Source: http://www.acoel.org/2008/02/default.aspx
Timestamp: 2019-04-24 08:42:58+00:00

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On October 18, 2007, the head of the Kansas Department of Health and Environment (KDHE), Secretary Roderick Bremby, denied an air quality permit application for two proposed 700-megawatt coal-fired generating units to be constructed in Holcomb, Kansas. The application was submitted by Sunflower Electric Power Company as part of a planned $3.6 billion expansion of an existing facility. The Secretary’s decision to deny the permit was based solely on the projected carbon dioxide emissions from these units and the impact of such emissions on climate change. Carbon dioxide is not specifically regulated as an air pollutant in Kansas.
In announcing his decision, which rejected the recommendation of agency staff that the permit be granted, the Secretary stated “I believe it would be irresponsible to ignore emerging information about the contribution of carbon dioxide and other greenhouse gases to climate change and the potential harm to our environment and health if we do nothing.” The expanded facility was projected to release an estimated 11 million tons of carbon dioxide annually. The Secretary did not indicate at what level projected carbon dioxide emissions would, in his opinion, threaten human health and the environment. Thus, the Secretary left open the question of how other CO2 emitting facilities would be regulated in Kansas in the future. Although a number of states have entered into regional initiatives or enacted legislation designed to reduce greenhouse gas emissions over time, it is believed that KDHE’s outright denial of an air quality permit based solely on perceived “excessive” emissions of an unregulated greenhouse gas is a first in the nation.
The cited legal support for the decision is an opinion of the Kansas Attorney General that, notwithstanding specific statutes or rules regulating air emissions, K.S.A. 65-3012 gives KDHE the broad authority to take any permitting or other action deemed necessary should the Secretary make a factual determination that a particular emission constitutes an air pollutant and that such emissions threaten health or the environment. The “factual determination” supporting the Secretary’s conclusion that carbon dioxide is an air pollutant and that this particular facility’s projected carbon dioxide emissions would constitute a threat to health and the environment is not apparent from the permit denial decision.
On November 16, 2007, Sunflower Electric Power Corporation filed two lawsuits seeking to overturn KDHE’s permit denial decision challenging the legal authority for the agency’s decision.
Not surprisingly, the KDHE’s permit denial decision has generated substantial controversy. A media campaign was immediately launched by those opposing the KDHE’s decision. The theme of that campaign is that the Secretary’s claimed authority could logically be extended to other facilities and potentially other unregulated emissions to the general detriment of the state and its ability to attract and retain business.
In a subsequent action perceived as an attempt to diffuse this criticism, the Secretary announced the decision to approve an air quality permit for an ethanol plant, notwithstanding the facility’s carbon dioxide emissions. Although the projected CO2 emissions from the ethanol facility are substantially less than those of the proposed coal-fired generating plant, the KDHE’s approval of the ethanol plant permit did not elaborate on the specific factual and scientific bases for distinguishing the facilities. Thus, it remains unclear in Kansas what quantity of projected carbon dioxide emissions may exceed the unspecified level deemed by KDHE to constitute an unacceptable global warming threat.
State law-makers in both chambers of the legislature are presently considering several bills directed at the Secretary’s permit denial decision. Provisions of the various bills include legislation specifically “over-turning” the Secretary’s decision, the enactment of phased-in limitations on CO2 emissions with a “carbon tax” penalty for violators, and a variety of alternative energy incentives and requirements. Most of the bills being considered are being opposed by the governor and environmental groups as being hastily conceived and inadequate to meet the future health and regulatory challenges of greenhouse gas emissions in the state.
For more information please contact Charles Efflandt, practice group leader of the Environmental and Natural Resources team, Foulston Siefkin L.L.P., Wichita, Kansas http://www.foulston.com.
Following the United States Supreme Court’s landmark decision in Massachusetts v. EPA, deciding that greenhouse gases are a pollutant under the Clean Air Act, a federal-state skirmish has emerged in the climate change arena over mobile source emissions. The United States Government estimates that the transportation sector accounts for approximately one-third of all greenhouse gas emissions in the U.S. Over the past months, the question of how to reduce those emissions has evolved into a dramatic political and legal battle, pitting California’s Governor Arnold Schwarzenegger against U.S. President George Bush.
The stage for this tussle was set long ago when Congress adopted the federal Clean Air Act and included in the law a special provision for California. Specifically, Section 209(a) of the Clean Air Act prohibits individual states from adopting emission standards for new motor vehicles. However, in recognition of California’s unique smog problems, a subsection (b) was added to enable California to adopt standards more stringent than federal standards so long as it applies for and obtains a waiver from the U.S. EPA. As one court recently explained, under Section 209(b), “Congress has essentially designated California as a proving ground for innovation in emission control regulations.” Other states are then free to adopt California’s standards pursuant to Section 177 of the Clean Air Act, so long as the standards are adopted at least two years before the model year that they regulate.
In 2002, California invoked its unique Clean Air Act authority to address greenhouse gas emissions from mobile sources. In particular, the State passed AB 1493 requiring the California Air Resources Board to develop and adopt regulations for the greenhouse gas emissions of passenger automobiles and light duty trucks. In September of 2004, the Air Resources Board adopted standards that apply to such vehicles beginning with model year 2009. As required by the Clean Air Act, California then requested a waiver from the U.S. EPA so that the standards could enter into force. While the waiver request was pending, no less than sixteen other states lined up to adopt California’s standards—for all practical purposes, the California standards were poised to become the de facto national standard.
Automobile manufacturers challenged those regulations in federal courts in both Vermont and California, arguing that the state automobile emission standards for greenhouse gases constituted fuel efficiency standards, and that fuel efficiency standards are exclusively regulated by the federal government under the Environmental Policy and Conservation Act (“EPCA”). Both courts rejected the manufacturers’ challenges, deciding that federal law did not preempt California’s ability to affect fuel economy through the regulation of greenhouse gas emissions from automobiles, so long as the U.S. EPA granted a waiver under the Clean Air Act—the stage was set for a showdown between California and the U.S. EPA.
Retaliation came swiftly. Little more than two weeks after Johnson’s announcement, California, along with 15 other states and five environmental groups, petitioned the Ninth Circuit on January 2, 2008, for review of the waiver denial. In the lawsuit, California will need to make the case that its regulation under Section 209 was necessary to “meet compelling and extraordinary conditions.” As a coastal state with limited fresh water resources, the effect of climate change on California may indeed be severe, involving rising sea levels, a reduction in the Sierra snow pack, and higher temperatures that would exacerbate the state’s ozone nonattainment problem, which is already the worst in the nation. A recent Stanford University study added fodder to this argument when it found Californians’ health will be disproportionately affected by greenhouse gas emissions, because the state is home to six of the most polluted cities in the United States. California will also need to make the case under section 209, that its standards “will be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards.” To that end, the California Air Resources Board released a January 2, 2008, assessment that concludes the federal law, even when fully implemented, will not be as effective as California’s standards at reducing greenhouse gas emissions from new vehicles. Even if California is successful, California’s regulation will have to be modified as it was to apply to 2009 model cars—models that will shortly be coming to market.
The EPA’s first legal maneuver in response to California’s petition may be to request a transfer from the Ninth Circuit to the more agency-friendly D.C. Circuit. Most challenges of EPA regulations must be filed in the D.C. Circuit—the relevant jurisdictional trigger being whether the action has “nationwide scope or effect.” While the issue of the waiver makes its way through the courts, the U.S. EPA’s rulemaking will also go forward. To meet its goal of final action by October 2008, the U.S. EPA will have to move quickly, with the public comment period coming by summer 2008 at the latest.
As these battles are fought, looming on the horizon is a general election in November, and a new federal administration beginning in January of 2009. If the U.S. EPA adopts regulations in October 2008 that do not go as far as the California standards, yet another legal challenge seems almost inevitable, if for no other reason than to stall any final rule until the administration changeover. When the dust does settle, presumably in 2009, the road to mobile source emission reductions will finally be paved.
Michèle Corash is a partner in the international law firm of Morrison & Foerster LLP and a member of the firm’s environmental law practice group. She served as General Counsel of the United States Environmental Protection Agency (EPA) from 1979 to 1982 and previously as Deputy General Counsel for the U.S. Department of Energy and Special Assistant to the Chairman of the Federal Trade Commission. Ms. Corash has consistently been listed in American Lawyer’s Corporate Counsel among the “Best Lawyers in America for Environmental Law” and in numerous other publications as being at the top of her field. She represents companies on a broad range of state, national and international environmental issues and claims regarding exposure to toxic substances. With the experience of being a former General Counsel of the EPA, Ms. Corash is well versed, and has been for many years, in the evolving area of clean technology, renewable resources and climate change. She advises clients on the many issues now facing corporations as they face the challenges of new technologies, infrastructures, markets and regulatory regimes.
 Adopted in 1975, EPCA provides for the establishment of national corporate average fuel economy (“CAFÉ”) standards that apply to all passenger automobiles and light duty trucks.
 Coincidentally, at the same time, the European Commission adopted a proposal for legislation to dramatically reduce the average carbon dioxide (“CO2”) emissions of new passenger cars by 2012. If adopted by the European Parliament, the proposal requires, by 2012, a fleet average of 130 grams of CO2 emissions per kilometer, with another 10 grams per kilometer reduction from alternative sources such as biofuels and more efficient air-conditioning. Considering Europe’s cars currently emit on average 160 grams of CO2 per kilometer, this represents an almost twenty percent reduction of CO2 emissions in four years.
The Supreme Court ruled last term that climate change can be regulated under federal law. But will the continuing lack of action by Congress, the En­vironmental Protection Agency, and most states be replaced by new litiga­tion by activist states and public inter­est organizations against government agencies and private parties? Is this an area where litigation will, or alternatively should, fill a void left by meaningful government activity? When EPA separately receives a record-breaking 100,000 comment letters on the request by California to waive the Clean Air Act’s barrier to state regulation of greenhouse gases from motor vehicles, one realizes that the public’s demand for concrete action is urgent. A legitimate fear, how­ever, is that these petitions and lawsuits could produce a patch­work response to global warm­ing where a comprehensive na­tional strategy is called for.
Without federal legislation setting out a clear and compre­hensive policy on GHGs, what is certain is that court cases to address alleged damages from global warming emissions will continue under authorities liti­gants claim are in the CAA or under public nuisance and oth­er common law torts. Whether seeking federal statutory pre­emption of state action or af­firmation that the claimants’ is­sues are non-justiciable political questions, cases that would bar some of those assertions are now squarely before two federal appeals courts. The stakes in those cases — which I expect will go to the Supreme Court — are high. At issue are the responsibilities and rights of both the federal government and the states in en­vironmental policymaking as well as the role that courts play in resolving the special issues, such as causation, injury, and standing, raised by global warming.
The Supreme Court’s holding in Massachusetts v. EPA, decided April 2, 2007, has already had a tre­mendous impact on climate change policy develop­ment and litigation in the United States. In Massa­chusetts, 13 states, 3 cities, 13 environmental orga­nizations, and American Samoa asked for review of EPA’s denial of a petition for rulemaking to regulate GHGs — in this case four specific gases, including carbon dioxide — from new motor vehicles under Section 202(a)(1) of the CAA. That section requires that EPA “shall by regulation prescribe . . . standards applicable to the emission of any air pollutant from any class . . . of new motor vehicles . . . which in [the administrator’s] judgment cause[s], or contribute[s] to, air pollution . . . reasonably . . . anticipated to endanger public health or welfare.” The act defines air pollutant to include any physical or chemical substance emitted into the ambient air.
EPA’s denial of the petition reasoned that the CAA does not authorize it to issue mandatory regu­lations to address GHGs, especially when, as argued by the federal government, there is no science firmly linking emissions with an increase in global surface air temperatures. From a political perspective, EPA also reasoned that regulating new motor vehicles would conflict with President Bush’s comprehensive, voluntary strategy and undermine his ability to conduct foreign policy with developing countries over their emissions. EPA’s denial was not without sup­port: 10 states and 6 trade associations filed briefs against the petition.
Although the agency claimed that Massachusetts had failed to demonstrate an injury that could be tied to GHG emissions, the Court found that the state had standing to pursue review of EPA’s denial of its petition. The Court held that carbon dioxide and other GHG emissions do meet the definition of air pollutant under the CAA. The Court next held that the CAA requires EPA to regulate GHGs from new motor vehicles if it forms a judgment that such emissions under Section 202(a) “may reasonably be anticipated to endanger public health or welfare.” Welfare under the CAA includes effects on climate. EPA can only avoid regulatory action if it is appar­ent that GHGs from new motor vehicles do not contribute to climate change. Because of the Court’s linking of GHGs with the definition of air pollutant under the CAA, future litigation and other actions to reduce emissions will be strengthened.
In reaction to Massachusetts, and the lack of any decisions on GHG regulation by the agency since the decision last April, there are a variety of efforts underway to force EPA or other federal agencies to formulate a national approach to GHG regulation. Unfortunately, such an approach has to be taken up piecemeal since there is no single authority in the Clean Air Act that is a logical target. As a result, U.S. climate policy could become a crazy-quilt of differing standards and regulations across the country.
In a lawsuit pending while Massachusetts’s petition for a rulemaking was on its journey, on September 12, 2007, another New England state received a favorable response to its separate petition to regu­late GHGs from motor vehicles in a federal trial court — although the final result will depend on the outcome from yet another state petition. In Green Mountain Chrysler Plymouth Dodge Jeep v. Crombie, a case brought by a group of car dealers, manufacturers, and their associations, a U.S. district court found that the state of Vermont’s regulations adopting California’s GHG standards for new automobiles were not pre­empted by either the CAA or the Energy Policy and Conservation Act of 1975, as amended. EPCA autho­rizes the Department of Transportation to set mileage standards for new cars and light trucks.
Section 202 of the CAA, the object of Massachusetts, requires the agency to establish standards for air pol­lutants emitted by new motor vehicles. Section 209(a) preempts a state from adopting its own motor vehicle emission standards, while Section 209(b) requires EPA to waive the preemption barrier for standards that meet certain conditions. The most important condition, of course, is that the state adopt the same regulations as California, which because it suffers from the worst air pollution in the country and was already legislating emissions reductions before the national government can receive a waiver to adopt standards stricter than federal regulations. Other states may adopt California standards for which a waiver has been granted if they do so at least two years before commencement of a new automotive model year.
California adopted GHG standards for new vehi­cles to begin in model year 2009, and asked EPA for a waiver of federal preemption in 2005, the same year as Vermont enacted its standards. It is this request that en­gendered the 100,000 comment letters, the most ever received on any regulatory petition. The federal agency is expected to act on California’s waiver request after it reviews the letters. However, California has decided not to wait on EPA to act on its request. On November 5, 2007, the state sued the agency in federal court to compel it to act on the petition. California Attorney General Edmund G. Brown Jr. said, “We have waited two years and the Supreme Court has ruled in our fa­vor. What is the EPA waiting for?” California pointed particularly to the fact that 16 other states have adopt­ed California standards or will do so soon. The ruling in Green Mountain Chrysler Plymouth allows Vermont’s petition to go forward, where it will have to await EPA’s decision on the California petition.
The Green Mountain decision draws support from Massachusetts, because the Supreme Court commented that despite the overlap between EPCA and the CAA, EPA must act to carry out its obligations without re­gard to what DOT does under EPCA. The Supreme Court held that “EPA has been charged with protect­ing the public’s health and welfare . . . a statutory obli­gation wholly independent of DOT’s mandate to pro­mote energy efficiency.” While recognizing that those emissions contribute to global warming, the district court recognized that Vermont’s attempt to regulate GHGs from cars is part of its comprehensive strategy to reduce GHG emissions statewide. Vermont is un­dertaking its motor vehicle program and other actions through its participation in the Regional Greenhouse Gas Initiative, an agreement among nine northeastern and mid-Atlantic states to adopt a regional cap-and-trade program for GHGs associated with large station­ary sources such as power plants.
Staying in the world of motor vehicle emissions, on November 15, 2007, the Ninth Circuit reversed and remanded NHTSA’s corporate average fuel economy standards for light trucks for model years 2008–2011 issued under EPCA in Center for Biological Diversity v. National Highway Traffic Safety Administration. The standards were challenged by 11 states, the District of Columbia, the city of New York, and four public inter­est organizations. Emissions from light trucks make up about 8 percent of annual U.S. greenhouse gas emis­sions. NHTSA claimed it weighed all of the benefits of improved fuel savings, concluding that “there is no compelling evidence that the unmonetized benefits would alter our assessment of the level of the standard for [model year] 2011.” The appeals court found that NHTSA “assigned no value to the most significant benefit of more stringent CAFE standards: reduction in carbon emissions” and thus will have to promulgate new CAFE standards that take GHGs into account.
California has also turned to litigation and legisla­tion. Its case against the automobile manufacturers un­der federal common law and state law was dismissed on September 18 when the district court refused to entertain the federal common law claim, ruling that it comprises a nonjusticiable political issue, and then re­fused to exercise supplemental jurisdiction under state law. But the state is moving on its own: On September 27, 2007, Governor Arnold Schwarzenegger signed a bill that establishes a comprehensive program of regu­latory and market mechanisms to achieve GHG re­ductions.
Another issue facing current and future liti­gants concerns a political question, as decid­ed by the Southern District of New York in Connecticut v. American Electric Power Com pany. In that case, Connecticut and seven other states, the city of New York, and environmen­tal groups sued a number of electric utilities, includ­ing American Electric Power Company, the Southern Company, TVA, Xcel Energy, and Cinergy Corpora­tion under federal common law to abate the public nuisance of global warming. The complaint alleged that the defendants were the five largest emitters of car­bon dioxide in the United States, constituting approxi­mately one fourth of the electric power sector’s carbon dioxide emissions, and that U.S. electric power plants are responsible for 10 percent of worldwide carbon di­oxide emissions from human activities.
As in the California suit against the automakers, the court held that filing nuisance suits against utilities to abate emissions that allegedly contribute to global warming raises non-justiciable political questions that are beyond the limits of a court’s jurisdiction. The court concluded that “the scope and magnitude of the relief plaintiff’s seek reveals a transcendentally legislative na­ture of this litigation. Plaintiff asks this court to cap carbon dioxide emissions and mandate annual reduc­tions of an as-yet-unspecified percentage.” The court found that a case is “justiciable in light of the separa­tion of powers ordained by the Constitution only if the duty asserted can be judicially identified and its breach judicially determined and protection for the right ju­dicially molded.” The district court then went through an analysis of the six situations recognized as indicating the existence of a non-justiciable political question, cit­ing two U.S. Supreme Court cases, Baker v. Carr, de­cided in 1962, and Vieth v. Jubelirer, decided in 2004.
Among the factors in the Vieth v. Jubelirer case, which concerned gerrymandering, is whether a court faces “the impossibility of deciding [the case] without an initial policy determination of a kind clearly for nonjudicial discretion.” In Connecticut, the district court was honestly puzzled. It struggled with a variety of policy determinations concerning whether the cost of GHGs would be borne just by the defendants, the entire electricity generating industry, or all industries. It also struggled with the economic implications of making these choices, not to mention the effect on the country’s energy policy. In the end, the court conclud­ed it is the judicial branch that decides when a political question is raised, but “looking at the past and current actions (and deliberate inactions) of Congress and the executive within the United States and globally in re­sponse to the issue of climate change merely reinforces my opinion that the questions raised by plaintiffs’ complaints are non-justiciable political questions.” The decision was appealed to the U.S. Court of Appeals for the Second Circuit. Oral argument on appeal was held before the Massachusetts decision and although the Sec­ond Circuit sought additional briefing in light of the decision, it has not yet ruled in the case.
Another court decision that addressed the non-jus­ticiable political question issue is Comer, et al. v. Mur­phy Oil USA Inc., et al., decided last August by the U.S. District Court for the Southern District of Mississippi. This case, brought in the aftermath of Hurricane Ka­trina, was a putative class action on behalf of Mississip­pi citizens against defendants which included named oil company defendants (plus an additional 100 oil companies licensed to do business in Mississippi), in­surance firms, utilities, and chemical companies. The allegation was that these businesses emit GHGs, which changed the environment so as to cause more frequent and intense hurricanes over the past 30 years, result­ing in, among other things, Hurricane Katrina and the damages suffered by the plaintiffs.
Motions to dismiss were filed in the case, following arguments, similar to those made in Connecticut, that the case presented a non-justiciable political question and must be dismissed. In an opinion that received little notice, the district court found that the plaintiffs did not have standing to assert claims against any of the defendants and that their claims were nonjudiciable pursuant to the political question doctrine. An appeal has been docketed with the U.S. Court of Appeals for the Fifth Circuit.
Lee A. DeHihns III, is the Chair of the American Bar Association’s Section of Environment, Energy and Resources for the 2007–2008 term, is a Partner in the Environmental and Land Use Group at Alston+Bird LLP in Atlanta, Georgia.
*This article originally appeared in The Environmental Forum January/February 2008 issue. For information regarding the Environmental Law Institute please visit their website at www.eli.org.

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