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

Posted By Rich Trzupek On December 10, 2009 @ 12:13 am In FrontPage | 20 Comments

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.


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