• Air
• Climate Change
• Environmental

White House Announces Plan to Initiate Regulations in Response to Mass. v EPA

Beveridge & Diamond, P.C., May 15, 2007

On May 14, President Bush announced that he has directed federal agencies to initiate a regulatory process to cut gasoline consumption and greenhouse gas (“GHG”) emissions from motor vehicles, to be completed by the end of 2008.  His announcement explicitly linked this mandate to the Supreme Court’s decision last month in Massachusetts v. EPA.

In his statement, the President said that he has directed the Environmental Protection Agency (“EPA”) and the Departments of Transportation, Energy and Agriculture to take the "first steps toward regulations that would cut gasoline consumption and greenhouse gas emissions from motor vehicles,” using the President’s “20-in-10” plan “as a starting point.”  The 20-in-10 plan, announced in his 2007 State of the Union speech, proposed to reduce gasoline consumption 20 percent within 10 years, through new legislation to increase corporate average fuel economy (CAFE) standards and establish a mandatory fuel standard that requires 35 billion gallons of renewable and other alternative fuels by 2017.  The President’s statement also indicates that he has directed the agencies “to complete the process by the end of 2008.” 

The statement leaves some room for interpretation as to its effect, including whether the regulations must themselves achieve the ambitious goals of the 20-in-10 plan or merely serve as a start in that direction.

In conjunction with the statement, the White House released an Executive Order focused on the coordination of executive agencies in addressing GHG emissions.  The Order is mainly procedural in nature, although it establishes an overarching policy “to ensure the coordinated and effective exercise of the authorities of the President and the heads of the Department of Transportation, the Department of Energy, and the Environmental Protection Agency to protect the environment with respect to greenhouse gas emissions from motor vehicles, nonroad vehicles, and nonroad engines, in a manner consistent with sound science, analysis of benefits and costs, public safety, and economic growth.”

The practical impact of these actions remains to be seen, particularly in light of the ongoing state efforts to address climate change and the pending legislation on the Hill relating to fuel efficiency standards.  In the short run, however, there appear to be at least two near-term implications: 

• It now appears unlikely that EPA will respond to the Supreme Court’s decision in Massachusetts v. EPA either by concluding that GHG emissions do not result in endangerment of public health or welfare or by providing “some reasonable explanation as to why it cannot or will not exercise its discretion” to make that determination.  The Court had left open these alternative courses, though EPA would have been hard-pressed to pursue them.  If EPA instead  concludes that GHG emissions do contribute to climate change, as seems more likely now, it would be required under Section 202 of the Clean Air Act to “prescribe standards” to address those emissions.

• That does not mean, however, that the Administration is likely to set individual engine emissions standards under Section 202.  Indeed, the issuance of the Executive Order focusing on coordination among agencies, together with the President’s direction to use his “20-in-10” program as a starting point, suggests that federal agencies will focus on heightened CAFE standards and the promotion of alternative fuels as the regulatory response under section 202, presumably to the exclusion of other regulatory options to address these emissions.  This is a logical response to the Supreme Court’s decision --  the Court did observe that “EPA no doubt has significant latitude as to the manner, timing, content, and coordination of its regulations with those of other agencies” -- though environmental groups likely will argue that it is not enough.

It is not clear how the announcement will affect an important pending decision that EPA faces:  whether to grant the waiver requested by California under the Clean Air Act to regulate GHG emissions from vehicles.  Eleven other states have already indicated that they will follow California’s lead if the waiver is granted.  Because the President’s announcement reflects the Administration’s intent to develop a federal regulatory policy for GHG emissions from vehicles, it may indicate a disposition within the Administration to deny the waiver request.  

Further, because it focuses exclusively on mobile sources, the President’s announcement sidesteps the question of how, if at all, to regulate GHG emissions from the electricity generating sector and other sectors of the economy.  In this regard, the announcement -- also on May 14 -- by Chairman Dingell of the House Energy & Commerce Committee that he will be pursuing a multi-sector cap-and-trade regime in the current Congress is perhaps ultimately of greater significance than the President’s announcement. 

Beveridge & Diamond, P.C. will continue to evaluate the impact of these announcements and related developments.

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For more information, please contact Russ LaMotte at rlamotte@bdlaw.com, (202) 789-6080, Nicholas van Aelstyn nvanaelstyn@bdlaw.com, (415) 262-4008, Nancy Young at nyoung@bdlaw.com, (202) 789-6017, Tom Richichi at trichichi@bdlaw.com, (202) 789-6026, or David Friedland at dfriedland@bdlaw.com, (202) 789-6047.