In another step towards regulating greenhouse gas emissions (“GHG”) under the Clean Air Act, the President on Tuesday unveiled agreement on new automobile fuel economy standards that include regulation of automotive GHG emissions. The proposal would be jointly implemented by the U.S. Environmental Protection Agency (“EPA”) and the U.S. Department of Transportation (“DOT”). EPA would act in response to the Supreme Court’s decision two years ago in Massachusetts v. EPA, which held that EPA may regulate GHG emissions under the Clean Air Act if it finds that such emissions endanger public health or welfare. EPA proposed to make such an endangerment finding last month, and has set a June 24, 2009 deadline for the receipt of comments on such proposal. DOT would act under authority of the December 2007 Energy Independence and Security Act, which authorized the department to tighten corporate average fuel economy (“CAFE”) standards
The proposal will mandate a five percent annual increase in fuel efficiency for model years 2012 through 2016 and push to a fleetwide average of 35.5 mpg by 2016, four years earlier than the deadline imposed by Congress in its 2007 energy law. It would additionally, for the first time ever, limit the amount of greenhouse gas emissions from passenger cars and light trucks. While the limit has not yet been made public, a White House spokesperson said the proposal will set a limit of 250 grams per mile per vehicle by 2016. The proposal is still in a conceptual stage, and no announcement was made as to when an actual rulemaking would commence.
The Administration’s proposal was endorsed by the automobile industry which welcomed a single national regulatory program for the industry. The industry was greatly concerned that the Obama Administration would grant a “waiver” request by the State of California that would authorize that state to establish its own automotive greenhouse gas standards. If the waiver were granted, more than a dozen other states were ready to adopt the California standards, potentially resulting in a dual set of standards for automotive GHG emissions, one by EPA and one by those states. The Administrator’s proposal resolves the waiver issue, as California also endorsed the proposal. The proposal was further endorsed by leading environmental groups.
The announcement of the proposals means that EPA intends to finalize its proposed endangerment finding and proceed with formal GHG rulemaking under the Clean Air Act. Once EPA issues final rules regulating automotive GHG emissions, such emissions, including carbon dioxide, will become regulated pollutants under the Clean Air Act. That means that, even if the GHG rules are initially limited to automotive emissions, any stationary source emitting carbon dioxide above certain threshold amounts will be required to obtain a preconstruction air quality permit for new construction and for modifications. Because these thresholds are relatively low,
a very large number and type of buildings and facilities may be affected. Additionally, EPA is ultimately unlikely to limit GHG regulations to the automobile industry without also proceeding against industrial sources.