Supreme Court Decision Turns Up the Heat on Greenhouse Gas Regulation
 
June 6, 2007
 
Mark J. Steger- Chicago

On April 2, 2007 the United States Supreme Court ruled in Massachusetts, et al. v. United States Environmental Protection Agency, 549 U.S. ______ (2007) that the United States Environmental Protection Agency (USEPA) has the authority to regulate greenhouse gas (GHG) emissions from new motor vehicles. This long-awaited decision has heightened the congressional debate on the means by which GHG emissions should be regulated.

This case began in October 1999 when 19 environmental groups filed a petition with USEPA to regulate GHG emissions from new motor vehicles under the Clean Air Act. USEPA requested comment on this rulemaking petition, and in September 2003, USEPA denied the petition stating that the Clean Air Act does not authorize USEPA to issue mandatory regulations to address global climate change and that even if USEPA had such authority to set GHG emission limits it would be unwise to do so at this time.

In its rulemaking decision, USEPA noted that Congress was aware of the global climate issue when the Clean Air Act was amended in 1990. However, Congress declined to adopt amendments regulating GHG emissions. According to USEPA, Congress designed the Clean Air Act to address local air pollutants rather than “global” pollutants such as GHGs. USEPA concluded that climate change was so important that unless Congress specifically authorized such regulation, it could not have meant USEPA to address it. USEPA went on to conclude that GHGs were not air pollutants within the meaning of the Clean Air Act and that any regulations of GHG emissions from motor vehicles would conflict with the President’s comprehensive approach to the problem. According to USEPA, unilateral regulation of motor vehicle GHG emissions might limit the President’s ability to persuade key developing countries to address GHG emissions.

The Petitioners, joined by several states and local governments, sought review of USEPA’s decision in the United States Court of Appeals for the District of Columbia. The D.C. Circuit upheld USEPA’s decision, and the Petitioners then appealed to the United States Supreme Court.

The Supreme Court first held that the Petitioners have standing to challenge USEPA’s decision. The Supreme Court’s standing requirements provide that to ensure a proper adversarial presentation, the litigant must demonstrate that it has suffered a concrete and particularized injury that is either actual or imminent, that the injury is fairly traceable to the defendant, and it is likely that a favorable decision will address that injury. The Court focused its discussion on Massachusetts’s standing identifying its injury associated with climate change and that the injury even though it is widely shared, does not minimize the state’s interest in the outcome of the litigation. With respect to causation the Court noted that USEPA did not dispute the existence of a causal connection between man-made GHG emissions and global warming, and at a minimum, USEPA’s refusal to regulate such emissions contributes to Massachusetts’ injury. Finally, the Court determined that even though the remedy, regulating GHG emissions from motor vehicles, will not by itself reverse global warming, it did not lack jurisdiction to decide whether USEPA has a duty to take steps to slow or reduce it. In summary, the Court stated that according to the Petitioner’s uncontested affidavit, the rise in sea levels associated with global warming has already harmed and will continue to harm Massachusetts. The risk of catastrophic harm, though remote, is nevertheless real and the risk would be reduced to some extent if the Petitioners received the relief they seek. Therefore, the Court held that the Petitioners had standing to challenge of USEPA’s actions.

With respect to the merits, the Court first focused on whether the Clean Air Act authorizes USEPA to regulate GHG emissions from new motor vehicles in the event that USEPA determines that such emissions contribute to climate change. The Court had little trouble concluding that USEPA has such authority, citing the broad definition of air pollutant under the Act. The Court held that GHGs are clearly “air pollutants” as defined under the Clean Air Act, and therefore USEPA had the authority to regulate GHG emissions from new motor vehicles.

With respect to USEPA’s alternative basis for denial, i.e., even if it did have the authority to regulate GHG emissions, it would be unwise to do so. The Court felt that the USEPA’s reasoning was “divorced from the statutory text.” The Court stated that under the Clean Air Act, USEPA can avoid taking further action only if it determines that GHG emissions do not contribute to climate change or if it provides some reasonable explanation as to why it cannot or will not exercise its discretion to determine whether they do so. The USEPA failed to satisfy this clear statutory mandate and offered a list of reasons including that a number of voluntary, executive branch programs already provide for an effective response and that regulating GHG emissions would impair the President’s ability to negotiate with key developing nations to reduce such emissions. The Court noted that such arguments do not have anything to do with whether GHG emissions contribute to climate change. In short, the Court concluded that USEPA refused to offer a reasonable explanation for its refusal, and therefore, its actions were arbitrary and capricious. Accordingly, the Court remanded the case back for further proceedings.

For those of you following this issue, you are well aware that much has been written about the impact of this decision. For example, several courts have stayed resolution of climate change lawsuits challenging the implementation of new state rules aimed at reducing GHG emissions from automobiles. In addition, some suggest that the Supreme Court’s decision will heighten the debate on climate change, forcing Congress to step in and adopt a federal program for the control of GHG emissions. It is clear that many states have instituted or are beginning to institute such actions and, in fact, some Congressmen have stated that the Supreme Court’s ruling provides a compelling reason why Congress must act and the President must sign comprehensive climate change legislation in the near future. Stay tuned for intense Congressional activity on this issue in the coming months.

For more information, e-mail Mark Steger at mark.steger@hklaw.com  or call toll free, 1-888-688-8500.