How to Stop Cap-and-Trade – by Rich Trzupek

Rich Trzupek is a veteran environmental consultant and senior advisor to the Heartland Institute. He is the author of the new book Regulators Gone Wild: How the EPA is Ruining American Industry (Encounter Books).


cap-and-trade-budget-defecit

The Obama administration is trying to use the threat of Environmental Protection Agency regulation of greenhouse gases under its Clean Air Act authority as a means to force Congress into passing some form of a cap-and-trade bill.

It’s a subtle strategy, and many Republicans have risen to the bait, worried about what would happen if the EPA tries to implement a so-called “command and control” system instead of a market-friendly solution. But the GOP shouldn’t be concerned. In fact, they should call the administration’s bluff.

Fox News reports that a top White House economic official warned:

“If you don’t pass this legislation, then … the EPA is going to have to regulate in this area. And it is not going to be able to regulate on a market-based way, so it’s going to have to regulate in a command-and-control way, which will probably generate even more uncertainty.”

True enough, but under the Clean Air Act, rulemaking is an exhaustive, time-consuming process. Consider what would have to happen before the EPA could regulate greenhouse gases under the Clean Air Act.

  • The agency would, at a minimum, have to determine what control technologies are available and which are most cost effective.
  • It would have to determine which source categories should be regulated and how.
  • It would have to write the regulations.
  • The EPA would have to require each state to implement some version of the new regulations into its State Implementation Plan.

And, every step of the way, the agency would have to seek public comment, respond to public comment, hold meetings with stake holder groups, determine economic impacts and worry about legal challenges.

A relevant precedent is the Clean Air Interstate Rule that was begun under the Clinton administration. Yet, it was not implemented until this year and it still faces legal hurdles.

Neither the Clean Air Act nor the EPA’s internal processes are designed to take quick regulatory action, much less when that action involves as grand a scheme as greenhouse gas control. It is simply inconceivable that the agency could develop anything close to a final rule before the end of Obama’s term. By that time, resurgent ice-growth in the Arctic, further Climategate-type revelations, and economic realities may tip public opinion against the supposed “consensus” of today.

Not only should the GOP call Obama’s bluff on cap-and-trade, but they should up the ante. Under the Clean Air Act, the EPA is obligated to regulate major sources of air pollutants. For purposes of the operating permit program, a major source is defined as any source with the ability to emit 100 tons or more of an air pollutant per year. Since the Agency has officially declared the greenhouse gases are pollutants, this threshold should apply.

It is ridiculously easy to reach this threshold of greenhouse gas emissions. A larger household gas furnace (rated at about 160,000 Btu/hour) has the potential to emit 100 tons per year of greenhouse gas emissions, for example. Applying this threshold would bring churches, elementary schools, the corner store – literally millions of sources – into the regulatory structure. Estimates vary, but the EPA itself says the number of major sources would increase from the current inventory of 15,000 sources to over six million.

Why would a Republican support such a massive regulatory scheme — command and control regulation of six million sources? Because it can’t be done. It’s an absurd goal and, if attempted, would overload and paralyze the regulatory system. The EPA recognizes this, and has proposed a so-called “tailoring rule” to manage the problem. The tailoring rule redefines a major source, for greenhouse gases only, as any source capable of emitting 25,000 tons per year of our latest and greatest pollutant.

The tailoring rule would be a neat solution to a problem that has EPA very worried, but it’s also a solution that many attorneys don’t feel can survive a legal challenge. The Clean Air Act is quite clear in defining what a major source is, and it does not grant EPA the authority to redefine those criteria.

Even if the tailoring rule remains in place, though, the EPA would still have to deal with all of the regulatory inertia inherent to the rulemaking process under the Clean Air Act. Calling the administration’s bluff, in other words, would guarantee that no greenhouse gas regulation would be implemented under the Obama administration. And that means that American industry – particularly the small businesses who would be hit with higher energy costs under cap-and-trade – could breathe easier.

Rich Trzupek is a chemist and Principal Consultant at Mostardi Platt Environmental, an environmental consulting firm based in Oak Brook, Illinois. He specializes in air quality issues and is the author of McGraw-Hill’s Air Quality Permitting and Compliance Manual. Rich is a confirmed skeptic with regard to the theory that human activity has caused global warming. He is also a regular contributor at threedonia.com.

  • dreadbongo

    Does not every rule need congressional approval before it becomes part of the CFR?

  • doloresdelaura

    The Republicans should indeed call the EPA's bluff. If the economy suffers enough from their actions ie command and control, the Dems would lose control of congress for a generation.

  • josephwiess

    I think the EPA has gotten too big for it's britches. It is an agency run by the congress, and as such has no business telling the congress that it can set rules and enact policies and that the congress should get used to it.

    This is what happens when people who aren't scientists try to act upon scientific data.

  • KevinStowell

    Dolores, I've been waiting for 57 years for the invertebrates to stand up to these festering boils. It' not going to happen in any meaningful way.

  • owyheewine

    The EPA has never been limited by hypocracy, and would, if enabled, enforce their regulations selectively to fulfill their political whims. This is a VERY bad idea.

  • USMCSniper

    George Will has the envronmentalists' number “Green on the Outside and Red on The Inside.”

    For some people, environmentalism is collectivism in drag. Such people use environmental causes and rhetoric not to change the political climate for the purpose of environmental improvement. Rather, for them, changing the society's politics is the end, and environmental policies are mere means to that end.

    The unending argument in political philosophy concerns constantly adjusting society's balance between freedom and equality. The primary goal of collectivism — of socialism in Europe and contemporary liberalism in America — is to enlarge governmental supervision of individuals' lives. This is done in the name of equality.

    People are to be conscripted into one large cohort, everyone equal (although not equal in status or power to the governing class) in their status as wards of a self-aggrandizing government. Government says the constant enlargement of its supervising power is necessary for the equitable or efficient allocation of scarce resources.

    Therefore, one of the collectivists' tactics is to produce scarcities, particularly of what makes modern society modern — the energy requisite for social dynamism and individual autonomy. Hence collectivists use environmentalism to advance a collectivizing energy policy. Focusing on one energy source at a time, they stress the environmental hazards of finding, developing, transporting, manufacturing or using oil, natural gas, coal or nuclear power.

  • mmcfm

    “The agency would, at a minimum, have to determine what control technologies are available and which are most cost effective.
    It would have to determine which source categories should be regulated and how”

    This administration has had no problem forcing banks who were not in trouble to take bail out funds, tell them to lie about it, and demand they take over other banks in trouble.

    This administration has had no problem taking General Motors from the share holders and giving it to the UAW, and closing down Saturn with a massive job loss.

    This administration and its EPA are not going to bother with determining what technologies are available, and they are just going to blanket America with new, 'pie-in-the-sky, environmental-cliche mandates they've been dreaming of for years and we'll all pay the price.

    Reality, reasonable actions and incremental measures are not the hallmark of the Obama administration. As quoted in the New York Times December 3, President Obama was told his policies are killing jobs,

    “The president acknowledged, “This is a legitimate concern [this validation is part of that 'community organizer training],” one that he and his advisers had discussed before he took office.

    But Mr. Obama said he had decided that “if we keep on putting off tough decisions about health care, about energy, about education, we’ll never get to the point where there’s a lot of appetite for that.”

    So, before your appetite for EPA control of your thermostat is dampened, they're going to get right in there and regulate you before the technology is manufactured, but don't worry, he's got billions of TARP money to open a plant to churn those needed government controlled thermostats out next week. And, he'll be creating jobs.

    How's that hope and change working for you?

  • Jeff_Perren

    An interesting gambit, and perhaps necessary given the circumstances. But rather than pragmatically hoping to game the system in favor of freedom to stall for time, it might be best to urge Americans to demand the elimination of the EPA entirely. It should be replaced with a Dept of Property Protection which concerns itself solely with issues of downstream laws.It's time to start the revolution to restore freedom in earnest.

    • http://www.facebook.com/ Roby

      I told my gradnomhetr how you helped. She said, “bake them a cake!”

  • http://www.threedonia.com/ Rich Trzupek

    @dreadbongo: To answer your question, no. Under its Clean Air Act authority, the EPA can make rule changes by itself. But, it can not simply write up a rule and force it down the public's throat – well, not quickly anyway. As I state above, the Agency has to go through a tedious, arduous – and most of all lengthy – process before promulgating a rule. (If they don't go through the process, the rule won't hold up to a legal challenge.) The rules to control nitrogen oxides took more than 10 years to develop. No way – repeat NO WAY – they'd get this done before 2012 under their CAA authority.

  • doubledan

    Since Congress holds the purse strings, why not go tit for tat. For every new regulation a reduction by a given percentage of funding.

  • GaryMX5NA

    Rich,

    Do you really think that massive reg's have not already been written and some fast track process is going to be offered to solve the “crisis”? Just like the health care bills, and stimulus package, the groups who stand to gain power and money are going to be prepared for this windfall opportunity. We are under attack by a well prepared enemy.

  • JeromefromLayton

    Problem is that the EPA can declare an “emergency” and limit the comment period to thirty days. Also, about the only major group of people who understand the Notice of Proposed Rule Making (NPRM) process are aviators who deal the the FAA rule making process frequently. The rest of the population are mushrooms. Time to “Lawyer Up” and start citing the East Anglia “Climate-gate” papers.

  • Obakeinu

    With any other administration, I'd be inclined to say 'yes', this is a viable option.

    Since Obaka is at the helm, the EPA will steamroll right pass Congress; and with the Far Left fully in charge, they'll say NOTHING even though their 'power' is effectively being 'undercut'.

    Quite frankly, the ONLY tactic that might have any effect would be a prominent GOP 2010 'plank' pledging action against the EPA's CO2 diktat.

    Threats concerning 'funding' are the only club the Lefties understand.

    This should a major issue during 2012 as well, especially if we can keep 'Climategate' an active issue. This is a club that we should wield without mercy for the next three years.

  • mamapajamas

    Doubledan… that is absolutely brilliant! Now all we have to do is get control of Congress back, which can happen in 2010.

  • bubba4

    And why are you trying to figure out a way for companies to keep polluting without restraint?

    I thought pollution was still bad…maybe I missed the FPM article where that was a “leftist” plot and pollution is really giving us vitamins and making us live longer.

  • inpalinwetrust

    The Cover-Up Goes On, UN Security Stops Journalist’s Questions About Climategate Scandal
    http://inpalinwetrust.wordpress.com/2009/12/13/

    Climategate: Barack Obama’s rule by EPA decree is a coup d’etat against Congress
    http://inpalinwetrust.wordpress.com/2009/12/13/

  • inpalinwetrust

    Climategate: Barack Obama’s rule by EPA decree is a coup d’etat against Congress
    http://inpalinwetrust.wordpress.com/2009/12/13/

    The Cover-Up Goes On, UN Security Stops Journalist’s Questions About Climategate Scandal
    http://inpalinwetrust.wordpress.com/2009/12/13/