EPA’s first regulation of greenhouse gas emissions from aircraft—Is it the emperor’s new clothes?

In January 2021, during the waning days of the Trump administration, the U.S. Environmental Protection Agency (EPA) issued a new rule regulating greenhouse gas (GHG) emission standards for large commercial airplanes, what we might call simply the Airplane Rule. 86 Fed. Reg. 2136 (Jan. 11, 2021). Within a week, California, along with 10 other states together with the Commonwealth of Puerto Rico and the District of Columbia, sought judicial review, challenging the Airplane Rule as “unlawful” because it did not result in a net decrease of regulated emissions and, per the petitioners, it did not even consider any significant decrease as a regulatory option. Is this the bureaucratic equivalent of the emperor’s new clothes, designed to cover over a naked, underlying flaw? We examine first the outline of the new Airplane Rule, the litigation by the states and environmental groups with industry intervenors, and the Biden administration’s surprising decision not to revise the rule.

The Airplane Rule: Consistent with prior international standards, but can—and must we—do better?

The Airplane Rule began with a finding by President Obama’s EPA administrator that GHG emissions from commercial aircraft contributed to air pollution that could endanger public health and the environment. As of 2014, EPA estimated that “U.S. aircraft” emissions constituted 12 percent of the total GHG emissions from the transportation industry and 3.2 percent of the total U.S. “inventory” of GHG emissions. 81 Fed. Reg. 54,422, 54,466 (Dec. 30, 2016). This endangerment finding set the stage under the Clean Air Act for meaningful regulation of the two principal GHGs emitted by covered commercial aircraft—carbon dioxide and nitrous oxide.

In 2020, EPA, acting under President Trump, announced its intent to promulgate a new rule in conformance with the prior endangerment finding. EPA stated that it intended to adopt the standard already embraced by the International Civil Aviation Organization (ICAO), but noted that U.S. manufacturers had already developed technologies to meet those standards, and concluded: “For these reasons, the EPA is not projecting emission reductions associated with these proposed GHG regulations.” 85 Fed. Reg. 51,558 (Aug. 20, 2020). EPA’s key rationale for adopting the ICAO standards was a policy decision—“aligning domestic standards with the ICAO standards, rather than adopting more stringent standards, will have substantial benefits for future international cooperation on airplane emission standards, and such cooperation is the key for achieving worldwide emission reductions.” Id.

Commentators, including states led by California, reacted with visceral scorn. California’s comment letter, filed in October 2020 and joined by other states, noted that the proposed rule “would do nothing to control GHG emissions. . . .  Far from a historic or ‘major’ rule for GHG emissions, the Proposed Rule is an empty exercise that substitutes feeble, already-obsolete standards for the critically needed regulation Congress intended.”

The National Association of Clean Air Agencies, described as a nonpartisan association of air pollution agencies in some 41 states, similarly commented that “simply adopting the ICAO standards would fall short of what is necessary and feasible.”

Nongovernmental organizations (NGOs) were equally scathing in their comments. The NGO comment letter criticized EPA’s decision-making process and its alleged inconsistency with the cost-benefit analysis required by the Office of Management and Budget in its Circular A-4 (68 Fed. Reg. 58,366 (Oct. 9, 2003)).

EPA cast aside these comments and rushed out a final rule less than 90 days after they were received. Moreover, EPA declared the new Airplane Rule to be effective “immediately upon publication,” stating that it wanted to provide “regulatory certainty.” Airplane Rule, 86 Fed. Reg. at 2137.

Litigation begins and a new administration reconsiders the rule

Less than a week after EPA finalized the Airplane Rule, several states filed a petition for review with the U.S. Court of Appeals for the District of Columbia (Case No. 21-1018). The states alleged that the new rule was unlawful and should be remanded. The Center for Biological Diversity, Friends of the Earth, and the Sierra Club filed a similar petition (Case No. 21-1021). The Boeing Company and the Aerospace Industries Association of America moved to intervene in both actions, and Airlines for America sought to participate as an amicus party.

But as the litigation progressed to the courthouse forum, a new president was elected with a different set of environmental policies. Within five days of the filings of litigation, on the first day of his new administration, President Biden issued a series of Executive Orders, including one entitled “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis.” This Executive Order, No. 13990, directed EPA (and other federal agencies) to review a number of the prior administration’s actions, including the Airplane Rule.

By February 2021, EPA obtained an order from the D.C. Circuit putting the litigation on hold. In August, EPA sought a further order to place the litigation on hold. Over the objection of the environmental NGOs, the D.C. Circuit granted EPA’s motion and set a deadline for further motions of November 15, 2021.

In November, EPA decided that it would not reconsider the Airplane Rule or initiate a new rule, and all parties filed a joint motion to lift the abeyance and submit a proposed briefing schedule by December 6, 2021. EPA separately issued a statement explaining that the Biden administration intended to “press for” new, more stringent, regulations at the next IOAC negotiations. EPA in its statement acknowledged that it had independent power to regulate such emissions under the Clean Air Act and promised vaguely that: “[W]e will be evaluating what opportunities for greater regulatory ambition exist through the commonsense exercise of our Clean Air Act authority.” EPA did not explain what “commonsense” exercises it was considering under its admitted statutory authority.

The D.C. Circuit lifted the stay and the litigation challenging the new rule will proceed. We now await further litigation in the D.C. Circuit to determine whether the Airplane Rule will ultimately be determined to constitute another bureaucratic version of the emperor’s new clothes, or alternatively, a case of EPA exercising its “commonsense” discretion.