CO2 regulation under the Clean Air Act: Economic Train Wreck, Constitutional Crisis, Legislative Thuggery

Last week, EPA leaked a Power Point presentation revealing that the agency plans on April 30 to propose a finding that “air pollution” from emissions of greenhouse gases (GHGs), principally carbon dioxide (CO2), “endanger public health and welfare.”

The endangerment proposal, part of EPA’s response to the Supreme Court’s Massachusetts v. EPA (April 2, 2007) decision, is the essential first step towards establishing GHG emission standards for new motor vehicles under Sec. 202 of the Clean Air Act (CAA).

As I explain in this column, EPA cannot establish GHG standards for new motor vehicles without triggering a regulatory cascade through multiple CAA provisions. The impacts on energy markets and the economy will be subject to the vagaries of litigation, and potentially would be far more costly and intrusive than any climate bill Congress has either rejected or declined to pass.

There are three main risks (indicated in the title of this post). Litigation-driven regulation of CO2 under the CAA could block development and new construction, create a Kyoto-on-Steroids regulatory regime never approved or even voted on by Congress, and empower the greenhouse lobby to extort industry support for cap-and-trade legislation in return for dubious promises of “regulatory certainty.”

In the column, I advise friends of energy abundance, economic growth, and limited government to hang tough. Team Obama has got to know that EPA cannot control the regulatory cascade once it starts, that the results could be economically devastating, and that they won’t be able to blame G.W. Bush. If they open Pandora’s Box, there will be political hell to pay, and they know it.

When the greenhouse gang invoke the specter of CAA regulation if we don’t support their cap-and-trade program, we should say: “First you take that gun away from our head, and then we’ll discuss the merits of your bill.”