A Surprise from the Environmental Protection Agency?

Even if Congress doesn’t act in 2008, the Environmental Protection Agency may.

The Supreme Court in April of 2007 in Massachusetts v. EPA held that carbon dioxide and the other greenhouse gases are pollutants and therefore within the scope of the Clean Air Act, under which the EPA has an obligation to protect public health and welfare.

About a month later, President Bush issued Executive Order 13432 authorizing the EPA to move ahead with regulatory proceedings in response to the court ruling.

At the end of the year, I believe the EPA will issue a program in response to the Supreme Court decision. Unlike the energy legislation which Congress recently passed which tightened fuel-economy standards, and unlike the provisions of the energy legislation which require increased production of biofuels, the EPA’s approach will be based not on a focus on fuel economy, but on health and welfare.

The Clean Air Act requires an integrated approach to address automobile emissions that affect climate, so the EPA will need to regulate both cars and fuels. What the EPA comes out with — probably just after the election — could be a blockbuster and increase the pressure on Congress to act in 2009, if it has not acted in 2008.