EPA proposes rule to regulate greenhouse gas emissions from large sources under the Clean Air Act

The EPA has just announced a proposed rule to regulate greenhouse gas emissions under the New Source Review program of the federal Clean Air Act.  This regulatory action is hardly a surprise, as it’s been coming ever since the U.S. Supreme Court’s Massachusetts v. EPA decision in 2007, which held that greenhouse gases are pollutants under the Clean Air Act.  Still, it’s a welcomed development from the Obama administration and EPA, and comes with a notable twist and at a notable time.

First, while the Clean Air Act’s permitting requirements typically apply to emissions greater than 250 tons per year, EPA has proposed “tailoring” the threshold for greenhouse gas regulation at 25,000 tons per year of carbon dioxide (or equivalent greenhouse gases).  This makes some sense, as it will still regulate about 70% of stationary greenhouse gas emissions (basically big sources like power plants, incinerators, and refineries), without creating a regulatory burden for smaller sources.  But while the rule makes sense, the potential conflict with the Clean Air Act’s statutory language will almost certainly be the basis for large industrial interests to bring a legal challenge.

Second, the announcement of the proposed rule came right after the Clean Energy Jobs and American Power Act was introduced in the U.S. Senate.  The legislation, commonly called the Boxer-Kerry bill after its lead sponsors, creates a comprehensive regulatory and energy policy to address climate change and greenhouse gas emissions.  Unlike the legislation passed by the House earlier this year, the Senate legislation also preserves the EPA’s authority to regulate greenhouse gas emissions under the Clean Air Act, meaning that the EPA’s proposed rule would still be effective if the legislation is ultimately passed.

I expect two immediate outcomes of the EPA’s proposed rule.  First, large industrial greenhouse gas polluters will challenge the rule based on the high threshold which lets small polluters off the hook.  (One potential hurdle for such a lawsuit would be standing, since large polluters aren’t directly harmed by the EPA’s decision not to regulate small polluters.)  Second, the rule will put more pressure on Congress to enact climate change legislation, but at the same time it gives environmental groups good reason to consider the benefits of the currently regulatory approach under the Clean Air Act.  Despite these issues, it’s now practically certain that greenhouse gases from large sources will soon be regulated, either under the Clean Air Act or under new legislation.  Either way, the days of unregulated greenhouse gas emissions will soon be over.