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Climate Change Hero

Climate Change Blog

  • 02
  • February
  • 2017

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With the Clean Power Plan Under Attack Could a Climate NAAQS be Next?

While on the campaign trail, President Trump made several statements suggesting that he will seek to reverse many of the regulations and guidance documents that constitute President Obama’s Climate Action Plan, including the Clean Power Plan. Recent actions and statements by the Trump Administration have further signaled the potential for a significant reversal of U.S. climate policy. Given that the new Administration is unlikely to pursue further policies aimed at cutting greenhouse gas (GHG) emissions, and may even attempt to roll back some existing regulations, many environmental organizations and think tanks are considering alternative measures to achieve emission reductions. 

In January 2017, members of Duke University’s Nicholas Institute for Environmental Policy Solutions released a working paper (“Duke Working Paper”) concluding that if the Clean Power Plan were to be reversed by a Court or withdrawn by the Trump Administration, “stakeholders are likely to litigate to force EPA to use other authorities under the Clean Air Act to regulate GHG emissions.” Specifically, the new Duke Working Paper examines the possibility of using the Clean Air Act’s (CAA) National Ambient Air Quality Standards (NAAQS) program to regulate GHGs, and discusses the differences between the Clean Power Plan, and a possible GHG NAAQS. While it is unclear whether the use of a GHG NAAQS will gain any traction, the Duke Working Paper provides an example of one of the alternative avenues for climate action that environmental groups may pursue during the next Administration. 

The Clean Power Plan

As discussed in greater detail in this previous post, EPA published the Clean Power Plan on August 3, 2015. The rule calls on each state to reconfigure its electrical generation portfolio to achieve the standards of performance for carbon dioxide (CO2) emissions that EPA has determined to be achievable from an idealized generation portfolio for each state. The Clean Power Plan applies to existing power plants and was promulgated under section 111(d) of the CAA. The Clean Power Plan is considered a cornerstone of the Obama Administration’s climate policy.

As a result of legal challenges brought by industry groups and states, the Clean Power Plan was stayed by the U.S. Supreme Court on February 9, 2016. The stay will remain in effect throughout the pendency of the appeals process, at least until the Court gets the case on petitions for certiorari. In September, the D.C. Circuit heard en banc argument on the Clean Power Plan, but has not yet issued an opinion. It is unclear what the fate of the Clean Power Plan will be, either from this litigation, or from policies of the next Administration. The Duke Working Paper describes two ways that the D.C. Circuit or the Supreme Court could overturn all or part of the rule by determining that EPA may not use Section 111(d) to include “outside the fence line” measures (i.e. actions beyond regulation of the power plants) in the rule, or that EPA may not regulate GHGs under Section 111(d) because it has already regulated hazardous air pollutant emissions from the same sources under Section 112 of the CAA. Even if the rule does survive the legal challenges, the Trump Administration could use the same rulemaking process used to create the Clean Power Plan to revise or remove the rule.

Under either scenario, groups wishing to push for further GHG reductions may petition or sue the agency to pressure or force it to create a NAAQS for GHGs. The Administrative Procedure Act gives “interested persons” the ability to petition an agency to initiate a rulemaking, but does not create any deadlines for agencies to make decisions about such petitions. The Duke Working Paper specifically notes that EPA has not yet made a decision on at least one previous petition to regulate GHGs under the CAA filed in 2009. If EPA were to deny the petition, the petitioner could then challenge that denial in federal court. The petitioner could also attempt to force EPA to rule on its petition by using the CAA’s citizen suit and arguing that the agency’s action (deciding on the petition) was unreasonably delayed. While it remains unclear whether any group will try, or succeed, in forcing EPA to create a GHG NAAQS, the Duke Working Paper describes a number of aspects of how a theoretical GHG NAAQS program might function.

A GHG NAAQS?

Under Section 108 of the CAA, EPA’s responsibility to regulate an air pollutant under the NAAQS program is triggered when EPA determines that the pollutant causes or contributes to air pollution which may “reasonably be anticipated to endanger public health and welfare,” which is in the ambient air as the result of “numerous or diverse mobile or stationary sources” and “for which [the EPA Administrator] plans to issue air quality criteria under this section.” As the Duke Working Paper notes, EPA has already made a determination under CAA Section 202—which contains identical language to the Section 108 provision—that GHGs endanger public health and welfare. As a result, the Duke Working Paper concludes that the only missing element to issue a GHG NAAQS is whether EPA plans to issue air quality criteria.

Setting a GHG NAAQS

Once EPA has made the required determinations for a pollutant, it then makes a science-based assessment of the concentration of the air pollution that is safe for public health and welfare, and sets a primary and secondary NAAQS standard. Cost cannot be taken into account in setting these numbers. Each region in the country can be designated as in or out of attainment with these standards, depending on whether their concentration level is above or below the level that EPA has set. A region can also be designated as “unclassifiable.”

Once EPA has established a NAAQS, the states propose designations of which regions are in attainment and which are in nonattainment to EPA. States submit recommendations based on air quality data collected from air monitors in different locations, as well as other information characterizing air quality such as modeling. After considering the information from air quality monitors, and/or models, EPA will designate an area as attainment or nonattainment for the standard. Each state must also submit a state implementation plan (SIP) that demonstrates how the state will maintain or reach attainment levels by the statutorily-mandated deadline. SIP demonstrate that they will result in attainment of a primary NAAQS “as expeditiously as practicable, but no later than five years” after a region is designated in nonattainment, and it must meet a secondary NAAQS “as expeditiously as practicable.” If states do not submit a SIP or submit an insufficient SIP, the EPA will create and implement a federal implementation plan (FIP).

As the Duke Working Paper points out, setting NAAQS and designating regions for GHGs poses challenges due to the unique characteristics of GHGs: GHGs remain in the atmosphere for hundreds of years causing them to mix to a uniform global level. As a result, the entire country would either be in or out of attainment with the standards set by EPA and reductions of GHG emissions by the states may not have the practical effect of attaining the NAAQS. The Duke Working Paper notes that the same problem can be seen on a somewhat smaller scale with long-range transport of ozone but concludes “the NAAQS program for ozone has still progressed, leading to reductions in emissions of pollutants and public health benefits,” and notes that the international community has agreed to reduce GHG emissions under the Paris Agreement.

Although the standards are science-based, the Duke Working Paper notes that EPA retains discretion to set the exact standard from within a range recommended to the agency by a Clean Air Scientific Advisory Committee. It is unclear if the recommended ranges for GHGs would be broad enough to allow the Trump Administration, or any subsequent administrations, discretion in deciding whether the entire country was in or out of attainment.

Comparison to the Clean Power Plan

Unlike the Clean Power Plan, a NAAQS would not just regulate existing sources from a single sector or source type (such as power plants). Instead, it would apply to both new and existing sources across different industries, and could therefore be much more far-reaching than the Clean Power Plan.

Potential Sanctions

In addition, the Duke Working Paper points out that the NAAQS program includes sanctions to ensure that all states and sources comply with SIPs and the NAAQS standards, which are not present in the Clean Power Plan. EPA can institute sanctions if it disapproves a SIP for a nonattainment area for failure to: (1) meet required SIP elements; (2) submit a SIP or the SIP fails to meet completeness criteria; (3) make any other submission or the submission fails to meet completeness criteria; or (4) implement a requirement from an approved SIP. A state has 18 months to fix the deficiency, after which EPA may assess a sanction in the form of the loss of highway funds or an increase in the required offsets for new or modified sources by a ratio of at least two to one, which is an impediment to the construction of new facilities in a state. If the EPA finds a lack of good faith or if the state does not fix the deficiency within six months of the initial sanction, then both sanctions can be levied against the state. As discussed above, the well-mixed and uniform nature of GHGs means that the entire country will have the same level of GHGs in the local air, and the entire country will therefore fall under the same attainment or non-attainment classification category. The NAAQS sanctions provisions could be problematic if EPA sets the NAAQS levels such that the entire country is out of attainment, and therefore subject to potential sanctions when there are shortcomings in SIPs or SIP implementation.

The Working Paper includes the following chart, which more fully compares the Clean Power Plan to a potential GHG NAAQS:

CC Blog_20217_Table

Preconstruction Permits

The Duke Working Paper identifies preconstruction permits as a key difference between a NAAQS program and provisions that serve as the basis for the Clean Power Plan. Under the NAAQS program, major emitting facilities in both attainment and nonattainment areas must receive preconstruction permits, but different requirements apply depending on whether a region is in or out of attainment. For attainment areas, new or modified major emitting facilities (i.e., stationary sources that emit or that have the ability to emit at least 100 tons per year and any other source with the potential to emit at least 250 tons per year) must apply for prevention of significant deterioration (PSD) permits. While not addressed by the Duke Working Paper, the PSD permitting requirements for GHGs already exist for new sources that are major emitting facilities of other NAAQS air pollutants. The Duke Working Paper does not adequately explain that in nonattainment areas, new or modified major stationary sources with the potential to emit at least 100 tons per year would require a New Source Review (NSR) permit, which can contain much more stringent requirements than PSD permits, and require offsets.

The emissions thresholds included in the NSR provisions would be problematic as applied to GHG emissions, as even relatively minor operations exceed the 100/250 ton figures. EPA has previously attempted rewrite these thresholds through its “Tailoring Rule” where it defined sources as “major” if they emitted at least 100,000 tons of GHGs per year in order to prevent those smaller operations from needing permits based solely on their GHG emissions. In the Tailoring Rule, EPA explained that the PSD program and Title V air permitting programs were designed to regulate “a relatively small number of large industrial sources,” and that permits for all sources of GHGs above the 100/250 ton per year thresholds would greatly expand the permitting programs, create administrative difficulties and make the program “unrecognizable to the Congress that designed” it.

In Utility Air Regulatory Group v. EPA (UARG), the Supreme Court rejected EPA’s approach, explaining that the unambiguous statutory terms “100 or 250 tons per year” did not allow EPA to alter the figures for operations that were not already subject to the permitting requirements, but would be subject based on their GHG emissions. The Court stated that EPA did not have to regulate GHGs under the PSD and Title V permitting programs, but explained that once it did so, EPA did not have the discretion to alter the thresholds in the statute. The Court did allow EPA to continue requiring GHG permits for sources already subject to the PSD or Title V air permitting programs based on their emissions of other pollutants (“anyway” sources). The threshold for these “anyway” sources is subject to EPA rulemaking. EPA will similarly have to grapple with permitting threshold issues if a GHG NAAQS program is implemented.

Conclusion:

As the Trump Administration takes steps to limit or roll back the climate initiatives of the Obama Administration, environmental groups or think tanks may pursue alternative means to achieve reductions in GHG emissions. The Duke Working Paper provides one example of such an alternative. While the CAA’s NAAQS program might provide another way to regulate GHGs, there are a number of open questions about how such a program would function. Even if groups succeeded in forcing EPA to create such a program, the actual impact of the program would depend on the standard set by EPA and whether the country was in or out of attainment with that standard, the way that states fashion their SIPs to meet the standard, and whether EPA exercises any sanctioning power it may have.  

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Author

Margaret E. Peloso

Margaret E. Peloso Counsel