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NJ Daily / POWER PLAY

Tailor-Made Problem

Washington is tied up in a tricky legal fight over EPA’s climate-change rules.

Baucus: Ag exemption nixed.(Getty Images/Chip Somodevilla)

photo of Amy Harder
April 12, 2011

A range of industry groups, states and companies are playing a tricky game of legal Jenga with President Obama’s climate-change rules.

They are seeking to knock down a series of decisions and rules that give the Environmental Protection Agency authority to regulate greenhouse gas emissions that cause climate change. Out of the four major pillars of EPA’s regulatory framework for carbon emissions, its “tailoring” rule is on the shakiest legal ground. If the court strikes down the agency’s tailoring rule without nullifying the others, it would leave everyone—EPA, Congress, and the U.S. economy—in regulatory chaos.

The tailoring rule, finalized by EPA in May, allows the agency to phase in greenhouse gas rules under the Clean Air Act. EPA will start controlling carbon emissions from the largest polluters such as power plants and manufacturing facilities first. Agency officials have said they won’t consider regulating smaller polluters until at least 2016. Historically, Congress and courts have interpreted the Clean Air Act to impose strict thresholds to regulate traditional air pollutants that would not allow for a phased-in approach.

 

Noting that greenhouse gas emissions are not regular pollutants and are emitted in much higher quantities, EPA is bending the Clean Air Act’s statutory intent to make it work. That’s why industry groups like the National Association of Manufacturers and the U.S. Chamber of Commerce say the Clean Air Act is not designed to regulate carbon emissions and have filed lawsuits challenging EPA’s actions since a 2007 Supreme Court decision, Massachusetts v. EPA, gave the agency the right to control greenhouse gas emissions.

If EPA didn’t implement its tailoring rule, the agency would have to permit more than 6 million sources, which would cover everything from coffee shops to coal-fired power plants. That is an unworkable situation for everyone, which is why a court decision invalidating the rule would be so detrimental. NAM, the Chamber, and other organizations are filing lawsuits against this rule and other aspects of EPA’s authority over carbon emissions because they oppose the entire process.

“We believe it was unnecessary for EPA to have come up with the tailoring rule, because they shouldn’t have gone ahead with the [entire] ruling in the first place,” said Quentin Riegel, vice president for litigation and deputy general counsel at NAM.

A coalition of organizations is challenging three other major aspects of EPA’s carbon regulatory framework: its endangerment finding, which provides the scientific reasoning to control carbon emissions; the agency’s carbon rule for motor vehicles; and a “trigger” rule that essentially says: Since EPA regulates carbon emissions for cars, it must do the same for stationary sources.

Twenty-six interest groups, states and companies are suing EPA for its tailoring rule. There are 80 lawsuits against EPA for its climate-change emissions regulatory framework filed by roughly the same coalition that is challenging the agency for its tailoring rule.

EPA is more confident it will prevail in court with its endangerment finding, motor vehicles rule, and trigger rule. Privately, administration officials acknowledge the legality of the tailoring rule isn’t as sound.

While groups seek to topple the tower of EPA’s carbon rules, the court might end up only knocking out the top part, the tailoring rule.

“The last thing industry groups would want is EPA actually implementing GHG regulations to the letter of the law with none of the flexibility built into the tailoring rule,” said Patrick Parenteau, a professor at Vermont Law School. “What the industry plaintiffs are hoping for is a train wreck that would force Congress to overturn Mass. v. EPA and repeal the Clean Air Act requirements for GHG.”

Congress got a glimpse of the tailoring rule debate when the Senate last week voted down an amendment sponsored by Finance Chairman Max Baucus, D-Mont., that would have codified the tailoring rule and exempted agricultural producers. It failed 7-93. It would have made all the lawsuits against the tailoring rule moot if it had passed.

Baucus made a good-faith effort in protecting against a result nobody wants. Yet the measure failed because industry groups have their eye on the bigger prize: knocking down the entire tower. And environmental groups wanted to stand firm behind the rules since the vote on Baucus’s amendment, along with three other votes on more restrictive amendments limiting EPA’s authority over carbon emissions, were more for political cover than anything else.

Indeed, Congress isn’t ready to have a substantive debate over EPA’s greenhouse gas rules. It has time. The U.S. Court of Appeals for the D.C. Circuit won’t decide the tailoring rule case or the other challenges until 2012.

But if the court ends up striking down the tailoring rule but not the other three major ones—a likely scenario according to many lawyers—experts know what would come next.

 “Congress would essentially have to act,” said Rick Krause, a lobbyist for the American Farm Bureau. “EPA and the states are not equipped to handle that flood of entities that would be required to get permits if the tailoring rule would be overturned.”

The Farm Bureau opposed the Baucus amendment because it said energy costs would trickle down from the major polluters that are still regulated. Yet the organization is not suing EPA for its tailoring rule (it is for other aspects of the agency’s carbon regulations).

“We don’t think that phasing in the thresholds harms us,” Krause said of the tailoring rule. “It would seem to help.”

This article appears in the April 13, 2011 edition of NJ Daily.

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