Supreme Court Backs Carbon Pollution Controls - Again

Building on two prior decisions affirming the Environmental Protection Agency’s authority to set carbon pollution standards, the Supreme Court today held that the core provision of the Clean Air Act’s permitting requirements also applies to carbon pollution. 

Coming three weeks after EPA proposed carbon pollution standards for existing power plants, this is the third time the Supreme Court has backed EPA’s authority to curb heat-trapping carbon pollution under the Clean Air Act.

Specifically, the Court held in Utility Air Regulatory Group v. EPA that any large new industrial source that is otherwise required to obtain a Clean Air Act construction permit must use “best available control technology” (BACT) for all of its regulated air pollutants, including carbon dioxide and other heat-trapping air pollutants.  Though the Court ruled against EPA on another issue as I explain below, the practical result is that virtually all large new pollution sources will have to apply modern pollution controls to their carbon pollution.  As Justice Scalia said from the bench, “EPA is getting almost everything it wanted in this case.”

The most important message from this case is that the Supreme Court stands behind its prior decisions that EPA has the authority and responsibility to curb dangerous carbon pollution.  In 2007 the Court decided in Massachusetts v. EPA that EPA can set carbon pollution standards for motor vehicles under Section 202 of the Act.  And in 2011 the Court held in American Electric Power v. Connecticut that EPA can do the same for new and existing power plants under Section 111 – this is the authority EPA invoked in the carbon pollution standards proposed on June 2nd.   Indeed, the plurality opinion for the Court by Justice Scalia takes Massachusetts as its premise and refers approvingly to American Electric Power (see footnote 5)The contrary view commands only the votes of Justices Alito and Thomas.  

So for those still swinging at EPA’s authority to set carbon pollution standards, the UARG decision means three strikes and you’re out.

The UARG case concerned secondary provisions of the Clean Air Act that create permitting requirements.  Two permitting requirements were at issue.  The first is called “new source review,” and it is found in the Prevention of Significant Deterioration (PSD) provisions of the Act.  Each “major” new industrial source must get a construction permit before starting to build, showing that it will use the “best available control technology” (BACT) for “each pollutant subject to regulation” under the Act.   The second is called the “operating permit program,” and it is found in Title V of the Act.  It requires each “major” industrial source (both new and existing) to have an operating permit that collects in one place all emission limits and monitoring obligations that apply to the source.   For both provisions, a source is “major” if it emits “any air pollutant” in amounts exceeding certain thresholds. 

I’ve explained the difference between standards and permits here.  The key points are that standards apply to all covered facilities of a given type (e.g., power plants) and they are fully enforceable on their own even if there are no permits.  Permits are issued facility-by-facility, and they provide important supplementary protections:  The BACT requirement assures that each big new plant is built with up-to-date pollution controls – which is especially important when there are no standards, or when they have fallen out of date.  Operating permits simplify compliance determinations and enforcement proceedings, even though the underlying standards are legally binding and enforceable on their own. 

In UARG, the Court decided 7-2 that if a new or expanded source requires a construction permit because it emits sufficient amounts of other air pollutants, it must apply “best available control technology” to its emissions of all regulated air pollutants, including carbon dioxide and other heat-trapping pollutants.  Justice Scalia issued an opinion for the Court joined by Chief Justice Roberts and Justice Kennedy.  Justices Breyer, Ginsburg, Sotomayor, and Kagan agreed with this part of Scalia’s opinion, making the seven justice majority on this point.

A different 5-4 majority held that a source cannot be required to obtain either a PSD or Title V permit solely because of its carbon pollution.  Scalia, joined in this part of his opinion by Roberts, Kennedy, Alito, and Thomas, held that a source cannot become a “major” source, and thus subject to these permitting requirements, solely by virtue of its carbon pollution because, they reasoned, the phrase “any air pollutant” does not include carbon dioxide in the specific context of the permitting provisions.  According to Scalia, while Massachusetts held that the Act’s broad definition of “any air pollutant” includes all air pollutants, the reach of that term can be limited by the context of particular operative provisions if they show that Congress intended a narrower scope.  Scalia found evidence of that narrower scope in the provision requiring PSD permits for new sources emitting 100 or 250 tons per year of any air pollutant.   As applied to carbon dioxide, this would cover a vast number of small sources – smaller than the ones EPA conceded Congress intended to cover.  EPA had dealt with this problem by administratively changing the 100/250 ton thresholds to 100,000 tons, at least for a phase-in period.  Scalia ruled that EPA lacked the authority to change those numbers.  Instead, Scalia ruled that “any” air pollutant simply does not include carbon pollution in these permitting provisions.

Justice Breyer, writing for the four dissenters on this issue, argued that EPA had reasonably interpreted those permitting requirements to apply to carbon pollution sources above 100,000 tons per year.  He reasoned that so doing was a reasonable limitation of another “any” – “any major emitting facility.”  Breyer’s reading would preserve permitting for sources exceeding 100,000 tons per year of carbon pollution while exempting the smaller ones – solving the problem of burdening small sources with a much narrower exemption.

Justice Breyer has the stronger argument, at least in my book.  But the consequences of Scalia’s overly broad exemption are limited by his other holding – that BACT still applies to the carbon pollution from sources that need permits anyway because of the other pollutants they emit.  This certainly includes power plants, oil refineries, chemical plants, and other large industrial sources.  They emit the vast bulk of industrial carbon pollution, and they nearly always need PSD and Title V permits anyway.

To recap, today’s decision reaffirms EPA’s authority to set carbon pollution standards, like the standards already set for cars and trucks and the standards proposed for power plants earlier this month.  And it preserves the requirement that the biggest new sources of carbon pollution use the best available pollution controls.

So EPA's critical work to protect Americans from the worst impacts of climate change will move ahead.

Not a bad day for clean air.