Research & Commentary: EPA Guidance on Greenhouse Gas Emissions

Published November 23, 2010

The U.S. Environmental Protection Agency’s proposed guidance for regulating greenhouse gas emissions was released in mid-November and is set to go into effect on January 2, 2011. EPA regulators are allowing only a very short, 14-day comment period–the deadline is December 1, 2010–before the new guidance is finalized and states are required to carry out the policy. The guidance will disproportionately affect larger businesses, exempting smaller ones–though all businesses and consumers will pay higher prices because of the restrictions.

The guidance will place further strain on under-resourced state permit-granters. State permitting bodies will be tasked with determining whether permit-seeking manufacturers are making big enough changes; selecting the best technology for controlling emissions (the BACT, or Best Available Control Technology); and satisfying a five-step process to hand-pick a technology they deem most appropriate before granting a permit.

The Competitive Enterprise Institute’s Marlo Lewis sums up the proposed guidance, “Even a cursory glance at the EPA guidance document makes one thing crystal clear–the permitting process to reduce or control carbon dioxide emissions is costly, complex, and time-consuming.”

Many analysts challenge EPA’s authority to establish the mandate, which will increase economic regulation dramatically. It will create supply shortages and consumer price increases. Because the guidance will apply only to major modifications to existing plants and new construction (terms purposely left ambiguous by Obama’s EPA), many manufacturers will forgo building newer, more innovative production plants and updating older, less efficient ones. Thus the guidelines will stifle innovation and choke off job growth.

The following documents provide more information on the consequences of the guidance.

EPA Bid for Carbon Clarity Fails to Satisfy Business
This Bloomberg News article quotes Howard Feldman of the American Petroleum Institute on the guidance: “The EPA is railroading job-killing regulations onto states, localities and America’s businesses during a time of uncertain economic recovery.” The article also highlights favoritism toward subsidy-receiving energy providers such as biomass operations.

EPA Offers Draconian “Guidance” for Global Warming Energy Restrictions
Competitive Enterprise Institute Senior Fellow Marlo Lewis warns small businesses exempted by the “tailoring” rule that they are the likely next target. “Before small businesses applaud EPA’s ‘Tailoring Rule,’ which temporarily exempts them from certain mandates,” says Lewis, “they should remember that Congress never authorized EPA to make climate change policy in the first place.”

EPA Issues Guidance on New Emissions Rules
The New York Times‘ “Green” blog conveys the reaction of Sen. James Inhofe (R-OK) to the proposed regulations and guidance for enforcement. “Make no mistake: this is an important part of the Obama administration’s back-door cap-and-trade agenda,” says Inhofe, “which seeks to impose the very rules and regulations that will make electricity more expensive, jobs more scarce, and keep the economy mired in stagnation.”

Texas Sues EPA, Claims Decision to Regulate CO2 Is Based on Flawed Science
Texas state legislators are planning to ignore the new guidance and accept whatever punishment the federal government will levy on them, this article reports. “With billions of dollars at stake, EPA outsources the scientific basis for its greenhouse gas regulation to a scandal-plagued international organization that cannot be considered objective or trustworthy,” said Texas Attorney General Greg Abbot, “so EPA should not rely upon it to reach a decision that will hurt small businesses, farmers and ranchers, and the larger Texas economy.”

For further information on this subject, visit the Environment & Climate News Web site at, The Heartland Institute‘s Web site at, or the Global Warming Facts Web site at

Nothing in this message is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. If you have any questions about this issue or the Heartland Web site, contact Legislative Specialist Marc Oestreich at 312/377-4000 or [email protected].