EPA Issues Endangerment Finding for CO2

On April 17, 2009, EPA issued an endangerment finding on carbon dioxide and other greenhouse gases, pronouncing that greenhouse gas (GHG) emissions endanger public health and welfare.  The endangerment finding comes nearly two years after the Supreme Court found that carbon dioxide, methane, nitrous oxide, and hydrofluorocarbons are air pollutants covered by the Clean Air Act (Massachusetts v. EPA, 549 U.S. 497).  Six greenhouse gas emissions are included in the endangerment finding: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.
 
EPA is proposing the endangerment finding and the "cause or contribute" finding under section 202 of the Clean Air Act, which regulates emissions from motor vehicles.  Even though the finding is focused on mobile source emissions, elements of the proposal give EPA potentially broad flexibility to reduce GHGs from a wide range of large and small emission sources such as power plants and motor vehicles.  This finding could have far-reaching implications on New Source Review (NSR), Title V, and New Source Performance Standards (NSPS) relative to regulation of greenhouse gases for industrial facilities.
 
The landmark finding, unless superseded by congressional action, is a significant contributor to changing the course of climate change policy in the U.S.  The discussion has now evolved from whether or not legislation or regulation may occur, to which framework will be developed to control U.S. greenhouse gas emissions - cap and trade or command and control regulation through the Clean Air Act, or both.  There is the lingering concern that regulating carbon dioxide under the Clean Air Act could impose an enormous regulatory burden on industrial sources in particular as well as the economy.
 
It is important to note that the proposed endangerment finding itself does not impose any specific requirements on industry or other entities at this point.  An endangerment finding under one provision of the Clean Air Act does not by itself automatically trigger regulation under the entire Act.  It is expected that rulemaking will succeed the endangerment finding to propose GHG emissions standards for motor vehicles and additional rulemaking could be proposed to address regulation of GHGs from industrial sources.  The Obama administration and the EPA Administrator have stated their preference for a comprehensive legislation using a cap and trade system.  In addition to the endangerment finding issued by EPA on Friday, April 11th, cap and trade legislation (Waxman-Markey) is moving through the House Energy and Commerce committee with a target issuance date of Memorial Day for the final legislation.  And, this recently issued endangerment finding will likely provide an alternate or gap-filling form of regulation for greenhouse gases, in the event climate change legislation is not passed in 2009.
 
To finalize its findings, EPA will hold two public hearings.  The first hearing is on May 18, 2009 in Arlington, Virginia and the second hearing is on May 21, 2009 in Seattle, Washington.  EPA will accept public comments for 60 days from the date the rule is published in the Federal Register.  
 
Please stay tuned for an upcoming Trinity client webinar on the context and impacts of the CO2 endangerment finding.  If you have any immediate questions on this development relevant to your company's climate change programs, please contact Katherine Blue, Trinity's Climate Change Services Practice Leader, at kblue@trinityconsultants.com or 404-256-1919.