[Federal Register Volume 68, Number 173 (Monday, September 8, 2003)]
[Notices]
[Pages 52922-52933]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-22764]


-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

[FRL-7554-7]


Control of Emissions From New Highway Vehicles and Engines

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of denial of petition for rulemaking.

-----------------------------------------------------------------------

SUMMARY: A group of organizations petitioned EPA to regulate emissions 
of carbon dioxide and other greenhouse gases from motor vehicles under 
the Clean Air Act. For the reasons set forth in this notice, EPA is 
denying the petition.

EFFECTIVE DATE: September 8, 2003.

ADDRESSES: Information relevant to this action is contained in Docket 
No. A-2000-04 at the EPA Docket Center, Public Reading Room, Room B102, 
EPA West Building, 1301 Constitution Avenue, NW., Washington, DC. 
Dockets may be inspected at this location from 8:30 a.m. to 4:30 p.m., 
Monday through Friday, except on Government holidays. You can reach the 
Air Docket by telephone at (202) 566-1742 and by facsimile at (202) 
566-1741. You may be charged a reasonable fee for photocopying docket 
materials, as provided in 40 CFR part 2.

FOR FURTHER INFORMATION CONTACT: Chitra Kumar, Office of Air and 
Radiation, (202) 564-1389.

SUPPLEMENTARY INFORMATION:

I. Background

    On October 20, 1999, the International Center for Technology 
Assessment (ICTA) and a number of other organizations \1\ petitioned 
EPA to

[[Page 52923]]

regulate certain greenhouse gas (GHG) emissions from new motor vehicles 
and engines under section 202(a)(1) of the Clean Air Act (CAA). 
Specifically, petitioners seek EPA regulation of carbon dioxide 
(CO2), methane (CH4), nitrous oxide 
(N2O), and hydrofluorocarbon (HFCs) emissions from new motor 
vehicles and engines. Petitioners claim these emissions are 
significantly contributing to global climate change.
---------------------------------------------------------------------------

    \1\ Alliance for Sustainable Communities, Applied Power 
Technologies, Bio Fuels America, California Solar Energy Industries 
Association, Clements Environmental Corporation, Environmental 
Advocates, Environmental and Energy Study Institute, Friends of the 
Earth, Full Circle Energy Project, Green Party of Rhode Island, 
Greenpeace USA, Network for Environmental and Economic 
Responsibility of the United Church of Christ, New Jersey 
Environmental Watch, New Mexico Solar Energy Association, Oregon 
Environmental Council, Public Citizen, Solar Energy Industries 
Association, SUN DAY Campaign.
---------------------------------------------------------------------------

    EPA is authorized to regulate air pollutants from motor vehicles 
under title II of the CAA. In particular, section 202(a)(1) provides 
that ``the Administrator [of EPA] shall by regulation prescribe * * * 
in accordance with the provisions of [section 202], standards 
applicable to the emission of any air pollutant from any class or 
classes of new motor vehicle * * *, which in his judgment cause, or 
contribute to, air pollution which may reasonably be anticipated to 
endanger public health or welfare.''

II. Summary of the Petition

    Petitioners contend the test for regulating motor vehicle emissions 
under CAA section 202(a)(1) has been met for CO2, 
CH4, N2O and HFCs. They claim statements made on 
EPA's Web site and in other documents constitute an Agency finding that 
the four GHGs may reasonably be anticipated to endanger public health 
or welfare. They also assert that motor vehicle emissions of the GHGs 
could be significantly reduced by increasing the fuel economy of 
vehicles, eliminating tailpipe emissions altogether, or using other 
current and developing technologies. Based on their analysis, they 
argue that EPA has a mandatory duty under section 202(a)(1) to regulate 
emissions of GHGs from motor vehicles.
    Petitioners present their case for why EPA should, and even must, 
regulate motor vehicle GHG emissions under section 202(a)(1) in four 
parts. First, they assert that anthropogenic emissions of 
CO2, CH4, N2O, and HFCs meet the CAA 
section 302(g) definition of ``air pollutant,'' which is ``any air 
pollution agent or combination of such agents, including any physical, 
chemical, biological, radioactive * * * substance or matter which is 
emitted into or otherwise enters ambient air. Such term includes any 
precursors to the formation of any air pollutant * * *.'' Citing 
international and national reports, petitioners contend that 
anthropogenic emissions of CO2, CH4, 
N2O, and HFCs are accelerating global warming, and that 
motor vehicle emissions of these GHGs, particularly CO2, 
significantly contribute to the U.S. GHG inventory. Petitioners argue 
that the contribution of motor vehicle GHG emissions to global climate 
change qualify them as ``air pollutants'' under the CAA.
    Petitioners also claim that EPA has already determined 
CO2 to be an air pollutant. They cite an April 10, 1998, 
memorandum from Jonathan Z. Cannon, then General Counsel of EPA, to 
Carol Browner, then Administrator of EPA, entitled ``EPA's Authority to 
Regulate Pollutants Emitted by Electric Power Generation Sources'' 
(hereinafter ``Cannon Memorandum''). The memorandum states that sulfur 
dioxide, nitrogen oxides, mercury, and CO2 emitted from 
electric power generating units fall within the definition of ``air 
pollutant'' under CAA section 302(g). According to petitioners, it 
follows from the memorandum that the other three GHGs meet the CAA 
definition of ``air pollutant,'' too.
    Second, petitioners argue that GHG emissions contribute to 
pollution that ``may reasonably be anticipated to endanger public 
health or welfare,'' a key criterion for regulation under section 
202(a)(1). Petitioners state that the CAA does not require proof of 
actual harm, but allows the Administrator to make a precautionary 
decision to regulate an air pollutant if it ``may reasonably be 
anticipated'' to endanger public health or welfare. The petitioners 
point to statements made by the United Nations Intergovernmental Panel 
on Climate Change (IPCC), EPA and others about the potential effects of 
global climate change on public health and welfare as establishing that 
global climate change ``may reasonably be anticipated to endanger 
public health and welfare.'' Based on these statements, the petitioners 
allege numerous threats to public health and welfare.
    Third, petitioners argue that it is technically feasible to reduce 
GHG emissions from new motor vehicles and engines. In particular, they 
note that CO2 emissions can be reduced by increasing the 
fuel economy of passenger cars and light trucks, and that a number of 
currently available gasoline-powered cars get significantly better fuel 
economy than the 27.5 mpg corporate average fuel economy (CAFE) 
standard currently applicable to cars under Federal law. They also 
point to a congressional report identifying other technologies for 
further improving the fuel economy of gasoline-powered cars that have 
yet to be fully employed. In addition, petitioners note that several 
foreign and domestic car manufacturers are already marketing or 
developing hybrid-electric vehicles that get significantly better fuel 
mileage than the most fuel-efficient gasoline-powered car. Looking 
ahead to the next generation of vehicle technology, petitioners 
describe the potential for electric and hydrogen-celled vehicles to 
eliminate tailpipe emissions altogether. Petitioners recommend that EPA 
set a ``corporate average fuel-economy based standard'' under CAA 
section 202 that would result in the rapid market introduction of more 
fuel-efficient and zero-emission vehicles.
    Petitioners suggest other potential ways of reducing CO2 
emissions such as setting a declining fleet average NOX 
emission standard that would require manufacturers to add zero-emission 
vehicles to their fleets. They also note the availability of tire 
efficiency standards. Petitioners do not, however, address the 
potential for reducing motor vehicle emissions of the other three GHGs.
    Finally, petitioners maintain that the Administrator has a 
mandatory duty to regulate motor vehicle GHG emissions under CAA 
section 202(a)(1). They contend that EPA has ``already made formal 
findings'' that motor vehicle GHG emissions ``pose[] actual or 
potential harmful effects [on] the public health and welfare.'' Noting 
that section 202(a)(1) provides the Administrator ``shall'' prescribe 
motor vehicle standards, petitioners argue that the use of ``shall'' 
creates a mandatory duty to promulgate standards when the requisite 
findings are made. They accordingly claim that the Administrator must 
establish motor vehicle standards for the four GHGs.
    Petitioners further argue that ``the precautionary purpose of the 
CAA supports'' regulating these gases even if the Agency believes there 
is some scientific uncertainty regarding the actual impacts of global 
climate change. Petitioners cite several court cases recognizing the 
Administrator's authority to err on the side of caution in making 
decisions in areas of scientific uncertainty. They also assert that 
scientific uncertainty does not excuse a mandatory duty to regulate.

III. Request for Comment

    On January 23, 2001, EPA requested public comment on the petition 
(see 66 FR 7486). The public comment period ended May 23, 2001.
    EPA requested comment on all the issues raised in ICTA's petition. 
In particular, EPA requested comment on any scientific, technical, 
legal, economic or other aspect of these issues that may

[[Page 52924]]

be relevant to EPA's consideration of the petition.

IV. Summary of Public Comments

    EPA received almost 50,000 comments on the petition. Most comments 
were relatively brief expressions of support for the petition sent by 
electronic mail; many were virtually identical. EPA also heard from a 
number of business and environmental groups. Most of the comments 
focused exclusively on CO2. This section describes the 
significant points and arguments made in the public comments.
    Several commenters addressed the issue of whether the four GHGs--
CO2, CH4, N20 and HFCs--are ``air pollutants'' under the CAA 
and thus potentially subject to regulation under the Act. Some of the 
commenters agreed with the petitioners that GHGs are air pollutants 
under the CAA. Like the petitioners, they noted that the definition of 
``air pollutant'' in CAA section 302(g) is very broad and that the CAA 
itself refers to CO2 as an ``air pollutant'' (see CAA 
section 103(g)). These commenters also cited to and agreed with the 
Cannon Memorandum and statements by Gary Guzy, EPA's General Counsel 
following Mr. Cannon, that CO2 falls within the CAA 
definition of air pollutant.
    Other commenters argued that EPA has never formally determined that 
any GHGs are air pollutants and that the Cannon Memorandum is not such 
a finding. Some commenters also argued that CO2 is not an 
air pollutant because it is a naturally-occurring substance in Earth's 
atmosphere and is critical to sustaining life. Other commenters pointed 
out that EPA already regulates as air pollutants substances that have 
natural as well as anthropogenic sources where human activities have 
increased the quantities present in the air to levels harmful to public 
health, welfare or the environment (e.g., sulfur dioxide, volatile 
organic compounds, particulate matter).
    Another issue of concern to commenters was whether EPA has 
authority to regulate motor vehicle emissions of GHGs even if they meet 
the CAA definition of ``air pollutant.'' Commenters supportive of the 
petition noted the broad authority conferred by section 202(a)(1) to 
regulate motor vehicle emissions that cause or contribute to air 
pollution that may reasonably be anticipated to endanger public health 
and welfare. These commenters also noted that CAA section 302(h) 
defines ``welfare'' to include effects on weather and climate, as well 
as other aspects of the environment that may be affected by global 
climate change (e.g., soils, water, crops, vegetation, animals, 
visibility).
    Other commenters argued that the CAA does not authorize regulations 
to address global climate change, including motor vehicle GHG emission 
standards. They noted that no CAA provision specifically authorizes 
global climate change regulations, a Senate committee's proposal for 
mandatory CO2 standards for motor vehicles did not survive 
Senate consideration, and other contemporaneous legislative proposals 
for mandatory GHG emission reductions failed to pass. They also pointed 
out that the only CAA provision that specifically mentions 
CO2 authorizes only ``nonregulatory'' measures and expressly 
precludes its use as authority for imposing mandatory controls. They 
cited another CAA provision that calls on EPA to determine the ``global 
warming potential'' of certain pollutants but expressly precludes 
regulation on that basis as further indication that Congress did not 
intend EPA to regulate GHGs under the CAA.
    Looking at the CAA more broadly, several commenters argued that the 
key statutory mechanism for controlling pervasive ``air pollutants''--
establishing and implementing national ambient air quality standards 
under sections 108, 109 and 110--is unworkable for addressing an issue 
whose causes and effects are global in nature. Several commenters also 
pointed out that Congress addressed another global atmospheric issue, 
depletion of stratospheric ozone by man-made substances, explicitly and 
in discrete portions of the Act, specifically part B of title 1 prior 
to the CAA Amendments of 1990 and title VI following the 1990 
amendments. Moreover, both incarnations of CAA stratospheric ozone 
authority included recognition of the international nature of the 
problem and provisions to facilitate and augment international 
cooperation in achieving a solution. These commenters argued that if 
Congress had intended EPA to address global climate change under the 
CAA, it would have made that clear by including analogous provisions.
    Placing the CAA in a larger context, the commenters noted several 
other Federal statutes that specifically address global climate change 
and authorize only research and policy development, not regulation. 
Commenters also pointed out that Congress has expressed dissatisfaction 
with the Kyoto Protocol, negotiated under the auspices of the United 
Nations Framework Convention on Climate Change and requiring parties to 
the Protocol to reduce their GHG emissions by a specific amount. They 
further cited congressional actions taken since the 1990 CAA amendments 
to prevent EPA from implementing the Kyoto Protocol (the so-called 
Knollenberg amendments to the FY 1999 and 2000 VA-HUD and Independent 
Agency Appropriations Acts). Finally, they noted that Congress had 
rejected numerous legislative proposals mandating GHG reductions (see, 
e.g., S. 1224, 101st Cong. (1989); H.R. 5966, 101st Cong. (1990)) . 
According to the commenters, these actions clearly signal that Congress 
awaits further scientific information and other technological and 
international developments before authorizing any regulation to address 
global climate change.
    Finally, several commenters pointed to the Supreme Court's decision 
in Food and Drug Administration v. Brown & Williamson Tobacco Corp., 
120 S.Ct. 1291 (2000), finding that the FDA lacks authority to regulate 
tobacco products despite a facially broad grant of authority. These 
commenters warned that a reviewing court would closely scrutinize and 
likely strike down an EPA assertion of CAA authority to regulate for 
global climate change purposes when Congress specifically addressed the 
issue of global climate change, not in the CAA, but in other Federal 
statutes that do not authorize regulation.
    On the other hand, several commenters pointed to, and agreed with, 
a letter from then EPA General Counsel Guzy to a congressional 
committee explaining that explicit mention of a pollutant is not a 
necessary prerequisite to regulation under a statutory provision 
granting broad authority to regulate pollutants, provided that the 
statutory criteria for regulation are met. These commenters also echoed 
Mr. Guzy's view that a congressional decision not to require standards 
does not affect pre-existing discretionary authority to set standards 
where the applicable criteria are met.
    Many commenters considered the issue of whether anthropogenic GHG 
emissions contribute to air pollution that may reasonably be 
anticipated to endanger public health or welfare. Several commenters 
pointed out, as petitioners did, that EPA's climate website and other 
national and international reports describe hazards to human health and 
welfare that may result from global climate change. Other commenters 
claimed that there is no basis at this time for EPA to conclude that 
GHG emissions from U.S. motor vehicles endanger public health or 
welfare. Some commenters questioned

[[Page 52925]]

whether global warming was occurring or whether humans' impact on any 
global warming was significant. These commenters also suggested that 
global warming, if real, would have beneficial impacts (e.g., helping 
prevent another ice age, increasing agricultural production) that could 
outweigh any adverse effects. Several commenters argued that since the 
causes and effects of global climate change occur on a worldwide basis, 
regulation of only U.S. motor vehicles would be neither effective nor 
fair.
    Commenters also addressed whether it is technologically feasible to 
reduce GHG emissions from new motor vehicles. Some commenters described 
categories of technologies that can substantially reduce CO2 
emissions from gasoline-powered passenger cars and light trucks, 
including vehicle load reduction, engine improvements, improved 
transmissions, integrated starter generators, and hybrid-electric drive 
trains. Vehicle load reduction strategies include reduced vehicle mass, 
reduced aerodynamic drag, reduced tire rolling resistance, and reduced 
accessory loads. Engine improvement strategies include improved 
specific power and gasoline direct injection. Improved transmission 
strategies include 5- and 6-speed automatic transmissions, 5-speed 
motorized manual gearshifts, and continuously variable transmissions. 
Other commenters asserted that EPA may not regulate motor vehicle GHG 
emissions by setting fuel economy standards inasmuch as Congress 
entrusted fuel economy standard-setting to the Department of 
Transportation (DOT) under the Energy Policy and Conservation Act 
(EPCA).
    Finally, commenters considered whether EPA has a mandatory duty to 
regulate motor vehicle GHG emissions. Some commenters agreed with 
petitioners that the Cannon Memorandum and EPA's website statements 
triggered an obligation under CAA section 202(a)(1) to set 
CO2 standards. Other commenters countered that the Cannon 
Memorandum and EPA website statements are not formal EPA findings for 
the purposes of exercising statutory authority. They asserted that for 
findings to provide a sufficient legal basis for regulating under 
section 202(a)(1), they must be established through a public notice-
and-comment process.

V. EPA Response

    After careful consideration of petitioners' arguments and the 
public comments, EPA concludes that it cannot and should not regulate 
GHG emissions from U.S. motor vehicles under the CAA. Based on a 
thorough review of the CAA, its legislative history, other 
congressional action and Supreme Court precedent, EPA believes that the 
CAA does not authorize regulation \2\ to address global climate change. 
Moreover, even if CO2 were an air pollutant generally 
subject to regulation under the CAA, Congress has not authorized the 
Agency to regulate CO2 emissions from motor vehicles to the 
extent such standards would effectively regulate car and light truck 
fuel economy, which is governed by a comprehensive statute administered 
by DOT.
---------------------------------------------------------------------------

    \2\ ``Regulation'' as used in this section of the notice refers 
to legally binding requirements promulgated by an agency under 
statutory authority. It does not include voluntary measures that 
emission sources may or may not undertake at their discretion.
---------------------------------------------------------------------------

    In any event, EPA believes that setting GHG emission standards for 
motor vehicles is not appropriate at this time. President Bush has 
established a comprehensive global climate change policy designed to 
(1) answer questions about the causes, extent, timing and effects of 
global climate change that are critical to the formulation of an 
effective, efficient long-term policy, (2) encourage the development of 
advanced technologies that will enable dramatic reductions in GHG 
emissions, if needed, in the future, and (3) take sensible steps in the 
interim to reduce the risk of global climate change. The international 
nature of global climate change also has implications for foreign 
policy, which the President directs. In view of EPA's lack of CAA 
regulatory authority to address global climate change, DOT's authority 
to regulate fuel economy, the President's policy, and the potential 
foreign policy implications, EPA declines the petitioners' request to 
regulate GHG emissions from motor vehicles.

A. EPA's Legal Authority Under the CAA

    As summarized above, many commenters on the petition raised 
important legal issues regarding EPA's authority to issue global 
climate change regulations under the CAA. Two EPA General Counsels 
previously addressed the issue of EPA's authority to impose 
CO2 emission control requirements. Both found that 
CO2 meets the CAA definition of ``air pollutant'' and could 
therefore be subject to regulation under one or more of the CAA's 
regulatory provisions if the applicable statutory criteria for 
regulation were met. Both also noted, however, that the Agency had not 
made the requisite findings under any CAA provision for regulation of 
CO2 emissions. Significantly, the past general counsels 
reached their conclusions prior to the Supreme Court's decision in 
Brown & Williamson, which cautions agencies against using broadly 
worded statutory authority to regulate in areas raising unusually 
significant economic and political issues when Congress has 
specifically addressed those areas in other statutes.
    Because the petition seeks CAA regulation of GHG emissions from 
motor vehicles to reduce the risk of global climate change, EPA has 
examined the fundamental issue of whether the CAA authorizes the 
imposition of control requirements for that purpose. As part of that 
examination, EPA's General Counsel, Robert E. Fabricant, reviewed his 
predecessors' memorandum and statements, as well as the public comments 
raising legal authority issues. The General Counsel considered the text 
and history of the CAA in the context of other congressional actions 
specifically addressing global climate change and in light of the 
Supreme Court's admonition in Brown & Williamson to ``be guided to a 
degree by common sense as to the manner in which Congress is likely to 
delegate a policy decision of such * * * magnitude to an administrative 
agency.'' In a memorandum to the Acting Administrator dated August 29, 
2003, the General Counsel concluded that the CAA does not authorize EPA 
to regulate for global climate change purposes, and accordingly that 
CO2 and other GHGs cannot be considered ``air pollutants'' 
subject to the CAA's regulatory provisions for any contribution they 
may make to global climate change. Accordingly, he withdrew the Cannon 
memorandum and statements by Mr. Guzy as no longer expressing the views 
of EPA's General Counsel. The General Counsel's opinion is adopted as 
the position of the Agency for purposes of deciding this petition and 
for all other relevant purposes under the CAA.
    As summarized above, commenters supporting the petition claim that 
section 202 of the CAA provides EPA with broad authority to set 
standards for motor vehicle emissions of CO2 and other GHGs 
to the extent those emissions cause or contribute to global climate 
change. At the same time, other commenters correctly note that (1) no 
CAA provision specifically authorizes global climate change regulation, 
(2) the only CAA provision specifically mentioning CO2 
authorizes only ``nonregulatory'' measures, (3) the codified CAA 
provisions related to global climate change expressly

[[Page 52926]]

preclude the use of those provisions to authorize regulation, (4) a 
Senate committee proposal to include motor vehicle CO2 
standards in the 1990 CAA amendments failed, (5) Federal statutes 
expressly addressing global climate change do not authorize regulation, 
and (6) numerous congressional actions suggest that Congress has yet to 
decide that such regulation is warranted. These indicia of 
congressional intent raise the issue of whether the CAA is properly 
interpreted to authorize regulation to address global climate change.
    Congress was well aware of the global climate change issue when it 
last comprehensively amended the CAA in 1990. During the 1980s, 
scientific discussions about the possibility of global climate change 
led to public concern both in the U.S. and abroad. In response, the 
U.S. and other nations developed the United Nations Framework 
Convention on Climate Change (UNFCCC). President George H. W. Bush 
signed, and the U.S. Senate approved, the UNFCCC in 1992, and the 
UNFCCC took effect in 1994.
    The UNFCCC established the ``ultimate objective'' of 
``stabiliz[ing] greenhouse gas concentrations in the atmosphere at a 
level that would prevent dangerous anthropogenic interference with the 
climate system'' (Article 2 of the UNFCCC). All parties to the UNFCCC 
agreed on the need for further research to determine the level at which 
GHG concentrations should be stabilized, acknowledging that ``there are 
many uncertainties in predictions of climate change, particularly with 
regard to the timing, magnitude and regional patterns thereof'' 
(findings section of UNFCCC).
    Shortly before the UNFCCC was adopted in May 1992, Congress 
developed the 1990 CAA amendments. A central issue for the UNFCCC--
whether binding emission limitations should be set--was also considered 
in the context of the CAA amendments. As several commenters noted, a 
Senate committee included in its bill to amend the CAA a provision 
requiring EPA to set CO2 emission standards for motor 
vehicles. However, that provision was removed from the bill on which 
the full Senate voted, and the bill eventually enacted was silent with 
regard to motor vehicle CO2 emission standards. During this 
same time period, other legislative proposals were made to control GHG 
emissions, some in the context of national energy policy, but none were 
passed (see, e.g., S. 324, 101st Cong. (1989); S. 1224, 101st Cong. 
(1989); H.R. 5966, 101st Cong. (1990)).
    In the CAA Amendments of 1990 as enacted, Congress called on EPA to 
develop information concerning global climate change and 
``nonregulatory'' strategies for reducing CO2 emissions. 
Specifically, uncodified section 821 of the CAA Amendments requires 
measurement of CO2 emissions from utilities subject to 
permitting under title V of the CAA. New section 602 of the CAA directs 
EPA to determine the ``global warming potential'' of substances that 
deplete stratospheric ozone. And new section 103(g) calls on EPA to 
develop ``nonregulatory'' measures for the prevention of multiple air 
pollutants and lists several air pollutants and CO2 for that 
purpose.
    Notably, none of these provisions authorizes the imposition of 
mandatory requirements, and two of them expressly preclude their use 
for regulatory purposes (sections 103(g) and 602). Only the research 
and development provision of the CAA--section 103--specifically 
mentions CO2, and the legislative history of that section 
indicates that Congress was focused on seeking a sound scientific basis 
on which to make future decisions on global climate change, not 
regulation under the CAA as it was being amended. Representatives Roe 
and Smith, two of the principal authors of section 103 as amended, 
explained that EPA's ``science mandate'' needed updating to deal with 
new, more complex issues, including ``global warming'' (A Legislative 
History of the Clean Air Act Amendments of 1990, 103 Cong., 1st Sess., 
S. Prt. 103-38, Vol. 2, pp. 2776 and 2778). They expressed concern that 
EPA's research budget had been too heavily focused on supporting 
existing regulatory actions when the Agency also needed to conduct 
long-term research to ``enhance EPA's ability to predict the need for 
future action'' (id. at 2777).
    In providing EPA with expanded research and development authority, 
however, Congress did not provide commensurate regulatory authority. In 
section 103(g), Congress directed EPA to establish a ``basic 
engineering research and technology program to develop, evaluate and 
demonstrate'' strategies and technologies for air pollution prevention 
and specifically called for improvements in such measures for 
preventing CO2 as well as several specified air pollutants. 
But it expressly provided that nothing in the subsection ``shall be 
construed to authorize the imposition on any person of air pollution 
control requirements.'' As if to drive home the point, section 103(g) 
was revised in conference to include the term ``nonregulatory'' to 
describe the ``strategies and technologies'' the subsection was 
intended to promote. In its treatment of the global climate change 
issue in the CAA amendments, Congress made clear that it awaited 
further information before making decisions on the need for regulation.
    Beyond Congress' specific CAA references to CO2 and 
global warming, another aspect of the Act cautions against construing 
its provisions to authorize regulation of emissions that may contribute 
to global climate change. The CAA provisions addressing stratospheric 
ozone depletion demonstrate that Congress has understood the need for 
specially tailored solutions to global atmospheric issues, and has 
expressly granted regulatory authority when it has concluded that 
controls may be needed as part of those solutions. Like global climate 
change, the causes and effects of stratospheric ozone depletion are 
global in nature. Anthropogenic substances that deplete stratospheric 
ozone are emitted around the world and are very long-lived; their 
depleting effects and the consequences of those effects occur on a 
global scale. In the CAA prior to its amendment in 1990, Congress 
specifically addressed the problem in a separate portion of the statute 
(part B of title I) that recognized the global nature of the problem 
and called for negotiation of international agreements to ensure world-
wide participation in research and any control of stratospheric ozone-
depleting substances. In the 1990 CAA amendments, Congress again 
addressed the issue in a discrete portion of the statute (title VI) 
that similarly provides for coordination with the international 
community. Moreover, both incarnations of the CAA's stratospheric ozone 
provisions contain express authorization for EPA to regulate as 
scientific information warrants. In light of this CAA treatment of 
stratospheric ozone depletion, it would be anomalous to conclude that 
Congress intended EPA to address global climate change under the CAA's 
general regulatory provisions, with no provision recognizing the 
international dimension of the issue and any solution, and no express 
authorization to regulate.
    EPA's prior use of the CAA's general regulatory provisions provides 
an important context. Since the inception of the Act, EPA has used 
these provisions to address air pollution problems that occur primarily 
at ground level or near the surface of the earth. For example, national 
ambient air quality standards (NAAQS) established under CAA section 109 
address concentrations of substances in the ambient air and the related 
public health and welfare problems. This has meant setting

[[Page 52927]]

NAAQS for concentrations of ozone, carbon monoxide, particulate matter 
and other substances in the air near the surface of the earth, not 
higher in the atmosphere. Concentrations of these substances generally 
vary from place to place as a result of differences in local or 
regional emissions and other factors (e.g., topography), although long 
range transport may also contribute to local concentrations in some 
cases. CO2, by contrast, is fairly consistent in 
concentration throughout the world's atmosphere up to approximately the 
lower stratosphere. Problems associated with atmospheric concentrations 
of CO2 are much more like the kind of global problem 
Congress addressed through adoption of the specific provisions of Title 
VI.
    In assessing the availability of CAA authority to address global 
climate change, it is also useful to consider whether the NAAQS 
system--a key CAA regulatory mechanism--could be used to effectively 
address the issue. Unique and basic aspects of the presence of key GHGs 
in the atmosphere make the NAAQS system fundamentally ill-suited to 
addressing these gases in relation to global climate change. Many GHGs 
reside in the earth's atmosphere for very long periods of time. 
CO2, by far the most pervasive of anthropogenic GHGs, has a 
residence time of roughly 50-200 years. This long lifetime along with 
atmospheric dynamics means that CO2 is well mixed throughout 
the atmosphere, up to approximately the lower stratosphere. The result 
is a vast global atmospheric pool of CO2 that is fairly 
consistent in concentration, everywhere along the surface of the earth 
and vertically throughout this area of mixing.
    While atmospheric concentrations of CO2 are fairly 
consistent globally, the potential for either adverse or beneficial 
effects in the U.S. from these concentrations depends on complicated 
interactions of many variables on the land, in the oceans, and in the 
atmosphere, occurring around the world and over long periods of time. 
Characterization and assessment of such effects and the relation of 
such effects to atmospheric concentration of CO2 in the U.S. 
would present scientific issues of unprecedented complexity in the 
NAAQS context. The long-lived nature of the CO2 global pool 
would also make it extremely difficult to evaluate the extent over time 
to which effects in the U.S. would be related to anthropogenic 
emissions in the U.S. Finally, the nature of the global pool would mean 
that any CO2 standard that might be established would in 
effect be a worldwide ambient air quality standard, not a national 
standard--the entire world would be either in compliance or out of 
compliance.
    Such a situation would be inconsistent with a basic underlying 
premise of the CAA regime for implementation of a NAAQS--that actions 
taken by individual states and by EPA can generally bring all areas of 
the U.S. into attainment of a NAAQS. The statutory NAAQS implementation 
regime is fundamentally inadequate when it comes to a substance like 
CO2, which is emitted globally and has relatively homogenous 
concentrations around the world. A NAAQS for CO2, unlike any 
pollutant for which a NAAQS has been established, could not be attained 
by any area of the U.S. until such a standard were attained by the 
entire world as a result of emission controls implemented in countries 
around the world. The limited flexibility provided in the Act to 
address the impacts of foreign pollution transported to the U.S. was 
not designed to address the challenges presented by long-lived global 
atmospheric pools such as exists for CO2. The globally-
pervasive nature of CO2 emissions and atmospheric 
concentrations presents a unique problem that fundamentally differs 
from the kind of environmental problem that the NAAQS system was 
intended to address and is capable of solving.
    Other congressional actions confirm that Congress did not authorize 
regulation under the CAA to address global climate change. Starting in 
1978, Congress passed several pieces of legislation specifically 
addressing global climate change. With the National Climate Program Act 
of 1978, 15 U.S.C. 2901 et seq., Congress established a ``national 
climate program'' to improve understanding of ``climate processes, 
natural and man induced, and the social, economic, and political 
implications of global climate change'' through research, data 
collection, assessments, information dissemination, and international 
cooperation. In the Global Climate Protection Act of 1987, 22 U.S.C. 
2651 note, Congress directed the Secretary of State to coordinate U.S. 
negotiations concerning global climate change, and EPA to develop and 
propose to Congress a coordinated national policy on the issue. Three 
years later, Congress passed the Global Change Research Act of 1990, 15 
U.S.C. 2931 et seq., establishing a Committee on Earth and 
Environmental Sciences to coordinate a 10-year research program. That 
statute was enacted one day after the CAA Amendments of 1990 was signed 
into law. Also in 1990, Congress passed Title XXIV of the Food and 
Agriculture Act, creating a Global Climate Change Program to research 
global climate agricultural issues (section 2401 of Pub. L. 101-624).
    With these statutes, Congress sought to develop a foundation for 
considering whether future legislative action on global climate change 
was warranted and, if so, what that action should be. From Federal 
agencies, it sought recommendations for national policy and further 
advances in scientific understanding and possible technological 
responses. It did not authorize any Federal agency to take any 
regulatory action in response to those recommendations and advances. In 
fact, Congress declined to adopt other legislative proposals, 
contemporaneous with the bills to amend the CAA in 1989 and 1990, to 
require GHG emissions reductions from stationary and mobile sources 
(see, e.g., S. 1224, 101st Cong. (1989); H.R. 5966, 101st Cong. 
(1990)). While Congress did not expressly preclude agencies from taking 
regulatory action under other statutes, its actions strongly indicate 
that when Congress was amending the CAA in 1990, it was awaiting 
further information before deciding itself whether regulation to 
address global climate change is warranted and, if so, what form it 
should take.
    Since 1990, Congress has taken other actions consistent with the 
view that Congress did not authorize CAA regulation for global climate 
change purposes. In the 1992 Energy Policy Act, Congress called on the 
Secretary of Energy to assess various GHG control options and report 
back to Congress, and to establish a registry for reporting voluntary 
GHG emissions. Following ratification of the UNFCCC, nations party to 
the Convention negotiated the Kyoto Protocol calling for mandatory 
reductions in developed nations' GHG emissions. While the Kyoto 
Protocol was being negotiated, the Senate in 1997 adopted by a 95-0 
vote the Byrd-Hagel Resolution, which stated that the U.S. should not 
be a signatory to any protocol that would result in serious harm to the 
economy of the U.S. or that would mandate new commitments to limit or 
reduce U.S. GHG emissions unless the Protocol also mandated new, 
specific, scheduled commitments to limit or reduce GHG emissions for 
developing countries within the same compliance period. Although the 
Clinton Administration signed the Kyoto Protocol, it did not submit it 
to the Senate for ratification out of concern that the Senate would 
reject the treaty. Congress also attached language to appropriations 
bills that barred EPA from implementing the Kyoto Protocol

[[Page 52928]]

without Senate ratification (see, e.g., Knollenberg amendments to the 
FY 1999 and 2000 VA-HUD and Independent Agencies Appropriations Acts). 
Since enactment of the 1990 CAA amendments, numerous bills to control 
GHG emissions from mobile and stationary sources have failed to win 
passage (see, e.g., H.R. 2993, 102d Cong., 1st Sess. 137 Cong. Rec. 
H4611 (daily ed. 1991)).
    Against this backdrop of consistent congressional action to learn 
more about the global climate change issue before specifically 
authorizing regulation to address it, the CAA cannot be interpreted to 
authorize such regulation in the absence of any direct or even indirect 
indication of congressional intent to provide such authority. EPA is 
urged on in this view by the Supreme Court's decision in Brown & 
Williamson, which struck down FDA's assertion of authority to regulate 
tobacco products under the Food, Drug and Cosmetic Act (FDCA). That 
statute contains a broadly worded grant of authority for FDA to 
regulate ``drugs'' and ``devices,'' terms which the statute also 
broadly defines. However, the FDCA does not specifically address 
tobacco products while other Federal laws expressly govern the 
marketing of those products.
    Notwithstanding the FDCA's facially broad grant of authority, the 
Supreme Court explained that ``[i]n extraordinary cases, * * * there 
may be reason to hesitate before concluding that Congress has intended 
such an implicit delegation.'' The Court noted that FDA was 
``assert[ing] jurisdiction to regulate an industry constituting a 
significant portion of the American economy,'' despite the fact that 
``tobacco has its own unique political history'' that had led Congress 
to create a distinct regulatory scheme for tobacco products. The Court 
concluded that FDA's assertion of authority to regulate tobacco was 
``hardly an ordinary case.'' The Court analyzed FDA's authority in 
light of the language, structure and history of the FDCA and other 
federal legislation and congressional action specifically addressing 
tobacco regulation, including failed legislative attempts to confer 
authority of the type FDA was asserting. Based on that analysis, it 
determined that Congress did not ``intend[] to delegate a decision of 
such economic and political significance * * * in so cryptic a 
fashion.''
    It is hard to imagine any issue in the environmental area having 
greater ``economic and political significance'' than regulation of 
activities that might lead to global climate change. Virtually every 
sector of the U.S. economy is either directly or indirectly a source of 
GHG emissions, and the countries of the world are involved in 
scientific, technical, and political-level discussions about climate 
change. We believe, in fact, that an effort to impose controls on U.S. 
GHG emissions would have far greater economic and political 
implications than FDA's attempt to regulate tobacco.
    The most abundant anthropogenic GHG, CO2, is emitted 
whenever fossil fuels such as coal, oil, and natural gas are used to 
produce energy. The production and use of fossil fuel-based energy 
undergirds almost every aspect of the U.S. economy. For example, 
approximately 70 percent of the electric energy used in this country is 
generated from fossil fuel, and the U.S. transportation sector is 
almost entirely dependent on oil.
    Proposals to reduce CO2 emissions from these sectors 
have focused on four major approaches: (1) Improve fuel efficiency; (2) 
capture and sequester CO2; (3) switch to alternative non-
fossil fuel sources; and (4) reduce vehicle usage by switching to 
alternative forms of transportation. Congress has already addressed the 
first approach in other statutes--not the CAA--by giving other 
Departments and agencies--not EPA--regulatory authority to deal with 
fuel and energy efficiency. For example, Congress has authorized DOT to 
set fuel economy standards for motor vehicles and the Department of 
Energy to set efficiency standards for products such as air 
conditioners and appliances that consume electricity.
    The other approaches for reducing CO2 emissions all have 
substantial economic implications. While it may eventually be possible 
to achieve widespread capture and sequester CO2 emissions 
from power plants, such an approach would require a new generation of 
power plants and would be very costly, even if implemented over many 
years. As for the use of alternative fuels, governments and private 
companies around the world are investing billions of dollars to explore 
the possibility of using non-fossil fuels for power generation and 
transportation. Any widespread effort to switch away from fossil fuels 
in either sector would likewise require a wholesale transformation of 
our methods for producing power and transporting goods and people. As 
for alternative modes of transportation, Congress and many states have 
already adopted measures to encourage public transportation, car 
pooling, bike usage, and land-use planning designed to minimize 
commuting distances. EPA supports these measures and believes that they 
provide many environmental benefits. However, widespread substitution 
of alternative forms of transportation for transportation based on 
fossil fuel energy would also require a wholesale remaking of this 
sector. It is hard to overstate the economic significance of making 
these kinds of fundamental and widespread changes in basic methods of 
producing and using energy.
    The issue of global climate change also has enormous political 
significance. It has been discussed extensively during the last three 
Presidential campaigns; it is the subject of debate and negotiation in 
several international bodies; and numerous bills have been introduced 
in Congress over the last 15 years to address the issue.
    In light of Congress' attention to the issue of global climate 
change, and the absence of any direct or even indirect indication that 
Congress intended to authorize regulation under the CAA to address 
global climate change, it is unreasonable to conclude that the CAA 
provides the Agency with such authority. An administrative agency 
properly awaits congressional direction before addressing a fundamental 
policy issue such as global climate change, instead of searching for 
authority in an existing statute that was not designed or enacted to 
deal with the issue. We thus conclude that the CAA does not authorize 
regulation to address concerns about global climate change.
    It follows from this conclusion, that GHGs, as such, are not air 
pollutants under the CAA's regulatory provisions, including sections 
108, 109, 111, 112 and 202. CAA authorization to regulate is generally 
based on a finding that an air pollutant causes or contributes to air 
pollution that may reasonably be anticipated to endanger public health 
or welfare. CAA section 302(g) defines ``air pollutant'' as ``any air 
pollution agent or combination of such agents, including any physical, 
chemical, biological, radioactive * * * substance or matter which is 
emitted into or otherwise enters the ambient air. Such term includes 
any precursors to the formation of any air pollutant[.]'' The root of 
the definition indicates that for a substance to be an ``air 
pollutant,'' it must be an ``agent'' of ``air pollution.'' Because EPA 
lacks CAA regulatory authority to address global climate change, the 
term ``air pollution'' as used in the regulatory provisions cannot be 
interpreted to encompass global climate change. Thus, CO2 
and other GHGs are not ``agents'' of air pollution and do not satisfy 
the CAA section 302(g) definition of ``air pollutant'' for purposes of 
those provisions. We reserve judgment on

[[Page 52929]]

whether GHGs would meet the CAA definition of ``air pollutant'' for 
regulatory purposes were they subject to regulation under the CAA for 
global climate change purposes.\3\
---------------------------------------------------------------------------

    \3\ As General Counsel Fabricant notes in his memorandum, a 
substance does not meet the CAA definition of ``air pollutant'' 
simply because it is a ``physical, chemical, biological, radioactive 
* * * substance or matter which is emitted into or otherwise enters 
the ambient air.'' It must also be an ``air pollution agent.''
---------------------------------------------------------------------------

B. Interference With Fuel Economy Standards

    Even if GHGs were air pollutants generally subject to regulation 
under the CAA, Congress has not authorized the Agency to regulate 
CO2 emissions from motor vehicles to the extent such 
standards would effectively regulate the fuel economy of passenger cars 
and light duty trucks. No technology currently exists or is under 
development that can capture and destroy or reduce emissions of 
CO2, unlike other emissions from motor vehicle tailpipes. At 
present, the only practical way to reduce tailpipe emissions of 
CO2 is to improve fuel economy. Congress has already created 
a detailed set of mandatory standards governing the fuel economy of 
cars and light duty trucks, and has authorized DOT--not EPA--to 
implement those standards. The only way for EPA to proceed with 
CO2 emissions standards without upsetting this statutory 
scheme would be to set a standard less stringent than CAFE for cars and 
light duty trucks. But such an approach would be meaningless in terms 
of reducing GHG emissions from the U.S. motor vehicle fleet.\4\
---------------------------------------------------------------------------

    \4\ Although the ICTA petition focuses on passenger cars and 
light duty trucks, it seeks regulation of GHG emissions generally 
from motor vehicles and engines, which include heavy duty engines 
and trucks. Passenger cars and light duty trucks are subject to CAFE 
standards; heavy duty trucks are not. The contribution of heavy duty 
trucks to the U.S. motor vehicle GHG inventory is relatively small, 
about 16 percent. EPA believes it would be ineffective, inefficient, 
and unreasonable to set CO2 and other GHG reductions from 
the many types of sources of these emissions.
---------------------------------------------------------------------------

    Congress' care in designing the CAFE program makes clear that EPCA 
is the only statutory vehicle for regulating the fuel economy of cars 
and light duty trucks. Under EPCA, DOT may set only ``corporate 
average'' standards that automakers meet on a fleetwide basis. 
Automakers thus have flexibility to design different vehicle models 
having different fuel economy so long as the average of the vehicles 
sold by the automaker in a given model year and class meets the CAFE 
standard for that year. In fact, EPCA offers automakers additional 
flexibility by allowing them to meet the CAFE standard for a given 
model year by ``carrying back'' or ``carrying forward'' the excess fuel 
economy performance of their fleets for the three years before or after 
the applicable model year.
    EPCA also builds in an opportunity for congressional oversight of 
CAFE standard-setting that reinforces the notion that Congress intended 
fuel economy to be governed by EPCA alone. The statute specifies a CAFE 
standard of 27.5 miles per gallon for passenger cars in model years 
1984 and beyond (49 U.S.C. 32902(b)), but authorizes DOT to amend the 
standard to the ``maximum feasible average fuel economy level'' for the 
relevant model year. However, to the extent DOT raises or lowers the 
standards beyond specified levels, EPCA provides an automatic 
opportunity for Congress to disapprove and effectively void the amended 
standard (49 U.S.C. 32902(c)). Given that the only practical way of 
reducing tailpipe CO2 emissions is by improving fuel 
economy, any EPA effort to set CO2 tailpipe standards under 
the CAA would either abrogate EPCA's regime (if the standards were 
effectively more stringent than the applicable CAFE standard) or be 
meaningless (if they were effectively less stringent).

C. No Mandatory Duty

    As explained above, in light of the language, history, structure 
and context of the CAA and Congress' decision to give DOT authority to 
regulate fuel economy under EPCA, it is clear that EPA does not have 
authority to regulate motor vehicle emissions of CO2 and 
other GHGs under the CAA. In any event, the CAA provision authorizing 
regulation of motor vehicle emissions does not impose a mandatory duty 
on the Administrator to exercise her judgment. Instead, section 
202(a)(1) provides the Administrator with discretionary authority to 
address emissions in addition to those addressed by other section 202 
provisions (see, e.g., sections 202(a)(3) and (b)). While section 
202(a)(1) uses the word ``shall,'' it does not require the 
Administrator to act by a specified deadline and it conditions 
authority to act on a discretionary exercise of the Administrator's 
judgment regarding whether motor vehicle emissions cause or contribute 
to air pollution that may reasonably be anticipated to endanger public 
health or welfare.
    The Web site statements, legal memorandum and other documents cited 
by petitioners and commenters in support of the petition are not 
sufficient to satisfy the criteria for setting standards under section 
202(a)(1). Exercise of section 202(a)(1) authority turns on the 
judgment made by the Administrator, and CAA section 301 does not permit 
the Administrator to delegate her standard-setting authority under 
section 202(a)(1). None of the statements petitioners claim constitute 
the requisite endangerment finding for GHGs under section 202(a)(1) 
were made, or subsequently adopted, by the Administrator. As the Cannon 
memorandum stated in 1998, no Administrator had made a finding under 
any of the CAA's regulatory provisions that CO2 meets the 
applicable statutory criteria for regulation. (Notably, the Web site 
statements on which the petitioners partly rely were in existence at 
the time Mr. Cannon issued his memorandum.) That statement remains true 
today--no Administrator has made any finding that satisfies the 
criteria for setting CO2 standards for motor vehicles or any 
other emission source. In any event, for such findings to suffice for 
standard-setting purposes, they must be established through a notice-
and-comment process.
    EPA also disagrees with the premise of the petitioners' claim--that 
if the Administrator were to find that GHGs, in general, may reasonably 
be anticipated to endanger public health or welfare, she must 
necessarily regulate GHG emissions from motor vehicles. Depending on 
the particular problem, motor vehicles may contribute more or less or 
not at all. An important issue before the Administrator is whether, 
given motor vehicles' relative contribution to a problem, it makes 
sense to regulate them. In the case of some types of air pollution, 
motor vehicles may be one of many contributors, and it may make sense 
to control other contributors instead of, or in tandem with, motor 
vehicles. The discretionary nature of the Administrator's section 
202(a)(1) authority allows her to consider these important policy 
issues and decide to regulate motor vehicle emissions as appropriate to 
the air pollution problem being addressed. Accordingly, even were the 
Administrator to make a formal finding regarding the potential health 
and welfare effects of GHGs in general, section 202(a)(1) would not 
require her to regulate GHG emissions from motor vehicles.

D. Different Policy Approach

    Beyond issues of authority and interference with fuel economy 
standards, EPA disagrees with the regulatory approach urged by 
petitioners. We agree with the President that ``we must address the 
issue of global climate change'' (February 14, 2002). We do not 
believe, however, that

[[Page 52930]]

it would be either effective or appropriate for EPA to establish GHG 
standards for motor vehicles at this time. As described in detail 
below, the President has laid out a comprehensive approach to climate 
change that calls for near-term voluntary actions and incentives along 
with programs aimed at reducing scientific uncertainties and 
encouraging technological development so that the government may 
effectively and efficiently address the climate change issue over the 
long term.
    Petitioners cited numerous studies and other sources of information 
in contending that anthropogenic emissions of CO2, 
CH4, N2O, and HFCs are accelerating global 
climate change and that emission of these compounds from motor vehicles 
contribute to the problem. Numerous commenters agreed with petitioners 
and a few cited additional information or studies as further support. 
See ``Summary of Climate Petition Comments on Science'' in the docket 
for this action. Other commenters disagreed with petitioners' 
contentions, citing different data and studies or in some cases 
interpreting the same data and studies differently or emphasizing 
different aspects of the information provided. Id. We reviewed the 
information submitted by petitioners and commenters and concluded that 
all of the information was widely available and in the public domain at 
the time we solicited comments on the petition. The information 
submitted does not add significantly to the body of information 
available to the National Research Council (NRC) when it prepared its 
2001 report, Climate Change Science: An Analysis of Some Key Questions. 
We rely in this decision on NRC's objective and independent assessment 
of the relevant science. The comments submitted to the record do not 
include information that causes us to question the validity of the 
NRC's conclusions.
    As the NRC noted in its report, concentrations of GHGs are 
increasing in the atmosphere as a result of human activities (pp. 9-
12). It also noted that ``[a] diverse array of evidence points to a 
warming of global surface air temperatures'' (p. 16). The report goes 
on to state, however, that ``[b]ecause of the large and still uncertain 
level of natural variability inherent in the climate record and the 
uncertainties in the time histories of the various forcing agents (and 
particularly aerosols), a casual linkage between the buildup of 
greenhouse gases in the atmosphere and the observed climate changes 
during the 20th century cannot be unequivocally established. The fact 
that the magnitude of the observed warming is large in comparison to 
natural variability as simulated in climate models is suggestive of 
such a linkage, but it does not constitute proof of one because the 
model simulations could be deficient in natural variability on the 
decadal to century time scale'' (p. 17).
    The NRC also observed that ``there is considerable uncertainty in 
current understanding of how the climate system varies naturally and 
reacts to emissions of [GHGs] and aerosols'' (p. 1). As a result of 
that uncertainty, the NRC cautioned that ``current estimate of the 
magnitude of future warming should be regarded as tentative and subject 
to future adjustments (either upward or downward).'' Id. It further 
advised that ``[r]educing the wide range of uncertainty inherent in 
current model predictions of global climate change will require major 
advances in understanding and modeling of both (1) the factors that 
determine atmospheric concentrations of [GHGs] and aerosols and (2) the 
so-called `feedbacks' that determine the sensitivity of the climate 
system to a prescribed increase in [GHGs].'' Id.
    The science of climate change is extraordinarily complex and still 
evolving. Although there have been substantial advances in climate 
change science, there continue to be important uncertainties in our 
understanding of the factors that may affect future climate change and 
how it should be addressed. As the NRC explained, predicting future 
climate change necessarily involves a complex web of economic and 
physical factors including: Our ability to predict future global 
anthropogenic emissions of GHGs and aerosols; the fate of these 
emissions once they enter the atmosphere (e.g., what percentage are 
absorbed by vegetation or are taken up by the oceans); the impact of 
those emissions that remain in the atmosphere on the radiative 
properties of the atmosphere; changes in critically important climate 
feedbacks (e.g., changes in cloud cover and ocean circulation); changes 
in temperature characteristics (e.g., average temperatures, shifts in 
daytime and evening temperatures); changes in other climatic parameters 
(e.g., shifts in precipitation, storms); and ultimately the impact of 
such changes on human health and welfare (e.g., increases or decreases 
in agricultural productivity, human health impacts). The NRC noted, in 
particular, that ``[t]he understanding of the relationships between 
weather/climate and human health is in its infancy and therefore the 
health consequences of climate change are poorly understood'' (p. 20). 
Substantial scientific uncertainties limit our ability to assess each 
of these factors and to separate out those changes resulting from 
natural variability from those that are directly the result of 
increases in anthropogenic GHGs.
    Reducing the wide range of uncertainty inherent in current model 
predictions will require major advances in understanding and modeling 
of the factors that determine atmospheric concentrations of greenhouse 
gases and aerosols, and the processes that determine the sensitivity of 
the climate system. Specifically, this will involve reducing 
uncertainty regarding:
    [sbull] The future global use of fossil fuels and future global 
emissions of methane,
    [sbull] The fraction of fossil fuel carbon that will remain in the 
atmosphere and contribute to radiative forcing versus exchange with the 
oceans or with the land biosphere,
    [sbull] The impacts (either positive or negative) of climate change 
on regional and local systems,
    [sbull] The nature and causes of the natural variability of climate 
and its interactions with human-induced changes, and
    [sbull] The direct and indirect effects of the changing 
distribution of aerosols.
    Knowledge of the climate system and of projections about the future 
climate is derived from fundamental physics, chemistry and 
observations. Data are then incorporated in global circulation models. 
However, model projections are limited by the paucity of data available 
to evaluate the ability of coupled models to simulate important aspects 
of climate. The U.S. and other countries are attempting to overcome 
these limitations by developing a more comprehensive long-term 
observation system, by making more extensive regional measurements of 
greenhouse gases, and by increasing the computing power required to 
handle these expanded data sets.
    A central component of the President's policy is to reduce key 
uncertainties that exist in our understanding of global climate change. 
Important efforts are underway to address these uncertainties. In 
particular, the Federal Government has expanded scientific research 
efforts through its Climate Change Research Initiative (CCRI). 
President Bush announced this new initiative in June 2001 and called 
for it ``to study areas of uncertainty and identify priority areas 
where investments can make a difference.'' The CCRI recently issued its 
final ``Strategic Plan for the Climate Change Research Program'' to 
ensure that scientific efforts are focused where they are most critical 
and that the key scientific uncertainties identified are

[[Page 52931]]

addressed in a timely and effective manner for decision makers.
    The President has also stated, however, that ``while scientific 
uncertainties remain, we can begin now to address the factors that 
contribute to climate change'' (June 11, 2001). Thus, along with 
stepped-up efforts to reduce scientific uncertainties, the President's 
policy calls for public-private partnerships to develop break-through 
technologies that could dramatically reduce the economy's reliance on 
fossil fuels without slowing its growth. Large-scale shifts away from 
traditional energy sources, however, will require not only the 
development of abundant, cost-effective alternative fuels, but 
potentially wholesale changes in the way industrial processes and 
consumer products use fuel. Such momentous shifts do not take place 
quickly. As the President has explained, ``[a]ddressing global climate 
change will require a sustained effort, over many generations' 
(www.whitehouse.gov/news/releases/2002/02/climatechange.html).
    By contrast, establishing GHG emission standards for U.S. motor 
vehicles at this time would require EPA to make scientific and 
technical judgments without the benefit of the studies being developed 
to reduce uncertainties and advance technologies. It would also result 
in an inefficient, piecemeal approach to addressing the climate change 
issue. The U.S. motor vehicle fleet is one of many sources of GHG 
emissions both here and abroad, and different GHG emission sources face 
different technological and financial challenges in reducing emissions. 
A sensible regulatory scheme would require that all significant sources 
and sinks of GHG emissions be considered in deciding how best to 
achieve any needed emission reductions.
    Unilateral EPA regulation of motor vehicle GHG emissions could also 
weaken U.S. efforts to persuade key developing countries to reduce the 
GHG intensity of their economies. Considering the large populations and 
growing economies of some developing countries, increases in their GHG 
emissions could quickly overwhelm the effects of GHG reduction measures 
in developed countries. Any potential benefit of EPA regulation could 
be lost to the extent other nations decided to let their emissions 
significantly increase in view of U.S. emission reductions.\5\ 
Unavoidably, climate change raises important foreign policy issues, and 
it is the President's prerogative to address them.
---------------------------------------------------------------------------

    \5\ The U.S. faced a similar dilemma in its efforts to address 
stratospheric ozone depletion. Early U.S. controls on substances 
that deplete stratospheric ozone were not matched by many other 
countries. Over time, U.S. emission reductions were more than offset 
by emission increases in other countries. The U.S. did not impose 
additional domestic controls on stratospheric ozone-depleting 
substances until key developed and developing nations had committed 
to controlling their own emissions under the Montreal Protocol on 
Substances that Deplete Stratospheric Ozone.
---------------------------------------------------------------------------

    In light of the considerations discussed above, EPA would decline 
the petitioners' request to regulate motor vehicle GHG emissions even 
if it had authority to promulgate such regulations. Until more is 
understood about the causes, extent and significance of climate change 
and the potential options for addressing it, EPA believes it is 
inappropriate to regulate GHG emissions from motor vehicles.
    In any event, the President's policy includes efforts to reduce 
motor vehicle petroleum consumption through increases in motor vehicle 
fuel economy. As noted previously, petitioners specifically suggested 
that EPA set a ``corporate average fuel economy-based standard,'' but 
only DOT is authorized to set motor vehicle fuel economy standards. DOT 
considered increasing fuel economy standards and recently promulgated a 
final rule increasing the CAFE standards for light trucks, including 
sports utility vehicles, by 1.5 miles per gallon over a three-year 
period beginning with model year 2005. The new standards are projected 
to result in savings of approximately 3.6 billion gallons of gasoline 
over the lifetime of the affected vehicles, with the corresponding 
avoidance of 31 million metric tons of carbon dioxide emissions. For 
the longer term, the President has established a new public-private 
partnership with the nation's automobile manufacturers to promote the 
development of hydrogen as a primary fuel for cars and trucks, with the 
goal of building a commercially viable zero-emissions hydrogen-powered 
vehicle. In the near-term, the President has sought $3 billion in tax 
credits over 11 years for consumers to purchase fuel cell and hybrid 
vehicles.
    Aside from fuel economy-based standards, petitioners only other 
suggestions for reducing CO2 from motor vehicles are tire 
efficiency standards and a declining fleet-averaged NOX 
standard to force the introduction of zero-emitting vehicles. In the 
case of tire efficiency standards, it is questionable whether such 
standards would qualify as ``standards applicable to the emission'' of 
an air pollutant from a motor vehicle under section 202(a)(1), since 
such standards would presumably apply to the vehicle's tires, not its 
CO2 emissions (emphasis added). As for zero emission 
vehicles, further technological developments are needed before they 
could be a practical choice for most consumers.
    With respect to the other GHGs--CH4, N20, and HFCs--petitioners 
make no suggestion as to how those emissions might be reduced from 
motor vehicles. GHG emissions from motor vehicles primarily consist of 
CO2 from fuel combustion. In 1999, N20 represented 4 
percent, HFCs 1 percent, and CH4 less than 1 percent of transportation 
GHG emissions. As byproducts of combustion, there is a direct 
proportional relationship between CO2 emissions and fuel 
economy levels. EPA believes parameters other than fuel economy are 
more relevant to N2O and HFC formation. HFCs come from mobile air 
conditioners, while N2O is influenced by catalytic converter design. 
CH4 is a byproduct of combustion, like CO2, but can also be 
affected by catalytic converter design. As noted above, N20, HFCs, and 
CH4 represent a very small percentage of total U.S. transportation GHG 
emissions. As such, they would not be an effective or efficient target 
for regulation in the absence of regulation of CO2 
emissions.

VI. Administration Global Climate Change Policy

    Lack of CAA authority to impose GHG control requirements does not 
leave the Federal Government powerless to take sensible measured steps 
to address the global climate change issue. As described in this 
notice, the President has laid out a comprehensive approach to global 
climate change that calls for near-term voluntary actions and 
incentives along with programs aimed at reducing scientific 
uncertainties and encouraging technological development so that the 
government may effectively and efficiently address the global climate 
change issue over the long term. The CAA and other Federal statutes 
provide the Federal Government with ample authority to conduct the 
research necessary to better understand the nature, extent and effects 
of any human-induced global climate change and to develop technologies 
that will help achieve GHG emission reductions to the extent they prove 
necessary. The CAA and other statutes also authorize, and EPA and other 
agencies have established, nonregulatory programs that provide 
effective and appropriate means of addressing global climate change 
while scientific uncertainties are addressed.
    As part of that effort, the President in February 2002 called for 
voluntary reductions in GHG intensity, including

[[Page 52932]]

through fuel economy improvements. GHG intensity is the ratio of GHG 
emissions to economic output. The President's goal is to lower the U.S. 
rate of emissions from an estimated 183 metric tons per million dollars 
of gross domestic product (GDP) in 2002 to 151 metric tons per million 
dollars of GDP in 2012. Meeting this commitment will prevent GHG 
emissions of over 500 million metric tons of carbon equivalent (MMTCE) 
from entering the atmosphere cumulatively over the next ten years, and 
is equivalent to taking 70 million (or one out of three) cars off the 
road.
    The ``Climate VISION'' (Voluntary Innovative Sector Initiatives: 
Opportunities Now) program, a Presidential initiative launched by the 
Department of Energy (DOE) in February 2003, is a voluntary public-
private partnership designed to pursue cost-effective strategies to 
reduce the growth of GHG emissions, especially by energy-intensive 
industries. Working with trade associations and other groups, the 
program assists industry in its efforts to accelerate the transition to 
energy technologies and manufacturing processes that are cleaner, more 
efficient, and capable of capturing or sequestering GHGs. Climate 
VISION links these objectives with technology development and 
deployment activities primarily at DOE, but also at other participating 
agencies. Since Climate VISION was launched, 14 industry groups have 
become program partners with DOE.
    EPA is also pursuing a number of nonregulatory approaches to 
reducing GHG emissions. In February 2002, EPA launched EPA's Climate 
Leaders program, a new voluntary partnership program between government 
and industry. Through Climate Leaders, companies will work with EPA to 
evaluate their GHG emissions, set aggressive reduction goals, and 
report their progress toward meeting those goals. To date, more than 40 
companies from almost all of the most energy-intensive industry sectors 
have joined Climate Leaders.
    EPA's Energy Star program is another example of voluntary actions 
that have substantially reduced GHG emissions. Energy Star is a 
voluntary labeling program that provides critical information to 
businesses and consumers about the energy efficiency of the products 
they purchase. Over the past decade more than 750 million Energy Star 
products have been purchased across more than 30 product categories 
(e.g., computers, microwaves, washing machines). Reductions in GHG 
emissions from Energy Star purchases were equivalent to removing 10 
million cars from the road last year. Businesses and consumers not only 
reduced their GHG emissions, but also saved $5 billion last year 
through their use of Energy Star products.
    EPA is also working to encourage voluntary GHG emission reductions 
from the transportation sector. The key elements of this effort are the 
SmartWay Transport Partnership and the Best Workplaces for Commuters 
program. The SmartWay Transport Partnership works with the trucking and 
railroad industry to develop and deploy more fuel-efficient 
technologies and practices to achieve substantial fuel savings and 
emission reductions. The goal of Best Workplaces for Commuters is to 
offer innovative solutions to commuting challenges faced by U.S. 
employers and employees by promoting outstanding commuter benefits that 
reduce vehicle trips and miles traveled. EPA estimates that these 
voluntary programs have the potential to reduce GHG emissions by 9 
MMTCE annually by 2010.
    EPA has voluntary programs aimed specifically at reducing methane 
emissions from a variety of sources. For example, the Agency has 
partnerships with natural gas companies to reduce emissions from leaky 
pipelines and distribution equipment, solid waste landfill facilities 
to capture and reuse emissions from landfills, and coal mining 
companies to capture and reuse methane escaping from mines. Together, 
these programs are projected to reduce methane emissions to below 1990 
levels through 2010.
    In addition, EPA has extensive partnerships with industries 
responsible for emissions of the most potent industrial GHG (e.g., 
sulfur hexafluoride, per fluorocarbons and HFCs). Through partnerships 
with EPA, the aluminum sector has exceeded their goal of reducing PFC 
emissions by 45% from 1990 levels by 2000 and is now in discussions 
about a new, more aggressive goal. The semiconductor manufacturing 
sector has agreed to reduce their emissions by 10% below 1995 levels by 
2010. This year, a new agreement was reached with the magnesium sector 
under which they have agreed to completely phase-out their SF6 
emissions by 2010.
    The Federal Government's voluntary climate programs are already 
achieving significant emission reductions. In 2000 alone, reductions in 
GHG emissions totaled 66 MMTCE when compared to emissions in the 
absence of these programs.
    Importantly, the President's initiative will improve our ability to 
accurately measure and verify GHG emissions through an enhanced 
national GHG registry system. The U.S. will improve the voluntary 
registry's accuracy, reliability, and verifiability, taking into 
account emerging domestic and international approaches. Organizations 
participating in the new registry will be provided with transferable 
credits for achieving voluntary emissions reductions. These credits 
will be available for use under any future incentive-based or mandatory 
programs. We believe the enhanced standards for the new registry will 
strengthen the current voluntary trading systems.
    The President's 2003 budget also seeks $4.5 billion for global 
climate change-related programs, a $700 million increase over 2002. 
This includes $1.7 billion for science research under the Climate 
Change Research Initiative, and $1.3 billion for climate change 
technologies under the National Climate Change Technology initiative. 
This commitment is unmatched in the world. The 2003 budget seeks $555 
million in clean energy incentives to spur investments in solar, wind, 
and biomass energy, co-generation, and landfill gas conversion.
    New and expanded international policies will complement our 
domestic policies, including tripled funding for the ``Debt-for-
Nature'' Tropical Forest Conservation Program, fully funding the Global 
Environment Facility for its third four-year replenishment, enhanced 
support for climate observation systems and climate technology 
assistance in developing countries, and sustained level funding for 
USAID climate programs, including technology transfer and capacity 
building in developing countries.
    In the transportation sector, the Administration's global climate 
change plan includes promoting the development of fuel-efficient motor 
vehicles and trucks, researching options for producing cleaner fuels, 
and implementing programs to improve energy efficiency. The plan calls 
for expanding Federal research partnerships with industry, providing 
market-based incentives, and updating current regulatory programs that 
advance our progress in this area. This commitment includes expanding 
fuel cell research, in particular through the ``FreedomCAR'' 
initiative.
    FreedomCAR is a new public-private partnership with the nation's 
automobile manufacturers. It seeks to promote the development of 
hydrogen as a primary fuel for cars and trucks, with the goal of 
building a commercially viable zero-emissions hydrogen-powered vehicle. 
FreedomCAR focuses on technologies to enable mass production of 
affordable hydrogen-

[[Page 52933]]

powered fuel cell vehicles and the hydrogen-supply infrastructure to 
support them.
    Developing new technologies to improve the energy efficiency of 
transportation in the U.S. will be a key element in achieving future 
reductions in GHG emissions. The President's 2003 budget seeks more 
than $3 billion in tax credits over 11 years for consumers to purchase 
fuel cell and hybrid vehicles. The Administration's global climate 
change plan supports increasing automobile fuel economy and encouraging 
new technologies that reduce our dependence on imported oil, while 
protecting passenger safety and jobs.
    EPA will play an important role in efforts to develop advanced 
motor vehicle technologies that improve fuel economy and reduce 
emissions. The Agency's Clean Automotive Technology (CAT) program is 
working to develop advanced clean and fuel-efficient automotive 
technology. Under the program, EPA's goal is to develop technology by 
the end of the decade that will satisfy stringent emissions 
requirements and achieve up to a doubling of fuel efficiency in 
personal vehicles such as SUVs, pickups, and urban delivery vehicles--
while simultaneously meeting the more demanding size, performance, 
durability, and power requirements of these vehicles. EPA will also 
play a leadership role in advancing fuel cell vehicle and hydrogen fuel 
technologies and influencing the direction of technological and policy 
progress in support of U.S. environmental, energy, and national 
security goals.
    To address GHG emissions from the electric utility sector, DOE in 
February of this year announced FutureGen, a $1 billion government/
industry partnership to design, build and operate a nearly emission-
free, coal-fired electric and hydrogen production plant. The 275-
megawatt prototype plant will serve as a large scale engineering 
laboratory for testing new clean power, carbon capture, and coal-to-
hydrogen technologies. It will be the cleanest fossil fuel-fired power 
plant in the world. The project is a direct response to the President's 
Climate Change and Hydrogen Fuels Initiatives.
    In all, the President's global climate change policy sets the U.S. 
on a path to slow the growth of GHG emissions and, as the science 
justifies, to stop and then reverse that growth. This policy supports 
vital global climate change research and lays the groundwork for future 
action by investing in science, technology, and institutions. In 
addition, the President's policy emphasizes international cooperation 
and promotes working with other nations to develop an efficient and 
coordinated response to global climate change. In taking prudent 
environmental action at home and abroad, the U.S. is advancing a 
realistic and effective long-term approach to the global climate change 
issue.

VII. Conclusion

    For the reasons discussed above, and after considering the ICTA 
petition, public comment, EPA's legal authority, and other relevant 
information, EPA hereby denies the ICTA petition requesting that EPA 
regulate certain GHG emissions from new motor vehicles and engines 
under CAA section 202(a)(1).

    Dated: August 28, 2003.
Jeffrey R. Holmstead,
Assistant Administrator for Air and Radiation.
[FR Doc. 03-22764 Filed 9-5-03; 8:45 am]
BILLING CODE 6560-50-P