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The Worst Option on Greenhouse Gases

Wednesday, February 25, 2009

Eighty-five percent of everything Americans do with energy might soon be regulated by the EPA.

Throughout the presidential campaign, and into the early days of the Obama presidency, one thing has been crystal clear: the administration is determined to establish strict controls over the emissions of greenhouse gases that trap heat in the Earth’s atmosphere. The administration has set highly aggressive targets, declaring a goal of reducing greenhouse gas emissions by the year 2050 to 80 percent of the level emitted in 1990.

So it is no surprise that two Obama appointees, the Environmental Protection Agency’s Lisa Jackson and former EPA administrator Carol Browner, are eager to regulate greenhouse gases under the auspices of the Clean Air Act. Sadly, of all the many ways in which one might control greenhouse gases, this approach is the worst by far.

In the waning days of the Bush administration, EPA staff were tasked with assembling an Advanced Notice of Proposed Rule-Making on “Regulating Greenhouse Gas Emissions under the Clean Air Act.” The proposed rule, which ran 564 pages, described what EPA staff thought would be needed to regulate greenhouse gases.

The Obama administration has unwisely chosen to start controlling greenhouse gas emissions with the worst approach of all.

In an inter-agency critique of the proposed rule, Susan Dudley, then Administrator of the Office of Information and Regulatory Affairs in the Office of Management and Budget, observed that regulating greenhouse gases under the Clean Air Act would entail:

  • Granting permits case-by-case for the building design of large office and residential buildings, hotels, retail stores and other similarly sized projects;
  • Regulating the design of power plants in the U.S. manufacturing sector to increase energy efficiency;
  • Mandating various technologies to achieve greenhouse gas emission reductions in the trucking industry, including devices to limit vehicle speed;
  • Regulating ship design and marine operations, including redesigning ship hulls, limiting ship speed, using less ballast, and regulating route planning and port management, and;
  • Placing additional regulations on animal feeding operations, agricultural soil management, and fire management practices as a source of greenhouse gas emissions.

Your local coffee shop won’t emerge unregulated either: under another proposal, a vast number of small- to medium-size businesses will have to obtain costly, time-consuming EPA approval and implement “Best Available Control Technology” before starting up or undergoing significant modifications.

As attorney Peter Glaser, a specialist in the Clean Air Act, observed in congressional testimony regarding the proposed rule:

“Buildings of about 100,000 square feet, if they are heated by oil or natural gas, would likely become subject to the program, as would relatively small users of natural gas such as commercial kitchens that use natural gas for cooking and businesses that use CO2 naturally as a component of their operations. A very large number and variety of buildings and facilities could therefore become subject to the program—including many office and apartment buildings; hotels; enclosed malls; large retail stores and warehouses; college buildings, hospitals and large assisted-living facilities; large houses of worship; product pipelines; food processing facilities; large heated agricultural facilities; indoor sports arenas and other large public assembly buildings; restaurants; soda manufacturers; bakers, breweries and wineries; and many others.” 

Even your lawnmower won’t escape EPA’s scrutiny. According to Glaser, the proposed rule suggests that among other household greenhouse gas regulations, Clean Air Act regulation “could require a different unit of measure tied to [a] machine’s emissions or output—such as grams per kilogram of cuttings from a ‘standard’ lawn for lawnmowers.”

Even your lawnmower won’t escape the EPA’s scrutiny.

The Obama administration was bound to make good on campaign promises to control greenhouse gas emissions. The question remained, what policy should be taken? There are three broad options available: carbon emission trading (bad), carbon taxes (better), or regulation (horrible). The Obama administration has unwisely chosen to start with the worst approach of all, applying draconian directives to an industrial byproduct uniquely unsuited to traditional command-control regulations.

It will take time for these regulations to bite and the real pain won’t be felt for years to come. But make no mistake: America gets 85 percent of its energy from fossil fuels, and those fuels, and what Americans do with them, will soon be regulated by the EPA. This will likely be the most costly and pervasive regulatory regime in U.S. history.

Kenneth P. Green is a resident scholar at the American Enterprise Institute.

Image by Darren Wamboldt/The Bergman Group.

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