- - Tuesday, October 30, 2012


No matter who wins the presidency (or the Senate), the next Congress will renew its focus on regulatory overreach, including the Environmental Protection Agency‘s. A relevant fact for the intermediate term is that U.S. greenhouse gas and other emissions have plummeted because of a dramatic increase in use of natural gas, the phaseout of CFCs and a major improvements in auto efficiency.

The background is the Supreme Court’s ruling in early 2007 that carbon dioxide and other greenhouse gases are a pollutant and that EPA was required to address whether greenhouse gases “endangered” public health or the environment. But the court did not go beyond that to tell EPA what it could or had to do. Congress enacted sweeping legislation later in the year to deal with automobiles, which were the principal subject of the court’s ruling.

The Supreme Court addressed the climate change issue again last year. Both the legislation and the second Supreme Court case deserve some attention.

The legislation, the Energy Independence and Security Act of 2007, amended the 1975 legislation that established the “Corporate Average Fuel Economy” standards, otherwise known as the CAFE standards. The 2007 statute authorized the Department of Transportation to undertake a major tightening of the rules with the over-arching purpose of reducing oil usage in order to reduce dependency on foreign oil imports. Included in the legislation were detailed incentives for the use of nonpetroleum fuels such as natural gas and alcohols made from natural gas, coal or biomass.

Although the statute made little reference to the role, if any, EPA was to play, there is little question that EPA had very little if anything to do, since the means of decreasing carbon dioxide emissions is to increase fuel efficiency — and compliance with DOT’s fuel economy rules is in fact already enforced by taking carbon measurements under EPA’s regular pollution testing program.

The statute’s expansion of DOT’s responsibilities did not, however, stop EPA from taking the auto efficiency responsibility away from DOT and issuing its own rules in conjunction with the California Air Resources Board. EPA’s action has had two significant consequences not prescribed or even foreseen by Congress.

The first was to curtail dramatically Energy Independence and Security Act and DOT’s incentives for alternative fuels. EPA argues that these fuels have a built-in carbon dioxide advantage and don’t need any additional statutory incentives. But it is not EPA’s job to sit in judgment on congressional legislation. The second consequence was to give EPA an excuse to realize a lifelong ambition — never authorized by Congress — to lay the groundwork for requiring a permit for virtually every construction project bigger that building a single family home.

Congress has in the Clean Air Act required permits for very large projects involving major increases in traditional health pollutants. But it never intended in this permitting program to cover carbon dioxide, which is emitted in such small quantities that coverage would affect almost every human activity. The logical response would be to construe the permitting program as covering only the traditional pollutants regulated under the national air quality standard system — which EPA has made clear does not apply to. carbon dioxide

Instead, EPA made a huge leap to apply the permitting program to carbon dioxide, changing the threshold for coverage from 100 tons to 100,000 tons in order to avoid the admittedly absurd $25 billion cost of administering such a breathtaking task. But EPA has reserved the right to move down the scale to 100 tons at its discretion.

In the recent climate change case, the Supreme Court held that the Clean Air Act displaces any federal common law rules that might have applied to climate change. The White House brief argued extensively that the important provisions were the permitting rules. The Supreme Court instead focused exclusively on a different provision, making clear that this provision did not have to be activated to displace the common law. It ignored the White House’s discussion of the permitting rules, except to say, in an opinion by Justice Ruth Bader Ginsburg, that obviously emitting carbon dioxide could not be made to depend on a permit, since we exhale it every day.

The courts will have to make the ultimate call on whether the 2007 legislation satisfied the immediate requirements of the Clean Air Act and whether EPA’s extraordinary stretch to apply the permitting rules to carbon dioxide is permissible. But it would be better and simpler for Congress to make a short, one-paragraph clarification that the Energy Independence and Security Act of 2007 satisfied the initial court decision and that, given the dramatic reduction of greenhouse gases in the U.S., any further action should be taken by Congress, not the Environmental Protection Agency.

C. Boyden Gray previously served as White House counsel and U.S. ambassador to the European Union, and helped to lead the Reagan administration’s regulatory reform efforts.

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