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NAAQS May Help EPA Achieve Greenhouse Gas Reductions, Should Clean Power Plan not Survive Challenges

Legal challenges and the recent U.S. presidential election have left the future uncertain for the Clean Power Plan, which regulates greenhouse gases from existing power plants under the Clean Air Act. Should the Clean Power Plan be weakened or not survive challenges, then stakeholders may litigate in an attempt to force the U.S. Environmental Protection Agency (EPA) to use other authorities under the Clean Air Act to regulate greenhouse gas emissions. Authors of a new working paper by the Duke University’s Nicholas Institute for Environmental Policy Solutions and the University of North Carolina’s Center for Climate, Energy, Environment, and Economics examine how the National Ambient Air Quality Standards (NAAQS) program might be used to regulate greenhouse gases in the future to achieve greenhouse gas reduction goals if the EPA must take this approach.

What are the possible legal outcomes of the Clean Power Plan that could force the EPA to regulate greenhouse gases under the NAAQS Program?

There are a number of possible outcomes of the litigation on the Clean Power Plan. If the ultimate decision is that the EPA either cannot regulate existing fossil fuel-fired power plants under Section 111(d) of the Clean Air Act or cannot include generation shifting when setting the rule’s stringency, then stakeholders may seek to use NAAQS. Further, President-Elect Donald Trump has stated he would “scrap” the Clean Power Plan. If he does, then stakeholders would likely sue, seeking to force the EPA to use the NAAQS program to reduce greenhouse gas emissions.

What exactly gives the EPA the ability to regulate greenhouse gases under NAAQS?

To start, the Supreme Court precedent, including Massachusetts v. EPA and American Electric Power v. Connecticut, state that the EPA can regulate greenhouse gases under the Clean Air Act. One of the main pillars of the Clean Air Act is the NAAQS program. The triggering tests for regulating under this program require that a pollutant “endanger public health and welfare” and come from “numerous or diverse” sources. Greenhouse gases satisfy these two tests.

Could a NAAQS program for greenhouse gas reduction bear any resemblance to the Clean Power Plan?

The language of the Clean Air Act gives states and the EPA a lot of flexibility to implement the NAAQS program for specific pollutants meaning that states and the EPA could take many of the same mechanisms from the Clean Power Plan and apply them to the power sector in a NAAQS implementation plan. In fact, Section 111(d) of the Clean Air Act relies on NAAQS-like state plans that are sector specific.

One of the key provisions of the Clean Power Plan allowed states to create “trading ready” plans. Is this type of approach possible under the NAAQS program?

Yes, based on the language of the Clean Air Act as well as the precedent of existing trading programs under the NAAQS program. The plain language of the Clean Air Act encourages states to use “economic incentives such as fees, marketable permits, and auctions of emissions rights” in their state implementation plans. This language clearly anticipates, and encourages, the use of trading as a mechanism for compliance. Additionally, the NAAQS program could build on the trading options of the Clean Power Plan because it applies economy wide, and thus could include multi-sector trading rather than a narrowly confined category of sources, like those of Section 111. 

EPA has so far chosen not to develop a NAAQS for GHGs. What are the challenges?

In contrast to Section 111(d) of the Clean Air Act, the NAAQS program is highly detailed, and it was written with localized pollutants in mind. Applying NAAQS to greenhouse gases would require the EPA to address a number of thorny issues where greenhouse gases don’t fit neatly into the structure of NAAQS.

For example, even small sources emit large levels of greenhouses gases that may require them to obtain permits under the program. Thus, the program will be challenging without effective streamlining for these small sources that’s legally acceptable.

Additionally, most greenhouse gases are “well-mixed,” meaning their concentration is similar around the world regardless of where the emissions arise. Given this characteristic, the level where the EPA sets the NAAQS standard matters a lot because all states would be either in or out of compliance with the standard. Moreover, because international emissions affect the global concentration level, states have limited control over their state’s specific greenhouse gas concentration level.

Why might stakeholders seek to force the EPA to use the NAAQS program?

Assuming that neither the Supreme Court nor Congress acts to remove greenhouse gases from the definition of “pollutant” under the Clean Air Act, even if executive action or litigation severely weakens or invalidates the Clean Power Plan, the EPA would still hold the authority to regulate greenhouse gas emissions from the power sector. Existing legal precedent demonstrates that the EPA’s regulation under the NAAQS program may be mandatory. In the case of lead, the Second Circuit Court of Appeals ruled that the EPA was required to regulate lead under the NAAQS program because it made an endangerment finding and because lead was emitted from numerous diverse sources, satisfying two of the three tests in the triggering use of the NAAQS program. Given this precedent and stakeholder interest in reducing greenhouse gas emissions, groups may litigate in an attempt to force the EPA to use the NAAQS program.

However, the EPA has argued that regardless of the precedent from the lead case, the agency is not required to regulate greenhouse gas emissions under the NAAQS program. That does not constrain any other circuit court or the Supreme Court from finding that the EPA does have discretion to decide whether to regulate under the NAAQS program.

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To read this working paper, visit our website. Nicholas Institute authors Christina Reichert, Franz Litz, Tim Profeta, and Sarah Adair are available for comment by contacting Erin McKenzie, erin.mckenzie@duke.edu or 919.613.3652.