EPA Endangerment Finding Could it Undo Climate Change Policy?

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Besides perhaps the health care debate, no single policy issue has created as much controversy as the EPA’s recent Ëœendangerment’ declaration that greenhouse gas emissions cause people harm. And as my colleague Stuart posted last week, “whatever one may think of the whole concept of carbon trading and however flawed one believes existing trading systems are and believe me this site has frequently criticized both the fact remains that carbon trading is almost certainly here to stay and will have a major impact on business and our personal lives in the decade to come.

Stuart didn’t touch the hot potato of whether the science supports the argument behind the case for global warming (or if the best way to address it involves carbon cap and trade or just a plain old carbon tax or curbing emissions via the Clean Air Act or some other scientific means making its way around such as injecting sulfur dioxide into the stratosphere which by the way, a very prominent metals subject matter expert who has posted on MetalMiner subscribes to but for which we are not yet at liberty to discuss). We’ll steer clear of that one as well but the science behind global warming and the trail of hacked emails suggesting the science may not sit on as strong a foundation as some would like us to believe may very well turn out to be what will ultimately undermine the EPA’s ability to regulate greenhouse gases. In addition, the fact that the EPA made the ruling, whereas Congress failed to act, may place the entire issue squarely on President Obama and his administration. And therein lies the rub – Congress, instead of tackling this controversial issue, can punt it to the EPA and leave the implementation of the ruling to the lawyers (you can be sure there will be lawsuits) as well as the burden of proof to the EPA (the EPA has to prove greenhouse gases are harmful to human health). And that’s where those ugly leaked emails can get a little tricky for the EPA.

Prior to the EPA’s ruling last Monday, organizations like the American Iron and Steel Institute, “has made it known it wants to make sure energy-intensive imports such as steel bear the same climate-related costs as domestic products.”  If the EPA sets policy, as opposed to Congress, the AISI concerns become very real. The EPA could only regulate domestic producers. A unilateral solution will have a devastating impact on US manufacturing. Consider the following:

  • A piece on manufacturer Quality Float Works a company that makes metal float balls used on flagpoles, weather vanes, plumbing and industrial devices raises concerns about how a middle market manufacturer will compete globally
  • Nucor has not made a decision on where to put a new plant (it is deciding between Louisiana and Brazil) pending the outcome of climate change legislation, Copenhagen etc.
  • Here is a list of a few of the trade associations who have come out against the EPA endangerment finding:
  • So here is my prediction: Congress will do nothing on carbon cap and trade because now it no longer needs to do anything. According to this Forbes article, “Around March, look for the EPA to finalize its ruling for the auto sector (editor’s note: to federally regulate automotive emissions). It will also put the finishing touches on its decision to tailor greenhouse gas regulation under the Clean Air Act. What happens then? Lawsuits.

    And that’s my second prediction.

    –Lisa Reisman

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