Carbon Curbs: Regulatory Stick or Cap'n'Trade Carrot?

One of the most far-reaching enviro-regulation overhauls in American history is in progress, and it's good news for curbing global warming.

Last week, the Environmental Protection Agency sent to the White House Office of Management and Budget its finding that greenhouse gases like CO2 and methane are dangerous pollutants. By destabilizing the climate, the finding affirms, these heat-trapping gases are endangering public health by intensifying heat waves, contributing to increasingly severe coastal storms (which "will increase the number of people suffering from disease and injury due to floods, storms, droughts and fires") and more.

According to the fast-track timeline in an agency presentation about the finding, recently leaked to the press and eco-activists, EPA expects the finding to emerge successfully from its interagency review, and EPA Administrator Lisa Jackson plans to sign it by April 16.

Once the public comment period for the finding has ended, EPA will have the authority to compel industries and businesses to control and curb greenhouse gas pollution. Such regulations would touch nearly every American: "The move is likely to have a profound effect across the economic spectrum, affecting transportation, power plants, oil refineries, cement plants and other manufacturers," write Kate Galbraith and Felicity Barringer in The New York Times. "It sets the agency on a collision course with carmakers, coal plants and other businesses that rely on fossil fuels, which fear that the finding will impose complex and costly rules.

"In practical terms, the finding would allow quick federal regulation of motor vehicle emissions of heat-trapping gases and, if further actions are taken by the E.P.A., it could open the doors for regulatory controls on power plants, oil refineries, cement plants and other factories."

More likely, however, is that the potential for a slew of new EPA regulations -- likely to include intensive monitoring and reporting of emissions, retrofitting industrial facilities, and other demanding requirements -- will drive businesses and industries to supporting the Obama administration's proposed carbon cap and trade legislation. Stick, meet carrot.

The administration's plans would seem to undercut the recent pronouncement by liberal pundit George Stephanopolous that Congressional Democrats intend to backwater climate legislation this year, in favor of rallying support to enact healthcare reform (covered here in last week's Fatalistic Friday).

Regulation or legislation? Either way, if it's done by December, the US will be in a strong position to lead, both morally and politically at this year's international climate treaty negotiations in Copenhagen, where negotiators must hammer out a new treaty to cut greenhouse gas emissions worldwide.

In the meantime, the administration's push for a nationwide carbon cap-and-trade system seems to have boosted the price of a ton of CO2 in the most recent Northeast Regional Greenhouse Gas Initiative auction, which raised $117 million for clean energy development and energy efficiency programs in the 10 participating Northeastern and mid-Atlantic states.

Image courtesy of The Bus Project.