Obama Staffer Warns against Costs of CO2 Regulation

Published July 1, 2009

The Environmental Protection Agency is likely to impose serious economic harm on the U.S. economy if it decides to regulate carbon dioxide emissions, an Obama administration official has warned in an interagency memo.

In addition to warning of likely economic consequences of regulation, the memo chastises EPA for a lack of transparency and evidentiary support in concluding atmospheric carbon dioxide emissions endanger health and public welfare.

Strong Criticisms

According to the memo, “an endangerment finding under section 202 may not be the most appropriate approach for regulating GHGs [greenhouse gases]. Making the decision to regulate CO2 under the [Clean Air Act] for the first time is likely to have serious economic consequences for regulated entities throughout the U.S. economy, including small businesses and small communities. Should EPA later extend this finding to stationary sources, small businesses and institutions would be subject to costly regulatory programs such as New Source Review.”

Moreover, observes the memo, “The finding rests heavily on the precautionary principle, but the amount of acknowledged lack of understanding about basic facts surrounding GHGs seem[s] to stretch the precautionary principle to providing for regulation in the face of unprecedented uncertainty.

“The Finding should also acknowledge that EPA has not undertaken a systematic risk analysis or cost-benefit analysis,” notes the memo. “In the absence of a strong statement of the standards being applied in this decision, there is a concern that EPA is making a finding based on (1) ‘harm’ from substances that have no demonstrated direct health effects, such as respiratory or toxic effects, (2) available scientific data that purports to conclusively establish the nature and extent of the adverse public health and welfare impacts are almost exclusively from non-EPA sources, and (3) applying a dramatically expanded precautionary principle.”

The memo continued, “If EPA goes forward with a finding of endangerment for all 6 GHGs, it could be establishing a relaxed and expansive new standard for endangerment. Subsequently, EPA would be petitioned to find endangerment and regulate many other ‘pollutants’ for the sake of the precautionary principle (e.g., electromagnetic fields, perchlorates, endocrine disruptors, and noise).”

White House Attacks Author

The memo was leaked to the press on May 11 without a signature or named author. Media coverage reported the author was likely Shawne Carter McGibbon, acting chief counsel for the Office of Advocacy of the U.S. Small Business Administration, a White House executive agency.

Attempting to characterize the document as a partisan attack, an Obama administration official derided the author as “a holdover from the Bush administration” in an interview with the Associated Press.

The attempt to paint the author as partisan was roundly criticized as misleading and disingenuous. While it is true McGibbon served in the Bush administration, she was initially appointed to the Small Business Administration by President Bill Clinton, and before that she worked for former Democratic Rep. Al Wynn of Maryland.

Democrat Rallies Support

Rep. Nydia Velazquez (D-NY) defended McGibbon and her impartiality.

“Congress expects the Office of Advocacy to provide objective information, not tell us what we want to hear,” said Velazquez in a May 13 media statement. “In this instance, it appears they did exactly that. As with any report, the findings and conclusions require further review and discussion. But what should not be questioned is whether the Office of Advocacy should play a role in this process or, for that matter, if their work was politically motivated.”

Velazquez added, “There appears to be confusion in the media about whether some of the office’s personnel are holdovers from the Bush Administration and whether that influenced their findings. The facts are clear: The Acting Chief Counsel served not just under President Bush, but began her tenure at the SBA Office of Advocacy under President Clinton and continues to serve as Acting Chief Counsel with the approval of the Obama Administration. Her ability to serve in now three Administrations, Democratic as well as Republican, speaks to her professionalism and talent. Her abilities and objectivity should not be questioned.”

“It is clear that the release of the individual’s name was done solely for political reasons and to smear her credibility,” added Sen. John Barrasso (R-WY) in a letter to Office of Management and Budget Director Peter Orszag and EPA Administrator Lisa Jackson. “Rather than present a coherent argument as to why the comments were ignored by the Environmental Protection Agency, officials within the administration chose to take the path of publicly discrediting the individual who wrote the comments.”

EPA Move ‘Raises Concerns’

While expressing her support for Congressional legislation addressing carbon dioxide, Velazquez made it clear she is wary of EPA stepping into the mix.

“The Clean Air Act laws were not designed for the purpose of regulating greenhouse gases,” said Velazquez. “Trying to apply them for that purpose raises concerns for consumers and small and large businesses alike.”

James M. Taylor ([email protected]) is a senior fellow of The Heartland Institute and managing editor of Environment & Climate News.