Georgetown Law Faculty Blog

EPA's Unvarnished Advice on Climate

by Lisa Heinzerling

This afternoon, the Environmental Protection Agency is expected to release its much-anticipated "Advance Notice of Proposed Rulemaking" (ANPRM, in the lingo) discussing the potential for regulation of greenhouse gases under the Clean Air Act.  The Washington Post reported this morning that the White House ordered changes in the agency's draft ANPRM, with the effect of lowering the agency's estimates of the benefits of regulating greenhouse gases.

While we await publication of the White House-altered document, it is worth taking a moment to review EPA's unvarnished draft -- the ANPRM as it existed before the White House got its antiregulatory hands on it.

Reading the draft ANPRM (the version dated May 30), one is reminded why we have agencies in the first place.  The draft describes the science of climate change, the economics of climate change, and all of the nooks and crannies of the Clean Air Act that might be used to address this problem.  It is objective and levelheaded, yet also ambitious and creative.  Throughout the draft, EPA appears genuinely interested in seeking solutions to the problem of climate change rather than finding ways to avoid addressing it.  This Administration has done everything it can to hamstring EPA and to belittle its scientific and technical expertise (going so far as to refuse, childishly, to open an email sent to the White House in December, describing EPA's finding that greenhouse gases endanger us), yet somehow, EPA has soldiered on, producing a document that showcases the very expertise the White House has dismissed.  If nothing else -- and this is a lot -- EPA's draft ANPRM provides evidence that an eager and capable cadre of experts remains on duty at the agency.  The next Administration should take heart in this fact.

The draft ANPRM also contains good news from the perspective of climate regulation.  In the May 30 draft, EPA concludes -- specifically focusing on regulation of mobile sources -- that the benefits of regulating greenhouse gases are vastly greater than the costs.  According to EPA, regulation of mobile sources would produce $2 trillion in net benefits.  EPA even concludes that car owners will, over the lifetime of owning a car, save money if strict controls are put in place.  (This is because the regulations EPA has in mind would make cars more fuel efficient.)  This should come as good news to everyone, environmentalists and economists alike.

EPA produced this happy economic conclusion using manifestly reasonable assumptions.  First, the agency used fuel cost estimates reflecting the current (high) cost of oil.  Second, it included as benefits of greenhouse gas regulation the avoidance of adverse effects in other countries.  Droughts, heat waves, intense storms, rising sea levels, and the rest affect us here, even if they happen in other countries, both through the workings of the global economy and through our own concern for the welfare of the rest of the world.  Third, EPA did not "discount" the future effects of climate change as dramatically as it and other agencies sometimes have done.  Discounting is a technique used to reflect the idea that events occurring in the future are not as important as events occurring now.  By using a fairly low discount rate, EPA avoided the severe trivialization of the future that often attends use of discounting.

The draft ANPRM is not perfect, of course.  One notable shortcoming is its fixation on the effects of climate change on "welfare" rather than health.  Under the Clean Air Act, "welfare" is basically defined as everything good (effects on welfare include effects on soils, water, crops, vegetation, manmade materials, animals, wildlife, weather, visibility, climate, property, transportation, economic values, and personal comfort and well-being) except human health.  The draft ANPRM gestures toward, but does not emphasize, the effects of climate change on human health.  There appears to be no scientific basis for EPA's reticence.  Rather, the agency seemed anxious to try to avoid the more constraining legal requirements that flow from a finding of adverse effects on public health.

In context, however, this is a quibble.  The draft ANPRM lays out the scientific basis for finding that greenhouse gases pass the "endangerment" threshold of the Clean Air Act.  It describes the economic grounds for believing that regulation of greenhouse gases will produce enormous net benefits.  And it provides a legal road map for the next Administration to follow when -- hope springs eternal -- EPA finally is freed up to do the job Congress has assigned it to do, which is to protect human health and the environment.

Vice-President Cheney has famously defended this Administration's insistence on secrecy by saying that secrecy is necessary to allow executive officials to provide "unvarnished" advice to the President.  EPA's draft ANPRM provided just such candid advice. Yet, as the Post this morning revealed, the White House couldn't handle the truth.

EPA Comes Clean on Climate

Lisa Heinzerling

Today EPA Administrator Stephen Johnson finally explained his decision, announced last December, to deny California's request for permission to implement its standards regulating greenhouse gas emissions from cars.  In a 48-page document, Johnson stated that EPA could not receive a "waiver" for its program under the Clean Air Act because the state does not have the kind of "compelling and extraordinary conditions" that make such a waiver appropriate.

But here is the kicker: Johnson concluded that California's problems aren't "compelling and extraordinary" because they're no worse than the very bad problems the rest of the country faces as a result of climate change.  Thus, in the course of denying California's waiver, EPA managed to make explicit, for the first time, its view that greenhouse gases endanger public health and welfare.  Johnson's discussion of greenhouse gases and climate change now obligates him to regulate these pollutants under the Clean Air Act.

The Clean Air Act directs EPA to regulate numerous sources of air pollution -- cars, power plants, factories, planes, and more -- once the EPA Administrator makes a finding that an air pollutant "may reasonably be anticipated to endanger public health or welfare."  In Massachusetts v. EPA, the Supreme Court explicitly held that regulation under the Clean Air Act must follow once the EPA Administrator makes such an "endangerment finding."

In 1999, several groups, led by the International Center for Technology Assessment, asked EPA to regulate greenhouse gases from automobiles.  They asserted that the science of climate change, even at that time, dictated a finding of endangerment.  In 2003, EPA rejected the petition, stating that it had no authority under the Clean Air Act to regulate greenhouse gases and that even if it had such authority it would decline to exercise it due, among other things, to the scientific uncertainty surrounding the issue.  In April of last year, in Massachusetts v. EPA, the Supreme Court reversed EPA's decision.  After holding that EPA did indeed have the power to reuglate greenhouse gases and that its reasons for declining to do so were unlawful, the Court directed the agency to take another look at the issues and to explain its ultimate decision in terms of the statutory criteria and the available science.  We've been waiting almost a year for an answer from EPA.

It came today, albeit in an unlikely context.  Superficially, today's decision looks like a huge loss not only for California but for all of the other states that have adopted California's emissions standards; together these states represent almost half of the U.S. population.  The rejection of California's waiver denies all of these states -- and their citizens -- the right to enact a climate change program for automobiles, a leading source of greenhouse gases.

But that is not all EPA's decision does.  The decision also contains a long discussion of the effect of greenhouse gases on climate and the effect of climate change on public health and welfare.  The EPA Administration states that "warming of the climate system is unequivocal."  He connects this warming to manmade greenhouse gases and describes the consequences of global warming for human health and welfare, to wit: "There is strong evidence that global sea level gradually rose in the 20th century and is currently rising at an increased rate"; "by the end of the century, globally averaged sea level is projected to rise between 0.18 and 0.59 meters relative to around 1990"; "it is very likely that heat waves will become more intense, more frequent, and longer lasting"; "it is likely that hurricanes will become more intense"; "wildfire and insect oubreaks are increasing and are likely to intensify."

These statements demonstrate that the Administrator has found that greenhouse gases are endangering public health and welfare.  For one thing, the Administrator does not equivocate about existing problems relating to climate change or about the possibility of future harms.  His findings -- including words such as "unequivocal" and "likely" -- easily meet the Clean Air Act's standard of reasonable anticipation of endangerment.  Indeed, his decision contains numerous examples of how greenhouse gases are already harming public health and welfare.  In addition, the Administrator's description of the consequences of climate change relate directly to the key Clean Air Act concepts of public health and welfare.  Floods, droughts, hurricanes, wildfires, and the rest all clearly implicate health and welfare.  Thus, the decision amounts to a finding of endangerment that triggers mandatory regulatory action under numerous provisions of the Clean Air Act.

In his decision, Administrator Johnson says that he is not making an endangerment finding.  But Johnson cannot so easily avoid the consequences of his own conclusions.  Settled law makes clear that formal factual findings like those made in Johnson's decision constitute an endangerment finding under the Clean Air Act, no matter how the agency labels them.

After too many years of denial and avoidance, EPA has finally said something true and right about climate change.  It is too bad that it comes in the midst of a palpably unlawful decision preventing California and other states from regulating greenhouse gas emissions from cars.  But the decision denying the waiver will be reversed; there is no legal basis for it.  The endangerment finding, on the other hand, has real staying power.

Balkin on Bush's Bureaucracy

Lisa Heinzerling

In a post on "Balkinization," regarding the amended executive order on regulatory review (see my January 23 GULC blog on the amended order), Jack Balkin argues that the amended order is of a piece with regulatory developments going back at least to the Reagan Administration.  There is some truth in Balkin's most general claim.  But Balkin's specifics leave much to be desired.  Balkin writes: 

[T]he Bush Administration has built on the Clinton model more than the Reagan model. Instead of trying to halt regulation, it has sought greater political control over advisory documents and required a greater showing that regulation addresses a genuine market failure. . . . The reasons why Bush has followed Clinton more than Reagan flow from the rise of Bush's big government conservatism, a conservatism that happily uses all the levers of federal power to benefit his political allies, including most particularly business interests, who remain central to the Republican political coalition. The Bush Administration does not so much seek to stop regulation as to mold it in a decidedly business-friendly way.

Contrary to Balkin's claim, the Bush Administration has not only actively tried to "halt regulation," but it has succeeded in doing so.  The first head of the White House regulatory office under President Bush, John D. Graham, made it his practice to return rules to agencies if the rules were either not justified by cost-benefit analysis or not consistent with the President's policies and priorities.  Many rules went by the boards this way.  Many others were so watered down during the process of regulatory review that they emerged scarcely recognizable -- and barely stricter than no regulation at all.  Balkin is correct that virtually all of the regulations that have managed to pass through the White House's fine sieve have been "mold[ed] in a decidedly business-friendly way," but he has missed the fact that many rules haven't made it through the filter at all.

Fish, Power Plants, and Cost-Benefit Analysis

Lisa Heinzerling

In a huge victory for fish and other fans of the Clean Water Act, the Second Circuit last week ruled that the Environmental Protection Agency may not use cost-benefit analysis in setting standards for cooling water structures used at existing power plants around the country.

These structures draw in huge amounts of water from water bodies adjacent to the power plants they cool.  Fish are killed when they are either trapped at the inlet to these structures or drawn into the machinery of the structures themselves.  The number of fish killed is almost unbelievable.  A single power plant might kill billions -- yes, billions -- of fish in a single year.

The Clean Water Act instructs EPA to set standards for these cooling water intake structures.  In its first pass at the issue, EPA decided to require state-of-the-art technology for the largest and most damaging facilities.  By the time the agency's proposal had passed through the regulatory review process required by the White House, however, this requirement was gone.  In addition, a new "compliance alternative" had emerged: plants could avoid installing even the less effective technology required by the amended proposal if they showed that installing that technology failed a cost-benefit test.  In simple terms, this meant that if the cost of the equipment exceeded the value of the fish that would be killed if the equipment weren't installed, the plant could avoid installing the equipment.  (And the White House didn't see much value in these fish.)  Thus the White House -- through its regulatory office, the Office of Information and Regulatory Affairs (OIRA) -- succeeded in both weakening the substance of EPA's proposal and in substantially altering the meaning of the relevant provisions of the Clean Water Act, by interpreting them to allow standard-setting based on cost-benefit analysis.

The Second Circuit didn't buy it.  The court ruled that the Clean Water Act does not permit the use of cost-benefit analysis in setting these standards or in allowing deviations from the standards.  Quite reasonably, the court held that the agency could engage in a form of cost-effectiveness analysis in setting standards, by identifying the level of protection afforded by state-of-the-art technology and then allowing use of cheaper but equally effective technologies in meeting the standards.  But the court clearly ruled out OIRA's favorite technique for undoing regulatory advances, cost-benefit analysis.

The court declined to decide an issue briefed to them (by amicus OMB Watch, represented pro bono by me), regarding OIRA's role in the regulatory process.  We had argued that EPA's interpretation of the Clean Water Act deserved no deference under Chevron because it was, in reality, OIRA's, not EPA's interpretation.  The court did not need to reach this issue because it held that cost-benefit analysis was just not permitted under the Act.

OIRA's role in this rulemaking proceeding also led to another interesting, also unresolved, legal skirmish.  In arguing that OIRA had foisted its own interpretation on the agency actually charged with implementing the statute in question, we relied on publicly available documents showing exactly how OIRA's intervention had led to alterations in EPA's proposal.  Out of all of the 6,000 records in the agency's docket on this rule and the hundreds of pages of typical legal mumbojumbo trying to explain the agency's decision, the documents showing the results of OIRA's intervention furnished the only really clear explanation of why EPA did what it did.  Yet EPA moved to exclude these documents from the agency record -- despite the fact that they had been made public by the EPA itself and despite the fact that EPA itself had originally placed them in the docket.  EPA explained that they were "deliberative" documents that shouldn't play a role in the court's review of EPA's rule.  Here again, the court found no need to rule on this issue because it disposed of the case without looking at OIRA's role in the process.  However, EPA's position that public documents showing exactly why it chose the rule it did does not bode well for meaningful judicial review in future cases.

The case is Riverkeeper v EPA.

Supreme Court Rulings in Wetlands Cases Rapanos & Carabell (6/19/06)

The Court decided two Clean Water Act wetlands cases today: Rapanos v. U.S and Carabell v. U.S. The result in this case is far different than it first seemed and initially reported. Environmental Law now has its own Bakke. We can hope, however, that it will not similarly take 26 years for the Court to bring some clarity to the law.

Scalia’s plurality (Roberts, Thomas, and Alito) favors a major cutback on Clean Water Act jurisdiction, a statute that he describes as “tedious.” According to the plurality, the Act’s jurisdictional touchstone “waters of the U.S.” is limited to “relatively permanent, standing, or continuously flow bodies of water” that form “geographical features” such as “streams,” “oceans,” “rivers,” and “lakes.” The only wetlands that are covered under this view for the purposes of the Army Corps of Engineers Section 404 dredge and fill permitting program are those that are in such physical proximity to traditional navigable waters that there is a problem in identifying the boundary between the two. Outside the Corps’ jurisdiction are nonnavigable tributaries and wetlands hydrologically connected to such tributaries, even if they have are connected to traditional navigable waters.  This view would remove from the Corps jurisdiction almost all wetlands and the nonnavigable tributaries, which serves in effect as the capillaries of the nation’s waters. If this view had prevailed, it would have resulted in a massive reduction in the Corps’ ability to protect the waters of the United   Statesunder the Clean Water Act, as currently drafted.

While Justice Scalia’s plurality opinion is strikingly sweeping and remarkably disdainful of the policy and purposes of the Clean Water Act, it is only that: a plurality opinion. And, as the Chief Justice pointedly reminds us in his own concurring opinion (he also joins Scalia’s), the lower courts will now have to follow Marks v.  United States, which means that Justice Kennedy’s separate concurring opinion is controlling. Under Marks, “[w]hen a fragmented Court decides a case and no single rationale explaining the result enjoys the assent of five Justices, ‘the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds ***.” 430 U.S. 188, 193 (1977), quoting Gregg v. Georgia, 428 U.S. 153, 169 n.15 (1979).

Here that is Kennedy, who rejects the most sweeping and central parts of the plurality opinion and expressly agrees with parts of the dissent: (1) “the dissent is correct to observe that an intermittent flow can constitute a stream”; (2) “It follows that the Corps can reasonably interpret the Act to cover the paths of such impermanent streams.”; (3) “the plurality concludes * * * that navigable waters may not be intermittent. The conclusion is unsound.”; (4) “as the dissent observes, the fact that point sources may carry continuous flow undermines the plurality’s conclusion that covered “waters” may not be discontinuous.” (5) rejects “plurality’s second limitation – exclusion of wetlands lacking a continuous surface connection to other jurisdictional waters.”

Kennedy’s announced test, which the plurality rejects is nonetheless now the controlling test, just as Powell’s arguably was in Bakke in 1978. Kennedy’s proffered contextual, balancing approach also seems reminiscent of Powell in Bakke in some respects. The Kennedy test for wetlands is:

“[W]etlands possess the requisite nexus, and thus come within the statutory phrase ‘navigable waters,’ if the wetlands either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as ‘navigable.” When, in contrast, wetlands’ effects on water quality are speculative or insubstantial, they fall outside the zone fairly encompassed by the statutory term ‘navigable waters.” 

 Kennedy goes on to say that the Corps’ current test for wetlands adjacent to traditional navigable waters is reasonable because of a “reasonable inference of ecological interconnection” that can be drawn. But, according to Kennedy, the Corps needs now to develop through regulations categories of tributaries for which the same can be said for wetlands adjacent to such tributaries. Outlining a blueprint for future Corps regulations, Kennedy goes on to describe the relevant factors to be considered in establishing those categories of tributaries that “perform important functions for an aquatic system incorporating navigable waters.”  Kennedy adds that until the Corps establishes specific regulations, it will have to approach these issues on a case by case basis.

 Finally, Kennedy adds that the “record contains evidence suggesting the possible existence of a significant nexus according to the principles outlined above” and, accordingly, the end result in these cases and many others to be considered may be the same as that suggested by the dissent * * *.

 Enormous uncertainty has now been injected into the law, but this case is not the huge loss it first seemed. Kennedy plus the Stevens dissent provides lots of regulatory space for the government and for environmental protection.
 

Court watchers are already speculating as to whether Scalia received the initial opinion assignment and lost Kennedy, or perhaps Kennedy had it and lost the dissenters, or his own way and voted for affirmance rather than reversal.  If the first, why did the CJ assign this to Scalia who was bound to do what he does best – write broadly and lose votes – rather than to Kennedy, which could have resulted in a narrowly written opinion for the Court rather than a splintered Bakke mess.  If the latter, Kennedy and the dissenters would have done the nation (and certainty in the law) a big favor if they could have smoothed over their differences (which are not that great) and delivered an opinion for the Court.