The EPA shouldn’t regulate greenhouse gas emissionsDouglas Holtz-Eakin | May 5, 2011
The Environmental Protection Agency (EPA) should keep its hands off greenhouse gases (GHGs). That doesn’t mean that emissions of carbon or other GHGs aren’t important national security, business investment, or pollution policy issues — that’s for citizens and policymakers to decide on the merits. It does mean that even if one decides in favor of limiting emissions, the EPA is the wrong way to go.
For nearly a century, the research community has recognized that market-based approaches provide the best combination of environmental benefits and economic growth incentives. Permit-trading systems, deposit-refund mechanisms, taxes on environmental “bads” and other approaches provide the means to reach environmental objectives at much lower economic cost than command-and-control regulatory systems that dictate technologies and other choices, and cost jobs, investment and growth in the process. Over the years, actual public policy has caught up with best practice, notably with the “acid rain” program that controls emissions of sulfur oxides (SOx) and nitrogen oxides (NOx). The permit-trading system has solved the problem at costs well below original estimates.
At a time when jobs and growth are the top national priorities, it would be a shame to take a strong step backward by using the EPA to impose a draconian regulatory regime. Unfortunately, this is a real risk that cannot be overlooked by free-market supporters.