Steve Seidel, vice president for policy analysis, co-wrote this post.
With the failure of the Senate to act on climate change legislation, the focus of attention now shifts to possible regulatory actions by EPA. The Supreme Court in 2007 made it clear that greenhouse gases (GHGs) are pollutants under the existing Clean Air Act (CAA), and the overwhelming scientific evidence (spelled out in great detail in the endangerment finding) demonstrates that such pollutants represent possible harm to public health and welfare.
Opposition to EPA action rests in part on concerns that any regulations will be excessively costly and burdensome to households and U.S. manufacturers. While it is certainly true that regulating GHGs will result in costs, it is also important to look at whether the economic benefits from those regulations will be greater than the costs they impose. In other words, will societal costs of allowing global GHG emissions to continue unabated (costs that will come in the form of impacts from rising sea levels, increased extreme weather including heat waves and droughts, among others) be greater than the costs of regulating those emissions responsibly?
This basic regulatory framework – that regulatory costs should be less than the resulting benefits – is codified in OMB review of all major federal regulations by both Republican and Democratic Administrations, has historically been applied to all EPA regulations, and would certainly be applied to any future regulations of GHGs.
So what have been the costs and benefits of past EPA regulations under the CAA historically? Congress required EPA to undertake a retrospective assessment of the costs and benefits of regulations under this statute. The conclusion of this retrospective review is that the CAA resulted in total benefits that are around $37 trillion, while total costs were $0.874 trillion (in 2010 dollars) – an astounding 40 to 1 benefit to cost ratio!
EPA has also produced a prospective assessment of the costs and benefits of the CAA – this time for the time period of 1990 through 2010. In this review, EPA estimated that the most likely benefit to cost ratio of the CAA for this period is 4 to 1. While a very strong and positive value, the ratio is substantially lower than the estimated benefits for the first 20 years of the CAA.
This is not unexpected – early gains are usually greater, and more cost effective, because simple or cheap remedies are the first to be applied in response to regulatory requirements. As those requirements become more stringent, creating additional benefits becomes more costly (from an economics perspective this is described as moving up the marginal cost curve).
How credible is EPA’s assessment of its regulations? Alan Krupnick, formerly of the President’s Council of Economic Advisors, has testified before Congress about the credibility of EPA’s analyses: “Under the auspices of the agency’s Science Advisory Board, both studies were scrutinized throughout the decade-long preparation by at least three expert committees of outside economists, air quality modelers, epidemiologists, and other health experts.”
In addition to these EPA assessments, there have been a handful of quality external analyses of the costs and benefits of the CAA. The Office of Management and Budget (OMB) found that the “major rules” from EPA’s Office of Air resulted in total benefits between $145 and $218 billion annually, for the years between 1992 and 2002. This is compared to costs of between $22 and $25 billion over that same period. A study by researchers at MIT found total annual benefits rising from $50 billion in 1975 to $400 billion in 2000. This report accounts for the monetary benefits of avoided premature death differently than the EPA studies, and as a result reports lower values for the total benefits. A sum of the total discounted benefits yields a total benefit of $6.85 trillion from 1975 through 2000 – a figure still substantially greater than the EPA estimate for the costs of the regulations.
So how might this play out in terms of future regulations of GHGs? EPA’s first GHG regulations were standards set for light duty vehicles (which it coordinated with the efficiency standards set by NHTSA). These standards are expected to lead to net benefits of between $0.5 and 1.2 billion dollars (discounted back to present values using 7 percent and 3 percent discount rates, respectively) without even including a social cost of carbon. If a value is assigned to the avoided GHG emissions associated with this regulation, the net present benefits are even greater!
If there is a lesson that can be drawn from these previous regulatory efforts it is that while regulations do impose real costs, EPA’s actions under the CAA have consistently led to positive environmental and economic outcomes. By not regulating, we would have foregone these positive net benefits and incurred the social costs imposed by unabated pollution.
So the next time someone tells you that the costs of reducing air pollution are too high, ask them what would be the costs to society of not reducing those emissions.
Russell Meyer is the Senior Fellow for Economics and Policy. Steve Seidel is Vice President for Policy Analysis.
We’ve been tracking federal government efforts towards reducing our vulnerability and increasing our resiliency in the face of the potential impacts and risks from climate change. I continue to be impressed by the steps that many federal agencies are taking in this regard—a lot of work is going on to mainstream climate change adaptation.
Yesterday the Interagency Climate Change Adaptation Task Force released its report to the President. During the past year this task force—which includes about 20 different Federal agencies—worked on developing recommendations and guiding principles on a strategic approach to climate change adaptation. The Task Force’s recommendations include: making sure that adaptation is a standard part of Agency planning (mainstreaming!), ensuring information about the impacts of climate change is accessible, and aligning federal efforts that cut across agency jurisdictions and missions.
A number of agencies have already gotten started on this. Two agencies within the Department of the Interior (DOI) released climate change strategies last month—the Fish and Wildlife Service and the National Park Service. These efforts build on DOI’s overarching strategic response to climate change.
The Fish and Wildlife Service manages more than 150 million acres of wildlife refuges across the United States and has additional responsibilities related to the protection of fish populations, endangered species, and migratory birds. (Interesting side note: according to the Service, about 41 million people visit national wildlife refuges each year and their spending generates almost $1.7 billion in sales for regional economies.) The Service defines adaptation as “minimizing the impact of climate change on fish and wildlife through the application of cutting-edge science in managing species and habitats” and has made adaptation the centerpiece of its Strategic Plan.
Charged with preserving the natural and cultural heritage of our nation, adapting to climate change presents the National Park Service with many challenges. What should it do about the melting glaciers at Glacier National Park? Or the threats of flooding to historic Jamestown, VA (part of the Colonial National Historical Park)? The National Park Service’s Climate Change Response Strategy details long- and short-term actions in three major areas: mitigation, adaptation, and public communication. Measures to tackle the adaptation piece include planning, promoting ecosystem resilience, preserving the nation’s heritage, and protecting facilities and infrastructure.
Earlier this month, the EPA released its 2011-2015 Strategic Plan containing five strategic goals for advancing its environmental and human health missions, the first of which is “Taking Action on Climate Change and Improving Air Quality.” As part of its Strategy, the EPA recognizes that it “must adapt and plan for future changes in climate” and “incorporate the anticipated, unprecedented changes in climate into its programs and rules.”
And just last week at the first White House Council on Environmental Quality (CEQ) GreenGov Symposium there were three separate panels devoted to climate change adaptation. We heard presentations from the Army Corps of Engineers, CDC, CEQ, DOT, the Forest Service, HUD, OSTP, USDA, as well as a number of stakeholders including the state of Maryland, the Nature Conservancy, and the National Association of Clean Water Agencies (NACWA). All of which are very much engaged on the adaptation issue.
Finding it hard to keep track of all of these agencies and what they are up to? Don’t worry – we’ll be posting our newest adaptation report, Climate Change Adaptation: What Federal Agencies are Doing, to this site very soon.
Heather Holsinger is a Senior Fellow for Domestic Policy
Most Americans can recall from social studies class and Schoolhouse Rock that a bill becomes a law through a process of introduction, committee work, and votes in both chambers of Congress before being signed by the President. Yet in reality, Congress influences policy decisions and administrative actions in ways that are more complex and potentially less transparent.
The Constitution gives Congress the power of the purse over government. Congress passes annual appropriations bills that fund the various programs of the federal government, and the necessity for Congress to pass these bills every year makes them an attractive target to attach riders – legislative provisions not directly related to the bill at hand. Appropriations riders are added to a bill by a small number of Congressmen to avoid an open debate on the merits of a particular policy, relying instead on the political and practical necessity to pass the larger funding bill.
Several rider efforts have succeeded in prohibiting funding or delaying environmental programs, much as some are talking about doing to prevent EPA from implementing greenhouse gas regulation under the Clean Air Act. Unlike policy decisions set in authorizing legislation, funding restrictions only apply for the year of appropriations covered and must be renewed on an annual basis. Unfortunately, once the precedent is set, it is common for riders to reappear for multiple years, usually without an up-or-down vote on that specific policy decision.
When it comes to climate change, Rep. Joe Knollenberg (R-MI) took a bill that failed to gain any traction in the committee process and turned it into a barrier to productive climate work through the appropriations process. Reacting to the Kyoto Protocol, drafted in December 1997, Rep. Knollenberg introduced HR 3807, in May 1998, which would have prohibited the use of funds for “for rules, regulations, or programs designed to implement, or in contemplation of implementing, the Kyoto Protocol.” A broad reading of the phrase “in contemplation of” would have stopped federal funds from being used for any work on climate change, even educational workshops. When the bill failed even to move out of the Republican controlled committee to which it was referred, Rep. Knollenberg turned to the appropriations process, where he attached the bill as a rider to the appropriations bill that included FY1999 funding for EPA. The same language was included in several appropriations bills. In addition to the EPA bill, it was also included the next year for FY2000 funding. As a result, Rep. Knollenberg was able to inhibit the Clinton Administration’s climate change work without going through the regular process of enacting legislation.
Other environmental priorities have been the targets of appropriations riders and defunding efforts. These riders became popular shortly after the political upheaval of 1994, but the effects were often much longer lasting. Beginning in Fiscal Year 1996, a rider was attached annually to the transportation appropriations bill preventing increases in the Corporate Average Fuel Economy (CAFE) standard known as the “CAFE freeze rider.” Like the proposed riders on greenhouse gas regulation, this rider was in reaction to an action by the Clinton Administration, in this case an advanced notice of proposed rulemaking by the National Highway Traffic Safety Administration. The recurrence of this rider continued until Fiscal Year 2001 when the rider was dropped in favor of a study on raising CAFE standards, ultimately yielding to bipartisan support for new standards much later than initially anticipated.
Environmental advocates have also used riders to avoid open policy discussion and votes. One of the longest running annual appropriations riders was a prohibition on offshore oil and gas leasing off the East and West coasts and certain parts of Alaska. That rider was included in appropriations bills for 27 years, from 1981 to 2008, without ever being a stand-alone piece of legislation passed by Congress.
The lesson of these and the plethora of other riders included on appropriations bill every year is clear: these provisions have staying power. The inclusion of a one-year delay on greenhouse gas reductions could easily continue for two years – or even twenty. According to the scientific information available, we don’t have the luxury of waiting that long to reduce our emissions. Instead, the United States should proceed with the prudent and reasonable series of regulations that have been outlined and are being implemented under existing law following the 2007 Supreme Court ruling in Massachusetts v. EPA.
Michael Tubman is the Congressional Affairs Fellow
There has been a lot of important climate news in recent weeks and months. In addition to record warmth, an unusually active Atlantic hurricane season, and a devastating string of extreme weather events in the U.S. and around the world, Arctic sea ice has reached a new low in its total volume.
The ice covering the Arctic Ocean goes through a seasonal cycle in which it expands during the winter, reaching its maximum extent in March, and shrinks during the summer, reaching its minimum extent in September. Satellites have been observing the daily coverage of sea ice since 1979, during which time the summer minimum has declined rapidly over the decades. In 2007, the summer minimum dropped by a startling amount compared to previous summers, generating an iconic graph that was splashed across blogs and newspapers around the world (Figure 1). This record still holds, although every year since 2007 has seen below-average summer minima.
According to the National Snow and Ice Data Center (NSIDC), Arctic sea ice reached its minimum extent for 2010 on September 19 at 1.78 million square miles. Although this was the third-lowest extent behind 2007 and 2008, the sea ice set a new and probably more important record by reaching the lowest estimated volume – or total amount of sea ice – since satellite observations began in 1979.
Picturing an ice cube floating in a glass of water is a good comparison. The ice cube has three dimensions. But looking directly down at the glass, you see only the two dimensions that cover part of the surface of the water. When you look at the glass from the side, you can also see that the ice cube has depth, and that most of the ice is below the surface. The same phenomenon holds for sea ice, so if the ice melts from below, it becomes thinner and its total volume decreases.
This year, even though the area of the ocean’s surface covered by ice was a little larger than in 2007, the ice was much thinner, making its total volume much less than in 2007 or any previous year since estimates began in 1979 (Figure 2).
The rapid decline in total ice volume is significant since it takes less heat to melt a small volume of ice than to melt a larger volume. The area of ice cover can recover in one season, as it did in 2009, but the thickness builds up over several years. Consequently, the low volume of ice currently in the Arctic is more susceptible to melting next summer and the summer after that than was the 2007 ice. Consequently, scientists are wondering whether the Arctic could become ice free during the summer much sooner than previously projected.
The opening of the Arctic has enormous implications, ranging from global climate disruption to national security issues to dramatic ecological changes. The Arctic may seem far removed from our daily lives, but changes there are likely to have serious global implications.
- An ice-free Arctic Ocean will absorb more sunlight and convert it to heat, thus amplifying warming.
- The Arctic currently removes CO2 from the atmosphere, but physical and biological changes in the Arctic could cause it to switch to releasing CO2 and CH4 (a very potent greenhouse gas) to the atmosphere, thus amplifying global warming.
- Atmospheric circulation and therefore precipitation and storm patterns may be altered by a warming Arctic and changes in how the ocean interacts with the atmosphere in the region.
- A warmer, ice-free Arctic Ocean with more freshwater from snow and ice melt could change global ocean circulation patterns, thus altering marine ecosystems (i.e. fisheries) around the world and changing patterns of precipitation and storms on a very broad scale.
- More rapid melting of ice on land will accelerate sea level rise and could destabilizing the Greenland Ice Sheet, leading to abrupt and massive sea level rise.
- Countries have begun to compete for access to untapped natural resources in the Arctic. Unlike other international arenas, such as Antarctica, coastal waterways, and space, there are no agreed international rules to govern how different countries will access and utilize the Arctic.
Jay Gulledge is Senior Scientist and Director of the Science and Impacts Program
In our previous posts, I described some of the benefits to national security and the environment with the use of plug-in electric vehicles (PEVs). This final post takes a look at what is often the most important issue to Americans: their wallets. PEVs are not cost-competitive with conventional vehicles in most situations yet, but there are some considerations that could be compelling for consumers to consider this winter when the first PEVs hit the market.