USEPA GHG Finding Triggers Reviews and Reconsiderations of Global Warming Science
Over ten years have passed since EPA was petitioned, in October 1999, by 19 private organizations asking EPA to regulate greenhouse gas emissions from new motor vehicles. A decade later, the issue continues to be fraught with controversy. The 1999 petition culminated in the 2007 US Supreme Court closely decided decision (5 to 4) in Massachusetts v. EPA (549 U.S. 497 ERC 2057 (2007)) requiring the EPA to make a finding on whether greenhouse gas emissions endanger public health. On December 7, 2009, EPA signed its finding that greenhouse gas emissions do endanger public health and welfare, and that cars and light trucks cause or contribute to the emissions
Reviewing the majority and dissenting opinions associated with the Supreme Court Mass v. EPA case reveals that the court relied on much of the same information that EPA relied upon in its finding. However, the majority and dissenting opinions indicate that the justices in favor of requiring EPA to make a finding viewed the evidence for global warming quite differently than those that dissented. In Mass v. EPA, the majority “attached considerable significance to EPA’s espoused belief that global climate change must be addressed” and reviewed the study of the history of climate change from the late 1950s. Justice Stevens, who delivered the opinion of the court, highlighted the progress of the scientific understanding of climate change as reported by the Intergovernmental Panel on Climate Change (IPCC) in its “comprehensive reports” published in 1991 and 1995. The 1995 IPCC report concluded that there is a discernible human influence on global climate change. The court in its majority opinion asserted that, “The harms associated with climate change are serious and well recognized,” and referred to Michael MacCracken’s declaration and his statement that, “qualified scientific experts involved in climate change research have a ‘strong consensus’ that global warming threatens (among other things) a precipitate rise in sea level by the end of the century.”
In the court’s dissenting opinion, Chief Justice Roberts stated, “If petitioners’ particularized injury is loss of coastal land, it is also that injury that must be actual or imminent, not conjectural or hypothetical.” Chief Justice Roberts continued, “Thus, aside from a single conclusory statement, there is nothing in petitioner’s 43 standing declarations and accompanying exhibits to support an inference of actual loss of Massachusetts coastal land from 20th century global sea level increases. It is pure conjecture.”
Since EPA published its finding in the Federal Register on December 15, 2009, the agency has come under fire from industry, public interest groups and legislators regarding the process and information EPA used to make its finding. This scrutiny has come under CAA section 307(b)(1), where various parties have requested a judicial review of the finding by filing a petition for review in the US Court of Appeals for the District of Columbia Circuit before February 16, 2010. (see earlier blog post re EPA endangerment finding and petition for review - the court battle over GHG regulation begins)
The Clean Air Act also provides a mechanism for a proceeding for reconsideration, stating, ‘‘ ‘If the person raising an objection can demonstrate to EPA that it was impracticable to raise such objection within [the period for public comment] or if the grounds for such objection arose after the period for public comment (but within the time specified for judicial review) and if such objection is of central relevance to the outcome of this rule.
The petitions for reconsideration can be found here. By example, on February 11, 2010, seven petitioners (Coalition for Responsible Regulation, Inc., Industrial Minerals Association – North America, Great Northern Project Development, L.P., National Cattlemen’s Beef Association, Rosebud Mining Company, Massey Energy Company, and Alpha Natural Resources) filed a Petition for Reconsideration of the Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act. The petitioners argued that the University of East Anglia’s Climate Research Unit (CRU) in England fudged and fabricated temperature data, the IPCC’s peer review process was not independent, and that the IPCC assessments reflect the IPCC policy priorities. The petitioners stated that the CRU disclosures document fundamental flaws in the science and processes upon which EPA relied to make its finding. The petition for reconsideration presents evidence that the CRU fudged the data; created false temperature stations; cherry picked data to create a warming bias; and destroyed data so that it cannot be recreated. The petition for reconsideration stated that, “Consistent with its responsibilities under the Clean Air Act, EPA must make its own independent assessment and scientific judgment." Review of the other petitions for reconsiderations reveals that the petitioners believe that EPA abdicated its responsibility by relying on the IPC summary reports. The petitions also provide the petitioners’ extensive analysis of the reported global warming claims by the IPCC and certain climatologists.
House Agriculture Committee contributes to a bumper crop of proposed climate change legislation
On March 12, 2009, House Agriculture Committee Chairman Collin C. Peterson (D-Minn.) announced that the committee, which has jurisdiction over the Commodity Futures Trading Commission ("CFTC"), is seeking comments from agricultural, environmental and other groups and members of the public on priorities for future climate change legislation. The committee has prepared an instruction letter and a questionnaire, with responses due by April 10, 2009.
Rep. Peterson’s announcement follows the committee’s February 12, 2009, passage of H.R. 977, The Derivatives Markets Transparency and Accountability Act of 2009 (“DMTAA”). Although the DMTAA has received attention primarily for its provisions addressing financial derivatives – including authorizing the CFTC to suspend U.S. trading of so-called “naked” credit default swaps under certain circumstances and requiring that most over-the-counter derivatives be cleared through central clearinghouses – the bill would also require carbon offsets and emissions allowances to be traded on a designated contract market under CFTC oversight.
The DMTAA finds itself in the midst of a Congressional turf battle on both the financial derivatives and carbon emissions fronts. Introduced by Rep. Peterson, the DMTAA has been sent for review to the House Financial Services Committee, whose chairman, Rep. Barney Frank (D-Mass.), has reportedly expressed displeasure that the Agriculture Committee jumped ahead on derivatives reform without input from the Financial Services Committee and has said that he plans to tackle legislation for a new systemic risk regulator first, with hearings scheduled for mid-to-late March 2009.
The bill’s future in the carbon emissions arena is equally hazy. Edward Rosen, testifying on behalf of the Securities Industry and Financial Markets Association, argued that the prohibition of off-exchange trading in carbon offsets and emission allowances would create an exchange monopoly and thus impede the successful development of cap-and-trade programs. Paul N. Cicio, President of Industrial Energy Consumers of America, expressed his concern that adoption of the DMTAA would prejudice the outcome of the debate on how to control GHG emissions and recommended that Congress consider regulatory options other than a cap-and-trade system.
Meanwhile, Congress is awash in competing legislative efforts, among them:
- February 4, 2009: Rep. Edward J. Markey (D-Mass.) introduced H.R. 889, the Save American Energy Act, which would create a federal energy efficiency resource standard for retail electricity and natural gas distributors.
- February 4, 2009: Rep. Markey joined Rep. Todd Platts (R-Pa.) to introduce H.R. 890, the American Renewable Energy Act, which would create an electricity standard requiring that by 2025, 25% of electricity be generated from renewable sources like wind, solar and geothermal.
- March 5, 2009: Rep. John B. Larson (D-Conn.) introduced H.R. 1337, America's Energy Security Trust Fund Act of 2009, intended to reduce carbon dioxide emissions by imposing a tax on “taxable carbon substances,” which the bill defines to include coal, petroleum and petroleum products and natural gas.
- March 5, 2009: Sen. John Thune (D-S.D.) and Sen. Charles E. Schumer (D-N.Y.) introduced S. 527, which would amend the Clean Air Act to prohibit requiring farmers to purchase permits “for any carbon dioxide, nitrogen oxide, water vapor, or methane emissions resulting from biological processes associated with livestock production.” According to a press release from Sen. Thune’s office, the bill “will once and for all prevent the government from imposing an onerous ‘cow tax’ on farmers across the country.” S. 527 has been referred to the Committee on Environment and Public Works.
- March 11, 2009: Rep. Jeff Fortenberry (D-Neb.) introduced a similar bill, H.R. 1438, with the announced goal of “prohibit[ing] any Federal agency or official, in carrying out any Act or program to reduce the effects of greenhouse gas emissions on climate change, from imposing a fee or tax on gaseous emissions emitted directly by livestock.” A press release from Rep. Fortenberry’s office quotes the Congressman as observing that “As climate change issues are debated, the consideration of a tax on natural livestock emissions is unreasonable and peculiar.”
- March 12, 2009: In response to reports that the administration was considering using budget reconciliation rules to shield a cap-and-trade bill from a threatened Republican filibuster, twenty-eight Senators wrote a letter to the leaders of the Senate Budget Committee, Chairman Kent Conrad (D-N.D.) and ranking member Judd Gregg (R-N.H.), voicing their opposition to “using the budget reconciliation process to expedite passage of climate legislation.” The group explained:
Enactment of a cap-and-trade regime is likely to influence nearly every feature of the US economy. Legislation so far-reaching should be fully vetted and given appropriate time for debate, something the budget reconciliation process does not allow. Using this procedure would circumvent normal Senate practice and would be inconsistent with the Administration’s stated goals of bipartisanship, cooperation, and openness.
- March 22, 2009: Asked about the idea of folding cap-and-trade legislation into a budget reconciliation bill, Sen. Conrad said on ABC’s “This Week”:
I'll put it this way: It is not included in the budget that I will present to my colleagues . . . . I have said for weeks, I don't think it is the right way to write substantive legislation, because if you get into the details – and we won't do that here – it just doesn't work very well.
- Rep. Markey – who chairs both the House Select Committee on Energy Independence and Global Warming and the Energy and Environment Subcommittee of the House Energy and Commerce Committee – is leading the effort on the House version of climate change legislation and has said that he hopes to complete that legislation by Memorial Day.
- Senate Majority Leader Harry Reid (D-Nev.) has indicated that he will combine measures on a nationwide renewable electricity standard, a modernized electrical grid and GHG cap-and-trade into a single bill. Commenting on the respective Senate and House legislative strategies, Sen. Reid told a reporter, “The House has decided to take them all up together. That’s probably where we’re headed,” adding, “We're not going to be able to get this [Senate package cleared] until sometime in the summer at the earliest.”
There has also been activity on the regulatory front:
- On March 10, 2009, the Environmental Protection Agency announced its proposal for “the first comprehensive national system for reporting emissions of carbon dioxide and other greenhouse gases produced by major sources in the United States.” The EPA’s proposed rule would require mandatory annual GHG emissions reports from suppliers of fossil fuel and industrial chemicals, manufacturers of motor vehicles and engines, and industrial facilities that emit 25,000 metric tons or more of GHG emissions per year.
- Last Friday, the EPA reportedly sent a proposal to the White House finding that global warming is endangering the public’s health and welfare. Greenwire had reported earlier this month that according to a leaked internal EPA PowerPoint, the EPA was moving quickly toward an endangerment finding but would not propose immediate GHG regulations.
A rather active year so far, and we’re still in March . . . .
Obama directs EPA to reconsider denial of California waiver - enabling states to set stricter standards regulating vehicle greenhouse gas emissions
*Updated 1/27/09 - added link to text of memorandum.
President Barack Obama today issued a memorandum directing the EPA to reconsider a previous denial of waivers to California and at least twelve other states, allowing them to set auto emissions standards stricter than the current federal standard. The move would reverse a Bush administration decision denying California’s application for a waiver, and would open the door for stricter regulations in many other states. Some 17 states, including New York and Florida – accounting for up to 50% of the US population – have already adopted or are considering the stricter California standards, which require the EPA waiver of federal preemption in order to be enforceable.
As part of California’s aggressive effort to reduce greenhouse gas emissions, California passed a law to regulate vehicle emissions in the state, but enforcement of the regulations implementing the law was blocked by years of litigation, ultimately concluding that California could move forward only with a waiver from the EPA. Under the Bush administration, the EPA denied the waiver, contending that allowing states to set their own pollution rules would create an unenforceable and unworkable patchwork of regulations.
Last week, California Governor Arnold Schwarzenegger sent a letter to President Obama requesting reconsideration of the waiver denial, while California Air Resources Board (CARB) Chairwoman Mary Nichols appealed directly to new EPA administrator Lisa Jackson to open a “reconsideration process.”
While Obama’s directive does not explicitly demand that the EPA grant the waiver request, it is widely assumed that the agency will do so. At her Senate confirmation hearing earlier this month, Jackson indicated that she would reconsider the request and hinted that she would grant a waiver. A final decision from the EPA, however, is expected to take several months, and will likely face additional legal challenges.
Meanwhile, the auto industry is faced with the prospect of being forced to spend billions of dollars to comply with the stricter California emissions rules. Currently, only two mass-produced vehicles, the Toyota Prius and the hybrid Honda Civic, average at least 42 mpg. To reach that level fleetwide would require significant investment in new technologies, including hybrid vehicle technology. Auto industry estimates claim that the cost of compliance with the California standard could be as high as $5,000 per-vehicle. These costs and their impact are the subject of multiple lawsuits. (See Green Mountain Chrysler v. Crombie (D. Vt. 2007); Central Valley Chrysler v. Goldstene (E.D. Cal. June 2008); and Lincoln Dodge, Inc. v. Sullivan (D. R.I. Nov. 2008).)
The quick action the Obama administration on this issue – coming less than a week into his term in office – suggests an aggressive stance on climate change and could signal more far-reaching policy shifts to come.
EAB ruling in In re Deseret Power Electric Cooperative opens door to a new regulatory era on climate change
The USEPA Environmental Appeals Board (EAB) issued a potentially groundbreaking decision in In re Deseret Power Electric Cooperative (PSD Appeal No. 0703) by ruling that EPA Region 8 was incorrect when it exempted a new coal fired unit at an existing Utah power plant from limiting carbon dioxide emissions and remanded the permit decision to the Region to reopen the record and reconsider its refusal to impose limits on carbon-dioxide emissions. In its November 13 decision the EAB rejected the Region 8 contention that it was not required to regulate carbon dioxide because the greenhouse gas, while a “pollutant” under the Clean Air Act, was not subject to current regulatory standards. (“We hold that this conclusion is clearly erroneous because the region’s permitting authority is not constrained in this matter by authoritative agency interpretation.”)
Under EPA’s existing Prevention of Significant Deterioration (PSD) rules, new and modified projects in areas that have acceptable air quality must install costly best available control technologies or “BACT” if the construction could cause an increase in the emissions of “pollutants.” The decision does not mandate industry to install BACT to meet greenhouse gas emission limits. Relying on the recent U.S. Supreme Court ruling in Massachusetts v. EPA, the ruling only requires the Region to develop and adequate record for its decision that does not rely on the “historical agency interpretations” regarding the regulation of CO2.
The EAB decision prominently recognizes the national importance of the climate change issue. The EAB ruling cautions that EPA “would be better served by the Agency addressing the interpretation [of CO2 regulation] in the context of an action of nationwide scope, rather than through this specific permitting proceeding.” Nevertheless, the decision clears the way for the Obama administration to impose new limits on CO2 emissions through the administrative process and permitting decisions. The Obama administration might use this decision and its administrative authority under the Clean Air Act as leverage to obtain sensible climate change legislation. The enormous cost and delay of applying PSD permitting and BACT with regard to CO2 emissions to existing facilities on construction projects of all sorts involving energy, infrastructure, and general industrial expansion would be disastrous in this sharply down economy. Nearly every large facility construction project would trip the 250 ton per year major source category if CO2 is regulated under the current Clean Air Act, causing years of delay in permitting and huge costs of retrofitting existing facilities. If Congress does not quickly address climate change through legislation, the EAB has shown through the Deseret decision that the EPA will.
International climate discussions and the political question defense
The first three major tort-based climate change lawsuits against alleged greenhouse gas emitters were dismissed in part because they raised non-justiciable political questions (all three cases are currently on appeal). For example, the district court in Conn. v. Am. Elec. Power Co., Inc. rejected a public nuisance case brought by 8 state attorneys general against 5 power companies based on the companies’ greenhouse gas emissions. The court held that the case was non-justiciable because it required “identification and balancing of economic, environmental, foreign policy, and national security interests” of a “transcendently legislative nature.”
Recent events offer added support for advocates of the political question defense in climate-based tort litigation:
- A report submitted to the G8 by Tony Blair in advance of last week’s G8 summit (“Breaking the Deadlock: A Global Deal for our Low Carbon Future”) identified the significant hurdles in crafting national and international approaches to greenhouse gas emissions: “Given the complexity of the issues involved, the imprecision of much of the data, and the extraordinarily tricky interplay between the political, the technical and the organisational, answering the question of ‘how?’ is as difficult as any the international community has grappled with since the design of the post-war Bretton Woods economic institutions.”
- The same report later states: “When negotiators sit down in Copenhagen in December 2009, they will face one of the most formidable political challenges in recent history. They must build on the strengths, as well as address the weaknesses of the Kyoto Protocol, to create a successor treaty that will be agreed to, ratified, and enacted by 191 countries to take firm and decisive joint action on climate change. That is why this year’s G8, under the leadership of Japan, is so important.”
- Commentators noted that the G8’s announcement of a goal of a 50% reduction in Greenhouse Gases by 2050 leaves most of the tough questions unanswered, while developing countries rejected the G8 goal. In DOT EARTH, Andy Revkin posted an annotated analysis of the political machinations involved in the G8 climate declaration and the joint statement from established and emerging economies a day later.
- EPA’s Advanced Notice of Proposed Rulemaking, “Regulating Greenhouse Gas Emissions Under the Clean Air Act” (July 11, 2008), notes an active debate within the Executive and Legislative branches about how to regulate greenhouse gas emissions: “The implications of a decision to regulate GHGs under the Act are so far-reaching that a number of other federal agencies have offered critical comments and raised serious questions during interagency review of EPA’s ANPR. Rather than attempt to forge a consensus on matters of great complexity, controversy, and active legislative debate, the Administrator has decided to publish the views of other agencies and to seek comment on the full range of issues that they raise.”
