to regulate GHG. The CAA with all its faults has been very successful and cost effective. The National Academies of Sciences did a review of the CAA and came to this conclusion.

The 'executive branch overreach' is a only purported disadvantage. Its a hand-wavey way for conservatives to say they don't like business regulations. It gets used by the right almost reflexively.

Reversibility isn't a big problem for enviros. The executive branch still must follow the law, and once a GHG program is in place it will be a violation of the CAA to reverse it.

If there was ever an example of not letting the perfect get in the way of the good, its using the Clean Air Act to regulate greenhouse gases.  

The lack of public deliberation is a problem. Something this big ideally would be debated. The public comment period during rule making will however allow lots of input from concerned citizens.

David --

I think you dramatically overstate the benefits of trying to do a cap-and-trade system under the CAA without legislation.

As a preamble, let me make clear that I believe the EPA is obligated to regulate GHGs under the Act, and not just from motor vehicles.  It will have to regulate from stationary sources as well.

As for your arguments, first, I believe it is highly unlikely that an administrative effort to create cap-and-trade under the existing Act would be quicker than legislative change.  The reason is that any regulations that are this ambitious would be tied upon in Court and not implemented for years.  Even if eventually upheld in the courts, the rules would not be enforced for years.  See, e.g., the Clinton NAAQS revisions (or, for what happens when the regs fail, the Bush Administration CAIR rule).

Second, I think you are mistaken to write that "a Clean Air Act carbon program would largely cover what the CAA already regulates."  Under current law, GHG regulation will require the EPA to regulate many thousands of facilities and buildings that are not currently covered by the Act, in part because so many facilities emit so much more CO2 than other regulated emissions (so they aren't major sources for other emissions, but would be for CO2).  So, for example, applying the Act to GHGs would, in a single stroke, increase the number of facilities covered by the PSD program tenfold (if not more). The effect of applying other provisions to GHGs could be equally expansive, particularly if (as I believe) the EPA is obligated to try and set a NAAQS, and require SIPs for GHGs.

Third, I am not sure a regulatory system can do all that much to build on state efforts, particularly the regional trading efforts, as the various regional trading regimes are unenforceable until they are ratified by Congress under the Compacts clause.

I could go on.

The bottom line is that if you want cap-and-trade (or other significant reforms), then you should want legislation. The existing Act can impose lots of regulatory restrictions, but won't allow for particularly rational or efficient climate policy.

Food for thought.

Jonathan H. Adler

David, I think you have captured the landscape really well.

Jonathan, I agree with everything you say (I was going to make the same point about the rules inevitably getting tied up in court).

BUT I think you did not mention an important benefit of undertaking the adminitrative effort at EPA.  Inevitably, a serious EPA effort toward promulgating carbon rules will light more of a fire under Congress' butt to pre-empt EPA with legislation.  

That could be all to the good (hopefully), as legislation is much less likely to result in a protracted court battle.

I recognize the pitfalls you guys have pointed out -- that Congress could override tighter state efforts, for example...but I'm pinning my hopes on President Obama and Chairman Waxman [let me savor that for a moment... President Obama. Chairman (of the full committee) Waxman...].

but will chime in with a few points, in response to the comments above.

Mark Ambinder: the decision to regulate CO2 under the CAA is not the same as a decision to regulate CO2 in a cap & trade structure under the CAA.  C&T, for it's merits is hugely complicated and has the potential for legislative & legal challenge.  The CAA alone has the benefit of precedent but for the fact that the current input-based regulatory model would immediately put CO2 compliance in conflict with criteria pollutant compliance.  But that's no less true if Congress regulates CO2, so the CAA has to be fixed regardless.  In that vein, it seems to me that it is vastly easier to fix with minimal unintended consequences if CO2 is inside the CAA and all redrafting of one section can be accompanied by concurrent redrafting in another, without having to first shuffle back to Capitol Hill to square conflicts.

Re: transport, as I've said many times, it is hard from a regulatory perspective for a CO2 bill to cover the transport sector for obvious compliance-tracking reasons.  But with the ownership costs of a car dominated by the cost of a car rather than the cost of the fuel, it's highly unlikely that any kind of carbon pricing would meaningfully affect transportation sector emissions anyway.  (This is especially so if the clearing price for CO2 is set in other markets that have higher variable cost structures.)  This may or may not suggest that we shouldn't try, but - at least to my mind - suggests that an effective transportation-sector model must include vehicle-level regulations in addition to (or in lieu of) regulations based on CO2 release.  There is a pretty good federal model for this, both through CAFE and (in other sectors) through appliance standards.  

I don't claim sufficient expertise in the transport sector to say exactly what the optimal way to structure that sector is, but I do think that it is likely to be sufficiently different from other sectors that an effective CO2 regulation must treat that sector differently - which in turn means that the political and structural challenges associated with transport shouldn't impact our decisions to do something for the other sectors, since we'll have to do something different there anyway.

One final point: the other pushback to federal oversight is likely, paradoxically, to come from the states.  RGGI, for better or for worse, is providing $ to states to top up constrained state budgets.  Whether CO2 is regulated by EPA or by Congress, a consequence of the delay in federal leadership on CO2 is that any effort now raises the potential for a fiscal fight and/or horsetrade between the feds and the states.