In the News

“In the Bush administration, the problem was that the political folks were hostile to the mission,” said Michael A. Livermore, executive director of the Institute for the Study of Regulation at New York University Law School. “We’ve already seen the new direction of this White House play out in other regulatory aspects — the Environmental Protection Agency and financial regulation. With the consumer protection agencies, you’re going to see a lot more stuff happening because they fit Obama’s broad vision for government.”

The Obama administration has warned it could use the Environmental Protection Agency to help cut carbon emissions if Congress drags its heels, but legal and logistical problems could thwart that strategy. Environmental groups, like the Sierra Club, and legal experts, such as those at New York University’s Institute for Policy Integrity, have said the EPA could get around Congress and create a national cap-and-trade market on the emissions.

One the same day that the US Senate announced its version of climate change legislation the EPA announced new action limiting greenhouse gases by big emitters. Mike Livermore, the executive director of the Institute for Policy Integrity at New York University’s School of Law and Bill Snape, the senior counsel for the Center for Biological Diversity, connects the dots for national, and international, action. Host Daphne Wysham wrote an editorial on this issues at Alternet.

Since EPA is legally bound to regulate vehicle fuel emissions, their new standards are a reasonable step. But it is an example of the kinds of command-and-control regulations that should be used only sparingly to address climate change.

The Washington Post ran an interesting editorial yesterday on regulating carbon—interesting, but ultimately wrong. The Post is correct that putting a price on carbon is the surest way to reduce greenhouse-gas emissions, and that it would be preferable for Congress to do this through legislation. But the editorial was wrong to say the EPA could not efficiently regulate carbon on its own. In fact, if Congress can’t pass a climate bill this year, this is exactly what the Obama administration should do.

Recently, the Wall Street Journal reported that the benefits of Waxman-Markey greatly outweigh the costs. The Journal highlights a new cost-benefit analysis of the House bill by the New York University Law School’s Institute for Policy Integrity. The NYU study finds that finds that the benefits outweigh the costs by 9:1 Based on a middle-of-the road estimate, potential benefits add up to about $1.5 trillion over the next 40 years.

Tucked into that estimate is a calculation that represents the first time the agency has put a dollar amount on the cost of greenhouse gas emissions, according to New York University’s Institute for Policy Integrity. Edna Ishayik, a spokeswoman for the institute, said EPA chose figures on the lower end of an already “conservative” range of $5 to $55 per ton of carbon. “These are very conservative estimates, which is problematic because the range will be applied to every significant regulation with a climate impact,” she said in an e-mail.

A new analysis of clean energy legislation finds that it will produce likely economic benefits of $1.5 trillion. The finding by the New York University School of Law’s Institute for Policy Integrity explains that the Waxman-Markey American Clean Energy and Security Act (H.R. 2454) is “cost‐benefit justified under most reasonable assumptions about the likely ’social cost of carbon.’”

While reducing greenhouse gases will have costs, so will the results of climate change. That may seem obvious, but up until now the debate over climate legislation has only focused on the costs, without looking at the benefits. Last week, a federal interagency taskforce released preliminary findings that began to set a dollar value for the negative effects of climate change. Often referred to as “the social cost of carbon,” this estimate is key to exposing the hidden costs of a high-carbon economy. If we only focus on the costs of cutting greenhouse gas emissions, we are seeing only half the story—inaction on global warming will lead to a greater economic hit than the price tag on the Waxman-Markey bill.

The Institute for Policy Integrity on Sept. 8, however, released The Other Side of the Coin: The Economic Benefits of Climate Legislation, an analysis that the group says uses EPA’s current cost estimates of the House climate bill and the interagency estimates to draw conclusions about the net benefit from the legislation. The analysis states that the break even point for the social cost of carbon—beyond which the legislation passes a cost-benefit test—ranges from $7.70 to $8.97 per ton of carbon dioxide.