White House memo challenges EPA finding on warming

[May 13, 2009]  WASHINGTON (AP) -- An Environmental Protection Agency proposal that could lead to regulating the gases blamed for global warming will prove costly for factories, small businesses and other institutions, according to a White House document.

The nine-page memo is a compilation of opinions made by a dozen federal agencies and departments during an internal review before the EPA issued a finding in April that greenhouse gases pose dangers to public health and welfare.

That finding could set in motion for the first time the regulation of six heat-trapping gases from cars and trucks, factories and other sources under the Clean Air Act.

The document, labeled "Deliberative-Attorney Client Privilege," says that if the EPA proceeds with the regulation of heat-trapping gases, including carbon dioxide, factories, small businesses and institutions would be subject to costly regulation.

"Making the decision to regulate carbon dioxide ... is likely to have serious economic consequences for regulated entities throughout the U.S. economy, including small businesses and small communities," the document says.

An official with the Office of Management and Budget, which compiled agency opinions on the EPA's proposed finding, said the cost critique came from the Office of Advocacy at the Small Business Administration. The official, who asked to remain anonymous to avoid harming the integrity of interagency reviews, said the SBA office was under the direction of a Bush administration appointee who had not yet been replaced.

The appointee in question, Shawne McGibbon, was promoted to acting chief counsel at the advocacy office in November 2008 by President George W. Bush. But she was initially hired on at the office in 1994 during the Clinton administration.

On his blog Tuesday, OMB Director Peter Orszag reiterated that his office did not object to the EPA finding.

"The bottom line is that OMB would have not concluded review ... if we had concerns about whether EPA's finding was consistent with either the law or the underlying science," Orszag wrote.

When the Bush administration unveiled its proposal to use the Clean Air Act to regulate greenhouse gases, it released full comments from each individual agency -- many of which were critical. The Bush White House ultimately decided against using the Clean Air Act, saying it was an imperfect tool that would burden the economy.

Unlike Bush, Obama has offered an alternative -- a new law that would limit and put a price on greenhouse gas pollution.

"The president has, on many occasions, discussed the strong desire to instead seek a legislative solution for dangerous greenhouse gases," said White House press secretary Robert Gibbs.

New legislation, currently being considered by the House, would mostly pre-empt the agency from regulating greenhouse gases under existing law. The bill may also help mitigate some of the costs to businesses by distributing some of the permits for free.

Still, Republicans and business groups immediately used the document to bolster their arguments that controlling greenhouse gases would hurt the economy.

They also highlighted parts of the document that fault how the EPA reached its conclusion that greenhouse gases endanger human health and welfare, since the gases by themselves do not pose any harm.

The memo says the EPA could have been "more balanced" in its analysis by also highlighting regions of the country that would benefit from global warming, such as Alaska, which would have warmer winters. It also says the EPA seemed to stretch the precautionary principle to support regulation despite the "unprecedented uncertainty" in linking emissions of greenhouse gases and the warming that will result to health effects.

"It really appears to me that the decision was based more on political calculations than on scientific ones," said Sen. John Barrasso, R-Wyo., who called the document "a smoking gun" during a hearing Tuesday on the Obama administration's proposed EPA budget.

"The counsel in this administration repeatedly questions the lack of scientific support that you have for this proposed finding," he said.

EPA administrator Lisa Jackson responded by saying the EPA's finding in April was required by law, stemming from a 2007 Supreme Court decision that said the agency should classify greenhouse gases as pollutants. Jackson also said the agency's determination was preliminary and would not necessarily result in regulation.

"I have said over and over, as has the president, that we do understand that there are costs to the economy of addressing global warming emissions, and that the best way to address them is through a gradual move to a market-based program like cap and trade," Jackson said.

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On the Net:

Office of Management and Budget blog:
http://www.whitehouse.gov/omb/blog/

[Associated Press; By DINA CAPPIELLO]

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