December 8, 2009Client Alert

EPA Issues Climate Change Endangerment Finding under Clean Air Act; Calls on Congress to Enact Comprehensive Climate Change Legislation

“Today’s finding is based on decades of research by hundreds of researchers. The vast body of evidence not only remains unassailable, it’s grown stronger, and it points to one conclusion: greenhouse gases from human activity are increasing at unprecedented rates and are adversely affecting our environment and threatening our health.”

With those words from United States Environmental Protection Agency (“EPA”) Administrator Lisa P. Jackson, on December 7, 2009, EPA issued two key environmental findings (“Findings”):

  1. “Endangerment Finding:” that the mix of six greenhouse gases (“GHG”) – carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride – in the atmosphere “threaten the public health and welfare of current and future generations”.

  2. “Cause or Contribute Finding:” that the combined emissions of these greenhouse gases from new motor vehicles and new motor vehicle engines “contribute to the greenhouse gas pollution which threatens public health and welfare”.

EPA’s action, generally referred to as the “GHG Endangerment Finding”, responds to the April 2007 decision of the United States Supreme Court in Massachusetts v. EPA, 549 US 497 (2007) that GHGs are air pollutants under the Clean Air Act. The Supreme Court directed EPA to determine whether GHG emissions from motor vehicles cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare, or whether the science is too uncertain to make a reasoned decision. EPA determined the science is sufficiently certain and issued the Findings described above. For a link to EPA’s website on the Findings and Administrator Jackson’s press conference, click here.

What is the immediate impact of this action?

In contrast to most actions announced by EPA, issuance of these Findings does not in itself impose any regulatory requirements. However, these Findings are closely tied to the following proposed and final EPA regulatory actions, developed in anticipation of the Findings.

On September 15, 2009, EPA and the Department of Transportation National Highway Safety Administration proposed emission standards for light-duty vehicles. Issuance of the Findings provides EPA the legal basis to finalize those joint regulations which will apply to vehicles manufactured beginning in model year 2012. EPA estimates that GHG emissions will be reduced by 950 million metric tons and 1.8 billion barrels of oil will be saved over the lifetime of vehicles produced during model years 2012-2016. The light-duty vehicle rule is expected to be finalized by March 31, 2010, so that the regulations are in effect in time for 2012 model year vehicles. For more information on the proposed light-duty vehicle emission standards, click here.

On September 22, 2009, EPA finalized its mandatory GHG reporting rules which require certain sources of GHG emissions to begin monitoring GHG emissions by January 1, 2010, and reporting by March 31, 2011. The mandatory GHG reporting rules apply to facilities that emit 25,000 metric tons or more per year of GHG emissions, and to certain source categories, regardless of the amount of emissions. For more information on that rule, click here.

On September 30, 2009, EPA proposed what it calls its “tailoring rule” designed to limit the applicability of any rules resulting from these Findings to large businesses that emit over 25,000 tons of GHG a year. The proposed thresholds are designed to “tailor” the New Source Review (NSR) and Title V air permitting programs to the largest GHG emitters. EPA estimates that 70% of GHG emissions come from these large sources, which include power plants, refineries and cement production facilities. The public comment period on the tailoring rule is open through December 2009. For more information on that rule proposal, click here.

Why now?

Many believe that EPA acted now for two reasons: first, the Obama administration is negotiating with Congress where the Senate has been unable to find the 60 votes necessary to pass climate change legislation, and GHG emission regulation under the Clean Air Act is widely believed to be less effective and more cumbersome than direct legislation by Congress; and second, to position President Obama to take a leadership role in the international proceedings on climate change underway in Copenhagen from December 7-18, 2009.

In response to questions at her December 7, 2009 press conference announcing the Findings, Administrator Jackson reaffirmed the view of the Obama Administration that federal legislation is the best means to a comprehensive approach to climate change.

President Obama is scheduled to attend the Copenhagen climate change summit on December 18, 2009. The President will attempt to demonstrate the U.S. commitment to GHG emission reduction, in the absence of legislation by Congress, through his recent announcement of a provisional GHG emissions target for 2020 in the range of 17% below 2005 levels and in the context of an overall deal in Copenhagen that includes robust mitigation contributions from China and other emerging economies. Commentators consider the United States’ role critical to a successful summit.

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