	Introduction

This report was originally published in May 2009, and the majority of the text reflects the authors' analysis of EPA's potential regulation of stationary sources under the Clean Air Act at that time. An "endangerment finding,," which is a prerequisite for the motor vehicle and other greenhouse gas standards, was finalized December 7, 2009. The agency has stated in several venues that promulgation of motor vehicle GHG standards would make GHGs "subject to regulation" for the purposes of triggering permitting requirements for new and modified stationary sources under the Prevention of Significant Deterioration requirements of Section 165 of the Clean Air Act, and also for the purposes of the operating permit requirements of Title V. And it has p r oposed a Greenhouse Gas Tailoring Rule to limit the applicability of the PSD and Title V permitting requirements to sources that emit more than 25,000 tons per year of carbon dioxide equivalents. New legislation to address greenhouse gases is a leading priority of the President and many members of Congress, but the ability to limit these emissions already exists under various Clean Air Act (CAA) authorities that Congress has enacted, a point underlined by the Supreme Court in an April 2007 decision (discussed below). Indeed, the U.S. Environmental Protection Agency (EPA) has already begun the process that could lead to greenhouse gas regulations for new mobile sources in response to court decisions. The legal drivers are beyond the scope of this report, which is focused on the policy options and control alternatives available to EPA as it uses existing authorities to regulate greenhouse gases from stationary sources. Section 202 gives the EPA Administrator broad authority to set "standards applicable to the emission of any air pollutant from any class or classes of new motor vehicles" if in her judgment they contribute to air pollution which "may reasonably be anticipated to endanger public health or welfare." If it makes this finding of endangerment, the Act requires the agency to establish standards for emissions of the pollutants. Publication of the proposal in the Federal Register on April 24 began a 60-day public comment period. The endangerment finding was finalized December 7, 2009. It should be noted that amidst this legal activity and EPA's commitment to move forward with an endangerment finding, EPA Administrator Jackson and others in the Administration have made clear that their preference would be for Congress to address the climate issue through new legislation. Global emissions are increasing. Section 111 provides authority for EPA to impose performance standards on stationary sources—directly in the case of new (or modified) sources, and through the states in the case of existing sources (Section 111(d)). Controlling GHG through Section 111

Section 111 appears to provide a strong basis for EPA to establish a traditional regulatory approach to controlling greenhouse gas emissions from large stationary sources. Focused on existing sources, EPA used Sec. Rather, as stated in a September 30, 2009 proposal, "Although several possible triggering events may be considered ..., the latest of these events would be the one that applies under EPA's current interpretation: a nationwide rule controlling or limiting GHG emissions." Title V and the Size Threshold

In the ANPR, EPA discussed the possibility that an endangerment finding and subsequent regulation of GHGs as air pollutants under any section of the Act could trigger Title V permit requirements, and that all facilities that have the potential to emit a GHG pollutant in amounts of 100 tons per year or more would be required to obtain permits. General Permits

Perhaps the most straightforward method of reducing administrative burden is for EPA to adopt a general permit scheme for PSD-NSR and Title V. For categories with numerous similar sources of emissions, the Clean Air Act provides in Section 504(d) that the permitting authority—be it EPA or a delegated state agency—may issue a "general permit" covering all sources in the category. There are also disadvantages to using existing Clean Air Act provisions to address climate change.
Although new legislation to address greenhouse gases is a leading priority of the President and many members of Congress, the ability to limit these emissions already exists under Clean Air Act authorities that Congress has enacted – a point underlined by the Supreme Court in an April 2007 decision, Massachusetts v. EPA. In response to the Supreme Court decision, EPA has begun the process of using this existing authority, issuing an "endangerment finding" for greenhouse gases (GHGs) December 7, 2009, and proposing GHG regulations for new motor vehicles in the September 28, 2009 Federal Register.
On September 30, 2009, the agency took another step toward Clean Air Act regulation of GHGs, proposing what it calls the Greenhouse Gas Tailoring Rule. The rule would define when Clean Air Act permits would be required for GHG emissions from stationary sources. The proposed threshold (annual emissions of 25,000 tons of carbon dioxide equivalents) would limit which facilities would be required to obtain permits; for the next six years, the nation's largest GHG emitters, including power plants, refineries, cement production facilities and about two dozen other categories of sources, would be the only sources required to obtain permits. Smaller businesses and almost all farms would be shielded from permitting requirements during this period. By tailoring the permit requirement to the largest sources, EPA says it would focus on about 13,000 facilities accounting for nearly 70% of stationary source GHG emissions.
Like the proposed standards for motor vehicles, the Tailoring Rule is part of a two-track approach to controlling emissions of GHGs. On one track, Congress and the Administration are pursuing new legal authority (for cap-and-trade, carbon tax, or other mechanisms) to limit emissions. At the same time, on a parallel track, the Administration, through EPA, has begun to exercise the Clean Air Act's existing authority to regulate GHGs. Despite EPA's commitment to move forward on this second track, EPA Administrator Jackson and others in the Administration have made clear their preference that Congress address the climate issue through new legislation.
The first step in using the Clean Air Act's existing authority is for the EPA Administrator to find that GHG emissions are air pollutants that endanger public health or welfare. The Administrator proposed this endangerment finding in the April 24, 2009 Federal Register and finalized it December 7. With the finding finalized, the agency can (indeed, must) proceed to set GHG emission standards for new motor vehicles, as it proposed to do, September 28.
Motor vehicle GHG standards will lead EPA and state permitting authorities to require permits for stationary sources: language in the Act triggers permitting under the Prevention of Significant Deterioration (PSD) program and Title V of the Act whenever a pollutant is "subject to regulation" under any of the Act's authorities. It is this trigger that the Tailoring Rule addresses.
This report reviews the various options that EPA could exercise to control GHG emissions from stationary sources under the Act. The PSD and Title V permitting requirements that are automatically triggered may be the most immediate point of interest, but an endangerment finding for GHGs would present the agency with other options, as well. Five of these options are discussed in this report. Among these, particular attention should be paid to Section 111 of the Act, which provides authority to set New Source Performance Standards and, under Section 111(d), requires the states to control emissions from existing sources of the same pollutants. As EPA moves forward, Section 111 appears to be the most likely authority it will use to establish emission standards for stationary sources.