Gregg Easterbrook

The budget compromise that averted a federal government shutdown nearly foundered upon the rocks of Republican riders, one of which would have stripped the Environmental Protection Agency of authority to regulate greenhouse gases. Speaking as someone who favors greenhouse restrictions, I wish the Republican rider — dropped just before the clock struck midnight — had succeeded.

The EPA is trying to restrict greenhouse gases using a 41-year-old statute intended for another purpose. Republicans are right to object to this.

Of course, most Republicans don’t want any greenhouse gas regulation at all — though greenhouse regulation is now justified by a strong body of science, including by statements from George W. Bush’s Climate Change Science Program. Greenhouse regulation probably will not cost anywhere near as much as current estimates. All previous programs to control air emissions have proven significantly cheaper than expected. Republicans are correct, though, that the EPA is going about this in the wrong way.

Only a global warming program enacted by Congress will have political validity. A backdoor attempt — federal bureaucrats using strained interpretations of old laws, leading to solutions imposed by judges — will be illegitimate in the eyes of voters. Americans are sick of bureaucrats and judges trying to dictate policy. Laws passed by Congress, on the other hand, clearly are legitimate politically. You may not like any particular law passed by Congress — but that’s where the Constitution vests the power in our system.

Thus Congress must speak on greenhouse gases. Backdoor bureaucratic attempts will only discredit climate change action.

Here’s the fast-forward version of the current EPA controversy:

The Clean Air Act of 1970 regulates pollutants that cause smog and acid rain. The Act has been a spectacular success: smog and acid rain have declined rapidly, without harm to the economy. Indeed, the economy has mainly boomed since smog and acid rain rules became stricter; an improving natural environment may be a cause of economic growth. The Clean Air Act has strong political legitimacy, because Congress clearly spelled out the specific compounds that were to be restricted.

Congress has never enacted any regulation of carbon dioxide, the primary greenhouse gas. Frustrated, advocates proposed that the Clean Air Act be used. It contains a clause saying the EPA may impose rules on gases not named in the statute, if they are found to “endanger public health or welfare.”

Do greenhouse gases threaten “public health or welfare?” Saying they threaten public health is quite a stretch — there is no evidence of this in the United States, though it might be happening in equatorial nations. Perhaps they threaten public “welfare,” since that term is amorphous. But considering the general welfare of the United States has steadily improved during the postwar period, even as greenhouse gas accumulation has risen, this one vague word seems hardly sufficient to hang a broad regulatory authority on.

In 2003 the EPA, under Bush, declared that the health-or-welfare clause of the Clean Air Act did not apply to greenhouse gases. Massachusetts sued, and in 2006 the Supreme Court said this. Totally obvious what the decision means, right? Like many recent Supreme Court opinions, the justices’ decision could scarcely be understood by monks standing on their heads in a monastery.

Many politicians and pundits, to quote former Speaker of the House Nancy Pelosi, said the Supreme Court “ordered the EPA to impose greenhouse gas regulations.” The decision did not. Rather, the court found the EPA was wrong to assert that it could not regulate greenhouse gases. Get the maddening double negative? The Supremes weren’t definitive on whether the EPA has authority: rather, they told the EPA to go back to the drawing board and articulate a “reasonable basis” for deciding one way or the other.

When Barack Obama, who favors greenhouse rules, was elected, senators John Kerry and Joe Lieberman put together a Senate bill. It failed, and that’s good — the Kerry-Lieberman global warming bill was a nightmarish mélange of top-down controls, special exemptions and giveaways to campaign donors. (Here’s the 987-page “discussion draft”). Knowing the bill was goin’ nowhere even when Democrats controlled the House, Obama’s EPA reversed Bush’s EPA and declared that the Clean Air Act can be used to regulate greenhouse gases.

That brings us to the present. Two weeks ago, the Republican-controlled House voted to amend the Clean Air Act, to clarify that it does not apply to greenhouse gases. The Democratic-controlled Senate would not match. Then the Tea Party took the issue to the budget showdown, without success. Now it’s settled? Hardly. There’s no guarantee the EPA’s pro-regulatory finding will amuse the Supreme Court any more than its anti-regulatory finding did. Additional litigation seems assured.

This tussle has brought out absurd degrees of exaggeration from theologians of both extremes. The Wall Street Journal editorial page, representing the Church of the Perpetual Denunciation, declared that having no regulation of greenhouse gases would trigger “growth and job creation”. Wait, there was already no regulation of greenhouse gases during the recession!

Paul Krugman, representing the New Jersey Synod of the Latter-Day Limousine Liberals, ridiculed the mere suggestion that steady improvement of public health during the era of greenhouse accumulation shows greenhouse gases don’t harm public health. Wait, that makes sense! It’s 2011, must the left still shout down its critics rather than engage their arguments?

Bottom line: all three branches of the federal system (legislative, executive and judicial) have spent eight years arguing about the meaning of a single sentence in an statute. And we’re still not sure what the sentence means.

Solution: ditch the EPA’s backdoor regulatory attempt, then enact legislation to reduce greenhouse gases. Such legislation would have political legitimacy; could be simple and practical; and can be conservative!

In 1992, Martin Feldstein, who had been Ronald Reagan’s chief economist, proposed that greenhouse gases be reduced via a carbon tax. In 2007, Gregory Mankiw, who had been George W. Bush’s chief economist, proposed the same. Rather than impose some super-complex regulatory scheme with decisions made in Washington, a carbon tax would allow individuals and businesses to make their own decisions about carbon dioxide reduction — while creating a profit incentive to invent low-cost control technology. That’s why conservative economists like the idea.

The national-debt monster is looming: why not combat it with a tax on air pollution? That’s preferable to higher taxes on income or corporate profits. Taxing income and profit only discourages labor and capital, both of which are good. Taxing pollution would discourage pollution — while helping balance the books.

So Tea Party, I hope you succeed in stripping the EPA of Clean Air Act-based authority regarding global warming. Then enact the reform the country needs: a carbon tax, to reduce the deficit and protect the climate.

Substituting ethanol for petroleum – what could be wrong with that? A lot, it turns out, including a cynical “stealth tax” on drivers.

A few days ago the Environmental Protection Agency announced that soon gasoline can be made from 85 percent petroleum and 15 percent ethanol, up from a current limit of 10 percent ethanol. Such a move to replace imported petroleum with home-grown ethanol sounds great — until you examine the details.

Ethanol is the king of subsidies. Ethanol from genetically engineered dwarf trees or tall grasses holds tremendous promise as a cost-effective, greenhouse-neutral fuel. But for today, nearly all ethanol sold in the United States is made from corn. Domestically produced corn-based ethanol is subsidized via federal payments to grain farmers, by refinery tax exemptions for fuel containing domestic ethanol, and by tariff barriers intended to prevent Brazilian sugar-based ethanol from entering the country. Annual federal subsidies to corn ethanol cost around $5 billion. Are the benefits worth that?

Corn ethanol may not save petroleum. There’s a dispute, but some research suggests corn-based ethanol is a net loser in energy terms — more petroleum goes into production of the corn than the energy value in the ethanol. Indisputably, raising corn to burn as ethanol depletes topsoil. Topsoil may be a more important resource than petroleum, given there are vast reserves of oil and alternatives being developed, while with current science, topsoil is irreplaceable. We’ve got to deplete topsoil to eat. We don’t need to deplete topsoil for fuel: topsoil should be allocated to its highest use, food production.

Corn ethanol may not be good for the environment. If ethanol occurred by magic, then replacing fossil fuel with corn ethanol would reduce greenhouse gas emissions. But ethanol calculations should take into account the greenhouse gases associated with corn production, especially carbon released by changes in land use. Last year, the EPA concluded that corn ethanol production would be worse overall for the environment than petroleum refining http://www.epa.gov/otaq/renewablefuels/420f09024.htm. The ethanol lobby howled, and the EPA “reworked” its ethanol data to reach the desired PC outcome. In politics, “sound science” is whatever supports your predetermined conclusions.

Politics drives the corn-ethanol push. The farm lobby loves corn-based ethanol because it raises the price of corn – though that penalizes average people via higher food prices. Many (not all) enviros love ethanol because it’s not a fossil fuel. Big campaign donors such as ethanol producer Archer Daniels Midland love ethanol because the subsidies are corporate welfare. But does adding more ethanol to gasoline serve the public? Hey – who cares about that?

The stealth tax. By volume, corn ethanol contains about a third less energy than petroleum. That means a gasoline blend of 85 percent petrol, 15 percent ethanol delivers about 95 percent the energy of pure-petroleum fuel. When the federally sanctioned new gasoline blend starts being put into the tanks of cars, MPG will go down.

The typical American driver covers 12,000 miles annually at a real-world fuel economy average of 20 miles per gallon, which comes to 600 gallons of gasoline purchased annually. That the typical U.S. driver burns through almost two gallons a day is a core reason America is addicted to oil. But higher-MPG vehicles with lower horsepower, and plug-in hybrids, seem the best cure — rather than subsidized ethanol.

If the typical driver’s annual 600 gallons declines in energy value by 5 percent, the typical driver will need to buy 30 additional gallons per year. At today’s prices, that’s a stealth tax of $100 per year per American driver. If gasoline prices go up, the stealth tax rises.

Who gets the money from the stealth tax? Oil companies that market gasoline, and the ethanol lobby. Typical Americans will pay an extra $100 per year so that funds can be channeled to these politically connected lobbies, which in turn will make campaign donations to incumbents of both parties. This is both parties of Congress, and the White House, at their worst – reaching into your pocket in order to create campaign donations for themselves.

Don’t fall for it. The media have not noticed that ethanol mandates will cause automotive MPG to decline – as well as subtract spending money from people’s pockets at a time when consumer demand is needed to spur the economy.

Politicians hope people won’t notice that their MPG is going down, or won’t know why, and will simply be quiet and pay the new stealth tax.

Don’t fall for it.