Supreme Court Test: Should EPA Regulate CO2?

(Photo: U.S. Supreme Court)NEWS WATCHSupreme Court Test: Should EPA Regulate CO2?

WASHINGTON (July 26, 2006) - If the U.S. automotive industry didn't already have enough on its plate, a pending case before the U.S. Supreme Court (Case # 05-1120: Massachusetts, et al., Petitioners v. the U.S. Environmental Protection Agency (EPA), et al.) might just be the tipping point for some automakers, in addition to impacting heavy industries such as electrical generation. 

The U.S. Supreme Court has agreed to review a case that seeks to overturn EPA's refusal to regulate greenhouse gas emissions from motor vehicles. A coalition of 29 plantiffs - 12 states (including California and most of the Northeast), the District of Columbia, three cities and several environmental groups - seeks to overturn the Agency's refusal in this matter, which had been earlier upheld in a lower court ruling (U.S. Court of Appeals for the D.C. Circuit in Commonwealth of Massachusetts v. EPA).

Caught in the crosshairs At issue is whether the federal administration and EPA are obligated to regulate, oversee and enforce the limiting of CO2 emissions per the 1990 Clean Air Act (CAA). Section III (a) of the CAA states that EPA "shall regulate emissions of new vehicles which in its judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger the public health or welfare." CO2 Emissions BenchmarksDateThe Debate Over Regulating CO21990Clean Air Act enacted1994EPA in a August 1994 fact sheet titled Automobile Emissions: An Overview stated, "In recent years, the U.S. Environmental Protection Agency has started to view carbon dioxide, a product of 'perfect' combustion, as a pollution concern. Carbon dioxide does not directly impair human health, but it is a 'greenhouse gas' that traps the earth's heat and contributes to the potential for global warming."1999Several environmental groups filed a rulemaking petition requesting that EPA to set motor vehicle emission standards for four greenhouse gases, including CO2.2003EPA denied the rulemaking petition. The plaintiffs challenge that decision in the D.C. Circuit Court.2005D.C. Circuit Court votes 4-3 to let the EPA's current position on greenhouse gas pollutants stand. The lower court also denied the motion to retry the case in December.2006Supreme Court accepted for review the appeal of the lower D.C. Circuit Court decision. The court's decision is expected no later than June, 2007.

The same section also states that if the Agency decides it is not feasible to prescribe or enforce a standard of performance, it may instead promulgate a design, equipment, work practice or operational standard, or combination thereof, which reflects the best technological system of continuous emission reduction. The Supreme Court is faced with the decision as to what extent the CAA has been complied with, and whether to require EPA to regulate CO2 emissions with standards, rather than voluntary means.

"If ever there was a case that warranted Supreme Court review, this is it," says Massachusetts Attorney General Tom Reilly, whose state is leading the appeal. "We owe it to our children and grandchildren to address the problem of global warming.

"For too long, EPA has used its own research and data to support its actions - doing nothing to regulate our greenhouse gas emissions," Reilly adds. "Global warming is not a myth and, today, the Supreme Court has seen the importance of this case and will now have an opportunity to address the most significant environmental issue of our generation."

In their petitions, the plaintiffs argue that the lower court's 4-3 decision on July 15, 2005 is contrary to Supreme Court precedent on statutory interpretation because it allowed EPA to refuse to regulate greenhouse gases based on policy considerations, rather than adhere to the scope of the legislation. Furthermore, they contend the Agency arbitrarily concluded that the CAA does not provide EPA the authority to regulate greenhouse gas emissions.

Recognizing that CO2 as a problem to be reckoned with is no stranger to the Agency. As far back as an August 1994 fact sheet titled "Auto Emissions: An Overview," EPA stated that it has viewed CO2 as a pollutant concern and as a greenhouse gas. To date, however, the federal administration and EPA have relied on voluntary measures to combat climate change under the legislation. The Agency maintains that CO2 is not a pollutant under the CAA and that even if it were considered a pollutant, it has discretion over whether or not to regulate it.

Consequences If the Supreme Court disagrees with the lower court, this decision could have a profound impact on American life and industry. Should the regulation of CO2 emissions be required, the automotive industry will face significant costs to meet new standards, in addition to the existing challenge: emerging consumer demands, competitive market forces, legacy health and pension issues, political pressures in the face of high fuel costs, and existing regulatory emissions. Almost certainly, the mix of products offered by automakers would need to change rapidly - the acceleration into smaller and more efficient gasoline/diesel cars, hybrid vehicles, electric cars and other alternative fuel vehicles. Additionally, fuel-saving and emissions control technologies would become even more strategically important factors in design. For some automakers who may already be struggling, attracting the capital needed to refocus, retool and redesign may be a difficult transition to make. Like a poker game, taking calculated risks is a cost of doing business. Should the Supreme Court rule in favor of the plaintiffs, CO2 could be one bet that might drive some players out of the game.(Sources: Supreme Court, Massachusetts Attorney General, EPA, Environmental News Service)