Howard Rich's Blog

May 14, 2009

Undercutting cap-and-trade?

From the Washington Examiner

The Obama administration is planning to use the Environmental Protection Agency’s finding the public health is endangered by carbon dioxide emissions which it can therefore regulate as a sledgehammer to get Congress to pass cap-and-trade legislation. If you don’t pass a bill, the threat is, EPA will impose much harsher regulation than you would like.

That threat, however, is at least somewhat undercut by this memorandum from the Office of Management and Budget, labeled “DELIBERATIVE—ATTORNEY CLIENT PRIVILEGE” which has made its way into the public domain. The memorandum is studded with acronyms which may puzzle some readers, but it makes a strong argument that the EPA finding is shoddy and may be indefensible in court.

Here’s a sample paragraph:

In the absence of a strong statement of the standards being applied in this decision, there is a concern that EPA is making a finding based on (1) “harm” from substances that have no demonstrated direct health effects, such as respiratory or toxic effects, (2) available scientific data that purports to conclusively establish the nature and extent of the adverse public health and welfare impacts are almost exclusively from non-EPA sources, and (3) applying a dramatically expanded precautionary principle. If EPA goes forward with a finding of endangerment for all 6 GHGs, it could be establishing a relaxed and expansive new standard for endangerment. Subsequently, EPA would be petitioned to find endangerment and regulate many other “pollutants” for the sake of the precautionary principle (e.g., electromagnetic fields, perchlorates, endocrine disruptors, and noise).

And consider this:

Making the decision to regulate CO2 under the CAA for the first time is likely to have serious economic consequences for regulated entities throughout the U.S. economy, including small businesses and small communities. Should EPA later extend this finding to stationary sources, small businesses and institutions would be subject to costly regulatory programs such as New Source Review.

My quick translation into English. You’re biting off far more than you can chew. Your finding that carbon dioxide is a pollutant isn’t backed by evidence that will stand up in court. And if your position is sustained, you’ll be finding yourself regulating all economic activity in America without any guidelines from Congress (which, of course, never put carbon dioxide in the Clean Air Act).

The OMB memorandum also challenges the notion, cherished as an almost religious belief by global warming alarmists, that any climate change will have only negative effects.

For example, climate change is likely to unfold slowly and people may migrate from hot regions (e.g., Arizona) to more temperate regions (e.g., Minnesota) and this would mitigate the adverse impacts on health (although people would incur migration costs).

Further, climate change is likely to lead to innovation that mitigates the ozone related health impacts; it seems reasonable to assume that in the absence of regulation of GHS, new medicines that lessen the health impacts of ozone will be developed. Moreover, advances in technology and the development of public health programs (e.g., cooling centers) are likely to lessen the negative welfare impacts of heat waves.

Whence cometh this document? The answer is likely professional OMB analysts. Over the years I have been told by OMB directors of both parties that the agency is staffed by extremely competent people who, whatever their personal political feelings, attempt to carry out administration policy in a rigorous fashion.

They are familiar with peer-reviewed evidence on the effectiveness of government programs and they know which ones don’t work at all.

When I listen to Barack Obama or any other presidential candidate say he will root out waste, fraud and abuse in the federal government, I feel confident that OMB have in their desk drawers papers which show exactly where it is and will be pleased to advise an OMB director accordingly. I feel confident also that each of the ineffective federal programs they could identify has a champion or champions in Congress who will resist any attempt to end it. We all saw the quick reactions of members of Congress to the $17 billion in savings that Obama recently proposed.

The agency culture at OMB is one of trying to crack the whip over the rest of government, to apply rigorous intellectual standards in evaluating programs. This mentality is apparent in this memorandum. The OMB people make a strong case that EPA has produced a flimsy basis for regulating carbon dioxide emissions.

The political bottom line: the Obama administration’s sledgehammer may be made of silly putty. Wavering members of Congress should not be bullied into passing cap-and-trade legislation by threats that something worse will be immediately imposed by EPA. It’s going to take a long time and a lot of hard work for EPA to come up with a justification for regulating carbon dioxide emissions that will stand up in court.


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