This post was updated on 5/21/2010
While climate legislation is moving through Congress, the EPA (as most of you know) is moving ahead with greenhouse-gas regulations under the existing Clean Air Act. Industry groups and many in Congress think the two paths should be mutually exclusive – they want new climate legislation to preempt the EPA’s existing authority. Many environmental groups want to keep both tools. Some states have also requested that Congress preserve EPA authority.
I’ve questioned elsewhere whether leaving Clean Air Act authority intact gets very much in the way of environmental results (though note that even if preemption isn’t very costly from a policy point of view, opposing it could be very useful from a strategic point of view – it’s a useful bargaining chip).
But this debate doesn’t have to be hypothetical anymore. We have draft bill text in the form of Kerry-Lieberman, and it’s worth taking a look at what effect it would have on EPA authority.
In short, the bill would preempt almost every major element of EPA Clean Air Act authority by preventing the agency from using most Clean Air Act programs to regulate pollutants based on their climate change effects. In a general sense, Congress would be repealing the holding of Massachusetts v. EPA that greenhouse gases (GHGs) can be regulated under the existing statute (and, of course, replacing the old statutory provisions with a new set of cap-and-trade tools).
But there are exceptions to the preemption: one big one that actually leaves the narrow holding of Massachusetts v. EPA intact, one relatively small one, and a variety of tiny ones that might be noteworthy, but probably interest only me and other climate law wonks.
Preemption
Kerry-Lieberman aims a series of rifle shots at the foundations of each of the existing programs the EPA might use to regulate GHGs. Section 2301 of the bill would block the agency from setting national air quality standards (NAAQS) for any pollutant based on climate change effects. Section 2303 would similarly forbid the agency to regulate GHGs as hazardous air pollutants, and Section 2304 would prevent the agency from using a little-used part of the Clean Air Act (Section 115, governing international emissions) that has been discussed by some as a plausible choice for regulating GHGs. Section 2302 blocks the agency from issuing GHG performance standards (NSPS) for sources covered under the cap – or emitters that the bill treats as sources of offsets. Finally, Sections 2306 and 2307 prevent the agency from requiring emitters to get permits (NSR) based only on their GHG emissions.
These five programs – NAAQS, hazardous air pollutants, NSPS, Section 115, and NSR permitting are the only routes available to the EPA to implement big regulations for stationary GHG emitters. By preempting this authority, Kerry-Lieberman blocks the agency from economywide GHG regulation under the existing CAA.
Mobile Sources Excepted
But this broad preemption applies only to stationary sources – what about the transportation sector? Like Waxman-Markey before it, Kerry-Lieberman largely leaves EPA authority to regulate vehicles alone. This means that the EPA’s recent rule setting new vehicle fleet emissions standards would stand – and could be strengthened in the future. This is the core result of the Massachusetts v. EPA decision – that the EPA has the authority to regulate GHGs from vehicles under the current statute – and it would continue to be the case under the new bill.
This isn’t surprising. Unlike EPA regulations of stationary sources (which are often portrayed as expensive and inefficient, though our research suggests they aren’t necessarily so bad), fleet fuel-economy and emissions regulations are broadly popular. The EPA measure released recently is in part the result of a compromise between states, the EPA, and the car industry. Whatever it’s flaws, it’s more politically expedient to let it stand than to preempt it and create a new program (though the new bill would bring transport-sector carbon emissions into the price mechanism as well).
Some Performance Standards Excepted
As I mentioned above, the EPA wouldn’t be able to set GHG emission performance standards for emitters that are subject to the cap set by the bill. The EPA would still be able to set such standards for uncapped sources, however. For example, industrial sources that emit less than 25,000 tons/year of CO2-equivalent GHGs aren’t included under the Kerry-Lieberman cap. The EPA would still have authority to regulate these sources under the Clean Air Act.
This isn’t much of an exception, however. The EPA has shown no interest in regulating such small GHG sources to date. The tailoring rule it released this week exists solely to avoid regulating small sources, and it’s unlikely that the agency would have a newfound interest in them if the bill were to pass.
Update: It appears that this exception is somewhat broader than I initially realized. The bill in fact allows EPA to set performance standards for most coal plants as well. Specifically, the EPA can (through the states) set standards for all coal plants permitted before 2009, and also all plants permitted more recently, until the agency determines carbon capture and storage technology is available or 2020, whichever comes first. When either of those things happens, the bill has its own, new, performance standards that essentially require CCS.
If you’re not interested in the deep details of EPA preemption, you can stop reading – though if you’ve gotten this far. . .
Loopholes
Beyond these apparently intentional exceptions, the bill has some smaller loopholes which would allow the EPA to exercise its existing authority. These may be unintentional, or may simply have been thought too trivial to be worth addressing.
First, the statute allows the EPA to consider the effect on GHG emissions of performance standards it issues for other pollutants. This would allow the EPA to consider the climate-change “co-benefits” of regulations on traditional pollutants like sulfur dioxide: if the agency tightens regulations on those pollutants, fuel switching or technical changes could reduce GHG emissions as well. Of course, this can cut in the other direction: some regulations on traditional pollutants could increase GHG emissions – and the EPA could consider that too.
Second, Sections 2306 and 2307 of the bill that limit the ability of the agency to require permits from GHG emitters aren’t completely clear. My interpretation of these sections is that the EPA wouldn’t be able to require permits based on GHG emissions alone, but that the agency could consider GHG emissions for a source that is required to get a permit for other reasons.
Finally, and this may really only interest me, the bill prevents the EPA from using some of its existing authority based on a pollutant’s climate change or ocean acidification effects. In other sections, though, ocean acidification isn’t mentioned. The EPA could still in principle use ocean acidification (or other non-climate harms) to allow regulation under those programs. The chances of the EPA actually attempting this approach zero.
It’s possible there are other loopholes that I haven’t noticed, and it’s possible that those I point out will be filled in a final version of the bill.
Despite these loopholes and exceptions, however, I think the right story to tell about the bill is that advocates of EPA preemption have gotten essentially everything they asked for.