As Danny reported yesterday, the EPA’s recent endangerment finding has had some impact in Copenhagen. Such regulatory technicalities can and do often have big effects, but they are rarely so thoroughly discussed. Is this attention deserved? What is the real significance of the endangerment finding? There are a couple of ways to answer this. The first is practical: what effects will the finding have on EPA regulation? A second is political: what effect will the finding have on the domestic and international debate—and why is it being issued now? I’ll try explain the finding practically today and talk about the politics in another post tomorrow.In the past couple of days the endangerment finding has simultaneously been portrayed as both less important and more important than it actually is. Let me give you some quick background before I explain what I mean by that.
To refresh your memory, the endangerment finding is a determination by the EPA that greenhouse gasses (the six Kyoto gases, GHGs) are air pollutants that present a danger to the public. Specifically, they “cause or contribute” to pollution “which may reasonably be anticipated to endanger public health or welfare.” The endangerment finding isn’t a random announcement or purely informational finding, however—it has real legal relevance. The language quoted comes from the Clean Air Act (§202(a)(1), to be exact). In order for the EPA to regulate under the CAA, it has to first make this kind of finding—it can’t just regulate any pollutant it wants. The EPA delayed the finding for some time, first by claiming GHGs weren’t pollutants (which the Supreme Court rejected in Massachusetts v. EPA) and later through standard bureaucratic foot-dragging. Under President Obama’s leadership the process moved much more quickly, however, and the result is Monday’s final finding.The endangerment finding is important, therefore, because it allows the EPA to regulate GHG emissions for the first time—this has generally been reported accurately.
There are two ways that coverage of the endangerment finding has been misleading or at least incomplete, however—and, oddly, they point in opposite directions. The first overrates the finding’s importance, and the second underrates it.
First, coverage of the endangerment finding has focused on what it does or enables, and hardly at all on what it does not do. The finding is actually very limited. There are a lot of regulatory programs under the broad umbrella of the CAA, and the endangerment finding only applies to one of them. Specifically, it only allows the EPA to regulate GHGs from new motor vehicles. Transportation sector emissions are about 30% of total U.S. GHG emissions, and this includes emissions from aircraft and other non-road vehicles not covered by the endangerment finding. In other words, the endangerment finding only allows the EPA to regulate sources responsible for somewhere around a quarter of U.S. emissions, and even then only through new vehicles as they enter the market. The EPA also doesn’t have unlimited powers to regulate even this slice of emissions—it is limited by what the statute allows it to do. In practice, this means standards (CAFE-like) on new cars. This won’t be enough to get to the President’s stated 17% cut from 2005 levels by 2020 goal, much less more ambitious goals based on 1990 levels. Reports that suggest that EPA regulation of GHGs will suddenly crush the economy or suddenly solve the GHG emissions problem are therefore overblown. On its own, the endangerment finding just doesn’t do or even allow all that much.
One important caveat to this is the subject of my recent paper that I blogged about on Monday. It is possible (I think likely) that this relatively-narrow endangerment finding will fulfill the requirements of another endangerment provision in the CAA—that for the expansive National Ambient Air Quality Standards (NAAQS) program. If that happens, the EPA will have the power (and the mandate) to regulate most “stationary” GHG sources in the country—power plants, refineries, etc. The agency doesn’t want this power, however, since it and most analysts believe the NAAQS are a poor fit for GHG regulation. The endangerment finding might therefore be broader than I suggest above, but it can hardly be characterized as an economy-killing power grab.
Second, coverage has focused on what the endangerment finding allows the EPA to do much more than on what it requires the EPA to do. Endangerment findings aren’t just bureaucratic threshold determinations—they are also triggers. In most CAA programs, once an endangerment finding is made, the agency must regulate, often on a fixed schedule. This is true of §202, the section of the CAA for the recent endangerment finding. It states that the EPA “shall by regulation prescribe … standards applicable to the emission of any air pollutant from … new motor vehicles” that meet the endangerment test. The EPA doesn’t have any discretion here—Congress has spoken, and the agency shall comply. The agency does have some discretion over what those standards look like, but this is not unlimited. The statute also triggers compliance requirements for manufacturers and import restrictions. This means that the endangerment finding cannot be a purely political move—it has real-world regulatory implications that the EPA and Obama administration can’t dodge even if they (now or later) decide they want to.
So what’s the practical impact of the endangerment finding? It:
- doesn't give the EPA the power to destroy the US economy.
- doesn't give the EPA the power to make big GHG cuts
- does force the EPA to regulate new cars.
Whether EPA regulation of GHGs will have a big impact on the economy or emissions therefore depends on what the agency does over the coming months, not on the single endangerment finding released on Monday. How will the agency decide to regulate stationary sources of GHGs, if at all? Will the agency be forced to regulate under the NAAQS? Will Congress move to take some of this authority away or supersede it with new legislation? The answers to these questions will tell us much more about what EPA GHG regulation will look like.
Given these limited but mandatory effects, why issue the finding now? More on that tomorrow.
Nathan Richardson is a Visiting Scholar at RFF.
