Here are links to some pertinent materials for the U.S. EPA’s announcement today of its proposed rule to tailor the major source applicability thresholds for greenhouse gas (GHG) emissions under the Prevention of Significant Deterioration (PSD) and title V programs of the Clean Air Act (CAA or Act) and to set a PSD significance level for GHG emissions:

• Fact Sheet — Proposed Rule: Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule;
• Text of the Proposed Rule;
• Information on EPA’s New Source Review Program
• Advance Notice of Proposed Rulemaking: Regulating Greenhouse Gas Emissions under the Clean Air Act
• Summary of Proposal by Law Firm of Holland & Hart

Below is the press release from EPA today announcing the proposed new rule.

CONTACT:
Cathy Milbourn
202-564-7849
202-564-4355

FOR IMMEDIATE RELEASE
September 30, 2009

New EPA Rule Will Require Use of Best Technologies to Reduce Greenhouse Gases from Large Facilities

Small businesses and farms exempt

LOS ANGELES – U.S. EPA Administrator Lisa P. Jackson will announce today in a keynote address at the California Governor’s Global Climate Summit that the Agency has taken a significant step to address greenhouse gas (GHG) emissions under the Clean Air Act. The Administrator will announce a proposal requiring large industrial facilities that emit at least 25,000 tons of GHGs a year to obtain construction and operating permits covering these emissions. These permits must demonstrate the use of best available control technologies and energy efficiency measures to minimize GHG emissions when facilities are constructed or significantly modified.

The full text of the Administrators remarks will be posted at www.epa.gov later this afternoon.

“By using the power and authority of the Clean Air Act, we can begin reducing emissions from the nation’s largest greenhouse gas emitting facilities without placing an undue burden on the businesses that make up the vast majority of our economy,” said EPA Administrator Jackson. “This is a common sense rule that is carefully tailored to apply to only the largest sources – those from sectors responsible for nearly 70 percent of U.S. greenhouse gas emissions sources.  This rule allows us to do what the Clean Air Act does best – reduce emissions for better health, drive technology innovation for a better economy, and protect the environment for a better future – all without placing an undue burden on the businesses that make up the better part of our economy.”

These large facilities would include power plants, refineries, and factories. Small businesses such
as farms, restaurants and many other types of small facilities would not be included in these requirements.

If the proposed fuel-economy rule to regulate GHGs from cars and trucks is finalized and takes effect in the spring of 2010, Clean Air Act permits would automatically be required for stationary sources emitting GHGs. This proposed rule focuses these permitting programs on the largest facilities, responsible for nearly 70 percent of U.S. stationary source greenhouse gas emissions.

With the proposed emissions thresholds, EPA estimates that 400 new sources and modifications to existing sources would be subject to review each year for GHG emissions. In total, approximately 14,000 large sources would need to obtain operating permits that include GHG emissions. Most of these sources are already subject to clean air permitting requirements because they emit other pollutants.

The proposed tailoring rule addresses a group of six greenhouse gases: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6).

In addition, EPA is requesting public comment on its previous interpretation of when certain pollutants, including CO2 and other GHGs, would be covered under the permitting provisions of the Clean Air Act. A different interpretation could mean that large facilities would need to obtain permits prior to the finalization of a rule regulating greenhouse gas emissions.

EPA will accept comment on these proposals for 60 days after publication in the Federal Register.
The proposed rules and more information: http://www.epa.gov/nsr

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An interesting analysis has been just published by the Atmospheric Pollution and Economic Development Program of the International Institute for Applied Systems Analysis in Austria: Wagner & Amann, Analysis of the Proposals for GHG Reductions in 2020 Made by UNFCCC Annex I Countries by Mid-August 2009 (2009). This could be an excellent reading for students in the post-Kyoto section of a climate change course because it not only provides a contemporaneous summary of current pledges of Annex I countries, but also discusses the costs of reducing emissions and the continued threat that “hot air” credits from Russia and Ukraine pose to the viability of international efforts to address climate change.

Among the take-aways from the report:

• A conservative interpretation of the 2020 pledges made by Annex I Parties to date implies a reduction of their collective emissions by a mere 5% below 1990 levels, comparable to the Kyoto Protocol targets; an optimistic projection (largely assuming no use of CDM, LULUCF etc.) pegs the reduction at 17%, but even this is well below the IPCC’s conclusion in 2007 that reductions of 25-40% need to be effectuated by 2020 if we hope to keep temperatures increases below the 2C “guardrail”;
• 40% of the pledges by Annex I Parties could be settled through “hot air” credits from Russia and Ukraine; hot air amounts to a projected 4.3% of Annex I emissions by 2020 relative to 1990;
• Even under the most optimistic interpretation of the pledges of Annex I Parties, the cost of compliance would only nick off 0.01-0.05% of GDP by 2020, compared to a projected 42% increase in GDP during that period. However, some countries would face much higher costs (e.g. 1.1% for New Zealand), while others would enjoy net revenue (Ukraine 2.9% of GDP);
• Excluding hot air credits as a means to effectuate Annex I GHG emissions reductions could increase the reductions by Annex I Parties t0 24%;
• Reducing GHG emissions would yield substantial co-benefits at no cost in terms of other pollutants. Pledges to reduce GHG emissions by Annex I Parties may result in reductions of 10% in sulfur dioxide, nitrous oxide and particular matter.

The 2d Circuit’s decision in Connecticut v. American Electrical Power, reversing a district court decision that dismissed an acton by state attorneys general seeking damages associated with climate change under a theory of common law public nuisance, is available here.  There will undoubtedly be a number of good legal analyses of the case in the next few weeks. However, a good starting point is UCLA Law’s Jonathan Zasloff’s piece in Grist today, which indicates that while polluters usually seek to tie up regulations in interminable challenges, in the hope that a more sympathetic regime will come along, the decision in Connecticut v. AEP poses a real dilemma for them. The panel in Connecticut indicated that while EPA regulation of GHGs under the CAA might displace public law nuisance suits, at this point the Obama administration has only “proposed” such regulation, and only for mobile sources, and thus the panel held that there is no displacement.

Is it in the best interest of major GHG polluters to seek to prevent promulgation of regulations when the alternative is potentially huge and unpredictable exposure to common law actions? (though as Zasloff points out, it’s far from clear whether CAA regulation would displace nuisance suits) While Zasloff doesn’t extend his analysis beyond the interplay with EPA, one wonders if polluters might be more amenable now to passage of the American Clean Energy & Security Act, which would “displace” regional accords for at least five years, most regulation of GHGs under the CAA, and common law actions. Given the vise that is tightening on polluters from the executive and judicial branches, they may perceive that their best bet is to work in the legislative arena to weaken the ACES bill to the point where it’s palatable, given that it can also serve as a shield against the far more frightening prospect of EPA regulation or a proliferation of common law actions. One must also not forget in this context that another shoe could drop should appellants prevail in other cases of this nature, including Comer v. Murphy Oil (5th Circuit), California v. General Motors Co. (9th Cir.) and Native Village of Kivalina v. Exxon Mobil Corp, et al., (C.D. Cal.).