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U.S. EPA Takes Another Step Towards Regulation of Greenhouse Gas Emissions

On April 17, 2009, the U.S. Environmental Protection Agency (EPA) issued its much-anticipated Proposed Endangerment Finding for greenhouse gases (GHGs).¹ The proposal finds that GHGs as a group endanger public health and welfare, and that the emissions from mobile sources contribute to GHG concentrations in our atmosphere. Should the Proposed Endangerment Finding become final, EPA will have taken a significant step towards federal regulation of the suite of GHGs, including carbon dioxide (CO₂), which contribute to global warming.

EPA's proposal comes as little surprise in the wake of the recent barrage of federal climate change bills to establish a GHG cap-and-trade program and EPA's recent proposal to implement a national GHG reporting program.² If the Proposed Endangerment Finding becomes final in substantially the same form, EPA would be required to promulgate standards to control GHGs from mobile sources. In other words, GHG emissions from mobile sources may become subject to regulation without federal legislative action. The promulgation of such regulations could also open the door for regulation of GHG emissions from stationary sources during the permitting process.

Background

The Endangerment Findings comes in direct response to the U.S. Supreme Court's 2007 decision in Massachusetts v. EPA, 549 U.S. 497 (2007). In that decision, the Supreme Court held that GHGs are "air pollutants" under the Clean Air Act (CAA). Consequently, pursuant to Section 202(a) of the CAA (regulation of motor vehicle emissions), EPA was required to make a determination as to whether GHG emissions from new motor vehicles cause or contribute to air pollution that endangers public health or welfare. In the event of a final positive endangerment finding, EPA is required under the CAA to regulate such emissions.

Proposed Endangerment Finding

In the Proposed Endangerment Finding, EPA concluded that GHG emissions endanger both public health and the public welfare. The finding applies to the total collective concentrations of the six commonly accepted GHGs (CO₂, methane (CH₄), nitrous oxide (N₂0), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulfur hexafluoride (SF₆)). In addition, the Proposed Endangerment Finding proposes that the combined emissions of CO₂, CH₄, N₂0 and HFCs from mobile sources contribute to air pollution. This means that EPA is proposing regulation of GHGs as a class of pollutants, rather than on a pollutant-by-pollutant basis. EPA claims that this decision is based, at least in part, on the fact that other GHG programs (like the proposed federal GHG reporting program) evaluate GHGs on a class basis, and that regulation of GHGs as a class will allow for flexibility in setting federal standards (such as allowing netting and offsets under the federal Prevention of Significant Deterioration (PSD) program).

EPA's action continues the unavoidable press propelling the United States to regulate GHGs and makes it highly likely that climate change legislation will be passed before the upcoming December 2009 Copenhagen meeting of the United Nations Framework Convention on Climate Change.

Public comments on the Proposed Endangerment Finding will be due 60 days after the publication of the proposal in the Federal Register. EPA has set public hearings for May 18, 2009, in Arlington, Virginia, and May 21, 2009, in Seattle, Washington.

Schiff Hardin LLP can assist in reviewing the Proposed Endangerment Findings and its impact on your business and can assist in providing comments to the EPA on this proposal. Schiff Hardin can also provide general background on climate change, GHG emissions and reduction strategies, energy efficiency projects, renewable energy assistance, and regulatory developments as your business responds to changes in statutory and regulatory requirements. Please contact Jane E. Montgomery, Joshua R. More, or David M. Loring.

RECENT ENVIRONMENTAL PUBLICATIONS

"U.S. EPA Publishes Proposed National Greenhouse Gas Reporting Rule," Environmental Update (April 10, 2009)
"EPA Retains Authority to Set Reasonable National Performance Standards under Section 316(b) of the Clean Water Act," Environmental Update (April 2, 2009)
"96th Illinois General Assembly: Environmental Bill Summaries," Environmental Update (April 1, 2009)

ABOUT SCHIFF HARDIN LLP

Schiff Hardin's diverse environmental practice advises clients engaged in a wide variety of industries and commercial endeavors such as electric generation, natural gas distribution and production, chemical manufacturing, auto and auto parts manufacturing, consumer goods manufacturing, real estate development and investments by financial institutions and equity investors.

For more information, contact us.