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Richard L. Revesz

Richard L. Revesz

Richard L. Revesz, dean of NYU's School of Law, is an expert on environmental regulation and policy and co-founder of the Institute for Policy Integrity.

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EPA should proceed with market-based regulations

Q: Should EPA keep pressing ahead with new greenhouse gas rules, or should it accept Congress will shape the future of any mandatory limits on carbon dioxide?

The EPA can and must proceed with new rules--but it must do so using market-based mechanisms that will not clash with possible future congressional actions. It is bound by law to proceed, but it can move wisely by laying groundwork that will come at the lowest possible costs to business and will mesh well with the legislation Congress will hopefully enact someday soon.

In 2007, the Supreme Court ruled in Massachusetts v. EPA that the agency had to either prove that greenhouse gases were not a danger to public welfare or else, if it could not, it had to regulate those pollutants. In the remaining years of the Bush tenure, his administration stalled on its response, causing legal petitions for prompt action to pile up on EPA's desk. Last year, EPA Administrator Lisa Jackson submitted the finding, based on decades of climate science, that showed the seven heat-trapping gases, including carbon dioxide, are indeed a serious problem. Now lawsuits and protestations are piling up on the other side.

The loudest of these was Senator Lisa Murkowski's resolution of disapproval of the EPA's endangerment finding. In one fell swoop the measure would have removed the agency's ability to regulate the gases--not by disapproval of EPA's policy choices, but by the more extreme act of rejecting the well-documented scientific evidence for climate change. The proposal failed, but not by enough to comfort those concerned with the effects of too much carbon in our atmosphere. With 47 Senators essentially casting their votes for climate change denial, many now wonder where the legislative action can go from here.

Last year, Policy Integrity's detailed legal analysis of the Clean Air Act looked at the options and obligations EPA faces following the Supreme Court's 2007 decision. We found there are two roads the agency can take. One option is command-and-control regulations, which will be costly, inefficient, and almost inevitably will conflict with legislation if and when Congress finally does act. Or EPA can select market-based mechanisms, like the one used successfully to combat acid rain since the 1990s, which allow businesses to cut their emissions at the lowest possible cost. As an added bonus, if Congress proceeds with its own trading plan, the EPA's market-based actions could merge seamlessly instead of getting in the way.

Policy Integrity also submitted the first legal petition filed with the Obama EPA requesting the start of greenhouse gas regulations for vehicle fuels. It's a good example of how the agency could follow the model of other successful cap-and-trade programs, already in place, to target carbon emissions without imposing major costs on industry.

EPA has a legal obligation to proceed with rules that rein in our greenhouse gas emissions. The agency's wisest course of action would be to try to anticipate what Congress will eventually do and begin to set up market-based mechanisms that will not clash with legislation in over-lapping and onerous ways.

The irony of the question of who should act first (EPA or Congress?), and the irony of much of the six-hour debate over the Murkowski resolution, is that the Senate has seen six climate and energy bills this year and has yet to act on any of them. It might very well make sense to curtail the EPA's existing authority in specific and targeted ways once new climate legislation is in place. But until a bill has been passed, the EPA should push forward.

By Richard L. Revesz  |  June 17, 2010; 11:05 AM ET Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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