The Environmental Protection Agency (EPA) is moving forward
aggressively to regulate fossil fuels in the name of fighting
global warming. Recent agency proposals would start with emissions
standards for cars and trucks, but these would likely lead to
subsequent regulations affecting a million or more businesses and
other energy-using entities.
Even the EPA itself admits that regulations will be burdensome,
and it has not hidden the Obama Administration's strategy of
threatening unworkable regulations to spur Congress to pass
legislation instead. The Waxman-Markey and Kerry-Boxer bills,
like the proposed regulations, are an expensive and ineffective
response to the overstated threat of global warming. Indeed, the
best answer is: none of the above.
EPA v. the U.S. Economy
In Massachusetts v. EPA (2007), the Supreme Court held
that the EPA could regulate carbon dioxide from motor vehicles
under the Clean Air Act. However, the decision did not require the
agency to take this step. The Bush Administration refrained from
rushing to do so, opting instead to gather information on the
potential economic and environmental consequences of addressing
global warming in this manner. This was a wise move: Even putting
aside growing doubts about the seriousness of the global warming
threat, regulating carbon dioxide under the Clean Air Act is a very
poor way of addressing it.
Nonetheless, the Obama Administration has reversed course and
accelerated the regulatory process, proposing both a new motor
vehicle emissions rule as well as an overall finding that carbon
dioxide endangers public health and welfare.
Although the proposed rules address all greenhouse gases, the
main target is carbon dioxide, which is the unavoidable byproduct
of fossil fuel combustion--the coal, oil, and natural gas that
provides Americans with 85 percent of their energy. The only way to
reduce emissions is with costly measures that drive up the price of
using this energy. The EPA's proposed new motor vehicle standards
would increase the sticker price of new cars and trucks by $1,300
according to the agency. Others say much more.
A Regulatory Pandora's Box
New motor vehicle regulations are bad enough, but the Clean Air
Act does not end there. Once something is regulated as a pollutant
under one section of the act, it is automatically regulated under
several other sections. Fully applying the rest of the Clean Air
Act to sources of carbon dioxide emissions would result in severe
adverse economic consequences.
For example, the stringent New Source Review permitting program
applies to any source that emits 250 tons of any regulated
pollutant per year, and in some cases as little as 100 tons per
year. Most pollutants currently regulated are trace compounds like
smog or mercury that are typically measured in parts per billion,
so this threshold level sensibly distinguishes between minor
contributors and significant ones.
But carbon dioxide is not a trace compound. Background levels of
naturally occurring carbon dioxide alone measure 275 parts per
million, and even relatively small usage of fossil fuels could
reach 250 tons. Thus, even the kitchen in a restaurant, the heating
system in an apartment or office building, or the activities
associated with running a farm could cause these and other entities
to be regulated--potentially more than a million buildings, 200,000
manufacturing operations, and 20,000 farms.
New Source Review permitting imposes an average of $125,000 in
costs and takes 866 hours to complete. These and other onerous
programs would now be imposed, for the first time, on a million or
more entities beyond the large power plants and factories that have
already been regulated in this manner.
EPA admits the unworkability of applying Clean Air Act red tape
to nearly everything that uses more than minimal amounts of
energy. Indeed, the agency concedes that state and
federal permitting authorities would "be paralyzed by enormous
numbers of these permit applications" The agency's solution is to
try to rewrite the statute, turning the 250-ton threshold into
25,000 tons, thus exempting all but the largest industrial
sources. However, past EPA attempts to take
liberties with the Clean Air Act language have failed to survive
the inevitable court challenges.
The Threat of Regulation to Spur
EPA administrator Lisa Jackson has candidly admitted that one of
the goals of the highly problematic regulatory proposal is to spur
on legislation: "Legislation is so important because it will
combine the most efficient, most economy-wide, least costly, least
disruptive way to deal with carbon dioxide pollution," she recently
stated, adding that "we get further faster without top-down
While the regulations would be disruptive to the economy, the
legislation currently in Congress would be very damaging as well.
The Heritage Foundation's analysis of the economic impacts of
Waxman-Markey found $393 billion in lost gross domestic product
each year, nearly $3,000 in annual energy costs for a household of
four, and over a million net job losses. The Kerry-Boxer Senate
bill was introduced with many details missing, but it appears to be
at least as costly.
Both the regulatory and the legislative approaches unilaterally
target American emissions and leave the rest of the world off the
hook; thus, it would accomplish little. Climate scientist Chip
Knappenberger estimates that, even assuming continued man-made
global warming, the Waxman-Markey bill would reduce the earth's
future temperature by no more than 0.2 degrees Celsius by 2100--an amount probably too small to verify
and certainly too small to matter. The proposed regulations would
be just as ineffective.
Rather than settle for the least bad of two undesirable options,
there is a better approach to the issue: Do not pursue any
problematic policy, regulatory or legislative. H.R. 391, sponsored
by Marsha Blackburn (R-TN), would eliminate any EPA authority to
regulate carbon dioxide and other greenhouse gases under the Clean
Air Act. It is currently the subject of a discharge petition, which
would allow it to come to a vote before the full House.
Remove the Threat
Rather than respond to the threat of problematic regulation by
enacting problematic legislation, Congress should remove the
regulatory threat and then debate various global warming
legislative proposals on their merits. The merits of costly
cap-and-trade proposals are highly dubious, but they are not made
any better by the specter of EPA regulation.
Lieberman is Senior Policy Analyst in Energy and the
Environment in the Thomas A. Roe Institute for Economic Policy
Studies at The Heritage Foundation.