Bureaucratic micromanagement of the economy, all in the name of fighting global warming, would likely be the end result of the Environmental Protection Agency’s (EPA) endangerment finding on greenhouse gases. The White House Office of Management and Budget completed its interagency review of the EPA’s proposed finding, and it is now a matter of time (tomorrow or next week) before the endangerment finding is officially released. In essence, the endangerment finding says that global warming and climate change pose a serious threat to public health and safety and thus almost anything that emits carbon dioxide and other greenhouse gases could be regulated under the Clean Air Act.

The endangerment finding is the first step in a long regulatory process that could lead to EPA requiring different regulations and units of emissions requirements for each gadget that emits carbon dioxide. The first target would be automobiles, but the EPA’s Advanced Notice of Proposed Rulemaking (ANPR) suggested regulations of almost everything that moves, including new regulations smaller items such lawnmowers and forklifts. The ANPR also suggests putting speed limiters on large trucks on the table as a means of reducing carbon dioxide and even suggested sharkskin boats oozing bubbles to reduce emissions from the shipping industry. You can’t make this stuff up. EPA states that

Innovative strategies for reducing hull friction include coatings with textures similar to marine animals and reducing water/hull contact by enveloping the hull with small air bubbles released from the sides and bottom of the ship.”

Beyond things that move, the agency could go after things that stand still. More than a million energy using businesses, buildings, and farms could also be hit with crushing administrative burdens and costly controls. And even if EPA decides not to go that far, they will almost certainly be sued into doing so.

For the very reasons that any effort to substantially curtail such emissions would have extremely costly and disruptive impacts on the economy and on living standards, Congress has been reluctant to enact policy to reduce greenhouse gas emissions. In fact, last June America’s Climate Security Act, which outlined a cap-and-trade proposal to reduce greenhouse gas emissions, was withdrawn by its Senate supporters after only three days of debate. A Heritage Foundation analysis detailed the costs of the bill, which included a 29 percent increase in the price of gasoline, net job losses well into the hundreds of thousands, and an overall reduction in gross domestic product of $1.7 to $4.8 trillion by 2030. Little wonder opposition is also building to the Waxman-Markey discussion draft, likely to become the lead cap-and-trade bill in this House, which has even more stringent targets than previous measures.

An endangerment finding would bypass legislative authorities and allow the EPA to regulate carbon dioxide under the Clean Air Act. Since the agency literally could be micromanaging the economy through costly regulations, clearly this would take months, if not years, to finalize. However, the economic damage would be similar to any carbon capping bill passed by Congress and perhaps even worse. Dr. David Kreutzer and Dr. Karen Campbell of The Heritage Foundation’s Center for Data Analysis found the economic costs of EPA regulations to be:

• Cumulative gross domestic product (GDP) losses are nearly $7 trillion by 2029 (in inflation adjusted 2008 dollars)
• Single-year GDP losses exceed $600 billion (in inflation-adjusted 2008 dollars).
• Annual job losses exceed 800,000 for several years.
• Some industries will see job losses that exceed 50 percent.

Senior Policy Analyst Ben Lieberman writes,

Virtually every concern heightened by the economic downturn, especially job losses, would be exacerbated under EPA global warming regulations. As with cap-and-trade legislation, the EPA’s suggested rulemaking would be poison to an already sick economy. But even in the best of economic times, this policy would likely end them.”

Ben Lieberman co-authored this post.