On July 11, the head of the U.S. Environmental Protection Agency publicly refused to address global warming pollution despite a 2007 Supreme Court decision affirming EPA’s broad power to act under the nation’s clean air laws.
Instead, EPA Administrator Stephen Johnson defiantly slammed the door on meaningful action in the nation’s fight against global warming during the remainder of the current administration.
“This administration has turned its back on a golden economic opportunity, choosing instead to keep walking the path of costly delay,” said Nathaniel Keohane, PhD, EDF director of economic policy and analysis. “EPA’s own analysis says reducing heat-trapping pollution from motor vehicles would ultimately save American consumers over a hundred billion dollars a year at the gas pump.”
A May 30, 2008 leaked version of the EPA document estimated that cutting greenhouse gases from motor vehicles would result in net benefits as high as $2 trillion dollars, in present value terms, over the next three decades. Those estimates take into account the costs of the regulation, and include fuel savings to consumers as well as the economic benefits from reducing greenhouse gas emissions.
The final draft released today, however, leaves out the benefits of addressing global warming, and assumes that gasoline prices will be just over $2 per gallon for the period 2010-2020. As a result, today’s analysis radically diminishes the value of action and instead states that the “net present value to society could be on the order of $340 to $830 billion without considering benefits of GHG reductions.” (Pages 239-240)
The document nonetheless confirms the unequivocal authority of the agency to take meaningful action to address climate change, including the use of a cap and trade system to cost-effectively cut emissions.
“It’s up to the next President, regardless of party, to move forward where this administration has denied the science and defied the law,” said Steve Cochran, Director of the National Climate Campaign at EDF. “By working with Congress to enact a national climate policy while moving forward aggressively under existing law, he can reap the economic and environmental benefits shown by every credible analysis, including EPA’s.”
Background:
Supreme Court Decision and EPA’s Broken Commitment to Respond
On April 2, 2007, the U.S. Supreme Court rejected the EPA’s refusal to address global warming pollution under the Clean Air Act, finding that the statute clearly empowered EPA to address greenhouse gas emissions. In an opinion written by Justice John Paul Stevens, the high Court instructed EPA to determine whether global warming pollution endangers human health or welfare and, if so, to establish greenhouse gas emission standards for motor vehicles.
In the immediate aftermath of the Supreme Court decision, EPA Administrator Stephen Johnson repeatedly enunciated a commitment to take action. Johnson testified before a November 2007 Congressional Committee hearing: “The EPA plans to address the issue of endangerment when we propose regulations on greenhouse gas emissions for motor vehicles and fuels later this year.” “EPA is firmly committed to addressing the long-term challenge of global climate change.” To carry out the Administrator’s commitment, some 60 to 70 EPA officials were working on corrective action in response to the Supreme Court decision.
But on March 27th the EPA Administrator reversed course and informed Congressional leaders that EPA will take no meaningful action in response to the Supreme Court. Today Johnson disparaged the nation’s clean air laws, defied the Supreme Court and closed the door on EPA action to address greenhouse gases in the current Administration.
Leaked Draft Estimates Trillions of Dollars in Net Benefits Due to Greenhouse Gas Emissions Cuts
But a May 30th leaked version of the document propounded today shows the extraordinary benefits to society of reducing greenhouse gases from motor vehicles. The draft estimates net benefits from EPA’s proposed approach of $0.5 to $2 trillion dollars in present value terms through the year 2040. (The low end of the range discounts benefits and costs in future years at 7% per year, while the higher end of the range uses a 3% discount rate, giving more weight to future benefits.)
“Our work to date indicates that there are significant reductions of GHG emissions that could be achieved for passenger cars and light-duty trucks, up to 2020 and beyond, that would result in large net monetized benefits to society. For example, taking into account specific vehicle technologies that are likely to be available in that time period and other factors relevant to motor vehicle standard-setting under the CAA, EPA’s analysis suggests that substantial reductions can occur where the cost-per-ton of GHG reduced is more than offset by the value of fuel savings, and the net present value to society could be on the order of $0.5 to $2 trillion….” (EPA 5-30-08 DRAFT at p. 92, available from EDF contacts.)
Although EPA does not provide a precise breakdown of the benefits, the analysis notes that in the year 2040, the estimated economic benefits of reducing global warming pollution amount to $67 billion (for an estimated reduction of 635 million tons of CO2). This amounts to roughly one-quarter of the net benefits in that year, with the remainder representing savings at the gas pump.
The final draft released today, however, leaves out the benefits of addressing global warming, and assumes that gasoline prices will be just over $2 per gallon for the period 2010-2020. As a result, today’s analysis radically diminishes the value of action and instead states that the “net present value to society could be on the order of $340 to $830 billion without considering benefits of GHG reductions.” (Pages 239-240)
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