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Supreme Court ruling on EPA greenhouse gas regulations: so who really won?

On 23 June 2014, the Supreme Court issued a split decision in Utility Air Regulatory Group v EPA, striking down part of an Environmental Protection Agency (EPA) rule requiring pre-construction permits for large sources of greenhouse gas (GHG) emissions, while upholding EPA’s authority to require inclusion of GHGs in pre-construction permits mandated for other pollutants. The mixed decision underscores the court’s view that EPA has authority to regulate GHG emissions under the Clean Air Act (CAA), including under other provisions, but it strongly warns EPA that it should not stray far from statutory limits on its authority when establishing broad-ranging programmes to address climate change. By so doing, the court’s opinion has allowed EPA, its supporters and foes to all claim victory.

In brief, following the Supreme Court’s 2007 ruling in Massachusetts v EPA that EPA could consider GHGs as pollutants under the CAA, EPA determined in 2009 that GHGs endangered public health and set GHG tailpipe standards for cars and light trucks in 2010. Under EPA’s longstanding interpretation of the Civil Aviation Authority (CAA), the agency concluded such regulation automatically triggered regulation of GHGs from stationary sources under the CAA’s Prevention of Significant Deterioration (PSD) pre-construction permit programme and Title V’s annual operating permit programme. However, the statutory threshold levels for regulations under PSD and Title V were so low (100–250 tons depending on the pollutant and programme) that EPA felt it had no other choice than to rewrite these threshold levels to avoid an ‘absurd result’ wherein virtually any substantial source of GHGs would be regulated…

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