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DC Circuit Court Upholds GHG Regulations (7/9/12)

On June 26th, the DC Circuit Court settled a series of lawsuits against EPA, essentially supporting some of EPA’s recent greenhouse gas (GHG) regulations. The plaintiffs, including various state agencies and environmental and industrial groups, filed petitions for review of the recent EPA actions, including the GHG Endangerment Finding, the Tailpipe Rule and the Timing and Tailoring Rules. Although not involved in this case, the court decision also reaffirms EPA’s recent GHG regulations under the New Source Performance Standards.

Central to this decision was EPA’s Endangerment Finding (2009), which found that CO 2 and other GHGs were considered an endangerment to public health. Although the Endangerment Finding was a consequence of the 2008 Supreme Court decision regarding legality of GHG regulation for motor vehicles, it essentially clarified the definition of an “air pollutant” under the CAA and established the basis for GHG regulations for stationary sources under the Prevention of Significant Deterioration (PSD) and the Title V permitting programs. The first of these regulations, known as the “Timing Rule” clarified that major sources of GHGs would be subject to PSD and Title V requirements beginning on January 2, 2011. The second of these regulations, known as the “Tailoring Rule” limited the initial scope of the regulations to the larger emitters with the intent of reducing the permitting burden.

In their petitions, state and industry petitioners rejected the Endangerment Finding, citing several issues such as inadequate supporting data, failure to quantify public health risks, and a fundamental misinterpretation of the CAA 202(a)(1), which provides the statutory link between GHG regulation and the Endangerment Finding. In the ruling, the DC Circuit Court rejected all of these arguments and found that the Endangerment Finding was wholly consistent with the requirements of the 2008 Supreme Court directive and CAA. On the key issue of the supporting scientific data, the Court rejected industry arguments that there is too much uncertainty in the correlations between GHG emissions and indicators of global climate change to support GHG regulation. Instead, the Court found that such uncertainty is overruled by the need to protect public health, particularly if the supporting evidence is “difficult to come by, uncertain, or conflicting because it is on the frontiers of scientific knowledge.”

The Court also agreed with EPA’s interpretation of the PSD and Title V permitting trigger. Following the Endangerment Finding, EPA issued the “Tailpipe Rule”, which set first-ever emissions standards for cars and trucks. Because this action caused GHGs to be considered a “regulated pollutant” under the CAA, EPA interpreted this to trigger GHG permitting actions for stationary sources under the PSD and Title V permitting programs since these programs also rely on the same statutory definition of an “air pollutant”.

Finally, the Court dismissed all challenges to the Tailoring Rule, which clarifies the statutory threshold for GHG permitting actions, on the basis of the legal standing of the petitions without further consideration of the merits of the case. The Court stated that petitioners did not adequately demonstrate that they would have been harmed by the rule and, therefore, could not challenge the constitutionality of the rule.

The Court’s ruling is a significant blow to those attempts to undercut the foundation of existing and future GHG regulations. Petitioners will likely take the case to the Supreme seek or request to have the case heard en banc from the full panel of DC Circuit Court judges. However, a rehearing is unlikely given the unanimous ruling. Without further action, this decision suggests that the future of GHG regulations will ultimately be determined through litigation on rule-by-rule basis. A copy of the ruling can be found in our FTP library.

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Last Revised: February 16, 2016