Regulating Carbon

Tuesday, March 24, 2009

THE ENVIRONMENTAL Protection Agency has told the White House that global warming is endangering public health and welfare, The Post's Juliet Eilperin reported yesterday. This "finding" under the Clean Air Act may seem like a no-brainer, given the potential ill effects of climate change. But that law, enacted in 1970, was never intended to deal with greenhouse gases and is not suited to that task. The Bush administration's failure to tackle climate change directly drove states and environmental advocates to seek back-door paths to regulation. If this one goes forward, the EPA would have to regulate greenhouse gases from all sources, including cars, houses and commercial buildings. This would create what Rep. John Dingell (D-Mich.) has called "a glorious mess." Congress should avert it putting a price on carbon.

Such a market-based solution could be accomplished either through a tax or, as the Obama administration supports, by setting a cap on greenhouse gas emissions and having polluting companies pay for the right to emit. Mr. Obama's budget anticipates collecting $645.7 billion over the next 10 years from such a cap-and-trade regime. But such a complex system would take time to develop and institute, even if Congress supports it. Laurie Williams and Allan Zabel, two EPA enforcement attorneys for more than 20 years in the agency's San Francisco office and writing as private citizens, released a paper last month advocating a "carbon fee" because, they argue, a cap-and-trade system "will not insure a competitive price advantage for clean energy over fossil fuel energy in the near future." Rajendra Pachauri, chairman of the United Nations Intergovernmental Panel on Climate Change, supports cap-and-trade. But when we asked him whether opponents of a carbon tax were right in saying that a tax would not guarantee emissions reductions, Mr. Pachauri said no. "If you rationally design the tax, you could meet the carbon emissions reduction goals," he said, because it "should lead to a shift to other sources of energy or other technologies that reduce energy use efficiently."

Yes, we know. A carbon tax is a politically unpalatable solution for some. But it has advantages over a complex trading system and should be considered. And either a carbon fee or cap-and-trade would be far superior to bureaucratic regulation under the Clean Air Act.

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