The Greenhouse Protection Racket

"Are you gonna come along quietly, or do I have to let the California Air Resources Board (CARB) muss ya up?" That was pretty much the line White House energy and environment czar Carol Browner took to obtain the auto industry’s support for first-time-ever greenhouse gas emission standards and new fuel economy standards, which the EPA and the National Highway Traffic Safety Administration (NHTSA) issued in a joint rule on April Fools’ Day.

We Don’t Need No Stinking Badges

Through the joint rule, the EPA now wields the power to determine the stringency of fuel economy standards for the auto industry. Previously -- for the past three decades and more -- the EPA’s role was limited to testing automakers’ compliance with fuel economy standards. How did the EPA go from second banana to top dog?

Carbon dioxide (CO2) makes up at least 94% of all greenhouse gas (GHG) emissions from motor vehicles, and there is no commercial technology to filter or capture CO2 emissions from tailpipes. Consequently, the only significant way to reduce an automobile’s GHG emissions per mile is to decrease its fuel consumption per mile, i.e., increase fuel economy. Because miles per gallon and grams of CO2 per mile are tightly correlated, the EPA can now increase the stringency of fuel economy standards by increasing the stringency of GHG emission standards. Yet Congress authorized NHTSA to regulate fuel economy, not the EPA.

Not only does the joint rule put the EPA in the fuel-economy driver’s seat, it also expands the agency’s control over "stationary sources" such as power plants and factories. By adopting GHG motor vehicle standards, the EPA has made CO2 a "regulated air pollutant" under the Clean Air Act, which in turn makes stationary sources of CO2 "subject to regulation" under the Act’s pre-construction and operating permits programs. Potentially millions of previously unregulated buildings, farms, and small businesses face new permitting requirements.

In addition, the endangerment rule that the EPA issued in December 2009 to justify regulating GHG emissions from motor vehicles also obligates the agency to issue GHG "performance standards" for numerous categories of industrial facilities.

In short, by issuing GHG emission standards for motor vehicles, the EPA positioned itself not only to determine fuel economy standards for the auto industry, but also to set climate policy for the nation. Yet the Clean Air Act provides no authority to regulate fuel economy and says nothing about greenhouse gases or global climate change. "We don’t need no stinking congressional authority" would make a fitting motto for this rogue agency.

Mum’s Da Woid

Here’s how the regulatory extortion went down.

In February 2009, EPA Administrator Lisa Jackson commenced a rulemaking to reconsider Bush EPA Administrator Stephen Johnson’s denial of California’s request for a waiver to establish its own GHG emission standards program. Because the waiver would also allow other states to adopt the California program, because GHG emission standards are mainly fuel economy standards by another name, and because automakers would have to reshuffle the mix of vehicles delivered for sale in each "California" state to achieve the same average fuel economy in those states, Jackson’s proceeding threatened to subject automakers to an inefficient, consumer-thwarting, regulatory patchwork.

In the spring of 2009, Czarina Browner conducted closed-door negotiations with automakers, CARB Chairman Mary Nichols, the United Auto Workers, and major environmental groups. Browner required participants to take a vow of silence and forbade anyone to take notes -- an "apparently willful and egregious violation" of the Presidential Records Act. The outcome was an "historic agreement" whereby automakers would agree to support the joint GHG/fuel economy standards rule, and California and other states would deem compliance with the federal standards as compliance with their own.