Friday, February 20, 2009

EPA to Regulate Carbon (Per NYTimes) - Thresholds may be much higher than 250 tons/yr "Dunkin Donuts" Rule

A recent NYC article (below) reports on the renewed activity at EPA to regulate Greenhouse Gas. The article mentions a regulation threshold of 250 tons of Co2/yr, which is incredibly low. Regulators have told us that 25,000 metric tons CO2/yr (scope 1) is likely threshold at federal, but some states could drop to 5 or 10,000.

I attended a status phone call this week of The Climate Registry, which represents 40+ states, and it quite clear that the EPA is not talking to this group. Hopefully the EPA doesn't reinvent the wheel, works with the states and TCR, and moves to less regulatory confusion at Federal and State levels, and not more.

February 19, 2009
E.P.A. Expected to Regulate Carbon Dioxide

WASHINGTON — The Environmental Protection Agency is expected to act for the first time to regulate carbon dioxide and other greenhouse gases that scientists blame for the warming of the planet, according to top Obama administration officials.

The decision, which most likely would play out in stages over a period of months, would have a profound impact on transportation, manufacturing costs and how utilities generate power. It could accelerate the progress of energy and climate change legislation in Congress and form a basis for the United States’ negotiating position at United Nations climate talks set for December in Copenhagen.

The environmental agency is under order from the Supreme Court to make a determination whether carbon dioxide is a pollutant that endangers public health and welfare, an order that the Bush administration essentially ignored despite near-unanimous belief among agency experts that research points inexorably to such a finding.

Lisa P. Jackson, the new E.P.A. administrator, said in an interview that she had asked her staff to review the latest scientific evidence and prepare the documentation for a so-called endangerment finding. Ms. Jackson said she had not decided to issue such a finding but she pointedly noted that the second anniversary of the Supreme Court decision, Massachusetts v. E.P.A., is April 2, and there is the wide expectation that she will act by then.

“We here know how momentous that decision could be,” Ms. Jackson said. “We have to lay out a road map.”

She took a first step on Tuesday when she said that the agency would reconsider a Bush administration decision not to regulate carbon dioxide emissions from new coal-burning power plants. In announcing the reversal, Ms. Jackson suggested that the E.P.A. was considering additional measures to regulate heat-trapping gases. The White House signaled that it fully supported Ms. Jackson’s approach, deferring to her to discuss the administration’s response to the Supreme Court case.

Ben LaBolt, a White House spokesman, also pointed to statements on the subject during the presidential campaign by Heather Zichal, a top adviser on environmental and energy issues.

Ms. Zichal, who is now deputy to Carol M. Browner, the White House coordinator for climate and energy policy, said last fall that the Bush White House had prevented the E.P.A. from making the endangerment finding “consistent with its obligations under the recent Supreme Court decision.” She also said that while Mr. Obama supported Congressional action on climate change, he was also committed to using the regulatory authority of the executive branch to reduce emissions that contribute to global warming.

Mr. LaBolt said the White House would not interfere with the agency’s decision-making process.

If the environmental agency determines that carbon dioxide is a dangerous pollutant to be regulated under the Clean Air Act, it would set off one of the most extensive regulatory rule makings in history. Ms. Jackson knows that she would be stepping into a minefield of Congressional and industry opposition and said that she was trying to devise a program that allayed these worries.

“We are poised to be specific on what we regulate and on what schedule,” Ms. Jackson said. “We don’t want people to spin that into a doomsday scenario.”

Even some who favor an aggressive approach to climate change said they were wary of the agency’s asserting exclusive authority over carbon emissions. They say that the Clean Air Act, now more than 40 years old, was not designed to regulate ubiquitous substances like carbon dioxide. Using the law, they say, would capture carbon emissions from new facilities, but not existing ones, blunting its impact. They also believe that a broader approach that addresses all sectors of the economy and that is fully debated in Congress would be better than a regulatory approach that could drag through the courts for years.

The finding and proposed regulations would be issued in sequence, with ample opportunity for public comment and not in a sudden burst of regulatory muscle-flexing, Ms. Jackson said. The regulations would work in concert with any legislation and not supplant it, she added.

“What we are likely to see is an interplay of authorities, some new, some existing,” she said.

That is not likely to assuage critics, including many Democrats from states dependent on coal-generated electricity and manufacturing jobs, where such regulation could significantly increase costs. Representative John D. Dingell, the Michigan Democrat who has long championed the interests of the auto industry, said that the regulation of carbon dioxide emissions by the E.P.A. would set off a “glorious mess” that would resonate throughout the economy.

Senator John Barrasso, Republican of Wyoming, warned Ms. Jackson during her January confirmation hearing that she should not undercut Congress’s authority by using the agency’s regulatory power to address global warming. Mr. Barrasso called the use of the Clean Air Act to regulate carbon “a disaster waiting to happen.”

Many environmental advocates, however, said the E.P.A.’s action was long overdue, but added that it was only as a stopgap until Congress passed comprehensive climate change legislation.

“It’s politically necessary, scientifically necessary and legally necessary,” said David Bookbinder, chief climate counsel at the Sierra Club, a plaintiff in the Supreme Court case.

But, Mr. Bookbinder added, Congressional action is preferable to the agency’s acting on its own. “We are loudly advocating for tailor-made legislation as the best means of addressing carbon emissions,” he said. “Trying to address climate change via a series of rule makings from E.P.A. is a distant second best.”

As Ms. Jackson navigates the complexities of carbon regulation, she will be advised by Lisa Heinzerling, a former law professor at Georgetown who wrote the winning Supreme Court briefs in Massachusetts v. E.P.A. Ms. Heinzerling is now the agency’s lead attorney for global warming matters.

Jeffrey R. Holmstead, the former head of the agency’s office of air and radiation, said that a finding of endangerment from emissions of heat-trapping gases did not initiate immediate regulation but started a clock ticking on a process that typically took 18 months to two years.

“Potentially, it’s a huge mess, not only for E.P.A. but for state regulatory agencies, because the Clean Air Act is second only to the Internal Revenue Code in terms of complexity,” said Mr. Holmstead, now director of environmental strategies at the law firm Bracewell & Giuliani.

He said that under the clean air law any source emitting more than 250 tons of a declared pollutant would be subject to regulation, potentially including schools, hospitals, shopping centers, even bakeries, which has prompted some critics to call it the “Dunkin’ Donuts rule.”

But Mr. Bookbinder and other supporters say the regulations can be written to exempt these potential emitters. Ms. Jackson said that there was no timetable for issuing regulations governing carbon emissions and that her agency would not engage in “rash decision making.”

But she also said that the Supreme Court decision obliged her to act.

“It places E.P.A. square in the center of the discussion on climate and energy,” Ms. Jackson said. “People are waiting.”

The headline and summary accompanying an earlier Web version of this article misstated the immediate impact of the E.P.A. review taking place.

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