Tags: climate | obama | economy | us

Climate Change Ruling Threatens to Chill U.S. Economy

Monday, 07 Dec 2009 01:05 PM

By David A. Patten

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Disregarding the recent e-mail scandal over the apparent manipulation of global-warming data, the Obama administration on Monday declared that man-made carbon dioxide gas poses a grave threat to public health.

Business groups and GOP members of congress warned the move could impose "huge costs" and endanger the nation's shaky economic recovery.

"Today," announced Environmental Protection Agency administrator Lisa P. Jackson, "I am proud to announce that EPA has finalized its endangerment finding on greenhouse gas pollution, and is now authorized and obligated to make reasonable efforts to reduce greenhouse gas pollutants under the Clean Air Act."

GOP Sen. Judd Gregg told Fox Business News the EPA's decision will hurt the economic recovery.

"This is incredible," he said. "I mean basically you've got a regulatory agency that's now populated obviously by folks who have a very definite ideological view, regulating the ability of industry in this country and business to expand by saying they're going to subject a large percentage of businesses in this country to massive new regulations without any congressional approval.

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"It's going to have consequences that are very significant for our economic recovery," Gregg added. "A lot of economic expansion is going to be put on hold pending what happens with these regulations. And we really can't afford that right now. We need to give some certainty to those folks who are willing to take risks, create jobs out there. We shouldn't be hitting them with new bills relative to health care that they probably can't afford, and we certainly shouldn't be creating a massive new regulatory scheme that's going to chill their ability to expand their businesses and thus create new jobs."

The EPA finding follows an April preliminary ruling that greenhouse gases endanger public health. It will give the administration a way to impose tough new restrictions on greenhouse-gas emissions, even if Congress fails to enact the pending cap-and-trade bill.

That legislation passed in the House, but remains stalled in the Senate. Moderate senators have shown little enthusiasm for enacting expensive global-warming legislation at a time when taxpayers' primary concerns are the economy and high unemployment.

Jackson confirmed the EPA announcement was timed to show attendees at the climate-change conference in Copenhagen that President Obama and the United States are ready to lead the battle against global-warming. Jackson said she hopes Monday's finding will help spur "far-reaching accords" at Copenhagen on restricting greenhouse-gas emissions.

The Republican Study Committee reacted with an e-mail blast that openly mocked the finding.

"Earlier today," the GOP e-mail stated, "the EPA announced that carbon dioxide is a danger to human health. This is good news for all those opposed to the despicable practice of breathing, but it may put the rest of humankind in an odd spot. After all, isn’t the carbon dioxide emitted by flying Air Force One to Copenhagen identical to the carbon dioxide exhaled while addressing a Joint Session of Congress? If one is a danger to human health, isn’t the other?"

Republicans had called for Jackson to delay the finding until recently hacked e-mails, which indicating some climate scientists associated with the Climate Research Unit of the University of East Anglia sought to manipulate climate data, could be investigated.

"I didn't delay it," Jackson said, "because there is nothing in the hacked e-mails that undermines the science upon which this decision is made."

Jackson added: "In taking action now, and recognizing this threat now, we join the hundreds of other countries, thousands of leading scientists, tens of thousands of innovators, entrepreneurs, and private companies, millions of Americans, and billions of global citizens who have seen the overwhelming evidence and called for action on climate change."

The Obama administration has already taken several steps that figure to bring added costs and uncertainty for American industry:

  • Earlier this year, EPA established requirements for companies to report their greenhouse-gas emissions beginning in 2011.

  • President Obama has proposed a clean-car plan, which limits the greenhouse gas emissions from new automobiles. Analysts say the plan could add $600 to the cost of the average U.S. vehicle. Jackson said the EPA finding announced Monday will provide a legal basis for imposing that plan's requirements on the auto industry.

  • Also, starting this spring, companies that emit substantial amounts of greenhouse gases will be required to install the "best-available systems" to restrict greenhouse-gas emissions whenever they build or expand a plant.

    Jackson maintained that the administration's environmental protection policies will help rather than hurt U.S. economic growth, and would not place "an undue burden on the businesses that make up the better part of our economy."

    In 2007, the U.S. Supreme Court determined that the Clean Air Act covers greenhouse-gas emissions if they pose a danger to public health. That ruling laid the basis for the preliminary finding in April, and the final determination issued Monday afternoon.

    Business groups worry that new regulations will drive up their costs, while hurting their ability to compete with companies in developing nations, where the new emission-control standards won't apply.

    The greenhouse gases that climate-change advocates say contribute to global warming come primarily from three sectors: electricity, transportation, and manufacturing.

    Many business groups are highly skeptical of the administration's climate-change policies. The National Association of Manufacturers has stated that climate-change regulation will come at "a huge cost to the economy."

    Thomas Donohue, president of the U.S. Chamber of Commerce, warned that the EPA finding "could result in a top-down command-and-control regime that will choke off growth by adding new mandates to virtually every major construction and renovation project."

    Edison Electric Institute, a trade organization for the power industry, has expressed concerns that the EPA's regulation of the emission of carbon dioxide and five other greenhouse gases would place more economic burden on specific industries without implementing an "economy-wide approach" that would spread the costs around, The Wall Street Journal reported.

    A major concern for trade groups and GOP members of congress is how small businesses would be affected. The EPA's finding that carbon dioxide, which is released from fossil fuels such as coal or gasoline, is a dangerous pollutant clears could result in regulations on businesses that generate as little as 250 tons of the gas on an annual basis. That would impose burdensome regulations on tens of thousands of small- and medium-sized American businesses. At last week's jobs summit, President Obama hailed such businesses as the key spawning ground for the new jobs needed to stem the tsunami of U.S. unemployment.

    The administration has countered those concerns by promising an exemption for any U.S. business releasing fewer than 25,000 tons of greenhouse gases annually.

    The problem with that pledge, legal experts say, is that it might not stand up in court. Major users of carbon fuels will sue if they are asked to shoulder the entire burden of environmental protection, the experts say. There are serious questions about whether the exemption would hold up in court.

    As with every aspect of climate-change legislation, the real question becomes who will pay for it. Domestically, the question is which sectors will bear the greatest burden. Internationally, it is how much developed nations have to pay to undeveloped nations to persuade them to join a carbon-emission reduction regime.

    The Iron and Steel Institute, a steel-producer's trade group, echoed the concerns voiced by other industry groups, stating that new regulations on the emission of gasses must "reduce emissions without altering the competitiveness of American steelmakers."

    The European Union has estimated that the cost of reducing emissions in developing nations could rise to $150 billion by 2020. The Weekly Standard has estimated that the cost of the cap-and-trade legislation pending before Congress could exceed $3,900 per household per year, but that figure is in dispute.

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