Obama's climate change police

By Steve Hargreaves, staff writer

NEW YORK (CNNMoney.com) -- The Copenhagen climate talks went nowhere. The Senate's attempt to pass a global warming bill appears stuck. But that's doesn't mean greenhouse gas laws aren't coming.

The Environmental Protection Agency, spurred by a Supreme Court ruling, is racing to fill the void. As early as March, the EPA is planning to cap greenhouse gases from things like power plants and large factories, essentially doing what Senate Democrats want, without a messy vote.

Some say it's a great idea. It could put a serious dent in greenhouse gas emissions and go a long way to cleaning up the environment. Others say it could jeopardize investment in industry and hurt job creation.

A tight spot

The EPA didn't really ask for this new power, and most lawmakers pushing to restrict greenhouse gases, in Congress and the administration, would prefer Congress to pass a new global warming law.

But EPA is being forced to act thanks to a challenge from the state of Massachusetts and others back in 2007. Massachusetts said global warming was eroding its coastline, and pushed the EPA to regulate greenhouse gases from vehicles.

The Supreme Court more or less sided with Massachusetts, saying EPA must either classify carbon dioxide - the main gas behind global warming - as an endangerment to public health and regulate it, or say it's not.

The Obama administration, like most scientists, believes it could be a danger.

So come March, EPA will begin regulating carbon dioxide from vehicles - largely through tighter fuel economy standards that have already been announced. Once that happens, the next step, legally, is to regulate it from everything else.

"EPA has been very up front that a final decision to regulate greenhouse gases from mobile sources would require stationary sources...to minimize greenhouse gas emissions," an EPA spokeswoman said in an email. "EPA expects to issue a final rule by March 31."

Many believe using EPA, and specifically the Clean Air Act, to combat global warming is a bad idea.

There are too many steps EPA needs to go through to perform the task - too many questions that need answering. Who is going to be regulated? What technologies will be used? What are the acceptable limits going to be? At each stage in the process, there's the possibility for lawsuits.

"No one is going to be able to build any kind of industrial facility because they will be sued," said Max Williamson, head of the climate program at Andrews Kurth, a law firm that represents both renewable and fossil fuel energy companies. "You're going to see any industry that can go overseas, go overseas."

Many say a law passed by Congress would avoid all that.

Whitney Stanco, an energy analyst at the brokerage firm Concept Capital, also thinks using EPA for the job will keep investors at bay.

"There will be lawsuits on each of these rules, and it's going to create a lot of uncertainty for quite some time," she said. "It increases the hurdles for new investment."

Up to the job

But others believe this fear over using EPA is overblown.

Industry currently has to get a permit from the agency for hundreds of other pollutants. Given enough time to iron out the many questions before EPA starts acting, companies shouldn't have any trouble meeting the new restrictions.

"They've lived with this for decades for other pollutants, they can make it work with this," said David Doniger, policy director at the Natural Resource Defense Council's climate center. "You can take a big bite out of global warming pollution by using the Clean Air Act," he said.

Doniger says the EPA should regulate greenhouse gases in addition to having Congress pass a more comprehensive law. That way, if Congress' rule is too weak, the nation will have something to fall back on.

"EPA has a legal obligation to do it, and they have a moral one," he said.

A high-stakes game

As a whole, utilities would like to see Congress pass a global warming bill similar to the one that passed the House this summer, although perhaps one a bit less ambitious in its targets. They also believe using the EPA is a bad idea.

Most utilities believe regulation in some form is coming, and they want to be at the table crafting the laws as they are passed.

Global warming legislation keeps getting bumped further down the agenda in the Senate and is now behind financial reform and health care. But Jim Owen, a spokesman for the utility trade organization the Edison Electric Institute, is still hopeful Congress will pass something, and in the process tell EPA it does not need to act.

"Sometimes, when you least expect it, stuff can happen," said Owen.

But lots of other groups oppose both EPA action and a global warming law similar to what Congress is considering, including the U.S. Chamber of Commerce, The American Petroleum Institute and the National Mining Association.

So what's their plan?

The mining association is continuing to work with Congress to draft what they feel is a better global warming bill, said the association's spokeswoman Carol Raulston. Plus, they are hoping Congress steps in and tells EPA to back off, even if they don't have separate climate legislation ready to go.

That last strategy right now is a long shot. Even if they could muster the votes in Congress, it's thought the president would veto such a move.

But as Raulston says, "The train may have left the station, but there are many stops along the way."

First big stop? This year's midterm elections.

Correction: An earlier version of this story said the EPA did not return calls or emails seeking comment. The EPA did email before the story was published. This version contains the response.  To top of page

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