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The Supreme Court has rebuked the Bush administration on global warming. What comes next? On April 2, the Court issued a 5-4 decision in Massachusetts v. Environmental Protection Agency rebuking the administration for its inaction on climate change. The decision affirms the EPA’s authority to regulate greenhouse gas emissions under the Clean Air Act, and it prods the administration to consider mandatory emission controls. The Court’s surprisingly forceful opinion comes against the backdrop of growing public concern about global warming and a new determination by Congress to control greenhouse gases. Whether the Bush administration will aggressively use these new tools provided by the Court remains to be seen. Beyond the 2008 presidential election, however, there is no doubt that a proactive White House could use the threat of aggressive administrative measures to build momentum for congressional action. AIR POLLUTANTS The Court’s decision centered around the EPA’s 2003 denial of a petition by environmental groups for regulation of greenhouse gas emissions from new motor vehicles under Section 202(a) of the Clean Air Act. After rejecting a challenge to the petitioners’ standing, Justice John Paul Stevens’ majority opinion held that “greenhouse gases fit well within the Clean Air Act’s capacious definition of �air pollutant.’” The Court then turned to EPA’s rationale for declining to regulate motor vehicle emissions under Section 202(a) of the act, which provides that EPA “shall by regulation prescribe . . . standards applicable to the emission of any air pollutant from any class or classes of new motor vehicles” if these emissions “in [its] judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare.” The agency had cited policy reasons for not regulating motor vehicle emissions, including the absence of an unequivocal link between human activities and rising temperatures; the piecemeal nature of regulations targeted at new U.S. motor vehicles; and the president’s preference for voluntary programs, technology initiatives, and further scientific research. The Court held, however, that this rationale for declining to undertake rulemaking under Section 202(a) “rests on reasoning divorced from the statute.” As the ruling explained: “Under the clear terms of the Clean Air Act, EPA can avoid taking further action only if it determines that greenhouse gases do not contribute to climate change or if it provides some reasonable explanation as to why it cannot or will not exercise its discretion to determine whether they do.” The EPA’s “laundry list of reasons not to regulate,” according to the opinion, “have nothing to do with whether greenhouse gas emissions contribute to climate change [and] [s]till less do they amount to a reasoned justification for declining to form a scientific judgment.” On remand, the EPA’s threshold task will be to review the science of climate change and determine whether greenhouse gases “endanger” public health and welfare. This will be a moment of truth for the Bush administration. Long a skeptic of aggressive action on climate change, the administration has never denied outright the scientific link between the rising greenhouse gas levels in the atmosphere and increases in global temperatures. Indeed, the ruling repeatedly noted that the EPA did not contest the numerous affidavits and scientific reports in the record, which concluded that “the harms associated with climate change are serious and well recognized” and that “a causal connection [exists] between man-made greenhouse gas emissions and global warming.” For the EPA now to suggest that anthropogenic climate change does not exist or does not endanger public welfare would likely be a step too extreme even for the hard-headed Bush administration. EPA Administrator Steve Johnson’s recognition on May 14 that “we know that emissions contribute to climate change and that this is a serious issue” may signify that the agency will bow to the inevitable. But if the EPA makes an endangerment finding, how will it discharge its obligation under Section 202(a) to regulate greenhouse gas emissions from motor vehicles? Tantalizing hints of the administration’s thinking have begun to emerge and raise intriguing questions about the Clean Air Act and the scope of the EPA’s discretion under the Court’s decision. FIRST STEPS President George W. Bush’s May 14 executive order directs the EPA to work with the Departments of Transportation, Energy, and Agriculture to write regulations that will reduce gasoline consumption and greenhouse gas emissions from cars and light trucks. These regulations would implement the administration’s “Twenty in Ten” goal to cut gasoline consumption by 20 percent over 10 years. The cornerstones of this effort are, first, a fuels standard that would replace 15 percent of the gasoline supply by requiring 35 billion gallons of ethanol and other alternative fuels be available for use by 2017 and, second, Corporate Average Fuel Economy standards for cars and light trucks that would reduce gasoline use by 5 percent or up to 8.5 billion gallons. The executive order calls for regulations to be issued by the end of 2008 and describes these regulations as “first steps . . . in response to the Supreme Court’s ruling.” Whatever else they may achieve, the regulations will not directly control emissions of carbon dioxide from motor vehicles under Section 202(a), which is required under the statute once the EPA makes an “endangerment” finding. The question thus arises if the administration, while paying lip service to the Court’s opinion, nonetheless intends to avoid the obligations the opinion imposes. There is no doubt that energy security, not climate change, is the primary driver for reducing gasoline consumption through greater reliance on bio-fuels and enhanced fuel efficiency. But burning less gasoline will necessarily lower carbon dioxide emissions as well. Thus, the EPA could argue that programs to reduce gasoline consumption are the best way to reduce carbon dioxide emissions from the transportation sector and represent a good-faith response to the Court’s decision, even if they don’t actually result in regulation of carbon dioxide emissions under Section 202(a). The EPA will find support for this position in the Court’s comment that the “EPA no doubt has significant latitude as to the manner, timing, content, and coordination of its regulations with those of other agencies” and the Court’s explicit decision not to reach the question whether “policy concerns can inform EPA’s actions” after any endangerment finding. In the end, most observers will judge the administration’s actions less by their legal basis than by their effectiveness in achieving timely carbon dioxide reductions from motor vehicles. The inevitable point of comparison will be to the greenhouse gas emission standards initially developed by the California Air Resources Board and subsequently adopted in several other states. They are expected to result in a 22 percent reduction of emissions in the short term and 30 percent in the mid-term. California has requested a waiver of preemption for these standards under Section 209 of the act. If the administration were either to grant this waiver or impose equivalent emission reductions under federal law, even its harshest critics would probably applaud its actions even if they are not directly based on Section 202(a). But if the EPA denies the waiver and then adopts standards that fall short of the California reductions, environmental groups, some states, and Democratic leaders in Congress will condemn the agency for shirking its obligations under Massachusetts v. EPA. WHAT ABOUT TITLE I? Important as it is for the transportation sector, the decision will have equally far-reaching, if perhaps less immediate, consequences for other sources of greenhouse gas emissions subject to the Clean Air Act. Title I of the act establishes a comprehensive program for the creation, attainment, and maintenance of National Ambient Air Quality Standards, which must be set at levels that provide an ample margin of safety for public health or welfare. The EPA administrator must develop an air standard for each “air pollutant . . . which, in his judgment, cause[s] or contribute[s] to air pollution which may reasonably be anticipated to endanger public health or welfare.” Under Massachusetts v. EPA, once the EPA makes an “endangerment” finding under Title II, it will be difficult to avoid making a similar “judgment” for stationary emission sources under Title I. The agency would then have to develop an air quality standard for carbon dioxide and other greenhouse gases. This standard would set an atmospheric concentration that protects against potentially harmful temperature increases and would require an array of implementing actions. These would likely include emission standards for power plants and other large emission sources. Because Massachusetts v. EPA addressed only vehicle emissions subject to Title II, the EPA has no obligation on remand to make a comparable “endangerment” finding under Title I. The current EPA management will undoubtedly have no appetite to proceed under Title I unless compelled to do so by an adverse court decision, which is unlikely to occur in the remaining 18 months of the Bush administration. Title I, which charges local jurisdictions with responsibility of meeting air quality standards through state implementation plans, is an unwieldy vehicle by which to regulate pollutants whose local levels are dictated by global emissions. Crafting a workable carbon dioxide reduction framework for power plants and other stationary sources based on greenhouse gas air standards will therefore be challenging. Nonetheless, starting in 2009, an activist administration committed to combating global warming could well test the limits of its authority under Title I, particularly if Congress has not enacted climate-change legislation. Similarly, environmental groups will use their increased leverage under Massachusetts v. EPA to pressure the agency if it is slow to regulate greenhouse gases under Title I. An immediate opportunity for potential litigants will be performance standards for new sources of pollution. The EPA is required to set such standards for each category of sources that cause or significantly contribute to air pollution and may reasonably be anticipated to endanger public health or welfare. Indeed, the EPA’s standards for utility and industrial steam boilers are already being challenged in the U.S. Court of Appeals for the D.C. Circuit for failing to regulate carbon dioxide emissions. In sum, the Court’s holding in Massachusetts v. EPA has opened the door to mandatory regulation of greenhouse gas emissions from new motor vehicles and fuels. All signs point to some action by the EPA to move toward that goal, though it may fall short of expectations. Regulation of stationary source emissions is a logical consequence of the decision but will probably proceed at a slower pace, both because it is outside the scope of the decision and because it raises more complex issues. The stringency, timing, and legal basis for these new requirements will depend on several factors, notably the policy leanings of the EPA’s top management and the success of activists and states in using the courts to drive agency action. We can expect a fluid and complex environment for climate-change policy in the next few years, with election results, administrative rulemaking, court decisions, and legislative action all determining how the United States ultimately addresses global warming. Congress will likely need to meld these divergent forces into a coherent policy framework, but there will be considerable ferment in the regulatory and judicial arenas before that task is completed.
Robert Sussman is a partner in the Washington, D.C., office of Latham & Watkins and chaired the firm’s environmental practice in Washington from 1996 to 2006. He is a former deputy administrator of the EPA. Shari Diener Shaw is an associate in the D.C. office.

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