REGULATIONS VI. CONCLUSION I. INTRODUCTION

   This article analyzes the U.S. Environmental Protection Agency's (EPA) greenhouse gas (GHG) regulations and notes the cognitive dissonance between the temperance of the regulations and the intemperance of the challenges to them. Part II discusses the long history of GHG regulation under the Clean Air Act (CAA or Act), starting from 1998 when then-EPA General Counsel Jonathan Cannon issued a legal opinion concerning the possibility of GHG regulation under the Act and spanning to the present day. This turbulent history, driven by shifting administration policies and a seminal decision of the United States Supreme Court, has set the stage for EPA's current actions to regulate GHGs under the Act. Part III elucidates how this protracted history has resulted in EPA's existing GHG regulations being carefully transparent and based on efficiency. This part specifically evaluates four EPA actions that impact GHG emissions from mobile sources and stationary sources, analyzing the Agency's efficiency-based focus in disparate regulatory spheres. These actions include: 1) the Endangerment Finding--a science based determination that GHGs endanger human health or welfare; 2) the Vehicle Emission Standards--fleet-wide measures designed to reduce GHG emissions from cars and light trucks; 3) the Tailoring Rule--an action designed to smooth implementation of the Act's stationary source requirements and initially, to focus only on the largest sources of GHG emission; and 4) the State Implementation Rules--actions designed to allow sources in states currently lacking the authority to issue GHG permits to nonetheless obtain legally-required permits. Part IV analyzes the disproportionate challenges from various parties seeking to overturn EPA's GHG regulations. This part highlights incongruities in litigants' positions, from states challenging vehicle standards designed to benefit consumers, to large industries challenging regulations designed to exempt small sources from GHG permitting requirements, and finally, to states challenging rules intended to ensure that states have authority to issue legally-required greenhouse gas permits. Part V discusses the current state of EPA's GHG regulations, focusing on the historic GHG litigation currently unfolding in the D.C. Circuit that could ultimately be addressed by the Supreme Court of the United States. Finally, Part VI concludes by attempting to situate the current GHG regulations within the larger spectrum--both regulatory and legislative--of efficiency-focused policies designed to reduce GHG emissions, noting some of the challenges these prospective actions may face in light of the experience with the .current regulations.

2. HISTORY OF GREENHOUSE GAS REGULATIONS--WHO IS INVOLVED AND How?

   Spanning from 1998 to the present, the history of GHG regulation is already long and complex. It is also a story without an ending. Legal challenges to these rules are currently being resolved in the D.C. Circuit and have a good chance of being taken up, at least in part, by the Supreme Court, so it is unclear how and when the GHG story will conclude.

   1. EPA Issues Legal Opinion Confirming its Authority over Carbon Dioxide

      On April 10, 1998, then-EPA General Counsel Jonathan Cannon issued a legal opinion addressing the question of whether EPA possessed the authority to establish pollutant controls for carbon dioxide. (1) The so-called Cannon Memo was prepared at the request of Congressman Tom DeLay. In this five-page memorandum, Cannon concluded that "EPA's regulatory authority under the Clean Air Act extends to air pollutants, which ... are defined broadly under the Act and include" carbon dioxide, the most significant GHG emitted due to human activities. (2) Cannon also noted EPA's nonuse of this authority despite carbon dioxide being putatively within its regulatory ambit, as then-EPA Administrator Carol Browner had not signaled whether EPA would exercise regulatory authority under the Act." (3)

      The Cannon Memo, a diminutive but influential legal opinion, would eventually lead to the regulation of GHG emissions in America. But such regulation would not come quickly. Indeed, no direct regulation of GHGs occurred for more than a decade. (4)

   2. Bush Administration EPA Disavows GHG Regulation

      On October 20, 1999, more than a year after the Cannon Memo, the International Center for Technology Assessment along with eighteen other organizations filed a petition (ICTA Petition) requesting that EPA regulate certain GHGs, namely "carbon dioxide (C[O.sub.2]), methane (C[H.sub.4]), nitrous oxide ([N.sub.2]O), and hydrofluorocarbon (HFC) emissions from new motor vehicles and engines." (5) SEPA received some 50,000 public comments in response to its January 23, 2001 request for public comment on the ICTA Petition, yet the petition laid dormant at the agency for almost four years.

      Finally, on September 8, 2003, President George W. Bush's EPA denied the ICTA Petition. In a direct reversal of the 1998 Cannon Memo, which had been the agency position in the interim, EPA concluded that regulating motor vehicle GHG emissions under the Act was neither permissible nor advisable. (6) EPA proclaimed that:

      [a]fter careful consideration of petitioners' arguments and the public comments, EPA concludes that it cannot and should not regulate GHG emissions from U.S. motor vehicles under the CAA. Based on a thorough review of the CAA, its legislative history, other congressional action and Supreme Court precedent, EPA believes that the CAA does not authorize regulation to address global climate change. Moreover, even if C[O.sub.2] were an air pollutant generally subject to regulation under the CAA, Congress has not authorized the Agency to regulate C[O.sub.2] emissions from motor vehicles to the extent such standards would effectively regulate car and light truck fuel economy, which is governed by a comprehensive statute administered by [the Department of Transportation]. (7) Both policy and legal concerns were given for the agency's denial of the ICTA Petition. The EPA's denial notice asserted that not regulating GHG emissions from motor vehicles dovetailed with President Bush's "comprehensive global climate change policy," which included the need for long-term research on ways to reduce GHGs other than by regulation of motor vehicle emissions. (8) The agency argued that regulating GHG emissions from motor vehicles "would require EPA to make scientific and technical judgments without the benefit of the studies being developed to reduce uncertainties and advance technologies.... [and] would also result in an inefficient, piecemeal approach to addressing the climate change issue." (9) Foreign policy was also implicated, the agency declared, as "[u]nilateral EPA regulation of motor vehicle GHG emissions could also weaken U.S. efforts to persuade key developing countries to reduce the GHG intensity of their economies." (10) Additionally, the denial notice disclaimed any mandatory duty to regulate GHGs, arguing that section 202(a)(1) of the CAA "provides the Administrator with discretionary authority to address emissions in addition to those addressed by other section 202 provisions." (11)

   3. D.C. Circuit Upholds Bush EPA's Decision Not to Regulate GHG Emissions From New Motor Vehicles

      After the EPA's 2003 denial of the ICTA Petition, the consequent petition for judicial review of the denial snaked its way through the courts. First, "twelve states, three cities, an American territory, and numerous environmental organizations" challenged the agency's decision not to regulate GHG emissions from new motor vehicles in the D.C. Circuit Court of Appeals. (12) The D.C. Circuit had exclusive jurisdiction over the issue under CAA section 307(b)(1) because EPA's refusal to promulgate nationally applicable regulations governing motor vehicle GHG emissions in response to petitions constituted final agency action under the Act. (13)

      While the court noted that the Act requires the EPA Administrator to regulate emissions that in his judgment "may reasonably be anticipated to endanger public health...