A specter is haunting the U.S. economy — the specter of an Environmental Protection Agency (EPA), empowered by activist judges, attempting to implement Al Gore’s climate policies.
In April 2007, in Commonwealth of Massachusetts v. EPA, the Supreme Court, by a 5-4 majority, held that the Clean Air Act authorizes the EPA to regulate carbon dioxide (CO2) as an “air pollutant.” The Court also basically told the EPA to promulgate CO2 emission standards for new cars and trucks. This was a major political victory for the plaintiffs — a gaggle of state attorney generals, and green pressure groups.
The majority’s ruling is a flagrant example of legislating from the bench. Unless Congress intervenes to overturn Mass v. EPA or negate its regulatory consequences, non-elected bureaucrats and litigators will end up dictating how Americans produce and use energy.
Judicial Activism in Overdrive
To reach the decision that EPA may, and indeed must, regulate CO2 emissions, the majority had to ignore common sense and play fast and loose with the text, structure, and legislative history of the Clean Air Act.
Vehicular CO2 emission standards are de facto fuel-economy standards. There is no device that can be installed in a car engine to capture or destroy CO2 emissions. Hence the only practical way to reduce CO2 emissions from vehicles is to increase fuel economy. More miles to the gallon means less CO2 per mile. Accordingly, although the National Highway Traffic Safety Administration (NHTSA) sets fuel-economy standards in terms of miles per gallon, EPA monitors and tests fuel economy by measuring grams of CO2 per mile.
Congress authorized NHTSA, not EPA, to administer fuel-economy standards for cars sold in the U.S. marketplace. As the auto industry pointed out in a superb brief, EPA-designed CO2 emission standards would either conflict with, or wastefully duplicate, NHTSA-administered fuel-economy standards. This is a result that — Congress presumably did not intend. Indeed, in the 30-year history of the federal fuel-economy program, not only has Congress never delegated any standard-setting authority to EPA, it has kept a tight rein on NHTSA. The idea that Congress implicitly gave EPA authority to improvise in the field of fuel-economy regulation is preposterous.
The 5-4 majority failed to engage this argument, instead simply asserting that there is “no reason to think the two agencies cannot both administer their obligations and yet avoid inconsistency.” This en passant comment is the majority’s total justification for effectively re-writing (or mangling) the 1975 Energy Policy and Conservation Act, which created the federal fuel-economy program.
The majority also uncritically accepted the linchpin of plaintiffs’ argument — the claim that CO2 is an “air pollutant” within the meaning of the Clean Air Act. The provision defining “air pollutant” in the Clean Air Act — Section 302(g) — is only two sentences long. Here it is, in full:
The term “air pollutant” means any air pollution agent or combination of such agents, including any physical, chemical, biological, or radioactive (including source material, special nuclear material, and by-product material) substance or matter, which is emitted into, or otherwise enters, the ambient air. Such term includes any precursors to the formation of any air pollutant, to the extent that the Administrator has identified such precursor or precursors for the particular purpose for which the term “air pollutant” is used.
Plaintiffs argued that the term “air pollutant” includes any “substance or matter which is emitted into or otherwise enters the ambient air,” and since CO2 is emitted, EPA may regulate it. But according to the Clean Air Act, “air pollutant” does not include anything and everything emitted into, or entering, the air. Rather, it says that any “air pollution agent” emitted into, or entering the air, is an air pollutant. An air pollution agent is obviously something that dirties or fouls the air — or something that degrades air quality.
Carbon dioxide, however, does not fit that description. A clear, odorless gas, CO2 is non-toxic to humans and other animals at 20 times ambient levels, and the ongoing rise in the air’s CO2 content helps most crops, trees, and other plants grow bigger, produce more fruit, and utilize water more efficiently.
The majority erred in reading the term “air pollution agent” as a synonym for “air pollutant” and the effect is to make the first sentence of Section 302(g) hopelessly circular (an “air pollutant” is an “air pollutant”), with the bizarre result that oxygen, water vapor, and even — as Justice Scalia noted — Frisbees become “air pollutants.”
Ignoring legislative and regulatory history
The immediate policy question raised in Mass v. EPA is whether EPA must regulate vehicular emissions of greenhouse gases under Section 202 of the Clean Air Act. Legislative and regulatory history suggest not. A central purpose of Section 202 since it was enacted in 1970 and amended in 1977, has been to ensure that automobile engines become so clean burning that, ultimately, nothing comes out of the tailpipe except two greenhouse gases: water vapor and CO2, both of which — — increase greenhouse-gas emissions from automobiles. Thus, federal law and regulation have regarded CO2 and water vapor as harmless byproducts.
In its brief, EPA noted that, during the past quarter century, Congress has either voted against or declined to adopt every regulatory climate proposal it has considered. For example, and most pertinently, during debate on the 1990 Clean Air Act Amendments, Congress decided not to adopt a Senate committee-approved provision requiring EPA to regulate CO2 emissions from motor vehicles.
The majority, however, deemed such legislative history irrelevant, arguing that Congress’s failure to pass subsequent laws or provisions cannot curtail EPA’s authority under Section 202. But EPA was not suggesting that “post-enactment legislative history” implicitly repeals portions of the Clean Air Act. Rather, EPA was trying to clarify what Congress’s consistent intention was regarding its authority to regulate greenhouse gases.
In effect, the majority in Mass v. EPA asks us to believe that when Congress enacted and amended the Clean Air Act, it implicitly ratified the Kyoto Protocol, or enacted the McCain-Lieberman Climate Stewardship Act, in substance if not in detail. This is so absurd it would be funny, if judicial usurpation of legislative power and regulatory overkill were laughing matters.
The larger issue put in play by Mass v. EPA is whether EPA must set national ambient air-quality standards (NAAQS) for CO2 and other greenhouse gases. This is not obvious at first glance, but is well known to policy insiders.
EPA’s first step in regulating an air pollutant under Section 202 is to make a “judgment of endangerment.” Any EPA regulation of CO2-emission rates from motor vehicles would have to include, and be based upon, an official judgment that CO2 emissions “endanger public health or welfare.” In setting such standards, Section 202 directs EPA to take account of technological feasibility and cost. This is one reason plaintiffs argued that EPA regulation of CO2 emissions from cars would not adversely affect the U.S. auto industry.
What plaintiffs conveniently neglected to mention, is that an endangerment finding with respect to CO2 emissions under Section 202 will trigger regulatory action under other Clean Air Act provisions. The most important such provision is Section 108, the cornerstone of the NAAQS program. Section 108 standards are pollution concentration (parts per million) standards, which specify how much of a substance is allowable in the ambient air, and subsequently regulates accordingly. But here’s the kicker: In setting NAAQS, EPA is prohibited from taking cost and technological feasibility into account. In other words, the majority in Mass v. EPA has created a regulatory Pandora’s Box.
Of course, if EPA were to undertake a NAAQS rulemaking for CO2, the agency would face enormous pressures to set the standard below current atmospheric levels. The U.S. CO2 emissions are projected to increase by more than one third from 2005 to 2030. Therefore in order for a lowering of atmospheric CO2 levels to be possible, U.S. CO2 emissions would have to fall almost to zero. Basically, we’d have to stop using coal to generate electricity, and stop using gasoline to power our cars.
At the very least, establishing NAAQS for CO2 would give the Kyoto crowd carte blanche to demand ever-more onerous government meddling in energy markets and political constraints on economic growth. Would even de-industrializing America be enough to save the planet? “Probably not,” our greener friends would say, “but every little bit helps.”
The Dingell Factor
Is there any way to nip this mischief in the bud? The majority claimed that EPA wouldn’t need to set CO2 standards if the agency determined that CO2 emissions do not contribute to global warming, or if EPA provides statutory reasons why it cannot or will not make a judgment of endangerment. But this was just a politic way of telling EPA to do plaintiffs’ bidding; CO2 emissions do contribute to global warming — that’s just basic physics — and the majority pointedly rejected the agency’s understanding of its discretionary authority.
Congress could foil plaintiffs’ NAAQS strategy by amending the Clean Air Act to clarify that Congress never delegated to EPA the power to regulate CO2. But in today’s political climate, with pro-Kyoto Democrats in control of the House and Senate, there is not a snowball’s chance in hell of that happening.
Corporations lobbying for Kyoto-style cap-and-trade legislation in the hope of achieving “regulatory certainty” are fooling themselves. These companies haven’t considered the implications of Mass v. EPA. None of the climate bills before Congress contains language prohibiting EPA from regulating CO2 under the NAAQS program. The bills leave EPA free to set conflicting or tougher emission reduction requirements. That’s hardly surprising, since the green groups championing those bills relish the prospect of serving in or partnering with a climate-crusading EPA. They know that EPA bureaucrats are more willing to inflict economic pain on voters than are senators and congressmen who must answer to the public at the ballot box.
Back in June, Rep. John Dingell (D., Mich.), chairman of the House Energy and Commerce Committee, proposed legislative language that drove the Kyoto crowd nuts. Dingell’s foremost concern is to protect the U.S. auto industry from being regulated to death by EPA and the California Air Resources Board (CARB), which is busy implementing CO2 emission standards for new cars sold in California. Dingell’s legislation provides that only NHTSA — not EPA or CARB — may regulate fuel economy.
From a good-government perspective, Dingell’s logic is unassailable. CO2 emission standards are fuel-economy standards, only one agency should set fuel-economy standards, and it should be the agency with the longest experience and most expertise. That’s NHTSA; not EPA or CARB.
Dingell denies that his legislation would overturn Mass v. EPA, since it does not contest the majority’s opinion that EPA has authority to regulate CO2. What the legislation would do, however, is preempt an EPA rulemaking under Section 202. EPA would not be able to regulate vehicular CO2 emissions, because it would not be to regulate fuel economy. That would forestall — perhaps indefinitely — an EPA judgment of endangerment regarding CO2. Hence EPA might never get to pull the trigger for a CO2 NAAQS rulemaking with its vast potential to kill jobs and growth
Under heavy pressure from the California greenhouse gang — Gov. Arnold Schwarzenegger, Senators Barbara Boxer and Dianne Feinstein, Speaker Nancy Pelosi, Attorney General Jerry Brown, and Rep. Henry Waxman — Dingell withdrew his legislation from consideration. However, he vowed to press the issue in the fall. That’s now.
Will cooler heads prevail? Eventually, yes. Kyotoism’s days are numbered. In America, any policy that is economically ruinous is politically unsustainable. California Governor Gray Davis got the boot because he couldn’t keep the lights on — and couldn’t keep jobs and businesses in the state. Several bills in Congress call for roughly 70-percent CO2 reductions by mid-century. Gov. Schwarzenegger proposes 80 percent. Not to be outdone, Al Gore demands 90 percent. Each of these proposals would turn out the lights in America and send millions of jobs overseas.
If I am not mistaken, a backlash against the smug elitism and rhetorical excess of the global-warming crusade is stirring, and the greens have barely begun to regulate. The American people punished Jimmy Carter for stagflation, they punished Bush I for new taxes, and they punished Democrats in Congress for HillaryCare. They will likely punish the greens too once global-warming policies are actually implemented and the staggering costs become clear.
— Marlo Lewis is a senior fellow in environmental policy at the Competitive Enterprise Institute.