Another Oldie But Goodie: Mark Mills 1998 CO2 Compliance Burden Study

In the interest of ensuring public access to climate-related documents that may be hard to find, I am posting here the original, June 1998 study by technology analyst Mark P. Mills of the sprawling compliance burdens of EPA regulating carbon dioxide (CO2) as an air pollutant under the Clean Air Act (CAA).

The study, entitled A Stunning Regulatory Burden: EPA Designating CO2 As A Pollutant, estimated that applying CAA permitting requirements to CO2 would compel EPA to regulate over 1 million small- and mid-size businesses.

In September 2008, Mills and his daughter Portia updated the study for the Chamber of Commerce in a report entitled A Regulatory Burden: The Compliance Dimension of Regulating CO2 as a Pollutant.

Although superceded by the later report, the June 1998 report remains highly relevant to the climate policy debate.

A Stunning Regulatory Burden was a direct response to the April 1998 Memorandum by then EPA General Counsel Jonathan Z. Cannon asserting EPA’s authority under the Clean Air Act to regulate CO2 and other greenhouse gases (GHGs). Petitioners in Massachusetts v. EPA partly relied on the Cannon memorandum to press their claim that EPA had a statutory obligation to issue an endangerment finding and regulate GHG emissions from new motor vehicles under Sec. 202 of the Act.

Most importantly, the June 1998 Mills study reminds us that EPA had to know all along that a victory for petitioners in Massachusetts v. EPA would dramatically expand its regulatory reach beyond any plausible delegation of regulatory authority from Congress.

Yet during all the years when the case was being litigated (Sep. 2004 – April 2007), EPA never pointed out the regulatory ramifications of a victory for petitioners. Only long after losing case, in its Advanced Notice of Proposed Rulemaking (July 2008) and Tailoring Rule (October 2009), did EPA acknowledge that the endangerment finding tees up the very sorts of regulatory excesses Mills warned about a decade earlier. 

The 5-4 majority in Mass v. EPA decided in favor of petitioners partly in the belief that an endangerment finding would not lead to ”extreme measures” (p. 531). But according to the Tailoring Rule, unless EPA “tailors” — that is, amends — the CAA, the endangerment finding will lead inexorably to a host of “absurd results” that conflict with and undermine congressional intent.  

The question arises: Why didn’t EPA explain this when it really mattered? Why did EPA pull its punches in Mass. v. EPA? Why didn’t EPA make the case that the endangerment finding sought by petitioners would lead a regulatory cascade that Congress never intended and would not approve?

I think the answer is obvious. For EPA, losing the Massachusetts case meant gaining the power to regulate fuel economy for the auto industry and, more importantly, the power to determine climate and energy policy for the nation. Strong circumstantial evidence suggests that EPA wanted to be thrown into the greenhouse briar patch all along.