EPA’s Endangerment Finding Could Spur More NEPA, Nuisance Litigation

The Environmental Protection Agency issued its final Endangerment Finding under Section 202(a) of the Clean Air Act on December 7, 2009. The Finding is EPA’s determination that greenhouse gases (GHGs) pose a danger to human health and the environment, and it could pave the way for regulation of carbon dioxide and other greenhouse gas emissions from vehicles, power plants, factories, refineries and other major sources under the Clean Air Act.

EPA’s announcement coincided with the opening of the UN Climate Conference in Copenhagen and signaled that the U.S. is moving to address climate change, with or without Congress. Litigation is almost certain to ensue.

Final Endangerment Finding Completes a Process Begun in April

EPA set the stage for the issuance of the final Endangerment Finding in April when it released its proposed finding that GHG emissions “cause or contribute” to air pollution that endangers public health and welfare. As a result of the Supreme Court’s decision almost two years ago in Massachusetts v. EPA,[1] in which the Court held that CO2 is an “air pollutant” within the meaning of the Clean Air Act, EPA was required to either regulate GHGs under the Clean Air Act, or explain why it was unwilling to do so. See Marten Law Group Environmental News: Supreme Court Greenhouse Gas Decision Extends Beyond the Tailpipe (April 4, 2007). After EPA issued its preliminary finding last spring, the Agency held two separate public hearings on the proposed rule in Seattle, Washington and Arlington, Virginia, and took comment on the proposed finding through the spring and summer.[2]

The Final Endangerment Finding

At 284 pages, the “Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act” is no light read, though a substantial amount of those pages are devoted to responses to public comments received on EPA’s proposed finding.

Six GHG’s Identified

EPA begins by finding “that six greenhouse gases taken in combination endanger both the public health and the public welfare of current and future generations.”[3] Because the Endangerment Finding is made under Section 202(a) of the Clean Air Act, it focuses on the “combined emissions of these greenhouse gases from new motor vehicles and new motor vehicle engines.”[4] Of the major contributors of GHGs, electricity generation is the largest emitting sector (34% of total U.S. GHG emissions), followed by transportation (28%) and industry (19%).[5]

Focus on the Transportation Sector

Given these percentages, EPA received a number of comments on its proposed finding that asked it to focus on sectors other than transportation or to wait until specific harm has arisen. EPA responded by noting that “the Administrator is required to protect public health and welfare, but she is not asked to wait until harm has occurred. EPA must be ready to take regulatory action to prevent harm before it occurs.”[6] EPA also justified its initial focus on the transportation sector without foreclosing an extension of that focus, noting that “the Administrator is to consider the cumulative impact of sources of a pollutant in assessing risks from air pollution, and is not to look only at the risks attributable to a single source or class of sources. … [T]he statute is clear that she need not find that emissions from any one sector or group of sources are the sole or even the major part of an air pollution problem.”[7]

Reliance on the Scientific Evidence from the IPCC and USGCRP

EPA had been criticized for relying on scientific assessments from the Intergovernmental Panel on Climate Change (IPCC), in particular, the IPCC’s Fourth Assessment Report for 2007, reports from the National Research Council (NRC) and assessments from the U.S. Climate Change Science Program (USGCRP). EPA responded by stating its view that “the scientific assessments of the IPCC, USGRCP and the NRC represent the best reference materials for determining the general state of knowledge on the scientific and technical issues before the agency in making an endangerment decision.”[8] This is likely to be a key focus of any legal challenge to the Endangerment Finding. Opponents of EPA’s action believe hacked emails from the Climatic Research Institute in East Anglia, England, show bias in some of the data relied upon by the IPCC, and so taint EPA’s Finding.[9]

Projected Risks and Impacts from Future Climate Change

EPA found that the “[r]isk to society, ecosystems, and many natural Earth processes increase with increases in both the rate and magnitude of climate change.”[10] Those risks include severe heat waves with attendant risks of increased mortality and morbidity, particularly among the elderly, young and frail.[11] EPA also anticipates increases in regional ozone pollution and effects on grain and oilseed crops, a reduction in livestock production and negative impacts on cold-water fisheries, along with an increased risk of the size and number of forest fires, insect outbreaks and tree mortality in the interior West, the Southwest and Alaska. Coastal communities will be increasingly stressed by climate change impacts “interacting with development and pollution.”[12]

EPA also found that climate change will constrain already overallocated water resources, increasing competition among agricultural, municipal, industrial and ecological uses. Higher water temperatures could increase precipitation intensity. In addition, climate change will affect energy use and production.[13]

While No New Regulations Were Issued, the Finding Allows EPA to Proceed to Finalize a Number of Rules Directed to Climate Change

Like EPA’s previous proposed finding, the final Endangerment Finding does not include any proposed regulations. However, the Finding will pave the way for several pending EPA rules. Based on its conclusions that GHGs endanger both human health and welfare and that emissions from new motor vehicles are contributing to the mix of those heat-trapping gases, the Agency will have to finalize a number of regulations, some of which it has already begun to develop.

In May, the Agency released for comment the first-ever federal tailpipe standards for GHGs, requiring the largest industrial sources to install best available control technology to curb their emissions. In September, EPA issued a proposed rule regulating GHG emissions from large stationary sources. See Marten Law Group Environmental News: One Way or Another* – Senate Climate Change Bill Introduced; EPA Proposes to Regulate GHGs From Stationary Sources; And Court Allows GHG Nuisance Suit to Proceed (October 1, 2009).

The administration had previously struck a deal with automakers to set stricter tailpipe emissions and higher fuel economy standards as part of its regulation efforts.[14] In addition, rules to require GHG reporting by the largest industrial sources have already been issued. See Marten Law Group Environmental News: EPA Issues Mandatory Greenhouse Gas Reporting Rule; Monitoring To Begin January 1, 2010 (September 23, 2009).

Consequences of the Endangerment Finding – Both the Intended and the Unintended

1. Strengthening the President’s Negotiating Position at Copenhagen

Most observers believe that the timing of the Endangerment Finding was designed to boost President Obama’s negotiating leverage at the Copenhagen summit by allowing him to point to the Administration’s actions as evidence that the United States is making serious efforts towards controlling its GHG emissions. Roger Martella, former EPA General Counsel, said that the “U.S. as a whole wants to open the discussion with an accomplishment.”[15] Steve Seidel, Vice President for Policy Analysis at the Pew Center on Global Climate Change, echoed these sentiments, saying that the “announcement will signal that the administration is serious about tackling global warming. ‘It adds to the case the Obama administration has been making that it is moving forward on all fronts to address climate change and that it’s a major change in policy from the previous administration.’”[16]

The Obama Administration was forced to rely on the Endangerment Finding as its evidence of forward progress because climate legislation has stalled in Congress – in part because the Administration has made health care legislation a higher domestic priority. After the House of Representatives adopted its climate bill, some had hoped for quick Senate action as well. However, the Senate rarely moves as quickly as the House on major legislation. As a result, Congress has yet to give President Obama the legislative tools that members of his administration (including EPA Administrator Lisa Jackson) have repeatedly stated they would prefer to regulation under the Clean Air Act.[17]

2. Forcing Congressional Action – Though Perhaps Without Preemption of EPA Regulations

The release of the Endangerment Finding is also seen as an effort to prod Congress into acting. Many industry groups and some lawmakers oppose efforts to regulate GHGs under the Clean Air Act, with some observers maintaining that the prospect of EPA regulations may be sufficient to move opponents of current climate legislation to get behind what they may perceive as the lesser of two evils. According to Dan Ridenger of the Edison Electric Institute, “EPA’s action serves as a reminder that greenhouse gases will be regulated one way or another. But most people’s strong preference is for Congress to cross that finish line first, establish a workable cap-and-trade program because it will be much more cost-effective, much more easy to implement than regulations under the Clean Air Act.”[18]

The courts have advanced this same position. In its recent opinion upholding the validity of federal common law nuisance claims based on climate change, the Second Circuit Court noted that it was allowing such cases to proceed, in part, based on Congress’ failure to legislate: “It may happen that new federal laws and new federal regulations may in time pre-empt the field of federal common law of nuisance. But until that comes to pass, federal courts will be empowered to appraise the equities of the suits alleging creation of a public nuisance by greenhouse gases.”[19]

Assuming that Congress finally does act in 2010, one of the interesting questions will be the pre-emptive effect of any legislation. On the same day that the Kerry-Boxer bill was introduced in the Senate (September 30, 2009), EPA proposed rules that would bring GHG emissions under the existing Clean Air Act new source review and Title V air operating permit programs. While the climate change bill passed by the House would exempt GHG emissions from these programs, the Kerry-Boxer bill would not. Thus, if EPA finalizes the regulations it has proposed, the Kerry-Boxer approach would leave sources open to regulation under both programs.

Both the House bill and the Kerry-Boxer bill would preempt state and regional cap-and-trade programs for five years, from 2012 to 2017, but the Kerry-Boxer bill delays the preemption if the federal program is “substantially delayed.” Neither bill would preempt states from adopting or enforcing other types of air pollution laws affecting GHG sources. The consequences of all of this is that multiple sources of GHG emissions may face the worst of both worlds – trying to comply with cumbersome EPA regulations while navigating newly adopted Congressional legislation at the same time.

3. Other Consequences – More Litigation and a New Basis For Challenging Project Development

While the scope of any Congressional legislation and new regulations issued by EPA remains in doubt, one thing is certain – the Endangerment Finding has just added a new weapon to the arsenal already held by plaintiffs and environmental groups opposing projects and a new basis for damage claims. Irrespective of whether Congress acts and regardless of the scope of any pre-emptive legislation, it is likely that the Finding will provide fodder for any project opponent wishing to challenge a project under NEPA and its state-law equivalents, or under the ESA or the Clean Air Act itself.

Since 1990, federal courts have required agencies to consider GHG emissions under NEPA,[20] but have generally deferred to agencies’ climate change assessments.[21] Prior to the Endangerment Finding, the clearest statement of the requirement to undertake climate change analysis under NEPA came from the Ninth Circuit’s unanimous decision in Center for Biological Diversity v. National Highway Traffic Safety Administration.[22] See Marten Law Group Environmental News: Ninth Circuit Requires Climate Change Analysis under NEPA (November 28, 2007). In light of the Ninth Circuit’s emphatic declaration that the “impact of greenhouse gas emissions on climate change is precisely the kind of cumulative impact analysis that NEPA requires agencies to conduct,”[23] federal agencies have been hard pressed to avoid evaluating climate change impacts.

These types of cases are already commonplace. Columbia Law School’s Center for Climate Change has developed a Climate Change Litigation Chart which catalogs 29 different cases challenging coal-fired power plants filed in 2009 alone, with 46 cases filed since 2007. With the Endangerment Finding in hand, project opponents suing under NEPA can now point to EPA’s finding that GHGs “endanger the public health and welfare.” Based on this finding, it seems likely that any development that generates significantly more vehicle trips and any power production or manufacturing project that results in significantly more GHG emissions could be subject to challenge based on a failure to adequately assess its climate change impacts. Other projects which will be at greater risk of attack because of the Endangerment Finding include transmission lines, casinos, landfills, mines, and transportation projects. Furthermore, in states like California and Washington, where state environmental statutes have substantive components, merely assessing or quantifying impacts is not sufficient. In those states, once impacts have been identified, they must be mitigated. In other words, a claim that a project does not contribute to global warming will be met by an argument that any project-specific risks identified in the environmental review process must be mitigated.

It is also likely that the Endangerment Finding could fuel more tort claims based on climate change impacts. In American Electric Power,[24] the Second Circuit allowed federal common law nuisance claims to proceed, in part, based on the fact that EPA’s preliminary finding did not definitively require regulation to address climate change impacts.[25] Less than a month later, the Fifth Circuit held that the fact that a case might be “political … in the broad sense, i.e., that it has political implications or ramifications,”[26] was not enough to render the tort claims based on climate-change impacts non-justiciable: The fact that cases “implicate[] a matter within the authority of a political branch,” will not serve to bar those claims.[27]

The claims allowed by the Second Circuit and the Fifth Circuit demonstrate that the potential for climate-related causes of action is limited only by the imagination of the plaintiffs’ counsel – in American Electric Power, eight states, the City of New York and three land trusts pressed common law nuisance claims against five of the nation’s largest utilities, based on their emissions of greenhouse gases. See Marten Law Group Environmental News: Second Circuit Allows Federal Nuisance Claims for Global Warming to Proceed (September 23, 2009). In Comer v. Murphy Oil USA, Inc., a class of coastal residents brought tort claims against a number of energy, oil and refining and chemical manufacturing companies, claiming that their activities contributed to climate change and increased the damage done by the hurricane. See Marten Law Group Environmental News: Before the Deluge*: Fifth Circuit Joins Second Circuit in Allowing Climate Change Tort Suits, while District Court Dismisses Similar Claims (November 4, 2009).

While it is possible that the Endangerment Finding may reduce such claims, it is just as likely that it will spur more tort litigation, since both the Finding itself and the new regulations based on the Finding that are currently being finalized by EPA will define new causes of action. At worst, creative plaintiffs may plead claims in the alternative, pressing traditional state and federal tort theories while they simultaneously point to statutory and administrative bases for damages arising from climate change.

Conclusion

EPA’s final Endangerment Finding will no doubt serve to strengthen President Obama’s hand at Copenhagen and may provide an impetus for Congress to finally move on climate change legislation. But the unintended consequence of the Finding in the near-term is likely to be more litigation and a new basis for project opponents to demand more analysis and more mitigation for climate change impacts.

For more information, contact Steve Jones or any member of our Climate Change practice group.