On Sept. 28, Senate Republicans, joined by four Democrats, blocked tax legislation that would have punished U.S. firms that export jobs. Even if the proponents of the failed bill are correct in asserting that the current environment encourages U.S. companies to send jobs abroad, the result would be small potatoes compared to the havoc the Environmental Protection Agency (EPA) is about to wreak on the U.S. economy beginning in January unless Congress takes action to stop it.
At issue is the EPA's designation of "greenhouse gases," e.g., carbon dioxide, as pollutants subject to EPA regulation in accordance with the Clean Air Act. The EPA ploy is the Obama administration's response to Congress' failure to pass a broad climate bill that would include provisions such as "cap-and-trade" to reduce carbon-dioxide emissions.
In fact, such an interpretation is a naked power grab by the EPA that has the potential to damage the U.S. economy badly. Job loss will be just one consequence of this ill-advised scheme.
There are many reasons for Congress to resist this abomination. For one thing, the term "greenhouse gases" does not appear anywhere in the Clean Air Act, confirming that Congress never intended this legislation to be used to regulate carbon dioxide emissions and the like. Certainly, no previous administration has interpreted the Clean Air Act as a mandate to regulate such emissions. In any event, a constitutional perspective suggests that Congress, not unelected bureaucrats, should be setting U.S. policy.
For another, the agency did not employ the usual clinical studies or toxicological data to determine the actual threat to human health and the environment. Finally, recent revelations of fraud and misrepresentation in climate research have called into question the scientific basis of anthropogenic climate change, which the EPA regulations presumably are intended to counter.
But the main reason to resist this EPA power grab is the adverse impact it will have on the U.S. economy. The new EPA regulations will raise energy costs for companies and create additional investment uncertainty, reducing their competitiveness in international markets and driving jobs overseas. They will also drive up prices for consumers. Meanwhile, there will be little if any reduction of global greenhouse gas emissions.
The fact is that U.S. firms have done a remarkable job of reducing greenhouse gas emissions without the EPA's heavy-handed regulatory intrusion. This is because market economies have an incentive to adopt technologies that reduce carbon emissions. As a forthcoming Heritage Foundation study demonstrates, market economies have a much lower carbon intensity (carbon emissions per unit of production) than those economies in which an activist government plays a more intrusive role. Unfortunately, the EPA power grab suggests that the United States is moving in the latter direction, following what Friedrich von Hayek, a Nobel laureate in economics, called the "road to serfdom."
The best alternative for Congress would be to deny the EPA the authority to enforce the new regulations at all. Unfortunately, such a proposal was defeated in the Senate in June. Under the circumstances, the next best approach is one that is favored by a number of Democrats, including Sen. John D. Rockefeller IV of West Virginia, Sen. Jim Webb of Virginia and Sen. Ben Nelson of Nebraska, to delay implementation of the new regulations for two years.
The American economy has undergone a number of shocks over the past two years. It can't afford another one, especially one of this magnitude.
Mackubin Thomas Owens is professor of national security affairs at the U.S. Naval War College and editor of Orbis, the quarterly journal of the Foreign Policy Research Institute.
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