The U.S. Court of Appeals for the District of Columbia Circuit has unanimously upheld four U.S. Environmental Protection Agency (“EPA”) actions aimed at regulating greenhouse gas (“GHG”) emissions. In Coalition for Responsible Regulation, Inc. v. EPA, several states and industry groups challenged the EPA rulemakings which, either directly or indirectly, have the effect of regulating GHG emissions from vehicles and certain stationary sources under the Clean Air Act (“CAA”). As an immediate consequence of the decision, these rulemakings will stand as promulgated to force new cars and light trucks, as well as certain major stationary emitters of GHGs, to curb GHG emissions. Beyond these near-term impacts, the decision will eventually allow EPA to phase in permitting requirements for construction, modification, and operation of all stationary “major emitting facilities” that meet threshold GHG emissions. This will result in regulation of facilities never before covered by the CAA. More fundamentally, the decision further opens the door to allow EPA to regulate GHGs as “air pollutants” under the CAA, despite this seemingly square-peg-in-a-round-hole approach.

Background

The impetus of the Coalition for Responsible Regulation decision dates back to EPA’s 2003 denial of a petition asking it to regulate GHG emissions from new motor vehicles, and the U.S. Supreme Court decision in 2007 that reversed the denial. In Massachusetts v. EPA, a divided Supreme Court recognized that “greenhouse gases fit well within the [CAA]’s capacious definition of ‘air pollutant,’” and held that, under § 202(a) of the CAA, “EPA has the statutory authority to regulate the emission of such gases from new motor vehicles.” Moreover, EPA must regulate “any air pollutant from any class or classes of new motor vehicles,” but only if EPA first issues an “endangerment finding” which determines that such pollutant “cause[s], or contribute[s] to, air pollution which may reasonably be anticipated to endanger public health or welfare.” In holding that EPA “offered no reasoned explanation for its refusal to decide whether [GHGs] cause or contribute to climate change,” the Massachusetts Court refused to decide whether EPA should issue an “endangerment finding” for GHGs, or whether policy considerations may guide EPA for such a finding. The Court said, “We hold only that EPA must ground its reasons for action or inaction in the statute.”