May 6, 2009 – On April 17, 2009, the Obama EPA Administration took the first step in creating a comprehensive regulatory program aimed at climate change by releasing a proposed finding that greenhouse gases (GHG) in the atmosphere endanger public health and welfare (the Endangerment Finding).¹ The EPA also proposed finding that GHG emissions from new motor vehicles are contributing to these atmospheric GHG levels (the Contribution Finding).

This proposal represents a historic shift in environmental regulatory policy for the United States and could ultimately trigger a cascade of wide-reaching federal Clean Air Act (CAA) regulations that could affect nearly every aspect of our economy. The magnitude of this action was expressed by U.S. Rep. Edward J. Markey (D-MA):

History will judge this action by EPA … as the environmental equivalent of what Brown v. Board of Education meant to our nation’s civil rights laws. Just as that decision sparked a generation to alter our very way of daily life, so will the [EPA’s Endangerment Finding] be considered by future generations as pushing our nation into a new clean energy direction.

The EPA’s April 17, 2009 proposal has two parts. The proposed Endangerment Finding concludes that GHG emissions in the atmosphere – as a class of pollutants – are reasonably anticipated to endanger the public health and welfare of current and future generations. The Contribution Finding concludes that GHG emissions from new motor vehicles “cause or contribute” to these air pollution levels.

Potential impact of the endangerment finding 

The most immediate and direct effect of these findings, if finalized, would be the regulation of GHG emissions from new motor vehicles. On this point the EPA explicitly states that its proposal is limited to mobile sources and would not itself impose any new requirements on industry or other entities.² These motor vehicle regulations would be promulgated through separate rulemakings to be initiated after finalizing the Contribution Finding.

Despite the explicit limitation to motor vehicles, the proposed Endangerment Finding is widely seen as setting the groundwork for future EPA-imposed regulations on industrial and other GHG sources. For example, the proposed Endangerment Finding addresses six GHG pollutants – carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. Yet only four of these pollutants are released from motor vehicle tailpipes, suggesting that the Endangerment Finding will be used to trigger CAA regulations on stationary emission sources, not just motor vehicles.

The concern being expressed by industry and the private sector is that the Endangerment Finding will be used to regulate GHG emissions from stationary sources under the existing CAA. Of particular concern is the possibility of regulating CO₂ emissions, a ubiquitous pollutant emitted from all combustion sources (boilers, heaters, furnaces, etc.), under the entire CAA. CO₂ is frequently emitted by stationary sources at rates that are an order of magnitude above the regulatory triggers for existing CAA regulatory programs. Accordingly, well over one million new sources that are currently exempt from CAA regulation, including nonindustrial facilities such as schools, restaurants, churches, hotels, and office buildings, could be pulled into this extremely complicated program.

The EPA has set a 60-day public comment period that will end June 23, 2009.³ Public hearings will be held on May 18 and May 21, 2009 in Arlington, Virginia and Seattle, Washington, respectively.⁴

Pressure for congressional action? 

The Obama Administration has signaled that the CAA would be a poor mechanism for regulating GHG and has publicly expressed a desire that Congress enact separate legislation to address climate change.⁵ This reflects a belief that sweeping regulatory programs with the potential for such profound societal impacts should be crafted by elected officials, not unelected regulatory agencies. Legislation may take the form of a cap-and-trade program that would require emitters of CO₂ and other GHGs to buy emission permits.

To date, however, comprehensive global-warming legislation has not gained enough support for passage in Congress, largely due to the current economic climate and the potential for profound negative impacts on the economy, particularly in the Midwest.⁶

Where to learn more on the impacts of CO2 regulation under the CAA? 

It is quite possible that EPA, or court action, will soon subject many of your business clients to CAA requirements for the first time. Whether they will face air permitting requirements or compliance with air emission standards, your clients could be thrown into a program that is regarded as one of the most complex and bureaucratic of all federal regulations. They will need legal help.

A good overview of these CAA requirements, with practical advice for compliance, is contained in Volume 2, The Wisconsin Business Advisor Series: Environmental and Real Estate Law (State Bar of Wis. CLE Books, 2006 & Supp.). This book contains an entire section on CAA obligations that are imposed on businesses in Wisconsin. Additional information related to the EPA’s proposed findings can be found on the EPA’s Web site, which should be checked periodically.⁷

Todd E. Palmer is with DeWitt Ross & Stevens, Madison.

Endnotes 

¹74 Fed. Reg. 18,886 (April 24, 2009).

²74 Fed. Reg. 18.909 (Apr. 24, 2009).

³74 Fed. Reg. 18,886 (Apr. 24, 2009).

⁴Id.

⁵Press release of EPA Administrator Lisa Jackson dated April 17, 2009 (“…both President Obama and Administrator Jackson have repeatedly indicated their preference for comprehensive legislation to address this issue and create the framework for a clean energy economy.”).

⁶Cap and Burn, Wall Street Journal, June 9, 2008 (“After the bill bottomed out, no fewer than 10 Democrats from the Midwest and South – whose economies rely on coal-fired power or heavy industry and thus will be disproportionately affected – registered their displeasure with Mr. Reid and Ms. Boxer. Including Sherrod Brown (Ohio), Carl Levin (Michigan), Jay Rockefeller (West Virginia) and Jim Webb (Virginia), the Senators said they could not support cap and trade ‘in its current form’ because it would cause ‘undue hardship on our states, key industrial sectors and consumers.’”).

⁷http://epa.gov/climatechange/endagerment.html.

Todd E. Palmer, St. Louis Univ. 1992, is a shareholder with DeWitt Ross & Stevens, Madison, and practices in environmental, administrative, and patent law. He is admitted to practice in Wisconsin and Illinois and is a registered patent attorney. 

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