WASHINGTON (June 2, 2014) – New carbon emissions regulations proposed today by the U.S. Environmental Protection Agency are likely to prove expensive and damaging to a still-fragile economic recovery, according to the R Street Institute.
The regulations, which will be subject to a one-year review period, rely on the spectacularly ill-fitting regime of the Clean Air Act to impose a 30 percent reduction in carbon emissions from electricity generation by 2030. The EPA’s new scheme comes after years of unsuccessful legal and legislative challenges to the agency’s authority.
While climate change is a pressing environmental and economic issue deserving of a public policy response, these overly prescriptive regulations likely will impose enormous costs for relatively modest emissions reductions. R Street has instead urged officials to embrace the power of the free market by utilizing revenue-neutral carbon pricing as a complete substitute for command-and-control regulation.
“Carbon pricing could allow states to kill two birds with one stone,” said Andrew Moylan, executive director of R Street. “They could achieve mandated emissions reductions through a price signal instead of complicated regulation, while utilizing all resulting revenue to eliminate or reduce taxes that are damaging to the economy. This could get EPA off their backs while securing real pro-growth tax reform.”
Moylan also pointed out that Congress’ failure to legislate has helped lead to the imposition of this expensive plan, which the U.S. Chamber of Commerce estimates will cost $51 billion annually. This is simply the latest example of growth in executive power as Congress stands idly by, Moylan said.
“The fact that Congress has proven unable to legislate effectively in this area led directly to the unworkable regulations released today,” Moylan said. “Perhaps now that EPA’s economic threat is more real, Congress will reengage with its duty to guide policies of such enormous consequence.”