The ever-widening recession apparently will not delay the Obama Administration’s plans to mandate carbon reductions.
Last week, the administration’s two most senior decision-makers on climate change stated that the U.S. Environmental Protection Agency (EPA) will declare that carbon dioxide (CO2) is a pollutant endangering human health within the legal meaning of the Clean Air Act. White House climate czar Carol Browner and EPA Administrator Lisa Jackson announced that EPA will make this “endangerment finding” to coincide with the two-year anniversary of the 2007 Supreme Court ruling driving EPA’s decision.
Ms. Browner claimed that this decision would actually help the deteriorating economy by providing the legal clarity needed for investment in carbon mitigation. What happened to EPA’s recent economic analysis of carbon cuts, predicting annual declines in America’s Gross Domestic Product, millions of lost jobs, and 50-150 percent increases in energy prices within 10 years?
The silver lining the administration sees in exorbitant carbon mandates imposed on a recessionary economy: federal revenues from the sale of carbon allowances. Peter Orszag, director of the Office of Management and Budget, acknowledged that the administration’s budget includes the government’s sale of carbon allowances to generate billions in new federal revenues – potentially $300 billion a year according to estimates from the Congressional Budget Office.
President Obama has consistently advocated auction of even the initial allowances in a carbon cap and tax/trade schemes. This means a power plant would have to purchase federal approval merely to keep operating at current levels.
Legislation creating this colossal carbon tax would be the biggest tax increase ever, surpassing in real dollars the 1942 law providing funds for World War II. If included in budget reconciliation bills – which cannot be filibustered – it would only require 50 votes in the U.S. Senate.
The EPA’s legal endangerment finding on CO2 is key to this policy. The EPA decision would unleash the onerous regulatory scope of the Clean Air Act. Although Browner said the initial regulations would not be too broad, courts are unlikely to give EPA this leeway. Throughout the 30-year history of the Act, environmental organizations have used the courts successfully to compel EPA action. Steadily expanding air quality rules have arisen far more from court rulings and out-of-court settlements than legislation.
Recall that an endangerment finding is connected to the EPA’s blueprint for economic disaster issued last July, the Advanced Notice of Proposed Rulemaking to Regulate Greenhouse Gases. The Bush Administration declined to make the finding whether CO2 is or is not a harmful pollutant but agreed to issue the Notice – apparently a quid pro quo with EPA. A most unusual administrative action, the White House issued and simultaneously condemned the Notice in an accompanying memo signed by five Cabinet secretaries.
An odd preface for his own action, former EPA Administrator Steve Johnson noted that using the Clean Air Act to regulate CO2 “could result in an unprecedented expansion of EPA authority that would have profound effect on virtually every sector of the economy and touch every household in the land.”
EPA’s long-expected endangerment finding is anything but bland news. Once made, the force of federal law mandates the regulation of a mind-boggling scope of human activity. The legal debate about global warming will be over at the stroke of a federal bureaucrat’s pen. The Obama Administration will then have the leverage to design whatever carbon tax it prefers.
The Supreme Court ruling behind EPA’s actions did not dictate that CO2 be declared a pollutant. The 5-4 ruling required that EPA merely make and reasonably justify an endangerment finding, one way or the other. The Bush Administration avoided this formal decision evidently because of irresolvable disagreement between EPA career staff and the White House.
Al Gore, the world’s most celebrated global warming alarmist, repeatedly preaches that carbon cuts of the magnitude needed to “save” the planet will require a “total transformation of our economy.” If the first few weeks are any indication, let there be no doubt in the Obama administration’s willingness to use carbon policy as a major tool in such a mission.
Kathleen Hartnett White is Director of the Center for Natural Resources at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. White is the former Chair of the Texas Commission on Environmental Quality.