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Tuesday, March 24, 2009

EPA Sends CO2 Endangerment Recommendation To OMB

The Center agrees with President Obama that Congress should pass climate change legislation that includes a cap on greenhouse-gas emissions. We disagree with President Obama on auctioning the allowances in a cap-and-trade program, preferring instead to allocate the credits free to utilities and other participants in the program. This will reduce complex and keep costs of the program in check and avoid unnecessary increases in utility bills. We also agree with the president that Congressional legislation is preferable to agency regulation.

The Environmental Protection Agency has sent the White House Office of Management and Budget (OMB) a proposed finding that carbon dioxide is a danger to public health. If approved, the endangerment finding could clear the way for the EPA to treat CO2 as a pollutant and to use the Clean Air Act to control emissions of carbon dioxide and other greenhouse gases that contribute to climate change. The EPA program would involve about 13,000 facilities, including: coal-fired and natural gas-fired power plants, oil refineries and domestic industries, such as energy-intensive paper, cement, fertilizer, steel, and glass manufacturers, among others. It is estimated that these facilities account for about 85% to 90% of greenhouse gases emitted in the U.S.

Such a finding would raise pressure on Congress to enact a system that caps greenhouse gases and create a market for businesses to buy and sell the right to emit them, as President Barack Obama has proposed and the Center supports. The administration's proposed a cap-and-trade system could raise $646 billion by 2019 through government auctions of emission allowances (Center opposes the auction portion of the proposal).

Ideally, climate change legislation would be passed before the international Copenhagen meeting in December to address the climate change issue. We doubt a bill will pass this year, but one should pass in 201o. Representatives from over one hundred countries will be drafting a successor to the Koyoto Protocol, the 1997 agreement that commits many industrialized countries to reducing their greenhouse-gas emissions.

The Supreme Court ruled ( Mass. v EPA, April 2, 2007) that the EPA must review whether greenhouse-gas emissions pose a threat to public health or welfare. (WSJ, 3/24/09)

EP&W Committee Hearing, “Regulation of Greenhouse Gases under the Clean Air Act,” Tuesday, September 23, 2008. [Witness Statements]

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