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What The EPA's New Tailoring Rule Is All About

Looming in the background of the congressional debate on climate change is the fact that the EPA still has the authority to regulate greenhouse-gas emissions on its own, under the existing Clean Air Act. I outlined how that might work here. Short answer: It's complicated, and not perfect from an environmental perspective, though feasible. On the flip side, though, a lot of business groups really dislike the idea of a federal agency crafting its own rules on CO2 emissions—obviously they'd rather have Congress shape the policy and hash things out with lobbyists.

Still, so long as the Senate dithers, the EPA has to move ahead, as per the Supreme Court's orders. And today it just took a major step on that front by issuing its long-awaited "tailoring rule." This is a slightly complicated subject, but here's the rough idea. Currently, under the Clean Air Act's New Source Review program, if you try to either build a new facility or upgrade an existing plant, and it's expected that the plant will emit a certain amount of pollutants—usually 100 to 250 tons per year is the threshold—then you have to apply for a permit from a state agency and show that you're using the "best available control technology" to restrict that pollution.

Now, here's where things get tricky: That 100-250 ton threshold is fine for stuff like lead or sulfur dioxide, since 100 tons per year is an enormous amount of lead, and it ensures that only the very largest polluters get regulated. But 100 tons per year isn't a whole lot of carbon-dioxide. If the EPA used this existing program to tackle greenhouse gases, about six million different facilities could potentially have to apply for permits, including some buildings that burn heating oil and conceivably a bunch of small businesses or churches or what have you. And then we get a big bureaucratic nightmare and a public backlash and things get hideous fast.

So, to avoid that apocalyptic scenario, the EPA just announced that, for now, the only entities that will be covered will be polluters who already have to apply for permits for other pollutants (like lead and sulfur-dioxide) and who emit more than 75,000 tons of greenhouse gases per year. That standard will apply to only about 550 big polluters in the entire country. After that, for the next two years, any new power plant expected to emit more than 100,000 tons of greenhouse gases per year will get covered. (This will pretty much cover all new coal plants, most of which can be expected to emit tens of millions tons of CO2 each year.) Those plants will have to employ the best available control technology—although no one knows yet what that means. Becoming more efficient? Co-firing biomass? Switching to natural gas?

So a couple of things are happening here. One, it's now going to be very tough for new coal-fired power plants to get built in the United States. Given that those plants are a major source of carbon pollution, that's a significant step. Second, the EPA's clearly pressing ahead with its own regulations—and that might give the Senate the kick it needs to pass a climate bill. But the agency's also being cautious and moving very deliberately on this stuff—indeed, it's backing off from it's previously planned 25,000-ton threshold. No doubt Lisa Jackson's trying to avoid a hostile reception from senators like Lisa Murkowski, who has been insisting that EPA rules would throttle the economy and has threatened to pass a bill stripping the agency of its carbon authority. There's a fine line the EPA has to walk here.