The Senate is expected to vote today on several amendments that would affect the Environmental Protection Agency’s (EPA) ability to regulate carbon dioxide (CO2) and other greenhouse gas emissions. Senate Majority Leader Harry Reid (D–NV) told reporters that it’s now or never and voting on the amendments will “get rid of that issue one way or the other.”
Policymakers have introduced a number of legislative fixes, both bad and good, to address the regulation of greenhouse gas emissions. A temporary fix by means of a two-year delay is no fix at all and leaves a lot of uncertainty for businesses expansion because of the threat of future regulations. CO2 permit exemptions for small businesses and farmers will not exempt them from the higher energy prices they will pay when the EPA regulates larger facilities. Regulating these entities would significantly increase the cost of energy for all of America. Congress needs to enact policies that would permanently prevent unelected bureaucrats from regulating CO2 and the catastrophic economic consequences that come along with it. Only this approach would provide the regulatory certainty American businesses need.
The Bad: Two Year Delay or Exemptions
Senator Jay Rockefeller (D–WV) introduced legislation that would delay the EPA’s ability to regulate CO2 for two years, but this is not the right approach for Congress to take. It is not a step in the right direction and would do more harm than good by creating uncertainty and leaving the endangerment finding intact.
One problem with a two-year delay is that it creates uncertainty for energy-intensive businesses looking to build new projects or make major expansions. From planning to construction and operation, such projects have much longer time horizons than two years. Not knowing whether the energy tax will go into effect in two years would deter businesses from making new investments and creating jobs at a time when they’re most needed. Another serious problem with a two-year delay, specifically the Rockefeller bill, is that the EPA can still regulate CO2 under the National Ambient Air Quality Standards (NAAQS) program.
Another bad legislative fix is to permanently exempt small emitters of greenhouse gas emissions from CO2 regulations. Senator Max Baucus (D–MT) introduced an amendment that would in effect codify the 75,000-ton-per-year threshold and carve out permanent exemptions for the agricultural community from regulation under the Clean Air Act’s Prevention of Significant Deterioration preconstruction permitting program and Title V operating permits program. Doing so would remove the legal questions surrounding the Tailoring Rule but would provide no protection from higher energy costs that small businesses, farms, and consumers would face since larger emitters, such as energy producers, would still be taxed. Further, the EPA could still regulate greenhouse gases under the NAAQS program.
Since the EPA determined that CO2 and other greenhouse gas emissions are a pollutant that is dangerous to public health and welfare, it would have to go down the road of establishing NAAQS for greenhouse gases. As Marlo Lewis of the Competitive Enterprise Institute wrote, this has the potential for devastating economic consequences:
Eco-litigation groups were quick to pick up on this logic. In December 2009, the Center for Biological Diversity and 350.Org petitioned EPA to establish NAAQS for CO2 at 350 parts per million (about 40 ppm below current concentrations) and for other [greenhouse gases] at preindustrial levels. Numerous other environmental organizations and activists (including Al Gore and NASA scientist James Hansen) have joined the 350 Petition. …
The potential for mischief is hard to exaggerate. Not even a worldwide depression permanently reducing global economic output and emissions to, say, 1970 levels, would stop CO2 concentrations from rising over the next 90 years. Note also that the [Clean Air Act] allows states only five or at most 10 years to attain NAAQS or face sanctions such as loss of highway funding. For perspective, the Waxman-Markey cap-and-trade bill, which Senate leaders considered too economically risky to bring to a vote, aimed to help stabilize CO2 concentrations at 450 ppm by 2050. The economic sacrifices required to implement a CO2 NAAQS set at 350 ppm hugely exceed those associated with any climate bill Congress has either rejected or declined to pass.
The Good: Stop the EPA and Stop All Climate Change Regulations
The House Energy and Commerce Committee passed legislation introduced by Representatives Fred Upton (R–MI) and Ed Whitfield (R–KY) that would repeal the EPA’s endangerment rule and block the EPA from regulating CO2. Senator James Inhofe (R–OK) introduced companion legislation. Specifically, the Energy Tax Prevention Act would “amend the Clean Air Act to prohibit the Administrator of the Environmental Protection Agency from promulgating any regulation concerning, taking action relating to, or taking into consideration the emission of a greenhouse gas to address climate change, and for other purposes.”
The most effective and comprehensive approach would be to permanently prohibit any federal regulators from using greenhouse gas emissions as a reason to slow or prevent economic activity. Senator John Barrasso (R–WY) introduced the Defending America’s Affordable Energy and Jobs Act, which would prevent the EPA and other federal regulators (such as the U.S. Fish and Wildlife Service) from using any environmental act to impose regulations based on climate findings, including Clean Air Act, the Endangered Species Act, the Clean Water Act, and the National Environmental Policy Act. The act would “preempt regulation of, action relating to, or consideration of greenhouse gases under Federal and common law on enactment of a Federal policy to mitigate climate change.”
Congress needs to enact policy that would permanently prevent unelected bureaucrats from regulating CO2 and the catastrophic economic consequences that come along with it. Only this approach would provide the regulatory certainty American businesses need.