The Supreme Court has defined the limited issue as "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."

Stationary Sources of Greenhouse Gases

Will the Supreme Court, which recently let stand the D.C. Circuit's decision that greenhouse gases present a danger to the environment through climate change, allow EPA to control greenhouse gases from stationary sources?

This spring, the U.S. Supreme Court will consider whether the Clean Air Act is flexible enough to allow the U.S. EPA to regulate greenhouse gases from stationary sources, such as industrial facilities. But it has refused to hear an appeal of the D.C. Circuit's ruling that greenhouse gases, by contributing to climate change, present a danger to the environment. Will the Court now allow the EPA to control greenhouse gases that come from stationary sources?

On October 15, the Court agreed to hear Texas v. EPA, No. 12-1269, one of six consolidated appeals from the D.C. Circuit's decision in Coalition for Responsible Regulation v. EPA. That decision upheld EPA's endangerment finding for greenhouse gases and its rules for emissions from mobile sources (cars and trucks) and stationary sources (industrial facilities). The Supreme Court defined the limited issue as "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." Oral argument is set for Feb. 24, 2014. By declining to hear an appeal of the endangerment finding, the Supreme Court let stand the decision that greenhouse gases present a danger to the environment. In other words, the parties cannot argue whether climate change is real or presents a danger. That legal issue has been decided and is off the table.

At stake is EPA's selection of new source review as the tool for regulating greenhouse gases from stationary sources. This program imposes technology requirements to control emissions from new and modified industrial facilities, for "each pollutant subject to regulation." EPA chose this tool over the alternative of identifying greenhouse gases as criteria pollutants and setting national ambient air quality standards (NAAQS). EPA could have said the endangerment finding relating to the mobile source rule was sufficient to compel the setting of NAAQS for greenhouse gases, based on common statutory language. Practically, this would pose numerous problems. EPA would have to determine a numerical standard for the protection of public health and the environment, by linking a particular level of greenhouse gases in the air to a particular harm. There would be endless disputes over safe levels, complicated by the generation of greenhouse gases throughout the world.

If EPA were to designate a NAAQS, states would have to develop state implementation plans (SIPs) to come into attainment. The SIPs would involve difficult political decisions. Depending on whether an air quality control region is in attainment or nonattainment, there would be consequences for economic development. New or modified facilities in nonattainment areas (but not attainment areas) must obtain offsets from other sources. For a universal contaminant such as carbon dioxide, this would have an accentuated impact on economic development.

On a deeper level, the appeals present a conflict over the structure of the Clean Air Act. Under the law and regulations, EPA believes it can regulate greenhouse gases in new source review because they are now "subject to regulation" by virtue of the mobile source rule. The costs of increased regulation create a powerful incentive for business and industry to contest this structural interpretation.

A similar structural conflict is playing out in White Stallion Energy Center v. EPA before the D.C. Circuit. Business and industry are challenging the Utility MACT, which imposes numerical emissions limitations for hazardous air pollutants from coal-fired power plants, including mercury. EPA admits that more than 99 percent of the rule's benefits are based on reductions of fine particulates (PM2.5), which are not subject to direct regulation by EPA, but rather the state SIP process. But it is hard to fault EPA for identifying a control for one air pollutant that addresses another air pollutant. Co-generated pollutants do not respect artificial divisions of legal authority among statutory sections.

The Supreme Court must now determine whether the Clean Air Act should be interpreted rigidly or flexibly.

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