U.S. EPA Issues Proposed Finding That GHGs Pose Threat to Public Health

After years of inaction by the U.S. federal government to address climate change, the tables have suddenly turned. Earlier today the U.S. Environmental Protection Agency issued a "proposed finding" that greenhouse gases (GHGs) contribute to air pollution that may endanger public health or welfare.

The proposed finding now enters a 60 day public comment period, which is the next step in the required deliberation process that EPA must take before issuing a final finding.

EPA Administrator Lisa P. Jackson said, "This finding confirms that greenhouse gas pollution is a serious problem now and for future generations. Fortunately, it follows President Obama's call for a low carbon economy and strong leadership in Congress on clean energy and climate legislation."

Addressing the seriousness of the challenge of climate change, Ms. Jackson said, "In both magnitude and probability, climate change is an enormous problem. The greenhouse gases that are responsible for it endanger public health and welfare within the meaning of the Clean Air Act."

The announcement came two years after the U.S. Supreme Court in Massachusetts v. EPA ordered the agency to determine whether GHGs should be regulated under the Clean Air Act.

Former Bush administration EPA general counsel Roger Martella said, "The proposed endangerment finding marks the official beginning of an era of controlling carbon in the U.S. This means that EPA's mission of environmental protection will burst outside those bounds and place it on the stage as one of the most influential regulators of both energy use and the greater economy in the upcoming year," according to The Washington Post ("EPA Proposes Regulating Greenhouse Gas Emissions," April 17, 2009).

The proposed finding involves six gases:

• Carbon dioxide
• Methane
• Nitrous oxide
• Hydrofluorocarbons
• Perfluorocarbons
• Sulfur hexafluoride
• The proposed finding does not include any proposed regulations; that step would be undertaken only after a "final" finding of endangerment and hearing from stakeholders.
  

The proposed finding does not include proposed regulations. They would be proposed and adopted only after the endangerment finding becomes final.

Meanwhile, legislation -- the American Clean Energy and Security Act of 2009 -- authored by U.S. House Energy Committee Chair Henry Waxman (D-CA) and aimed at establishing a GHG cap-and-trade system, will be considered by the House in the next few weeks.

So which approach is better? Legislative or regulatory? It depends on your position in the overall debate.

Legislative: More flexible, greater stakeholder influence

U.S. Senator Barbara Boxer, chair of the Senate Environment and Public Works Committee, favors the legislative approach. "The best and most flexible way to deal with this serious problem is to enact a market-based cap-and-trade system which will help us to make the transition to clean energy and will bring us innovation and strong economic growth," according to the BNA Daily Environment Report ("EPA Issues Proposes Rules Finding Greenhouse Gases Endanger Health, Welfare," April 17, 2009).

Administrator Jackson has also voiced a preference for legislation.

Business will also prefer this approach now that it is clear that the U.S. will take action on reducing GHGs.  The reason is that the chances of the various industrial sectors having their views taken into account is much greater in the legislative process where they can seek to influence politicians than in the regulatory process where their influence will be considerably less.  This is made all the more important bearing in mind that while Congress is likely to establish a cap-and-trade system, the EPA is likely to mandate what measures industry must take and skip the cap-and-trade system.  For business this is a key issue since they always prefer more flexibility to less flexibility.  

Regulatory: More control by EPA, probably a less flexible reduction system

If it becomes impossible for Congress to enact GHG-related legislation, then the regulatory approach can be undertaken through the authority of the Obama administration acting on its own. If this approach is taken, the likelihood for robust involvement from the various stakeholders, perhaps most importantly those who prefer a very "conservative" approach will be lessened.

More specifically, while EPA must take account of the various stakeholders' positions in the final analysis the agency will do pretty much what it so desires.

This approach, however, is likely to be susceptible to legal challenge but not before the endangerment ruling is finalized.

Endangerment Finding Just Around the Corner?

Since last November, and the election of Barack Obama, there has been speculation as to whether "his" EPA would classifiy carbon as a dangerous pollutant.

Well the wait may be about over, according to the venerable Wall Street Journal. In today's edition ("Henry Waxman Has a Plan...," April 10, 2009) the Journal's editoral page proclaims, "As early as next week the EPA will classify carbon as a dangerous pollutant under current clean air laws." The Journal speculates that this finding will prompt "a seperate avalanche of new regulations."

The editorial goes on to say, "The Obama Administration claims it is flirting with this 'endangerment finding' and the economic havoc it would wreak only to force Congress into falling in line with its climate agenda." Funny, but the European Union has already enacted such legislation and last time I checked the EU still seemed to be standing. Or did I miss something and the EU collapsed this morning? I hope not since I have 100 Euros in my billfold.

And since when does the always-pro-capitalism-without-restrictions Wall Street Journal oppose the creation of a market -- in this case a market for carbon emmissions credits? I thought the Journal figured that markets were the cure for everything.