Climate Policy Crash
The EPA is poised to regulate greenhouse gases without a legislative fix.


Jonathan H. Adler

Climate change remains at the top of President Obama’s agenda, current economic woes notwithstanding. Obama recently inveighed against energy sources that “threaten our planet,” and several of his early appointments–including Energy Secretary Stephen Chu, science adviser John Holdren, and White House energy czar Carol Browner–signal the importance of climate-change policy to this administration. During the campaign, Obama endorsed an 80-percent reduction in greenhouse-gas emissions by 2050, and House Speaker Nancy Pelosi said she hopes to move climate-change legislation before the end of the year. California Representative Henry Waxman’s successful coup against longtime Energy and Commerce Committee Chairman John Dingell of Michigan makes congressional action more likely.

Even were Congress to have second thoughts, the climate-policy die is cast. In April 2007, the Supreme Court held, in Massachusetts v. EPA, that the U.S. Environmental Protection Agency (EPA) has the authority to regulate greenhouse gases under the Clean Air Act. Thus no new legislation is required for the Obama EPA to begin crafting rules to control the emission of carbon dioxide and other gases from automobile tailpipes, power plants, boilers, and more. Like it or not, EPA administrator Lisa Jackson and her team have ample authority to impose controls on the most ubiquitous by-product of modern industrial civilization.

Indeed, they may not have a choice. Justice Stevens’s majority opinion in Massachusetts did not command the EPA to begin regulating, but that is the practical effect of the Court’s decision. At issue was Section 202 of the Clean Air Act, which requires the EPA to impose emission standards on new motor vehicles for any air pollutants which in the EPA’s “judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare.” The Court decided that greenhouse gases are “air pollutants,” and so the EPA must set standards if it believes climate change “may reasonably be anticipated to endanger public health or welfare.”

The EPA would have a hard time claiming not to believe that, even if the Obama administration were so inclined: In numerous documents and statements, the agency has reiterated its belief that climate change is a significant concern, and that a gradual warming could have deleterious effects on health and welfare. Even during the Bush administration, the EPA endorsed federal action to “reduce the risk” of global warming. The EPA has done everything short of publishing a formal statement that climate change “may reasonably be anticipated to endanger public health or welfare,” and no court would readily let it off the hook. Thus, Massachusetts effectively requires the imposition of carbon-dioxide controls on new cars and trucks.

But that’s not the only regulation affected by the Court’s conclusion that greenhouse gases are air pollutants under the act. Section 111 of the act, for instance, requires the agency to set standards for some stationary sources of emissions “which may reasonably be anticipated to endanger public health or welfare.” So if the EPA must regulate automotive emissions under Section 202, it must regulate emissions from power plants and factories under Section 111 as well.

And there’s more. The act requires the issuance of permits and the imposition of technological controls on facilities that emit more than 250 tons of regulated pollutants annually. For traditional pollutants, such as sulfur oxides, these provisions capture only the really big emitters–large power plants and the like. Applied to carbon dioxide, however, the 250-ton standard could encompass many commercial and residential buildings, increasing the number of regulated facilities tenfold, if not more.

A plain reading of the Clean Air Act would also seem to require that the EPA set a National Ambient Air Quality Standard (NAAQS) for carbon dioxide, and then force state pollution-control agencies to develop plans to ensure that metropolitan areas comply. This is a fool’s errand. There is simply no way for state and local regulators to ensure that individual cities, or even larger regions, meet an air-quality standard for a globally dispersed atmospheric pollutant. Local emissions could be reduced to zero, and a given city could still violate the NAAQS because of emissions elsewhere. It would be a pointless regulatory exercise, but after Massachusetts v. EPA it is the law.

The regulatory train thus set in motion by the Supreme Court will move apace unless Congress stops it through legislative action. What should such legislation look like? Some who would prefer to replace existing Clean Air Act rules with a cap-and-trade emissions-control regime have labored under the delusion that such a regime could be adopted by administrative fiat. Unlikely. Last year a federal court struck down the Bush administration’s effort to create a regional cap-and-trade system for traditional air pollutants. If the Clean Air Interstate Rule was invalid under the Clean Air Act, there is little hope for implementing a greenhouse-gas trading system.