EPA Announces Endangerment Finding, Sets Federal Regulatory Framework for Regulating Greenhouse Gases

On Tuesday, December 8, 2009, the U.S. Environmental Protection Agency declared that greenhouse gas emissions pose a health hazard through the formal announcement of its "endangerment finding." The decision provides the Obama Administration with the legal authority under the Clean Air Act to cap greenhouse emissions in the event that Congress fails to act on climate change legislation. The new finding also bolstered other regulations making their way through the regulatory process.

The EPA has been very aggressive in exercising its regulatory powers in the area of climate change since the change in Administration. Two months ago, the EPA finalized a rule requiring facilities which emit more than 25,000 tons of carbon dioxide equivalent to begin collecting and reporting emissions data.

The EPA is also working to finalize a proposed rule which would establish the threshold for regulating carbon dioxide equivalents at 25,000 ton per year, thereby exempting smaller sources from regulations. This rule, referred to as the "tailoring rule," is expected to be finalized in 2010. Large emitters under the tailoring rule could face strict EPA regulations designed to implement emission reduction strategies and the use of new equipment to achieve compliance.

With the issuance of the endangerment finding, the EPA's legal authority to implement a broad regulatory regime for all greenhouse gases appears to be complete.