EPA Can Add Greenhouse Gas Limits to Already Regulated Businesses

By William Peacock, Esq. on June 24, 2014 | Last updated on March 21, 2019

For those hoping for a stunning reversal of pro-Environmental Protection Agency rulings from the Supreme Court, well, it hasn't happened yet, and doesn't seem like it will any time soon.

Yesterday, the nation's High Court mostly reaffirmed prior holdings that upheld the EPA's ability to regulate greenhouse gasses, but narrowed that power just a bit, by striking down the agency's "tailoring rule," as an agency's overstep into rewriting its enabling statute, the Clean Air Act.

What companies are left with is this: if your emissions are already regulated, the EPA is well within its rights to limit the amount of greenhouse gases that you produce -- which is pretty much exactly what the EPA was aiming for.

No 'Tailoring Rule'

Scalia, who penned an opinion that had fellow justices jumping in-and-out of concurrence, first struck down the agency's "Tailoring Rule:"

In the Tailoring Rule, EPA asserts newfound authority to regulate millions of small sources -- including retail stores, offices, apartment buildings, shopping centers, schools, and churches -- and to decide, on an ongoing basis and without regard for the thresholds prescribed by Congress, how many of those sources to regulate. We are not willing to stand on the dock and wave goodbye as EPA embarks on this multiyear voyage of discovery. We reaffirm the core administrative-law principle that an agency may not rewrite clear statutory terms to suit its own sense of how the statute should operate.

The rule emerged from the lack of fit between the Clean Air Act and greenhouse gases themselves: while the CAA sets thresholds for pollutants that trigger EPA regulations, those thresholds don't make sense in the context of naturally occurring, but climate change-inducing gases, such as carbon dioxide. The EPA's solution, to make up its own numbers, had no basis in the statute and, predictably, drew Scalia's ire.

Piggybacking Okayed

At the end of his opinion, Justice Scalia shifted gears into discussing what the EPA could do, including reaffirming recent decisions, including the 2007 case Massachusetts v. EPA, where the Court held that the agency could regulate carbon dioxide and other greenhouse gases as pollutants under the CAA.

A reasonable compromise, instead of rewriting the CAA's incongruous thresholds, would be to piggyback greenhouse gas limits on existing regulatory programs, such as PSD (Prevention of Significant Deterioration) and Title V, which already cover most large, stationary industrial sources.

Win for EPA, But What About You?

When announcing his opinion from the bench, Justice Scalia noted that "the EPA is getting almost everything it wanted in this case," reports the Washington Post.

"It sought to regulate sources that it said were responsible for 86 percent of all the greenhouse gases emitted from stationary sources nationwide," he noted. "Under our holdings, EPA will be able to regulate sources responsible for 83 percent of those emissions."

On the bright side, at least under yesterday's ruling, your company will only face greenhouse gas rules if you're already dealing with emissions regulations. On the other hand, if you were hoping to avoid regulation, this opinion, as well as the rest of the EPA's winning streak, make that more of a pipe dream.

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