International agreements are often quite hard to secure, but this is especially true when achieving this requires states to accept losses.
In a post this past February, I reported on the EPA’s regulation of greenhouse gases (GHGs) and the D.C. Circuit’s review thereof in the wake of Massachusetts v. EPA (2007). The appellate court has since upheld the EPA’s regulations in a per curiam opinion, issued by a panel that, amazingly, includes Judge Sentelle (Coalition for Responsible Regulation v. EPA, or “CRR”). The petitioners have asked for rehearing and/or rehearing en banc; the government has submitted a perfunctory reply (link no longer available). The petition will fail: the D.C. Circuit hardly ever convenes en banc, least of all on a per curiam panel opinion. But there is a decent chance that the petitioners may get a dissent from the denial, and therewith a shot at Supreme Court review. That may be the last chance to avert a regulatory train wreck of epic proportions.
Mass v. EPA held that (1) CO2 and other GHGs are “air pollutants” for purposes of the Clean Air Act (CAA) and (2) the agency ‘s “endangerment finding,” pursuant to § 202(a)(1)of the CAA, as to whether those pollutants may endanger public health and welfare must rest entirely on statutory factors, as distinct from considerations of policy. Under the CAA, an affirmative endangerment finding compels the agency to regulate mobile sources of emissions, aka automobiles. And that, it turn, triggers the regulation of stationary sources.
The EPA proceeded by breaking the formerly integrated GHG rulemaking into several separate rules, issued within a six-month span but carefully calculated to evade judicial review of the enterprise as a whole:
- An “Endangerment Rule,” based on a review of the climate change “literature” but divorced from any consideration of the regulatory consequences that would follow in its wake.
- An “Auto Rule,” applicable to mobile sources. By the year 2100, EPA calculates, this rule will reduce global mean temperature by 0.006-0.015 degrees Celsius and reduce global sea level rise by about 0.06-0.14 centimeters. The EPA does not give a rip about the content of this rule; its function is to get the agency from the endangerment finding to stationary source regulation. As to those sources, the EPA issued
- A “Timing Rule” and a “Tailoring Rule.” The difficulty here is that the CAA, written as it is to deal with conventional pollutants, imposes permitting and regulatory requirements on sources that emit over 250/100tpy (tons per year) of the bad stuff. That covers refineries, utilities, and other large emitters. Applied to CO2, the threshold would cover a vast number of much smaller sources, down to hospitals, dry cleaners, and large apartment buildings. To avoid that unmanageable consequence, the EPA invoked a canon of “absurdity avoidance” and creatively re-wrote the CAA: with respect to CO2 and other GHGs, 250/100tpy means 100,000tpy. After a phase-in of the GHG requirements for these major emitters, the EPA will issue GHG requirements for additional, smaller sources.
Petitioners—including the great majority of U.S. industries, as well as a number of states—argued that the agency may not construct a row of regulatory dominoes that produces a statutory re-write. The D.C. Circuit gave short shrift—very short shrift—to that central contention.
The D.C. Circuit, AWOL
The court summarizes its holdings in CRR as follows:
Petitioners, various states and industry groups, challenge all these rules, arguing that they are based on improper constructions of the CAA and are otherwise arbitrary and capricious. But for the reasons set forth below, we conclude: 1) the Endangerment Finding and Tailpipe [Auto] Rule are neither arbitrary nor capricious; 2) EPA’s interpretation of the governing CAA provisions is unambiguously correct; and 3) no petitioner has standing to challenge the Timing and Tailoring Rules. We thus dismiss for lack of jurisdiction all petitions for review of the Timing and Tailoring Rules, and deny the remainder of the petitions.
How can regulated industries not have standing to challenge a comprehensive stationary source regime, written in plain violation of the CAA? Why, says the court, the Timing and Tailoring rules follow—but are separate from—the earlier steps in the regulatory progression. So viewed, they are a form of regulatory relief for sources that would otherwise be covered, and you can’t complain about that. What this means is that the rules are forever shielded from judicial review. You can’t challenge them later, because they are merely a consequence of prior, lawful agency action. And you can’t challenge them now, as part of a regulatory package that includes all of the EPA’s regulatory dominoes. Not that there’s anything wrong with that:
That EPA adjusted the statutory thresholds to accommodate regulation of greenhouse gases emitted by stationary sources may indicate that the CAA is a regulatory scheme less-than perfectly tailored to dealing with greenhouse gases. But the Supreme Court has already held that EPA indeed wields the authority to regulate greenhouse gases under the CAA. See Massachusetts v. EPA. The plain language of § 202(a)(1) of that Act does not leave room for EPA to consider as part of the endangerment inquiry the stationary-source regulation triggered by an endangerment finding, even if the degree of regulation triggered might at a later stage be characterized as “absurd.”
Respectfully, this is legal reasoning by euphemism and non sequitur. The EPA did not “adjust” a statutory threshold; it re-wrote a numerical statutory standard. It’s one thing to say that a statutory “margin of safety” standard may mean 10 or 12 parts per million of some pollutant. It’s a very different thing to say that the statutory term “100” may mean 10,000 or 250,000, depending on the agency’s sense of “timing” and “tailoring.” If that’s the law, why do we still bother with legislation or judicial review?
Nor is the CAA “less-than perfectly tailored” to GHG regulation; it isn’t built for it at all. Mass v. EPA chose to ignore that obvious fact. But it still behooves the agency and the courts to construe the statute in a way that makes practical and legal sense, as opposed to unleashing a rulemaking cascade that terminates in a statutory re-write. That maneuver has nothing to do with a “degree of regulation,” and everything to do with agency authority vel non. Nor are we talking about some “later stage”: the Tailoring and Timing Rules are out, and they are before the court now. There is no “might” about any of this. And what’s with the scare quotes around “absurd”? That is not a beleaguered industry’s moniker for a reg it doesn’t like; it’s the canon that the agency invoked.
There ought to be an absurdity canon for appellate decisions.
The EPA’s GHG regime amounts to an improvised, fantastically expensive system of industrial policy. The agency and environmental groups do not deny this; they rather say that the planet needs the regime, even if its benefits are far-distant and speculative at best. Maybe. Upon information and belief, however, the economy isn’t doing so well. Before we further encumber it with a regulatory scheme of unprecedented proportions, we should think, debate, and perhaps even vote.
The unfolding GHG saga illustrates a point made elsewhere: debilitating policies flow from our broken institutions. Mass v. EPA was a recklessly, almost brutally lawless decision. (I’ve taught the case. Common student reaction: “If this is right, why am I going to law school?”) It is comprehensible only as an underhanded judicial attempt to force congressional action on GHGs. However, Congress cannot be forced to do anything; it is busy nursing its multiple dysfunctions. So the EPA is left free to hand-craft its biggest regulatory program ever in a completely unconstrained environment. The D.C. Circuit, confronted with the agency’s patent AdLaw manipulation, has mailed it in. And any congressional action will come too late. In the unlikely event that our Solons should bestir themselves to attend to the matter, the EPA’s mesh will be their baseline, not a thing to be torn up. Never mind checks and balances. The unfolding industrial policy weave is a form of governmental AIDS—a complete collapse of the institutional immune system.
Eventually, the judiciary will have to re-discover constitutional and statutory canons that arrest the progress of this debility. The GHG mess, a debacle of the Supreme Court’s own making, would be a very fine place to start.