The EPA declared carbon dioxide a health hazard, allowing it to regulate CO2 emissions from power plants and factories. Industry groups argue this will drive up energy costs and potentially impact business decisions and competitiveness. They prefer Congress pass climate legislation to reduce emissions in a more strategic way and lessen the impact on consumers. Legal challenges to the EPA's decision are expected.

1. This article illustrates how new regulations regarding CO2 emissions will drive up energy costs
12/8/2009 4:34 PM
By Julie Schmit, USA TODAY
The latest step by the government to regulate carbon dioxide emissions saddles industry with uncertainty
and potentially higher costs, industry groups said Monday after the Environmental Protection Agency
declared carbon dioxide a health hazard.
The EPA's decision paves the way for new regulations on carbon dioxide emissions from power plants
and factories even if Congress doesn't pass legislation to do so.
EPA RULING: Regulation of greenhouse gases approved
If nothing changes, the EPA, sometime next year, could require big carbon emitters – such as power
plants, steel mills, cement makers and others – to put the best available equipment on new and modified
plants to curb emissions.
Industry groups say EPA regulation would eventually drive up energy costs, lead to lost jobs and delays
in project permits and construction. More immediately, "This adds more uncertainty and could impact
how companies make decisions," says Keith McCoy, vice president of the National Association of
Manufacturers.
Instead of EPA regulation, industry wants Congress to pass climate change legislation to limit carbon
emissions – a stance also taken by the EPA and the White House. Such efforts are underway in the House
and Senate.
That way, emission cuts could be made more strategically and "soften the impact on consumers," says
Dan Riedinger of the Edison Electric Institute, a power industry trade group. He says energy costs will
"go up more under EPA regulation."
As a result of EPA regulation, U.S. companies could also face higher operating costs than foreign
competitors, says Larry Kavanagh of the American Iron and Steel Institute. The institute wants
legislation crafted to help U.S. companies stay competitive – while still cutting emissions – via trade
measures, rebates and other incentives.
Congress could override EPA's regulations or retain them.
Either way, the "train is moving down the tracks" to regulate emissions, says David Doniger of the
Natural Resources Defense Council, an advocacy group. He says that's key "to rebuilding the economy
along clean-energy lines."
The EPA's decision is expected to face legal challenges. Shortly after the announcement, the Competitive
Enterprise Institute, a public interest group, said it would file a lawsuit to overturn the EPA's finding on
the grounds that EPA ignored scientific issues around global climate modeling.
The carbon dioxide decision comes seven months after the Obama administration set national rules to
improve auto fuel efficiency nearly 40% by 2016, which would reduce tailpipe emissions. Given a
Supreme Court ruling, the EPA's finding on carbon dioxide is needed before it can regulate carbon
dioxide emissions from autos, factories and power plants.