A single, targeted program is far more sensible than a piecemeal approach to reducing greenhouses gases through existing statues that are unsuited for the job.

By excluding any regulatory language to limit GHGs from vehicles (the original focus of the 2007 Supreme Court decision), the proposal stops short of immediately triggering the host of regulatory programs that AF&PA and others have warned EPA would tie up mills and states in a nightmare of endless permitting reviews and their associated costs. Recognizing this fact, EPA’s release accompanying the notice states that “[A]n endangerment finding under one provision of the Clean Air Act would not by itself automatically trigger regulation under the entire Act.“

However, once EPA starts down a regulatory path, the existing law provides limited flexibility for millions of facilities to avoid the catastrophic economic consequences of complying with a myriad of new emission reduction programs. Thus, in the next one to three years, those requirements will be triggered either by EPA regulatory actions or perhaps a court decision concluding that GHGs are pollutants that must be regulated.

By seeking another round of comments, EPA is buying time for Congress to pass climate legislation. President Obama prefers comprehensive legislation over the use of the existing CAA to address climate change. The recent proposal by Congressman Henry Waxman (D-CA) and Ed Markey (D-MA) takes a positive step in this direction with the inclusion of provisions that appear to preempt GHG permitting under the CAA for covered sources.

With last week’s announcement, the EPA finally did what it was supposed to do all along: follow the science and the law.

After all, in 2007, the Supreme Court ruled that carbon emissions from cars qualify as air pollutants and ordered the EPA to determine--based on scientific considerations alone--whether those pollutants are dangerous to human health or welfare and if so, issue standards for them.

But the timing of this inevitable conclusion is significant for the climate debate in Congress. Before the EPA’s Friday announcement, people could say that if Congress did not act on climate, then nothing would happen. Stonewallers and filibusterers could hope for the last word.

Inaction is no longer an option. Something is happening, and the question now becomes: will national climate action be driven by EPA regulation alone? Or will it also be driven by a comprehensive Congressional effort that unleashes the full economic potential of building America’s 21^st century energy infrastructure?

On Wednesday, I participated in a process that might help answer some of those questions: I testified before the House Committee on Energy and Commerce.

Reps. Henry Waxman and Ed Markey scheduled four days of hearings to gather feedback on their draft language for a climate bill--the American Clean Energy and Security Act. It’s the Committee’s chance to get into the nitty gritty of the issues, and after listening to the testimony, Rep. Markey will introduce a revised version of the bill.

The Committee has 60 members, including some swing votes who have not yet committed to supporting action on climate. My hope is that the hearings will convince them that passing climate legislation is the smart thing to do for the economy and the environment.

This post was written by Jim Kerr and his colleague, Patricia Sharkey, a partner with McGuireWoods in the firm’s Chicago office.

EPA’s proposed Endangerment Finding for new motor vehicles represents a warning shot in the developing battle over how, when and whether to regulate greenhouse gases (GHG). Although the Obama Administration has stated that it would prefer a legislative approach rather than Clean Air Act regulation, climate change legislation is facing renewed opposition in the face of a slumping economy. Many believe the Administration’s strategy is to keep the drumbeat for GHG regulation under the CAA going in order to spur Congressional action. Every step EPA takes toward regulating GHGs will intensify that drumbeat.

Absent Congressional action, the Endangerment Finding represents a Plan B for the Obama Administration. EPA is keenly aware that President Obama is committed to reclaiming an active role for the United States at the United Nations global climate change summit in Copenhagen in December, yet any legislation or actual regulation of GHGs is likely to face both legal and political battles. By proposing a stand alone Endangerment Finding, unburdened by any concrete regulation, EPA can move the Administration’s agenda forward incrementally for Copenhagen in the Fall.

Significantly, the proposed Endangerment Finding unveils the new Administration’s approach to climate change and possibly to future environmental regulation in general. Its key determination is that a precautionary approach to global warming demands regulation of large man-made sources of greenhouse gas emissions despite scientific uncertainty. This new basis for EPA regulation is strikingly similar to the “precautionary principle” underlying the European Union’s controversial chemical regulatory regime (REACH) and should be embraced by the Europeans. Notably, the proposed Endangerment Finding may be the first time the “precautionary principle” has been expressly relied upon to justify a major U.S. environmental initiative. How far the EPA will extend this principle when it comes to actual regulation of GHGs and in other environmental arenas, such as air toxics and chemical regulation, will be closely watched by regulated industries.

This would all be amusing if it was not so serious. Let's be clear. Clean Air regulation is an insufficient tool to solve the Climate Crisis. So is every other single tool suggested to date. We need an array of responses.

But 1/3 of America's current CO2 emissions come from coal fired power plants. And about 20% come from private passenger vehicles. EPA's Clean Air Act authority is well tested in setting emission standards from such sources. EPA can set a standard for how much CO2 can be emitted by a new power plant -- California has already done so. Adn EPA has done for for other pollutants -- there's nothing unique about CO2 except, since the goal is overall emissions, it's easier to set -- the models are simple. EPA can also require the gradual clean up of existing power plants when they reach a certain age. EPA (or California) can set emission standards for cars, trucks and SUV's that guarantee that each year the auto industry achieves the technically established 4% per year improvement pace.

So if two sets of clean air standards -- one for coal fired power plants and one for passenger vehicles -- can deal with 50% of the CO2 problem threatening our country and our world, those who claim that the Clean Air Act is somehow a pathetic approach to this crisis had better offer something they support that can do more, faster, and that is somehow incompatible with Clean Air Act regulation.

Those who are saying "don't use the Clean Air Act" are the same voices that have been saying, "don't require all emitters of carbon to buy permits at a fair auction." If they really had a better pathway to cut our emissions of greenhouse pollution, they would have been advocating action during the last decade -- they haven't.

And their economics is bad. If EPA requires, let's say, a 50% reduction in emissions from coal fired power plants and passenger vehicles by 2025, that means that the need for, and demand in the market for, carbon permits under a cap and auction will be lowered by about 25%. Lowering demand for carbon permits means those permits will be cheaper -- and any drag on new investments in the economy that business is worried about will go away. So EPA Clean Air regulation, far from being in conflict with cap and auction or carbon taxes, actually makes them much more efficient economic tools -- because EPA can require the old economy to clean up, thereby making room for the new economy Americans are counting on.

The American economy and American families will pay a steep price if EPA's proposed "endangerment" finding leads to greenhouse gas regulations under the Clean Air Act. The regulations will be complex and costly and directly affect many thousands of businesses and institutions, such as restaurants, colleges, schools, shopping malls, and bakeries along with the larger industrial sources of greenhouse gas emissions, which have been the primary focus of existing air quality regulations that address air pollution.

Few believe the Clean Air Act, which was created to address local and regional air pollution problems, is appropriate for addressing a global environmental challenge. Let the American people, working through Congress, debate and decide. EPA should stand down.

Most of us in the energy business were not surprised by the EPA’s recent decision regarding greenhouse gas emissions. This decision certainly adds pressure for Congress to act, but we trust that our legislators will not be rushed by the EPA’s action. If Congress fails to thoroughly vet its decision and instead enacts hurried climate change legislation, the new law could hamper U.S. industry for a long time to come and frankly be a disaster to our economy. The better approach is deliberative discussion with debate to think through the potential pitfalls of regulating carbon and other greenhouse gases. In a sense, the EPA decision underscores the need for deliberation. For instance, the EPA is ill-equipped to oversee a carbon futures market with its necessary hedging and speculative functions, not to mention the over-the-counter (OTC) market involving derivatives, swaps, and other sophisticated trading. With all due respect to those who feel the EPA has the ability to oversee certain well-circumscribed carbon markets, we believe the agency would be grabbing a tiger by the tail if it attempted to do so. Only Congress is equipped to address these over-arching issues.

Carbon is lighter than oxygen, more abundant than nitrogen, and forms the basis of all human, plant and animal life on earth. At least it did last week. Today, it’s a danger to human health and, upon meeting air, a clear and present threat to our existence. That’s what the EPA says, and you can be sure that isn’t a statement that this generation and others that follow will not soon forget.

EPA was quick to promise that the rationing of carbon dioxide would only have limited application. This is incorrect. EPA will start by issuing new regulations on cars. Next, they’ll begin to restrict stationary sources. After that: the wholesale regulation of anything that uses oil, natural gas, or coal. And it won’t end there. If carbon dioxide is deemed a threat, other greenhouse gases like water, vapor and methane must be too.

While the American people will need to wait a few more months to see how the announcement manifests itself in their daily lives, we know one thing for sure: EPA is about to become the largest, most powerful and most distended government agency in American history. And that alone should give every American who has a job, or may want one in the future, reason for serious concern.

EPA’s proposed endangerment finding for greenhouse gases implies a regulatory rush to judgment that would have a devastating long-term impact on the American manufacturing sector. At a minimum, EPA’s action raises serious concerns because, based on the data presented by EPA to date, the agency has not sufficiently made its case.

Regulation of greenhouse gas emissions under the Clean Air Act would constitute the agency’s single largest, and perhaps most complex, assertion of authority over our economy and daily lifestyles, and the negative effects of such regulation on American businesses and families, to say nothing of our economy as a whole, would be tremendous. The Clean Air Act was designed primarily to address local ambient air quality concerns, not the global impact of greenhouse gas emissions. To the extent that the Clean Air Act addresses international concerns, such as stratospheric ozone, it does so with programs Congress specifically tailored to address the problem. At best, regulating greenhouse gases under the Clean Air Act would not meaningfully reduce ambient greenhouse gas concentrations, and thus would have minimal to no impact on the global concern. At worst, using the National Ambient Air Quality Standards (NAAQS) program as an example, regulation under the Clean Air Act would likely result in a U.S. standard incompatible with the terms of any eventual international agreement, thereby complicating international negotiations. Depending on the stringency of the U.S. target, this approach could either undermine global efforts to reduce greenhouse gases or make the U.S. standard impossible to meet due to other countries’ ongoing emissions.

While it is challenging and typically not productive to predict what Congress may or may not do, efforts are underway to draft and pass legislation designed to regulate greenhouse gas emissions. Numerous studies have shown clearly that recent and current proposals would be extremely costly and would have significant detrimental impacts on American consumers, jobs, and the economy. Beyond even the costs to businesses and families, NERA and NPRA released a report in 2008 showing that compliance with a cap-and-trade scheme (Lieberman-Warner) would require significant increases in nuclear and wind power, significantly more liquefied natural gas, the realization of carbon capture and sequestration, and significant increases in ethanol use that would not be sustainable. Although it is unclear what the outcome of the legislative debate will be, what is clear is that the Clean Air Act is poorly suited to address global climate change.

Section 101 of the National Environmental Policy Act states that “it is the continuing policy of the Federal government, in cooperation with State and local governments, and other concerned public and private organizations, to use all practicable means and measures, including financial and technical assistance, in a manner calculated to foster and promote the general welfare, to create and maintain conditions under which man and nature can exist in productive harmony, and fulfill the social, economic, and other requirements of present and future generations of Americans.” As it considers the prospect of regulating greenhouse gases under the Clean Air Act, we hope the Administration stands by these principles.

Last Friday, EPA Administrator Lisa Jackson signed a 133-page document proposing to find that “greenhouse gases in the atmosphere endanger the public health and welfare of current and future generations.” This proposed “endangerment finding” is the first step in a long regulatory process that could lead to the regulation of CO2 and other greenhouse gases under the Clean Air Act, but the Obama Administration is clearly hoping to avoid this result, and for good reason. The CAA was not intended to deal with climate change and does give EPA the authority to create the kind of aggressive cap-and-trade program that the President has proposed for reducing GHG emissions. On the other hand, regulating CO2 under the CAA could impose a substantial burden on industry – and the Administration and their allies in Congress are apparently hoping that the threat of such regulation will give them more leverage in the congressional debate.

In the end, though, supporters of aggressive climate change legislation will find that the CAA does not give them as much leverage as they might hope. Although regulating CO2 emissions under the CAA may be costly and burdensome for industry (and thus for consumers and workers), industry has concluded, correctly, that it will not be nearly as costly and burdensome as the cap-and-trade legislation that the Obama Administration and their allies in the environmental community are seeking in Congress. Thus, industry groups will not rush to support such legislation simply to avoid being regulated under the CAA. On the other hand, climate change activists know (or will soon learn) that they cannot accomplish nearly as much as they would like under the CAA. In the end, the effort to regulate CO2 under the CAA will be interesting, but will have little impact on the congressional debate or on the international negotiations on climate change.

Nobody should be surprised by the EPA’s finding that greenhouse gas emissions contribute to pollution that may reasonably be anticipated to endanger public health and welfare. It sends a clear signal that any further delay of action will only prove more costly for the environment and economy. This decision rests literally on thousands of pages of peer reviewed scientific studies that have been synthesized as part of both national and international assessments. And it responds to nothing less than a Supreme Court decision requiring the EPA to stop ducking the issue and to take a stand.

Nor should anybody be surprised that the EPA will move forward in its regulatory process.  That’s simply complying with the rule of law. But this path forward is fraught with challenges. The Clean Air Act clearly wasn’t designed with climate change in mind, and whatever specific regulations the EPA proposes (or not) will end up in the courts creating additional uncertainty, if not delay.

But there is a better way. EPA’s initial regulatory process will take at least a year, and will likely play out over many years. That gives Congress some time, but not a lot, to take control of this issue and to develop a comprehensive, economy-wide approach to shift the nation to a clean energy economy. They are off to a good start with the Waxman-Markey discussion draft, though some of the toughest issues remain to be addressed. Many in Congress understand that the costs of doing nothing on climate change are far greater than the costs of reducing greenhouse gas emissions, and that progress on comprehensive domestic action will send an important signal to the international community that the time to act is now.

ACC supports EPA taking public comments on its proposed endangerment finding, which applies to mobile sources and has a 60-day comment period. As we review the finding and prepare our own comments, we’ll be focused on the scope of the proposal and any implications for the regulation of greenhouse gases from stationary sources. We believe that the Clean Air Act is not well-suited to address greenhouse gas emissions from stationary sources. Given the national implications of carbon dioxide regulation by EPA and the interdependent nature of climate and energy issues, climate policy should be discussed and developed in Congress, in tandem with energy policy.

We look forward to working with EPA on strategies that can reduce the nation’s -- and the world’s -- greenhouse gas emissions. The products of chemistry will be important to that effort, given the widespread use of chemistry for energy efficiency and renewable energy applications. These include building insulation, solar panels, wind turbines, lightweight vehicle parts, compact fluorescent light bulbs, energy-efficient appliances, lithium-ion batteries, low-rolling resistance tires, automotive and industrial lubricants, thermal roof coatings, and many others.

Consistent with our forward-looking approach to reducing greenhouse gas emissions, ACC member companies track greenhouse gas emissions data and report it to ACC as a requirement of membership under our Responsible Care® program. ACC reports the industry data on an aggregate basis. Our companies’ greenhouse gas emissions fell 13.2 percent between 1990 and 2007 – exceeding Kyoto Protocol requirements, and the industry’s greenhouse gas intensity -- a measure of emissions per unit of output -- improved 40.4 percent in the same time period.