greenhouse gas regulations

Global Manufacturer: Is There a Burning Case for Greenhouse Gas Regulations?

As the battle continues in Washington over EPA rules, the public shows only modest interest in making global warming a priority.

On April 18, a coalition of business groups including the National Association of Manufacturers challenged the Environmental Protection Agency's regulation of greenhouse gases (GHG) under the Clean Air Act (CAA). The industry organizations are asking the U.S. Supreme Court to review a D.C. appeals court decision upholding EPA's right to regulate GHG as air pollutants.

NAM President Jay Timmons called the regulation "one of the most costly, complex and encompassing energy regulatory issues facing manufacturers" and warned it was "damaging to our global competitiveness." The coalition said the regulations could impact 6 million stationary sources of GHG emissions, including 200,000 manufacturing facilities.

See Also: Global Manufacturing Economy Trends & Analysis

EPA took the lead in the GHG fight when it became clear that a cap-and-trade program to reduce GHG emissions would not be enacted by the U.S. Congress in 2010. The Supreme Court had cleared the way for EPA action when it ruled in 2007 that carbon dioxide and other greenhouse gases were covered by CAA's definition of air pollutants. In December 2009, EPA found that certain greenhouse gases threatened the public health. As a result, EPA said it was compelled to issue new regulations to control them.

Manufacturers clearly have an interest in how GHG is regulated. Manufacturing uses about one-third of the energy consumed in the U.S. Manufacturers have become more frugal users of energy; from 2002 to 2010, energy consumption fell 17% in the sector, partly due to improvements in energy efficiency and partly due to changes in the nation's manufacturing output mix. 

Dire Consequences Predicted from Carbon Pollution

The case for action against greenhouse gases is well known – and intensely debated. In its 2007 report, the Intergovernmental Panel on Climate Change, the body created by the United Nations to study climate change, found "unequivocal" evidence of warming of the planet and that "most" of this warming was due to increases in GHG emissions caused by human activity.

The consequences of global warming are so dire that they seem akin to the script of a science fiction movie. EPA's Regina McCarthy told a House subcommittee in June 2012 that "carbon pollution and resulting climate change are expected to lead to more intense hurricanes and storms, heavier and more frequent flooding, increased drought, and more severe wildfires…" The results could range from starvation and diseases to mass migrations and war.

Despite broad scientific consensus on the threat from global warming, many critics remain skeptical of climate change forecasts and see GHG rules as a formula for raising energy costs and making U.S. manufacturing less competitive. Opponents of EPA's actions have argued broadly that the Clean Air Act was never intended to regulate GHG. In particular, they have been critical of the tailoring rule which EPA developed to phase in permitting requirements under CAA. 

A second front in the global warming battle could open if any political momentum builds for a U.S. carbon tax. The most popular version would tie in a carbon tax with tax reform so that consumers who would feel the effects of the tax at the pump would find relief in lower tax rates. NAM is firmly opposed, warning that such a tax would have "a net negative effect on consumption, investment and jobs…."

While the costly legislative and regulatory battles play out, the American public does not put great emphasis on climate change action. In January, a Pew Research poll found that only 28% said dealing with global warming was a top priority for the president and Congress this year. This comes despite a March survey that found 69% believe there is solid evidence that the earth is getting warmer and a growing belief (42% in October 2012 versus 34% in 2010) that the warming is caused by human activity.

Public attitudes provide support for both climate change activists and critics. Activists can argue that the public recognizes the problem and supports a broad range of actions to reduce carbon emissions such as improved mileage standards for cars. Critics can point to a public that is much more intensely focused on the economy and jobs, and argue that more regulation imperils both. It is a formula for the kind of expensive, prolonged public policy stalemate that we have become increasingly used to.

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