Introduction

Generally, the avenues for Greenhouse Gas (GHG) regulation under the Clean Air Act (CAA) fall into three basic categories:

1. mobile source standards (i.e. transportation);
2. stationary source standards (i.e. residential houses, commerical buildings); and
3. ozone protection.

The CAA is not a suitable policy framework for reducing GHG pollution, an inconvenient truth that lends credo to Justice Scalia dissenting argument that the CAA was originally intended to regulate local, not global, pollution levels.^[1] Nonetheless, flexibility in the CAA framework in conjunction with political willpower create many statutory opportunities to address global climate change

Mobile Sources

Mobile sources are an immense contributor of GHGs, and the program is expected to reap reduced GHG emissions, reduced national oil consumption, cost-savings over the vehicle’s lifespan, a positive cost-benefit ratio, and long-term health benefits.

EPA/NHTSA Joint Fuel Economy Standards

According to CAA § 202(a)(1):

“The Administrator shall by regulation prescribe...standards applicable to the emission of any air pollutant from any class or classes of new motor vehicles or...engines, which in [her] judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare.”^[2]

Therefore, in September 2009 the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) and EPA jointly proposed a rule addressing the NHTSA’s Corporate Average Fuel Economy (CAFE) standards for vehicle model years 2012 through 2016.^[3] The rule was finalized on April 1, 2010, satisfying the requirement of the Energy Policy and Conservation Act that CAFE regulations be in place 18 months prior to model year 2012 vehicles beginning production.^[4]

The new standards are expected to boost the combined average fuel economy of new passenger cars and light trucks from today’s 26.4 mpg up to approximately 34.1 mpg.^[5] Most significantly, the standards set the first national GHG tailpipe emissions standard for vehicles at 250 grams/mile, which is approximately 25 percent less than the 2010 vehicle fleet average.^[6],^[7]

According to the EPA:

“Mobile sources emitted 31 percent of all U.S. GHG emissions in 2007 (transportation sources… account for 28 percent) and have been the fastest-growing source of U.S. GHG emissions since 1990[.] Mobile sources addressed in the recent endangerment and contribution findings under CAA section 202(a)… account[s] for 23 percent of all U.S. GHG in 2007[.]... Light-duty vehicles… are responsible for nearly 60 percent of all mobile source GHGs and over 70 percent of Section 202(a) mobile source GHGs. …[I]n 2007, CO2 emissions represent about 94 percent of total greenhouse emissions (including HFCs), and the CO2 emissions measured by EPA fuel economy compliance tests represent about 90 percent of all greenhouse gas emissions[.]”^[8]

Under the new program, the EPA will regulate GHG emissions under the CAA, and the NHTSA will regulate fuel economy under the Energy Policy and Conservation Act of 1975 (EPCA) (as amended by the Energy Independence and Security Act of 2007).^[9] Because vehicle GHG emissions are technically related to fuel consumption, the overlapping nature requires that the two agencies to work closely and collaboratively in setting their respective standards. The EPA’s standards call for a fleet-wide level of 250 grams/mile of CO₂ by model year 2016, which could be partially met through credits from improved air conditioning operation.^[10] The technology to meet these mandates currently exists “off the shelf,” and is hindered only by political and economic barriers.^[11]

The regulations are designed to be both aggressive and achievable, providing numerous “program flexibilities” that permit manufacturers to use a system of “averaging, banking, and trading (ABT)” credits to meet compliance in the early years of the program.^[12]

The danger exists, of course, that these tools can erode the efficiency of the regulations without the proper oversight. It is critical that the manufacturer, the EPA, and the NHTSA work closely and openly throughout the duration of the program in 2016.^[13]

Looking forward, several sections of the CAA would permit regulation of GHGs from marine shipping vessels,^[14] aircraft,^[15] and non-road vehicles and engines.^[16]

Hazardous Air Pollutants (HAPs)

This section was designed to address the direct acute health impacts of ozone and particulate matter, a much different type of threat than the indirect harms posed by GHG emissions.^[17] It remains questionable whether the EPA Administrator can add GHGs to the list of HAPs, under § 112(b)(2).^[18]

Mobile HAPs are regulated under § 202(l), but the EPA had not included GHGs on the 1990 list of HAPs. CAA § 202(a)(3)(B) limits how the EPA Administrator may revise these standards, allowing her to change only those standards that were proclaimed prior to the 1990 CAA amendments. Since there were no GHG standards at that time, the Mobile HAP section cannot be used to control mobile GHG emissions.

Although most GHGs are beyond HAP regulation, both heavy-duty and light-duty vehicles are subject to hydrocarbon, carbon monoxide, and NO_x regulation under CAA Sections 202(a)(3)(B) and 202(g)-(h), respectively.

CAA § 112 of the CAA provides a list of 189 HAPs, among which CO₂ is excluded. Specifically, CAA § 112(b)(2) allows the EPA to add “pollutants which present, or may present, through inhalation or other routes of exposure, a threat of adverse human health effects… or adverse environmental effects whether through ambient concentrations, bioaccumulation, deposition, or otherwise.”

Stationary Sources

PSD & Title V Permitting

Title I of the Clean Air Act requires an appropriate level of best available control technology (BACT)^[19] under the Prevention of Significant Deterioration (PSD) program,^[20] and may subject a “major” stationary source^[21] of pollution to Title V preconstruction permitting requirements.^[22]

Under the PSD program, BACT is required for “each regulated NSR pollutant,”^[23] which has been interpreted to include “[a]ny pollutant otherwise subject to regulation under the Act.” ^[24]

The endangerment and cause or contribute findings do not automatically trigger stationary source GHG permits under PSD, but rather they fulfill a jurisdictional mandate under § 165. According to § 165(a)(4):

“[T]he proposed facility is subject to best available control technology for each pollutant subject to regulation under this chapter emitted from, or which results from, such facility.”^[25]

In view of the forthcoming EPA/NHTSA CAFE standards, GHGs including CO₂ will soon become “subject to regulation” for purposes of the PSD and Title V permit programs. Regulation of CO₂ under § 202 necessarily triggers mandatory stationary source CO2 regulation under § 165. However, at the time that the EPA finalized the endangerment and cause or contribute findings it publicly stated that it did not interpret the PSD program provisions to apply to GHGs, although it did acknowledge the potential for such developments.^[26]

The fact that GHGs (especially CO2) are emitted in much greater quantities than conventional pollutants means that many small, previously unregulated sources could come within PSD and Title V permitting.^[27] To address the problems posed by regulating CO2 under PSD, the EPA proposed a “tailoring rule” to limit the number of “sources” within PSD and Title V jurisdiction.^[28]

PSD & Title V Tailoring Rule

In September 2009 the EPA proposed a “tailoring rule” to clarify the major source applicability thresholds for GHG emissions under the PSD and Title V programs.^[29] The administrative burdens of regulating every car, business, and farmer would cause severe disruption to the existing programs. Therefore, it is necessary to apply a common-sense approach to changing the major source thresholds.

The EPA proposed that the PSD and Title V major source threshold be raised to 25,000 tons/yr CO2e, an approximately ten-fold increase.^[30],^[31] Facilities above these levels still must obtain permits.^[32]

The EPA is still accepting comments on the rule, and has explained its justification for choosing the proposed levels as the lowest level that it is possible to administer in the next six years.^[33] It reasoned that at proposed levels, GHG regulations would add a manageable workload to permitting authorities, but going lower would create too many sources, and going higher would not result in enough coverage.

Although the tailoring rule defies existing statutory thresholds it is permitted to do so under two separate legal bases; “absurd results” and “administrative necessity.” A statutory requirement need not be applied literally if doing so would result in “absurd results” that are contrary to congressional intent.^[34]

Applying the PSD and Title V statutory thresholds literally would be a classic example of an “absurd result” because it would sweep unprecedented numbers of small sources that Congress did not intend be included into the two permitting programs, resulting in administrative burdens that would prevent the State permitting authorities from permitting the larger sources that Congress intended to regulate.^[35]

Similarly, a statutory requirement need not be applied literally if it would be impossible for the agency to administer it. Applying the PSD and Title V statutory thresholds would create impossible administrative burdens for the State permitting agencies.^[36],^[37]

National Ambient Air Quality Standards (NAAQS)

CAA Section 108(a)(1) requires the EPA to issue air quality criteria for air pollutants that:

• (A) cause endangerment to public health or welfare;
• (B) are from numerous and diverse sources or; and
• (C) are pollutants “for which [the Administrator] plans to issue air quality criteria under this section.”^[38]

The Administrator must accordingly then publish simultaneously with the issuance of such criteria pollutants, proposed national ambient air quality standards (NAAQS).^[39]

The endangerment findings list 6 criteria pollutants, satisfying § 108(a)(1)(A), while Administrator Jackson’s response to the Johnson Memorandum satisfies § 108(a)(1)(C).

The next step is to set the NAAQS for the 6 criteria pollutants at the level of pollution that will still protect the public health and welfare.^[40] After the proclamation of NAAQS, the states must develop and submit to the EPA State Implementation Plans (SIPS) delineating how the state will meet the primary standards set in § 109.^[41] However, given the global, evenly-mixed nature of GHGs, it may be problematic to set a reasonable GHG NAAQS threshold. If the NAAQS are set above the current atmospheric CO2 concentration, then the entire country is automatically in attainment, thus triggering PSD.^[42] The PSD program mandates the application of BACT which requires that each emission limitation be based on the maximum degree of reduction of each pollutant, while also considering economic impacts.^[43] Thus, the relatively low technological standard of BACT is unlikely to make a significant impact in curbing domestic GHG emissions from stationary sources.

A similar problem results if the NAAQS are set above the current atmospheric concentration, thus forcing the entire country into nonattainment. Given the requirement that areas not in attainment utilize technology designed to achieve the “lowest achievable emissions rate” (LAER), such a designation would require every emitting source to demonstrate technology reflecting “(a) the most stringent emission limitation which is contained in the implementation plan of any State for such class or category of source, unless the owner or operator of the proposed source demonstrates that such limitations are not achievable, or (B) the most stringent emissions limitation which is achieved in practice by such class or category of source, whichever is more stringent.”^[44]

Unfortunately this is problematic because the technology does not currently exist to put the entire country into attainment, and NAAQS thus creates an unworkable scenario.

A potential solution to this rests in research concerning “CO2 domes” over cities. According to Stanford University Professor of civil and environmental engineering Mark Z. Jacobson, extremely high, localized concentrations of CO2 and other GHGs form “CO2 domes” over urban areas and create acute health risks.^[45] Thus, if the NAAQS threshold is set such that some areas are in attainment and some are not, the program could effectively regulate GHGs by regulating only those areas that are most culpable.

One practical problem with setting NAAQS is that it can take a very long time from issuance of standards to promulgation of regulations. Since 1970 only one pollutant, lead, has been added to the NAAQS program.^[46] Contrast the list of hazardous pollutants under CAA § 112, which has grown from just 3 pollutants in 1973 to nearly 200 hazardous air pollutants after the 1990 CAA Amendments.^[47] Although avenues for CO2 regulation exist under the NAAQS program, the practical constraints limit its actual implementation.

Section 111 New Source Performance Standards

CAA § 111 New Source Performance Standards (hereafter “NSPS”) could feasibly be implemented to regulate GHGs among major stationary source emitters. Under NSPS, the EPA sets national emissions standards for new stationary sources based on “best demonstrated technology” (hereafter “BSD”) rather than ambient air quality.^[48]

The standards are designated for over 70 categories of industrial sources including power plants, and are consistent across the Unites States. Further, NSPS does not apply only to new sources; many modifications and reconstructions are covered as well.^[49]

The individual States are responsible for setting the standards in accordance with the EPA’s NSPSs, and are afforded considerable flexibility. This feature makes it appealing way to regulate GHGs from the perspective of many industry sectors.

A cap-and-trade program may potentially be authorized under § 111. Many proponents argue that such a market-based system would lower compliance costs and achieve a high level of emissions reductions, mainly due to the extreme flexibility it provides. However, not all regulated entities agree and challenges will be likely.

The EPA had once before promulgated a cap-and-trade program for mercury under § 111.^[50] The program was overturned, but there remain unexplored legal avenues that may allow for a cap-and-trade program for future GHG emissions.^[51]

Regardless of whether a standards-based or a market-based system is used, the degree of GHG reductions under §111 will depend on available technologies and other considerations, including cost. Choosing the levels of performance standards would be very important, and very contentious.

Stratospheric Ozone Protection

CAA § 602(a) allows the EPA to regulate substances that “cause[] or contribute[] significantly to harmful effects on the stratospheric ozone layer.” The EPA must therefore determine and publish the global warming potential (GWP) for the criteria GHG pollutants.^[52] However, § 602(e) specifically states that the publishing of the GWP of a listed substance “shall not be construed to be the basis of any additional regulation under this chapter.” Thus, it is unlikely that GHGs will be regulated under CAA Title VI- Stratospheric Ozone Protection.

Mandatory Greenhouse Gas Reporting Rule

In October 2009 the EPA finalized the first-ever mandatory GHG reporting requirement, calling on 31 targeted industries (covering 85 % of total U.S. GHG emissions) to track and report their emissions.^[53] The intent is to collect accurate and timely emissions data to form a baseline to help inform future policy decisions. Currently, suppliers of fossil fuels or industrial greenhouse gases, manufacturers of vehicles and engines, and facilities that emit 25,000 metric tons or more per year of GHG emissions are required to submit annual reports to EPA.^[54]

On March 22, 2010, Administrator Jackson signed new proposed rules that amend the Mandatory Greenhouse Gas Reporting Rule.^[55] These proposals would require reporting of emissions data from the petroleum and natural gas industries that emit fluorinated greenhouse gases,^[56] and from facilities that inject and store carbon dioxide (CO2) underground for the purposes of geologic sequestration or enhanced oil and gas recovery.^[57]

EPA has additionally proposed to add three new reporting requirements to the General Provisions of the rule.^[58] EPA plans to finalize all four of these proposals this year.

References

1 ^ Massachusetts v. EPA, 549 U.S. 497, 560 (2007) [hereafter Massachusetts].

2 ^ Massachusetts (emphasis added).

3 ^ EPA’s Endangerment Finding: Paving the Way Toward the Next Generation of Cars and Trucks (hereafter “Paving the Way”), available at http://www.epa.gov/climatechange/endangerment/downloads/EndangermentFinding_LightDutyVehicleProgram.pdf (last visited April 20, 2010).

4 ^ 42 U.S.C.A. § 7521 (2010), Emissions standard for new motor vehicles or new motor vehicle engines.

5 ^ “Because credits for air-conditioning improvements can be used to meet the EPA standards, but not the NHTSA standards, the EPA standards require that by the 2016 model-year, manufacturers must achieve a combined average vehicle emission level of 250 grams of carbon dioxide per mile. The EPA standard would be equivalent to 35.5 miles per gallon if all reductions came from fuel economy improvements,” EPA News Release, DOT, EPA Set Aggressive National Standards for Fuel Economy and First Ever Greenhouse Gas Emission Levels For Passenger Cars and Light Trucks, April 1, 2010, available at http://yosemite.epa.gov/opa/admpress.nsf/8b770facf5edf6f185257359003fb69e/562b44f2588b871a852576f800544e01!OpenDocument (last visited April 26, 2010).

6 ^ EPA News Release, DOT, EPA Set Aggressive National Standards for Fuel Economy and First Ever Greenhouse Gas Emission Levels For Passenger Cars and Light Trucks, April 1, 2010, available at http://yosemite.epa.gov/opa/admpress.nsf/8b770facf5edf6f185257359003fb69e/562b44f2588b871a852576f800544e01!OpenDocument (last visited April 26, 2010).

7 ^ Union of Concerned Scientists,National Clean Vehicle Program: Model Year 2012-2016 Standards, April, 2010, available via Google search using the following search terms: “National Clean Vehicle Program: Model Year 2012-2016 Standards” (search last performed on April 26, 2010).

8 ^ EPA Press Release, EPA and NHTSA Finalize Historic National Program to Reduce Greenhouse Gases and Improve Fuel Economy for Cars and Trucks, April 14, 2010, (hereafter “EPA Press Release”) available at http://www.epa.gov/otaq/climate/regulations/420f10014.htm (last visited April 20, 2010).

9 ^ Economy standards are to be based on the following factors: (1) technological feasibility; (2) economic practicability; (3) effect on other government standards on fuel economy; and (4) need of the nation to conserve energy.

10 ^ Air Conditioning credits include CO2 & hydrofluorocarbon (HFC) refrigerant reductions.

11 ^ Technology to meet the new standards currently exists in the form of downsized, turbocharged, diesel, and other high efficiency combustion engines, as well as hybrid and electric vehicles.

12 ^ The “flexibilities” include alternative fuel credits, payment in lieu of compliance, advanced technology credits, innovation credits, and early credits. EPA Press Release, supra.

13 ^ The “flexibilities” include alternative fuel credits, payment in lieu of compliance, advanced technology credits, innovation credits, and early credits. EPA Press Release, note 8 supra.

14 ^ CAA § 213(a)(4) sets the standards for vessels.

15 ^ CAA § 231 sets the standards for aircraft.

16 ^ CAA § 213 for vehicle engines such as outdoor power equipment, RVs, farm and construction equipment, and garden equipment.

17 ^ CAA § 112(b).

18 ^ The Administrator may add pollutants to the list that have adverse effects on either humans or the environment, or cause exposure dangers through “inhalation or other routes of exposure.”

19 ^ CAA § 165(a)(4); 42 U.S.C. §7475(a)(4).

20 ^ The main element of the PSD is the requirement that a PSD permit be obtained prior to construction of any new major source or any major modification at an existing major source.

21 ^ See 40 CFR section 52.21(b)(1)(i). The determination of whether a source is a major source subject to PSD is based on whether the source emits more than 100 or 250 tons per year (depending on the type of source) of one or more regulated pollutants. Thus, the emissions that are considered in identifying a major source are determined on the basis of the same definition that controls the applicability of the BACT.

22 ^ See CAA § 160-69B; 40 C.F.R. § 51.160 (2002).

23 ^ 40 C.F.R. § 52.21(j)(2)-(3).

24 ^ See 40 C.F.R. § 52.21(b)(50).

25 ^ Excludes HAPs.

26 ^ “It is EPA’s current position that these Final Findings do not make well-mixed GHGs “subject to regulation” for purposes of the CAA’s PSD program.” EPA’s Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act: EPA’s Response to Public Comments Volume 11: Miscellaneous Legal, Procedural, and Other Comments, available at http://www.epa.gov/climatechange/endangerment.html (last visited May 20, 2010).

27 ^ PSD and Title V permitting thresholds are 250 tons/yr and 100 tons/yr, respectively. Such limits would subject millions of small sources to Title V permitting, and tens of thousands of small sources to PSD.

28 ^ 40 C.F.R. Parts 51, 52, 70, and 71 (hereafter “Tailoring Proposal”), available at http://www.epa.gov/nsr/documents/20100413final.pdfwww.epa.gov/nsr/documents/GHGTailoringProposal.pdf (last visited April 29, 2010).

29 ^ See note 28

30 ^ See note 28 at 2.

31 ^ “Equivalent CO2 (CO2e) is the concentration of CO2 that would cause the same level of radiative forcing as a given type and concentration of greenhouse gas.” Wikipedia, available at http://en.wikipedia.org/article/Carbon_dioxide_equivalent (last visited May 20, 2010).

32 ^ Facilities that remain covered are responsible for nearly 70 percent of stationary source GHG emissions. Facilities proposed for exclusion comprise only 7 percent. See EPA”s New Source Review Fact Sheet – Proposed Rule: Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule, available at http://www.epa.gov/nsr/fs20090930action.html (last visited May 8, 2010).

33 ^ For instructions on how to comment, see EPA”s New Source Review Fact Sheet – Proposed Rule: Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule, available at http://www.epa.gov/nsr/fs20090930action.html (last visited May 8, 2010).

34 ^ See Crooks v. Harrelson, 282 U.S. 55 (1930) ("To justify departure from the letter of an Act of Congress as leading to absurd results," the Court ruled, "the absurdity must be so gross as to shock the general moral or common sense; there must be something to make plain the intent of Congress that the letter shall not prevail; it is not enough merely that hard and objectionable or absurd consequences, which probably were not in the contemplation of the framers, are produced by the act of legislation.")

35 ^ See note 34.

36 ^ See note 34.

37 ^ New York Times, EPA on Track to Release Automobile, ‘Tailoring’ Rules in March, February 3, 2010, “[N]early 40 states have 100- or 250-ton thresholds on the books, and regulators are seeking additional time to modify state laws and regulations.”

38 ^ 42 USCA § 7408(a)(1). CAA § 108(a)(1)(A)-(C).

39 ^ CAA § 109(a)(2).

40 ^ CAA § 109(a); CAA § 109(b).

41 ^ CAA § 110(a)(1).

42 ^ See Tailoring Proposal, supra note 28.

43 ^ Arnold W. Reitze Jr., Air Pollution Control Law: Compliance & Enforcement, Environmental Law Institute (2001), ch. 5: New Source Review.

44 ^ CAA § 108(h) refers to the RACT/BACT/LAER Clearinghouse, which is available online at http://cfpub.epa.gov/rblc/ (last visited May 20, 2010).

45 ^ Mark. Z. Jacobson, Enhancement of Local Air Pollution by Urban CO2 Domes, Environmental Science and Technology (December 2009), available at http://www.stanford.edu/group/efmh/jacobson/urbanCO2domes.html (last visited April 26, 2010).

46 ^ See NRDC v. Train, 545 F.2d 320. Also, The original pollutants listed in the 1970 CAA amendments were carbon monoxide, nitrogen dioxide, sulfur dioxide, total suspended particles, hydrocarbons, and photochemical oxidants. Since then, lead was added and hydrocarbons were removed. In addition, total suspended particles became particulate matter PM10 and PM2.5 standards, NO2 was broadened to NOx, and ozone replaced photochemical oxidants.

47 ^ CAA § 112(b).

48 ^ CAA § 7411(a)(1).

49 ^ 40 C.F.R. § 60.2.

50 ^ The Clean Air Mercury Rule (CAIR) was overturned primarily because the EPA had not used the proper procedures for removing mercury from the list of hazardous air pollutants.

51 ^ If the EPA set standards for GHGs under § 111, the regulations could include an entirely separate trading program option aimed at lowering the cost of compliance. If the EPA could prove that it would lower cost and achieve suitable reductions, it may ultimately be the preferred system.

52 ^ Global warming potential (GWP) is the measure of how much a given mass of greenhouse gas is estimated to contribute to global warming. It is a relative scale which compares the gas in question to that of the same mass of carbon dioxide (whose GWP is by convention equal to 1). Wikipedia, available at http://en.wikipedia.org/article/Global_warming_potential (last visited May 20, 2010).

53 ^ 74 Fed. Reg 56373 (2009); Docket ID No. EPA-HQ-OAR-2008-0508-2278.

54 ^ See note 53 at 56377.

55 ^ EPA, Proposed Rules Under the Mandatory Reporting of Greenhouse Gases Rule, available at http://www.epa.gov/climatechange/emissions/proposedrule.html (last visited March 8, 2010).

56 ^ 40 CFR Part 98 Subpart W – Petroleum and Natural Gas Systems; Docket No.EPA-HQ-OAR-2009-0923, available at http://www.epa.gov/climatechange/emissions/proposedrule.html (last visited March 5, 2010).

57 ^ 40 CFR Part 98 Subpart RR – Carbon Dioxide Injection and Geologic Sequestration; Docket No. EPA-HQ-OAR-2009-0926 available at http://www.epa.gov/climatechange/emissions/proposedrule.html (last visited March 5, 2010).

58 ^ 40 CFR Part 98 Subpart A – General Provisions: Corporate Parent/NAICS Amendments; Docket No. EPA-HQ-OAR-2009-0925, available at http://www.epa.gov/climatechange/emissions/proposedrule.html (last visited March 5, 2010).