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Manufacturing an Argument: TX Takes Challenge Against EPA Greenhouse Gas Regulations to Supreme Court

The Texas Association of Business (TAB) has written an amicus brief in support of the challenge against new Environmental Protection Agency greenhouse gas regulations. In October, the Supreme Court decided to take up the challenge's claim that the EPA has misinterpreted their Clean Air Act regulatory authorization since implementing new vehicle emission standards. The specific issue is the "Triggering Rule," by which the EPA can require reduced emissions from existing plants if they are found to be in violation of new standards. All other claims in the lawsuit were not accepted by the Court.

Attorney General Abbott and Rick Perry helped launch the challenge in 2011, claiming the regulations would harm Texas' economy by hampering business. The support of TAB, a corporate-conservative Texas political organization run by Bill Hammond, is an obvious one. But it's worth evaluating because it encompasses the arguments that opponents have offered against the improved safety standards.

"These proposed regulations could be devastating to our Texas economy and to employers across the state," said TAB President and CEO Bill Hammond.  "We believe this brief effectively points out a number of ways these regulations will threaten our economy in Texas and the rest of the country."

TAB argues the regulations will create a "chilling" effect on business expansion:

Although the Agency claims that small sources obtained 'relief' when EPA delayed their regulations until 2016, small businesses are neither relieved nor comforted by the deferral. The eventual regulations produce a 'chilling effect' that inhibits expanding operations, entering into new markets, and developing new products.

Note that there are no specifics at all given. Reducing the amount of lethal greenhouse gases (lethal to humanity, that is) is as necessary for the public good as lawfully required fire extinguishers in factories.

The brief takes issue with the new "Triggering Rule," by which the EPA can require reduced emissions from existing plants if they are found to be in violation of new standards. Objectively, it's hard to argue that existing plants who pollute heavily should be allowed to continue while new plants aren't allowed to.

The Triggering Rule is economically remarkable not only because of the scope of expanded regulatory authority — in terms of the over 6 million facilities potentially subject to regulation by the programs for the first time — but also because of the type of regulation (PSD and Title V permitting) that those entities would face...extremely burdensome on the applicant. In 2004, EPA calculated that a PSD permit costs an applicant an average of $125,120 and requires 866 hours for the applicant to complete. Moreover, in the Tailoring Rule, EPA admitted that "a literal application of the title V applicability provisions to all GHG sources would result in permitting delays of some 10 years," even though the statute requires resolution in 18 months.

The argument is as empty as it seems: because of a 2004 estimate, the cost of applying for emission level approval is too high. That's it. The Tailoring Rule critique up there is simply a bending of words. The EPA seems to have been saying that they will resolve permitting delays in a year and a half, because they will work efficiently.

Then, the threats begin.

Most importantly, the brief demonstrates the extraordinary economic burdens the Agency's scheme will impose on American businesses, large and small alike.  These include higher energy costs and higher prices for essential goods and services. Although EPA claimed that America's large businesses will not sustain "direct" economic burdens, the Agency failed to consider the indirect burden of higher prices caused by, among other things, the shutdown of many existing power plants fired by coal.  EPA also failed to consider how these and other increased costs for essential goods and services will burden the small businesses and consumers who must ultimately absorb them. This economic reality undermines the Agency's claim that its regulations are 'not expected to result in any increases in expenditures by any small entity.'

Above is a threat against the American consumer with significantly higher prices, and a ridiculous one at that. It's just not how capitalism works. TAB may prefer a crony capitalist government that picks its favorite corporations based on political donations, but millions of Americans still believe in an open, competitive market. The wild idea that this market will stop existing if the new regulations are implemented is plainly desperate. American businesses in every sector have always adjusted to new safety regulations and competition has continued unabated. This is the nature of American business. American law (written for the American people) must be followed completely, by businesses just as much as citizens. And it works well for us.

TAB's last argument:

In our free enterprise system, law and economics are inextricably intertwined.  This is especially true when regulatory policy is concerned.  Here, EPA has promulgated new laws without adequately considering their economic effects.  EPA's legal decisions should not be evaluated in an economic vacuum.  The Supreme Court should return the Agency's exercises 'back to the drawing board' — with instructions to consider the practical economic effect of its policies before endangering the nation's economic health and welfare."

Law and economics may be intertwined, but economic concerns should never take precedence over good public policy. Every law passed in America should be written with the benefit of the American people (and sometimes the world's, too) as its goal. The benefit of having clean air, water and a sustainable ecosystem outweighs the legless concerns voiced by TAB. Warning against phantom "economic effects" to sway the Supreme Court is an effort to deny the American people regulations that will unquestionably help the country move forward.

Abbott hopes that in the challenge's last stand at the Supreme Court, the judges will rule that the EPA had no right to apply its greenhouse gas regulatory authority more broadly than it had been before, because Congress didn't pass an additional law directing the EPA to do so. But the Clean Air Act gives the agency authority to enact new standards and apply them equally across the country — the EPA is acting exactly as agencies are designed to. TAB can't even point to a reason it doesn't. If Abbott want to imply that the EPA has no authority to regulate pollutants in this country, he might as well throw his favorite argument against gravity in as well.

Abbott and Perry's help launching the lawsuit in 2011 was based on the claim that Texas' economy was facing harm from the new regulations. Their refusal to issue lawful permits for two years has in fact harmed the economy. Deciding not to issue permits based on the new regulations has hampered the expansion of Texas factories. Only last week did the Texas Commission on Environmental Quality begin issuing permits in accordance with the 2011 standards.

"Texas initially refused to operate the program which left manufacturers, power plant developers — anybody with big factories that wanted to expand — completely in the lurch because you cannot build those things unless there is someone there to write the permits," said David Doniger, policy director for clean air issues at the Natural Resources Defense Council.

This is not just hypothetical; many Texas businesses are comforted by the implementing of the regulations so they can move their business forward. "It'll be a more certain, more prompt and less expensive process for us," said John Fainter with the Association of Electric Companies of Texas.

That's right: in addition to harming Texans' general livelihood outright, Abbott and Perry have clamped down on Texas' economy.

Hopefully, news will spread soon that their crusade against securing Texans' future has failed.

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