Regulating Carbon Dioxide

Last year the Supreme Court ruled that the EPA is required to decide if carbon dioxide is a pollutant as defined by the Clean Air Act.  The Bush White House basically just ignored the ruling, but now there’s a new sheriff in town:

The Environmental Protection Agency is expected to act for the first time to regulate carbon dioxide and other greenhouse gases that scientists blame for the warming of the planet, according to top Obama administration officials.

….Lisa P. Jackson, the new E.P.A. administrator, said in an interview that she had asked her staff to review the latest scientific evidence and prepare the documentation for a so-called endangerment finding….If the environmental agency determines that carbon dioxide is a dangerous pollutant to be regulated under the Clean Air Act, it would set off one of the most extensive regulatory rule makings in history. Ms. Jackson knows that she would be stepping into a minefield of Congressional and industry opposition and said that she was trying to devise a program that allayed these worries.

This is sort of a good-news-bad-news situation.  The bad news is that the Clean Air Act probably isn’t a very good vehicle for regulating greenhouse gases.  Its state-based machinery just wasn’t built for something like this.  The good news is that this very fact might act as a spur for Congress to enact something better, such as a national carbon tax, cap-and-trade plan, or even simply some more appropriately designed regulation.  Of these, cap-and-trade seems to be the most likely candidate, since it has support both in Congress and the White House already, and it might pick up some Republican votes it wouldn’t otherwise get if the alternative is to let the hated EPA start writing its own rules.

And if it doesn’t act as a spur?  Then it’s still good news, because it means at least we’ll get something, even if it’s not the most efficient regulatory regime we can imagine.  All things considered, I’m a fan of cap-and-trade myself, but I figure any port in a storm.  If I can’t get what I want, I’ll settle for the EPA at least getting the ball rolling.  Eventually the business community will scream hard enough to make Congress do something intelligent.

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