Comments on the Advance Notice of Proposed Rulemaking by the Environmental Protection Agency

September 16, 2008

by H. Sterling Burnett, Ph.D.

16 September 2008

H. Sterling Burnett, Ph.D.
National Center for Policy Analysis Senior Fellow

National Center for Policy Analysis
12770 Coit Rd., Suite 800
Dallas, TX 75251

H. Sterling Burnett, Ph.D. is a Senior Fellow for the National Center for Policy Analysis (NCPA). While Burnett works on a number of issues, he specializes in issues involving environmental policy. He has held various positions in professional and public policy organizations, including serving as a member of the new Environment and Natural Resources Task Force in the Texas Comptroller's e-Texas commission. His articles and opinion pieces have been published in Ethics, Environmental Ethics, International Studies in Philosophy, The World and I, USA Today, Los Angeles Daily News, The Washington Times, Washington Post, The Dallas Morning News, Houston Chronicle, Rocky Mountain News, Miami Herald, Las Vegas Review-Journal, Detroit News, The Seattle Times and Human Events. Burnett received his Ph.D. in 2001 from Bowling Green State University. His doctoral dissertation was "Ecosystemic Goods: The Pros and Cons of a Property Rights Approach."

My name is H. Sterling Burnett. I am writing in regards to the advance notice of proposed rulemaking (ANPR) "Regulating Greenhouse Gas Emissions under the Clean Air Act," published in the Federal Register on July 30, 2008 on behalf of the National Center for Policy Analysis NCPA, for whom I am a Senior Fellow,. The NCPA is a nonprofit, nonpartisan public policy research organization dedicated to developing and promoting private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector.

Although the ANPR seeks to assess the effectiveness of the Clean Air Act (CAA) as a vehicle to regulate and reduce greenhouse gas emissions in the United States, we believe it suffers from several defects. We recognize that the EPA is precluded by law from considering the costs of its actions when deciding whether to issue an endangerment finding and subsequently regulate a pollutant. However, under section 202 of the CAA the agency is required to consider both cost and technical feasibility of proposed regulations of pollutants - in this case emissions of CO2 from automobile emissions. The EPA's analysis in on this point is lacking especially as it ignores the slippery slope: the mere act of designating CO2 as a regulated pollutant from automobiles will likely trigger regulatory action under other CAA provisions. The scope of such regulations and the overall costs will be unprecedented.

We also find the ANPR fails to recognize the futility of localized efforts to reduce overall greenhouse gas emission levels due to emission leakage and the negligible levels of human contribution to the greenhouse effect.

The entirety of the proposed regulation put forth in the ANPR is contingent upon the EPA making a positive endangerment finding regarding greenhouse gas emissions from new motor vehicles. Two requirements must be met to make a positive endangerment finding. First, the Administrator must decide if, in his judgment, the air pollutant in question, in this case Carbon Dioxide - a naturally occurring chemical --, may reasonably be anticipated to endanger public health or welfare. Second, the Administrator must decide whether, in his judgment, emissions of from new motor vehicles or engines cause or contribute to this air pollution. Though the Supreme Court has decided that GHG emissions do meet the definition of "air pollutant" put forth in the Clean Air Act, the EPA has not met either of the two requirements needed to make a positive endangerment finding, the absence of which renders the regulatory proposals of the ANPR unnecessary and unwarranted at this time. However, the EPA has assumed in the ANPR that the statutory ruling in Massachusetts v. EPA (549 U.S. 497) is precautionary and suggests the Administrator should act to prevent possible harm rather than wait for proof of actual harm . Without proof of actual harm, the regulation proposed in the ANPR would have no firm factual basis and would be founded solely upon sheer speculation about the future based on the judgment of the Administrator. Regulation such as that proposed in the ANPR must be founded on fact and have proof of actual harm in order to be considered appropriate.

The Clean Air Act Imposes Increased Costs and Prices

The U.S. Supreme Court decision handed down in Massachusetts v. EPA (549 U.S. 497) in 2007 determined greenhouse gases (GHG) fall under the definition of "air pollutant" as defined by the Clean Air Act, giving the EPA the authority to regulate GHG emissions from new motor vehicles. Because of language similarities in sections of the CAA, regulation of GHG emissions would be expanded from new motor vehicles to also include stationary sources, triggering the prevention of significant deterioration (PSD) permit program. The PSD permit program regulates stationary sources that either emit or have the potential to emit 250 tons per year of a regulated pollutant, which would sweep thousands of new sources, such as small businesses, hospitals, schools, and large single family homes into the PSD permit program. These previously unregulated entities would now be subject to the regulatory authority of the Clean Air Act, resulting in the need for costly new investments or retrofits to reduce GHG emissions and time consuming permitting processes. The regulatory costs alone would be quite substantial, but when considered in conjunction with the rise in energy prices resulting from such regulation, the resulting economic burden would be massive and would significantly weaken the economy of the United States.

The use of the Clean Air Act to regulate GHG emissions from stationary sources would cause a dramatic shift in the United States' energy sector away from coal, which is currently used to generate half of the domestic electricity supply, and toward natural gas. Without rapid deployment of carbon capture and storage technologies and a significant expansion of domestic nuclear power production, the increased demand for natural gas will cause its price, and consequently the price of electricity, to skyrocket. Natural gas prices, based on analyses of recent climate change legislation, could increase as much as 108% to 146% and electricity prices by 101% to 129% by 2030.

The use of coal at current levels is an enormous economic benefit for the United States, as it provides over $1 trillion in GDP, $360 billion in additional house hold income, and over 7 million jobs for Americans . The proposed regulations in the ANPR would substantially reduce the production of coal based energy in the U.S. and thus the vitality of the United States' economy. A 66% reduction in coal-fired power generation would reduce GDP by $371 billion, household income by $142 billion and employment by 2.7 million . These figures speak to the enormous and far reaching negative impacts of reducing coal based energy in the United States which the ANPR largely ignores.

In 1984, Harvey Brenner of Johns Hopkins University conducted the first major research on the impacts of unemployment on public health and in 2005 developed estimates specifically for the effects of unemployment from reduced coal based energy production on public health. According to the Brenner, "[G]iven an estimated potential displacement of 78% of U.S. coal generation based on EIA's study of proposed climate change initiatives, the indicated premature mortality from reduced income and increased unemployment would exceed 150,000 deaths annually, absent direct and effective mitigation programs." This significant increase in the mortality rate is an unseen effect of the shift in the energy sector away from coal as a result of the regulations proposed in the ANPR. Previously ignoring these effects, it is thus imperative the EPA take public health considerations into account when evaluating the potential impact of such regulation.

The Clean Air Act is Ineffective in Reducing Global Greenhouse Gas Levels

Potential reductions of GHG emission levels achieved in the United States will be offset by global emission leakage. Significant price increases due to regulation and energy costs will cause production capacity to shift overseas to less regulated countries, causing emissions in those countries to increase. The ANPR suggests ineffective measures for handling global emission leakage that are antithetical to U.S. trade policy, namely "...import tariffs on carbon or energy content, export subsidies, or requirements for importers to submit allowances to cover the carbon content of certain products."[1] Raising such trade barriers would only serve to increase regulatory costs and energy prices, hindering the growth of the economy. Such measures would drastically reduce the ability of the United States to compete in the global market and force American workers, consumers, and businesses to bear the brunt of the effects. Furthermore, even if the new regulations overcame the problem of emission leakage, they would have a negligible effect, considering humanity is responsible for only about one-quarter of 1 percent of the greenhouse effect. Efforts to regulate the miniscule levels of human contribution to greenhouse gas levels will not only be costly, but ineffective.

It is important to ask whether the goal of reducing the greenhouse effect should even be considered desirable, given the potential benefits for public health resulting from an increase in global temperatures. Bjorn Lomborg has published important research which concludes that global warming, within reasonable limits, may actually result in lower death rates. There is an optimal temperature at which mortality rates are lowest for nearly every location in the world and deviation from this optimal temperature in either direction results in an increase in the mortality rate for that location. The optimal temperature is almost identical to the average summer temperature, which means that temperatures rarely go above the optimal temperature, but will very often go below. The temperature related deaths from two climactically different cities, Athens and Helsinki, show that the relative frequency of non-optimal temperature days is directly related to the number of temperature related deaths. The optimal temperature in Helsinki (59F) is exceeded on average 18 days a year, and is below that temperature for 312 days. Correspondingly, the number of extra deaths from heat is 298, while the number of extra deaths from cold is 1,655 . In Athens, a city with a much higher optimal temperature (75F), 63 days exceed the optimal temperature while 251 days are below. Approximately1,376 people die each year from excess heat in Athens, while over 7,852 die from excess cold . Increases in global temperature could have a tremendous impact on reducing the number of cold related deaths each year. The EPA must consider the full range of implications for public health resulting from the greenhouse effect, which includes the potential public health benefits of an increase in global temperatures.

Conclusion

The Clean Air Act was originally intended to regulate traditional air pollutants from major emitters on a state and regional level. The use of EPA authority to regulate GHG emissions under the Clean Air Act severely distorts these intentions by expanding regulation to affect nearly every sector of the economy, without any tangible benefit in the form of decreased emissions. The enormous regulatory burden and significant increase in energy prices without any net reduction in greenhouse gas levels proves the Clean Air Act is not an effective vehicle for regulating GHG emissions.

As a final point, one of the most common logical fallacies philosopher's catch people violating is the principle that "ought implies can." All too often citizens call on politicians to do the impossible, however, governments - and this should apply to regulatory agencies as well - surely only have a duty to do something, if it is possible that they can actually have an effect. Futile actions ought not be required by law. Since no actions contemplated by the EPA would, in fact, have any measureable impact on overall greenhouse gas concentrations and thus on either global temperature and or future sea levels, assuming for the sake of argument that the former are related to the latter, the EPA ought not to regulate CO2. The judicial system refers to this point as the issue of redressability. Any regulations proposed or implemented ought to be likely to redress, prevent, correct or reduce the harm from the action being regulated. This condition is not met and for this reason alone, the EPA ought not to regulate CO2 emissions.