Hearing on the Energy Tax Prevention Act: Truth vs. Fiction

Last Wednesday’s House Energy and Power Subcommittee hearing on the Energy Tax Prevention Act lived up to its billing as being the first clash between the new majority and minority on the committee. For eight hours, the Members opposing regulation argued that EPA was overstepping its authority in regulating greenhouse gas (GHG) emissions. They asserted that such action would kill jobs and harm the economy. Members supporting regulations argued that EPA is required to act and is doing so in the interest of public health.

The Energy Tax Prevention Act, a draft proposal jointly released by Rep. Upton (R-MI), Rep. Whitfield (R-KY), and Sen. Inhofe (R-OK), would prevent EPA from regulating GHGs, remove GHGs from the Clean Air Act, and specifically repeal all actions related to climate change, including the scientific Endangerment Finding, the Tailoring RuleNew Source Review regulations, reporting requirements for GHG emissions, and proposed New Source Performance Standards. The lone exemption is the Clean Car rule, which would remain untouched.

The marathon hearing was divided into four panels, yet the overarching themes for those panels were all the same. Very little of what the witnesses said was directly applicable to what EPA has actually done or is likely to do regarding the regulation of GHGs.

With the focus on economic impacts, little was said that challenged the legal or scientific basis for EPA’s actions. The legal foundation for EPA’s actions is the Clean Air Act and the Supreme Court ruling in Massachusetts v. EPA (2007). In this case, the Supreme Court found that GHGs fit the definition of an air pollutant under the Clean Air Act and required EPA to determine whether or not GHG emissions may reasonably endanger public health or welfare. Upon a thorough of the peer-reviewed science, EPA determined in 2009 that GHGs do in fact endanger Americans’ public health and welfare. With this “endangerment finding,” EPA was required under the provisions of the Clean Air Act to begin regulating GHG emissions.

The first of EPA’s GHG regulations applied to light-duty vehicles, which were achieved with consensus support from states, industry, labor unions, and environmental groups. By requiring more fuel efficient cars, these rules are projected to save consumers more than $3,000 over the life of a vehicle, reduce CO2 emissions by 950 million metric tons, and save 1.8 billion barrels of oil.

Under the Clean Air Act, once a pollutant is regulated under any part of the Act, major new sources or modifications are also subject to regulation. The stationary source regulations for GHGs only apply to major new sources or major modifications to existing facilities and emphasize energy efficiency technologies over pollution control technologies. And any future rulemaking under the Clean Air Act will also have to look in detail at both costs and benefits.

In addition to attacking the legal basis for EPA’s action, several opponents went after the scientific basis of EPA’s endangerment finding. The fact that none of the witnesses called to testify were climate change scientists or had a scientific background became a point of contention. Ranking member Bobby Rush (IL-01) asked the witnesses whether they found it odd that no climate scientists were called to testify.

Proponents of EPA GHG regulations made it known that they had to "fight tooth and nail" to get EPA Administrator Lisa Jackson invited to the hearing. Administrator Jackson’s testimony reiterated the arguments that there are strong, proven public health benefits of the Clean Air Act and the new GHG regulations are reasonable and necessary. Dr. Lynn Goldman of the American Public Health Association testified about the public health risk associated with climate change and affirmed the Clean Air Act as one of the most successful public health laws. Dr. Goldman pointed to a study that showed in the first 20 years of the Act’s existence, it prevented more than 200,000 premature deaths, 672,000 cases of chronic bronchitis, 843,000 asthma attacks, and 189,000 cardiovascular hospitalizations.

Opponents repeatedly asserted that these regulatory actions are job killers and are adding to economic uncertainty. Providing the opposing view, Betsy Blaisdell of Timberland pointed out that businesses need long-term market certainty to develop and implement strategies to address climate change while meeting the demands of the marketplace. Addressing climate change sooner rather than later is prudent and cheaper for businesses in the long run. This desire is especially heightened at a time of low interest rates. While delaying EPA regulations will allow some firms to avoid compliance costs in the short run, a delay would mean that all firms would ultimately face increased overall costs in the long run.

We have always been in favor of comprehensive legislative action to address climate change. However, in the absence of congressional action, EPA regulations should be evaluated on their substantive impacts – both their costs and their benefits. From what we’ve seen so far, these regulations would have both modest costs and benefits but are a necessary start to addressing this critical issue.