The federal appeals court decision today to uphold U.S. EPA's basis for regulating greenhouse gas emissions stripped industry of several of its most well-worn arguments against EPA climate rules, including that they could someday apply to small emitters like churches and bakeries.

The court upheld EPA's so-called tailoring rule, which places the threshold for regulation of carbon dioxide emissions at 100,000 tons per year for new sources and 75,000 tons per year for expanded sources. The Clean Air Act generally sets the bar at 250 tons per year of a regulated pollutant, and opponents of EPA regulation have warned for years that EPA had no authority to exempt smaller emitters.

EPA Administrator Lisa Jackson said the ruling is a "strong validation" of the agency's greenhouse gas rules.

"I am pleased that the U.S. Court of Appeals for the D.C. Circuit found that EPA followed both the science and the law in taking common-sense, reasonable actions to address the very real threat of climate change by limiting greenhouse gas pollution from the largest sources," Jackson said.

Last week Robb MacKie, president and CEO of the American Bakers Association, expressed concern at a House Energy and Commerce Committee hearing that EPA could someday regulate carbon dioxide from rising bread.

At the 250-ton threshold, a particularly busy baking month could constitute a "major modification" and require a midsize bakery to apply for an EPA permit, he said (Greenwire, June 19).

But the court's decision confirms that EPA is on firm legal ground with its tailoring rule. It also means that barring appeal of the court's decision, industry can no longer challenge the scientific underpinnings of EPA's 2009 endangerment finding for carbon dioxide.

"This opinion pretty much lays to rest any attempts to challenge future regulation based on findings that greenhouse gas pollutants endanger public health and welfare," said David Baron, a lawyer for the environmental law firm Earthjustice.

"Industry and states raised all of these objections to the science based on really peripheral claims about a few emails and a few inaccuracies amongst 18,000 studies," he said. "The court overwhelmingly rejected those attempts to question the climate science."

Opponents of EPA's regulatory regime have frequently pointed to the so-called Climategate emails, which they said showed climate scientists falsifying data on climate-related research, to argue that greenhouse gas emissions do not constitute a threat to public health. While Climategate may continue to be a talking point on Capitol Hill and elsewhere, the court's decision means it will not be a basis for legal challenges to EPA rules in the future.

Environmentalists applauded the court's decision.

Vickie Patton, general counsel for the Environmental Defense Fund, called it "a good day for climate progress in America and for the thin layer of atmosphere that sustains life on Earth."

Representatives of the utility industry expressed disappointment with the ruling but said it "isn't surprising" given the three-judge panel's reactions to the arguments in late February (Greenwire, Feb. 28).

Scott Segal, director of the Electric Reliability Coordinating Council, a coalition of power companies, noted that challengers typically have to meet a high standard in order to successfully undo an EPA regulation.

"There is always a fairly high burden for a court to set aside a rule," said Segal, who is also a lobbyist at Bracewell & Giuliani.

Others who were involved in the case said the ruling will have an economic effect and cast EPA greenhouse gas regulations as "damaging" and "devastating."

"EPA's decision to move forward with these regulations is one of the most costly, complex and burdensome regulations facing manufacturers," said Jay Timmons of the National Association of Manufacturers. "These regulations will harm their ability to hire, invest and grow. By moving forward, the EPA is adding to the mounting uncertainty facing manufacturers of all sizes."

Relevance to future regs

Environmentalists and business groups disagreed on the ruling's effect on future EPA regulations.

David Doniger of the Natural Resources Defense Council said it gave EPA a "green light" to proceed with its future carbon dioxide regulations for power plants, petroleum refineries and other sources.

Joe Mendelson, director of global warming policy at the National Wildlife Federation, said that the court's decision would strictly limit what challenges could be brought against EPA greenhouse gas rules in the future.

"What it does mean, I think, is that if there are any future challenges to when those rules come out, it's going to be sort of skirmishes over little-scope pieces of regulation but not over the authority of the whole to go forward," he said.

But despite the sweeping nature of the case -- judges took the unusual step of holding hearings on two days because of its size -- industry officials sought to portray the ruling in a narrow light.

They argued that while the opinion upholds EPA's ability to regulate carbon emissions under the Clean Air Act, it does not have a bearing on recent or future agency rulemaking. Most notably, EPA proposed limiting carbon air emissions from power plants for the first time this year and is expected to put forth similar regulations for the refining sector.

"What today does is answer a threshold question of whether or not carbon is proper for the agency [to regulate], but it doesn't go farther than that," Segal said.

Further, Lisa Jaeger of Bracewell & Giuliani, who was a former general counsel at EPA, said the ruling underscores the need for Congress to pursue aggressive and continued oversight of the agency's efforts to regulate carbon emissions.

"The basis of EPA's exercise of authority [in this case] is effectively a rewrite of the Clean Air Act," Jaeger said. "To accomplish its goals under these rules, EPA needed to change clear terms of the act, and Congress should stand up and pay attention."

Congressional Republicans have been particularly critical of EPA's greenhouse gas proposal for power plants, arguing that it is part of EPA's "war on coal." A House Energy and Commerce subcommittee is holding a hearing on the proposed rules that will feature testimony from EPA air chief Gina McCarthy on Friday, when today's ruling will undoubtedly come up.