Environmental Protection Agency

Let’s wait until the economy recovers a little before we step on it with costly environmental regulations. That was the message from Environmental Protection Agency’s (EPA) Administrator Lisa Jackson in a response to eight Democratic senators from industrial coal states the authority of the EPA to regulate greenhouse gases. Administrator Jackson said by April she will “take actions to ensure that no stationary source will be required to get a Clean Air Act permit to cover its greenhouse gas emissions in calendar year 2010.”

As the Clean Air Act is currently written, the EPA could regulate sources or establishments that emit 100 or 250 tons or more of a pollutant per year. The EPA is proposing a “tailoring rule” that would amend the CAA so that only entities that emit 25,000 tons of carbon dioxide equivalent per year would be affected. But even the 25,000 ton threshold is subject to change said Jackson: “I expect the threshold for permitting will be substantially higher than the 25,000-ton limit that EPA originally proposed.” These regulations for the largest of emitters are expected to take place between the latter half of 2011 and 2013.

Smaller entities would be exempt from carbon dioxide regulations – for now. Schools, farms, restaurants, hospitals, apartment complexes, churches, and anything with a motor–from motor vehicles to lawnmowers, jet skis, and leaf blowers–could be subject to regulations – but no sooner than 2016 said Jackson.

Although Jackson is delaying the regulatory pain, the business uncertainty the EPA is creating is preventing economic recovery today. Lisa Murkowski (R-AK), in a response to Lisa Jackson’s statement, said, “Until the specter of command-and-control regulations goes away, it will remain a counterproductive threat hanging over the work that must be done to find common ground.” A December 2009 National Federation of Independent Business (NFIB) survey of small and independent business owners asked owners to rank the single most important problem they faced. Behind poor sales, taxes and government regulations/red tape finished second and third, respectively. Government regulations and red tape jumped three spots from a year ago.

Even without regulations, the prospect of them is enough to impose economic harm. Rising uncertainty can drive down investments in riskier projects and prohibit expansion. The EPA may be delaying carbon dioxide regulations but they’re also delaying a quicker economic recovery with looming uncertainty.