Landmark Emissions Ruling on the Chopping Block

U.S. Senators will have up to seven hours to debate on Thursday before voting on a resolution meant to prevent the Environmental Protection Agency from regulating greenhouse gas emissions under the Clean Air Act. Led by Senator Lisa Murkowski of Alaska and supported by at least 40 legislators, the “resolution of disapproval” (a rarely used mechanism for overturning regulations) seeks to block the EPA’s finding last year that greenhouse gas emissions are harmful to public health welfare — a landmark ruling that paves the way for the agency to regulate emissions.

EPA Administrator Lisa Jackson decried Murkowski’s resolution in a blog post today as a Big Oil-backed move that would seriously handicap efforts to improve fuel economy, reduce oil consumption and cut greenhouse gas emissions. In the context of the ongoing catastrophe of BP’s oil gusher in the Gulf, Jackson writes on The Huffington Post today that “it is surprising to learn that on June 10, the Senate will vote on legislation that would take us back to the same old failed policies and increase America’s oil dependence by billions of barrels.”

Jackson describes Murkowski’s proposal as having “strong support from big oil companies and their lobbyists,” and warns that it would “gut the EPA’s authority in the clean cars program,” allowing polluters to pay “modest penalties to avoid full compliance” with fuel economy standards.

When it comes to regulating greenhouse gas emissions, Jackson defends the EPA’s decision to focus on the largest emission producers and exempt small businesses from regulation. “We know that the local coffee shop or the backyard grill is no place to look for meaningful CO2 reductions,” she writes.

Frances Beinecke, President of the Natural Resources Defense Council, notes in a blog post today that Murkowski’s resolution would effectively sacrifice 25 percent of the fuel savings expected to result from the joint fuel economy and emissions standards finalized by the EPA and  Transportation Department in April, after winning support from car manufacturers, environmental groups and California regulators.

Under the vehicle standards finalized in April, manufacturers must achieve an average of at most 250 grams of carbon dioxide per mile for their fleet by the 2016 model year. If all of the emission reductions came from improvements in fuel economy (other options might include controlling air conditioner coolant leaks), that would mean a fleet average of 35.5 MPG — higher than the 34.1 MPG fleet average required under the DOT’s basic fuel economy standard for that year. Murkowski’s resolution would essentially wipe out the emissions piece, leaving only the more modest 34.1 MPG standard.

The resolution itself will have a tough time making it through the Senate, let alone the House, and let alone Obama’s veto — but it’s an indicator of the level of resistance to the climate and energy bill in the Senate. If passed, the resolution could potentially undermine not only the EPA’s authority, but also the already questionable prospects of a comprehensive climate bill making it through Congress this year. As Kevin Drum writes over on Mother Jones, “one thing working in favor of passage is the background threat that if Congress doesn’t act, the EPA will,” although most stakeholders, including the EPA, agree that it would be preferable (more effective and less costly) to have Congress develop “a program that’s custom built to do the job.”

For greentech ventures and their investors, all of these issues play into the prolonged quest for a solid picture of how demand for emission-reducing technologies is likely to shape up in the coming years, and how regulations will affect future costs. As David Blood of investment management group Generation Investment said early on at the climate talks in Copenhagen last year, limiting uncertainty for the business community could help to unleash innovation and a massive amount of capital. By some estimates, three-quarters of the trillions of dollars needed to remake the world’s energy infrastructure will come from the private sector.

Photo courtesy of Flickr user Beige Alert

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