Friday, April 17, 2009

LOW CARBON REGULATION IN THE US - NOW COMING!

The US Environmental Protection Agency (EPA) has determined that it should regulate green house gas emissions from industry and from transportation and is now engaged in the process of consulting on these regulations and their consequences. The EPA action was prompted by a Supreme Court ruling two years ago that said greenhouse gases are pollutants under the US Clean Air Act and must be regulated if found to be a danger to human health or public welfare. The US law specifically states that EPA "shall" (i.e. must, not may) regulate dangerous pollutants once they are found to endanger public health or welfare.

As part of their thinking, the EPA has concluded that the science pointing to man-made pollution as a cause of global warming is "compelling and overwhelming." Notice that they did not say “the cause”, it is one factor. Nonetheless, they will start the process of dismantling a carbon driven economy and moving the US to a low carbon economy during the next few years of the Obama administration.

The EPA’s move is independent of the discussion in the US Congress on the establishment of a cap and trade system. While the EPA may have an involvement in the design of the cap and trade regulations – such a scheme begins with a measurement of how much green house gas emissions are occurring and from where and also requires the setting of targets for emissions – their actions may go much further. For example, they could determine what kind of domestic emissions are permissible and what kind of exhaust emissions are permissible from vehicles of various kinds.

This is a profound shift from the position taken by the previous US administration and signals a sea change in US strategy with respect to the low carbon economy. It also positions the US as a serious combatant – for it will be a battle – at the December climate change treaty talks in Copenhagen, when 170 countries will meet to negotiate a successor treaty to Kyoto.

But it not all plain sailing for Obama’s climate change strategy. The Senate firmly rejected Obama's plan to try to push through a carbon emissions cap-and-trade program through fast-track procedures, making clear that getting any bill done this year will be a struggle. The Senate voted 67-31 to pass an amendment that says Congress should not try to force cap-and-trade through under the budget "reconciliation" process, now that both houses have passed the budget (without any Republican support). While not binding on the final House-Senate agreement, the strong statement on a Republican-sponsored amendment does go a long way toward tying Congress' hands.

And the EPA are just starting the process of entering into greenhouse gas regulation. It will be a long and contentious journey, with lobbyists and large firms calling “foul” at every turn. Nonetheless, the US is now aligning itself with the EU and is working to reduce emissions. Unlike the EU, however, Obama is setting modest goals. The EU has indicated that it is seeking a 20% reduction on CO2 emissions by 2020 and 80% by 2050. All Obama has committed to is getting CO2 emissions back to the 1998 levels by 2020 – modest in comparison to the EU but still quite a stretch.

Will this do what many in Europe still mindlessly talk about: “stop climate change”. No. And the good news is that the EPA does not claim that any regulations they may enact will do so. What they do say is that emitting more greenhouses gasses than are necessary for effective production is not a good thing and we can stimulate the use of appropriate technologies to reduce them through regulation. The minute they connect regulatory activity with “stopping” climate change you will know that they are no longer doing the job, but are engaged in polemical Pollyanna politics.

1 comment:

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