Deep Dive Episode 135 – Evaluating the EPA’s Proposals to Retain the Existing Particulate Matter and Ozone Standards

The Environmental Protection Agency recently proposed retaining both the existing particulate matter and ozone primary and secondary standards. Over the last several decades, air quality in the United States has improved dramatically. Though many have advocated for more stringent PM and ozone standards, the environmental and public health imperative for tighter standards is the subject of debate. Unlike in the past, the agency was able to finish the review of these criteria pollutants within the five-year statutory window. What was the basis for retaining these standards, how did the agency review the standards in such a timely fashion, and are these actions supported by the best available science? What are the arguments for and against these proposed actions? And are these standards, if finalized, likely to withstand judicial review? Experts discuss these and other critical questions.

Subscribe to the Fourth Branch Podcast on Apple PodcastsSpotifyGoogle Play, and Spreaker.

TRANSCRIPT

Nick Marr:   Welcome to The Federalist Society’s Teleforum conference call as today, September 21, 2020, we discuss “Evaluating the EPA’s Proposals to Retain the Existing Particulate Matter and Ozone Standards.” My name is Nick Marr. I’m Assistant Director of Practice Groups at The Federalist Society.

 

As always, please note that expressions of opinion on today’s call are those of the experts.

 

First, I’ll introduce our moderator. We’re pleased to have Daren Bakst here to moderate another conversation on environmental issues. He’s a Senior Research Fellow at The Heritage Foundation. So I’ll hand the floor off to him in a moment here.

 

Just a quick note for the audience, after Daren moderates a conversation between our two other speakers, we’ll then go to audience Q&A. So as we go through the program, be thinking of questions you might have for when we get to that portion of the call. Okay. Daren, the floor is yours. Thanks for sharing with us.

 

Daren Bakst:  Thank you, Nick. Appreciate it. And I also want to thank all of you for calling in to today’s Teleforum and everybody who’s going to be listening to this when it’s a podcast. Under the Clean Air Act, the EPA is required to set national ambient air quality standards for six major air pollutants. These pollutants are lead, carbon monoxides, sulfur dioxide, nitrogen dioxide, and the two pollutants we’re going to be discussing today, which are particulate matter and ozone.

 

Here’s some background EPA data. From 1980 to 2019, the national concentration level of lead has gone down by 98 percent, carbon monoxide by 85 percent, sulfur dioxide by 92 percent, and nitrogen dioxide by 62 percent. Now, as for particulate matter, so PM10, which refers to particles with diameters of 10 micrometers and smaller, from 1990 to 2019, national concentration levels have declined by 46 percent. PM2.5, or fine particles, from 2000 to 2019, national concentration levels have declined by 43 percent. From 2010 to 2019, so over the last decade, the decline’s been 23 percent.

 

So as for ozone, which refers to ground level ozone and is the main ingredient in smog, from 1980 to 2019, national concentration levels have declined by 35 percent. And from 2010 to 2019, the decline has been 10 percent. So as you can see, there’s been a drastic improvement in air quality in this nation, including for particulate matter and ozone. And the reductions in PM and ozone continue, which is, I think, especially impressive given that it’s far more difficult and costly to achieve any additional improvements.

 

So now, let me briefly explain what the EPA is currently proposing. Every five years, the EPA is required to review and, if appropriate, revise these standards. But the EPA almost never meets its five-year deadline for review. In April, EPA Administrator Andrew Wheeler decided to retain the current PM standards, which were previously reviewed and in part revised in 2013. The proposed rule of retaining the standards was published on April 30, with the comment period ending in late June.

 

Soon thereafter, in July, the EPA proposed to retain the existing ozone standards. Just five years ago, in 2015, the EPA made these standards more stringent by setting them at 70 parts per billion. They had been previously set at 75 parts per billion. Now, the comment period on this proposed decision, the ozone one, is still open, but it ends on October 1.

 

So what was the basis for proposing to retain these standards? What are the arguments for and against these proposed actions, and are these proposed actions, if finalized, likely to withstand judicial review? So today, we’re going to discuss these issues and more. And here’s the format for the program. We’ll hear from our experts, who I’ll introduce in a second. And then we’ll have a brief discussion among the three of us, and then, of course, we’ll have plenty of time for your questions.

 

And we’re very fortunate to have two leading experts today, and you can see their full bios on The Federalist Society website. Justin Schwab is our first speaker. Justin is the founder of CGCN Law and has served as Deputy General Counsel at the EPA from 2017 until the end of 2019. He’s an expert on the Clean Air Act and has extensive experience in the Toxic Substances Control Act, the Administrative Procedure Act, and many other environmental and administrative statutes and polices.

 

Jeff Holmstead will speak second. He heads the environmental strategies group at Bracewell and has been recognized as one of the nation’s leading climate change lawyers by Chambers U.S.A. Jeff was a political appointee who headed the EPA’s Office of Air and Radiation from 2001 to 2005, longer than anyone in EPA history. He also served in the White House Counsel’s Office under President George H. W. Bush and was involved in the passage and early implementation of the 1990 Clean Air Act amendments.

 

At this point, I’m going to turn the program over to Justin Schwab. Justin?

 

Justin Schwab:  Thank you very much and thank you all for listening. I’d like to thank The Federalist Society for hosting this important conversation. I’m going to focus my remarks, which I will keep brief, on two aspects of the governing statute: the advisory committee that plays a large role in NAAQS review and then the core statutory standard itself that EPA has been tasked by Congress to meet and that will be the focus of judicial review.

 

But before I do that, I just want to very briefly note that NAAQS setting — the setting of the NAAQS standard is only the first part of a very, very lengthy and complicated process which involves both the federal and state government. If a final decision is made to keep the NAAQS standard the same, it will likely be challenged in the D.C. Circuit within 60 days of publication. It has to be. That’s a deadline in the statute.

 

But if a no revision decision stands, that’s largely the end of the matter, except for judicial review. But if the standard — when the standard is revised more stringently, that sets off an extremely elaborate and lengthy process of designation of air quality across the country, maintenance plans, attainment plans, etc., which in some cases can stretch on literally decades under the statutory design. So it has major implications in terms of which way this decision goes.

 

I’d now like to turn to the aspects of the statute that I flagged. For those who want to follow along or who want to check later, we’re talking here about Section 109 of the Clean Air Act, which is 42 United States Code § 7409. First, I’d like to talk about the advisory committee. This section of the statute calls for the creation of an advisory committee, which is styled as — not in the statute — but is known as CASAC, which is the Clean Air Scientific Advisory Committee.

 

This is an unusually detailed and prescriptive creation by Congress of a committee. It requires that it have seven members. It specifies the professional background of some of those members. And then both by statutory design and as the case law has played out, its recommendations are, A) perhaps the central factor in the record that the Administrator’s called upon to engage with.

 

The case law essentially, if I can synthesize it and just speak generally about it, more or less falls along these lines. If the Administrator makes a final decision that is in line with CASAC’s recommendations or is within a range that CASAC has recommended, the Court will tend to be highly deferential as a matter of policy and certainly as a matter of science to that. If the Administrator were to depart from the recommendations of CASAC, the case law is clear that the Administrator is the one that makes the final decision. CASAC’s recommendations are not binding, but I think it’s fair to say that, in that situation, the Court would expect a considerably more detailed engagement by the Administrator of why there were a departure from CASAC’s recommendation.

 

I can analogize this to the Fox — famous Fox case about changing Agency position where SCOTUS said, “When you contradict prior findings at agencies, it’s the same standard of review, but we want a more detailed justification.” I think some flavor of that is what’s at play in some of the implications of some of the case law. The general review, which the D.C. Circuit — which is the primary source of NAAQS case law — essentially lays it out like this.

 

It is the State Farm standard. They’re looking for did you engage with significant comments? Did you rationally explain your decision? Did you consider the statutory factors? The court has been clear that it, the D.C. Circuit, is not making scientific judgements. It is trying to view this through the standard administrative law lens of the administrative decision as the administrator engages with the record. But I think it’s fair to say that the CASAC recommendations do play an outsized role in that review due to the statutory design and due to the way that the program has been implemented over the decades and then due to the way that the case law has played out as they reviewed administrators’ decisions of whether or not to revise.

 

Let’s talk now — now that we have that background of CASAC, which is important for the review process, let’s look a little more at the statutory standard that EPA is tasked to meet by Congress and then the major case law that has glossed it. We’re talking here about Section 109B of the Clean Air Act. And what is says is that the primary NAAQS, which is the focus of our discussion today, must be at the level requisite to protest public health, and it must allow an adequate margin of safety.

 

There’s a very well-known case, which is a 2001 Supreme Court case, Whitman v. American Trucking Associations. The cite for that is 531 U.S. 457. This is the lead NAAQS case. I think it’s fair to say it’s a leading SCOTUS case certainly in environmental law and I think in administrative law more broadly. I’m just going to focus in on one aspect of that case here.

 

Whitman clearly holds that this statutory standard means that EPA cannot look at the cost implications as a decisional criterion of where to set the NAAQS. SCOTUS was holding here essentially that Congress spoke in sufficiently precise terms when it was delegating this role to EPA that there is simply no room to allow cost to be a decisional criterion here. I would reference here the endangered species case, the Home Builders case from the Supreme Court in 2007, which doesn’t cite Whitman, I think, but is somewhat similar in terms of, if you have a precise recipe and formula given to you by Congress of here’s what you must consider, there may be no room to consider cost. And SCOTUS clearly held that as the case here.

 

A case last year from the D.C. Circuit took that general kind of thinking and extended it a little. I’m referring here to Murray Energy, which the D.C. Circuit decided in August of 2019. The cite for that case is 936 F.3d 597. That dealt with the review of the last decision to revise downward the ozone standards — the 2015 ozone standard for NAAQS.

 

Many people had made the argument that background levels of ozone, whether biogenic — just arising naturally, potentially whether blown in from elsewhere, maybe even internationally, that in some areas, especially in the western United States, background levels were so high that revising the standard downward would begin to doom, essentially, a large part of the country to immediate and very potentially permanent nonattainment. What the D.C. Circuit held — they did not cite Whitman — cite in its own authority — but its similar logic. The D.C. Circuit held that there is no room for that caveat—I think is the word the D.C. Circuit used—when applying the standard.

 

So questions now under D.C. Circuit case law not only of cost but even of the feasibility and attainability of the standard the courts have held, broadly speaking, those are not relevant decisional criteria when it comes to setting the standard. It’s important to note here that the fact that the courts have held that these cannot be decisional criteria does not mean that CASAC cannot — and the EPA staff and CASAC are forbidden from discussing them, in fact quite the contrary. I want to note that the statute tasked CASAC — I’m going to quote here — “to advise the Administrator on the relative contribution to air pollution concentrations of natural, as well as anthropogenic activity –” well, that’s a paraphrase for background — “and to advise the Administrator, among other things, of economic effects that may result from various strategies for attainment and maintenance of the NAAQS.” This is part of CASAC’s role as tasked by Congress is to provide such advice to the Administrator, but the courts have squarely held that cannot come at the frontend as a decisional criterion when you’re setting the standard.

 

So I want to talk now at the end of my remarks more generally about the situation as a matter of policy and a matter of law that EPA now finds itself in. These cases have clearly held that EPA cannot consider cost or even the implications of the background case might be even attainability of the standards. But the case law, including Whitman, also says that this is not a zero-risk program and that standards should neither be too lax nor too stringent. And the phrase is sufficient but not more than necessary, which I think the Whitman court adopted from the Solicitor General’s brief in that case.

 

This creates what you might see as a paradox, or at least it’s a complicated legal and policy situation. And I think this is particularly noticeable, as Jeff will discuss in more detail, when you’re talking about pollutants like particulate matter and ozone, where there’s no quantified scientific consensus about a level below which there’s no harm — that it’s certain that there’s no harm. There’s a lot of uncertainty at low levels, but there’s no consensus of, oh, we can just stop here.

 

So if the Agency is forbidden from considering cost or feasibility and it is told by the courts it should not set the standards too low and if there is no scientific consensus on a totally safe minimum level, how does one tell when to stop? It ultimately comes back to what the words “requisite” and “adequate” mean in the context of the statute and the context of public health policy. And EPA itself, but then also the reviewing court, is tasked with a quite complex and nuanced task here in squaring that circle and determining what the appropriate standards are as governed by the case law that interprets the statute.

 

As a final note, there are some commenters — I think most prominently a paper from Susan Dudley and Marcus Peacock have criticized the effects of the Whitman case in particular. And they have said that it has — I don’t want to put words in their mouth, but I think it’s a fair characterization to say that they have noted that the effect of these cases may be to distort and send considerations of policy underground where they are effectively still being done but in a way that is not necessarily very transparent and visible to the public. I don’t take a personal position on that here, but I just want to note that respected commenters have taken that view. And with that, that concludes my frontend remarks here.

 

Daren Bakst:  Thank you, Justin. Jeff, I’ll turn it over to you.

 

Jeffrey R. Holmstead:  Yes, thank you and thank you for hosting this Teleforum. I want to just point out another implication of the Supreme Court’s decision– the Supreme Court decision and the D.C. Circuit’s decision on feasibility. We talked about EPA is required to set these NAAQS, National Ambient Air Quality Standards. But then, each state has an obligation to ensure that air quality within its borders meet those standards. So that’s not EPA’s obligation; that actually falls on the states. And there are penalties for states that don’t meet that obligation.

 

Now, EPA issued regulations that make it possible or easier for states to meet the standards, but they ultimately have a legal obligation to meet them. And yet, we have a decision from the D.C. Circuit that says that EPA is not even allowed to consider whether it’s possible to meet the standards. So states have a legal obligation in some cases to do something that’s simply not possible.

 

And I would just point to the example of California where there are many areas of that state who have never even come close to meeting the ozone standard — the original ozone standard that was set back in the 1970s and going forward has become more stringent over time. And California is not even close to meeting the standards. And I think many air quality experts will say there’s just no conceivable way for them to meet those standards, yet they have a legal obligation to do so.

 

Let me just take a minute and talk about the history of the NAAQS to highlight and important issue. So the modern Clean Air Act was passed in 1970, and in 1971, EPA set these national air quality standards for five of the six pollutants we’re talking about. So there are six NAAQ standards. EPA set five of those in 1971. And then in 1978, it set the sixth standard, which was for lead.

 

As Daren mentioned, EPA is required under the Clean Air Act to review each of the NAAQS every five years to decide whether they need to be changed based on new science. So given that the standards for five of the six pollutants was set back in 1971, each of those standards should have been reviewed nine times since they were first established. The other — lead was set first in 1978, so it should have been reviewed eight times. So keep those numbers in the back of your head.

 

EPA had a legal obligation to review them nine times or, in the case of lead, eight times. But actually, only once in the 50-year history of the Clean Air Act has EPA actually complied with the statutory requirement to review a NAAQS within five years. And I’m not going to spend a lot of time on these, but just for those of you who are Clean Air Act gurus, one of the standards, carbon monoxide, CO, has only been reviewed three times and never been changed since 1971, so almost 50 years.

 

Lead has only been reviewed twice since it was established, and it was tightened 30 years later. SO2 has only been reviewed three times. It basically was the same from ’71 to 2010. And NO2 has been reviewed four times but only changed once. So SO2 and NO2, they were both set back in ’71. And then there was a revision in 2010, 39 years later.

 

And then that brings us to the two pollutants we’re talking about today. And they have been the most contentious and the most consequential for reasons that we’ll have a chance to discuss at least briefly. So ozone’s been reviewed five times, changed four times. It actually became less stringent in 1997 — I’m sorry, 1977 and then became more stringent several times since then. And then particulate matter, PM, it’s a much more complicated story. I’m not going to go into it, but it has been reviewed four times and made more stringent every time.

 

So we have this legal requirement for EPA to review these standards formally to determine whether they need to be revised every five years. But they’ve met that requirement only one time. So why is that?

 

Well, I would say, first, although there was ongoing research, there was nothing in the research to indicate that a change was needed. So no one inside or outside EPA thought it made sense to review the standards. And because no one sued EPA, EPA was able to ignore the statutory requirement.

 

But when there had been enough research — and this applies specifically and mostly to PM at 2.5 — when there had been enough research to justify a review of the science, the process that EPA adopted for this formal review of the NAAQS was so exhaustive and so comprehensive that there was simply no way it could be completed within five years. I won’t go into all the details, but it involves the preparation of four major documents before you get to a proposed rule. Each of those goes through a public process. It’s reviewed by CASAC. There’s often multiple drafts. But there is this comprehensive process that simply cannot be done within five years.

 

Since the early 2000s, there’s been a number of bills introduced in Congress to change the review period from five years to ten years, but the environmental community has always opposed any effort to change the five-year review period. So the Trump administration came along and announced that they intended to meet the statutory requirement. And they changed the process so that the NAAQS reviews could actually be completed within five years.

 

Now, the very same members of Congress and environmental groups who refused to extend the period are now complaining that EPA has shortened it. And this obviously sort of points to some tension between these petitions. Why is it that they are insisting on a longer process yet refuse to change the statutory requirement?

 

Well, my view is that the way things now work the citizen suit provisions of the Clean Air Act basically allow them to bring a lawsuit any time EPA fails to meet a deadline. And what that has meant historically, and especially over the last 20 years, is it’s the environmental groups, not government officials, who decide on the timing of the NAAQS reviews. And that’s been a pattern we’ve seen over and over again is there are statutory deadlines that are simply infeasible. But because they exist and because they are legal deadlines, that gives outside parties a great deal of influence over EPA’s decisions and the timing of their decisions and, in particular, whether or not to review a NAAQS.

 

Let me just mention two other quick things, and I think I’ve already used more than my allotted time. But just a quick note on ozone and PM2.5, EPA’s proposal to review the ozone standard — I’m sorry, to retain it where it is has not been nearly as controversial as its decision regarding PM2.5. There has not been any real change in the science. The environmental community has insisted that it needs to be tightened, as they always do. But EPA staff and CASAC have agreed that there’s no need to strengthen it.

 

Because many states have been struggling with the ozone standard for many years and because we’re at a point where we’re getting close to background, it would be enormously costly to lower the standard and for a number of reasons. And the health data regarding the effects of ozone is not nearly as, I would say, strong as the health data regarding PM2.5. Just a note on PM2.5, as Daren said, this refers to very tiny particles that are made up of many, many different constituents. But the standard has to do with these small particles.

 

And EPA and OMB have found that the vast majority of all the benefits from all the government regulation come from reducing levels of PM2.5. EPA itself does a study every ten years and found that well over 90 percent of all the benefits from the Clean Air Act come from reducing concentrations of PM2.5. And then OMB does a review every year of the cost and benefits of government regulation. And they also do sort of ten-year retrospective reviews, I think, every five years.

 

And so this is not only EPA’s thing that PM2.5 is important, but OMB itself, in looking at all the rules that it reviews, that EPA rules account for 80 percent of the benefits of all of the rules, as well as over 70 percent of the cost, and that 95 percent of the benefits of EPA rules, meaning more than 75 percent of the social benefits of all said rules come from reducing levels of PM2.5. So PM 2.5 is a very important issue for that reason but also because almost any kind of emissions are somehow related to PM2.5, SO2, NAAQS, VOCS, direct PM2.5 emissions. So for the most part, almost any regulation EPA does, even if it’s not targeted at PM2.5 has some effect on reducing levels of PM2.5.

 

And often, the benefits of EPA’s regulations for other pollutants are justified based on the benefits they will obtain from reducing levels of PM2.5. So Daren, I’m sorry. I may have talked longer than I should have but let me turn the time back over to you.

 

Daren Bakst:  That’s great. Thanks, Jeff. So let me follow up with some questions, and then we’ll get some questions from the audience. So one of the criticisms that’s out there right now is that the EPA decided to get rid of the CASAC’s PM review panel and also that the EPA staff — if I’m correct here — recommended revising the PM standards. Just what do you guys think about the EPA getting rid of the CASAC’s PM review panel, and what impact do you think it might have if the EPA staff recommended revising the PM standards?

 

Jeffrey R. Holmstead:  Well, I’ll take this one. As part of the effort to actually meet the statutory obligation to conduct the reviews within five years, EPA did significantly change the process. And one of those changes was to eliminate one step involving a special subcommittee.

 

So historically, there’s this CASAC that Justin discussed, which has a statutory rule. CASAC has then called upon — and I think EPA actually decides on the membership. But then they will have a subcommittee or a committee that deals with a specific pollutant. And Administrator Wheeler decided to do away with that step and that subcommittee as one way to try to expedite the process and to complete the review before the end of 2020.

 

I’ll let Justin talk about sort of the legal implications of that and the fact that EPA staff — and again, I will say it is unusual that we have a public process where EPA staff make their own policy recommendation in public and then the Administrator can choose to accept or reject that. But that’s all done through a public process. But that is the case here that the EPA staff recommended the PM standard be lowered, even though the CASAC suggested that there was not enough evidence to lower it from the current level.

 

Justin Schwab:  Thank you, Jeff. This is Justin. I would just add to that, if you’re looking at it in terms of judicial review, if the EPA staff, as part of the record under review makes a recommendation and if the CASAC or the Administrator—or both as happened here—go a different way in CASAC’s recommendation — and I’m assuming here, which I want to be clear these are not final actions yet. But if they’re finalized largely as proposed — that will be part of the record. And then the Administrator’s engagement with the staff advice will be part of the record for review.

 

It will be held ultimately to the general State Farm standards of was the evidence underlying the staff recommendation properly engaged with. Was there alternative evidence or alternative weight placed on other evidence? It will be all in the mix there. But the statute is very clear on CASAC’s role, and then both the statute and the case law are very clear on the Administrator’s role. If there’s a contrary recommendation in the record, it must be — unless it’s frivolous, which I’m stipulating this is not — then it must be engaged with. But it will ultimately be held to the familiar administrative law standards of review.

 

Daren Bakst:  Thanks. I’m going to take the questions in a little different direction into economic implications. I just want to see if — Jeff, you mentioned this a little bit. But can you provide us with kind of a sense of the economic implications of making the PM ozone standard stricter? And what does it mean for states as they try to get to compliance, and what impact would it have on, for example, electricity prices and jobs if you made ozone standards less stringent and the PM2.5 standards more stringent?

 

Jeffrey R. Holmstead:  I have to say I don’t have the actual numbers at my fingertips. When EPA proposes these standards, even though they are not allowed to consider cost as a decisional criteria, they nevertheless, under the Executive Order on regulatory review, do prepare a regulatory impact analysis. And because they’ve proposed to retain the standard where it is, there hasn’t been too much focus on what the cost would be to lower it. What I will say is, especially with ozone, it would be enormously costly.

 

And we didn’t go into all the details, but many parts of the country have struggled for years to reduce the pollutants that need to be reduced that form ozone. So ozone isn’t emitted directly by any industrial source. It’s formed by photochemical reactions of NAAQS and VOCS in the atmosphere. Efforts to reduce NAAQS and VOC have been going on since the 1970s. And getting additional increments becomes increasingly expensive and even impossible in some cases. That means, as I said, that states are looking for any reduction they can get, essentially no matter how costly it is.

 

The other implication, though, is that it effectively prevents new industries from coming into those areas because, under the Clean Air Act, if a new a facility is going to be built in a nonattainment area, it has to offset all of its projected emissions. So in effect, it has to find someone else and pay them to reduce their emissions to offset the emissions of the new facility or the expanded facility. And in fact, in nonattainment areas, it’s not even just a one for one offset. It can be as high as 1.5 percent offset, depending on the severity of the ozone problem.

 

So as a practical matter, it creates a virtual ban on new industrial development. And I will say that’s been a real problem with ozone because ozone, in some cases, is formed down wind. And you have relatively rural areas with no industry at all that are nonattainment for ozone. So you can only put an industrial facility there if you can buy an offset, but you’re in an area where there’s no other facilities that you can pay to reduce their emissions.

 

So the consequences of ozone in particular are very large. With PM2.5, it’s not — I would say that the costs are not as high in part because there do seem to be additional opportunities to reduce PM2.5, at least in certain parts of the country.

 

Justin Schwab:  And this is Justin. I would just briefly add to that that in the case law I discussed, the Whitman case at the SCOTUS level and then Murray Energy last year at the D.C. Circuit level, in the course of holding that respectively cost and background ozone levels were not allowed to be a decisional criterion—I should say when you’re setting the standards—both Justice Scalia in the Whitman opinion and then the Murray Energy per curiam decision last year suggested that what I’ll call backend, or downstream, features of the Clean Air Act in the implementation process, in enforcement discretion, in the scenario that Jeff described there’s such a thing as a rural transport area. They suggest that there are ways that EPA can deal with these problems of impact and maybe even non-attainability through some other mechanisms that are in the Clean Air Act. But I think it’s fair to say that a lot of the policy community interests in this had not been particularly satisfied with that as an answer, in which case at some point eyes will turn to Congress.

 

Daren Bakst:  Thanks. That was a great point about the rural areas. So Nick, let’s get ready to start fielding questions, so I’ll turn it over to you briefly to kind of let them know how to ask questions.

 

Nick Marr:  Okay. Thanks, Daren. In an effort to give our callers a minute or two to line up here, Daren, I’ll send it back to you for another question.

 

Daren Bakst:  That’s great. Thank you, Nick. One area that’s been kind of controversial — definitely controversial is the PM2.5 science. I just wanted to kind of ask isn’t there a lot of criticism of the PM2.5 science? And I just wanted to see what you guys thought about that.

 

Jeffrey R. Holmstead: Justin, do you want to go first on this one?

 

Justin Schwab:  Sure. The standard caveat is that I’m a lawyer; I’m not a scientist. But I think your statement is very accurate. There has been a lot of controversy surrounding some of the scientific underpinnings of EPA’s and the broader air quality community’s projections of what the harms of PM are and then the flip side of that is the benefits that can be attributed to reductions in PM.

 

My understanding is that many of the core studies were conducted at a time and in places where the levels are significantly higher unfortunately than the levels that are observed today. And then one of the questions becomes, if you have studies at which you had much higher levels of particulate matter concentration, perhaps approaching what you see, for instance, in some mainland Chinese cities—which fortunately is not the case the vast majority of the time in the vast majority of the United States—and then one projects downwards from that level to try to assess what the health effects and the benefits of reductions are from the levels we see today — let alone from what it would be for a standard that would further revise downwards — one has to make assumptions. And one has to make projections. And those are always open to criticism.

 

Another criticism I’ve heard is that some of the studies and some of the conclusions drawn from them are based largely on a correlation of observed air quality on a certain day and then things like hospital admittance in the following days. Now, obviously sometimes that’s the method you have available to you, but I think it’s fair to say that this has been the focus of some of the criticism has been on the granularity, did they properly control for confounding variables and so forth. So with the caveat that I’m neither a scientist nor a statistician, I think you’re right in your observation that there has been quite a bit of controversy in this area over the years.

 

Daren Bakst:  Thanks. Jeff, did you want to add anything to that?

 

Jeffrey R. Holmstead:  I will just add another, I think, related issue about the science. Remember that when the EPA Administrator sets the NAAQS for PM2.5, he or she is representing that that is a level that protects public health with an adequate margin of safety. At the same time, when EPA issues regulations and does its own cost-benefit analysis, it takes the position in those regulatory impact statements that there are still tens of thousands of premature deaths every year at concentrations that are below, and in some cases well below, the level of the standard.

 

And so you have this tension between where the NAAQS is set to protect public health with an adequate margin of safety and then these other public statements by EPA saying that we get enormous benefits from regulations when those regulations reduce the PM2.5 concentrations below the level of the NAAQS and explicitly say that we are reducing thousands and in some cases tens of thousands of premature deaths that would otherwise occur because of PM2.5 at levels below the standard.

 

Daren Bakst:  Thanks. Nick, do we have any questions in the queue?

 

Nick Marr:  One just popped up actually, Daren. We’ll go to it now.

 

Caller 1:  Yes, good afternoon. I don’t have the ability to get at the science, but I’m curious — I apologize. I was kind of only listening with half an ear. But one of your guests mentioned that the process for evaluating the standards, sort of the full-time staff of EPA in a public way makes recommendations and then leaves the Administrator to sort of endorse or not. And I’m curious if that has been — number one, is that a statutory matter, or is that something that was developed purely regulatorily? And I’m wondering to what extent that’s been challenged at all. And if so, on what grounds?

 

Justin Schwab:  This is Justin. I’ll just say that the statute does not contemplate such a role. It certainly doesn’t expressly forbid it. But what the statute does is create some tasks for the advisory committee, which has become known as the CASAC — and they are the recommendation role.

 

My understanding—and Jeff will surely be able to speak to this in more detail—is that over the decades of the implementation of the NAAQS process, not the advisory committee, who are special government employees sort of just for that role, but the civil servants who work in EPA’s Office of Air and Radiation, with other roles potentially played by the Office of Research and Development, have over the years developed quite an elaborate process, which was streamlined in order to meet the deadline here involving the so-called policy assessment. Or it used to be known as the “staff assessment” I’ve heard. But that is extra-statutory.

 

Jeffrey R. Holmstead:  That’s exactly right. This elaborate process is a creation of EPA, and it’s a very robust process. But it does include, and has for many years, this step where EPA staff, without any consultation with the Administrator, prepare this so-called staff paper or policy paper that is given to the CASAC for review.

 

And I don’t believe that that has ever been challenged or really even addressed in court. As Justin said, what matters from a legal perspective is the recommendation from CASAC and the question of when the staff recommends something different from that. I think when this PM2.5 rule is challenged, as it will be if EPA finalizes it, that will be the first time that that issue has been presented to a court.

 

Caller 1:  And I’m just curious. I don’t know if my microphone’s still on or not. But I’m wondering where’s the accountability? It’s sort of similar to some of the things that have been said about the Consumer Financial Protection Bureau and no financial accountability to Congress for them. If there’s a change in administration obviously, visions of the deep state and entrenched bureaucrats who are advancing an agenda entirely detached from the express will of the American people through the elected process. Again, I haven’t thought this through. I’m just sort of learning about it now in the context of what you’ve provided. But Chevron comes to mind and all kinds of constitutional issues seem like they’re fraught here.

 

Justin Schwab:  This is Justin. Well, I think the accountability comes precisely from the congressional design in the Clean Air Act itself and then the notice-and-comment process. The CASAC, obviously Congress clearly tasked it with a role, so there’s accountability in that sense. People elected the — whatever it was, 100th Congress or whoever it was — 95th Congress, I guess, that created the Clean Air Act. And that was what they chose to do. And then the Administrator, obviously, is appointed by a democratically elected president.

 

Your point is well taken, but views expressed by the staff, as I said earlier, to the extent they’re part of the record, they will be engaged by. But comments that come in from the outside world also may make certain recommendations and arguments, which the decisionmaker ultimately will have to engage with. And that’ll be part of the State Farmreview. So I do think it fits, maybe not perfectly comfortably. But I think there is a way to conduct the process in a way that is legitimate and transparent.

 

Daren Bakst:  Thanks. Nick, do we have any other questions in the queue?

 

Nick Marr:  So we don’t have any questions in the queue right now. But Daren, I’ll pass it back to you, and maybe you have some more questions.

 

Daren Bakst:  Yeah. I do. Thanks. I’m going to turn to a little bit more policy oriented I guess. So for our at or near background levels, does it even make sense to have a review process anymore? And let me just ask a second question that’s kind of connected to that. So given the incredible cost for achieving, at best, nominal improvements, isn’t making any standard stricter something Congress should decide to do by passing legislation as opposed to having EPA making these decisions?

 

Jeffrey R. Holmstead:  Well, I’m happy to go first with this one. I think there’s certainly good government arguments that decisions that have this kind of economic implication should be made by Congress and not by a regulatory agency. But as a matter of law and as a matter of constitutional law, that issue was sort of addressed in the ATA v. Whitman case because, in the D.C. Circuit, the panel that reviewed the PM2.5 and ozone standards that the Clinton administration set in 1997, the D.C. Circuit panel, in an opinion by Judge Williams, said that there was a nondelegation issue there — that because there was no intelligible principle to how low EPA could go that that was a decision that had to be made by Congress.

 

And they, therefore, basically struck down the standard — the PM2.5 standard — well, the 1997 standard. That decision was appealed to the Supreme Court, and in a 9-0 decision they rejected that argument. So as a constitutional matter, the Supreme Court seems to have been okay with this program. But I don’t think it squarely addressed the issue you’re talking about where, if we’re getting close to background levels and there’s simply no feasible way for states to meet their obligation to obtain the standards, what does that mean?

 

Justin Schwab:  This is Justin. I agree with everything Jeff just said. I would just add the following observation. The statistics that were recited in the opening remarks really do tell the tale here. In 1970 when the Clean Air Act took it’s major modern form—there was an early version, but really the birth of the Clean Air Act as we know it—there were two things happening.

 

One, environmentalism as a social movement as a political tendency was really cresting. And you think of Richard Nixon creating the EPA that year, creating the Council on Environmental Quality, NEPA just a few years earlier, I believe. Muskie, who people thought would be the opponent in ’72—although he ended up not being—environment was his major issue or one of his two major issues. And also what was happening is there was a perceived, and I think to a large extent  real, crisis in air quality, especially but not only in our major cities.

 

Everybody had the experience if you view film clips or background shots in the sitcom that are establishing that you’re in a city from the ‘70s, the kind of Norman Lear era, it looks quite a bit closer to what the Chinese cities look like today than it does, fortunately, to what most of our cities look like today. In that context, setting up the NAAQS program and going after the low hanging fruit and then including a five-year review provision may not have struck people as particularly controversial. But as Jeff noted, we’re on the eighth or ninth—depending on how you count—of these five years review.

 

And it may be time, and I know there are people who would like to see some aspects of the NAAQS program revised by Congress to reflect this reality, which is, in large respects, in most parts of the country the air is much cleaner than it was before. That is due in large part, I think, to the operation of the NAAQS program. But it’s due to other factors such as a change in certain industrial processes, in economic affluency frankly has had a lot to do with it.

 

I would note that there have been multiple attempts to introduce legislation targeting three major aspects of the NAAQS program. A lot of attempts have been made and people have floated bills that would expand the review, for instance, from five to ten years that would allow EPA to decline to review and revise based on the prioritization instead of implementing the standards that are currently on the books. And it would allow some consideration of cost, especially of feasibility and attainability as they were setting the standards.

 

None of those efforts obviously have succeeded, and we have the statute we have. But these converging lines of the cutting edge of science on the one hand, controversy over that, the impact, and then perhaps the disconnect from people’s lived experience of the air on the one hand from what certain scientific and health advocates are saying may at some point lead to a revision of this program.

 

Jeffrey R. Holmstead:  This is Jeff. I want to just add I am one of those people who believe that the Clean Air Act should be amended. And I think there are all sorts of peculiar outcomes that we get, especially when you’re talking about pollutants like PM2.5 or ozone where there seems to be some evidence that, below the level of a current standard, there would still be public health benefits. So in certain parts of the country, because they meet the standard, there may be completely reasonable things that could be done to further improve air quality at a lower cost where you would say the benefit of those actions clearly outweighs the cost.

 

On the other hand, you have places around the country, along the Eastern Seaboard and in California especially, where they are legally required to make further improvements, even though those additional improvements would be enormously expensive and not justified by the benefits that would be achieved. So I agree with Justin. The Clean Air Act has been a remarkable success.

 

But what I would say is I think the NAAQS process has played a relatively limited role in that. We don’t have time to get into that now, but there are other regulatory programs that have actually achieved the lion’s share of the emission reductions without this NAAQS process that imposes a burden on the states to do things that in many cases they can’t do. So if you look at the EPA standards — tailpipe standards for cars and trucks, if you look at some of the major EPA regulations that directly impact the power sector and the industrial sector, that’s where you get major reductions in pollution. And the NAAQS process that then puts further burdens on the state has been responsible for a much smaller share of the emission reductions.

 

Justin Schwab:  That’s a very good point. This is Justin. If I could just briefly note Jeff’s point, Jeff’s point is very well taken, and we obviously do not have the scope to get into it here. But Jeff alluded to the state implementation process.

 

Because that is a state law which then gets approved by EPA and becomes dually both state and federal law for enforcement and other purposes, it is a, to my knowledge, quite unique and paradoxical beast which causes all sorts of complicated problems in terms of judicial review, which may be one of the reasons why EPA has probably relied less heavily on the NAAQS regime than its designers had intended. There’s no sign from the statute that they expected that EPA would stop at six NAAQS pollutants, but that’s what EPA has done. They haven’t added one since, I think, the late ‘70s.

 

And it is in our federalist system an anomaly the way the state planning system works. I think it’s no accident it was created in 1970. If you had designed the Clean Air Act for the first time in 1980 or 1985, I do not think it would be designed that way. And we may have reached the point where maintenance of the current standards is really where the focus should be. But there is still the — until it is changed, this congressional deadline for periodic review.

 

Daren Bakst:  Thanks. Let me just kind of close it out. Nick, do we have any questions in the queue? I just want to make sure I —

 

Nick Marr:  We don’t right now. No, we can close it out with ending remarks.

 

Daren Bakst:  Yeah. Let me just ask this question real quick. So the National Ambient Air Quality Standards are based on two assumptions, and that’s that for the relevant pollutants there’s a safe level below which public health is protected and also that, number two, the states, with EPA’s assistance, can get pollution below this level by imposing more stringent regulations on industry. But what if there is no safe level? And even if there is a safe level, what if it is simply not possible to get pollution below this level? We don’t have much time to address this, but I wanted to see what you guys thought.

 

Jeffrey R. Holmstead:  Well, let me just jump in and say, to me, I think it raises a fundamental question of what do we mean by the rule of law if Congress has imposed a legal obligation on states that there is no possible way for them to meet? I would say that this system, in some ways, may have made regulators less than fully honest. You have EPA perhaps aware of the fact that further reductions would be enormously costly.

 

And even if they don’t explicitly consider costs, does that prevent them from further lowering standards? And then you have this elaborate dance that goes on between EPA and that states where states come up with these sort of modelling programs and assumptions about the future where they claim that they’re putting a plan that will actually achieve attainment, when in reality it certainly won’t. So in my view, one of the results of this system is that we’ve sort of forced regulators at EPA and states to perhaps even be a bit dishonest about the things that they’re doing, or at least not fully above board.

 

Justin Schwab:  And this is Justin. I would just briefly add to that this all speaks to the road not taken in the Whitman case. Again, as a reminder, the statutory standard is that the NAAQS levels must be requisite to protect public health with an adequate margin of safety. In 2001, the Supreme Court held that forbids EPA from considering cost.

 

In roughly a dozen years later, a little more in the Michigan v. EPA case, which delt with Section 112 the hazardous air pollutants program, which is a source specific program — they held that the phrase “appropriate and necessary” required EPA to consider costs. And for those who care, there’s a very interesting interplay between the two cases. If words like “requisite” and “adequate” do not allow you to have these considerations of feasibility that won’t cost impact, what do they task one to do?

 

And that is the paradox I alluded to, or the puzzle I alluded to, that will govern judicial review, along with the record issues, of whatever final decision is made here. But some might view it as a fine line between requisite and adequate on the one hand and no costs, and appropriate and necessary on the other hand, must do costs. But that is what the case law has held, and they are infallible because the Supreme Court is final.

 

Daren Bakst:  Well, thank you, Justin, and thank you, Jeff, for the remarks and you’re presentations. It’s great. I want to thank all of you for calling in again. And this is Daren. I appreciate it. And Nick, I’ll turn it over to you.

 

Nick Marr:  Thanks, Daren. And on behalf of The Federalist Society I want to echo those thanks, and I want to thank you all, our experts Daren, Justin, and Jeff, for calling in today, for the benefit of their valuable time and expertise in discussing this issue. And for the audience, we welcome listener feedback by email at info@fed-soc.org. And as usual, keep an eye on your emails and on our website for announcements about upcoming Teleforum calls. We have a busy week this week, so be sure to be checking those. And we look forward to have you tune in next time. So thank you all for joining us today. We are adjourned.

Jeffrey Holmstead

Partner

Bracewell LLP


Justin Schwab

Founder

CGCN Law, PLLC


Daren Bakst

Senior Research Fellow in Agricultural Policy

The Heritage Foundation


Federalist Society’s Environmental Law & Property Rights Practice Group

Sign up now to receive early access to RTP content and exclusive materials available ONLY to our subscribers.