EPA Chief Says CO2 Finding May Not 'Mean Regulation'

By IAN TALLEY

WASHINGTON -- The head of the U.S. Environmental Protection Agency said Tuesday a finding that carbon dioxide and other greenhouse gases are a public health danger won't necessarily lead to government regulation of emissions, an apparent about-face for the Obama administration.
The comments follow revelations of an administration document warning the EPA of potential economically harmful consequences from an agency finding last month that proposes declaring greenhouse gases a danger to the public. The document represents comments from various federal agencies, prepared by the Office of Management and Budget for EPA rule-making.

An OMB spokesman said, however, that the document doesn't represent administration policy. And statements in the document are at odds with the EPA's reasoning for the "endangerment" proposal.
EPA Administrator Lisa Jackson previously has said that such a decision "will indeed trigger the beginning of regulation of CO2," echoing similar remarks by White House climate czar Carol Browner.
But speaking before the U.S. Senate Environment and Public Works Committee, Ms. Jackson said Tuesday: "The endangerment finding is a scientific finding mandated by law...It does not mean regulation."
EPA spokeswoman Adora Andy later said Jackson was referring to the proposal, and not a final endangerment designation. "No news here," Ms. Adora said, adding: "The proposed finding does not mean instant regulations."
Other administration officials also tried to downplay the comment, saying it wasn't a reversal of policy, and they reiterated the administration preferred a legislative solution.
Ms. Jackson told the committee: "It is true that if the endangerment finding is finalized, EPA would have the authority to regulate green-house-gas emissions and...we would be judicious, we would be deliberative, we would follow the science, we would follow the law."
Sen. John Barrasso (R., Wyo.) asked Ms. Jackson about the inter-agency document sent by the OMB to the EPA before the agency published its proposed endangerment finding. Ms. Jackson said she disagreed with several of the document's characterizations. "It's deliberative and so it's people's opinions," she said.
Ms. Jackson added, however: "We do understand that there are costs to the economy of addressing global warming," and she reiterated the administration's belief that "the best way to address that is through a gradual move to a market-based program such as a cap-and-trade program."
The document warns the EPA, that "Making the decision to regulate CO2 under the (Clean Air Act) for the first time is likely to have serious economic consequences for regulated entities throughout the U.S. economy, including small businesses and small communities."
The document -- marked as "Deliberative-Attorney Client Privilege" -- doesn't have a date or a named author.
OMB Director Peter Orszag said later Tuesday on his department's Web site that "the OMB simply collated and collected disparate comments from various agencies during the inter-agency review process of the proposed finding."
Mr. Orszag said that since they came from multiple sources, "they do not necessarily represent the views of either OMB or the administration."
An administration official said the comment that the EPA finding would hurt small business came from the head of the office of advocacy at the Small Business Administration, "a Bush holdover because the Obama folks haven't begun to staff" the agency. He didn't say where the other comments originated.
"The bottom line is that OMB would have not concluded review, which allows the finding to move forward, if we had concerns about whether EPA's finding was consistent with either the law or the underlying science," Mr. Orszag said.
Mr. Barraso called the document a "smoking gun" that shows the endangerment findings "were political, not scientific."
The White House legal brief starts by questioning the link between the EPA's scientific argument for endangerment and its political summary, raising concerns about the evidence presented. It also warns of a cascade of unintended regulatory consequences.
The head of the U.S. Chamber of Commerce's environment and regulatory affairs, William Kovacs, said the memo "confirms almost everything we've been saying on the spillover effects of regulating greenhouse gases." He said the document exposes the administration and the EPA to litigation if it finalizes the endangerment finding and begins to regulate greenhouse gases under the Clean Air Act, particularly because it was drafted during the deliberation process.
House Minority Leader John Boehner (R., Ohio) said the disclosure of this document "suggests that a political decision was made to put special interests ahead of middle-class families and small businesses struggling in this recession."
Frank O'Donnell, head of the environmental group, Clean Air Watch, called the document "nothing short of a direct attack on the EPA's proposed finding.
"It is very clear from this that the Obama administration contains people who are trying to sabotage the administration's climate strategy...(and) there are a lot of knives within the bowels of the bureaucracy," he said.
Write to Ian Talley at ian.talley@dowjones.com