573 U.S. 302 (2014)
In response to the Supreme Court's 2007 decision in Massachusetts v. EPA, the Environmental Protection Agency issued an Endangerment Finding in December 2009.1 The finding concluded that the combined mix of six greenhouse gases contributes to climate change and endangers public health and welfare.2
EPA then promulgated the Tailpipe Rule in May 2010. It established greenhouse-gas emission standards for new passenger cars, light-duty trucks, and medium-duty passenger vehicles effective January 2, 2011. The Agency also issued a Triggering Rule. That rule stated that stationary sources would become subject to the Prevention of Significant Deterioration program and Title V permitting requirements on the basis of their potential to emit greenhouse gases once the motor-vehicle standards took effect.3
EPA recognized that applying the existing statutory thresholds of 100 or 250 tons per year would sweep in millions of small sources such as office buildings, hotels, and retail establishments. This would occur because greenhouse-gas emissions occur in much greater quantities than conventional pollutants.4 To address this, the Agency promulgated the Tailoring Rule in June 2010, which phased in the requirements over several steps. During Step 1 from January to June 2011, only sources already subject to permitting for conventional pollutants would need to apply best available control technology for greenhouse gases if emitting at least 75,000 tons per year of carbon dioxide equivalent. Step 2 from July 2011 to June 2012 extended permitting to sources emitting 100,000 tons per year of greenhouse gases. Later steps contemplated possible further adjustments down to 50,000 tons per year.5
Petitioners including the Utility Air Regulatory Group, several states, and industry associations challenged EPA's greenhouse-gas actions in the United States Court of Appeals for the District of Columbia Circuit. The D.C. Circuit dismissed some petitions for lack of jurisdiction and denied the remainder. The Supreme Court granted certiorari on the limited question of whether EPA permissibly determined that its regulation of greenhouse gases from new motor vehicles triggered permitting requirements for stationary sources emitting those gases.6
Whether the Clean Air Act compels or permits EPA to require stationary sources to obtain PSD or Title V permits based solely on their potential to emit greenhouse gases?7
The Act neither compels nor permits EPA to adopt an interpretation of the Act requiring a source to obtain a PSD or Title V permit on the sole basis of its potential greenhouse-gas emissions.8 The Act-wide definition of air pollutant includes greenhouse gases. The permitting provisions have long received narrower, context-appropriate constructions limited to regulated pollutants.9 The presumption of consistent usage yields to context.10 An agency interpretation is unreasonable if inconsistent with the design and structure of the statute as a whole.11 An agency interpretation is also unreasonable if it effects an enormous and transformative expansion in regulatory authority without clear congressional authorization.12
No. The Endangerment Finding and Tailpipe Rule established greenhouse-gas standards for motor vehicles effective January 2, 2011. The Triggering Rule then subjected stationary sources to PSD and Title V on the basis of greenhouse-gas emissions alone.13 Yet the Act does not compel this result because, although Massachusetts interpreted the Act-wide definition to include greenhouse gases, EPA had for decades limited the term air pollutant in the PSD and Title V triggers to regulated pollutants. A construction Massachusetts did not disturb.14
The Act does not permit the interpretation because applying the 100- or 250-ton thresholds to greenhouse gases would require permits for millions of small sources such as office buildings, hotels, and retail establishments. This would produce annual permit applications that would jump from roughly 800 to nearly 82,000 under PSD and from fewer than 15,000 to 6.1 million under Title V. Administrative costs would balloon from $12 million to over $1.5 billion and from $62 million to $21 billion respectively.15 These results would be incompatible with the statutory design for a relative handful of large sources capable of shouldering heavy burdens. They would constitute an unheralded expansion of EPA authority that the Agency itself described as unrecognizable to the Congress that designed the programs.16
EPA's greenhouse-gas-inclusive interpretation of the PSD and Title V permitting triggers was impermissible under Chevron.17
Related opinions on this issue
Joined by Justices Ginsburg, Sotomayor, And Kagan
Justice Breyer, concurring in part and dissenting in part, would have sustained EPA's authority by reading an implicit exception into the phrase any source rather than any air pollutant. This would allow the Agency to exempt sources emitting unmanageably small amounts of greenhouse gases while preserving broad coverage of the pollutant definition.18 He reasoned that a source-based exception better advances the statutory purpose of limiting the programs to large industrial sources that can bear the regulatory costs.
It also maintains the flexibility recognized in Massachusetts and avoids draining the Act of its ability to address unforeseen threats such as climate change.19 In his view, the Court's pollutant-based exception went too far and undermined the Act's overall regulatory scheme.20
Joined by Justice Thomas
Justice Alito, concurring in part and dissenting in part, joined the majority in rejecting the greenhouse-gas trigger for non-anyway sources. He agreed that attempting to fit greenhouse gases into the PSD and Title V provisions produces absurd results. EPA could remedy those results only by rewriting the statute's numerical thresholds.21
This confirmed that the Agency lacked authority to require permits based solely on greenhouse-gas emissions. Alito emphasized that the mismatch between the statutory design and greenhouse gases exposed fundamental flaws in extending Massachusetts to these permitting programs.22
Whether EPA has authority under the Clean Air Act to tailor the statutory 100- and 250-ton-per-year permitting thresholds to higher levels for greenhouse gases?23
Agencies must always give effect to the unambiguously expressed intent of Congress. The power to execute the laws does not include a power to revise clear statutory terms that turn out not to work in practice. An agency may not rewrite unambiguous numerical thresholds to suit its own sense of how the statute should operate.24
No. The Tailoring Rule replaced the Act's precise numerical thresholds of 100 or 250 tons per year with a new 100,000-ton threshold for greenhouse gases. It phased in coverage over multiple steps. Yet the statute contains no ambiguity in those specific numbers that would authorize such revision.25 Allowing EPA to alter the thresholds would permit the Agency to decide on an ongoing basis how many of the millions of small sources to regulate.26
This would deal a severe blow to separation of powers by transferring legislative authority to the executive. The Tailoring Rule was not an exercise of enforcement discretion because it purported to alter the statutory requirements with the force of law. It also shielded otherwise-prohibited conduct from citizen suits authorized by the Act.27
EPA lacked authority to tailor the Act's unambiguous numerical thresholds to accommodate its greenhouse-gas-inclusive interpretation of the permitting triggers.28
Related opinions on this issue
Joined by Justices Ginsburg, Sotomayor, And Kagan
Justice Breyer would have permitted EPA to adjust the coverage threshold by reading an implicit exception into the source language. This would allow the Agency to exempt facilities whose greenhouse-gas emissions fall below a sensible regulatory line while still applying the programs to major emitters. He viewed this as the sort of interstitial, expertise-driven decision that Congress typically leaves to agencies under Chevron.29
Breyer argued that such flexibility preserves the Act's ability to address new environmental threats without requiring courts to rewrite the statute's pollutant definition.30
Whether EPA may require sources subject to PSD permitting due to emissions of conventional pollutants to apply best available control technology to their greenhouse-gas emissions?31
The BACT provision requires an emission limitation based on the maximum degree of reduction of each pollutant subject to regulation under the Act that is achievable through application of production processes and available methods, systems, and techniques.32 The specific phrasing of the BACT provision does not suggest that it can bear a narrowing construction.33 Applying BACT to greenhouse gases emitted by anyway sources is not so disastrously unworkable as to render EPA's interpretation unreasonable under Chevron.34
Yes. Sources already required to obtain PSD permits because of conventional pollutants must apply BACT for each pollutant subject to regulation. A phrase that encompasses greenhouse gases once they became regulated under the Act.35 Although BACT has traditionally focused on end-of-stack controls, EPA guidance indicates that energy-efficiency improvements and carbon capture and storage can be considered.36
Longstanding limitations prevent BACT from requiring fundamental redesign of a facility or reductions in grid demand. These constraints mitigate concerns about unbounded regulatory authority.37 The record does not establish that BACT is incapable of sensible application to greenhouse gases from anyway sources that already account for the vast majority of stationary-source emissions.38
EPA may require anyway sources to comply with BACT for their greenhouse-gas emissions.39
Related opinions on this issue
Joined by Justice Thomas
Justice Alito, concurring in part and dissenting in part, dissented from the BACT holding. He argued that BACT analysis is fundamentally incompatible with greenhouse gases because the statute requires case-by-case consideration of ambient air quality impacts at the site and in affected areas. A requirement that cannot coherently apply to pollutants whose effects are global rather than local.40
He further contended that EPA's guidance on balancing environmental benefits against collateral impacts produces arbitrary and inconsistent decisionmaking. Permitting authorities cannot meaningfully calculate the localized benefits of any particular reduction in greenhouse-gas emissions.41
Joined by Justices Ginsburg, Sotomayor, And Kagan
Justice Breyer joined the majority in holding that anyway sources must apply BACT to greenhouse-gas emissions. He agreed that the text of the BACT provision is clear and that practical concerns do not render the requirement unreasonable. Breyer viewed the BACT requirement for anyway sources as a modest and workable extension of existing PSD obligations that would not undermine the statutory scheme.
He stressed that this approach preserved the Act's flexibility to regulate greenhouse gases for major sources while avoiding the administrative overreach that would accompany broader coverage.42