Marlo Lewis

In a message titled, ”EPA WILL REGULATE GLOBAL WARMING IN STATES WITH OR WITHOUT AUTHORITY,” the ever-vigilant Maryam Brown of the Senate Republican Policy Committee reports:

As you likely saw, Senator Baucus [D-MT] said yesterday that he would strip U.S. EPA’s authority to regulate greenhouse gas emissions under the Clean Air Act: “That would put too much power into few hands.” (Source:  E&E News) Senator Baucus’s apprehension to EPA’s power over all activity is well placed.

On October 5th, EPA officials said that those states not cooperating come January 2nd would face a gap in permitting authority that could prevent sources from receiving the necessary permits.  [In plain English: If states don’t come along, the Obama EPA will hold up projects (and the jobs that go with) in your state.]  (Source:  BNA Daily)

Because these statements echoed states such as Texas’s fears that EPA has a “plan for centralized control of industrial development through the issuance of permits for greenhouse gases,” EPA issued a clarifying statement on October 6th: “EPA has a mechanism in place to ensure permitting can occur without disruption in any states that currently do not have authority to regulate GHG.”  [In plain English: Whether there is authority or not, the Obama EPA will regulate the states.] (Source:  BNA Daily)

Baucus’s opposition to EPA regulation of greenhouse gases is noteworthy for three reasons.

First, as E&E News observes, Sen. Baucus “is considered a key vote to obtain in order to pass any climate bill and a bellwether for many other moderate Democrats on the issue.” Second, Baucus voted against Sen. Lisa Murkowski’s resolution (S.J.Res.26) to overturn EPA’s Endangerment Rule — the trigger for a cascade of greenhouse gas regulation under the Clean Air Act. If he is a “bellwether,” then other opponents of S.J.Res. 26 may also have come to their senses and realize that Congress should not let EPA legislate climate policy.

Third, although Baucus may not acknowledge it, his “too much power into few hands” argument is tacit criticism of the Supreme Court’s ruling in Massachusetts v. EPA, which both authorized and pushed EPA to regulate greenhouse gases via the Clean Air Act. The Court authorized EPA to regulate greenhouse gases when it declared that “greenhouse gases fit well within the Clean Air Act’s capacious definition of ‘air pollutant’” (they don’t, as I explain here).

In addition, the Court pushed EPA to regulate greenhouse gases by pre-judging EPA’s endangerment proceeding. The Court held that EPA must make a positive finding of endangerment if it decides that “greenhouse gases cause or contribute to climate change” — as if climate change per se = endangerment. Since greenhouse gases by definition have a greenhouse effect, the Court left EPA only one alternative — declare that “the scientific uncertainty is so profound that it precludes EPA from making a reasoned judgment as to whether greenhouse gases contribute to global warming.” An impossible alternative for an agency that had been a certified member of the alleged “scientific consensus” for many years.

The key point regarding Mass. v. EPA, though, is that Sen. Baucus is almost uniquely qualified to rebut the claim that the Clean Air Act authorizes EPA to regulate greenhouse gases from new motor vehicles. During congressional deliberation on the Clean Air Act Amendments of 1990, Baucus  introduced legislation requiring EPA to do just that. As originally introduced on September 14, 1989, S. 1630, the Senate version of the 1990 Clean Air Act Amendments, contained a Section 216 on “Carbon Dioxide Emissions from Passenger Cars.” The provision would require the Administrator to establish tailpipe emission standards for CO2:

SEC. 216. (a) PROMULGATION OF REGULATIONS- The Administrator shall promulgate regulations providing for standards applicable to emissions of carbon dioxide from passenger automobiles (as defined in 15 U.S.C. 2001(2)). Such standards shall require that for model years 1995 to 2002, the average of such emissions from passenger automobiles manufactured by any manufacturer shall not exceed two hundred and forty two grams per mile, and for model year 2003 and thereafter, such average shall not exceed one hundred and seventy grams per mile.

However, the Senate declined to adopt that provision.  Another part of Baucus’s draft legislation, Title VII of S. 1630, would have made “global warming potential” a basis for regulating ”substances manufactured for commercial purposes,” such as chlorofluorcarbons and halogens. Although Title VII declared reductions in CO2 and methane emissions as a national goal, it did not explicitly provide authority to regulate those gases, which are byproducts of combustion and agricultural activity rather than “substances manufactured for commercial purposes.”

In any event, the House-Senate conference committee ultimately rejected even that limited basis for global warming regulation while also dropping Title VII’s goal of reducing CO2 and methane emissions. The only trace of Title VII’s climate language that survived is Section 602(e) of Title VI, which directs the Administrator to “publish” the “global warming potential”of ozone-depleting substances. To ensure that trigger-happy regulators would not go off half-cocked, the phrase “global warming potential” is immediately followed by this admonition: “The preceding sentence shall not be construed to be the basis of any additional regulation under [the CAA].”

So with the possible exception of Rep. John Dingell (see pp. 65-66 of this committee print), who chaired the House-Senate conference committee on the 1990 Clean Air Act Amendments, probably nobody on Capitol Hill knows better than Sen. Baucus that Congress never authorize EPA to regulate greenhouse gases for climate change purposes. Baucus tried to persuade the Senate to approve greenhouse gas emission standards for new motor vehicles — and failed. House and Senate conferees also rejected the other greenhouse gas regulatory provisions he had proposed. A lawmaker doesn’t forget stuff like that!

And now, 20 years later, Baucus is willing to break ranks with his own party leadership and incur the wrath of the green establishment because EPA is amassing powers that, in the last major re-write of the Clean Air Act, he tried and failed to confer on the agency via legislation. Sen. Baucus, I salute you! OK, I will salute you if you match your brave words with action and do something to stop EPA!

The Court in Mass. v. EPA ignored its own better judgment: “Few principles of statutory construction are more compelling than the proposition that Congress does not intend sub silentio [by its silence] to enact statutory language that it has earlier discarded in favor of other language.” INS v. Cardozo-Fonseca, 480 U.S. 421, 442-43 (1983) It is not too late to correct the Court’s error. If Sen. Baucus is indeed a bellwether, that correction may not be long in coming.

Energy Secy. Steven Chu kicked off a three-day federal “sustainability” symposium today by announcing that the Department of Energy will install solar rooftop water-heating panels on . . . the White House.

“Around the world, the White House is a symbol of freedom and democracy,” Chu told an audience of federal employees, according to Greenwire, the online energy & environment news service. “It should also be a symbol of America’s commitment to a clean energy future.”

Apparently, nobody interviewed in connection with the article sees anything goofy about the mighty DOE and the White House trying to save the planet one rooftop at a time. Nor anything comedic in talking about the future of presidential bath and shower water.

Chu’s announcement came one month after eco-activist Bill McKibben led a demonstration demanding that President Obama install rooftop solar panels. To show that if you will it, it is not a dream (okay, I’m editorializing here), McKibben presented White House officials with a solar panel from Jimmy Carter’s White House.  Initially, they rebuffed him. But now, they’ve taken one small symbolic step back to the … Carter administration. Of course, McKibben hails Chu’s pledge as a giant step for mankind.

“The White House did the right thing, and for the right reasons: They listened to the Americans who asked for solar on their roof, and they listened to the scientists and engineers who told them this is the path to the future,” said McKibben, the co-founder of the nonprofit 350.org. “If it has anything like the effect of the White House garden, it could be a trigger for a wave of solar installations across the country and around the world.”

Yup, hardly anybody “across the country and around the world” would be planting flowers or “installing” flower gardens  if the White House had not shown the way via those Rose Garden tours!

Apparently, nobody interviewed by Greenwire wanted to mention the elephant in the room, namely, that McKibben’s symbolic victory is a far cry from the political victory Team Obama and eco-campaigners boasted they would win by enacting cap-and-trade.

Ive got nothing against solar technology, which has come a long way since the Carter days. Nonetheless, outside of certain niche markets and applications, solar is not competitive with fossil energy or even with other so-called non-hydroelectric renewable energies. See slide #17 of the Energy Information Administration’s Power Point presentation on its 2010 Annual Energy Outlook report.

Yes, solar power has enjoyed a rapid growth spurt in Germany, but that is due market-rigging subsidies known as feeder tariffs. If an industry cannot sustain itself without special policy privileges, does it really deserve to be called “sustainable”?

If approved by the California electorate this November, Proposition 23 will suspend the implementation of AB 32, the California Global Warming Solutions Act, until the State’s unemployment rate declines to 5.5% or less for four consecutive quarters. AB 32 requires a reduction in the State’s greenhouse gas emissions to 1990 levels by 2020 — about 25-30% below the baseline projection.

In a just-published study for the Pacific Research Institute, Dr. Benjamin Zycher estimates that adoption of Proposition 23 will increase aggregate employment in the State by a bit less than 150,000 in 2011, about half a million in 2012, and 1.3 million in 2020, relative to the case in which AB 32 goes into effect.

The California Air Resources Board projects that AB 32 will decrease State-wide energy consumption by 4.5% in 2012 and 9.4% in 2020. Energy, of course, is used to support economic activity: “workers use energy to accomplish their tasks.”

Zycher derives AB 32’s employment impacts from CARB’s energy-consumption projections during 2010-2020 and data on the historical relationship between energy consumption and employment in California.

Last Thursday (September 16, 2010), three groups, each led by the Coalition for Responsible Regulation (CRR), filed motions with the D.C. Circuit Court of Appeals to “stay” (put a hold on) the Environmental Protection Agency’s recently finalized greenhouse gas regulations.

The EPA regulations at issue are:

1. The Endangerment Rule, which finds that greenhouse gas (GHG) emissions endanger public health and welfare, thereby obligating EPA to develop and adopt GHG emission standards for new motor vehicles.
2. The Tailpipe Rule, which, per the Endangerment Rule, establishes first-ever GHG emission standards for new motor vehicles.
3. The Triggering Rule, which holds that when the Tailpipe Rule takes effect (Jan. 2, 2011), “major” GHG emitting facilities will be “subject to regulation” under the Act’s Prevention of Significant Deterioration (PSD) pre-construction permitting program and Title V operating permits program.
4. The Tailoring Rule, which amends the PSD and Title V definitions of “major emitting facility” to avoid the “absurd result” of EPA and State environmental agencies having to process an estimated 41,000 PSD permits and 6.1 million Title V permits every year.

The groups filing the motions are: (1) a coalition of business associations led by the National Association of Manufacturers; (2) the State of Texas; and (3) a coalition of public policy advocates. The industry group is asking the Court to stay the Endangerment Rule, the Triggering Rule, and the Tailoring Rule, although not the Tailpipe Rule. Texas and the advocacy groups ask for a stay on all four regulations pending the Court’s review and decision to uphold or vacate the rules.

One point the motion makes is unarguable. Granting a stay can cause no harm to public health, even if one assumes global warming is a big problem. After all, EPA itself estimates that the Tailpipe Rule — the only rule for which environmental effects are estimated — would avert less than 1/100th of a degree Fahrenheit of global warming by 2100. Thus, if the Tailpipe Rule survives judicial scrutiny, delaying its implementation by six months to a year would have no discernible environmental impact. Besides, the stay would not affect the National  Highway Traffic Safety Administration’s (NHTSA) recent revision of fuel economy (CAFE) standards, and the overwhelming lion’s share of emission reductions required by the Tailpipe Rule actually comes from the new fuel economy regulations.

In contrast, the motions argue, EPA’s rules are already harming the economy. The dubious legal basis of both the Tailoring Rule and EPA’s efforts to bully States into immediately amending their permit programs ”now impose a terrible uncertainty tax on our struggling economy, as no business is able to make plans or investments in reliance on a regulatory scheme so clearly at odds with the plain language of the Act.” Businesses and State permitting agencies will incur additional losses if they make investments based on EPA’s rules and the rules are subsequently overturned. Best to put the regs on hold until the Court rules on their legal bona fides.

The Competitive Enterprise Institute (CEI) is a party to the advocacy group motion, which makes a powerful case that the regulations should be stayed and, ultimately, overturned. Lest anyone suspect that I’m tooting my own horn, I had absolutely no role in either developing or drafting the motion.

Big Picture

As can be surmised from the description above, EPA’s four rules are interdependent. The Endangerment Rule authorizes and, indeed, compels EPA to establish GHG emission standards for new motor vehicles. The emission standards, promulgated via the Tailpipe Rule, make GHGs subject to regulation under PSD and Title V, according to the Triggering Rule. To avoid administrative paralysis, economic disruption, and political backlash, the Tailoring Rule exempts all but the largest GHG emitters from PSD and Title permitting requirements over the next six years, raising from 100/250 tons per year to 75,000/100,000 tons per year the cutoff for regulation as a “major” emitting facility.

This custer of regulations is a classic case of bureaucratic self-dealing. As discussed elsewhere, EPA has positioned itself to determine the stringency of fuel economy standards for the auto industry, set climate policy for the nation, and even amend provisions of the Clean Air act—powers Congress never delegated to the agency. The Endangerment Rule is both trigger and precedent for sweeping policy changes Congress never approved. America could end up with a pile of greenhouse gas regulations more costly than any climate bill or treaty the Senate has declined to pass or ratify, yet without the people’s representatives ever voting on it. Overturning EPA’s GHG rules is a constitutional imperative.

The Arguments

The motion to stay advances new arguments — or improved versions of familiar arguments — for overturning each of the four EPA rules. The following sections summarize and excerpt some of the motion’s key insights.

EPA Outsourced Its Endangerment Judgment

Section 202 of the Clean Air Act requires the Administrator to determine the dangerousness of air pollution from motor vehicles based on her “judgment.” Instead, the motion points out, quoting EPA’s Endangerment Rule:

“the Administrator … rel[ied] on the major assessments of USGCRP, IPCC and NRC as the primary scientific and technical basis of her endangerment decision.” 74 Fed. Reg. at 66,510.14
EPA specifically declined to undertake “a new and independent assessment,” id. at 66,511, preferring to “plac[e] primary and significant weight on these assessment reports in making her decision on endangerment.” Id.

Which means:

. . . the only “judgment” EPA really made is that IPCC can be trusted to have made the endangerment assessment required by the Act. But the Act does not authorize entities other than EPA to make that assessment. See, e.g., U.S. Telecom Ass’n v. FCC, 359 F.3d 554, 565 (D.C. Cir. 2004) (“[F]ederal agency officials … may not subdelegate to outside entities—private or sovereign—absent affirmative evidence of authority to do so.”).

In effect, EPA asks the Court and the American people to trust that the IPCC did its job objectively, adhering to U.S. Government standards of scientific integrity. “But neither this Court nor the interested public can determine whether IPCC in fact did so, because the innumerable choices made by its many authors are not in the record.” The Climategate emails reveal instances of behavior inconsistent with U.S. information quality standards, such as Climatic Research Unit Director Phil Jones vowing to keep peer-reviewed research contrary to his views out of the next IPCC report “even if we have to redefine what the peer reviewed literature is.”

Bottom line: The Endangerment Rule embodies “a scientific judgment made by IPCC, and then adopted by EPA, not supported by any record that this Court can review. This is error.”

EPA Fails to Make the Judgment Required by Sec. 202

“Endangerment,” the motion observes, “is not a scientific term with defined endpoints. It is not an objective measure, like the boiling point of water, but a value judgment, like ‘bad.’ And so before EPA finds ‘endangerment,’ it first must define it.” In other words, EPA must explain its judgment in terms of climate-related metrics like temperature, precipitation, or wind speed, such that the public can understand which changes in climatic variables constitute endangerment, and which do not. “EPA has failed to do so.”

To clarify this point, the motion compares EPA’s  endangerment finding for motor vehicle GHG emissions with the agency’s 1973 endangerment finding for vehicular lead emissions. In the earlier rule, EPA provided quantitative information relating lead emissions to atmospheric concentrations, the latter to blood lead levels, and blood levels to brain function. In addition, EPA analyzed how regulation of lead in gasoline would reduce atmospheric concentrations, reduce lead levels in blood, and, thus, improve public health. Thus, “By the end of the rulemaking, EPA had fully explained all of the choices it made along the path of converting available scientific knowledge about lead toxicology and exposure into a policy-based finding of endangerment from automotive lead emissions sufficient to justify regulation, and allow—and survive—judicial review.”

In contrast, EPA “jumps from the tautology that ‘greenhouse gases cause a greenhouse effect’ to ‘greenhouse gases endanger public health and welfare’ sufficient to warrant exactly the level of GHG reductions that happen to result from NHTSA’s imposition of the CAFE standards required by the Energy Policy and Conservation Act.” The motion continues:

It is as though EPA, in Ethyl [Corp. v. EPA, 541 F. 2d1, 1976], were defending a rule to ban leaded gasoline because lead is a poison at some unknown dose; cars burning leaded gasoline can emit lead, which has some unknown effect on atmospheric lead concentrations; and banning leaded gasoline would yield some unknown but trivial reduction in atmospheric lead levels, possibly mitigating by some unknown (but at best trivial) degree the unknown adverse effects that may result from atmospheric lead, although it is very, very possible that the ban would accomplish absolutely nothing at all.

“If anything,” the motion comments, “EPA should face a far greater burden to explain its policy choices here than it did in Ethyl. Lead is strictly a poison, whereas carbon dioxide is a natural component of clean air, ingested by all plants and exhaled by all animals. Life on Earth depends on the very ‘danger’ that EPA is trying to prevent.” Carbon dioxide is not only plant food, it also helps keep the Earth habitably warm.

In short, “An endangerment finding under Section 202(a) does not simply identify a health and welfare risk, as EPA contends; it also establishes the criteria that will inform whether the emission standards adopted to address that risk are rational. . . . EPA here failed to do so, first by rubber-stamping the IPCC’s findings instead of making its own assessment of the evidence, and then by disavowing any obligation to explain the various policy choices it made to reach its ultimate judgment and regulatory response.”

EPA’s Assessment of the Scientific Record Is Logically Flawed

Quoting (or parroting) the IPCC, EPA argues that it is “extremely unlikely” (less than a 5% probability) that the warmth of recent decades can be explained without “external forcing” by greenhouse gas emissions. But this conclusion is inconsistent with other IPCC statements. The IPCC acknowledges three potential drivers of climate change: (1) changes in incoming solar radiation (e.g. due to changes in the Earth’s orbit or the Sun); (2) changes in reflected solar radiation (e.g. due to changes in low-level cloud cover); and (3) changes in outgoing longwave radiation (e.g. due to changes in greenhouse gas concentrations). According to the IPCC, scientific understanding of the Sun’s role in climate change is “low” and there is “significant uncertainty” with regard to cloud behavior and reflectivity. If there is significant uncertainty about two of the three main drivers, it is impossible for EPA — or the IPCC — to be 95% certain which is in the driver’s seat. In the motion’s words:

EPA cannot, and does not, explain how its 95% certainty is justified on the record. There cannot simultaneously be both “significant uncertainty” about primary climate drivers and 95% certainty that anthropogenic GHGs are causing any observed warming, yet EPA concludes there is. This fails even minimal standards of rationality.

EPA’s Administrative Record Fails to Establish Any Non-Trivial Benefits from the Tailpipe Rule

Citing Ethyl Corp. (541 F.2d at 31 n. 62), the motion argues that an administrative agency’s regulatory actions should “fruitfully” attack the problem being addressed. Yet, by EPA’s own admission, the Tailpipe Rule would produce imperceptible benefits, reducing projected global warming by 0.006-0.015°C and projected sea-level rise by 0.06-0.14 cm in 2100.

EPA’s GHG Tailpipe Limits Accomplish No Public Benefit (If Any) that NHTSA’s CAFE Standards Do Not Already Accomplish

About 95% of all GHGs emitted by motor vehicles is carbon dioxide (CO2) from fossil fuel combustion. As EPA’s Tailpipe Rule acknowledges (p. 25327), there is a “single pool of technologies . . .  that reduce fuel consumption and thereby reduce CO2 emissions as well.” Unsurprisingly, the motion argues, “The [new] CAFE standards and EPA’s Tailpipe Rule are virtually identical, with irrelevant differences in how the two standards address air conditioning.”

The case law is not favorable to agencies duplicating the regulations of other agencies. Alas, the Tailpipe Rule is not merely redundant, it also has “profound and pernicious effects” on the economy, if, as EPA contends, it subjects  millions of small stationary sources to Clean Air Act permitting requirements. In sum:

There is no rational basis for EPA to promulgate mobile source rules that do nothing more than reiterate other, independently effective legal requirements, and that offer no added environmental benefit but impose far-reaching and unintended costs on a source population (stationary sources) not even considered in the Endangerment Finding assessment.

The Tailoring Rule Is an Illegal Solution to a Legal Problem of EPA’s Own Creation

This is the most original part of the motion’s argument. To obtain a PSD permit to build or modify a “major” stationary source, the applicant must demonstrate the facility’s compliance with “best available control technology” (BACT) standards. EPA reads Section 165(a)(4) of the Clean Air Act as requiring BACT compliance and PSD permitting for major sources of almost any regulated air pollutant.** Since the Tailpipe Rule makes GHGs regulated air pollutants, major stationary sources of GHGs are subject to PSD and BACT, EPA reasons.

To reach this conclusion, however, EPA had to ignore statutory context. Sec. 165(a)(4) states:

No major emitting facility on which construction is commenced after August 7, 1977, may be constructed in any area to which this part applies unless . . . — the proposed facility is subject to the best available control technology for each pollutant subject to regulation under this chapter emitted from, or which results from, such facility [emphasis added].

In the foregoing, “this chapter” means the Clean Air Act. EPA reads the phrase “each pollutant subject to regulation under this chapter” apart from the qualifying and limiting phrase, ”in any area to which this part applies.” The “part” in question is Part C (Prevention of Significant Deterioration of Air Quality), and the “area” to which it applies is an attainment area. Part C is clearly distinguished from Part D, which addresses permitting requirements in non-attainment areas.

The distinction between attainment and non-attainment areas presupposes, and has no meaning apart from, the adoption of national ambient air quality standards (NAAQS) for the pollutant of concern. Properly construed, Sec. 165(a)(4) creates BACT and PSD obligations only in attainment areas based on a prior NAAQS rulemaking. Since there are no NAAQS for GHGs, there are no GHG attainment areas, hence no areas where Part C BACT and PSD requirements apply to GHG emitting facilities.

Since the Tailpipe Rule does not trigger BACT and PSD for stationary sources, there is also no need for EPA to play lawmaker and “tailor” — that is, amend– the PSD applicability thresholds. Similarly, because “Title V is intended solely to codify otherwise applicable requirements in permits issued to stationary sources,” and stationary sources have no new obligations as a consequence of EPA’s decision to regulate mobile source GHGs, there is no necessity to amend the Title V applicability threshold.

The motion sensibly concludes:

Having applied the Act to a “pollutant” under programs never intended for that “pollutant,” EPA is confronted with the need to undo the “absurd” results that follow by outright defiance of crystal-clear provisions of the statute, those setting forth the applicability thresholds. The far better—and only legal—choice instead is to avoid manufacturing overbreadth in the first place.

(If this argument is correct, then EPA bears a greater responsibility for Massachusetts v. EPA’s “legacy of absurd results” than I previously supposed.)

The Triggering and Tailoring Rules Treat the States as Vassals, Not As the Equal Sovereigns Contemplated by the Clean Air Act

EPA assumes it can simply command States to incorporate PSD permitting for GHGs in their State Implementation Plans (SIPs), or face imposition of an EPA-crafted Federal Implementation Plan (FIP). Not so, the motion argues:

Section 110(a)(2)(C) requires each State’s permit program to mandate permits only for “modification and construction of any stationary source within the areas covered by the plan as necessary to assure that national ambient air quality standards are achieved, including a permit program as required in parts C and D….” 42 U.S.C. § 7410(a)(2)(C). EPA has no basis, then, to disapprove a State’s permit program for failing to govern emissions of a pollutant for which there is no NAAQS.

EPA assumes that the Tailpipe Rule and Tailoring Rules will or at least should automatically revise State permitting programs and the SIPs governing them.  In so doing, EPA erroneously views the States as vassals, because “no sovereign can delegate to another the ability to make its laws. The State must by some affirmative act ratify any changes in pollutants and applicability thresholds incorporated from federal laws before they become effective.”

EPA’s rush to incorporate GHGs into State permitting programs also runs afoul of procedural requirements. Section110 of the Clean Air Act “allows at least 18 months after proper adoption of new SIP expectations before requiring their implementation by the States.” In addition, Section 166 allows States 21 months to submit a plan revision following an EPA rulemaking calling for the addition of new pollutants in the PSD program. “EPA, of course, has undertaken no such rulemaking, nor allowed any time for each State to respond.” Indeed, one of the rules EPA recently proposed to bypass the normal SIP revision process would “give States perhaps three weeks in December to respond to a call for revisions to their SIPs, or face a construction ban on January 2, 2011.”

A Stay Would Allow for Rational Policy Development

The House passed a cap-and-trade bill in June 2009, but in 2010 cap-and-trade died in the Senate. Senators mounted an unsuccessful effort to overturn EPA’s Endangerment Rule, but all 41 Republicans and six Democrats voted for the resolution of disapproval. “The 111th Congress evidently will adjourn unable to either ratify the current state of affairs or change it, but the 112th may be rather more willing to announce an opinion on behalf of the electorate. A stay would allow for the possibility that Congress finally will state its intentions to regulate GHGs under the Clean Air Act, or not, so that this Court will not have to speak for it.” ‘Nuff said.

** The Clean Air Act prescribes separate and tougher permitting requirements for major sources of toxic air pollutants and criteria air pollutants in areas failing to meet national ambient air quality standards.

As discussed in my recent post “Obama’s EPA: School Marms R Us,” EPA and the National Highway Traffic Safety Administration (NTSHA) are proposing to revise the mandatory fuel economy label or “sticker” affixed to new cars to include letter grades based on the car’s fuel economy and carbon dioxide (CO2) emissions. Electric vehicles and plug-in hybrids would get an A+; the biggest, heaviest, gas guzzling SUVs would get a D.

To view the current sticker, click here. To see what the tut-tutting scolds at EPA and NHTSA want to replace it with, click here.

 Among other rationales for the new sticker design, the agencies claim that adding letter grades will help consumers make smarter purchases by combating something called the “MPG Illusion.”

The MPG Illusion refers to the common misperception that fuel savings from mpg increases are linear. People often assume that each additional 1 mile per gallon increase in a vehicle’s fuel economy reduces fuel consumption and gasoline expenditures by the same amount. Hence, some may conclude, if they can’t afford (or simply don’t want) a Toyota Prius, Chevy Volt, or some other high-mpg vehicle, there’s no point in buying a car with only modestly better fuel economy than their current vehicle. In reality, fuel consumption avoided and dollars saved decrease as mpg increases. Which is to say, the biggest fuel savings come from modest fuel-economy improvements in the lowest mpg vehicles. Some hypothetical (indeed fanciful) examples will make this crystal clear.

Suppose that your current car gets only 1 mile per gallon, you drive 100 miles per week, and gasoline costs $3.00 per gallon. This means you consume 100 gallons and spend $300.00 per week. If you replace that car with a 2 mpg vehicle, you’ll consume 50 gallons and save $150.00 per week. At the very bottom end of the scale, even a 1 mpg increase in fuel economy yields big savings.

Suppose now that your current car gets 99 mpg, you drive 100 miles per week, and gas costs $3.00. This means you consume 1.01 gallons and spend $3.03 per week. If you replace that car with a 100 mpg vehicle, you’ll consume 1 gallon and save 3 cents per week. At the very top of the fuel economy scale, the fuel and cost savings from an extra 1 mpg are negligible.

Turning to more realistic examples, EPA and NTSHA calculate (p. 28) that replacing a 10 mpg vehicle with a 15 mgp vehicle saves 33 gallons of gas for every 1000 miles driven whereas replacing a 30 mpg vehicle with a 35 mpg vehicle saves only an additional 5 gallons of gas for every 1000 miles driven. The same increase in fuel economy — in this case, an extra 5 mpg – saves more than six times as much fuel if the vehicle replaced gets 10 mpg rather than 30 mpg.

Professors Rick Larrick and Jack Soll of Princeton University put the MPG Illusion on the map when they published an article about it in Science magazine. They clearly explain the basic arithmetic in this Youtube video. Their illustrative case assumes a motorist who drives 100 miles per week. If the motorist has a 10 mpg vehicle and switches to a 20 mpg vehicle, he’ll cut his weekly fuel consumption from 10 gallons to 5 gallons — a savings of 5 gallons. If the motorist has a 25 mpg vehicle and switches to a 50 mpg  vehicle, he’ll cut his weekly fuel consumption from 4 gallons to 2 gallons — a savings of only 2 gallons.

“The key insight,” says Larrick, “is that improving inefficient cars, that have low mpgs, by even low mpg increases, saves a lot of gas.” Soll elaborates: “If you’re comparing two vehicles, one that gets 12 miles per gallon and the other that gets 15 miles per gallon, if you drive 10,000 miles in a year, you’ve saved about 170 gallons of gas [in the 15 mpg vehicle], and that comes out to be about $700.00 at $4.00 a gallon. So this [savings] is a significant amount even though the jump from 12 to 15 [mpg] may look pretty small.”

To counter the MPG Illusion, Larrick and Soll advise policymakers to express fuel economy in terms of the amount of fuel consumed per unit of distance traveled. Expressing fuel economy in the conventional way, as miles per gallon, leads people to “undervalue small improvements on inefficient vehicles” and “underestimate the value of removing the most fuel inefficient vehicles,” the researchers argue in Science magazine.

This, of course, is music to the ears of the anti-SUV crowd. Greenies would love to believe that the market for SUVs is sustained by an “illusion.” Because if that is so, then EPA and NHTSA can depress SUV sales just by making simple changes in how fuel-economy information is presented — just by redesigning the sticker! 

Years of SUV-bashing, fuel-economy prosyletizing, climate-change scaremongering, and high gasoline prices have failed to kill SUV sales. Could that have something to do with the attributes of the vehicles — their size, safety, and utility? I mean, there are objective differences between SUVs and cars greenies insist are “smart.” Just have a look! Nothing illusory about that.

If the MPG Illusion has anything to do with SUV sales, then you gotta ask: Who’s responsible for foisting the illusion on the public? Answer: the very people who’ve tried to brow beat us into believing that the only vehicle attribute worth considering is its mpg — the preachers and proselytizers of fuel economy! There’s no escaping the law of unintended consequences.

EPA and NHTSA  propose to combat the MPG Illusion in two ways. First, the sticker will estimate how many gallons of fuel the car will consume per 100 miles (as per Larrick and Soll’s advice). Second, the sticker will carry a letter grade. Presumably (the agencies don’t spell it out), EPA and NHTSA expect that bad grades will stigmatize gas guzzlers and discourage people from buying them.

Although the first option may counteract the MPG Illusion, the second will enhance it. As Larrick and Soll show, there is only a small difference in fuel savings between a 25 mpg car and a 50 mpg car. However, in the proposed EPA/NHTSA ratings (p. 37), the 25 mpg car gets a B and the 50 mpg car gets an A-. As anyone knows who has ever applied to college, an A- GPA is way better than a B GPA. The grading system implies that the biggest fuel savings are achieved at the top end of the scale.

On the other hand, a 14 mpg vehicle gets a C- whereas a 17 mpg vehicle gets a C. That 3 mpg increment is a big deal in fuel savings, according to Larrick and Soll. Yet how many car buyers will be impressed because a particular vehicle is rated C rather than C-? Except in jest, I’ve never met anyone who boasted of getting solid Cs in high school or college.

In short, the proposed EPA/NHTSA grading system perpetuates the MPG Illusion, which, unfortunately for fuel-economy zealots, cuts both ways. The illusion of linearity not only under-values savings from fuel-economy improvements in low-mpg vehicles, it also over-values savings from fuel-economy improvements in high-mpg vehicles.

EPA and NHTSA, apparently, want to manipulate the MPG Illusion rather than actually dispell it. They don’t like the illusion when (as they believe) it promotes SUV sales, but they like it when (as they hope) it promotes hybrid, plug-in hybrid, and electric vehicle sales. But the attempted manipulation fails, because the grading system, like the MPG Illusion, both over-values high-end mpg improvements and under-values low-end mpg improvements.

Grading cars actually means grading the people who buy them. People who buy cars with super-low or zero emissions are A or A+ people. Those who buy gas guzzlers wear dunce caps. The South Park spoof on the “Toyonda Pius,” Smug Alert, all-too-accurately depicts the greener-than-thou pretension of EPA and NHTSA’s proposed grading system.

Last week, the Obama Administration filed a brief  on behalf of industry petitioners urging the Supreme Court to vacate an appeals court decision (State of Connecticut et al. v. American Electric Power et al.) that would allow States and private parties to sue coal-burning electric utilities for their alleged contribution to global warming-related “injuries.”

The brief clearly lays out the absurdities of attempting to regulate greenhouse gases via common-law public nuisance litigation. Because global warming is, well, global, practically anyone on Earth could claim to be a victim. And because companies emit carbon dioxide (CO2) only as a byproduct of providing goods and services (electricity, cars, food, medical care, bites of information, etc.) to people, practically everyone on the planet could be sued as a contributor to the alleged injuries. In the memorable words of South Park’s hilarious global warming episode, Two Days Before The Day After Tomorrow, “We all broke the dam!”

In addition, the Obama brief points out that, “Establishing appropriate levels for the reductions of carbon dioxide emissions from power plants by a ’specified percentage each year for at least a decade’ (as Plaintiffs request), would inevitably entail multifarious policy judgments, which should be made by decision-makers who are politically accountable, have expertise, and are able to pursue a coherent national or international strategy — either at a single stroke or incrementally.”

Yet the brief stops short of reaching the obvious conclusion implied by its argument, namely, that climate policy is a “non-justiciable political question.” Instead, it advises the Supreme Court to direct the court of appeals to reassess its decision on “prudential” grounds. Rather than seek a decision that would preempt all future CO2 litigation, the brief instead seeks to put one particular CO2 lawsuit on ice.

I smell a rat. The Administration, I suspect, does not want the Court to rule that the political question doctrine precludes public nuisance litigation against CO2-emitters, because it wants the only solid, durable shield against litigation chaos to be the EPA’s “displacement” of common-law injury claims via the agency’s endangerment rule and the ensuing regulatory cascade.

Just as the Administration used the endangerment rule to try and spook Congress and industry into supporting cap-and-trade, it is now using CO2 litigation to try and spook them into supporting — or at least not aggressively attacking — EPA regulation of greenhouse gases via the Clean Air Act. 

In short, as I discuss in a column this week in Pajamas Media, the Administration needs to keep the prospect of CO2 litigation alive in order to sustain the ”greenhouse protection racket” — the strategy of regulatory extortion — on which warmists increasingly rely to promote their agenda.