Thursday 30 April 2009

EPA GHG ruling opens alternative path for regulation

www.carbon-financeonline.com
22 April, 2009

In a long-anticipated move, the US Environmental Protection Agency (EPA) ruled on Friday that carbon dioxide and the five other Kyoto Protocol greenhouse gases (GHGs) pose a danger to human health - opening up an alternative avenue for GHG regulation, should Congress not pass climate change legislation. "This finding confirms that GHG pollution is a serious problem now and for future generations," said EPA administrator Lisa Jackson. "Fortunately, it follows President [Barack] Obama's call for a low-carbon economy and strong leadership in Congress on clean energy and climate legislation."

Specifically, the 133-page 'endangerment finding' notes that: "The GHGs that are responsible for [climate change] endanger public health and welfare within the meaning of the Clean Air Act." The finding follows a 2007 ruling by the Supreme Court, which found that GHG regulation would fall within the EPA's ambit, unless it could show that GHGs don't contribute to global warming. However, under the Bush administration, the agency failed to take the next step required to regulate GHGs.

The eventual judgement from the EPA opens the door for regulation of GHGs via the provisions of the Clean Air Act - allowing the Obama administration to bypass Congress, should it fail to bring a climate change bill to the president's desk. However, addressing climate change gases via regulation would leave the door open to a range of legal challenges. Efforts by the EPA to introduce new rules for emissions of sulphur dioxide and nitrous oxide by regulation - after former president George Bush's 2002 Clear Skies Act was rejected by Congress - collapsed last year as a result of legal action.

Analysts believe that the administration is reluctant to pursue the regulatory route - instead hoping that the endangerment finding will encourage a recalcitrant Congress to support legislation such as the recently introduced Waxman-Markey bill, hearings for which began yesterday.

"The agency could have included proposed emission standards for motor vehicles, and standards for other GHG sources," said a note from law firm Van Ness Feldman. "The fact that the proposal did not include such standards suggests that EPA might be moving deliberately, thereby reinforcing the Administration's oft-stated preference for a legislative programme, and signaling that the agency wants to avoid the regulatory cascade that some critics have said is the inevitable outcome of the endangerment finding."

Indeed, as the EPA said in announcing the finding: "Both President Obama and administrator Jackson have repeatedly indicated their preference for comprehensive legislation to address this issue and create the framework for a clean energy economy."

The finding is open for 60 days of public comment.

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