EPA Rescinds 2009 Endangerment Finding, Eliminates Federal Vehicle Greenhouse Gas Standards

The US Environmental Protection Agency has finalized its rule rescinding the 2009 Endangerment Finding under Section 202(a) of the Clean Air Act and repealing all federal greenhouse gas emission standards for motor vehicles and engines for model years 2012–2027 and beyond. The final rule also eliminates associated compliance programs, including credit banking and trading mechanisms and all off-cycle credits.

The rescission of the Endangerment Finding removes a predicate finding that had served as the foundation for federal greenhouse gas regulation from motor vehicles for more than 15 years. While it does not affect other regulatory programs directly, it does mark a significant shift in the agency’s overall approach to greenhouse gas regulation.

A variety of interest groups and state entities will soon seek judicial review in the DC Circuit. With an apparent eye to those legal challenges, EPA made significant revisions from the proposed rule it had issued this summer.

Notably, it added several alternative legal bases while declining to finalize its scientific conclusions regarding the impacts of climate change. EPA’s statutory bases for the rescission could potentially tee up the case for certiorari from the US Supreme Court, providing an opportunity for it to reconsider its conclusions in the landmark case Massachusetts v. EPA.

BACKGROUND AND LEGAL FRAMEWORK

In Massachusetts v. EPA, 549 U.S. 547 (2007), the Supreme Court held that greenhouse gases qualify as “air pollutants” under Section 202(a) of the Clean Air Act. That conclusion required EPA to determine whether emissions from new motor vehicles “cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare,” which is a prerequisite for regulating motor vehicle tailpipe emissions.

In 2009, EPA issued the Endangerment Finding, concluding that six well-mixed greenhouse gases, including carbon dioxide and methane, endanger public health and welfare and that motor vehicle emissions contribute to that endangerment. That determination triggered EPA’s obligation to promulgate greenhouse gas standards for vehicles under Section 202(a). It also had secondary impacts on many of EPA’s efforts to regulate greenhouse gases by, among other things, providing scientific factual findings on which EPA relied in other contexts.

EPA’s final rule rescinds that determination and repeals all of the annual motor vehicle greenhouse gas standards that were based on it.

KEY ELEMENTS OF THE FINAL RULE

EPA’s final rule provided multiple independent bases for the rescission of the Endangerment Finding. Those bases tend to emphasize statutory interpretation and changes in Supreme Court precedent over the last 15 years.

The Meaning of ‘Air Pollution’ in Section 202(a)

The first basis EPA provided for the rescission—and a central theme throughout the final rule—is EPA’s interpretation that “air pollution” as used in Section 202(a) refers only to pollutants that harm human health or welfare through local or regional exposure. In making that determination, EPA expressly rejected the view that Section 202(a) authorizes regulation of globally dispersed greenhouse gases based on worldwide climate impacts.

Litigants are likely to argue that EPA’s interpretation is in tension with aspects of the Supreme Court’s ruling in Massachusetts v. EPA. Anticipating those arguments, EPA posited in the final rule that more recent decisions from the Court—including UARG and West Virginia—have clarified that the scope of EPA’s authority under Section 202(a) should be construed more narrowly.

No Authority for a Standalone Endangerment Finding

EPA issued the Endangerment Finding as a standalone rule without a contemporaneous set of vehicle tailpipe emissions standards. EPA’s final rule identified this lack of a contemporaneous set of standards as an independent basis for rescission, concluding that “Section 202(a)(1) does not authorize EPA to sever the finding of endangerment from the finding of causation or contribution” and “the statute does not permit EPA to issue a freestanding finding that triggers a duty to regulate without simultaneously analyzing and promulgating emission standards that directly address the identified harm.”

Major Questions Doctrine

The final rule also identified the major questions doctrine as an independent basis for rescission, concluding that the decision of whether to regulate tailpipe greenhouse gas emissions is a “matter of vast economic and political significance,” and one which Congress did not clearly authorize EPA to make. EPA emphasized that recent Supreme Court decisions, particularly West Virginia v. EPA, have expanded upon the major questions doctrine since the Court’s decision in Massachusetts.

Futility as an Independent Rationale

EPA’s final basis for the rescission was futility: EPA concluded that even eliminating all US motor vehicle greenhouse gas emissions in the United States would have a de minimis impact on global climate through 2100. EPA characterized this futility as a separate and sufficient basis for repealing the tailpipe emissions standards, even apart from the validity of the Endangerment Finding itself.

WHAT EPA DID NOT FINALIZE

EPA also chose not to finalize several aspects of its proposed rule, some of which may have been cut in order to minimize the targets for litigation.

No Scientific Determination That Climate Change Does Not Endanger Health or Welfare

Most notably, EPA chose not to finalize a scientific conclusion that climate change does not endanger public health and welfare. The final rule acknowledged that the scientific portion of its proposal had drawn particularly heavy criticism from commenters, and while EPA expressed that it “continues to harbor concerns regarding the scientific determinations underlying the Endangerment Finding,” it concluded that its legal interpretations alone were sufficient to support the rescission of the Endangerment Finding without finalizing any additional scientific conclusions.

No Finalization of ‘Lack of Requisite Technology’ Theory

EPA also did not finalize its alternative rationale that no control technology exists that could meaningfully address the harms of greenhouse gases. It nonetheless expressed its view that, due to its conclusion that eliminating all greenhouse gases from US motor vehicles would have a de minimis impact on climate change, there is inherently no control technology that could sufficiently address the problem.

No Reliance on Vehicle Affordability or Fleet Turnover Effects

Similarly, EPA did not finalize the proposed rule’s alternative theory that greenhouse gas standards create higher vehicle prices that delay adoption of newer vehicles. EPA noted National Highway Traffic Safety Administration findings that newer vehicles tend to be safer and have lower greenhouse gas emissions, but it ultimately concluded that it was not necessary to finalize that alternative basis for its rule given its legal interpretations.

IMPLICATIONS

Elimination of Federal Vehicle GHG Standards

The most immediate impact of the rule is the elimination of all federal greenhouse gas standards for motor vehicles and engines for model years 2012 through 2027 and beyond as well as all of the associated compliance, credit, reporting, and certification programs. Automobile manufacturers will no longer need to measure or report vehicle tailpipe emissions.

Because EPA declined to finalize the proposal’s scientific conclusions regarding climate change, the rescission’s implications for other regulatory programs are somewhat narrower. But the rule still signals the agency’s shift in approach on greenhouse gas regulation, and EPA is likely to take similar regulatory steps in a number of areas, including stationary source permitting, greenhouse gas reporting requirements, and methane emissions.

Litigation

Litigation is expected to be filed immediately in the DC Circuit. While challengers will attack each of EPA’s bases provided in its rule, a particular focus is likely to be EPA’s interpretation that “air pollution” as used in Section 202(a) refers only to pollutants with regional or local impacts, which challengers will characterize as in tension with Massachusetts v. EPA.

EPA’s decision to make that broad argument may be a strategic calculation that the current Supreme Court would be willing to revisit Massachusetts. If the Court were to overturn or narrow Massachusetts, it would proscribe regulation of greenhouse gases from vehicles under Section 202(a) in a way that could not simply be undone by a different administration.

The litigation in the DC Circuit is likely to involve a large number of petitioners as well as intervenors and amici on both sides. Resolution could take several years, particularly if the Supreme Court ultimately grants certiorari.

In the interim, there will be legal uncertainty about the status of the Endangerment Finding rescission itself, though there should be little uncertainty about the administration’s approach to regulation of vehicle greenhouse gases: even if it could not rescind the Endangerment Finding, EPA has made clear that it would not set technology-forcing tailpipe greenhouse gas standards.