Last Thursday, the House Energy & Power Subcommittee, on a voice vote, approved H.R. 910, the “Energy Tax Prevention Act.” My colleague Myron Ebell blogged about it over the weekend in a post titled Inside the Beltway.
The present post offers additional commentary. The full House Energy and Commerce Committee marks up the legislation today and tomorrow.
Rep. Henry Waxman (D-Calif.) led the charge for the minority, claiming H.R. 910 “rolls back” the Clean Air Act. Wrong. H.R. 910 restores the Clean Air Act (CAA). Congress never intended the CAA to be a framework for greenhouse gas regulation, and never subsequently voted for it to be used as such a framework. The terms “greenhouse gas” and “greenhouse effect” never even occur in the Act, which was enacted in 1970, years before global warming was even a gleam in Al Gore’s eye.
The CAA as amended in 1990 does mention “carbon dioxide” and “global warming potential,” but only once, in the context of non-regulatory provisions, and each time followed by a caveat admonishing EPA not to infer authority for “pollution control requirements” or “additional regulation.” This language would have been superfluous and without legal effect if, as Waxman assumes, EPA already had authority since 1970 to control carbon dioxide as an “air pollutant” or regulate greenhouse gases in general based on their “global warming potential.” The only time Congress spoke directly to the issue of global warming in the Clean Air Act, it instructed EPA not to jump to regulatory conclusions. For further discussion, see my columns EPA’s End-Run Around Democracy and Endangerment Smackdown: Should Congress Heed Russell Train’s Advice.
Waxman said H.R. 910 “overturns EPA’s scientific finding.” Reps. Ed Markey (D-Mass.) and Jay Inslee (D-Wash.) go further, asserting that Republicans are trying to repeal the law of gravity and the first law of thermodynamics. Rubbish. Nature is what it is. EPA’s assessment of the science is what it is. H.R. 910 takes no position on climate science. It does not presume to command Nature or rescind EPA’s assessment of the scientific literature. Rather, H.R. 910 aims to overturn the legal force and effect of the rule in which EPA published its assessment, the so-called endangerment finding.
As even Rep. Waxman might admit, science should inform, not dictate, policy. EPA, however, is using its allegedly scientific assessment to dictate policy. EPA’s Endangerment Rule obligates EPA to regulate greenhouse gas emissions from new motor vehicles, which then obligates EPA to impose CAA permitting requirements on stationary sources of greenhouse gases. In addition, the Endangerment Rule authorizes or obligates EPA to establish emission standards for other mobile sources (aircraft, marine vessels, non-road vehicles) and New Source Performance Standards (NSPS) numerous industrial source categories. EPA may even be litigated into establishing National Ambient Air Quality Standards (NAAQS) for greenhouse gases set below current atmospheric concentrations.
Thus, by publishing an assessment of the science literature, EPA authorized itself to ‘legislate’ national policy on climate change. America could end up with a climate regulatory regime more costly and intrusive than any cap-and-trade bill Congress has declined to pass, or any climate treaty the Senate has declined to ratify, yet without the people’s representatives ever voting on it. H.R. 910 would stop this trashing of our constitutional system of separated powers and democratic accountability.
Waxman said: “Some Republicans on the committee will argue today that this bill is not a rejection of science, but if they believed in the serious threat posed by climate change, they would have accepted our offer to work together without preconditions to develop a responsible plan for promoting clean energy and reducing carbon emissions.” Two problems here. First, Waxman confuses science with his view of the science. Some scientists, such as University of Alabama in Hunstville climatologist John Christy, who recently testified before the Energy and Power Subcommittee, take a decidedly non-alarmist view.
Second, a “clean energy standard” (CES), like the failed Waxman-Markey cap-and-trade bill, is just another way of “skinning the cat,” as President Obama put it. A CES is another way to “bankrupt” coal power plants and cause electricity rates to “necessarily skyrocket.” Obama’s CES proposal aims at almost exactly the same mix of electricity fuels that the Waxman-Markey cap-and-trade bill would have created. A CES resembles a Soviet-style production quota and would probably be less efficient than cap-and-trade. Why should Republicans and Blue Dog Democrats who oppose cap-and-trade feel obliged to support something even worse?
Waxman said: “It is hard to know how to respond when the other side calls H.R. 910 the Energy Tax Prevention Act but EPA has no authority to levy taxes, nor does the Agency propose to do so.” Rep. John Dingell (D-Mich.) made the same point, claiming that the sponsors had a “truth in advertising” problem, because EPA is not collecting revenues from taxpayers. This kind of nit-picky literalism misses the point. Granted, rhetoric can distort reality. An apt example is Waxman and Markey’s “American Clean Energy and Security Act,” which would have inflated gasoline prices, destroyed jobs, and increased our reliance on costly and unreliable wind and solar power.
Rhetoric, however, can also demystify convoluted agendas so that the public can understand who’s trying to fleece them. Although economists had long argued that a carbon tax is more efficient, the global warming movement preferred cap-and-trade because its economic impacts are less obvious. Calling it “cap-and-tax” opened peoples eyes. Even though cap-and-trade was not strictly a tax, it would have some of the same effects as an energy tax, such as causing electric rates to “necessarily skyrocket.” EPA’s regs would similarly penalize fossil energy production and use, raising consumer energy prices. H.R. 910’s title spotlights this valid concern. As Subcommittee Chair Ed Whitfield (R-Ky.) later said, the bill would repeal a “de facto tax on energy.”
Rep. Mike Doyle (D-Penn.) argued that EPA’s greenhouse rules can’t be sending jobs to China because they apply only to facilities that are “new” or “drastically modified.” Two problems here. First, Doyle tacitly concedes that EPA’s rules could send future jobs to China, by discouraging firms to undertake new construction or major modifications. But that means the rules could be sending jobs to China already, because people invest today based on their expectations for the future (duh!). Moreover, EPA has announced that it plans to apply greenhouse gas performance standards to existing, non-modified coal power plants. Besides, the purpose of H.R. 910 is not merely to undo any economic damage that EPA’s greenhouse gas regulations have done since Jan. 2, 2011, when they took effect, but to safeguard America’s economic future for years to come.
Rep. Inslee denounced H.R. 910 as the “dirty air act” (not very original), asserting it would prevent EPA from fighting childhood asthma. If Inslee really believes that, then I have a bridge I’d like to sell him. To restate the obvious, carbon dioxide is not an asthma-triggering or -exacerbating air pollutant. EPA already has all the power it could possibly want under traditional CAA programs to control air pollution. U.S. air quality is not a major factor in childhood asthma. Asthma rates have risen even as air pollution has declined, and hospitalizations for asthma are lowest in July and August — months when smogs levels are highest. For further discussion, see Chapter 7 of Joel Schwartz and Steven Hayward’s book, Air Quality in America: A Dose of Realty on Air Pollution Levels, Trends, and Risks.
Rep. Eliot Engel (D-N.Y.) suggested that allowing EPA to regulate greenhouse gases through the CAA would grow the economy: “Since its adoption, the Clean Air Act has reduced key air pollutants by 60 percent, while at the same time the economy has grown by over 200 percent.” Yes, but who today would say that the economy is in great shape? Unemployment hovers near 10%. Imposing virtual taxes on energy can only impede recovery.
Small business is the main job creator. Environmental compliance already “costs 364 percent more [per employee] in small firms than in large firms,” according to the Small Business Administration Office of Advocacy. EPA’s Tailoring Rule shields small greenhouse gas emitters from CAA permitting requirements by effectively amending the statute’s numerical definitions of “major emitting facility.” If courts strike down the Tailoring Rule as a violation of the separation of powers, then small business compliance costs will “necessarily skyrocket.” Even if courts uphold the Tailoring Rule, EPA’s regulations will increase small business energy costs.
Waxman opined that H.R. 910 would jeopardize EPA’s model year 2012-2016 greenhouse gas tailpipe standards, on which auto companies have already based their plans, despite language leaving those standards in place. “The exception doesn’t address the issue of whether those standards can survive legal challenge without the endangerment finding,” he said. His point being that H.R. 910 would overturn EPA’s Endangerment Rule, without which EPA could not legally issue the Tailpipe Rule. True but irrelevant. As Subcommittee Counsel Maryam Brown noted, if Congress via H.R. 910 codifies the Tailpipe Rule, then there can be no legal challenge to it.
Brown’s point also takes care of Waxman’s concern that a decoupling of EPA’s greenhouse gas motor vehicle emission standards from the National Highway Traffic Safety Administration’s (NHTSA’s) fuel economy standards would decrease greenhouse gas reductions by 30% relative to the joint rulemaking the agencies issued in May 2010. I’m not sure where Waxman gets that percentage. P. 25429 of the joint rule says that an automobile air conditioner (AC) system must be 30% more efficient than the current average to qualify for a greenhouse gas reduction credit. That’s the only place in the joint rule where the figure “30%” occurs.
EPA and NHTSA confirm that “there is a single pool of technologies for addressing these twin problems [climate change, oil dependence], i.e. those that reduce fuel consumption and thereby reduce CO2 emissions as well” (p. 25327). EPA estimates that 94-95% of motor vehicle greenhouse gas emissions are carbon dioxide from motor fuel combustion, the remaining portion coming from the refrigerants used in automobile AC systems. Thus, even if H.R. 910 did have the effect of decoupling EPA’s greenhouse emission standards from NHTSA’s fuel economy standards, there should be only a small decrease in greenhouse gas reductions relative to the joint rule’s projected baseline.
Let’s also put things in perspective. EPA and NHTSA estimate their joint rule will avert 0.011°C of warming and 0.09 cm of sea-level rise by 2100 (p. 25637). Those effects are too small to be detected and make no practical difference to any public health or environmental concern. A 30% reduction in such puny “climate protection” is irrelevant.
Waxman also denounced H.R. 910 because California could not apply for another waiver to set even tougher greenhouse gas emission standards for cars manufactured after the 2016 model year. But EPA should never have granted California a waiver to establish its own greenhouse gas emission standards in the first place. The California program is massively “related to” fuel economy, and, as such, is preempted by the 1975 Energy Policy Act.
In addition, as Rep. Brian Bilbray (R-Calif.) ably argued, the waiver provision established by CAA Sec. 209 has no rational application to greenhouse gases. The CAA authorizes California to obtain waivers to go beyond federal motor vehicle emission standards because those are not tough enough to bring California, with its unique topography and meteorology, into attainment with federal air quality standards. There are no national air quality standards for greenhouse gases. Therefore, California has no need under the CAA to establish vehicle emission standards for greenhouse gases. Moreover, because greenhouse gases are well-mixed in the global atmosphere, greenhouse gases, unlike smog or soot, are no more heavily concentrated in California than anywhere else.
Engel argued that overturning EPA’s endangerment finding would be unprecedented in the history of the CAA. Counsel Brown countered that there is precedent for repealing EPA rulemakings and that EPA’s issuance of a “stand-alone” endangerment finding, without accompanying regulatory requirements, is itself “unprecendented.” I would put the matter this way. EPA’s Endangerment Rule is “stand-alone” only as a publication. It is the trigger, prelude, and precedent for a cascade of regulations Congress has not approved. If the “finding” were merely that — EPA’s interpretation of climate science — then Congress would not be voting on it. The Endangerment Rule is separate only in the trivial sense that it was published before all the other greenhouse gas regulations that flow from it.
Rep. Markey argued that because H.R. 910 takes away EPA’s authority over greenhouse gases, it also takes away EPA’s authority to reduce oil consumption in aircraft, marine vessels, non-road vehicles, boilers, etc. And that is bad, he reasoned, because NHTSA has no authority to reduce oil consumption from such entities. Markey fails to grasp the implication of his remarks. If the nation’s fuel economy laws (1975 Energy Policy Act, 2007 Energy Independence and Security Act) do not authorize NHTSA to reduce oil consumption from entities other than cars and trucks, then Congress obviously did not authorize EPA to do so through the Clean Air Act, which provides no authority whatsoever to set fuel economy standards.
If Markey thinks EPA should be reducing oil consumption throughout the economy, then he should draft a bill, introduce it, and try building legislative majorities to pass it. But that would be hard work, and it might not succeed. So instead Markey wants EPA to play lawmaker and impose his will on the nation.
I would summarize the core premise of Waxman, Markey, and Inslee’s opposition to H.R. 910 as follows: We know what is good for America and the world. It’s a future without fossil fuels. We can’t persuade the people’s representatives to support our agenda and turn it into law. Therefore, it is necessary for EPA to ‘enact’ our agenda regardless of the defeat of cap-and-trade, the November 2010 elections, and the separation of powers. The triumph of our agenda is more important than any constitutional principle that might interfere with it.