In Massachusetts v. EPA, the Supreme Court concluded that greenhouse gases, including CO2, are “air pollutants,” the it left (barely) open the question whether CO2 is “subject to regulation” under the Clean Air Act (“CAA”).
Following Massachusetts v. EPA, there have been a number of cases in which advocates of climate change regulation have sought to require EPA to regulate CO2 as a pollutant. One of those cases, In re Deseret Power Electric Cooperative, was just decided by the EPA Environmental Appeals Board. In Deseret Power, the Sierra Club had challenged issuance of a PSD permit issued by EPA Region 8 which would have allowed Deseret Power to construct a coal-fired power plant near Bonanza Utah. The basis for the challenge was the failure of EPA to impose a best available control technology, or BACT, limit on CO2 emissions.
Notwithstanding the decision in Massachusetts v. EPA, EPA took the position that it historically had not interpreted the term “subject to regulation under the Act” to include CO2. Moreover, it claimed in Deseret Power that it did not have authority to impose a BACT limit on CO2 emissions. The EAB firmly rejected EPA’s position that it did not have authority to impose BACT limits on CO2. However, the EAB also rejected the Sierra Club’s argument that EPA was required to impose compliance with BACT for CO2. In fact, the EAB concluded that “the statute is not so clear and unequivocal as to preclude Agency interpretation of the phrase ‘subject to regulation under this act,’ and therefore the statute does not dictate whether the Agency must impose a BACT limit for CO2.”
So where does the Deseret Power decision leave the regulation of CO2 under the CAA? Probably pretty much where it was before the decision was issued – that is, right in the lap of the new administration. However, if I were a betting man, I would certainly be reluctant to back new ventures that involve significant CO2 emissions unless the developer has a plan for addressing CO2 emissions.