This post is part of a Grist series on the Senate climate bill.
Does the Senate climate bill tie the EPA’s hands? You increasingly hear from progressives that the American Power Act—the energy and climate bill introduced by Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Ct.)—”guts” the Clean Air Act. Some groups have put this critique at the center of a campaign to improve the bill. If blog comments and email chatter are any indication, lots of grassroots greens have adopted it as a red line—reason to oppose the bill entirely.
So what would the bill do to the Clean Air Act, and how bad would it be? Let’s explore!
A smidgen of backstory
In a landmark 2007 judgment, the Supreme Court ruled that the EPA possesses the authority to regulate climate pollution under the Clean Air Act. The justices noted that the power and scope of that law have been gradually expanded by Congress over the last 40 years. As dangerous air pollutants have been identified—or the danger of known pollutants has been better understood—the Clean Air Act has been extended to address them.
And it has been wildly successful. The Clean Air Act requires that EPA periodically assess the overall ratio of costs to benefits of the program. Its first report, covering 1970 to 1990, estimated that “the actual costs of achieving the pollution reductions observed over the 20 year period were $523 billion.” Meanwhile, the benefits to health, welfare, and the environment were “estimated to range from about $6 trillion to about $50 trillion, with a mean estimate of about $22 trillion”—between 11 and 95 times the costs. Between 1990 and 2010, the benefits were four times the cost.
Every serious scientific assessment, most recently three new reports from the National Academy of Sciences, has concluded that the cost of inaction on climate change will be calamitous, while most knowledgeable economists agree that the cost of addressing it will be affordable, on the order of a few points shaved off GDP growth over the next half century. So there’s every reason to believe that the cost-benefit ratio of addressing greenhouse gases through the Clean Air Act would be similarly favorable.
So then what would the American Power Act do to the Clean Air Act?
The Clean Air Act currently contains a suite of tools to address air pollutants. There are standards that limit the ambient concentration of pollutants in the air, standards that mandate the use of particular emission-reduction technologies on new facilities, and cap-and-trade programs, which feature a declining limit on the total emissions permitted economy-wide.
By and large, when new tools have been added, the old tools have been preserved. For instance, when in 1990 Congress amended the Act to add a cap-and-trade system for acid-rain pollution, it did not exempt those pollutants from plant-by-plant technology standards, despite industry protests that the result would be a burdensome confusion of overlapping regulations. Acid-rain pollutants are regulated by a suite of Clean Air Act tools, and to wildly successful effect: This year the benefits of the acid-rain program are expected to outweigh the costs by 40 to 1 (PDF).
That brings us to greenhouse gases. Both the climate bill passed by the House last summer and the American Power Act now pending in the Senate amend the Clean Air Act to establish a declining cap on, and trading program for, greenhouse gases. (But don’t call it cap-and-trade! It’s a “pollution reduction and investment program,” or PRIP. At least I like to call it a PRIP.)
So far so good. But the climate bills do something new. They mandate that some of the other tools in the Clean Air Act may not be used on greenhouse gases. Specifically, they “preempt” some of the tools in the Act that apply to stationary sources—factories, power plants, etc. (The other major part of the Act, which governs “mobile sources,” i.e. vehicles, is left untouched.)
Industry argues—see if this sounds familiar—that using both stationary-source tools and a cap-and-trade system on greenhouse gases would be duplicative and burdensome. This argument, BS though it may be, holds considerable sway in the Senate. Thus: the cap-and-trade system replaces, rather than complements, the Act’s stationary-source air pollution tools (with a few significant exceptions, which we’ll get to in a subsequent post).
Does preemption render the American Power Act “worse than nothing”?
In a word, no. The bill’s Clean Air Act preemption is unnecessary and unwise. The more I’ve looked into it, the less I like it. But if eliminating it from the bill proves impossible—and it’s an uphill climb—it’s not sufficient reason to oppose the bill outright. Far from it. The bill is still overwhelmingly worth passing.
As I see it, there are roughly three possibilities, listed in order of preference:
- A bill that implements a declining cap on carbon alongside full Clean Air Act authority.
- A bill that implements a declining cap on carbon but preempts other Clean Air Act stationary-source tools.
- Existing Clean Air Act tools without a declining cap on carbon.
Unfortunately, if they were listed by probability, the order would be reversed. No. 3 is what the U.S. will end up with if the American Power Act fails to pass this session, which at least for now is the likely outcome. No. 2 is what happens if the American Power Act passes as currently written. No. 1 is what happens if the left musters the political influence to substantially improve the bill. Weirder things have happened.
In the end, the choice may come down to legislation without Clean Air Act stationary-source tools or Clean Air Act tools without legislation.
New legislation is better than existing Clean Air Act authority, if we have to choose
We should prefer option No. 2 to No. 3:
• It will be a while before another economy-wide cap on carbon pollution is politically viable; the next Congress is almost sure to be more Republican and more hostile to climate action than the Congress we’ve got now. And the chances of a successful climate-change mitigation program are immeasurably improved by a declining cap on carbon in statutory law. This is true even if the cap is initially set too high and allows too many carbon offsets for compliance. As a matter of simple Senate physics, it is much easier to improve an existing law than to create one from scratch. The cap is the foundation on which all future battles will be fought. Emission-reduction targets in law are what provide the long-term predictability needed by major energy investors and America’s international partners.
• The American Power Act expands the Clean Air Act in the largest, most significant way since it was originally passed. Authority over a declining cap on greenhouse gases would arguably be the most consequential authority EPA has ever possessed. Under the APA, the agency would be responsible for reducing pollutants involved in every known industrial process by 83 percent in 40 years. That is an historic chapter for the Clean Air Act, hardly a net diminution of EPA power.
• There’s no way the Clean Air Act alone will be able to reduce emissions as much as legislation can. (For a primer on how existing regulations would be applied, see here.) Attempts to retrofit the Act’s current suite of tools will be mired in litigation for years. Those tools only apply to new or modified sources of pollution and will result in the same problem of grandfathered old coal plants that has bedeviled enviros for years. And they will only be as effective as the administration in power. (Think the Palin-Gingrich administration will enforce them?) If the agency gets too ambitious, members of Congress could vote to revoke EPA authority (as Sen. Lisa Murkowski [R-Alaska] is trying to do) or attach riders to appropriation bills de-funding the program (a gambit for which there is precedent). There’s just no way an executive branch agency can engineer a social and economic transformation of the scale that’s needed.
• Legislation does things regulations can’t. Beyond reining in greenhouse gas emissions, the American Power Act incorporates energy-efficiency provisions, a renewable electricity standard, and electric-vehicle incentives. It distributes pollution-allowance value to affected industries and consumers to ease the transition. It protects trade-exposed industries. It funnels money to slow deforestation through domestic and international offsets. It massively incentivizes nuclear power (if you’re into that sort of thing). It reconnects America to the international climate process. It doesn’t do nearly as much investing in clean energy as I’d like, but it does some. However tentative and defensive, the bill represents the first steps toward an economy-wide, all-in effort to reduce emissions and enhance energy security. EPA regulations can’t do that—they’re all stick and no carrot.
Now, there is one extremely good reason to want to preserve stationary source tools for greenhouse gases: America has a filthy, aging, wheezing fleet of old coal plants, and they badly need to get shut down or dramatically upgraded. These plants are responsible for a disproportionate share of the power sector’s CO2, soot, and mercury, but they are fully paid off and cheap as hell to run, so it’ll be a while before a price on carbon gets high enough to hurt them. In the meantime, some sort of regulatory tool is needed to do the job. Some progressives claim the Clean Air Act has such tools and the American Power Act doesn’t. But they’re wrong! Check out the next installment of this series to find out why.