EPA Set to Move Toward Carbon-Dioxide Regulation

Climate Czar Says Agency Will Determine That Greenhouse Gas Endangers Public, Propose New Emissions Rules

By IAN TALLEY

WASHINGTON -- President Barack Obama's climate czar said the Environmental Protection Agency will soon determine that carbon-dioxide emissions represent a danger to the public and propose new rules to regulate emissions of the greenhouse gas from a range of industries.
Carol Browner, special adviser to the president on climate change and energy, said in an interview Sunday that the EPA is looking at a 2007 Supreme Court ruling that requires the agency to determine whether carbon dioxide endangers public health or welfare. And the agency "will make an endangerment finding," she said.
"The next step is a notice of proposed rule making" for new regulations on carbon-dioxide emissions, said Ms. Browner, speaking on the sidelines of the National Governors Association meeting in Washington.
Officially recognizing that carbon dioxide is a danger to the public would require the government, under the Clean Air Act, to draw up regulations governing greenhouse-gas emissions from coal-fired power plants, refineries, chemical plants, cement firms, vehicles and any other emitting sectors.
White House climate czar Carol Browner, center, examines an electric car earlier this month. She said Sunday that the U.S. is seeking to create a national policy for auto emissions.

Administration officials have said they would limit regulation to facilities over a certain size. But legal experts say designating carbon dioxide a public danger could open up any emitters to legal challenge. The U.S. Chamber of Commerce and the National Association of Manufacturers have been lobbying the EPA for months against trying to regulate greenhouse gases under the Clean Air Act, warning that such action would lead to costly new regulations affecting not only coal plants and large manufacturers but also schools, apartment buildings and hospitals.
"Once carbon dioxide is regulated, they can no longer contain the Clean Air Act...and it would completely shut the country down," said William Kovacs, a chamber vice president.
Speaking to governors and reporters later Sunday, Ms. Browner said the administration also is seeking to establish a national policy for auto emissions that could mean tougher efficiency mandates for auto makers. The White House said Sunday that the standard would be developed as part of the continuing restructuring negotiations between the government and major auto makers.
Ms. Browner's comments provided the clearest outline to date of the Obama administration's regulatory strategy for tackling global warming. But critics warned that moving too quickly and aggressively could cripple an already ailing economy, and some business groups vowed to step up their fight against the proposed changes.
Some Democratic lawmakers, mainly from states dependent on coal or manufacturing, are also leery of letting the EPA regulate emissions. Rep. John Dingell (D., Mich.), a longtime advocate for Michigan's auto makers, has warned of "a glorious mess."
Ms. Browner dismissed criticism that the administration's proposed moves would exacerbate the current recession. She said businesses hoping to invest in carbon-dioxide-mitigation projects need clearer policy direction before investing.
Ms. Browner declined to say when the EPA would act on the endangerment issue, but EPA chief Lisa Jackson has indicated it could be on April 2, the anniversary of the Supreme Court ruling in Massachusetts v. Environmental Protection Agency.
The White House has separately been pressing Congress to pass legislation that would aim to cut greenhouse gases to 80% below 1990 levels by 2050. It has threatened to use its authority under the Clean Air Act to regulate these gases if legislators don't move fast enough.
Based on government data, calculations suggest that such a reduction would be equivalent to taking several hundred conventional coal-fired power plants out of service, possibly more than all 600-plus coal stations currently in the U.S.
Ms. Browner said that even though the EPA will move forward with its rule making, the administration prefers that Congress draft legislation that could more deftly regulate carbon dioxide through a cap-and-trade system.
Under such a system, emitters would be required to cut their carbon-dioxide emissions every year. Those exceeding their emissions limits could buy credits on a newly created market.
Senate Majority Leader Harry Reid (D., Nev.) said Friday that he aims to pass a climate-change bill by the end of the summer; Rep. Henry Waxman (D., Calif.), head of the House panel responsible for drafting such a bill, said he wants it approved in May.
Tom Williams, a spokesman for Duke Energy Corp., one of the nation's largest generators of energy, including from coal-fired power plants, said the company believed the best way to regulate greenhouse-gas emissions was through congressional legislation, not the Clean Air Act. "It's best not to try and shoehorn climate rules in a law passed 18 years ago, as there are too many implications on the economy," he said.
Ms. Browner said the administration had directed the EPA and the Department of Transportation to develop a national policy for auto emissions. The DOT is developing new efficiency standards, but Ms. Browner indicated that the administration could look for guidance to a set of strict emissions standards proposed by California.
The administration is considering a request from California to implement its proposed standards, which would also consider cars' greenhouse-gas emissions, as opposed to just fuel efficiency, a move that a dozen other states are likely to follow.
Ford Motor Co. spokesman Mike Moran said his company supported a national policy, but without knowing the details of the administration's plan, he couldn't comment on how it would affect his firm. Like other car companies, Ford has said in the past that California's proposals were too aggressive.
Wade Newton, a spokesman for the U.S. Alliance of Automobile Manufacturers, said his organization has been seeking a national policy, but warned that auto makers continue to face unprecedented challenges, as car sales tumble and manufacturers' costs continue to rise.
"A single national standard that pulls all of our interests and efforts together will allow us to continue our work bringing consumers across the country more fuel-efficient automobiles," he said in an email.
Write to Ian Talley at ian.talley@dowjones.com