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The Environmental Protection Agency (EPA) is developing regulations to restrict carbon dioxide emissions under the Clean Air Act. These regulations will have a significant impact, because EPA is working to restrict the use of natural gas, coal, and petroleum—the source of 82 percent of America’s total energy consumption. Amazingly, EPA claims to be implementing these regulations because of global warming, but according to EPA, their regulation won’t affect global warming in any meaningful way. This begs the question—why is EPA implementing regulations that increase the price of energy, harm the economy, and have no benefits?

Background

Since at least the late 1990s, environmental activists have tried to get EPA to regulate greenhouse gases.[1] In 1998, EPA General Counsel Jonathan Cannon wrote a legal opinion stating that EPA had the authority to regulate greenhouse gases under the Clean Air Act.[2] During the rest of the Clinton administration and into the Bush administration, EPA declined to regulate greenhouse gases and was subsequently sued by environmental groups and a few states. This lawsuit became Massachusetts v. EPA and eventually reached the Supreme Court. Concerned about the potential impacts of global warming, such as rising sea levels, the Supreme Court in a 5-4 decision found that EPA had the authority to regulate greenhouse gases under the Clean Air Act.

EPA’s Renewed Efforts to Regulate Greenhouse Gases

After the Supreme Court’s decision in Massachusetts v. EPA, EPA had to make a finding of whether carbon dioxide and greenhouse gases “endanger public health and welfare.” For EPA to avoid taking further regulatory action, they would need to rebut the Supreme Court’s claims of alleged harms from global warming as well as EPA’s past claims of harms from greenhouse gas emissions. In the end, EPA did what almost all bureaucracies do when given a chance to increase their regulatory scope and power—it chose the route to more power.

On December 7, 2009, EPA found that carbon dioxide and other greenhouse gases threatened public health and welfare, and took steps to regulate greenhouse gas emissions from automobiles. Despite EPA’s statement that “[t]hese findings do not themselves impose any requirements on industry or other entities,”[3] the structure of the Clean Air Act does not allow EPA to only regulate carbon dioxide emissions from automobiles. Instead, once EPA finds that something is a pollutant, EPA has the legal duty to regulate those emissions from other sources as well.

Because EPA started regulating greenhouse gas emissions from automobiles, this action triggers a program under the Clean Air Act called Prevention of Significant Deterioration (PSD). The PSD program regulates sources that emit 250 tons or more of emissions a year. This may sound like a lot, but a 100,000 square foot building (more or less 10 stories) would emit that much in a year. This means that EPA would regulate the energy use of all large buildings and even of many smaller buildings (such as computer data centers) that use large amounts of energy. There are likely one million new sources that EPA would have to regulate[4] and require the buildings to use “Best Available Control Technology”—whatever EPA decides that is for the buildings.[5] These regulations could extend to the heating sources of large single-family homes, as well as stores, churches, hospitals, and police stations.

EPA would also likely regulate all large beef or dairy operations in the country because cows emit (to put it delicately) large amounts of the potent greenhouse gas methane. Who knows how EPA will propose to control these emissions?

EPA’s Regulation of Carbon Dioxide and Greenhouse Gases So Far

After Mass v. EPA, EPA’s first regulation of carbon dioxide and greenhouse gases were fuel economy standards for cars and light trucks for model years 2012–2016.[6] What is amazing about the regulation is the incredibly small impact the rule will have on global warming and sea-level rise. After all, the environmental litigants convinced the Supreme Court that carbon dioxide could be considered harmful to humans, and EPA found that increasing levels of carbon dioxide endangered “public health and welfare.” But when it comes to the actual regulations, EPA claims they will reduce global temperature by “0.006 to 0.015 °C by 2100” and reduce sea-level rise by approximately 0.06–0.14cm by 2100.”[7] This is an incredibly small amount, to say the least.

EPA has also imposed fuel economy regulations on medium and heavy duty trucks. The “benefits” of this rule are even smaller than before. According to EPA “global mean temperature is estimated to be reduced by 0.0017 to 0.0042°C, and sea-level rise is projected to be reduced by approximately 0.017–0.040 cm by 2100.”[8]

EPA has also announced new greenhouse gas regulations on new coal-fired power plants. Continuing on the same theme of ever-diminishing “benefits” from reducing carbon dioxide emissions, EPA’s estimate of the benefits of this rule are even smaller than the 4 thousandths of a degree Celsius estimate EPA claimed for the medium and heavy duty truck rule. In fact, EPA admits that under likely economic conditions there there will be no reduction in U.S. emissions because of its regulation of greenhouse gases from new coal-fired power plants. Zero! (See page p. 49.)

It is hard to see how EPA can say that carbon dioxide emissions from cars and coal-fired power plants are harming “public health and welfare” and then impose regulations that its own analysis admits do essentially nothing about the problem.

EPA is Just Getting Started with Their Regulation of Greenhouse Gases 

It is important to note that EPA’s regulation of greenhouse gases has just begun. EPA understands the point made above that once EPA found that carbon dioxide emissions were harmful under one part of the Clean Air Act (the sections that regulation emissions from vehicles), then EPA was legally bound to regulate carbon dioxide and other greenhouse gas emissions from other sources. But the problem is that there are millions of sources of carbon dioxide that meet the requirements of the law. As a result of this quandary, EPA implemented a “tailoring rule” which attempts to rewrite the Clean Air Act to work better for the regulation of carbon dioxide.[9] But EPA cannot legally rewrite the Clean Air Act. The Clean Air Act was not designed to regulate carbon dioxide and other greenhouse gases. As a result, EPA is currently in court defending its “tailoring rule.”

EPA will continue to regulate more and more sources of greenhouse gas emissions. As has been shown above, it does not matter to EPA if there are zero or very tiny climate benefits of their regulation. The magnitude of benefits apparently does not matter to EPA. EPA will only stop regulating more and more sources of carbon dioxide and greenhouse gas emissions if the courts stop EPA or if Congress changes the law. Otherwise, there is no reason to believe EPA will change course.



[1] One of the first attempts was the International Center for Technology Assessment’s petition for EPA to regulation greenhouse gases in 1999. See http://www.icta.org/doc/Chronology%20Short%208-31-06.pdf.

[2] Jonathan Z. Cannon, The Significance of Massachusetts v. EPA, May 21, 2007, http://www.virginialawreview.org/inbrief.php?s=inbrief&p=2007/05/21/cannon.

[3] Environmental Protection Agency, Endangerment and Cause or Contribute Findings for Greenhouse Gases under Section 202(a) of the Clean Air Act, http://epa.gov/climatechange/endangerment.html.

[4] Portia M.E. Mills & Mark P. Mills, A Regulatory Burden: The Compliance Dimension of Regulating CO2 as a Pollutant, http://www.uschamber.com/reports/regulatory-burden-compliance-dimension-regulating-co2-pollutant.

[5] For a more complete explanation of the issue with Prevention of Significant Deterioration see William Kovacs’ testimony before the United States Committee on Environment and Public Works: http://epw.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=9cc4d7e4-f066-4534-9337-9bf53154b0e1 and Marlo Lewis’ testimony before the same committee: http://epw.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=38ed7b76-2817-4f03-9e51-537515c9ffd2.

[6] Environmental Protection Agency, Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate

Average Fuel Economy Standards; Final Rule, 75 Fed. Reg. 25,506 (May 7, 2010), http://www.gpo.gov/fdsys/pkg/FR-2010-05-07/pdf/2010-8159.pdf.

[7] Id.  at 25,495.

[8] Environmental Protection Agency, Greenhouse Gas Emissions Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles, 76 Fed. Reg. 57,106, 57,299 (Sept. 15, 2011) http://www.gpo.gov/fdsys/pkg/FR-2011-09-15/pdf/2011-20740.pdf.

[9] Environmental Protection Agency, Final Rule: Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule; Fact Sheet, http://www.epa.gov/NSR/documents/20100413fs.pdf.