May 2007

Has the Supreme Court Seen Green? The Ramifications of Mass. v. EPA

On April 2, the Supreme Court of the United States dropped a bombshell on U.S. climate policy: the Court ruled 5 to 4 in Massachusetts v. Environmental Protection Agency (EPA) that the EPA was now forced to regulate vehicular greenhouse gas emissions as specified in Section 202 of the Clean Air Act, a task the EPA had previously declined. While the EPA's decision to decline was first upheld by the Court of Appeals for the D.C. Circuit, the Supreme Court disagreed, passing the ball back to the EPA.

The EPA is now under the gun to move forward with regulating vehicular greenhouse gas emissions, whether they do it voluntarily or are once again sued into doing so. Either way, it is a tricky mission: because greenhouse gases are unlike conventional pollutants, they can neither be blocked at the tailpipe nor minimized by pretreating or reformulating gasoline.

What are the implications and ramifications of the Supreme Court's groundbreaking decision? Will it lead only to new automobile regulations, or will it lead to broader regulation of greenhouse gases under other sections of the Clean Air Act? What kind of regulations might the EPA issue in order to fulfill this new greenhouse gas control mission? A panel of legal scholars discussed these and other questions as they reviewed the Court's decision at AEI on May 7, 2007.

Lisa Heinzerling
Georgetown University Law Center

The Supreme Court did not approve of the EPA's reasoning in refusing to regulate greenhouse gases and held that the agency does have the authority to regulate them. The justification was that the text in the Clear Air Act which refers to air pollutants covers greenhouse gases. Broad language which does not refer to a specific current problem does not mean that it does not apply to that problem. The Court brushed aside the argument for the need to be explicit in matters like greenhouse gases.

Regarding the standing issue, the pressing question now is whether only states will be able to take advantage of the Court's holding or whether private litigants will be able to as well. The Court dictates that states have special solicitude, but it also has a very traditional analysis of standing and thus offers a lot to both private litigants and states.

The decision on agency discretion was one of the most surprising and remarkable parts of this case. The agency has established that it does not want to act at this time. While agencies usually get a lot of leeway in such areas, the Court responded that the reasons given for the EPA's inaction were insufficient. It is important to note that this decision is completely reviewable but that the current reasoning was found to be inadequate. The Court's decision thus engages in what one could call "reason forcing" with the EPA by stating that because the agency has the authority to regulate, its reasons for inaction must "sound in the language of the authorizing statute." The Court also forces the agency to speak in terms of science by finding that the uncertainty and complexity of the issue are not justifications for inaction. After this decision, the room to maneuver for the EPA is very narrow.

Jeffrey Bossert Clark
Kirkland & Ellis, LLP
George Mason University Law School

This case's standing decision was results-oriented. It invokes rules of special solicitude for states and gives them fewer standing hurdles. The reasoning for this is that a deal exists between states whereby states relinquish some sovereignty in exchange for fewer standing rules, but there is no real evidence for this. This standing analysis may not be durable in the long run. The Court's decision has turned this into a procedural rights case and could do so for many other related cases.

It may have been reasonable to disagree on the authority question in earlier years, yet the majority opinion completely overlooks later enactments like the 1990 provisions to the Clean Air Act, which established that they should not be taken as creating authority to regulate carbon dioxide. The Court claimed that this was just "subsequent legislative history," but this is incorrect.

The Court bears more significantly on the discretion question. The only procedural right for litigants was to ask for a rule making and demand an endangerment finding. The Supreme Court bought into this strategy, but as Justice Antonin Scalia's dissent states, there is nothing in the statute about when and how to make the judgment. The statute only dictates what the agency must do once it makes the judgment.

The majority in this case recognized that it could not force an endangerment finding. It stated that the EPA could avoid regulation by determining that greenhouse gases are not harmful or by providing some reasonable explanation for not using its discretion to determine this. The EPA could make a negative endangerment finding, but this would be very difficult to do. The more feasible option for the EPA is to array all its priorities under the Clean Air Act and prove that there are more important priorities to public health than this.

Jonathan H. Adler
Case Western Reserve University School of Law

From a legal perspective, the resolutions of the questions of standing and authority are not sound. Given the decisions on these issues, however, finding that the EPA's justifications for inaction were inadequate is sound, given the nature and language of the statute and what the EPA has said in this and other contexts. The standing decision could have significant and far-reaching implications. It significantly reduces the burden for states and plaintiffs in environmental cases to demonstrate standing in procedural cases. The Court did this because, according to what the affidavits said, the traditional standing requirements could not be met. As the dissent notes, it is difficult to argue that plaintiffs have suffered a particular injury in the context of global warming, which is a generalized and nonimminent grievance. In this case, it is difficult to prove that the harm is concrete and particularized as well as actual or imminent. The majority overlooks this issue.

The question of authority depends on how one reads the Clean Air Act. With the premise that agencies have no inherent powers beyond those explicitly delegated to them by Congress, the burden resides with those trying to show the existence of such power. If one accepts the idea that Congress was creating wide authority to regulate all potential harms with this statute, however, the EPA is put in the impossible position of trying to apply inapplicable provisions of the Act.

The EPA does not have many options. This decision calls on the EPA to make a finding, even if it does not say how. At this point, not regulating without a finding is not an option. If this decision is going to have any meaningful impact on climate change beyond generating more litigation and commentary, Congress will have to do something with the statute, which is currently not well-suited to these issues.
 
Mark Moller
Cato Institute
 
The issue of agency discretion was the most remarkable part of the Court's decision. One position is that the executive branch has inherent and unreviewable power to refuse to regulate. At the opposite extreme, some find that, from a judicial review standpoint, agency inaction is no different from agency action so long as the statute lists factors that should guide official discretion. The third, often-overlooked position is that Congress has the power to require the executive branch to regulate, and in such cases judicial review is appropriate. When Congress enacts a statute that entrusts an agency with oversight, however, we can presume that Congress wants to preserve the executive's traditional discretion to decide when to intervene under the statute.

Section 202 of the Clean Air Act lacks any timing clauses or timing language. Given this absence, the EPA assumed that it retained discretion traditionally vested in the executive branch, based on concerns that were not grounded in the text of the statute, such as concerns for the foreign affairs implications of intervention among others. The Court rejects this approach, but as Justice Scalia's dissent states, the statute does not mention anything about a source of timing. The Court is therefore announcing a new presumption that when Congress is silent, the only factors that the agency can take into account are those expressly in the statute.

This is a bad ruling from a separation of powers perspective, but it need not be a disaster because the EPA can justify inaction through the statute. Section 202 directs that regulation can only take effect after development of the requisite technology and with appropriate consideration for the cost of compliance and "health-health trade-offs." The EPA invoked some of this but did not emphasize it enough. It could further develop cost benefit concerns regarding technology costs, the inefficiency of unilateral intervention, and high social costs.

Joel Schwartz
AEI

It is hard to believe that Congress meant for carbon dioxide or other greenhouse gases to be counted as air pollutants under the Clean Air Act, but this was a technique that turned out to work well for getting the Court to tell the EPA it had the authority to regulate carbon dioxide. For Congress, this decision is a relief because it put the issue into the hands of the EPA. It has become clear that both sides of Congress are not serious about doing anything about climate change. This is most likely because they know that the costs of these measures are high and do not want to impose them on their constituents and be blamed for it.

The EPA can make a finding of endangerment and regulate. If it does so, it is likely that nothing will happen for a decade or more while waiting for the administrative process and more lawsuits to take place. If the EPA chooses this option, there will be more pressure to do something and obviate this decision in terms of greenhouse gases being pollutants under this act. Automakers themselves might also go to Congress for more manageable standards if the EPA begins regulation. The EPA could also try to justify not regulating greenhouse gases. Because we are dealing with carbon dioxide, one viable option is to mask the detrimental effects through geo-engineering techniques. The EPA could propose alternative methods of addressing the issue and thus justify not regulating. The EPA would have been more successful had it tackled some of the petitioners' claims of harm. While the EPA does have reasons for not doing so, it is unfortunate that other defenders did not take up any of these claims.

David Schoenbrod
New York Law School
Cato Institute

If history repeats itself, not much will happen as a result of this decision. Congress crafted the Clean Air Act to clean the air but generally left the means to achieve this goal to others. This allowed legislators to take credit for cleaning the air but also shift the blame to the EPA when constituents complained about costs and lack of progress. Because the Clean Air Act's provisions leave hard choices to the agency, we can expect serious delays in regulation.

The Court's decision will put pressure on Congress to pass a special statute dealing with global warming. Unfortunately, like their predecessors, the potential statutes claim to be able to solve the problem with little impact on voters. Supposedly, this will be achieved by improving technology and putting the real burden on so-called big polluters rather than ordinary people. This has proved unrealistic in the past. Congress's unwillingness to admit that global warming regulation will cost something will delegitimize and slow down the EPA's efforts.

For a statute to deal efficiently with global warming, it must give not just automakers, but everyone a reason to reduce their contributions to global warming. Such a statute must also be open with voters that they will all have to pay to deal with global warming. Congress should also not promise technological silver bullets. Until a better statute is adopted, the Supreme Court will read the Clean Air Act to mean that the EPA is responsible for solving all pollution problems. This may be correct, but the statute is flawed in that it leaves the hard decisions up to the EPA.

AEI intern Daphne Leger prepared this summary.