On Monday, October 14th the U.S. Supreme Court denied several petitions for certiorari challenging EPA’s 2009 finding that greenhouse gas emissions (GHG) from mobile sources may be reasonably anticipated to endanger public health or welfare.  I know you’ve probably already read a dozen stories focusing on the intrigue of the Court granting cert on other aspects of the EPA GHG rulemakings.  But those articles by and large whiff on the larger point.  Climate change as a reasonably anticipated environmental and economic threat is the law – and it is a determination unlikely to ever be successfully overturned by a court.

Now that this whole climate change thing is settled (kidding), let me get back to the issue the Court will review.  The Court granted cert over the issue of whether EPA permissibly determined that its regulation of GHG emissions from mobile sources (aka motor vehicles) triggered preconstruction and operating permit requirements under the Clean Air Act for stationary sources (e.g. power plants).

This issue originates from a 2010 EPA determination that regulation of GHGs from motor vehicles automatically requires EPA to regulate GHG emissions from new and modified stationary sources under the prevention of significant deterioration (PSD) program.  Because the PSD program contains statutory emission thresholds for other criteria pollutants, EPA developed a “tailoring” rule to raise those statutory limits vis-à-vis the unique circumstances presented by GHGs.  EPA also developed a “timing” rule that effectively made synchronized the extension of the existing PSD requirements to GHGs.

Opponents to the tailoring rule argue in the DC Circuit that EPA was unlawfully changing statutory permit levels. Some of the petitioners are also more closely focused on the timing rule, which is more directly what the Supreme Court chose to review.  Several questions emerge on where the Court may go on everything, but the options appear to be a narrow review of the timing rule or a much broader review of the manner in which EPA extended PSD and Title V requirements for GHGs to stationary sources.  The nightmare scenario (logistically speaking) would be for the court to upend the tailoring rule in a manner that would require EPA to apply PSD and Title V permitting requirements to very small stationary sources (e.g. a new commercial building).

However, while there isn’t consensus among Clean Air Act experts, there is a dominant view that any Supreme Court ruling would not upend EPA’s actions to regulate CO2 emissions from new or existing power plants under Sections 111(b) (proposed) or 111(d) (forthcoming in 2014).  The 111(d) rule is where long-term climate investment strategies will start to come together.