Yes, the EPA should begin regulating carbon right now, AND Congress should draft climate legislation as well. Climate change is presenting us with an urgent crisis. We have to use all the weapons we have to fight it, and we need to deploy them immediately.

I just returned from the World Economic Forum in Davos, where climate change was a major focus. A day spent in Davos would make you think that we are the verge of policy and political breakthroughs in climate change. And we are. But we can’t underestimate how tough it will be to get the strongest bill possible out of the U.S. Congress in time for the international climate summit in Copenhagen this November.

If the EPA starts regulating carbon now--as the Supreme Court ruled it has the authority to do--it will increase pressure on Congress to move forward as well. President Obama has already exhibited strong leadership on the climate issue, but now we must translate his vision for a cleaner energy future into concrete, binding rules and regulations for one of the most dangerous pollutants of our time.

The EPA should begin that right now, because it will take time to assess the latest science, review all impacted sectors, draft the regulations, and send them out for comment. That is not a quick process. We have to start moving on all fronts to be sure we end up with real climate action soon.

Congress should pass a strong cap-and-trade program that would ratchet down U.S. global warming emissions at least 80 percent by 2050. But the potential severity of climate change means we can’t afford to wait until Congress enacts legislation and the administration puts it into practice.

So while Congress works on a bill, the Environmental Protection Agency should begin right away to regulate global warming pollution under the Clean Air Act. This law provides the agency the flexibility to regulate by setting performance standards, offering market-based incentives, and dictating how polluters can operate. It also lets the EPA focus first on the biggest polluters, electricity generators as well as cars and trucks, while developing ways to avoid overburdening smaller sources of global warming emissions.

Clean Air Act global warming regulations would serve as a bridge to a more comprehensive federal climate policy. In the meantime, the Clean Air Act allows us to immediately begin reducing emissions and the overall costs of a cap-and-trade system.

We shouldn’t put off until tomorrow what we can begin today. We’re running out of time.

The Administration should not use the Clean Air Act (CAA) to regulate carbon dioxide (CO2) and other greenhouse gases (GHG). The CAA is an inefficient and ineffective avenue of regulation of CO2 and other GHG due to its structure, its intent, and its scope.

When the Clean Air Act was enacted in 1970, its scope and purpose were vastly different than what would be required to regulate global GHG emissions. Congress was focused on air pollutants from industrial and vehicle specific sources affecting localized areas and did not consider common atmospheric compounds (nitrogen, oxygen, and carbon dioxide) as air pollutants. Consequently, the CAA was not crafted to address GHG.

EPA has presented three possible pathways for regulation of GHG for stationary sources: National Ambient Air Quality Standards (NAAQS), Hazardous Air Pollutants (HAP), and New Source Performance Standards (NSPS). None of these provide a plausible structure for addressing GHG and all come with excessive costs with no apparent environmental benefits.

The first path for consideration may be the use of NAAQS. However, as EPA recognizes, NAAQS is not well suited to address GHG emissions. A NAAQS pollutant is required to have demonstrable public health effects and demonstrated environmental effects such that ambient standards could be set, states could identify air quality control regions, attainment status could be determined and, if required, implementation plans developed. Since health effects do not occur at current ambient levels, no part of the country would be in non-attainment and a NAAQS approach fails.

The second path would use the HAP process to regulate GHG. The HAP program was devised to address chemicals that pose a toxic risk to human health. No one can make a credible argument that GHG present any toxic risk to human health. It is absurd to consider that a compound, carbon dioxide, which is essential for plant growth should be categorized and treated as an air toxic.

The third path would use the NSPS process. While the NSPS process allows EPA more latitude in crafting a regulatory framework, there is no assurance that any such framework would have any level of certainty due to the likelihood of litigation to establish its scope.

Global climate management is an enormously complex challenge, one that can only be addressed on an international stage. In contrast to the national air pollution programs of the CAA, global GHG emissions do not present a risk to public health at anything approaching current ambient levels. While data suggests that climate change is occurring, determining the role of anthropogenic emissions and the degree of impact remains elusive. Local, even national, actions will not produce measurable changes in the ambient concentrations of GHG. Realistically only widespread action by all emitting nations can hope to achieve any significant impact on global concentrations of GHG. Using the CAA to address GHG will lead to enormous regulatory growth sweeping up the smallest operations such as marginal oil and natural gas wells. While the new regulatory burdens can shut down these operations and reduce American energy production, they will do nothing to change global climate.

The Supreme Court has ruled that the EPA has the authority to regulate CO2, and I believe EPA should exercise that authority without waiting for Congress. We need to move as quickly as possible to regulate carbon dioxide as a danger to public health. Not to do so is to fail in our responsibility to address the most serious global challenge we will face in our lifetimes. Our current economic crisis will pale in importance compared to the costs of failing to address global warming.

Unchecked global warming is the next economic catastrophe. Instead of losing our pensions or our 401(k)s, we’ll lose our communities as rising temperatures and rising sea levels push our ecosystems to the brink of collapse. If we do not correct this market failure, the crash will come in the form of drought, disease, degradation of our forests, watersheds and biodiversity to the point where natural systems can no longer support the human communities that depend on them. That is why Sir Nicholas Stern, the author of the most thorough economic analysis of climate change to date, has said: “Climate change is the greatest market failure that the world has seen.”

Now is not the time for regulatory ambivalence. The EPA must move to prevent the collapse of the natural systems on which all human health depends. The United States is one of the last developed countries on earth that has not found the emission of heat-trapping carbon dioxide to be a danger to the public health and welfare. The world is already at risk from the last 100 years of global warming pollution, and we simply cannot afford to wait for more perfect policy mechanisms to emerge from a divided Congress.

Here's a better question: Should Congress wait to clarify the Clean Air Act? The answer is "no."

Unless it wants to undo whatever good the stimulus package might do for the economy, Congress needs to take CO2 out of the Clean Air Act. The CAA is an awkward and inefficient mechanism for regulating CO2 and full of legal booby traps. As long as the EPA has this stone ax in its regulatory tool bag, it will stifle investment and employment growth.

Threatening burdensome regulations and permitting processes along with guaranteed increases in energy costs is not a recipe for economic recovery. Nor would EPA regulation of CO2 be effective in cutting projected world temperature increases--even using the emissions estimates of the EPA and the climate sensitivity estimates of the IPCC.

Congress can and should ensure that the EPA doesn't begin regulating CO2 under the Clean Air Act.

The time for waiting has past.

EPA cannot and should not wait for Congress to act because the highest court in the land has already spoken on this issue (Massachusetts et al. v. EPA et al.) and has stated clearly that, counter to the position taken by the Bush Administration, carbon dioxide and other greenhouse gases fit the meaning of air pollutants under the existing Clean Air Act and are subject to regulation. The Supreme Court left to EPA to decide if such emissions may reasonably be anticipated to endanger public health or welfare. Given the overwhelming scientific evidence linking greenhouse gases to climate change and the potential damages that result, EPA has effectively no choice but to move forward in issuing an “endangerment” finding and to begin considering use of the tools contained in the Act to reduce the harm from climate change.

EPA’s extensive Advance Notice of Proposed Rulemaking underscores the challenges of applying existing Clean Air Act provisions to greenhouse gas emissions. In moving forward, the Act does afford EPA some discretion, and EPA must use it wisely -- setting priorities and reasonable timetables, and avoiding overreaching and cumbersome regulations. First up on EPA’s plate should be to complete its mandatory greenhouse gas reporting rule and to reassess its denial of California’s request for a waiver to set alternative standards for greenhouse gas emissions from automobiles.

While EPA responds to the Supreme Court’s mandate, now is also the time for Congress to step up, meet its challenge and pass an economy-wide, market-based cap-and-trade policy. Continued delay in passing legislation only increases the risk of environmental damage and undermines the regulatory certainty that businesses need if they are to begin investing in the clean energy future we seek.

The challenge for all is to act now to begin putting our country and the world on an aggressive path toward responsibly reducing our emissions of greenhouse gases.

EPA should definitely hold off on regulating. CO2 under the Clean Air Act (CAA) and wait instead for a the administration and congress to fashion comprehensive climate legislation.

The CAA is ill-suited to deal with CO2. Under the Act, it is very difficult to make the kids of tradeoffs that will be essential if our approach to cimate change is to balance human and ecological health, economic welbeing, energy security, geopolitical realities and technological potential. Under the CAA, the EPA administrator is more or less bound to regulate, even if the health effects in question are insignificant in comparison to the costs (economic, energy security or otherwise). This isn't a good recipe for sensible regulation.

It has taken us a long time to get into the greenhouse gas mess we're in. While we must act soon to begin the process of extrication, we can wait for a year or two to be sure we get it right. That's unlikely to happen under the CAA no matter how skillful EPA's regulators are.

This Post was authored by Jim Kerr and Patricia Sharkey, a partner at McGuireWoods in the firm’s Chicago office.

As a practical matter, the Obama EPA is under considerable political pressure to make a positive endangerment finding in the near future – perhaps even within “the first 30 days.” At the point that Administrator Jackson issues a final positive endangerment finding – presumably after a full notice and comment rulemaking, Section 202 of the Clean Air Act mandates that she then move forward with a regulatory docket to regulate greenhouse gases, including CO2. Thus, a two-track legislative and regulatory process for determining how to control CO2 ––whether desirable or not -- is likely if not inevitable in 2009. While Jackson may not be able to avoid starting a CAA regulatory process, she does have discretion as to the timing and the approach. The best start for that process would be a proposed endangerment finding that lays out a roadmap for how the CAA regulatory process will go forward – both procedurally and substantively. Given the implications of the Section 202 endangerment finding for stationary sources, as well as mobile sources, the roadmap should describe how the CAA’s low (for CO2) Title V and New Source Review permitting thresholds will be addressed. To avoid a permitting nightmare, the CAA must be amended to set reasonable regulatory thresholds for CO2 before implementing regulations are adopted. By publishing a schedule for a thorough deliberative process and required legislative amendments, the new Administration will ease some of the anxiety this two-track process will inevitably engender while also maintaining a steady drumbeat for Congressional action on climate change.

Many times a very short answer is the clearest and most effective way to present a position! So as to whether EPA should begin regulating carbon dioxide emissions in response to the U.S. Supreme Court’s decision in Massachusetts v. EPA, it is best to remember the slogan that got President Clinton elected --- “It’s the economy stupid.”

As discussed in great detail in prior blogs, the use of the Clean Air Act to regulate all entities that generate over 250 tons of carbon dioxide would ignite a regulatory cascade that will sweep up large sections of the economy into a massive and complex regulatory structure that will include hundreds of thousands of new permits, the imposition of what is in effect a carbon tax under the Title V permits and work as a construction moratorium on tens of thousands of facilities that will need a PSD permit before construction can be commenced. This regulatory cascade will literally stop the attempts at economic stimulus in its proverbial green tracks.

My critics call this warning nothing more than fear-mongering while claiming they are smart enough to avoid the regulatory shoals of the Clean Air Act. Yet, to continue the analogy, the federal courts are acting like lighthouses as they struck down the Clean Air Interstate Rule and the mercury rule because the regulators at EPA deviated from the strict structure of the Clean Air Act. No matter how smart one might believe himself to be; the decision is for the courts and not for any individual or government agency.

So in this instance, once the EPA decides to regulate carbon dioxide, the full weight of the Clean Air Act will be imposed upon society and that means the full weight will fall upon the 1.5 million facilities that emit more than 250 tons of carbon dioxide; notwithstanding whether they are power plants or churches. Perhaps the regulatory shoals can be navigated but if they cannot then regulation under the Clean Air Act will be a regulatory shipwreck.

President Obama has pledged a “government that works.” He and Congress are in the midst of launching the largest attempt in our lifetimes at economic recovery. Both efforts—creating a government that works and putting America back to work—can be undermined by forcing climate policy through a regulatory mechanism designed to address very different challenges. All parties understand the real-world impossibilities and consequences of using the Clean Air Act for this purpose.

Why?

First, the Act precludes the necessary integration of other priorities that have been embraced by President Obama and the American people, including the public/private partnerships necessary to research and develop the needed “green” technologies and the regulatory framework required for their commercial deployment—in our case Carbon Capture and Storage (CCS) technologies. Nor does the Act contemplate any strategy for greater energy independence, which is both an economic and national security imperative.

Further, regulating greenhouse gas emissions under the Act in its present form will trigger regulation of millions of businesses and emissions sources throughout the American economy and the threat of permit violations for gases that know no boundaries and are not effectively regulated by any other government in the world. This will impose staggering unproductive costs throughout our economy and damage our international competitiveness without any perceptible environmental benefit.

This is a congressional responsibility, and NMA has pledged to work with Congress and the administration to find solutions to climate concerns that will result in at the lowest cost to American families and businesses. They deserve and should expect no less.

The use of existing statutory authority is not, in our opinion, the most practical approach to reducing GHG emissions. Dow supports Congressional action to establish a robust program that is both environmentally effective and economically sustainable. Dow recently joined with 26 companies and five national environmental organizations under the US Climate Action Partnership (USCAP) to issue a "Blueprint for Legislative Action." We believe that legislation along the lines outlined in the Blueprint is preferable to EPA attempting to address the problem within its limited statutory authority. There is clearly much that the EPA can do to support this legislative effort, including helping to assure that complementary measures such as carbon capture and storage and energy efficiency are deployed early enough to prevent disruption in our energy markets.

Empowering the EPA to regulate greenhouse gases under the Clean Air Act is a very dangerous precedent and would seriously impede U.S. economic recovery. As a carbon-emitting society, virtually all facets of our daily lives could fall under the purview of the EPA. With the U.S. economy struggling and unemployment rising, now is not the time to impose new GHG reduction mandates on industry, households and of course, the government itself(no organizations would be exempt if an area were in "non-attainment".)

While the Clean Air Act has been appropriately used to curb smog and pollution in the 1970s and acid rain and ozone depletion in the 1990s, using it to combat greenhouse gases makes about as much sense as using a power drill to do brain surgery. Using the CAA to regulate emissions, EPA would mandate GHG emission standards for electricity and industrial production as well as for transportation(including possibly air transport).

Commercial office buildings will be affected. Large-scale retailers and restaurants are tremendous consumers of energy and could also feel the pains of mandated emissions reduction. They too will have no choice but to pass their increased costs on to customers. New automobiles will undoubtedly be mandated to be equipped with the strictest emission standards, driving the costs of a new car out of reach for many. Low carbon emitting natural gas will quickly become the favored fuel and prices will rise correspondingly to demand.

Will there be any environmental gain for all of the economic pain? Likely not, since greenhouse gas emissions are a global problem and aren’t bound by continental lines. Despite the best efforts of industrial and business sectors to curb emissions, the Clean Air Act will have zero impact on greenhouse gases that are emitted and migrate from developing nations like China and India.

Make no mistake, any policy aimed at reducing manmade GHG's, whether it is a cap and trade system or a carbon tax, is going to be costly, but using the blunt and heavy regulatory hand of the Clean Air Act will have a tremendous economic impact not just on large carbon emitters, and significantly raise costs for households, business and government as well.

I suppose the answer is a bit like giving a legal opinion – but one where the answer depends on whether you need a “would” opinion or a “should” opinion. Though I am not a lawyer, my suggestion is a creative way that the EPA might get to a “should” opinion. This would then lead to regulation or to a more modest legislative task in approving or modifying this EPA plan.

The EPA should set a baseline (say 2005) for co2 emissions from large source electric power and industrial facilities (10,000 annual metric tons of co2 and larger). Then, pursuant to the Clean Air Act, EPA should mandate abatement off of this baseline, say 1.5 to 2% per year. Abatement obligations should be pro-rata to baseline emissions – thus algorithmic rather than political. The emitters can debit (decrease) or credit (increase) their Abatement Account by trading with other emitters. The trading market could be set up as a transparent and electronic central limit order book (a CLOB) among emitters – an industrial market rather than a large financial market. Offsets could be added to this type of system quite easily, as could provisions for abatement obligations from new sources.

There are several reasons for pursuing an idea like this. First this “abate and trade” concept is anchored in the fact that co2 is large enough that we don’t need to create permits to create a liquid trading market. And the ability to distribute trillions of dollars of permits fairly, or auction them without straining our already fragile capital markets, makes economy-wide cap and trade challenging in any case. Also, accounting for permits and permit derivatives (think mark-to-market) is a more complicated matter than many have realized. Lastly, it seems like this approach is something the EPA could actually implement and execute on its own.

Yes, there is a disadvantage – the potential for windfall profits (since the pro-rata obligations are economically equivalent to 100% free allocation in cap and trade). But add this to the list of second-best solutions, where a “best solution” is some theoretically perfect model-derived combination of auction and allocation where trillions of dollars gets distributed without creating massive winners and losers. Given that many large electric power facilities are regulated, and that global commodities are a good portion of industrial facilities, it seems like this solution could at least be competitive with other second best solutions.

And what would the EPA do about transportation? That could be left to Legislative actions – where taxes and standards can be more effective than cap and trade in any case – especially in light of our ailing auto industry.

This idea is outlined in more detail at www.justcapit.org.