Climate Law Shores Up EPA’s Threshold GHG Authority But Silent On Scope

Source: By Dawn Reeves, Inside EPA • Posted: Thursday, August 25, 2022

Democrats’ newly enacted budget reconciliation law includes multiple amendments to the Clean Air Act with a first-time definition of greenhouse gases as an “air pollutant,” a move that some legal experts say shores up EPA’s GHG regulatory authority even as others argue the new statutory provisions do not address the scope of such authority.

The new law’s direction to regulate and its incentives “will help us” in legal fights, “but does not definitively resolve those future questions of design and stringency” of any specific EPA climate rule, says David Doniger, a top climate official with the Natural Resources Defense Council (NRDC), in an interview with Inside EPA’s Climate Extra.

The Inflation Reduction Act (IRA), which President Joe Biden signed into law Aug. 16, provides $370 billion over 10 years to spur low-carbon energy and cut GHGs. Of that, over $40 billion is headed to EPA for various programs to curb emissions, largely through grants and other financial support for low-carbon technology in sectors such as ports, heavy-duty trucks and schools.

To help define the criteria for those programs, lawmakers included an identical definition of GHGs in 15 places throughout the law. Specifically, it defines GHGs as “the air pollutants carbon dioxide, hydrofluorocarbons, methane, nitrous oxide, perfluorocarbons and sulfur hexafluoride.”

That definition aligns with EPA’s formal description of GHGs in its 2009 GHG endangerment finding that forms the basis of its climate rules — a document that was the outgrowth of the Supreme Court’s 2007 ruling in Massachusetts v. EPA that said GHGs fit the definition of a regulated air pollutant under the Clean Air Act.

While the GHG definitions in the IRA technically only apply to the new programs created by the reconciliation law, Democratic lawmakers and legal experts nonetheless say they could help EPA defend against any challenge to its threshold authority to regulate GHGs under the air act.

“The language, we think, makes pretty clear that greenhouse gases are pollutants under the Clean Air Act,” Senate environment committee Chairman Tom Carper (D-DE), told the New York Times. There are “no ifs, ands or buts” that Congress has now directed EPA to cut GHGs, he added.

Other experts say EPA’s threshold GHG regulatory authority is not in doubt because the Supreme Court has had several opportunities to overturn the agency’s endangerment finding or Massachusetts, but it has not.

The IRA does explicitly define GHGs as an air pollutant under the Clean Air Act, “which is all well and good, but that was not really a subject of dispute,” says Tom Lorenzen, a lawyer at Crowell & Moring, in an interview with Inside EPA’s Climate Extra.

He and others add that the new statutory GHG definition does not venture into the scope of EPA’s authority, which was the subject of the Supreme Court’s June 30 decision in West Virginia v. EPA. There, the court held under the “major questions” doctrine the agency lacked explicit congressional authority to mandate generation shifting to cleaner electricity sources under section 111 of the air law, as it had in the Obama-era Clean Power Plan.

The doctrine requires Congress to issue “clear” statutory authority when granting agencies new power with vast political and economic consequences.

‘How Aggressive Can You Be’

The high court could have revisited EPA’s threshold GHG authority in West Virginia, but it did not. Lorenzen notes. “The problem [for EPA] is what the court did in West Virginia . . . is that it looked at the specific provisions that were being invoked by EPA and asked, ‘Did Congress give EPA sufficient authority in that section to do what it was planning to do?’”

He argues that the “outcome of West Virginia would be no different now, post-signing the IRA, than it would have been before.” Even though EPA’s ability to regulate GHGs is now widely accepted, the question that remains is “how aggressive can you be.”

Some free-market groups are pursuing litigation over EPA’s decision this year not to revisit its GHG risk finding — a suit that could be undermined by the IRA’s new GHG definitions.

The U.S. Court of Appeals for the District of Columbia Circuit recently set a briefing schedule for the case, Concerned Household Electricity Consumer’s Council v. EPA, setting an Oct. 14 deadline for petitioners opening brief and a Dec. 13 date for EPA’s reply. Briefing is to conclude in February.

Even though some experts are downplaying the importance of the IRA’s new GHG definitions, the Times reported that Republican senators unsuccessfully pressed the Senate parliamentarian to remove the 15 definitions, arguing they did not qualify under the chamber’s reconciliation rules that says bill provisions must have a non-incidental fiscal effect and cannot be primarily about setting policy.

The report cited a three-hour meeting Aug. 5 during which Republican and Democratic aides made their case to the parliamentarian about whether the GHG definitions could be advanced via reconciliation.

However, the parliamentarian did object to language providing EPA with $45 million to implement eight provisions “with respect to greenhouse gases” that referred to specific sections of the Clean Air Act, including stationary sources under section 111, pollution effects on other countries under section 115, preconstruction requirements under section 165, state mobile source programs under section 177, mobile sources under section 202, fuels under 211, nonroad engines under 213 and aircraft under 231.

In a late-hour move, that language was ultimately removed from the bill. Sen. Shelley Moore Capito (R-WV), ranking member of the environment committee, argued in favor of its removal: “There is no doubt that EPA lawyers and environmental groups will point to this language when they try to convince courts to uphold future overarching climate regulations.”

Doniger, the NRDC climate official, largely agrees with Lorenzen’s assessment, saying the IRA’s funding provisions and air act amendments “do indeed make clear (a) that Congress considers GHGs air pollutants, and (b) that Congress wants EPA to regulate them from power plants, vehicles, oil and gas, and selected other sectors.”

The statute also provides incentives to reduce the costs of GHG rules, which “should enable EPA . . . to set stronger standards than before,” he adds.

However, Doniger says, “What the new law doesn’t do is speak directly to ‘how’ EPA may regulate the GHG emissions from those sources,” and the West Virginia plaintiffs “did not challenge ‘whether’ EPA may regulate GHGs from power plants. . . . They challenged only the ‘how.’”

Doniger also criticizes Capito and other Republicans for “misleadingly” attacking the $45 million for EPA to regulate GHGs using existing authority in eight sections of the air law, arguing other funding provisions in the IRA included similar language.

As one example, he cites a new Low-Emission Electricity Program that directs EPA to “set new GHG standards for existing power plants under current Clean Air Act authority.” This provision survived the parliamentarian’s review and was included in the enacted law.

Power Sector Rules

The Environmental Defense Fund (EDF) also cited the Low-Emission Electricity Program in an Aug. 15 white paper analyzing the IRA’s various EPA programs that represent a “historic modernization of the Clean Air Act.”

This program “importantly bolsters EPA’s ability to achieve reductions in emissions of [GHGs] from power plants.” Specifically, it adds a new section 135 of the air law that directs EPA to assess the GHG reductions “anticipated to occur” in the power sector through 2031, and then appropriates $18 million to “ensure that reductions in [GHGs] are achieved through use of existing authorities” of the air law.

EDF says this new provision requires EPA to ensure that its pending power plant GHG standards “will achieve reductions in emissions that are additional to the reductions already expected to occur from other causes, including the [IRA’s] investments.”

University of California-Berkeley law professor Dan Farber told Bloomberg Law that he is interested to see how the new statutory language can help shore up future EPA regulations, saying the provisions defining the agency’s authority “are going to be pretty helpful to EPA lawyers, and in general are going to show that EPA isn’t acting like some kind of rogue work agency in pursuing some of these climate change measures.”

Meanwhile, one source tracking the issue says the GOP attempt to kill the new air act GHG definitions in the IRA shows “there are plenty within the Republican Party who do not want EPA to regulate GHGs at all. . . . I think there is sort of a give-not-an-inch attitude that pervades this whole debate, and no willingness to conceded that GHGs are a pollutant so that EPA can regulate them.” — Dawn Reeves (