Chapter 5: Air Pollution Control

Figure 5.4, National Air Pollutants, addition
p. 473 (5^th edition):

  


National Ambient Air Quality Standards: What is an Air Pollutant?
p. 475 (5^th edition): The meaning of the term “air pollutant” as used in the Clean Air Act has not, until recently, been the source of controversy.  An “air pollutant” includes “any physical, chemical, biological, radioactive … substance or material which is emitted into or otherwise enters the ambient air,” as well as any precursors to the formation of any air pollutant.  42 U.S.C. § 7602(g).  If any such air pollutant is then determined by the EPA administrator to endanger either public health or welfare, different provisions of the Act authorize the agency to regulate that pollutant, depending on whether the pollutant satisfies the definition of criteria pollutant, or toxic pollutant, or is emitted from mobile sources or from stationary sources.  This latter determination – the endangerment determination – has occasionally been disputed, as it was in the case of EPA’s early assertion of regulatory authority over lead emissions from automobiles.  See Ethyl Corp., discussed in Chapter 3.  After Ethyl Corp., a second dispute arose concerning what implications an endangerment finding for an additive to gasoline, under § 211 of the Act, has for similar endangerment findings under other provisions of the Act. After EPA regulated lead in fuel, it was initially reluctant also to assert authority over lead as a criteria pollutant.  Environmentalists eventually sued EPA to force its hand, and the D.C. Circuit ruled that because EPA had already made a determination that lead endangered public health in order to regulate lead in fuel, and because it was indisputable that lead satisfied the criteria pollutant standard of being emitted from “numerous or diverse mobile or stationary sources,” EPA had a nondiscretionary duty to declare lead a criteria pollutant and regulate it under the provisions of the Act governing those pollutants as well.  NRDC v. Train, 545 F.2d 320 (2d Cir. 1976).  In neither lead dispute, however, did anyone question whether lead satisfied the statutory definition of “air pollutant.”

Just this question was raised with respect to carbon dioxide, the major greenhouse gas.   The history of EPA’s efforts to define its responsibilities under the Act for greenhouse gases began shortly after Vice President Gore signed the Kyoto Protocol on greenhouse gases (GHGs) on President Clinton’s behalf.  Congress, highly skeptical of the treaty, refused to ratify it.  (The story of Kyoto is told in Chapter 10.)  Some members of Congress also became concerned that President Clinton might begin to implement Kyoto anyway, even without Senate ratification of the treaty.  To prevent that, Congress enacted a series of appropriations riders prohibiting the use of any federal monies to implement Kyoto.  Members of Congress further worried about the possibility that EPA might begin to regulate GHGs, particularly carbon dioxide, under its existing Clean Air Act authorities.  While EPA Administrator Carol Browner was testifying in defense of her agency’s budget, she was asked directly by Representative Tom DeLay (R-TX) whether EPA already had the authority to regulate carbon dioxide.  Several weeks after that hearing, the EPA General Counsel issued a legal opinion that concluded carbon dioxide did satisfy the statutory definition of “air pollutant,” but that regulation of any air pollutant also required an finding that carbon dioxide was “reasonably … anticipated to endanger public health or welfare”  -- an endangerment finding -- which the EPA had never issued.   Memorandum from Jonathan Z. Cannon, EPA General Counsel, to Carol M. Browner, EPA Administrator, EPA’s Authority to Regulate Pollutants Emitted by Electric Power Generation Sources (April 10, 1998).  

In 1999, 19 organizations filed a petition with the EPA asserting that in light of this legal interpretation and the mounting evidence of climate change, EPA had a duty to issue the necessary endangerment finding and to regulate the emissions of GHGs from new motor vehicles.  In 2003, the EPA denied this petition.  The denial relied heavily on a new General Counsel’s opinion, issued the same day as the denial, reversing the conclusion reached in the Cannon memorandum.  Memorandum from Robert E. Fabricant, EPA General Counsel to Marianne L. Horinko, EPA Acting Administrator, EPA’s Authority to Impose Mandatory Controls to Address Global Climate Change Under the Clean Air Act (August 28, 2003).   The petitioners challenged the EPA denial in the D.C. Circuit.  Each of the judges thought the case was controlled by a different legal standard, but two agreed that EPA’s denial should be upheld.  The petitioners then sought review in the Supreme Court, which granted the writ of certiorari and rendered the following decision. 

Massachusetts  v. EPA
549 U.S. 497 (2007)

STEVENS, J., delivered the opinion of the Court.

I

Section 202(a)(1) of the Clean Air Act provides:

“The [EPA] Administrator shall by regulation prescribe (and from time to time revise) in accordance with the provisions of this section, standards applicable to the emission of any air pollutant from any class or classes of new motor vehicles or new motor vehicle engines, which in his judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare ....”

The Act defines “air pollutant” to include “any air pollution agent or combination of such agents, including any physical, chemical, biological, radioactive ... substance or matter which is emitted into or otherwise enters the ambient air.” § 7602(g). “Welfare” is also defined broadly: among other things, it includes “effects on ... weather ... and climate.” § 7602(h).

When Congress enacted these provisions, the study of climate change was in its infancy. In 1959, shortly after the U.S. Weather Bureau began monitoring atmospheric carbon dioxide levels, an observatory in Mauna Loa, Hawaii, recorded a mean level of 316 parts per million. This was well above the highest carbon dioxide concentration-no more than 300 parts per million-revealed in the 420,000-year-old ice-core record By the time Congress drafted § 202(a)(1) in 1970, carbon dioxide levels had reached 325 parts per million.

Meanwhile, the scientific understanding of climate change progressed. In 1990, the Intergovernmental Panel on Climate Change (IPCC), a multinational scientific body organized under the auspices of the United Nations, published its first comprehensive report on the topic. Drawing on expert opinions from across the globe, the IPCC concluded that “emissions resulting from human activities are substantially increasing the atmospheric concentrations of ... greenhouse gases [which] will enhance the greenhouse effect, resulting on average in an additional warming of the Earth's surface.”

Responding to the IPCC report, the United Nations convened the “Earth Summit” in 1992 in Rio de Janeiro. The first President Bush attended and signed the United Nations Framework Convention on Climate Change (UNFCCC), a nonbinding agreement among 154 nations to reduce atmospheric concentrations of carbon dioxide and other greenhouse gases for the purpose of “prevent[ing] dangerous anthropogenic [i.e., human-induced] interference with the [Earth's] climate system.” The Senate unanimously ratified the treaty.

II

Petitioners maintained that 1998 was the “warmest year on record”; that carbon dioxide, methane, nitrous oxide, and hydrofluorocarbons are “heat trapping greenhouse gases”; that greenhouse gas emissions have significantly accelerated climate change; and that the IPCC's 1995 report warned that “carbon dioxide remains the most important contributor to [man-made] forcing of climate change.” Id., at 13 (internal quotation marks omitted). The petition further alleged that climate change will have serious adverse effects on human health and the environment. As to EPA's statutory authority, the petition observed that the agency itself had already confirmed that it had the power to regulate carbon dioxide. In 1998, Jonathan Z. Cannon, then EPA's General Counsel, prepared a legal opinion concluding that “CO2 emissions are within the scope of EPA's authority to regulate,” even as he recognized that EPA had so far declined to exercise that authority.

Before the close of the comment period [on EPA’s review of the petition], the White House sought “assistance in identifying the areas in the science of climate change where there are the greatest certainties and uncertainties” from the National Research Council, asking for a response “as soon as possible.” The result was a 2001 report titled Climate Change: An Analysis of Some Key Questions (NRC Report), which, drawing heavily on the 1995 IPCC report, concluded that “[g]reenhouse gases are accumulating in Earth's atmosphere as a result of human activities, causing surface air temperatures and subsurface ocean temperatures to rise. Temperatures are, in fact, rising.” NRC Report 1.

On September 8, 2003, EPA entered an order denying the rulemaking petition. The agency gave two reasons for its decision: (1) that contrary to the opinions of its former general counsels, the Clean Air Act does not authorize EPA to issue mandatory regulations to address global climate change; and (2) that even if the agency had the authority to set greenhouse gas emission standards, it would be unwise to do so at this time.

In concluding that it lacked statutory authority over greenhouse gases, EPA observed that Congress “was well aware of the global climate change issue when it last comprehensively amended the [Clean Air Act] in 1990,” yet it declined to adopt a proposed amendment establishing binding emissions limitations.”  Congress instead chose to authorize further investigation into climate change. EPA further reasoned that Congress' “specially tailored solutions to global atmospheric issues,” - in particular, its 1990 enactment of a comprehensive scheme to regulate pollutants that depleted the ozone layer - counseled against reading the general authorization of § 202(a)(1) to confer regulatory authority over greenhouse gases.

EPA stated that it was “urged on in this view” by this Court's decision in FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000). In that case, relying on “tobacco['s] unique political history,” we invalidated the Food and Drug Administration's reliance on its general authority to regulate drugs as a basis for asserting jurisdiction over an “industry constituting a significant portion of the American economy.”

EPA reasoned that climate change had its own “’political history’: Congress designed the original Clean Air Act to address local air pollutants rather than a substance that “is fairly consistent in its concentration throughout the world's atmosphere,” (emphasis added); declined in 1990 to enact proposed amendments to force EPA to set carbon dioxide emission standards for motor vehicles; and addressed global climate change in other legislation. Because of this political history, and because imposing emission limitations on greenhouse gases would have even greater economic and political repercussions than regulating tobacco, EPA was persuaded that it lacked the power to do so. In essence, EPA concluded that climate change was so important that unless Congress spoke with exacting specificity, it could not have meant the agency to address it.

Having reached that conclusion, EPA believed it followed that greenhouse gases cannot be “air pollutants” within the meaning of the Act. See ibid. (“It follows from this conclusion, that [greenhouse gases], as such, are not air pollutants under the [Clean Air Act's] regulatory provisions ...”). The agency bolstered this conclusion by explaining that if carbon dioxide were an air pollutant, the only feasible method of reducing tailpipe emissions would be to improve fuel economy. But because Congress has already created detailed mandatory fuel economy standards subject to Department of Transportation (DOT) administration, the agency concluded that EPA regulation would either conflict with those standards or be superfluous.

Even assuming that it had authority over greenhouse gases, EPA explained in detail why it would refuse to exercise that authority. The agency began by recognizing that the concentration of greenhouse gases has dramatically increased as a result of human activities, and acknowledged the attendant increase in global surface air temperatures. EPA nevertheless gave controlling importance to the NRC Report's statement that a causal link between the two “‘cannot be unequivocally established.’ ” (quoting NRC Report 17). Given that residual uncertainty, EPA concluded that regulating greenhouse gas emissions would be unwise.

The agency furthermore characterized any EPA regulation of motor-vehicle emissions as a “piecemeal approach” to climate change, and stated that such regulation would conflict with the President's “comprehensive approach” to the problem. That approach involves additional support for technological innovation, the creation of non regulatory programs to encourage voluntary private-sector reductions in greenhouse gas emissions, and further research on climate change-not actual regulation. According to EPA, unilateral EPA regulation of motor-vehicle greenhouse gas emissions might also hamper the President's ability to persuade key developing countries to reduce greenhouse gas emissions.

IV

[EPA and its supporters initially argued that none of the petitioners had standing to bring this case.  In a lengthy analysis, Justice Stevens concluded that Massachusetts does have the required standing.  This portion of the case is excerpted and discussed in Chapter 2.]

VI

On the merits, the first question is whether § 202(a)(1) of the Clean Air Act authorizes EPA to regulate greenhouse gas emissions from new motor vehicles in the event that it forms a “judgment” that such emissions contribute to climate change. We have little trouble concluding that it does. In relevant part, § 202(a)(1) provides that EPA “shall by regulation  prescribe ... standards applicable to the emission of any air pollutant from any class or classes of new motor vehicles or new motor vehicle engines, which in [the Administrator's] judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare.” Because EPA believes that Congress did not intend it to regulate substances that contribute to climate change, the agency maintains that carbon dioxide is not an “air pollutant” within the meaning of the provision.

The statutory text forecloses EPA's reading. The Clean Air Act's sweeping definition of “air pollutant” includes “any air pollution agent or combination of such agents, including any physical, chemical ... substance or matter which is emitted into or otherwise enters the ambient air ... .” § 7602(g) (emphasis added). On its face, the definition embraces all airborne compounds of whatever stripe, and underscores that intent through the repeated use of the word “any.” Carbon dioxide, methane, nitrous oxide, and hydrofluorocarbons are without a doubt “physical [and] chemical ... substance[s] which [are] emitted into ... the ambient air.” The statute is unambiguous.

Rather than relying on statutory text, EPA invokes post enactment congressional actions and deliberations it views as tantamount to a congressional command to refrain from regulating greenhouse gas emissions. Even if such post enactment legislative history could shed light on the meaning of an otherwise-unambiguous statute, EPA never identifies any action remotely suggesting that Congress meant to curtail its power to treat greenhouse gases as air pollutants. That subsequent Congresses have eschewed enacting binding emissions limitations to combat global warming tells us nothing about what Congress meant when it amended § 202(a)(1) in 1970 and 1977.  And unlike EPA, we have no difficulty reconciling Congress' various efforts to promote interagency collaboration and research to better understand climate change with the agency's pre-existing mandate to regulate “any air pollutant” that may endanger the public welfare. Collaboration and research do not conflict with any thoughtful regulatory effort; they complement it.

EPA's reliance on Brown & Williamson Tobacco Corp. is similarly misplaced. In holding that tobacco products are not “drugs” or “devices” subject to Food and Drug Administration (FDA) regulation pursuant to the Food, Drug and Cosmetic Act (FDCA) we found critical at least two considerations that have no counterpart in this case.

First, we thought it unlikely that Congress meant to ban tobacco products, which the FDCA would have required had such products been classified as “drugs” or “devices.” Here, in contrast, EPA jurisdiction would lead to no such extreme measures. EPA would only regulate emissions, and even then, it would have to delay any action “to permit the development and application of the requisite technology, giving appropriate consideration to the cost of compliance,”§ 7521(a)(2). However much a ban on tobacco products clashed with the “common sense” intuition that Congress never meant to remove those products from circulation, Brown & Williamson,529 U.S., at 133, there is nothing counterintuitive to the notion that EPA can curtail the emission of substances that are putting the global climate out of kilter.

Second, in Brown & Williamson we pointed to an unbroken series of congressional enactments that made sense only if adopted “against the backdrop of the FDA's consistent and repeated statements that it lacked authority under the FDCA to regulate tobacco.” We can point to no such enactments here: EPA has not identified any congressional action that conflicts in any way with the regulation of greenhouse gases from new motor vehicles. Even if it had, Congress could not have acted against a regulatory “backdrop” of disclaimers of regulatory authority. Prior to the order that provoked this litigation, EPA had never disavowed the authority to regulate greenhouse gases, and in 1998 it in fact affirmed that it had such authority. There is no reason, much less a compelling reason, to accept EPA's invitation to read ambiguity into a clear statute.

EPA finally argues that it cannot regulate carbon dioxide emissions from  motor vehicles because doing so would require it to tighten mileage standards, a job (according to EPA) that Congress has assigned to DOT. But that DOT sets mileage standards in no way licenses EPA to shirk its environmental responsibilities. EPA has been charged with protecting the public's “health” and “welfare,” a statutory obligation wholly independent of DOT's mandate to promote energy efficiency.  The two obligations may overlap, but there is no reason to think the two agencies cannot both administer their obligations and yet avoid inconsistency.

While the Congresses that drafted § 202(a)(1) might not have appreciated the possibility that burning fossil fuels could lead to global warming, they did understand that without regulatory flexibility, changing circumstances and scientific developments would soon render the Clean Air Act obsolete. The broad language of § 202(a)(1) reflects an intentional effort to confer the flexibility necessary to forestall such obsolescence. … Because greenhouse gases fit well within the Clean Air Act's capacious definition of “air pollutant,” we hold that EPA has the statutory authority to regulate the emission of such gases from new motor vehicles.

VII

The alternative basis for EPA's decision-that even if it does have statutory authority to regulate greenhouse gases, it would be unwise to do so at this time - rests on reasoning divorced from the statutory text. While the statute does condition the exercise of EPA's authority on its formation of a “judgment,” that judgment must relate to whether an air pollutant “cause[s], or contribute[s] to, air pollution which may reasonably be anticipated to endanger public health or welfare.”  Put another way, the use of the word “judgment” is not a roving license to ignore the statutory text. It is but a direction to exercise discretion within defined statutory limits.

If EPA makes a finding of endangerment, the Clean Air Act requires the agency to regulate emissions of the deleterious pollutant from new motor vehicles.  EPA no doubt has significant latitude as to the manner, timing, content, and coordination of its regulations with those of other agencies. But once EPA has responded to a petition for rulemaking, its reasons for action or inaction must conform to the authorizing statute. Under the clear terms of the Clean Air Act, EPA can avoid taking further action only if it determines that greenhouse gases do not contribute to climate change or if it provides some reasonable explanation as to why it cannot or will not exercise its discretion to determine whether they do.  To the extent that this constrains agency discretion to pursue other priorities of the Administrator or the President, this is the congressional design.

EPA has refused to comply with this clear statutory command. Instead, it has offered a laundry list of reasons not to regulate. For example, EPA said that a number of voluntary executive branch programs already provide an effective response to the threat of global warming, that regulating greenhouse gases might impair the President's ability to negotiate with “key developing nations” to reduce emissions, and that curtailing motor-vehicle emissions would reflect “an inefficient, piecemeal approach to address the climate change issue.”

Although we have neither the expertise nor the authority to evaluate these policy judgments, it is evident they have nothing to do with whether greenhouse gas emissions contribute to climate change. Still less do they amount to a reasoned justification for declining to form a scientific judgment. In particular, while the President has broad authority in foreign affairs, that authority does not extend to the refusal to execute domestic laws.  In the Global Climate Protection Act of 1987, Congress authorized the State Department-not EPA-to formulate United States foreign policy with reference to environmental matters relating to climate. See § 1103(c), 101 Stat. 1409. EPA has made no showing that it issued the ruling in question here after consultation with the State Department. Congress did direct EPA to consult with other agencies in the formulation of its policies and rules, but the State Department is absent from that list. § 1103(b).

Nor can EPA avoid its statutory obligation by noting the uncertainty surrounding various features of climate change and concluding that it would therefore be better not to regulate at this time.  If the scientific uncertainty is so profound that it precludes EPA from making a reasoned judgment as to whether greenhouse gases contribute to global warming, EPA must say so. That EPA would prefer not to regulate greenhouse gases because of some residual uncertainty is irrelevant. The statutory question is whether sufficient information exists to make an endangerment finding.

In short, EPA has offered no reasoned explanation for its refusal to decide whether greenhouse gases cause or contribute to climate change. Its action was therefore “arbitrary, capricious, ... or otherwise not in accordance with law.” 42 U.S.C. § 7607(d)(9)(A). We need not and do not reach the question whether on remand EPA must make an endangerment finding, or whether policy concerns can inform EPA's actions in the event that it makes such a finding. We hold only that EPA must ground its reasons for action or inaction in the statute.

The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

NOTES AND QUESTIONS

1.  Both Chief Justice Roberts and Justice Scalia wrote dissents in the case; the Chief Justice disagreeing with the majority on the standing issue and Justice Scalia disagreeing with them on the merits.  Justice Scalia agreed with the majority that when the EPA makes an endangerment judgment it must do so based on scientific facts and reasoning.  But, he continued, “the statute says nothing at all about the reasons for which the Administrator may defer making a judgment-the permissible reasons for deciding not to grapple with the issue at the present time. …The reasons the EPA gave are surely considerations executive agencies regularly take into account (and ought to take into account) when deciding whether to consider entering a new field: the impact such entry would have on other Executive Branch programs and on foreign policy. There is no basis in law for the Court's imposed limitation.”  Does Justice Scalia have a point?

2.  On remand, what choices does EPA have in taking action “consistent with” the Supreme Court decision? 

3.  Reread the following sentence that comes toward the end of the opinion:  “We need not and do not reach the question whether on remand EPA must make an endangerment finding, or whether policy concerns can inform EPA's actions in the event that it makes such a finding.”  Does the latter half of this sentence suggest that EPA could determine that CO2 from mobile sources does cause or contribute to endangering public health or welfare, and yet decline to regulate those emissions for the same or similar policy reasons that prompted it to refuse to issue an endangerment finding in the first place?  Read § 202(a).

4.  Under § 202, an endangerment finding triggers an obligation to regulate.  That is not always the case in the Clean Air Act. See, e.g., § 213(a)(4) (after an endangerment finding, the Administrator “may” regulate.)  Most of the time, however, once the Administrator makes an endangerment finding, he or she is under an obligation to act in response.  And, as suggested by the chronology of lead regulation under the Clean Air Act, discussed above,  once EPA has made an endangerment finding under one provision of the Act, it is likely that this endangerment decision will be applicable to other provisions as well.

5. Many people believe that the existing Clean Air Act is ill-suited for regulation of GHG emissions.  The Act’s national ambient air quality standards (NAAQSs) are designed to achieve national, minimum levels of healthy air quality through controls implemented on a state-by-state basis. Yet the problem of climate change is global and caused by GHG emissions without regard for where they originate.  The Obama administration agrees that it would be preferable for Congress to adopt new legislation to control U.S. emissions. Mark Peters, White House Seeks Bill on Climate by December, Wall St. J., April 13, 2009.  But if Congress fails to act, it is prepared to use the Clean Air Act to establish its own GHG control program.  On March 10, 2009, EPA Administrator Lisa Jackson proposed to require large sources of GHGs to report their emissions to EPA.  74 Fed. Reg. 16448 (2009). While not requiring companies to reduce their emissions, this rule will provide crucial information for implementing any future controls.  On April 17, 2009, EPA responded to the Massachusetts v. EPA decision by issuing a proposed finding that emissions of GHGs endanger public health and welfare within the meaning of the Clean Air Act. EPA described “the case for finding that greenhouse gases in the atmosphere endanger public health and welfare” as “compelling and, indeed, overwhelming.” EPA noted “that climate changes already are occurring that harm our health and welfare, and that the effects will only worsen over time in the absence of regulatory action.” 74 Fed Reg. 18885, 18904 (2009). EPA’s action sets the stage for the agency to regulate GHG emissions under the Clean Air Act if Congress fails to adopt new legislation to establish a national program of GHG controls.

6. On May 21, 2009, the House Energy and Commerce Committee approved the “American Clean Energy and Security Act of 2009,” a bill to establish a complex cap-and-trade program to reduce total U.S. emissions of GHGs.  The bill is designed to reduce GHG emissions by 15% below 2005 levels by 2020 and by 75% below 2005 levels by 2050. To reduce political opposition to the legislation, the committee agreed that instead of auctioning off all emissions allowances, as President Obama had advocated, more than 80% of them would be distributed for free to ease the financial burden on emission sources. The bill passed the House by a 219-212 vote in June 2009.

Lead NAAQS
p. 476 (5^th edition): In May, 2008, EPA proposed its first revision of the lead standard since the 1978 standard was upheld in Lead Industries.  EPA proposes a new NAAQS in the .10 ug/m3 to .30 ug/m3 – 80% to 93% lower than the 1978 standard – and solicits comments on standards outside that range as well.  73 Fed. Reg. 29005 (May 20, 2008).  In this proposal, EPA shifts away from EP elevation as the adverse health effect upon which the standard should be based, instead using interference with neurological and neurocognitive function in children.  The Scientific Advisory Committee that by statute advises EPA on its NAAQS standards reported a unanimous consensus that a loss of 1 to 2 IQ points “could be significant from a public health perspective,” and that this concern justified a new NAAQS of .2 ug/m³.  In announcing the NAAQS proposal, the agency stated that “the Administrator first notes that ideally air-related (as well as other) exposures to environmental [lead] would be reduced to the point that no IQ impact in children would occur.  The Administrator recognizes, however, that … he is required to make a judgment as to what degree of protection is requisite to protect public health with an adequate margin of safety … [The] Administrator proposes to conclude that an air-related population mean IQ loss within the range of 1 to 2 points could be significant from a public health perspective, and that a standard level should be selected to provide protection from air-related population mean IQ loss in excess of this range.”  Id.  EPA later adopted a revised NAAQS for lead of .15ug/m³.

Only two areas of the country exceeded the current NAAQS, with an exposed population total of less than 5,000.  Both of these, East Helena Montana and Herculaneum, Missouri, are the sites of lead smelters (East Helena’s closed in 2001).  Only 3% of the nation’s counties have lead monitors; 24 states have none at all.

Page 562 (5^th edition): Comparison of Growth and Emissions

FIGURE 5.5

Comparison of Growth and Emissions

Source:  http://www.epa.gov/airtrends/images/comparison70.jpg.

Figure 5.7, National Ambient Air Quality Standards

 Figure 5.7
National Ambient Air Quality Standards
Primary (health related)

Source:  http://www.epa.gov/air/criteria.html.

Note:  Secondary (welfare-related) standards are the same as primary for Lead, Nitrogen Dioxide, PM, and Ozone.  The Sulfur Dioxide secondary standard is 0.5 ppm (1300 µg/m³) over a 3-hour average.  Carbon Monoxide has no secondary standard.

Attaining and Maintaining the NAAQs
p. 495 (5^th edition): Particular matter has also been a persistent problem, whose incidence overlaps considerably with the ozone problem.  Figure 5.8 shows the current NA areas for both.

Source: EPA Green Book. http://www.epa.gov/air/oaqps/greenbk/mappm25o3.pdf

These non attainment designations will be revised in light of the new, lower 8-hour standard of .075 ppm adopted by EPA in May.  Western States anticipate that under the new standards, ozone will become a compliance issue for an enlarged number of rural locations, as well as continuing as an urban problem.  See Draft White Paper, Revised 8-HR Ozone NAAQS & Implications for the Western States, Prepared by Gerard Mansell, ENVIRON International Corp., for the Western Region Air Partnership, July15, 2008.

New Source Review
p. 514 (5^th edition): From the beginning, the Clean Air Act has required new sources to install advanced pollution control technology, 42 U.S.C. §7411, thereby establishing different regulatory regimes for new and existing sources.  New sources that fall into categories that the EPA has found generate air pollution “which may reasonably be anticipated to endanger public health or welfare” are required to install federally established new source performance standards (NSPS).  These standards, which are called “best demonstrated technology” or BDT, have in large part been superseded by the tougher requirements of the PSD and NA programs, but they still serve as a technology floor for all new sources.  Notice, too, that 42 U.S.C. §7411 extends to pollutants beyond the criteria pollutants and the pollutants covered by the hazardous air pollutants provision, 42 U.S.C. §7412.  If  the EPA establishes new source performance standards for any category of new sources based such otherwise unregulated pollutants, 42 U.S.C. §7411(d) then enables EPA also to establish procedures whereby states are required to regulate existing facilities in the same category.  In contrast, existing sources of criteria pollutants are regulated through the SIP process, where states retain wide discretion in determining the mix of air pollution controls to be applied to the different existing stationary sources within each air quality control region.  The non attainment program impinges somewhat on that discretion by requiring existing sources in non attainment areas to install reasonable available control technology, RACT, a less stringent requirement than NSPS.  The NSPS defines “new source” to include existing sources that are modified, with a modification being defined as “any physical change in, or change in the method of operation of, a stationary source which increases the amount of any air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted.” 42 U.S.C. §7411(a)(4). 

The statutory PSD and NA programs carry forward this differential treatment of existing sources on the one hand and new (and modified) sources on the other, and they add even more onerous requirements on new sources.  Each program requires any “major” new source (including any modified existing source) that will or has the potential to emit “significant” amounts of any of the criteria pollutants to install state-of-the-art pollution control technology. 42 U.S.C. §7475.  The definitions of “major” and “significant” vary between the two programs and also according to the pollutants that are involved.  See 42 U.S.C. §§ 7475(a), 7479(2)(C) (PSD program applies to any “major emitting facility on which construction is commenced” after the effective date of the program; “construction” defined as “includ[ing] the modification (as defined in section 7411(a)(4) of this title) of any source or facility”); sections 7501(4), 7502(5), 7503(a)(2) (NA program applies to any “new or modified major stationary source” and “ ‘modified’ means the same as the term ‘modification’ as used in section 7411(a)(4) . . . ”).  The exact technology requirements also differ between the programs – lowest achievable emissions rate (LAER) for NA and best available control technology (BACT) for PSD.  BACT must be met “for each pollutant subject to regulation under [the Clean Air Act],” not just the pollutant for which a statutory PSD increment applies.  The NA program’s LAER requirement, on the other hand, applies only to the pollutant whose NAAQS is being exceeded, and which thus triggers the NA review.  The statutory NA program also carries over the offset and compliance certification requirements from EPA’s regulatory offset policy, while under the statutory PSD program facility owners must perform computer modeling to determine the available increment, as well as to determine the effect of the new source on visibility.

Avoiding NSR
p. 516 (5^th edition): Besides netting out, sources look for other ways to avoid NSR. Facts disclosed in recent litigation demonstrate that one group of facilities that were very creative in finding ways to avoid NSR were coal-fired power plants already in existence in 1977.   Consider this description from litigation brought by the EPA, charging Duke Energy with having engaged in a number of modifications of its power plants without complying with NSR: 

Duke Energy’s eight plants in the Carolinas include thirty coal-fired generating units that were placed in service between 1940 and 1975. Each unit contains, as one of its three major components, a boiler, which is a large structure from six to twenty stories tall containing thousands of steel tubes. The tubes are arranged into sets of tube assemblies, including economizer tubes, in which water is initially heated; furnace waterwall tubes, in which water evaporates to steam; superheater tubes, in which the temperature of the steam is raised before being released into a turbine; and reheater tubes, in which steam released from the turbine is reheated and returned to the turbine.

Between 1988 and 2000, as part of a plant modernization program, Duke Energy engaged in twenty-nine projects on the coal-fired generating units, most of which consisted of replacing and/or redesigning one or more of the boiler tube assemblies. These projects would both extend the life of the generating units and allow the units to increase their daily hours of operation. Duke Energy did not apply for or acquire new permits from the EPA for these projects, some of which, according to the Government, cost “more than seven times the original cost of the unit.”

The EPA and the Intervenors maintain that these life-extension projects constitute “major modifications” of Duke Energy’s furnaces as defined in the PSD statutory and regulatory provisions—that is, physical changes leading to a significant net emissions increase—and thus Duke Energy was required to obtain permits for them. United States v. Duke Energy, 411 F.3d 539, 544 (4^th Cir. 2005), rev’d   127  S.Ct. 1423 (2007).

Duke Energy’s activities as well as similar ones by other utility companies came to light when the EPA conducted an extensive investigation to ascertain why so few utility companies had applied for NSR permits in the 1980s and 1990s.  The relatively small number of applications ran contrary to expectations.  EPA had anticipated that as the years went by under the NA and PSD programs, owners of existing sources would face a choice of either shutting down those sources because they had become outmoded and uneconomical, or else upgrading them through capital improvements triggering the NSR requirements.  Instead, quite old existing plants were continuing to operate longer than anticipated.  A GAO estimate, for example, concluded that in 2002 coal-fired power plants built prior to 1972 (with some decades older than that) still comprised nearly 60% of the nation’s fossil-fuel fired capacity.  Government Accountability Office, Air Pollution:  Emissions from Older Electricity Generating Units at 2 (June 2002).

Environmental Defense v. Duke Energy
p. 518 (5^th edition): Some utilities did decide to litigate, however. As the litigation unfolded, it became clear that the disagreement between the EPA and the utility companies over when modifications triggered NSR implicated both parts of the definition of modification:  under the statute, a modification requires a “physical change” that “increases emissions.” The disputes over the first part of the definition focused on whether the capital improvements made by the utilities were exempt from NSR because they came within an exemption for routine maintenance, repair or replacement.  From very early on, EPA had always exempted certain alterations from being considered “physical changes” if those modifications constituted “maintenance, repair, and replacement which the Administrator determines to be routine for a source category. . .” 40 C.F.R. §52.21(b)(2). This exemption, the RMRR exemption, was intended to permit maintenance of existing facilities if the maintenance was the sort of activity that was normally expected to occur during the economic life of a facility, without thereby extending that economic life significantly.  Up until this recent litigation, the meaning of the RMRR exemption had rarely been tested in litigation, although EPA had been victorious in a significant case in the late 1980s.  In that case, Wisconsin Power (WEPCO) contested an EPA determination that renovations planned for some of the company’s coal-fired generating units could not qualify for an RMRR exception. “WEPCO proposes to replace rear steam drums on units 2, 3, 4 and 5; each of these steam drums measures 60 feet in length, 50.5 inches in diameter and 5.25 inches in thickness. In addition, WEPCO plans to replace another major component, the air heaters, in units 1-4. To implement this four-year program, WEPCO will need to make the replacements by taking the units successively out of service for nine-month periods.” Wisconsin Elec. Power Co. v. Reilly, 893 F.2d 901, 907-908 (7th Cir. 1990). Employing an analysis that it termed “case-by-case,” and that weighed “the nature, extent, purpose, frequency, and cost of the work, as well as other relevant factors, to arrive at a common-sense finding,” EPA found these changes to be non-routine and the court upheld the determination. (Perhaps internal company memoranda referring to these renovations as “life-extension projects” had something to do with the result.) 

In the enforcement actions filed in 1999, EPA claimed that it was applying the RMRR exemption as it had in WEPCO, but the utilities argued the agency’s interpretation was a significant change from prior practice, and that because they lacked fair notice of EPA’s changed approach they could not be charged with violations.  The fair notice defense has been unsuccessful so far, with U.S. v. Southern Indiana Gas and Electric Co., 245 F. Supp. 2d 994 (S.D. Ind. 2003),  U.S. v. Cinergy Corp, 495 F. Supp. 2d. 892 (S.D. Ind. 2007) and United States v. Ohio Edison, 276 F. Supp. 2d 829 (S.D. Ohio 2003) all rejecting it, on the ground that after WEPCO, EPA had been sufficiently consistent in reiterating the “case-by-case, fact intensive” nature of the RMRR review, as well as the major considerations that go into that review, to satisfy the fair notice requirement.

In addition to this threshold fair notice defense, the utilities focused on one particular aspect of EPA’s interpretation of the RMRR exemption.  EPA based part of its determination of RMRR on whether the capital improvements at issue were routine, prevalent or commonplace for the specific unit being evaluated.  Industry claimed this was the wrong standard, and that their improvements were routine because they were routine for the industry.

The significance of the dispute over the proper frame of reference for determining whether a project was routine, prevalent or commonplace was summarized by the district court in one of the enforcement actions:

[The utility companies focus] the inquiry on one factor, and interpret[] that factor in a way that could lead to exempting numerous projects as routine maintenance. If the "prevalent or commonplace in the industry" standard [is used], then a regulated party would only have to point to other similar projects in industry to show that they take place elsewhere to avoid the strictures of NSR. The end result could be many industry projects qualifying for routine maintenance just because others in the industry have taken on similar projects, projects that may or may not have been subject to NSR for various reasons. The comparisons could be misleading for a simple reason: perhaps many companies have made "major modifications" at their facilities. It is the frequency of the activity at other individual units within the industry that seems to us most relevant in this context. The mere fact that a number of different facilities within an industry may have undertaken these projects strikes us as less instructive with respect to whether a project under review should be considered 'routine,' than the observation that this kind of replacement is, for an individual unit, an unusual or once or twice-in-a-lifetime occurrence. In sum, this focus on whether or not projects are prevalent throughout industry could lead to exempting numerous expensive and complex projects, a result that strains the meaning of the word "routine," and clashes with the guidance gleaned from the regulatory context.  U.S. v. Southern Indiana Gas and Electric Co., 245 F. Supp. 2d 994, 1014 (S.D. Ind. 2003).

Industry counters EPA’s position first by drawing attention to the language of the RMRR exemption, which speaks of activities that are routine “for a source category.” They also observe that precisely because the kinds of projects at issue were undertaken numerous times within the industry throughout the 1990s, even though they might be once in a lifetime projects for any single unit,  EPA had ample opportunity to challenge them if the agency really had adopted a “routine for the unit” interpretation of the exemption.  As another district court put the matter, “Using a plant specific test for activities that occurred as far back as 1985, when it was patently obvious what [the utility] was doing, and the EPA said and did nothing by way of enforcement to require any of the work to be permitted, strikes the court as a ‘gotcha’ test.” The rulings on this dispute have so far been mixed.  U.S. v. Alabama Power Co., -- F. Supp. 2d – (N.D. Ala. 2008).  So far, SIGECO, Ohio Edison and Cinergy have ruled in favor of EPA on this issue, as have Sierra Club v. Morgan, 2007 U.S.Dist. LEXIS 82760 (W.D. Wis. 2007), and New York. v. Am. Elec. Power Serv. Corp., 2007 U.S.Dist. LEXIS 10700 (S.D. Ohio 2007) (following the EPA standard but including industry practices as a factor in the unit-specific analysis).  The district courts  in Alabama Power Co.,  U.S. v. Duke Energy, 278 F. Supp. 2d 619 (M.D.N.C. 2003), U.S. v. East Kentucky Power, 498 F. Supp. 2d 976 (E.D. KY 2007) have ruled for the utility defendants.

The utilities also defended based on the second part of the statutory definition of modification, which requires that the modification increase emissions. EPA took the position that the question of an emissions increase was to be answered by whether or not the facility’s emissions over an annual time period after the improvements exceeded its actual emissions over an annual time period prior to the improvements. The utilities countered that a physical change did not increase emissions unless it increased the facility’s emissions rate, calculated on an hourly basis.  Which method was chosen could have great consequences. If, for example, an improvement made operating the unit more efficient or economical without changing its hourly emissions rate – or even decreasing it due to operating efficiencies – a utility might then elect to run it for more hours during the year after the improvements. In that case, its annual emissions would go up even though its hourly emissions rate had not.  Under EPA’s approach, the improvements would constitute modifications; under the utility companies’ approach they would not.  Because most of the changes the utilities had made did not increase the unit’s hourly emissions rate, winning on this point alone would secure them a meaningful victory regardless of how the RMRR issues were decided.

As of July 2008, four decisions in EPA enforcement actions against utilities had been issued in four different district court actions. One of these has reached the Supreme Court.  In United States v. Duke Energy Corp., 278 F. Supp. 2d 619 (M.D.N.C. 2003), the court ruled on cross summary judgment motions, finding for the utility on both the routine in the industry versus routine at the unit issue and the total emissions versus emissions rate question. The United States appealed from the portion of the ruling holding that as a matter of law the EPA had to interpret “increases emissions” for purpose of NSR to mean increases the hourly emissions rate.  The Fourth Circuit affirmed.  The United States chose not to seek certiorari, but Environmental Defense, who had intervened in the case, did appeal.  In an unusual move, the Supreme Court decided to here the case notwithstanding the failure of the United States to appeal.

Environmental Defense, et. al., v. Duke Energy Corp.
127 S.Ct. 1423 (2007)

Justice Souter delivered the opinion of the Court.

    I

EPA’s 1975 regulations implementing NSPS provided generally that “any physical or operational change to an existing facility which results in an increase in the emission rate to the atmosphere of any pollutant to which a standard applies shall be considered a modification within the meaning of [S]ection 111.” [42 U.S.C. § 7411]  Especially significant here is the identification of an NSPS “modification” as a change that “increase[s] … the emission rate,” which “shall be expressed as kg/hr of any pollutant discharged into the atmosphere.” §60.14(b).

NSPS, however, did too little to “achiev[e] the ambitious goals of the 1970 Amendments,” R. Belden, Clean Air Act 7 (2001) (hereinafter Belden), and the Clean Air Act Amendments of 1977, included the PSD provisions, which aimed at giving added protection to air quality in certain parts of the country “notwithstanding attainment and maintenance of” the NAAQS.  The 1977 amendments required a PSD permit before a “major emitting facility” could be “constructed” in an area covered by the scheme. §7475(a). As originally enacted, PSD applied only to newly constructed sources, but soon a technical amendment added the following subparagraph: “The term ‘construction’ when used in connection with any source or facility, includes the modification (as defined in [S]ection 111(a)) of any source or facility.”  In other words, the “construction” requiring a PSD permit under the statute was made to include (though it was not limited to)a “modification” as defined in the statutory NSPS provisions.

In 1980, EPA issued PSD regulations, which “limited the application of [PSD] review” of modified sources to instances of “ ‘major’ modificatio[n],” defined as “any physical change in or change in the method of operation of a major stationary source that would result in a significant net emissions increase of any pollutant subject to regulation under the Act.” 40 CFR §51.166(b)(2)(i) (1987). Further regulations in turn addressed various elements of this definition, three of which are to the point here. First, the regulations specified that an operational change consisting merely of “[a]n increase in the hours of operation or in the production rate” would not generally constitute a “physical change or change in the method of operation.” §51.166(b)(2)(iii). For purposes of a PSD permit, that is, such an operational change would not amount to a “modification” as the Act defines it. Second, the PSD regulations defined a “net emissions increase” as “[a]ny increase in actual emissions from a particular physical change or change in the method of operation,” net of other contemporaneous “increases and decreases in actual emissions at the source.” §51.166(b)(3). “Actual emissions” were defined to “equal the average rate, in tons per year, at which the unit actually emitted the pollutant during a two-year period which precedes the particular date and which is representative of normal source operation.” §51.166(b)(21)(ii). “[A]ctual emissions” were to be “calculated using the unit’s actual operating hours [and] production rates.” Ibid. Third, the term “significant” was defined as “a rate of emissions that would equal or exceed” one or another enumerated threshold, each expressed in “tons per year.” §51.166(b)(23)(i).

The Court of Appeals held that Congress’s provision defining a PSD modification by reference to an NSPS modification caught not only the statutory NSPS definition, but also whatever regulatory gloss EPA puts on that definition at any given time (for the purposes of the best technology requirement). When, therefore, EPA’s PSD regulations specify the “change” that amounts to a “major modification” requiring a PSD permit, they must measure an increase in “the amount of any air pollutant emitted,” 42 U. S. C. §7411(a)(4), in terms of the hourly rate of discharge, just the way NSPS regulations do. Petitioners and the United States say, on the contrary, that when EPA addresses the object of the PSD scheme it is free to put a different regulatory interpretation on the common statutory core of “modification,” by measuring increased emission not in terms of hourly rate but by the actual, annual discharge of a pollutant that will follow the modification, regardless of rate per hour. This disagreement is the nub of the case.

II

Respondent class="highlight"Duke class="highlight"Energy Corporation runs 30 coal-fired electric generating units at eight plants in North and South Carolina. The units were placed in service between 1940 and 1975, and each includes a boiler containing thousands of steel tubes arranged in sets. Between 1988 and 2000, class="highlight"Duke replaced or redesigned 29 tube assemblies in order to extend the life of the units and allow them to run longer each day.

 The United States and intervenor-plaintiffs (collectively, plaintiffs) subsequently stipulated “that they do not contend that the projects at issue in this case caused an increase in the maximum hourly rate of emissions at any of class="highlight"Duke class="highlight"Energy’s units.” Rather, their claim “is based solely on their contention that the projects would have been projected to result in an increased utilization of the units at issue.” class="highlight"Duke, for its part, stipulated to plaintiffs’ right to appeal the District Court’s determination that projects resulting in greater operating hours are not “major modifications” triggering the PSD permit requirement, absent an increase in the hourly rate of emissions. The District Court then entered summary judgment for class="highlight"Duke on all PSD claims.

The Court of Appeals for the Fourth Circuit affirmed, “albeit for somewhat different reasons.”  “[T]he language and various interpretations of the PSD regulations … are largely irrelevant to the proper analysis of this case,” reasoned the Court of Appeals, “because Congress’ decision to create identical statutory definitions of the term ‘modification’ ” in the NSPS and PSD provisions of the Clean Air Act “has affirmatively mandated that this term be interpreted identically” in the regulations promulgated under those provisions. The Court of Appeals relied principally on the authority of Rowan Cos. v. United States, 452 U. S. 247, 250 (1981) , where we held against the Government’s differing interpretations of the word “wages” in different tax provisions. As the Court of Appeals saw it, Rowan establishes an “effectively irrebuttable” presumption that PSD regulations must contain the same conditions for a “modification” as the NSPS regulations, including an increase in the hourly rate of emissions.

As the Court of Appeals said, class="highlight"Duke had not initially relied on Rowan, and when the Court sua sponte requested supplemental briefing on Rowan’s relevance, plaintiffs injected a new issue into the case. They argued that a claim that the 1980 PSD regulation exceeded statutory authority would be an attack on the validity of the regulation that could not be raised in an enforcement proceeding. See 42 U. S. C. §7607(b)(2). Under §307(b) of the Act, they said, judicial review for validity can be obtained only by a petition to the Court of Appeals for the District of Columbia Circuit, generally within 60 days of EPA’s rulemaking. 42 U.S.C. §7607(b).

The Court of Appeals rejected this argument. “Our choice of this interpretation of the PSD regulations … is not an invalidation of those regulations,” it said, because “the PSD regulations can be interpreted” to require an increase in the hourly emissions rate as an element of a major “modification” triggering the permit requirement. 411 F. 3d,at 549, n. 7. To show that the 1980 PSD regulations are open to this construction, the Court of Appeals cited the conclusions of the District Court and the Reich opinions.

We granted the petition for certiorari brought by intervenor-plaintiffs, 547 U. S. __ (2006), and now vacate.

III A

In applying the 1980 PSD regulations to class="highlight"Duke’s conduct, the Court of Appeals thought that, by defining the term “modification” identically in its NSPS and PSD provisions, the Act required EPA to conform its PSD interpretation of that definition to any such interpretation it reasonably adhered to under NSPS. But principles of statutory construction are not so rigid. Although we presume that the same term has the same meaning when it occurs here and there in a single statute, the Court of Appeals mischaracterized that presumption as “effectively irrebuttable.” 411 F. 3d, at 550. We also understand that “[m]ost words have different shades of meaning and consequently may be variously construed, not only when they occur in different statutes, but when used more than once in the same statute or even in the same section.” Atlantic Cleaners & Dyers, Inc. v. United States, 286 U. S. 427, 433 (1932) . Thus, the “natural presumption that identical words used in different parts of the same act are intended to have the same meaning … is not rigid and readily yields whenever there is such variation in the connection in which the words are used as reasonably to warrant the conclusion that they were employed in different parts of the act with different intent.” Ibid. A given term in the same statute may take on distinct characters from association with distinct statutory objects calling for different implementation strategies.

The point is the same even when the terms share a common statutory definition, if it is general enough, as we recognized in Robinson v. Shell Oil Co., 519 U. S. 337 (1997) . There the question was whether the term “employees” in §704(a) of Title VII of the Civil Rights Act of 1964 covered former employees. Title VII expressly defined the term “employee,” 42 U. S. C. §2000e(f), but the definition was “consistent with either current or past employment,” 519 U. S., at 342, and we held that “each section” of Title VII “must be analyzed to determine whether the context gives the term a further meaning that would resolve the issue in dispute,” id., at 343–344.

 If Robinson were inconsistent with Rowan (on which the Court of Appeals relied), it would be significant that Robinson is the later case, but we read the two as compatible. In Rowan, the question was whether the value of meals and lodging given to employees by an employer for its own convenience should be counted in computing “wages” under the Federal Insurance Contributions Act (FICA), 26 U. S. C. §3101 et seq., and the Federal Unemployment Tax Act (FUTA), 26 U. S. C. §3301 et seq. Treasury Regulations made this value “includable in ‘wages’ as defined in FICA and FUTA, even though excludable from ‘wages’ under the substantially identical” statutory definition of “wages” for income-tax withholding purposes. 452 U. S., at 252. Although we ultimately held that the income tax treatment was the proper one across the board, we did not see it this way simply because a “substantially identical” definition of “wages” appeared in each of the different statutory provisions. Instead, we relied on a manifest “congressional concern for the interest of simplicity and ease of administration.” Id., at 255 (internal quotation marks omitted). The FICA and FUTA regulations fell for failing to “serve that interest,” id., at 257, not for defying definitional identity.

In fact, in a setting much like Rowan, we recently declined to require uniformity when resolving ambiguities in identical statutory terms. In United States v. Cleveland Indians Baseball Co., 532 U. S. 200 (2001) , we rejected the notion that using the phrase “wages paid” in both “the discrete taxation and benefits eligibility contexts” can, standing alone, “compel symmetrical construction,” id., at 213; we gave “substantial judicial deference” to the “longstanding,” “reasonable,” and differing interpretations adopted by the Internal Revenue Service in its regulations and Revenue Rulings. Id., at 218–220. There is, then, no “effectively irrebuttable” presumption that the same defined term in different provisions of the same statute must “be interpreted identically.” 411 F. 3d, at 550. Context counts.

 It is true that the Clean Air Act did not merely repeat the term “modification” or the same definition of that word in its NSPS and PSD sections; the PSD language referred back to the section defining “modification” for NSPS purposes. 42 U. S. C. §7479(2)(C). But that did not matter in Robinson, and we do not see the distinction as making any difference here. Nothing in the text or the legislative history of the technical amendments that added the cross-reference to NSPS suggests that Congress had details of regulatory implementation in mind when it imposed PSD requirements on modified sources; the cross-reference alone is certainly no unambiguous congressional code for eliminating the customary agency discretion to resolve questions about a statutory definition by looking to the surroundings of the defined term, where it occurs. See New York, 413 F. 3d, at 19 (“So far as appears, … [this] incorporatio[n] by reference [is] the equivalent of Congress’s having simply repeated in the [PSD] context the definitional language used before in the NSPS context”); compare 91 Stat. 745 (expressly incorporating in an unrelated provision of the 1977 amendments “the interpretative regulation of the [EPA] Administrator … published in 41 Federal Register 55524–30” with specified exceptions); New York, supra, at 19(“Congress’s failure to use such an express incorporation of prior regulations for ‘modification’ cuts against” any suggestion that “Congress intended to incorporate” into the Act the “preexisting regulatory definition” of “modification”). Absent any iron rule to ignore the reasons for regulating PSD and NSPS “modifications” differently, EPA’s construction need do no more than fall within the limits of what is reasonable, as set by the Act’s common⁶ definition.

B

The Court of Appeals’s reasoning that the PSD regulations must conform to their NSPS counterparts led the court to read those PSD regulations in a way that seems to us too far a stretch for the language used. The 1980 PSD regulations on “modification” simply cannot be taken to track the agency’s regulatory definition under the NSPS.

True, the 1980 PSD regulations may be no seamless narrative, but they clearly do not define a “major modification” in terms of an increase in the “hourly emissions rate.” On its face, the definition in the PSD regulations specifies no rate at all, hourly or annual, merely requiring a physical or operational change “that would result in a significant net emissions increase of any” regulated pollutant. 40 CFR §51.166(b)(2)(i). But even when a rate is mentioned, as in the regulatory definitions of the two terms, “significant” and “net emissions increase,” the rate is annual, not hourly. Each of the thresholds that quantify “significant” is described in “tons per year,” §51.166(b)(23)(i), and a “net emissions increase” is an “increase in actual emissions” measured against an “average” prior emissions rate of so many “tons per year.” §§51.166(b)(3) and (21)(ii). And what is further at odds with the idea that hourly rate is relevant is the mandate that “[a]ctual emissions shall be calculated using the unit’s actual operating hours,” §51.166(b)(21)(ii), since “actual emissions” must be measured in a manner that looks to the number of hours the unit is or probably will be actually running. What these provisions are getting at is a measure of actual operations averaged over time, and the regulatory language simply cannot be squared with a regime under which “hourly rate of emissions,” 411 F. 3d, at 550 (emphasis deleted), is dispositive.

 [The lower court’s] understanding of the 1980 PSD regulations makes the mistake of overlooking the difference between the two separate components of the regulatory definition of “major modification”: “[1] any physical change in or change in the method of operation of a major stationary source that [2] would result in a significant net emissions increase of any pollutant subject to regulation under the Act.” §51.166(b)(2)(i); cf. New York, 413 F. 3d, at 11 (“[The statutory] definition requires both a change—whether physical or operational—and a resulting increase in emissions of a pollutant” (emphasis in original)); Wisconsin Electric Power Co. v. Reilly, 893 F. 2d 901, 907 (CA7 1990) (same). The exclusion of “increase in … hours … or … production rate,” §51.166(b)(2)(iii)(f), speaks to the first of these components (“physical change … or change in … method,” §51.166(b)(2)(i)), but not to the second (“significant net emissions increase,” ibid.). As the preamble to the 1980 PSD regulations explains, forcing companies to obtain a PSD permit before they could simply adjust operating hours “would severely and unduly hamper the ability of any company to take advantage of favorable market conditions.” 45 Fed. Reg. 52704. In other words, a mere increase in the hours of operation, standing alone, is not a “physical change or change in the method of operation.” 40 CFR §51.166(b)(2)(iii).

The judgment of the Court of Appeals is vacated, and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

NOTES AND QUESTIONS

1. Notice that the court refers to Duke Energy’s capital investments as ones that would extend the life of the generating units.  Which of the two possible definitions of “increases emissions” is more consistent with the original idea of providing then-existing facilities a limited grace period to continue operating?

2. One reason that some utilities chose to litigate rather than settle EPA’s enforcement actions was that they were hoping that a new President and administration might result in a change in EPA’s approach to enforcement. When President Bush assumed office in January 2001, one of his first actions was to ask Vice President Cheney to head an energy policy task force to make recommendations on a comprehensive national energy policy. One of the task force’s recommendations was to revise the New Source Review program to respond to industry complaints that its requirements were stifling capital investments that could improve energy efficiency and reduce dependence on foreign energy sources. In December, 2002 and again in October, 2003, EPA promulgated changes to its NSR rules designed to “reduce burden, maximize operating flexibility, improve environmental quality, provide additional certainty, and promote administrative efficiency” in the NSR program for PSD and NA. 67 Fed. Reg. 80,166, 80,189 (Dec. 31, 2002).

3. In its December, 2002 regulations, EPA altered some of the rules for determining the baseline against which potential emissions increases were to be calculated in ways that would result in fewer unit changes triggering NSR.  These regulations also expanded several regulatory exemptions. They retained, however, the annual emissions increase definition of “increases emissions” that formed the backbone of EPA’s position in the enforcement litigation against the utilities. In New York v. EPA, 413 F.3d 3 (D.C. Cir. 2005), the court reversed and remanded several of these changes while sustaining the bulk of them.

4. In the October, 2003 regulations EPA adopted a bright line test for determining whether or not a capital project qualified for the RMRR exemption. Under the new Equipment Replacement Rule (ERP), a capital project at an existing facility was exempt from NSR if: (1) the project replaces existing equipment with identical ones, or ones that serve the same purpose; (2) project costs do not exceed 20 percent of the current replacement value of the entire unit; (3) the project does not alter the basic design of the unit or cause it to exceed any applicable emissions limitations that applies to the unit. 68 Fed. Reg. 61,248, 62,252. In December 2003, a panel of the D.C. Circuit stayed implementation of the ERP based on its belief that challengers had shown a reasonable likelihood of success on the merits, New York v. EPA, 03-1380, Dec. 24, 2003, and in March, 2006, the Court vacated the rule, finding such a large exemption to be “contrary to the plain language “ of the Act.  New York v. EPA, 443 F.3d 880 (D.C. Cir. 2006), cert. denied, 127 S.Ct 2127 (2007)

5. Notwithstanding having its annual emissions interpretation of “increases emissions” sustained in New York v. EPA, EPA proposed to switch to an hourly emissions rate approach. 70 Fed. Reg. 61,081 (Oct. 20, 2005).

EISA & Fuel Economy Agreement
p. 562 (5^th edition): In 2007, Congress supplied some stimulus to the move toward alternative vehicles by enacting the Energy Independence and Security Act of 2007 (EISA).  There, Congress raised the required corporate average fuel economy (CAFÉ) to 35 miles per gallon for autos and light duty trucks by 2020, compared to the current standard of 27.5 mph.  This will provide some additional incentives for hybrids, plug-in hybrids and other true alternative vehicles.  

In the same EISA that raised the CAFÉ standards, Congress also augmented a renewable fuels program, designed to reach a goal of supplying 36 billion gallons of renewable fuel by the year 2022.  While the interest in renewables stems largely from concern about climate change, some renewables can result in appreciable conventional air quality benefits with respect to the conventional pollutants, while the benefit of others is negligible.  The environmental benefits of renewables depend critically on both the chemical composition of the fuels as well as on how much non-renewable energy is required to produce the renewables.  The EISA adds to the Clean Air Act for the first time an explicit regulatory provision aimed at greenhouse gases.  §211(o) requires that renewable fuels have “greenhouse gas lifecycle emissions” that are 20-60% less than conventional gasoline, depending on the type of renewable fuel.  Lifecycle emissions, or well-to-wheel emissions, are the total emissions generated by the entire process of producing, delivering and then consuming a fuel. 

On May 19, 2009, President Obama announced an agreement between major U.S. automakers, federal officials, and the state of California, to establish faster and more stringent increases in corporate average fuel economy (CAFE) standards for motor vehicles than those mandated in the Energy Independence and Security Act of 2007 (EISA). By increasing average fuel economy from the current 25 mpg standard to 35.5 mpg by 2016, the agreement will reduce emissions of GHGs from motor vehicles by 30% and encourage greater use of alternative vehicles.

Renewable fuels
p. 568 (5^th edition): As the renewable fuels program suggests, going forward the relative intensity of greenhouse gases produced by an alternative fuel is going to play an increasingly important role in their development.  Comparisons of the greenhouse gas effects of alternative fuels, made on a well-to-wheel basis, vary according to assumptions about production processes, the type of fuels used in the production and delivery to market and the efficiencies of the engines used to deliver power to the wheels.   Figure 5.6 provides some illustrative figures, comparing each alternative to the gasoline that it would displace on an energy equivalent or BTU basis.  The chart shows, for instance, that when a BTU of corn ethanol replaces a BTU of gasoline, the total well-to-wheel greenhouse gas emissions decline by 21.8 percent.  The calculations account for methane and nitrous oxide as well as CO2. (A number of these comparisons are controversial.  Some detractors of corn ethanol, for example, assert that when a life cycle comparison with realistic assumptions is performed, corn ethanol actually increases GHGs relative to the gasoline baseline.)

Figure 5.6, Comparison of Greenhouse Gas Emissions from Alternative Fuels

 Figure 5.6

Alternative Vehicles: Enhanced AT PZEVs
p. 569 (5^th edition): In March, 2008, the CARB voted to modify the program further, marking the fifth change since its initial adoption on 1990.  It lowered the requirement for true ZEV vehicles (hydrogen fuel cell or battery) to 7,500 to be sold between 2012 and 2014, down from 25,000 called for by the 2003 program.  It also created an additional category of enhanced advanced technology partial-zero emissions vehicles (Enhanced AT PZEVs) that can satisfy part of this requirement.  Enhanced AT PZEVs include plug-in hybrids like the Chevy Volt or internal combustion engines that run on hydrogen, like the BMW Hydrogen 7.  CARB also introduced a 66,000 vehicles-sold requirement for plug-in hybrids for the same 2012-2014 period.

Greenhouse Gases and Mobile Sources:  California’s Special Role
p. 569 (5^th edition): While the EPA was resisting the call to regulate greenhouse gas emissions from automobiles, see Massachusetts v. EPA in Part B of this chapter, California was once again taking the lead on this mobile source related issue.  In 2002, California passed a law, AB 1493, requiring the CARB to issues regulations controlling the emissions of greenhouse gases from mobile sources.  In this case, California did not dispute that in order for these regulations to be lawful, it had to obtain a waiver under § 209 from the Clean Air Act’s preemption of all state regulations of auto emissions  Section 209 provides that if California “determines that the State standards will be in the aggregate, at least as protective of public health and welfare as applicable Federal standards,” it can apply to EPA a waiver.  § 209 then provides that “no such waiver shall be granted if the Administrator finds that:

(A) the determination of the State is arbitrary and capricious;

(B) [California] does not need such … standards to meet compelling and extraordinary     conditions …”

Over the years, California had successfully applied for approximately 50 past waivers and had never been turned down completely by EPA, although there had been several partial denials.

Prior to any decision on California’s waiver application, California was sued by automobile dealers and manufacturers.  They raised a number of challenges to the AB 1493 and the CARB regulations, the principle one being that they conflicted with the provisions of the Energy Policy and Conservation Act (EPCA) mandating that the Department of Transportation issue CAFÉ standards for automobiles and preempting any state law or regulation “related to” fuel economy standards.  This was the same argument that formed the basis of giving the manufacturers an initial victory in its challenge to a version of the ZEV standards, which had led to the CARB reformulating the ZEV program in 2003.  Now the automobile interests were using it in an attempt to block the greenhouse gas emissions standards. 

California’s AB 1493 regulations thus faced two hurdles:  the state had to obtain a waiver from the EPA under § 209, and it had to survive the legal challenges brought by the auto dealers and manufacturers.  The litigation was held in abeyance pending the Supreme Court decision in Massachusetts v. EPA.  Then in late 2007, the federal district court hearing the manufacturers lawsuit rendered the following decision.

Central Valley Chrysler-Jeep, Inc. et al., v. James Goldstene
529 F. Supp. 2d 1151 (E.D.CA 2007)

ANTHONY W. ISHII, District Judge.

ORDER ON MOTIONS AND COUNTER-MOTIONS FOR SUMMARY
JUDGMENT ON PLAINTIFFS' CLAIMS FOR RELIEF ON EPCA
PREEMPTION AND FOREIGN POLICY PREEMPTION

FACTUAL BACKGROUND AND UNDISPUTED MATERIAL FACTS

I. California Regulatory Background

In 2002, the California Legislature enacted Assembly Bill 1493 (“AB 1493”) [that] required CARB to “develop and adopt regulations that achieve the maximum feasible and cost-effective reduction of greenhouse gas emissions from motor vehicles” not later than January 1, 2005. The regulations directed by AB 1493 are to be applied to motor vehicles beginning with the 2009 model year. … The AB 1493 Regulations address four greenhouse gases: carbon dioxide, methane, nitrous oxide and hydrofluorocarbons. Although the emissions standards are expressed in grams of carbon dioxide per mile, the AB 1493 Regulations provide formulae for the conversion of other greenhouse gas pollutants to their carbon dioxide equivalents. The AB 1493 Regulations detail the method for computation of fleet average carbon dioxide emissions for the vehicle fleets being regulated.

II. Federal Regulatory Background

Generally, the Clean Air Act expressly preempts state regulation of motor vehicle emissions. However, section 209 of the Clean Air Act provides that “any state which has adopted standards (other than crankcase emission standards) for the control of emissions from new motor vehicles or new motor vehicle engines prior to March 30, 1966,” may be granted a waiver to impose standards more stringent than those imposed by the Clean Air Act, if specified criteria are met. California is the only state to have regulated new motor vehicle emissions prior to March 30, 1966, and so is the only state that may apply to EPA for a grant of waiver of preemption. Although other states may not request waivers for standards they develop, other states may adopt standards that are promulgated by California and for which a waiver of preemption is granted by EPA pursuant to section 209. Compliance with any California standards that are granted waiver of preemption under section 209 is deemed compliance with corresponding standards promulgated by EPA pursuant to 42 U.S.C., section 7543(b)(3), which provides:

In the case of any new motor vehicle or new motor vehicle engine to which State standards apply pursuant to a waiver granted under paragraph (1), compliance with such State standards shall be treated as compliance with applicable Federal Standards for purposes of this subchapter.

The Energy Policy and Conservation Act (“EPCA”) directs the Secretary of the Department of Transportation (“DOT”) to improve the efficiency of motor vehicles by establishing federal fuel economy standards for new vehicles on a fleet-wide basis. The Secretary of the Department of Transportation has delegated the authority under EPCA to determine the maximum feasible mileage standard to the National Highway Traffic Safety Administration. (“NHTSA”). In determining the maximum feasible average fuel economy, NHTSA must consider: “technological feasibility, economic practicability the effect of other Federal motor vehicle standards on fuel economy and the need of the nation to conserve energy.” 49 U.S.C., § 32902(f).

EPCA contains an express preemption provision as follows:

When an average fuel economy standard prescribed under this chapter is in effect, a State or a political subdivision of a State may not adopt or enforce a law or regulation related to fuel economy standards or average fuel economy standards for automobiles covered by an average fuel economy standard under this chapter.

III. Factual Background - Proposed Undisputed Material Facts

The court accepts as proven for purposes of this discussion that the implementation of regulations that require substantial reduction of carbon dioxide emissions will necessarily require substantial increases in motor vehicle fuel efficiency as measured in miles-per-gallon. [It is also] undisputed that compliance with California's AB 1493 Regulations can be at least partially achieved through changes that are not directly reflected in fuel economy improvements measured in miles-per-gallon.

MOTIONS FOR SUMMARY JUDGMENT/SUMMARY ADJUDICATION ON
PLAINTIFFS' CLAIM OF EPCA PREEMPTION

III. Preemption, Preclusion, and EPCA

“The Supremacy Clause of Article VI of the United States Constitution grants Congress the power to preempt state or local law.”  Where the interrelationship of two federal laws is at issue, preemption doctrine per se does not apply. Rather, the issue becomes whether one federal law has preclusive effect on the applicability of the other.

[AIAM contends that CARB’s regulations under AB 1493 remain state regulations even after they have been granted a waiver by the EPA.  Defendants claim that the state regulations become “federalized” and are not subject to preemption after that.]

The court is of the opinion that a slightly different analytical approach [than either of these two] may be more appropriate.

This court concludes that a more productive approach is to first analyze the interplay between the regulatory function of the Clean Air Act and EPCA's mileage-setting authority. Specifically, the court's analysis begins by asking if EPA may promulgate emission control regulations that have an effect on fuel economy. If so, the next question is whether any new EPA-promulgated regulations that would have the incidental effect of requiring greater fuel efficiency than is required under existing regulations set by NHTSA under the CAFE program are precluded by EPCA. Finally, the court will ask if there is any basis for treating a state regulation that has been granted waiver under section 209 any differently than a regulation that has been promulgated by EPA.

A. EPA's Authority to Promulgate Emission Control Regulations Having an Effect on Fuel Economy

Pertinent to the issues raised by Plaintiffs' claim of preemption under EPCA, the Supreme Court, in its discussion of potential conflict between EPCA and EPA's authority to regulate carbon dioxide, held:

EPA finally argues that it cannot regulate carbon dioxide emissions from motor vehicles because doing so would require it to tighten mileage standards, a job (according to EPA) that Congress has assigned to DOT. But that DOT sets mileage standards in no way licenses EPA to shirk its environmental responsibilities. EPA has been charged with protecting the public's “health” and “welfare,” a statutory obligation wholly independent of DOT's mandate to promote energy efficiency. The two obligations may overlap, but there is no reason to think the two agencies cannot both administer their obligations and yet avoid inconsistency.

While the Congresses that drafted § 202(a)(1) might not have appreciated the possibility that burning fossil fuels could lead to global warming, they did understand that without regulatory flexibility, changing circumstances and scientific developments would soon render the Clean Air Act obsolete.”. Because greenhouse gases fit well within the Clean Air Act's capacious definition of “air pollutant,” we hold that EPA has the statutory authority to regulate the emission of such gasses from new motor vehicles.  Massachusetts, 127 S.Ct. 1438, 1461-1462.

The above-quoted portion of Massachusetts indicates that the threshold inquiry should not be aimed at the likelihood the California standards would interfere with EPCA's regulatory scheme; rather, the threshold inquiry is to examine the scope of EPCA's ability to preclude regulations that are aimed at the prevention of damage to public health or welfare from greenhouse gas emissions where those regulations may impact mileage standards.

The previously quoted portion of the Massachusetts decision indicate clearly that Congress empowered EPA to enact controls on greenhouse gasses notwithstanding that such regulation might require increased fuel efficiency. The Supreme Court noted that EPA is specifically tasked with protection of the public health and welfare under the Clean Air Act, and that DOT, under EPCA, is not. In its discussion on plaintiffs' standing in Massachusetts, the Supreme Court acknowledged that carbon dioxide emissions from human activities constitute a causal connection with global warming and that the widely recognized consequences of global climate change constitute an increasingly severe threat to human health and welfare. See Massachusetts, 127 S.Ct. at 1455-56.

B. Non-Preclusion of EPA's Regulations by EPCA

As previously noted, in questions of both preemption of state law and preclusion of federal statutory remedies by other federal statutes, the touchstone is congressional intent. “To determine the congressional intent [...], [the court] look[s] to the language, structure, subject matter, context and history-factors that typically help courts determine a statute's objectives and thereby illuminate its text.”

As the Supreme Court's decision in Massachusetts makes clear, the EPA's congressionally established purpose is to protect the public's health and welfare, a task EPA can and must undertake independent of NHTSA's duty to set mileage standards. Massachusetts, 127 S.Ct. at 1462. While the Massachusetts Court recognized that the “obligations of the two agencies may overlap,” it opined that “there is no reason to think the two agencies cannot both administer their obligations and yet avoid inconsistency.” What remains unaddressed is the mechanism by which the two agencies should resolve inconsistencies between the two regulatory regimes. Put more directly, the question to be answered is what happens when EPA, independently fulfilling its duty to regulate emissions that threaten the public's health and welfare, imposes a regulatory structure that would result in fuel efficiency standards that are more stringent than the currently-operative CAFE standards?

At oral argument, AIAM clarified its EPCA preemption argument contending the effect of the Supreme Court's decision in Massachusetts is to require “harmonization” of the tension between EPA's regulation of greenhouse gasses and NHTSA's duty to set fuel economy standards under EPCA. AIAM contends that the Supreme Court's decision gave EPA authority to work out the overlap with DOT or NHTSA so that conflict would be avoided. AIAM's oral arguments continue to strongly imply without directly stating that it is EPA who must act to assure harmonization of any new regulations that limit motor vehicle greenhouse gas emissions if the new regulations impinge on existing CAFE standards. This court has examined the statutory language of the Clean Air Act and has reviewed the Supreme Court's decision in Massachusetts carefully and can find no support there for AIAM's position.

An examination of the structure and text of both EPCA and the relevant portions of the Clean Air Act indicate to this court that Congress intended to allocate to EPA the broader scope of authority to regulate vehicle exhaust emissions for the more important purpose of safeguarding the public's health and welfare. ... The Massachusetts Court held that it is EPA's duty to evaluate the risk to public health and welfare posed by greenhouse gas emissions from motor vehicles and, if endangerment is found, to regulate. Massachusetts, 127 S.Ct. at 1461-1462. Nothing in the language of Massachusetts requires EPA to harmonize its regulation with DOT's administration of EPCA.

EPCA's language requires NHTSA to give consideration to “other motor vehicle standards of the Government,” including, explicitly, regulations promulgated by EPA. 49 U.S.C. § 32902(f). There is no corresponding statutory duty by EPA to give consideration to EPCA's regulatory scheme. This asymmetrical allocation by Congress of the duty to consider other governmental regulations indicates that Congress intended that DOT, through NHTSA, is to have the burden to conform its CAFE program under EPCA to EPA's determination of what level of regulation is necessary to secure public health and welfare.

The court concludes that the “shall consider” requirement in section 32902(f) evinces Congress's intent to empower NHTSA to adapt its regulations developed through EPCA to accommodate emissions restrictions imposed by EPA as necessary for the public's health and welfare.

This conclusion is supported by noting how the factors EPA must consider to discharge its duty to formulate regulations necessary to protect public health and welfare overlap with the factors NHTSA is required to consider in formulating the highest possible fuel efficiency standards. In formulating emissions regulations, EPA is obliged to give consideration to factors including the level of emissions reductions achievable through available technology, cost, and energy and safety factors associated with the application of the emission-reduction technology. 42 U.S.C. § 7521(a)(3)(A). NHTSA, as previously mentioned, must consider technological feasibility, economic practicability, and the need of the nation to conserve energy, in addition to the effect of other government regulations. Thus, EPA is required to give consideration to the same factors NHTSA must consider in formulating its fuel efficiency standards while NHTSA is not directly empowered to consider EPA's goal to protect public health and welfare.

When the overlap in the factors NHTSA and EPA must consider in formulating their respective regulations is viewed in light of the Supreme Court's observation in Massachusetts, reflecting Congress' concern that changing circumstances and scientific developments related to global warming not be allowed to prevent EPA from acting, the congressional purpose behind EPCA's “shall consider” language becomes apparent. While Congress did not empower NHTSA to consider the impact of mileage standards on public health and welfare, Congress did empower NHTSA to consider the impact of “other motor vehicle standards of the Government” on mileage standards. Thus, Congress enabled NHTSA to conform the mileage standards it sets through the EPCA process to the pollution reduction requirements that are determined by EPA to be necessary for the protection of public health and welfare.

…The Supreme Court's decision in Massachusetts makes it clear that, while Congress could not have foreseen the evolution of climate change science that would bring EPA's mandate to protect health and welfare into conflict with NHTSA's goals in setting mileage standards, Congress intended that under such circumstances, EPA would not be prevented from necessary action. See Massachusetts, 127 S.Ct. at 1462 (holding that Congress did not intend to allow changes in scientific developments to render the Clean Air Act obsolete).

Simply put, the court concludes that where EPA, consistent with its obligation to protect public health and welfare, determines that regulation of pollutants under the Clean Air Act is necessary and where such regulation conflicts with average mileage standards established pursuant to EPCA, EPA is not precluded from promulgating such regulation. The court further concludes the agency designated by EPCA to formulate average mileage standards is obliged to consider such regulations pursuant to 49 U.S.C. § 32902(f) and is further obliged to harmonize average fuel efficiency standards under EPCA with the standards promulgated by EPA.

C. The Status of State Regulations Granted Waiver by EPA

Having now determined that EPA may promulgate regulations that are in conflict with fuel efficiency standards, the court … ask[s] whether a state regulation that is granted waiver of preemption under the Clean Air Act should stand in any different stead with respect to inconsistencies or conflicts it may have with EPCA-established fuel efficiency standards.

If EPA concludes that California's regulations meet [the] three requirements [of § 209], EPA is obliged to grant the waiver application. Although regulations proposed by California pursuant to section 209 must broadly advance EPA's primary purpose to protect public health and welfare, and must be at least as stringent as the corresponding EPA regulations in the aggregate, the proposed California regulations need not establish perfect compliance with all provisions of the Clean Air Act. In creating the waiver provisions of section 209, Congress determined that California should have the “‘broadest possible discretion in selecting the best means to protect the health of its citizens.’]” “‘In short, Congress consciously chose to permit California to blaze its own trail with a minimum of federal oversight.’ ”

Once a proposed California regulation has been granted a waiver of preemption pursuant to section 209 of the Clean Air Act, section 177 of the Clean Air Act [provides that other states may adopt the California standards.] … As a consequence of the limited adoption provisions of section 177, “there can be only two types of cars ‘created’ under emissions regulations in this country: ‘California’ cars and ‘federal’ (that is, EPA-regulated) cars.”

Defendants contend, and Plaintiffs and AIAM do not directly dispute that a California regulation that has been granted waiver of preemption under section 209 of the Clean Air Act is an “other motor vehicle standard[ ] of the Government” that must be considered by NHTSA in the formulation of average fleet mileage standards under EPCA. At oral argument AIAM admitted that a California regulation that is granted waiver of preemption under section 209 is an “other motor vehicle standard[ ] of the Government” that NHTSA must consider, however AIAM contends that the extent of consideration of the California regulation is confined to a determination that the regulation has a de minimis effect on fuel efficiency. AIAM contends that if NHTSA's consideration of the California regulation indicates an effect of fuel efficiency that is anything more than de minimis, then the California regulation is preempted. AIAM does not offer any textual or case law basis for this contention. As a historical matter, the court notes that it is true that prior California regulations that were approved under section 209 that reduced motor vehicle emissions of oxides of sulphur and nitrogen through catalytic converters had the effect of slightly decreasing fuel efficiency. However, this is merely a fortuitous historical fact that does not establish the otherwise unsupported proposition that EPCA requires NHTSA to consider and harmonize its standards only with California regulations that have no significant effect on fuel efficiency.

The most thorough and persuasive analysis of the issue so far as the court has found was offered as part of the decision in Green Mountain wherein that court rejected plaintiffs' claim of EPCA preemption. The Green Mountain court observed:

Section 502(d) of EPCA as originally enacted provided that any manufacturer could apply to the Secretary of Transportation for modification of an average fuel economy standard for model years 1978 through 1980 if it could show the likely existence of a “Federal standards fuel economy reduction,” defined to include EPA-approved California emissions standards that reduce fuel economy. § 502(d)(1-3). Thus, in 1975 when EPCA was passed, Congress unequivocally stated that federal standards included EPA-approved California emissions standards. § 502(d)(3)(D)(i). In 1994, when EPCA was recodified, all reference to the modification process applicable for model years 1978 through 1980, including the categories of federal standards, was omitted as executed. However the 1994 recodification was intended to “revise[], codif[y], and enact [ ]” the law “without substantive change.” If the recodification worked no substantive change in the law, then the term “other motor vehicle standards of the Government” continues to include both emission standards issued by EPA and emission standards for which EPA has issued a waiver under section 209(b) of the [Clean Air Act], as it did when enacted in 1975. NHTSA has consistently treated EPA-approved California emissions standards as “other motor vehicle standards of the government,” which it must take into consideration when setting maximum feasible average fuel economy under § 32902. Green Mountain, 508 F.Supp.2d at 345.

In sum, when a California regulation is granted waiver of preemption pursuant to section 209 of the Clean Air Act, the California regulation assumes three attributes. First, the California regulation becomes available for adoption by any other state…. Second, compliance with the California regulation or standard is deemed “compliance with applicable Federal standards for purposes of [Subchapter II-Emissions Standards for Moving Sources].” Third, as discussed in Green Mountain, the California regulation or standard becomes an “other motor vehicle standard[] of the government” that affects fuel economy and that the Secretary of Transportation must consider in formulating maximum feasible average fuel economy standards under EPCA.

The court can discern no legal basis for the proposition that an EPA-promulgated regulation or standard functions any differently than a California-promulgated and EPA-approved standard or regulation. Either EPA-promulgated regulations or California-promulgated regulations that are approved by EPA may be implemented to achieve compliance by any state, and both must be considered by NHTSA in formulating average fuel economy standards. In either case, where there is conflict between new EPA-promulgated or California-promulgated regulations that are EPA approved and existing EPCA fuel economy standards, DOT is empowered through EPCA to take the new regulations into consideration when revising its CAFE standards.

The court concludes that, just as the Massachusetts Court held EPA's duty to regulate greenhouse gas emissions under the Clean Air Act overlaps but does not conflict with DOT's duty to set fuel efficiency standards under EPCA, so too California's effort to regulate greenhouse gas emissions through the waiver of preemption provisions of the Clean Air Act overlaps, but does not conflict with DOT's activities under EPCA.

IV. Express Preemption and Conflict Preemption

There remains the question of whether, notwithstanding the non-preclusion of EPA-approved state regulation by EPCA-established fuel economy standards, EPCA either expressly or impliedly preempts states from enforcing EPA-approved California regulations because those regulations impinge on DOT's duty through EPCA to set maximum feasible mileage standards. Preemption of state law may be either express or implied. Express preemption may be found where Congress has explicitly stated “the extent to which its enactments preempt state law.”. State law is impliedly preempted where obligations imposed by federal statute “reveal a purpose to preclude state authority.”

A. Express Preemption

When a court examines a federal statute to discern the scope of express preemption, that examination is “informed by two presumptions about the nature of the preemption.” First, the court assumes that the “‘historic police powers of the states were not to be superceded by the Federal Act unless that was the clear and manifest purpose of congress.’ This presumption against preemption leads [the court] to the principle that express preemption statutory provisions should be given a narrow interpretation. [Citation.]” Second the court proceeds on the understanding that “ ‘the purpose of Congress is the ultimate touchstone in every pre-emption case.’” As previously noted, congressional intent is discerned by an examination of the “language, structure, subject matter, context and history-factors that typically help courts determine a statute's objectives and thereby illuminate its text.”

EPCA provides that “... a State or a political subdivision of a State may not adopt or enforce a law or regulation related to fuel economy standards or average fuel economy standards ....”49 U.S.C. § 32919. EPCA's preemptive scope obviously turns on the breadth of regulatory activities embodied in the term “related to.” In light of the foregoing discussion, the question to be resolved is not whether California's AB 1493 Regulations will have an effect on fuel economy standards established by EPCA, but whether the definition of “related to” encompasses effects on fuel efficiency that are incidental to the stated purpose of limiting greenhouse gas emissions.

The waiver provision of the Clean Air Act recognizes that California has exercised its police power to regulate pollution emissions from motor vehicles since before March 30, 1966; a date that predates both the Clean Air Act and EPCA. Thus, the court must presume that Congress did not intend that EPCA would supercede California's exercise of its historically established police powers. Second, EPCA's requirement that NHTSA consider “other motor vehicle standards of the government” that affects fuel economy pursuant to 49 U.S.C. § 32902(f) makes it clear that Congress did not intend that EPCA should preempt state laws that serve purposes different from EPCA, but which may have some effect on fuel economy as a byproduct of their enforcement. It makes no logical sense that EPCA would direct NHTSA to give consideration to a law that cannot be enforced because EPCA preempts it. Third, the Supreme Court's decision in Massachusetts makes it clear that EPA regulations under the Clean Air Act that control carbon dioxide emissions serve a purpose that is distinct from, and not in conflict with, the purpose of EPCA.

Each of the foregoing considerations support the proposition that EPCA's express preemption of state regulations related to mileage standards be construed as narrowly as the plain language of the law permits. The narrowest interpretation consistent with the plain language of EPCA's preemptive provision is that it encompasses only those state regulations that are explicitly aimed at the establishment of fuel economy standards, or that are the de facto equivalent of mileage regulation, or that do not meet the requirements established by the Clean Air Act for waiver of preemption under section 209.

Both parties agree that the proposed California AB 1493 Regulations, if granted preemption of waiver by EPA, will require substantial improvements in average fuel efficiency performance in passenger cars and light trucks. By the same token, the parties do not dispute that such factors as air conditioning offsets, hybrid and plug-in hybrid credits, and up-stream carbon offsets for ethanol-gasoline blends and other fuel-source considerations mean that the relationship between carbon dioxide reduction requirements under AB 1493 and increases in average fleet fuel efficiency that would be required to achieve those reductions is not one-to-one.

Plaintiffs' and AIAM's argument with respect to EPCA preemption can be summarized as contending that the fact implementation of the California AB 1493 Regulations would require substantial improvement in average fleet fuel efficiency standards under the CAFE program is sufficient to bring the proposed standards within the ambit of EPCA's preemption provision. Defendants' argument, on the other hand, can be summarized as asserting that the fact that the California AB 1493 Regulations do not have a one-to-one correspondence to average fleet fuel efficiency standards under the CAFE program and that the California AB 1493 Regulations are “other Government standards” that NHTSA must consider in formulating average fleet mileage standards takes the California AB 1493 Regulations out of the scope of EPCA's preemption provision. Given the narrow scope the court must accord EPCA's “related to” language, it is this court's opinion that Defendants have the better of the argument.

… Plaintiffs' and AIAM's argument is undercut by the fact EPCA, in addition to including an express preemption provision, also includes a provision that specifically requires the agency developing mileage standards under EPCA to specifically consider standards promulgated by California  and granted waiver of preemption under section 209 of the Clean Air Act.  As previously discussed, this feature of EPCA evinces a congressional intent to empower NHTSA to accommodate California regulations that are granted waiver of preemption by EPA under the Clean Air Act. The court finds the fact that EPCA's preemption provision was enacted after the waiver of preemption provision of the Clean Air Act is not determinative of the scope of express preemption under EPCA.

The court finds that the preemptive force of 49 U.S.C. § 32919 extends very narrowly. State laws that are granted waiver of preemption under the Clean Air Act that have the effect of requiring even substantial increases in average fuel economy performance are not preempted where the required increase in fuel economy is incidental to the state law's purpose of assuring protection of public health and welfare under the Clean Air Act. The court also finds that a law that requires substantial improvement in average fleet mileage standards incidentally to its purpose of protecting public health and welfare does not constitute a de facto regulation of fuel economy standards unless there is a narrow one-to-one correlation between the pollution reduction regulation and the fuel efficiency standard. Where, as here, various considerations including fuel type and source and other sources of emission may have the effect of mitigating fuel efficiency improvement requirements, the pollution control standard does not constitute a de facto regulation of fuel efficiency.

B. Conflict Preemption

“[A] state law is invalid to the extent it ‘actually conflicts with a ... federal statute.’ ” Such a conflict can result in preemption where it is impossible for a private party to comply with both the state and federal requirements. Conflict preemption can also be found where “the state law ‘stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.’ ”

Based on the discussion in Massachusetts, and on the text of EPCA, it is apparent that the objective of EPCA's efforts in establishing fuel economy standards is to conserve fuel by establishing the “maximum feasible average fuel economy” level. Considerations such as pricing, consumer choice, safety for the consumer, and dealer profitability are not goals or objectives in and of themselves, they are factors against which the possibility of increased fuel efficiency is weighed in order to determine feasibility. Massachusetts, 127 S.Ct. at 1461. Similarly, EPA's central mandate under the Clean Air Act is protection of public health and welfare. Factors such as technological feasibility, cost, and the like are factors against which the effort to promote public health and welfare is balanced.

In the context of concerns over carbon dioxide emissions, EPA's mandate to protect public health and welfare and DOT's mandate to establish the highest feasible level of fuel efficiency are aligned. DOT's goal of increasing fuel efficiency to the maximum feasible level promotes EPA's goal of limiting greenhouse gas air pollution and vice versa. Both EPA-promulgated standards or EPA-approved state standards must balance reductions in pollution emissions against factors that are specified by Clean Air Act, just as DOT, through NHTSA, must balance its determination of maximum feasible fuel economy against certain factors specified by EPCA. Neither the Clean Air Act nor EPCA, however, require any particular balance as a matter of law.

Case and statutory law support the broad authority of EPA to force substantial change on the status quo on an industry-wide basis. The “technology-forcing goals” of Subchapter II, the portion of the Clean Air Act that establishes emissions standards for moving vehicles, are well recognized. The technology-forcing authority of the Clean Air Act is embodied in the language of the Act that directs EPA to promulgate standards “that reflect the greatest degree of emission reduction achievable through the application of technology which the Administrator determines will be available for the model year to which the standards apply, ....” EPA is thus empowered to set standards for future model years based on reasonable projections of technology that may not be available currently.  Further, the same technology-forcing effect that an EPA-promulgated regulation may have on the automotive industry may be manifested in a California regulation that is granted waiver under section 209.

At oral argument Plaintiffs noted that under EPCA, NHSTA was required to factor “economic practicability” into its determination of maximum feasible fuel efficiency. Plaintiffs contend the term “economic practicability” incorporates considerations such as job loss, consumer impacts, and revenue losses from lost sales. The implication of Plaintiffs' argument is that there is actual conflict between California's AB 1493 Regulations and EPCA's purposes because California was not required to consider “economic practicability” and its AB1493 Regulations conflict with what NHTSA determined is economically practicable. Plaintiffs' argument is not persuasive. While California may not be required to engage in precisely the same weighing as NHTSA or to consider precisely the same factors, California is required to give consideration to the factors set forth in 42 U.S.C. § 7521; namely technological availability, cost, and safety factors associated with the application of emission-reduction technology-the same factors EPA would have to consider in promulgating regulations under its own authority. While EPCA and the Clean Air Act use somewhat different words to describe the factors that must be considered in setting standards or promulgating regulations, the court finds the weighing process covers substantially the same ground in both cases insofar as an assessment of economic impacts is concerned.

Based on available legal authority, the court must conclude Plaintiffs and AIAM assert more by way of economic protection than EPCA provides. The ability of EPA-promulgated regulations, or of California regulations that are granted waiver of preemption, to force technology changes necessarily implies the expectation that the forcing of technology change will force substantial investment by regulated companies to implement the required technology within the lead time provided. Such guarantee against economic burden as the statutory structure provides is embodied in EPA's charge to consider issues such as cost, technological availability, energy requirements, and time required to implement the technological improvement. In terms of California regulations that are granted waiver of preemption, such guarantee against economic burden is embodied in the requirements that the state standards are consistent with the requirements of section 7521(a) and that adequate lead-time be provided.

Because California's AB 1493 Regulations, if granted waiver under section 209 will fulfill both EPA's objective of “greatest degree of emission reduction achievable through the application of technology ...,” and EPCA's objective of implementing the “maximum feasible average fuel economy” standards, the enforcement of the California AB 1493 Regulations will not conflict with EPCA for purposes of conflict preemption. To the extent the enforcement of the AB1493 Regulations may be incompatible with existing CAFE standards, NHTSA is empowered to revise its standards taking into account the AB 1493 Regulations. To the extent the implementation of technology to meet the AB 1493 Regulations will be forced by enforcement of the standards, that technology forcing does not constitute an interference with EPCA's purpose of setting average fleet mileage standards to the maximum feasible level.

CONCLUSION

Pursuant to the foregoing discussion, the court concludes that both EPA and California, through the waiver process of section 209, are equally empowered through the Clean Air Act to promulgate regulations that limit the emission of greenhouse gasses, principally carbon dioxide, from motor vehicles. The court further concludes that the promulgation of such regulations does not interfere or conflict with NHTSA's duty to set maximum feasible average mileage standards under EPCA. The court finds EPCA's preemption of state laws that regulate vehicle fuel efficiency does not expressly preempt California's effort to reduce greenhouse gas emissions through AB 1493. Because Congress intended there should be no conflict between EPA's duty to protect public health and welfare and NHTSA's duty to set fuel efficiency standards through EPCA, the doctrine of conflict preemption does not apply. To the extent the enforcement of California's AB 1493 Regulations may be inconsistent with existing CAFE standards, EPCA provides that NHTSA has authority to reformulate CAFE standards to harmonize with the AB 1493 Regulations if, and when, such standards are granted waiver of preemption by EPA.

NOTES AND QUESTIONS

1.  The auto manufacturers raised other challenges to the AB 1493 Regulations as well, including particularly the contention that California’s mandatory regulations conflicted with President Bush’s foreign policy decision to deal with the international problem of climate change by entering into voluntary agreements with other parties.  They alleged that California’s regulations deprived President Bush a bargaining chip in those international negotiations.  Because our nation’s foreign policy is the responsibility of the federal government, the manufacturers argued these conflicts supported a ruling that the Regulations were subject to foreign policy preemption and invalid for that reason.  The court found that the evidence adduced with respect to the U.S. position on climate change reflected a strategy, not a substantive policy with which the California regulations conflicted.  It further found that the “bargaining chip” theory proved too much:  it would have the same potential application to any measures states might take to reduce their carbon footprint, because that would deny the federal government the option of using those reductions as another bargaining chip in negotiations.  529 F. Supp. 2d at 1187-89. 

2.  The Green Mountain decision to which Judge Ishii refers in Central Valley was also a suit brought by auto dealers and manufacturers challenging the California regulations, filed in federal district court in Vermont.  Vermont was one of the states that exercised its option under Section 177 to adopt California’s standards.  Like Central Valley, Green Mountain also sustained the regulations, although the reasoning of the two cases differs.  Green Mountain held that once California obtained a §209 waiver its greenhouse gas regulations would become “federalized” – the same argument that the defendants made in Central Valley.  As the Green Mountain court said, “it seems beyond serious dispute … that once EPA issues a waiver for a California emissions standard, it becomes a motor vehicle standard of the government, with the same stature as a federal regulation with regard to determining maximum feasible average fuel economy under EPCA.”  508 F. Supp. 2d at 347.  How does Central Valley differ from Green Mountain on this point, and what difference does it make?

3. After the court in Central Valley concludes that the AB 1493 Regulations would have to be taken into account by DOT in formulating CAFÉ standards, why does the opinion continue on to discuss whether the Regulations are preempted?  Hasn’t that question been answered?   In their argument that the California regulations were preempted, how did the auto dealers and manufacturers think that “related to” should be interpreted?  In contrast to the position of the dealers and manufacturers, what meaning did the court give to the “related to” language?  The court says that the plaintiffs failed to offer any textual basis for its preferred interpretation.  Did the court offer any textual basis for its own interpretation?  What role did the court’s judgment that improving fuel economy was not the only way to reduce greenhouse gases play in reaching its  conclusion about the correct interpretation of “related to”?  Is Central Valley’s interpretation of “related to” here consistent with Engine Manufacturer’s interpretation of “related to” with respect to the Fleet Rules at issue in that decision? 

4.  Any elation in California and among its supporters that the State’s regulations had passed muster was short lived.  In March, 2008, EPA denied California’s waiver application under § 209.  73 Fed. Reg. 12156 (March 6, 2008).  EPA acknowledged that global climate change will have substantial effects on California, but declined to find that these effects were “sufficiently different from conditions in the nation as a whole to justify separate state standards.”  It also concluded that while California’s unique topography, weather conditions and concentrations of automobiles had justified past waivers because these contributed to the severity of auto emissions impacts in the state, none of these factors had any relationship to the severity of the impact of greenhouse gas emissions, because a ton of CO2 emitted in California contributed the same amount to the global problem – and hence to its impact on California -- as a ton emitted anywhere else.   California and its supporters objected that EPA was applying a different standard to this waiver application than to any of the approximately 50 past waiver applications, all of which EPA had approved.  In deciding those applications, EPA had taken the position that so long as local conditions justified having a set of separate standards in California, California did not have to demonstrate that this was the case for each and every standard it wished to establish.  In other words, so long as there were going to be two standards – federal and California – auto manufacturers would not be further disadvantaged if California included in its standards further elements that could not be correlated to California’s unique topography, weather conditions and concentrations of automobiles. 

California promptly challenged the waiver denial in federal court.  In one of his first actions, President Obama instructed EPA Administrator Jackson to reconsider the waiver decision.  The waiver was granted in June 2009.

NOTES AND QUESTIONS

1.  EPA Administrator Johnson had announced his decision in December, 2007, well in advance of publishing it.  Shortly after his announcement, rumors spread quickly that EPA career staff had unanimously supported granting the California waiver and that staff in the general counsel’s office had warned that a denial would not be legally defensible.  Senator Barbara Boxer and Congressman Henry Waxman, both members of California’ congressional delegation and chairs of the Senate Environment and Public Works Committee and the House Committee on Oversight and Government Reform, respectively, launched investigations.  After several months of investigation, Waxman’s committee staff issued a memorandum, dated May 19, 2008, detailing evidence supporting these contentions.  The staff report provided further evidence suggesting that Administrator Johnson himself initially favored either a full or partial waiver, but changed his mind after input from the White House.  “The record before the Committee suggests that the White House played a pivotal role in the decision to reject the California petition, but it does not explain the basis for the White House intervention.” Majority Staff Memorandum to the Members of the Committee on Oversight and Government Reform, May 19, 2008 at http://oversight.house.gov/documents/20080519131253.pdf.  In response to a request for documents reflecting communications between the White House and the EPA on this issue, the White House asserted executive privilege and declined to produce them.  Id. at 6.

3.  Internal EPA staff analysis unearthed through the Waxman investigation had, prior to the final decision, concluded that denying California’s waiver would not be “consistent with past interpretation of statute, EPA practice, case law, and the record,” and “inconsistent with precedent saying we look at vehicle program as a whole, not individual standards.”  Id. at 11.  That internal analysis also concluded that the effects of climate change in California “represent serious conditions on their own and when compared with other states,” apparently indicating that a denial based on a lack of “extraordinary or compelling” local effects was not supportable.  Late in the internal review process, a slide prepared for an October 30, 2007 briefing of the Administrator stated that “California exhibits a number of specific features that are somewhat unique and may be considered compelling and extraordinary with regard to both the need for mitigation actions and its potential vulnerability to climate change.” Id. at 13.

5.         Greenhouse Gases and Mobile Sources:  EPA’s Response to Mass v. EPA

At the same time that the California waiver decision was under review, EPA was also considering its response to the remand in Massachusetts v. EPA. In June, 2008, the agency issued its response in the form of an Advance Notive of Proposed Ruling (ANPR).  In the ANPR, EPA did not indicate whether it was inclined to issue the endangerment finding or not.  Instead, in it as well as in accompanying Technical Support Documents (TSD) EPA presented a wealth of scientific analysis of climate change, drawing heavily on existing peer-reviewed synthesis reports, especially those of the Intergovernmental Panel on Climate Change (IPCC), the United States Climate Change Science Program (CCSP) and the National Research Council (NRC).  The ANPR contained an extensive discussion of the legal options potentially open to EPA, both under Section 202 and under the rest of the Clean Air Act provisions that could well be triggered should EPA issue the Section 202 endangerment finding. 

After President Obama assumed office on January 20, 2009, his Administration moved quickly to reconsider the ANPR.  On April 17, 2009, the EPA announced that it was proposing to issue the endangerment finding that the petitioners in Massachusetts v. EPA had been seeking. This came in the form of a proposed rule, which EPA will finalize after receiving and considering public comments both pro and con. 

Environmental Protection Agency:  Proposed Endangerment and Cause or
Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act,
74 Fed. Reg. 18886 (2009)

I.  Introduction

B.  Background Information Helpful to Understanding This Proposal

Today the Administrator is … proposing to find that the mix of six key greenhouse gases in the atmosphere may reasonably be anticipated to endanger public health and welfare due overwhelmingly to the effects of climate change. Furthermore, the Administrator is proposing to find that emissions of greenhouse gases by motor vehicles collectively contribute to the air pollution that endangers public health and welfare….

II.  Legal Framework for This Action

A.  Section 202(a) – Endangerment and Cause or Contribute

[S]ection 202(a) of the CAA calls for the Administrator to exercise her judgment and make two separate determinations: first, whether air pollution may reasonably be anticipated to endanger public health or welfare, and second whether emissions of any air pollutant from new motor vehicles or engines cause or contribute to this air pollution.

Based on the text of this provision and its legislative history, the Administrator interprets the two part test as follows. First, the Administrator is required to protect public health and welfare. She is not asked to wait until harm has occurred but instead must be ready to take regulatory action to prevent harm before it occurs. The Administrator is thus to consider both current and future risks. Second, the Administrator is to exercise judgment by weighing risks, assessing potential harms, and making reasonable projections of future trends and possibilities. It follows that when exercising her judgment the Administrator balances the likelihood and severity of effects. This balance involves a sliding scale; on one end the severity of the effects may be significant, but the likelihood low, while on the other end the severity may be less significant, but the likelihood high. Under either scenario, the Administrator is permitted to find endangerment. If the harm would be catastrophic, the Administrator is permitted to find endangerment even if the likelihood is small. In the context of climate change, for example, the Administrator should take account of the most catastrophic scenarios and their probabilities. As explained below, however, it is not necessary to rely on low-probability outcomes in order to find endangerment here. …

There is a very large and comprehensive base of scientific information that has been developed over many years through a global consensus process involving numerous scientists from many countries and representing many disciplines. …

1.  Statutory Language

By instructing the Administrator to consider whether emissions of an air pollutant cause or contribute to air pollution, the statute is clear that she need not find that emissions from any one sector or group of sources are the sole or even the major part of an air pollution problem. The use of the term contribute clearly indicates a lower threshold than the sole or major cause.

3.  Additional Considerations for the Cause and Contribute Analysis

Moreover, the statutory language in section 202(a) does not contain a modifier on its use of the term contribute. Unlike other CAA provisions, it does not require “significant” contribution. … In the past the Administrator has looked at emissions of air pollutants in various ways to determine whether they “cause or contribute” to the relevant air pollution. For instance, in some mobile source rulemakings, the Administrator has looked at the percent of emissions from the regulated mobile source category compared to the total mobile source inventory for that air pollutant.  In other instances the Administrator has looked at the percent of emissions compared to the total non attainment area inventory of the air pollution at issue. EPA has found that air pollutant emissions that amount to 1.2% of the total inventory “contribute."

While these prior actions are instructive, they do not establish bright line emission levels above which a positive contribution determination must be made, or below which a contribution determination could not be made.

III.  The Administrator’s Proposed Endangerment Finding

B. The Air Pollution

2.  Evidence That the Six Greenhouse Gases Are at Unprecedented Levels in the Atmosphere

Current atmospheric greenhouse gas concentrations are now at elevated levels as

a result of both historic and current anthropogenic emissions. The global atmospheric carbon dioxide concentration has increased about 38 percent from preindustrial

levels to 2009, and almost all of the increase is due to anthropogenic emissions. The current (year 2009) carbon dioxide concentration is 386 parts per million (ppm)

and has recently been increasing by about 2.0 ppm per year. The global atmospheric concentration of methane has increased by 149 percent since pre-industrial levels

(through 2007), and the nitrous oxide concentration has increased 23 percent (through 2007). The observed concentration increase in these gases can also be attributed primarily to anthropogenic emissions. The industrial fluorinated gases, hydrofluorocarbons,

perfluorocarbons, and sulfur hexafluoride, are almost entirely anthropogenic in origin, and have relatively low atmospheric concentrations but are increasing rapidly;

concentrations of many of these gases have increased by large factors (between 4.3 and 1.3) between 1998 and 2005.

C.  The Administrator’s Proposed Finding That the Air Pollution Endangers Public
Health and Welfare

1. Evidence of Currently Observed Climatic and Related Effects

Over the contiguous U.S., total annual precipitation increased at an average rate of 6.5 percent over the period 1901-2006. … Sea level has been rising along most of the U.S.

Atlantic and Gulf coasts [ranging] between 2.4 and 4.4 millimeters per year, or about 0.3 meters (1 foot) over the twentieth century. Climate changes are very likely already  ffecting U.S. water resources, agriculture, land resources, and biodiversity as a result of climate variability and change.  [Extreme weather events, such as unusually hot days or nights, heavy downpours, powerful hurricanes, are also increasing.]

2. Future Projected Climatic and Related Effects

Because atmospheric greenhouse gas concentrations are expected to climb for the foreseeable future, temperatures will continue to rise and the overall rate and magnitude of human-induced climate change will likely increase, such that risks to public health and welfare will likewise grow over time so that future generations will be especially vulnerable; their vulnerability will include potentially catastrophic harms.

3.  Impacts on Public Health

As our discussion of increasing temperature suggests, the adverse effects of greenhouse gas emissions are expected to mount over time. … We believe that existing evidence supports a finding that there are current adverse effects.  … To be clear, ambient concentrations of carbon dioxide and the other greenhouse gases, whether at current levels or at projected ambient levels under scenarios of high emissions growth over time, do not cause direct adverse health effects such as respiratory or toxic effects.  All public health risk and impacts described here as a result of elevated atmospheric concentrations of greenhouse gases occur via climate change.  The pathway or mechanism occurs through changes in climate, but the end result is an adverse effect on the health of the population.   …

Severe heat waves are projected to intensify … with likely increases in mortality and morbidity.  … The Administrator also acknowledges that warming temperatures may bring about some health benefits.  … The Administrator does not believe that it is now possible to quantify the various effects.  Because the risks from unusually hot days and nights, and from heat waves, are very serious, it is reasonable to find on balance that these risks support a finding that public health is endangered even if it is also possible that modest temperature increases will have some beneficial health effects. 

[Higher temperatures increase regional ozone pollution levels, as well.  Water-borne pathogens (e.g., Salmonella, Vibrio) will increase as well.] Climate change, including the direct changes in carbon dioxide concentrations themselves, could impact the

production, distribution, dispersion and allergenicity of aeroallergens and the growth and distribution of weeds, grasses and trees that produce them. 

4. Impacts on Public Welfare

The effects on welfare embrace every category of effect described in the Clean Air Act’s definition of “welfare,” and, more broadly, virtually every facet of the living world around us. … The Administrator acknowledges that as for human health, so too for welfare: moderate temperature increases may have some benefits, particularly for agriculture and forestry over the short term…. This possibility is not inconsistent with a judgment that greenhouse gases in the atmosphere endanger welfare. Beneficial effects can coexist with harmful effects, and it is not necessary to reach a firm conclusion, for particular domains and sectors, about the net result in order to reach an overall conclusion in favor of endangerment.

5. The Administrator’s Consideration of International Effects

The Administrator judges that the impacts to public health and welfare occurring within the U.S. alone warrant her proposed endangerment finding. In addition, the Administrator believes that consideration of climate change effects in other world regions adds support for today’s proposal, but that consideration of international impacts is not necessary in order to reach a judgment that there is endangerment to public health and welfare. Thus, the Administrator does not now take a position on the legal question whether international effects, on their own, would be sufficient to support an endangerment finding.

7. Summary

The evidence points ineluctably to the conclusion that climate change is upon us as a result of greenhouse gas emissions, that climate changes already are occurring that harm our health and welfare, and that the effects will only worsen over time in the absence of regulatory action.  The effects of climate change on public health include sickness and death. . . . The effects on welfare embrace every category of effect described in the Clean Air Act's definition of 'welfare' and, more broadly, virtually every facet of the living world around us. . . . In both magnitude and probability, climate change is an enormous problem.  The greenhouse gases that are responsible for it endanger public health and welfare within the meaning of the Clean Air Act.

NOTES AND QUESTIONS

1.  Is the EPA’s approach to interpreting the endangerment finding consistent with the approach of Ethyl Corp., to the question of when the EPA is entitled to find endangerment?

2.  Are the international effects of climate change relevant to an endangerment finding under the Clean Air Act, or are only domestic effects relevant?

3.  EPA says there are offsetting health and welfare benefits as well as costs associated with climate change.  If EPA cannot quantify these effects, how can EPA determine whether the costs exceed the benefits?  If EPA cannot make that determination, is it justified in regulating greenhouse gases?

4.  If you were to submit comments to the EPA regarding its endangerment and contribution findings, what would you recommend:  do the facts, as you understand them, support a finding that greenhouse gases are endangering the public health and welfare and that mobile source emissions are contributing to this endangerment?