EPA'S ENDANGERMENT FINDING SIGNALS FIRST STEP IN REGULATION OF GHGS
December 14, 2009
By James A. Holtkamp and Emily C. Schilling Holland & Hart
Today EPA released a pre-publication draft of its final endangerment finding under Clean Air Act ("CAA") Section 202 for six greenhouse gases ("GHGs") emitted from new motor vehicles and new motor vehicle engines. Designed to coincide with the first day of the international climate change conference in Copenhagen, EPA's finding lays the necessary groundwork to finalize GHG standards for new light-duty vehicles, which will trigger a cascade of regulatory requirements that will impact virtually every industrial facility in the country.
EPA issued the finding in response to the U.S. Supreme Court’s April 2, 2007, decision in Massachusetts v. EPA, which required the agency to determine whether GHG emissions from new vehicles and new vehicle engines “cause or contribute, to air pollution which may reasonably be anticipated to endanger public health or welfare.” Consistent with its April 24, 2009 proposed endangerment finding, EPA has defined “air pollution” to include carbon dioxide, methane, nitrous oxide, hydrogenated fluorocarbons, perfluorocarbons and sulfur hexafluoride.
Today’s formal endangerment finding states that “the body of scientific evidence compellingly supports” the conclusion that these six GHGs endanger public health and public welfare. Although EPA acknowledges that existing science does not allow all risks and impacts to be quantified and extrapolated into the future, the agency points to projected adverse impacts on air quality, food production, water resources, and ecosystems; increased mortality resulting from heat waves; the risk of severe weather events; and the disproportionate impact of climate-related health effects on vulnerable populations as supporting evidence for its endangerment finding.
The endangerment finding does not itself regulate GHGs, but it does require EPA to issue standards for GHGs from new vehicles and new vehicle engines. EPA proposed GHG standards for new light-duty vehicles on September 28, 2009 and a final rule is expected by March of 2010. Once GHGs are regulated under Section 202 of the CAA, unless Congress acts, EPA must begin regulating GHGs from stationary sources and may set new source performance standards for GHGs. On October 27, 2009, EPA proposed a rule designed to regulate GHG emissions from power plants and other large industrial sources. EPA indicated that it also would be developing an approach to regulate GHGs from hundreds of thousands of small facilities and buildings that otherwise would be required to go through formal CAA permitting. The extent to which EPA can change statutory permitting requirements, however, is an open question and EPA cannot control how a federal court would rule in the event of a citizen’s suit to force regulation of all sources that emit GHGs in excess of the statutory thresholds.
Additional information on EPA’s endangerment finding can be found here on EPA's website.
The endangerment finding is subject to judicial review in the U.S. Court of Appeals for the District of Columbia Circuit. A petition for review must be filed within 60 days of publication of the finding in the Federal Register, which is expected within the next month. The CAA also provides a mechanism for parties to file a petition for reconsideration with EPA where grounds for an objection to the final rule could not be practicably raised within the public comment period, or where the grounds for the objection arose after the public comment period, and the objection is of “central relevance” to the outcome of the rule.
EPA DECISION COULD DERAIL RECOVERY, TRIGGER MORE JOB LOSSES
December 14, 2009 - NAM
EPA Administrator Lisa Jackson on December 7 announced that greenhouse gases (GHGs) threaten the health and welfare of the American people. EPA's “endangerment finding” responds to a 2007 U.S. Supreme Court decision that GHGs fit within the Clean Air Act definition of air pollutants, and it allows the agency to begin regulating carbon emissions across the board. NAM Vice President Keith McCoy says the EPA “is moving forward with an agenda that will put additional burdens on manufacturers, cost jobs and drive up the price of energy.”
EPA DECISION ON COAL ASH WOULD INCREASE ENERGY COSTS
December 14, 2009 - NAM
Key Administration officials are currently considering a proposal from the EPA that may regulate Coal Combustion Byproducts (CCBs) or “coal ash,” as hazardous waste. Stricter regulations will not only decrease available ingredients for U.S. manufacturers but will also result in higher energy prices. These higher prices would disproportionately impact manufacturing, which already uses more than one-third of all energy consumed in the United States. As the EPA evaluates its regulatory options, it is important that manufacturers weigh in with their senators and urge them to contact the Administration in opposition to the classification of CCBs as hazardous waste. To contact your senators, click here. A draft message will appear which you can edit or send as drafted.
Key Administration officials are currently considering a proposal from the EPA that may regulate Coal Combustion Byproducts (CCBs) or “coal ash,” as hazardous waste. Stricter regulations will not only decrease available ingredients for U.S. manufacturers but will also result in higher energy prices. These higher prices would disproportionately impact manufacturing, which already uses more than one-third of all energy consumed in the United States. As the EPA evaluates its regulatory options, it is important that manufacturers weigh in with their senators and urge them to contact the Administration in opposition to the classification of CCBs as hazardous waste. To contact your senators, click here. A draft message will appear which you can edit or send as drafted.
MONDAY ECONOMIC REPORT
Following generally positive news the prior week, most of last week's reports showed that the economy continued to expand in the fourth quarter.
Still, there are signs that the pace of domestic demand in the fourth quarter will likely decelerate from the third quarter, where private domestic final sales (GDP less net exports, inventories and government spending) rose by 2.1 percent. Plagued by low confidence, slow income growth and continuing job losses, consumers are aggressively working down their credit balances, especially with respect to revolving credit (i.e. credit cards). While this may be a welcome sign that consumers are no longer "living beyond their means", it also suggests that they are not confident in their future earning potential. This will likely depress spending patterns going forward.
The November retail sales report that came out last Friday buttresses this argument. While overall retail sales accelerated in November, more than 40 percent of the increase was at gasoline stations and likely driven by an increase in the price of fuel last month. In other areas, consumer spending decelerated last month and actually declined at an annual rate of 1.1 percent in the three months ending in November.
The positive news that came out last week was the continued improvements on the trade front. The OECD's Composite Leading Indicators (CLI) rose for an eighth consecutive month in October, led by gains in Europe and Asia to a lesser extent. This measure of global economic activity was above the long-term average of 100 for the second month in a row in October.
A recovering global economy, along with the competitive dollar value that ignited export growth in the third quarter, is continuing into the fourth quarter. During the three months ending in October, U.S. exports of goods increased at an annual rate of 31 percent, nearly double the pace of imports.
A recovering global economy, along with the competitive dollar value that ignited export growth in the third quarter, is continuing into the fourth quarter. During the three months ending in October, U.S. exports of goods increased at an annual rate of 31 percent, nearly double the pace of imports.
Since the Organization for Economic Cooperation and Development's (OECD) Composite Leading Indicators (CLI) measure economic activity six to nine months in the future, export growth will likely continue into 2010, which will be a welcome shot in the arm for U.S. based manufacturers and will compare very favorably to the initial stages of the economic recovery following the 2001 recession when an overvalued dollar and weak growth abroad combined to delay a meaningful upturn in exports until the second half of 2003.
Dave Huether
Chief Economist
National Association of Manufacturers
SENATE HEALTH CARE BILL ADVANCING BEHIND CLOSED DOORS
December 14, 2009 - NAM
While floor debate continued last week on Majority Leader Harry Reid's (D-NV) health care bill, more important discussions took place off the floor. A group of 10 Democratic senators have submitted a “compromise” proposal to the Congressional Budget Office (CBO) for its analysis. Their proposal would reportedly add a trigger for the “public option” if certain affordability standards are not met, allow the government's Office of Personnel Management to administer national plans through the health exchange that will negotiate rates with private insurers and expand access to eligible individuals between 55 and 64 years old to buy into Medicare. The CBO score might not be available until next week. The NAM is monitoring the debate closely and will continue to weigh in on amendments that affect manufacturers.
December 14, 2009 - NAM
While floor debate continued last week on Majority Leader Harry Reid's (D-NV) health care bill, more important discussions took place off the floor. A group of 10 Democratic senators have submitted a “compromise” proposal to the Congressional Budget Office (CBO) for its analysis. Their proposal would reportedly add a trigger for the “public option” if certain affordability standards are not met, allow the government's Office of Personnel Management to administer national plans through the health exchange that will negotiate rates with private insurers and expand access to eligible individuals between 55 and 64 years old to buy into Medicare. The CBO score might not be available until next week. The NAM is monitoring the debate closely and will continue to weigh in on amendments that affect manufacturers.
Utah Governor Gary Herbert
December 14, 2009
Feature Story – EDCUtah
Changing of the Guard
What are Utah Governor Gary Herbert's Economic Development Priorities?
When Governor Gary Herbert assumed the helm as Utah's chief executive, his opinion regarding economic development was relatively unknown. Would it be as high a priority for him as it was for former Governor and now Ambassador Jon Huntsman?
To answer that question, EDCUtah went directly to the source--interviewing the Governor about his economic development priorities for the feature story in the fall edition of EDCUtah's Site Selection Quarterly newsletter.
"I am impressed by Governor Herbert's down-to-earth nature and 'get it done' attitude, which is great for economic development," says EDCUtah President and CEO Jeff Edwards. "What's more, he has an excellent understanding of what is needed on a local level to make economic development work. His experience as a Utah County Commissioner and the Rural Partnership Board provide him with a unique perspective regarding economic development in rural Utah, as well."
Indeed, from his inaugural address to the appointment of his "dream team" to run the Governor's Office of Economic Development (GOED), Governor Herbert's message has been clear: "Utah is open for business."
"I wanted to send a strong message to the marketplace that we are going to do everything we can to energize the private sector," Governor Herbert says of his all-star appointees, or dream team: Businessman and philanthropist Spencer P. Eccles and Josh Romney. "Each of these men has an impressive resume that will resonate with businesses across the nation and the globe. Bringing them together may be one of the most important things I could do for economic development." Read the full story about Governor Gary Herbert and is economic development priorities in the Fall Site Selection Quarterly newsletter.
NAM KEY VOTES HOUSE AMENDMENT ON DERIVATIVES
December 14, 2009 - NAM
The NAM on December 10 notified all House members of manufacturers' support for the end-users amendment sponsored by Reps. Murphy (D-NY), McMahon (D-NY) and Kratovil (D-MD) to H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009. Manufacturers of all sizes use over-the-counter derivatives to manage the cost of borrowing or other risks of operating their businesses. Unless amended, H.R. 4173 could unnecessarily subject some end-users to burdensome margin and collateral requirements. Click here to view the NAM's letter.
The NAM on December 10 notified all House members of manufacturers' support for the end-users amendment sponsored by Reps. Murphy (D-NY), McMahon (D-NY) and Kratovil (D-MD) to H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009. Manufacturers of all sizes use over-the-counter derivatives to manage the cost of borrowing or other risks of operating their businesses. Unless amended, H.R. 4173 could unnecessarily subject some end-users to burdensome margin and collateral requirements. Click here to view the NAM's letter.
NAM FILES BRIEF IN GLOBAL WARMING CASE
December 14, 2009 - NAM
The NAM on December 4 joined in an amicus brief with other organizations in Comer v. Murphy Oil U.S.A., a case in which we argue that global warming is a political question to be addressed through the policymaking branches of government. The NAM is asking the full U.S. Court of Appeals for the Fifth Circuit to review and reverse a three-judge panel decision in this major public nuisance case. The plaintiffs, Mississippi residents and property owners, allege that the emissions from more than 150 energy and manufacturing companies increased global warming and contributed to the severity of damages resulting from Hurricane Katrina. The NAM's brief argues that the plaintiffs' theory of liability would dramatically expand tort law beyond anything ever recognized because of the tenuous link between the alleged conduct and the alleged harm. Click here to view a summary of the case and a link to the NAM brief.
The NAM on December 4 joined in an amicus brief with other organizations in Comer v. Murphy Oil U.S.A., a case in which we argue that global warming is a political question to be addressed through the policymaking branches of government. The NAM is asking the full U.S. Court of Appeals for the Fifth Circuit to review and reverse a three-judge panel decision in this major public nuisance case. The plaintiffs, Mississippi residents and property owners, allege that the emissions from more than 150 energy and manufacturing companies increased global warming and contributed to the severity of damages resulting from Hurricane Katrina. The NAM's brief argues that the plaintiffs' theory of liability would dramatically expand tort law beyond anything ever recognized because of the tenuous link between the alleged conduct and the alleged harm. Click here to view a summary of the case and a link to the NAM brief.
HOUSE PASSES TAX EXTENDERS BILL WITH R&D CREDIT EXTENSION
December 14, 2009 - NAM
With the R&D tax credit slated to expire December 31, the House on December 9 passed tax extenders bill H.R. 4213 by a 241-181 vote. The bill contains a one-year credit extension but does not include language strengthening the credit. The bill also contains other NAM-member priorities, including the exception under Subpart F for active financing income and the look-through treatment of payments between related controlled foreign corporations under Subpart F. Timing of Senate action on H.R. 4213 remains uncertain due to the pending health care debate. Prior to this week's vote, lawmakers received a letter spearheaded by the NAM and signed by more than 5,300 employees from 45 states and employed by 135 companies, urging prompt action to strengthen and extend the R&D credit. To view the letter, click here.
With the R&D tax credit slated to expire December 31, the House on December 9 passed tax extenders bill H.R. 4213 by a 241-181 vote. The bill contains a one-year credit extension but does not include language strengthening the credit. The bill also contains other NAM-member priorities, including the exception under Subpart F for active financing income and the look-through treatment of payments between related controlled foreign corporations under Subpart F. Timing of Senate action on H.R. 4213 remains uncertain due to the pending health care debate. Prior to this week's vote, lawmakers received a letter spearheaded by the NAM and signed by more than 5,300 employees from 45 states and employed by 135 companies, urging prompt action to strengthen and extend the R&D credit. To view the letter, click here.
TRADE DEFICIT NARROWS
December 14, 2009 - NAM
The U.S. trade deficit narrowed in October as exports grew more than imports. Exports increased by $3.5 billion while imports edged up by just $700 million. As a result, the $32.9 billion trade deficit in October was down $2.8 billion from September. The rise in exports was mainly driven by increases in capital goods (civilian aircraft, semiconductors, computer accessories and materials handling equipment) and consumer goods (pharmaceuticals and artwork).
The U.S. trade deficit narrowed in October as exports grew more than imports. Exports increased by $3.5 billion while imports edged up by just $700 million. As a result, the $32.9 billion trade deficit in October was down $2.8 billion from September. The rise in exports was mainly driven by increases in capital goods (civilian aircraft, semiconductors, computer accessories and materials handling equipment) and consumer goods (pharmaceuticals and artwork).
RECISION ATTEMPTED, BUT STILL A "QUIT"
December 14, 2009 – Employers Council
The Utah Court of Appeals recently ruled that unemployment benefits should be denied an employee who resigned, but three days later attempted to withdraw her resignation. The court upheld the decision of the Utah Workforce Appeals Board that the employer acted reasonably in refusing to allow the employee to withdraw her resignation, and thus the separation was a quit. The employee had a history of health problems that affected her ability to perform various job assignments. The employer accommodated her within its ability to do so.
However, with every assignment the employee found a reason why she could not complete the task and requested an accommodation. She even requested to be returned to an assignment she initially told the employer she was physically unable to do, when she decided that assignment was better than the subsequent ones. The Board reasoned that the Employer needed an employee who could complete assignments and not 'shop' around by requesting accommodations until she found an assignment she liked. It found that the employer was reasonable in not allowing the employee to rescind her resignation. The relevant rule, Utah Administrative Code R994-405-106(6)(a) states, in part:
If a claimant resigns but later decides to stay and attempts to remain employed, the reasonableness of the employer's refusal to continue the employment is the primary factor in determining if the claimant quit or was discharged. For example, if the employer had already hired a replacement, or taken other action because of the claimant's impending quit, it may not be practical for the employer to allow the claimant to rescind the resignation, and the separation is a quit.
The Utah Court of Appeals recently ruled that unemployment benefits should be denied an employee who resigned, but three days later attempted to withdraw her resignation. The court upheld the decision of the Utah Workforce Appeals Board that the employer acted reasonably in refusing to allow the employee to withdraw her resignation, and thus the separation was a quit. The employee had a history of health problems that affected her ability to perform various job assignments. The employer accommodated her within its ability to do so.
However, with every assignment the employee found a reason why she could not complete the task and requested an accommodation. She even requested to be returned to an assignment she initially told the employer she was physically unable to do, when she decided that assignment was better than the subsequent ones. The Board reasoned that the Employer needed an employee who could complete assignments and not 'shop' around by requesting accommodations until she found an assignment she liked. It found that the employer was reasonable in not allowing the employee to rescind her resignation. The relevant rule, Utah Administrative Code R994-405-106(6)(a) states, in part:
If a claimant resigns but later decides to stay and attempts to remain employed, the reasonableness of the employer's refusal to continue the employment is the primary factor in determining if the claimant quit or was discharged. For example, if the employer had already hired a replacement, or taken other action because of the claimant's impending quit, it may not be practical for the employer to allow the claimant to rescind the resignation, and the separation is a quit.
Our enormous trade deficit is rightly of growing concern to Americans. Since leading the global drive toward trade liberalization by signing the Global Agreement on Tariffs and Trade in 1947, America has been transformed from the wealthiest nation on earth - its preeminent industrial power - into a skid row bum, literally begging the rest of the world for cash to keep us afloat. It's a disgusting spectacle. Our cumulative trade deficit since 1976, financed by a sell-off of American assets, exceeds $9.5 trillion. What will happen when those assets are depleted? Today's recession is the answer.
ReplyDeleteWhy? The American work force is the most productive on earth. Our product quality, though it may have fallen short at one time, is now on a par with the Japanese. Our workers have labored tirelessly to improve our competitiveness. Yet our deficit continues to grow. Our median wages and net worth have declined for decades. Our debt has soared.
At this point, I should introduce myself. I am author of a book titled "Five Short Blasts: A New Economic Theory Exposes The Fatal Flaw in Globalization and Its Consequences for America." My theory is that, as population density rises beyond some optimum level, per capita consumption begins to decline. This occurs because, as people are forced to crowd together and conserve space, it becomes ever more impractical to own many products. Falling per capita consumption, in the face of rising productivity (per capita output, which always rises), inevitably yields rising unemployment and poverty.
This theory has huge ramifications for U.S. policy toward population management (especially immigration policy) and trade. The implications for population policy may be obvious, but why trade? It's because these effects of an excessive population density - rising unemployment and poverty - are actually imported when we attempt to engage in free trade in manufactured goods with a nation that is much more densely populated. Our economies combine. The work of manufacturing is spread evenly across the combined labor force. But, while the more densely populated nation gets free access to a healthy market, all we get in return is access to a market emaciated by over-crowding and low per capita consumption. The result is an automatic, irreversible trade deficit and loss of jobs, tantamount to economic suicide.
One need look no further than the U.S.'s trade data for proof of this effect. Using 2006 data, an in-depth analysis reveals that, of our top twenty per capita trade deficits in manufactured goods (the trade deficit divided by the population of the country in question), eighteen are with nations much more densely populated than our own. Even more revealing, if the nations of the world are divided equally around the median population density, the U.S. had a trade surplus in manufactured goods of $17 billion with the half of nations below the median population density. With the half above the median, we had a $480 billion deficit!
Our trade deficit with China is getting all of the attention these days. But, when expressed in per capita terms, our deficit with China in manufactured goods is rather unremarkable - nineteenth on the list. Our per capita deficit with other nations such as Japan, Germany, Mexico, Korea and others (all much more densely populated than the U.S.) is worse. My point is not that our deficit with China isn't a problem, but rather that it's exactly what we should have expected when we suddenly applied a trade policy that was a proven failure around the world to a country with one fifth of the world's population.
If you‘re interested in learning more about this important new economic theory, then I invite you to visit my web site at http://PeteMurphy.wordpress.com
Pete Murphy
Author, "Five Short Blasts"