by Christine Hall
January 26, 2009

Washington, D.C., January 26, 2009— President Obama today announced he would seek to allow states to restrict tailpipe emissions and order the U.S. Department of Transportation to develop higher fuel-efficiency standards.  Both are disastrous for the American people and the economy, say energy policy experts at the Competitive Enterprise Institute. 

Statement by Sam Kazman, CEI General Counsel, on CAFE standards: 

Federal fuel economy standards are already a huge hidden burden on the industry, and the President is now proposing that make that burden even heavier.  Congress is spending billions to bail out the auto industry, and here's the President coming up with new ways to sink it.  (Read more on CAFE standards.)

Statement by Marlo Lewis, CEI Senior Fellow, on state regulation: 

If President Obama's EPA grants the waiver, an estimated 1.2 million previously unregulated buildings and facilities would be exposed to new regulation, controls, paperwork, and penalties under the Prevention of Significant Deterioration (PSD) pre-construction permitting program; and millions would potentially be subject to new record-keeping, reporting, and emission fees (virtual carbon taxes) under the Title V operating permits program. 

The moment it becomes clear that PSD and Title V would apply to CO2, new construction would come to a screeching halt. A more potent de-stimulus package would be difficult to imagine.

Obama's plan with respect to state regulation would have the Environmental Protection Agency grant a waiver to states, allowing them to establish greenhouse gas emission standards under authority of the Clean Air Act (CAA). That would make CO2 a regulated pollutant under the CAA, which in turn will start the regulatory cascade described in the EPA's Advanced Notice of Proposed Rulemaking (ANPR) and numerous comments (see here, here, and here).