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Summary

As Congress considers legislation to reduce the greenhouse gas (GHG) emissions that contribute to climate change, attention has focused on cap-and-trade legislation. Such legislation would set a national cap on GHG emissions, with allowances (permits) to emit limited amounts of the gases distributed or auctioned to affected parties. Recently, there has also been discussion of taxes on greenhouse-gas-emitting substances (generally referred to as a carbon tax), which proponents argue would provide greater transparency and a clearer price signal. However the arguments over these options play out, enacting greenhouse gas controls is not simply a choice between cap-and-trade and carbon tax options. A third set of options, using the more traditional regulatory approaches of the Clean Air Act (CAA), is available. Unlike a cap-and-trade system or a carbon tax, regulation under the Clean Air Act does not require new Congressional action. The ability to limit GHG emissions already exists under various CAA authorities that Congress has enacted, a point underlined by the Supreme Court in an April 2007 decision (Massachusetts v. EPA). Thus, controlling GHGs could follow a two-track approach, with Congress and the Administration pursuing new legal authority (for cap-and-trade, carbon tax, or whatever) at the same time that the Administration, through the Environmental Protection Agency (EPA), exercises existing authority under the Clean Air Act to begin regulation of greenhouse gas emissions. The key to using the Clean Air Acts authority is for the EPA Administrator to find that GHG emissions are air pollutants that endanger public health or welfare. Administrator Jackson proposed such an endangerment finding, April 17. A 60-day public comment period will begin upon publication of the draft finding in the Federal Register. Once an endangerment finding is finalized, the agency can proceed to regulate emissions from various sources of GHGs. EPA has received eight petitions asking that it make such findings and proceed to regulate emissions from mobile sources, including motor vehicles, aircraft, ships, nonroad vehicles and engines, and fuels, under Title II of the Clean Air Act. This report discusses EPAs authority under Title II and provides information regarding the mobile sources that might be regulated under this authority. Among these sources, motor vehicles (passenger cars and light trucks, including SUVs) are assumed to be the most likely initial targets for regulation, both because a petition addressing these sources began EPAs consideration of the endangerment issue, and because these are the most significant GHG emission sources among those covered by Title II. Regulation of GHGs from mobile sources might also lead the agency to establish controls for stationary sources, such as electric power plants. That option, the authority for which would come from different parts of the Clean Air Act, is not addressed in this report.

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