Capitol Hill

EPA showdown

In April 2007, the U.S. Supreme Court ruled the Environmental Protection Agency (EPA) can regulate greenhouse gases under the Clean Air Act (CAA), giving EPA authority to determine whether emissions endanger public health. The 5-4 decision was surprising because the CAA did not include greenhouse gas regulation when it was written in the 1970s, and it requires EPA to regulate entities emitting 250 tons of hazardous pollutants each year. This threshold was set for pollutants with particulate matter and is extremely low for gases that include carbon dioxide and are measured in thousands of tons.

Nonetheless, on Dec. 7, 2009, EPA issued an "endangerment finding" for greenhouse gases and announced a rule will go into effect Jan. 1, 2011, starting with power companies and factories, which undoubtedly will include construction material manufacturers.

To obviate the 250-ton statutory threshold, EPA issued what it calls a "tailoring" rule to regulate only sources emitting more than 100,000 tons of greenhouse gases. However, the tailoring concept is highly unusual, and many experts believe EPA cannot simply ignore the CAA's explicit statutory language—they believe EPA must regulate all entities that emit more than 250 tons annually.

Even with the tailoring rule, construction material manufacturers will be regulated under the CAA's Prevention of Significant Deterioration, which could increase material costs for the construction industry. Furthermore, other regulatory programs triggered by the finding could halt building construction.