February 22, 2009 CNN

US Climate Czar: CO2 Regulation Ruling To Come Soon

President Barack Obama's climate czar said Sunday the Environmental Protection Agency will soon issue a rule on the regulation of carbon dioxide, finding that it represents a danger to the public.

The White House is pressing Congress to draft and pass legislation that would cut greenhouse gases by 80% of 1990 levels by 2050, threatening to use authority under the Clean Air Act if legislators don't move fast enough or create strong enough provisions.

Carol Browner, Obama's special advisor on climate change and energy, also said the administration is seeking to establish a national standard for auto emissions that could mean tougher efficiency mandates for auto makers. The new standard could be fashioned after strict proposals developed in California that would limit greenhouse gas emissions - initiatives that car makers have vigorously fought.

The comments - the first by the administration on the topic - could lead to another blow for beleaguered car companies such as General Motors (GM) and Ford (F) that are already tottering.

"EPA's going to look at Mass. Vs. EPA and will make an endangerment finding," Browner told Dow Jones Newswires in an interview. The Supreme Court ordered the EPA in the Mass. Vs. EPA case to determine if carbon dioxide endangered public health or welfare.

"The next step is a notice of proposed rulemaking" for new regulations on CO2 emissions, Browner said on the sidelines of the National Governors Association meeting, one of her first public appearances since the inauguration.

Browner declined to say exactly when the EPA would issue the finding or rulemaking, but EPA chief Lisa Jackson has indicated it could be on April 2, the anniversary of Mass Vs. EPA. Obama EPA chief Lisa Jackson said earlier in the month that her office would soon begin drafting rules for regulating CO2. The agency has been intensely reviewing and updating an existing endangerment finding made last year by agency officials - but blocked by the previous administration - that found carbon dioxide threatened human welfare.

Officially recognizing that carbon dioxide is a danger to the public would trigger regulation of the greenhouse gas emissions from coal-fired power plants, refineries, chemical plants, cement firms, vehicles and any other emitting sectors across the economy.

Industry fears it could shut down the economy, not only preventing plants from operating and spurring a dramatic retooling of the energy sector but also pushing up costs and hurting the international competitiveness for a raft of sectors. Environmentalists, meanwhile, say action by the administration is required by law and need to pressure lawmakers to act.

But Browner said the administration prefers that Congress draft legislation rather than CO2 to be regulated under the Clean Air Act because lawmakers could develop a bill that could more deftly regulate the greenhouse gas through a cap- and-trade system.

Senate Majority Leader Harry Reid, D-Nev., said Friday he aims to pass a climate change bill by the end of the summer, and Rep. Henry Waxman, D-Calif., head of the panel responsible for drafting a CO2 bill, said he wanted a bill approved by the Memorial Day holiday in May.

Browner also declined to say what the administration's target date for Congress to pass a climate bill before accelerating the Clean Air Act rulemaking, but she called Waxman's schedule an "aggressive" one.

"In the next several weeks we will begin to see the shape of legislation...( and) we will work with Congress as they shape it," she later told a group of Western Governors.

The climate czar dismissed critics of fast, stringent climate change laws who have said that the existing financial crisis would only be exacerbated by putting a premium on emitting carbon dioxide. She said businesses hoping to invest in CO2 mitigation projects needed more certain policy signals to plow cash into projects and companies, and that the rulemaking process would create a buffer for action and compliance.

Critics of putting an expensive premium on carbon say that such a schedule may be overly optimistic given the global financial crisis and the ramifications that putting a cap on greenhouse gases would have across nearly every sector of the economy. Tough action too fast, they say, not only could curb manufacturing and create an energy crisis by halting new power plant construction, but also could force a rapid migration of businesses overseas to cheaper energy climes.

Specifically, Obama wants an economy-wide law - instead of just some major emitting sectors - and to auction off 100% of the emission credits, which analysts say could exponentially increase the cost of emitting, as well as the pay-off for low-carbon projects.

Browner also said the administration had directed the EPA and the Department of Transportation to develop a national policy for auto emissions.

The DOT is currently developing new auto efficiency standards, but the White House and the EPA are currently considering a request from California to implement their own much stricter standards, which consider greenhouse gas emissions rather than just fuel efficiency and are likely to be followed in a more that a dozen other states. The administration could seek to implement the California standards or a negotiated version of them across the country, however, Browner indicated.

"We need a unified national policy when it comes to clean vehicles," Browner told the governors, adding that the Department of Transportation and EPA needed to cooperate and determine the impact of both conventional pollution and greenhouse gas emissions and give auto makers the time and policy direction necessary to re-tool their plants.

"Both agencies have to meet their responsibilities...we're just trying to figure out how do you do it in a way that the car companies have a clear ( mandate)," Browner told reporters after the event.

Car makers have expressed concern not only about the costs of meeting the tough new standards, but also having to make cars that have to meet two different mandates.

Separately, Browner said the administration was also going to create an inter- agency task force to site a new national electricity transmission grid to meet both growing demand and the President's planned renewable energy expansion. Siting has been a major bottleneck to renewable growth, and lawmakers and administration officials have said they're likely to seek greater federal powers that would give expanded eminent domain authorities.