What you need to know about EPA's carbon rules

By Amy Harder

December 28, 2012

Congress has voted on the Environmental Protection Agency’s rules controlling greenhouse gas emissions around 10 times over the past few years, and next year the agency is wading into the most controversial parts of the rulemaking.

The politically charged debates conflate facts and myths, and important points with superfluous ones. This primer clears all of that up. Here are the five things you need to know.

1. EPA is Washington’s least-favorite option to address global warming.

EPA regulations were supposed to be the stick to prod lawmakers to enact comprehensive climate-change legislation, such as the cap-and-trade bill the House narrowly passed in 2009. Similar efforts in the Senate collapsed in 2010 and all that was left on the table was the stick of EPA, which in reality turned out to be a polarizing lightning bolt in Congress.

“In 2009, many of my members supported some type of legislation covering greenhouse-gas emissions,” said Christopher Guith, vice president for policy at the U.S. Chamber of Commerce’s Institute for 21st Century Energy. “However, no two industries, and no more than a handful of companies, could agree on an exact approach or language that they could support. The only durable consensus was they didn’t want EPA unilaterally regulating greenhouse-gas emissions.”

Many environmentalists who were instrumental in crafting the cap-and-trade bills in 2009 and 2010 agree.

“Sure, crafting a law that put together a consensus of legislators would have been my preferred outcome,” said Fred Krupp, president of the Environmental Defense Fund, in a recent interview. “In the current situation, lacking consensus in Congress, the Supreme Court has said that EPA has not only the authority but really the responsibility to move forward.”

It’s illustrative of Capitol Hill’s ability to do nothing. And it's also ironic that Washington finds itself left fighting over what everyone could agree they didn’t want after politics soured the better (or less bad) options.

2. The rules are coming because of a suite of court rulings and scientific findings, not because Obama is trying to secretly enact a backdoor cap-and-trade system.

A complicated and politically fraught trail of administrative actions both in the George W. Bush administration and in President Obama’s first four years, along with a web of legal decisions, have compelled EPA to regulate greenhouse-gas emissions under the Clean Air Act.

A 2007 Supreme Court decision found that greenhouse gases fit into the broad definition of a pollutant under the Clean Air Act, which gave EPA the authority (but not the obligation) to regulate these emissions.

A 2009 “endangerment finding” by Obama’s EPA found that greenhouse-gas emissions endanger the public health and welfare, and thus now EPA had the obligation to regulate the emissions under the Clean Air Act. A D.C. Circuit ruling in June upheld EPA’s authority to regulate these emissions, and subsequent challenges to that decision have not succeeded, including one effort that failed last week.

Some Republicans argue that Obama is forcing these rules when he has the power not to and that he is secretly trying to impose a backdoor cap-and-trade system to combat global warming after congressional efforts to do so failed. Obama and top officials at EPA argue that science is compelling the regulations, not an overzealous regulatory regime or a secret climate agenda.

This argument might still be politically potent, but it’s substantively moot since Obama won reelection and the reality is these rules are coming whether you like them or not. Even when and if a Republican wins the White House, court rulings have backed up EPA to a point where Congress would have to change the Clean Air Act—a herculean task by any measure—before these rules are stopped.

EPA might try to ultimately implement some form of cap-and-trade under the Clean Air Act because that offers industry more flexibility in complying with the rule compared to a command-and-control system. This would be good for industry but bad for politicians.

3. EPA’s greenhouse-gas regulations are a package of several different rules.

Here’s what EPA has done so far: In 2009, the agency promulgated rules controlling greenhouse-gas emissions from cars in 2009; in Jan. 2011, EPA started requiring companies operating major sources of greenhouse-gas emissions, like power plants and oil refineries, to apply for a permit to emit those gases; and in March 2012, EPA proposed draft standards limiting greenhouse-gas emissions from new (but not existing) power plants.

The list of what EPA has not done is longer and will be more difficult to accomplish, both substantively and politically. EPA has not yet finalized the regulations for new power plants; it’s expected to do so in the first part of next year. A much bigger lift: proposing rules to control greenhouse-gas emissions from existing power plants. A timeline for these rules is highly uncertain. Sources close to the agency don’t expect action on this for another year or more, but environmental groups and states will keep the legal pressure on EPA to follow through.

Meanwhile, EPA has not yet proposed draft standards limiting greenhouse-gas emissions from either new or existing oil and natural gas refineries. A timeline for both sets of these rules are also uncertain.

4. They’re not actually designed to reduce overall greenhouse-gas emissions.

If that statement seems counterintuitive to you, that’s because it is. Technically these regulations, which EPA is promulgating under the Clean Air Act, are designed to control greenhouse-gas emissions, not reduce them. “We do not in fact have any overall projection of what kind of greenhouse-gas emissions will be avoided as a result of this,” Gina McCarthy, assistant administrator for EPA’s Office of Air and Radiation, said on a conference call way back in Nov. 2010 when EPA was a couple months away from implementing the first part of the regulations. “GHG permitting is not a process for reducing overall GHG emissions.”

In fact, global greenhouse-gas emissions rose 3.2 percent last year despite U.S. carbon emissions being at a 20-year low, thanks in part to increased natural gas that’s offsetting coal (the former burns 50 percent less carbon emissions than the latter). This worldwide rise is due in large part to the developing economies of China and India building hundreds of new coal plants and racing to get their people out of poverty.

5. The political fight over EPA will wear on.

Expect Congress to keep fighting over what to do with EPA’s rules for the indefinite future. Republicans might employ the Congressional Review Act to try to nullify any and all parts of these regulations, but those efforts will probably not succeed (just like the GOP’s CRA efforts on other EPA rules didn’t succeed). Nonetheless, these fights will be particularly potent between now and 2014, when a full third of the Senate is up for reelection and political messaging will be turned up.

In another ironic twist, the Obama administration might try again to use EPA as a stick to prod Congress to act when the agency gets ready to move forward on the rules affecting existing power plants. The threat of those rules might hang more heavily over Congress because their potential impact on the economy will be far greater than the rules affecting only new power plants.

By Amy Harder

December 28, 2012