Impact of Repealing the EPA Endangerment Finding on US Emissions Through 2035

The Big Insight

The Endangerment Finding repeal is a dramatic legal event with surprisingly modest emissions consequences. The research consistently shows that the forces actually driving US emissions reductions—cheap natural gas displacing coal, plummeting renewable/battery costs, state-level mandates covering 55-60% of GDP, corporate procurement driven by investor pressure, and hundreds of billions in congressionally appropriated tax credits—operate almost entirely outside the regulatory chain the Finding enables. The Finding underpins mandates; the transition is being driven by economics. Even Rhodium Group's projections show 26-35% reductions below 2005 by 2035 under weakened federal policy, compared to 38-56% under full implementation (Report 3). The gap is real but narrower than the political rhetoric suggests.

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1. Baseline Emissions Trajectory

US gross GHG emissions fell from 7,495 MMT CO₂e in 2005 to 6,197 MMT in 2023 (a 17.5% decline), before rebounding an estimated 2.4% in 2025 to roughly 6,500 MMT—driven by data center electricity demand and a cold winter, not policy changes (Report 3). EIA pegs 2024 energy-related CO₂ at 4,772 MMT, the lowest since 1990 when adjusted for economic output (Report 3).

Sector breakdown of the decline since 2005:

Sector	2005 CO₂ (MMT)	2023 CO₂ (MMT)	Change	Primary Driver
Electricity	2,401	1,414	-41%	Coal-to-gas switch + renewables
Transportation	1,988	1,855	-7%	Vehicle efficiency standards
Industry	1,014	954	-6%	Offshoring + modest efficiency
Buildings	~550-600	~550-600	Flat	Weather-driven volatility

Sources: EIA and EPA inventory data via Report 3

The electricity sector delivered roughly 60% of all reductions, with natural gas displacing coal accounting for about 60% of power sector cuts (~1,000 MMT CO₂) and renewables an accelerating share (Report 3). Transportation stayed roughly flat despite 20%+ growth in vehicle miles traveled, meaning efficiency standards prevented what would have been a significant increase (Report 3).

Forward projections: Under policies in place prior to the repeal, models projected 33-40% below 2005 by 2030, with the power sector delivering 65%+ of savings (Report 2). Post-OBBBA and repeal, Rhodium projects a shallower 26-35% below 2005 by 2035 (Report 3).

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2. Isolating the Endangerment Finding's Marginal Impact

The Finding creates a specific regulatory chain: it triggers mandatory GHG standards for vehicles under CAA §202(a), and its scientific logic extends to power plant rules under §111 and aircraft under §231 (Report 1). Rescission directly repeals all GHG vehicle standards from MY2012 onward and claims $1.3 trillion in eliminated compliance costs (Report 1).

What depends on the Finding:
- Federal vehicle GHG/fuel economy standards (the tighter Biden-era targets for MY2027+)
- Power plant GHG standards under §111(b)/(d), including rules projected to avoid 7 billion tons CO₂ over 30 years (Report 1)
- Aircraft GHG standards under §231 (modest impact, 2-5 gCO₂/km reductions) (Report 1)
- ~$5 billion in EPA Climate Pollution Reduction Grants that explicitly reference CAA GHG authority (Report 2)

What does NOT depend on the Finding:
- IRA tax credits (~$369 billion original, $258 billion for clean electricity alone): these operate through the Internal Revenue Code via Treasury/IRS, not EPA authority (Report 2)
- IIJA grants ($30B+ in DOE carbon management, grid, EV infrastructure): direct congressional appropriations (Report 2)
- State RPS/CES mandates in 29 states + DC covering ~65% of US population (Report 7)
- California Section 177 vehicle standards adopted by 17 states + DC covering ~40% of new vehicle sales (Report 7, though CRA waivers create uncertainty)
- State cap-and-trade/carbon pricing in 13 states covering ~36% of GDP (Report 7)
- Corporate PPAs and clean energy procurement (record 28 GW in 2024) driven by investor pressure and cost economics (Reports 4, 6)
- Pure market economics: unsubsidized solar at $38-78/MWh vs. new gas at $48-109/MWh (Report 4)

Confidence assessment: High confidence that IRA/IIJA funding persists (statutory text and CBO scores confirm independence from EPA—Report 2). Medium confidence on state vehicle standards, as CRA nullification of California waivers creates genuine uncertainty, though litigation is ongoing (Report 7). High confidence that renewable energy economics are self-sustaining: 91% of new renewable projects globally are now cheaper than fossil alternatives (Report 4).

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3. Modeling the Repeal Scenario

Assuming the Finding is successfully repealed through all legal challenges—which Report 5 estimates at roughly 50-60% probability, with a realistic timeline of effective April 2026, likely stayed by July 2026, D.C. Circuit ruling 2027-28, and Supreme Court resolution 2028-29—what is the incremental emissions impact?

The realistic incremental increase is bounded, not catastrophic:

The repeal's primary emissions impact comes through two channels: relaxed vehicle standards and weakened power plant rules. But both face powerful countervailing forces:

Vehicles: Pre-repeal standards kept transportation emissions flat despite 20%+ VMT growth (Report 3). Without federal standards, the question is whether manufacturers revert. Report 8 notes automakers like Ford and Hyundai affirm they prefer "stable national standards" and won't mass-produce gas-guzzlers, because: (a) California + Section 177 states still cover ~40% of sales, requiring cleaner vehicles regardless; (b) EV battery costs hit $108/kWh in 2025 and are projected below $100/kWh by 2026, making EVs cost-competitive on total cost of ownership (Report 4); and (c) the repeal could be reversed in 2-4 years, making investment in dirtier platforms a losing bet.

However, Report 4 documents that US BEV share fell to 7.8% after September 2025 tax credit expiry, with Q4 collapsing to 5.8%—demonstrating that policy signals do matter for adoption speed, even if long-term economics favor EVs. Hybrids filled much of the gap (22% total electrified share), keeping transport emissions roughly flat (Report 3, Report 4).

Power sector: The power plant GHG rules projected to avoid billions of tons of CO₂ are already largely moot—the Clean Power Plan was stayed, repealed, reissued, and litigated for a decade without ever taking effect (Report 1). What actually drove the 41% reduction in power sector CO₂ was market economics: natural gas at <$3/MMBtu and solar at $38-78/MWh unsubsidized (Reports 3, 4). Report 4 shows that 93-96% of new US generating capacity in 2024-2025 was renewables plus storage, driven by cost, not regulation. Texas—with no state climate mandates and a deregulated market—leads the nation in renewable deployment, with solar overtaking coal in late 2025 (Report 4).

Estimated incremental emissions from repeal, cumulative through 2035:

The research doesn't provide a single precise figure, but allows reasonable bounding:

• Rhodium Group projects the difference between full-implementation and weakened-policy scenarios as the gap between 38-56% and 26-35% below 2005 by 2035 (Report 3). On a base of ~7,500 MMT, that's roughly 225-1,575 MMT CO₂e cumulative difference over 10 years, with the wide range reflecting uncertainty about which policies are weakened and how markets respond.
• The Finding-specific share of this is a fraction, since OBBBA's IRA phaseouts, not just the Endangerment repeal, drive the gap. Report 2 estimates surviving IRA credits alone deliver 1-4 billion tons CO₂e in reductions through 2032.
• EPA's own repeal document argues US vehicles represent ~2.5-4% of global GHGs, characterizing the impact as "de minimis" at the global scale—though critics note this ignores cumulative domestic effects (Report 1).

Best estimate: The Endangerment Finding repeal, if fully implemented and upheld, likely increases US emissions by 100-300 MMT CO₂e per year by 2030-2035 relative to a scenario where all Obama/Biden-era EPA rules remained in force—roughly a 1.5-5% increase above the weakened-policy baseline, or the difference between reaching 30% vs. 35% below 2005 levels. This is significant in climate terms but far smaller than political narratives on either side suggest.

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4. Countervailing Forces, Ranked by Strength

Strongest: Clean energy economics. This is the dominant finding across all reports. Unsubsidized solar ($38-78/MWh) and onshore wind ($37-86/MWh) are cheaper than new gas ($48-109/MWh) for the tenth consecutive year (Report 4). Battery storage dropped 93% since 2010 to $108/kWh (Report 4). Coal is economically dead—99% of US coal plants are more expensive to operate than building new solar/wind plus storage (Report 8). These economics drove 96% of new capacity additions in 2025 independent of any EPA regulation (Report 4). Texas proves the case: no state climate mandates, deregulated markets, and the nation's largest renewable buildout, with solar surpassing coal generation in 2025 (Report 4).

Second strongest: State-level policy architecture. The US Climate Alliance (24 states) covers 55% of population and 60% of GDP, with members having already cut net GHG 24% below 2005 (Report 7). Twenty-nine states plus DC have mandatory RPS/CES programs driving 37% of renewable additions (Report 7). California's vehicle standards—even under CRA threat—create compliance gravity: automakers design to the strictest standard they must meet in 40% of the market (Report 7). Thirteen states with carbon pricing cover 36% of GDP (Report 7). Federal repeal accelerates state divergence rather than eliminating action.

Third: Surviving congressional legislation. Post-OBBBA, surviving IRA provisions still include tech-neutral clean electricity credits (§45Y/48E for nuclear, storage, geothermal through 2032), CCUS credits (§45Q at $85/ton), advanced manufacturing credits (§45X), and EV credits—totaling well over $100 billion in incentives that operate through Treasury, not EPA (Report 2). IIJA's $30B+ in DOE grants for hydrogen hubs, DAC, grid resilience persist as direct appropriations (Report 2).

Fourth: Corporate procurement and investor pressure. Record 28 GW of corporate PPAs signed in 2024, led by tech companies whose data center demands are insatiable (Report 4, Report 6). Forty-five percent of Fortune Global 500 firms now target net zero by 2050, up from 8% in 2020 (Report 6). SBTi validated targets cover 40%+ of global market cap (Report 6). Investor pressure outranks regulation as the primary driver, with 76-80% of companies citing investor expectations (Report 6). This momentum is self-reinforcing: Walmart's Project Gigaton has engaged 5,900+ suppliers in emissions reductions totaling 1.19 billion metric tons—larger than many countries' total output (Report 6).

Fifth: Litigation and legal delay. The repeal faces certain legal challenge. Report 5 estimates a 40-50% chance challengers win at the D.C. Circuit level given binding Massachusetts v. EPA precedent, with a stay probable (60% historical rate for EPA GHG rules). Even if ultimately upheld at the Supreme Court, the 3-4 year litigation timeline means the repeal may never have practical force during this administration (Report 5).

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5. Strategic Uncertainties and the Policy Reversal Premium

The most underappreciated dynamic: The repeal's chilling effect on investment is simultaneously its greatest potential harm and its own undoing.

Report 5 documents that manufacturers face a "yo-yo" effect mirroring the Clean Power Plan's seven-year ping-pong (2015-2022), adding a 20-30% risk premium per unit for product redesigns. The auto industry alone spent $50+ billion on CAFE adjustments from 2017-2024 (Report 5). This uncertainty discourages dramatic shifts in either direction—automakers won't invest heavily in dirtier platforms they'd need to reverse in 2-4 years, nor will they accelerate EV timelines without regulatory certainty.

Report 6 shows the corporate response: 84% of companies are maintaining or accelerating climate targets despite US rollbacks, because the driver was never primarily federal regulation—it was investor expectations, cost economics, and competitive positioning. WEF data shows companies that cut emissions 12% simultaneously grew revenue 20% from 2019-2023 (Report 6).

The removal of federal preemption creates an ironic risk for industry: without the Endangerment Finding's CAA framework displacing common-law claims, states and private parties can now sue emitters directly under nuisance law, reviving litigation avenues that AEP v. Connecticut (2011) had closed (Reports 5, 8). Several legal analysts note this may leave fossil fuel companies more exposed to liability, not less (Report 8).

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Watch Out For

• Data center demand is the wild card. The 2025 emissions rebound (+2.4%) was driven not by deregulation but by AI/crypto electricity demand and weather. If data center growth continues at 5%+ annually and outpaces clean buildout, this structural demand growth could matter more than any regulatory change (Report 3).

• The CRA waiver nullification for California is more consequential than the Endangerment repeal itself. If Section 177 state vehicle standards covering 40% of sales are effectively dismantled, the transportation sector loses its primary federal-independent enforcement mechanism. This is a genuinely unresolved legal question with major implications (Report 7).

• OBBBA's IRA phaseouts are doing more damage to clean energy deployment than the Endangerment repeal. Wind and solar PTC/ITC termination post-2027 (unless construction began by July 2026) halves projected additions by 2035 per Energy Innovation (Report 2). The tax credit phaseout, not the regulatory repeal, is the sharper blade.

• Coal retirements delaying for data center demand. Fifteen plants deferred retirement in 2025 to serve surging load growth. If this becomes a trend, it could partially offset the market-driven coal decline that has delivered the bulk of US emissions reductions (Report 8).

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Questions to Explore

1. What happens to state vehicle standards if the CRA waiver nullification survives litigation? The research identifies this as the single largest point of vulnerability for emissions reductions that the current analysis can't fully resolve—it's in active litigation with a February 2026 hearing (Report 7).

2. How much does the OBBBA's accelerated IRA phaseout reduce projected clean energy deployment versus the original IRA timeline? Reports cite the pre-OBBBA IRA delivering 7 billion tons of reductions (Princeton REPEAT) versus 40-60% retained post-OBBBA, but detailed sector-by-sector modeling of surviving provisions is lacking (Report 2).

3. Will data center operators build dedicated clean generation or default to fossil grid power? The answer to this question may matter more for 2030 emissions than any regulatory decision. Current corporate PPA momentum suggests clean buildout, but permitting bottlenecks could force fossil fallback (Reports 3, 4, 6).

4. What is the actual litigation risk to fossil companies from the collapse of federal preemption? If the Endangerment Finding's removal reopens common-law nuisance claims, the financial exposure to fossil fuel producers could paradoxically accelerate the transition faster than the regulations themselves would have (Report 8).

5. How do EU Carbon Border Adjustment Mechanism tariffs on US exports change the calculus for US industrial emitters? Report 8 references this pressure but no research quantified the exposure. For trade-exposed sectors, international carbon pricing may substitute for lost domestic regulation.

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Five Key Insights on the Durability of US Emissions Reductions

1. The transition's center of gravity has already shifted from regulation to economics. Sixty percent of US power sector decarbonization came from natural gas displacing coal on price, not mandates (Report 3). Solar is now cheaper than gas unsubsidized (Report 4). Texas—the anti-regulatory poster child—leads the nation in clean energy deployment (Report 4). The Endangerment Finding was the scaffolding; the building now stands on its own foundation.

2. The US effectively has a dual climate governance system, and the federal piece is the smaller half. States covering 55-60% of GDP have independent climate mandates (Report 7). Corporate actors covering 40%+ of global market cap have validated science-based targets (Report 6). The Finding's repeal removes the top layer of a three-layer system where the bottom two layers do most of the work.

3. The repeal's most significant impact is on the pace of decarbonization, not its direction. The difference between the full-policy and weakened-policy scenarios is roughly 26-35% vs. 38-56% below 2005 by 2035 (Report 3). Both trajectories go down. The question is how fast, not whether.

4. Regulatory uncertainty imposes real costs but paradoxically favors clean energy. The "yo-yo" dynamic (Report 5) makes long-cycle fossil investments riskier, not safer—no rational firm builds a 30-year coal plant knowing the next administration could reimpose standards. Clean energy's short construction timelines (1-3 years for solar vs. 5-10 for fossil plants) make it the lower-risk bet under policy uncertainty.

5. The irony no one is discussing: the repeal may increase fossil fuel industry's legal exposure. By removing the federal regulatory framework that preempted state and common-law climate claims, the administration may have traded EPA mandates—which at least provided compliance safe harbors—for open-ended tort liability with no ceiling (Reports 5, 8). This was the dog that caught the car.