EPA Ruling on Global Warming — Big Changes Are Comming in the Economy

As Tim Hurst is already reporting elsewhere on Red Green and Blue, the EPA has now declaratively, authoritatively stated that

Global Warming is a health hazard.

One of the nicer Friday News Dumps, this decision comes as a welcome and long overdue shift in government activity on carbon and other global warming gasses.  The timing of the announcement, especially under the cover of Obama releasing torture memos from the Bush administration, is interesting — it’s already becoming a regular thing for this administration to give it’s opponents a few things to chew on in a very short period, and I would bet that many people are more fired up about the torture thing then this EPA ruling.

On the other hand: this is a big deal for everyone, be you tree-hugger or capitalist overlord, because the new set of rules for how the country is going to respond to the climate crisis is coming into focus.

The announcement come, by the way, almost two years to the day from when the Supreme Court ruled the the EPA was allowed to do something like this: regulate greenhouse gas emission if human health is endangered by global warming pollution.  A Bush administration choose to sit on that ruling, and was reticent to make any move that would bring about a regulatory system on carbon, but an Obama EPA seems more willing and more able.

From pretty much every angle, this is a big victory for any environmentalist who thinks, like I do, that the government has been horribly negligent in moving on regulating carbon emissions.  If Obama does nothing else for the cause of environmentalism, he will at least have moved us into a stage where we no longer wait around for corporations to decide they should probably do something.  Enforcement is in, which means…

This ruling essentially guarantees a carbon cap and trade program of some sort.

For all those Wall Street types sitting around and waiting for a compliance market to bust open, this ruling means that the government has a green light to go farther and faster in regulating carbon emissions then ever before.

From Politico.com’s Lisa Lerer:

“It is now no longer a choice between doing a bill and doing nothing,” said Energy and Environment Subcommittee Chairman Ed Markey (D-Mass.). “It is now a choice between regulation and legislation. EPA will have to act if Congress does not.”

Obama’s administration has already stated that they want to get real climate legislation through before the big Copenhagen conference on carbon in December (which is sure to open up a whole new can of worms when it comes down to U.S. versus world).  Maybe he can use this ruling as a stick to get congress moving: if you don’t do this voluntarily, the EPA will do it for you!  And you wont like it!

Most if not all Republicans and a handful of Democrats in the House and the Senate are worried that a carbon cap and trade program is going to be more then the current economy can bear, and that any attempted turn around will be killed before it can ever get to its feet.  There will still be quite a lot of fight on this over the upcoming months, and it will be interesting to see how much more the EPA has to flex their muscle and how much the legislative branch takes on themselves to get done.

Either way though, an open market on compliance carbon offsets isn’t going to develop until all the rules are set: this move by the EPA is a huge piece of that puzzle and should speed up the otherwise glacial pace that congress seems to deal with Climate Change issues — in turn opening up speculation.

Wall Street Pro and Con

And with speculation, as we all know, comes markets… and capitol.  As much as my knee jerk reaction right now is away from the sort of free flowing speculative market that brought about the sub-prome housing crunch, there can be no doubt that markets in offsets will make building and creating offsets a more profitable endeavor.   Which only continues my on-again, off-again relationship with money as motivating factor.  So, as everyone gets either excited or incensed by this EPA ruling, look for another set of regulations that will be very interesting and very important: how will this administration police these new financial markets?

Image from Flickr user Cheezepie

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