EPA Finds That Greenhouse Gases Endanger Public Health and Welfare

The Findings

On December 7, 2009, the United States Environmental Protection Agency (EPA) finalized its findings under Section 202(a) of the Clean Air Act that greenhouse gases (GHGs) endanger public health and welfare. As anticipated, the issuance of the findings coincided with the start of the 15th United Nations Climate Change Conference in Copenhagen. The findings, which are the first step toward federal regulation of GHG emissions, place pressure on Congress to act on federal GHG legislation and also will inevitably result in litigation from entities opposed to EPA regulation of GHGs.

The EPA made two specific endangerment findings:

1. Six GHGs – carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride – threaten the public health and welfare of current and future generations.
2. The combined emissions of these six GHGs from new motor vehicles and new motor vehicle engines contribute to GHG pollution which threatens public health and welfare.

EPA Administrator Lisa P. Jackson determined that scientific evidence, particularly climate change assessments by the U.S. Global Climate Research Program, the Intergovernmental Panel on Climate Change and the National Research Council, compellingly supports the finding that the six GHGs listed may reasonably be anticipated to endanger both human health and public welfare. The EPA found that potential health and environmental effects include:

• increased deaths and sickness from severe heat waves
• respiratory health problems from worsened regional ground-level ozone pollution
• increased health impacts from climate-sensitive diseases such as Lyme disease, and changes to the production and distribution of aeroallergens
• environmental justice concerns as climate change impacts may place greater burdens on certain populations such as the elderly, the disabled, those already in poor health and indigenous populations dependent on one or few resources
• more severe storm events, especially along the Gulf and Atlantic coasts, with heavy rainfall, flooding and erosion
• other environmental and welfare effects such as sea level rise, diminished snow pack in the Western United States and the resulting loss of water supply, larger and more frequent wildfires and ecosystem shifts

Evolution

The endangerment findings result from the U.S. Supreme Court’s decision in Massachusetts v. EPA, 549 U.S. 497 (2007), in which the Court held that the Clean Air Act authorizes the EPA to regulate GHG emissions from new motor vehicles, and that the EPA must determine whether GHGs from new motor vehicles cause or contribute to air pollution and endanger human health and welfare, or whether the science is too uncertain for EPA to make this determination. 549 U.S. at 527-35. In April 2009, the EPA issued proposed findings under Section 202(a) of the Clean Air Act as to GHG impacts to health and human welfare. The EPA’s final endangerment findings follow the receipt of over 380,000 public comments on the April 2009 proposal.

Findings Are a Critical Step in Finalizing Emissions/Fuel-Efficiency Standards for Light-Duty Vehicles

While the EPA’s GHG endangerment findings alone do not impose new regulations, they are a key step in finalizing proposed GHG standards for certain types of vehicles, which the EPA and the Department of Transportation’s National Highway Safety Administration (NHTSA) jointly proposed on September 15, 2009. These proposed vehicle standards would apply to passenger cars, light-duty trucks and medium-duty vehicles for model years 2012 through 2016, and require such vehicles to meet an estimated combined average emissions level of 250 grams of carbon dioxide per mile (or to achieve 35.5 miles per gallon of fuel if the standard is met solely through improved fuel efficiency). According to the EPA, on-road vehicles contribute more than 23 percent of total GHG emissions in the United States, and the proposed regulations would reduce GHG emissions by almost 950 million metric tons over the lifetime of the model year 2012-2016 vehicles covered by the standards. This joint proposal must be finalized by March 31, 2010, so that the new fuel-efficiency standards are in place 18 months prior to production of 2012 vehicles, as required by the Energy Policy and Conservation Act.

Findings Lay the Groundwork for the Promulgation of Other Climate Change Regulations

The EPA’s endangerment findings are part of a larger effort by the Obama Administration to curb GHG emissions, increase energy efficiency and reduce America’s dependence on fossil fuels – particularly foreign oil. Other recent EPA actions concerning GHGs include a “tailoring rule,” proposed on September 30, 2009, that would require large industrial facilities that emit at least 25,000 tons of GHG emissions per year to obtain construction and operating permits; these permits would be required to show that such facilities are using best practice technologies and energy efficiency measures to minimize GHG emissions when facilities are constructed or significantly modified. The rule proposes new thresholds for GHG emissions that define when permits under the New Source Review and Title V operating permit programs would be required for new and existing industrial facilities. In addition, further EPA actions related to climate change are likely, based on statements from Administrator Jackson that the endangerment findings “cement 2009’s place in history as the year when the United States Government began addressing the challenge of greenhouse-gas pollution and seizing the opportunity of clean-energy reform.”

Recommendations Going Forward

While the EPA’s endangerment findings and proposed vehicle standards do not directly impact corporate voluntary emissions reduction programs, it is recommended that entities utilizing, or considering utilization of these types of programs monitor the EPA’s regulatory actions on climate change for two reasons:

• First, new regulations may affect how companies both meet and verify their self-imposed GHG reductions. For example, the proposed regulations on vehicle fuel efficiency might impact a corporation’s decisions on vehicle fleet mix and credits taken for resulting GHG reductions.
• Second, as all industries will be called upon to reduce GHG emissions over time, companies that already utilize verified GHG reporting programs will be better equipped to influence future EPA rulemaking that may more directly affect reporting of GHG emissions.

Holland & Knight will continue to track the development of regulations that may follow the issuance of these findings, and we look forward to assisting our clients in complying with, monitoring and addressing the EPA’s climate change regulations.