US Announcement Good for Global Agreement

The biggest news out of Copenhagen on Monday did not originate in the Danish capital, but rather from Washington DC, where the US Environmental Protection Agency declared that Carbon Dioxide and the five other major greenhouse gas emissions are harmful to human and environmental health. The annoncement makes the creation of a binding global agreement more likely, even if it doesn’t occur at this summit.

Even with President Obama joining over a hundred leaders in the high-level talks starting next week, the entire world is fully aware that the climate change legislation currently making its way through Congress faces significant challenges in the Senate, where there are enough Republicans and Democrats in coal-producing states to scuttle any significant attempt at passing a strong bill.

The announcement from the EPA changes that by making it unnecessary to pass any new laws. By classifying GHGs as ‘harmful’, the EPA can use the powers it already has under Nixon’s Clean Air Act to regulate emissions without any prior approval from the US Congress.

Consider this move by the Obama administration as a warning shot to the Senate: You can pass a climate change bill that includes cap-and-trade and other similar methods or the EPA will force emissions reductions the old-fashioned way – with no significant measures to help emitters reduce costs and create jobs.

As a participant and a service provider in the North American carbon market, you can imagine what my preference would be. But the climate would benefit either way.