New U.S. climate super-tool spells concern for automakers: is coal-fired power generation next?

The Obama administration last week quietly acquired a potential climate policy super-tool. The EPA announced its “endangerment finding” that a certain mix of greenhouse gases (GHGs) from new motor vehicles “threatens public health and welfare.” This gives the executive branch the ability to regulate GHGs directly, without waiting for congress to develop legislation. Suddenly, the pieces are in place for a rapid, forced harmonization of Canadian and U.S. climate policy in the auto manufacturing sector.

Those who follow this issue are familiar with the Canadian government’s position on climate change. We’re waiting to see what happens in the U.S. congress. Though a bit frustrating, it is actually a sound strategy: why go off on our own when our biggest and most important neighbor and trading partner  could come out with policy that contradicts or undermines ours?

The political beauty of this strategy is also its chief drawback: it assumes that the driver of U.S. climate policy will be the federal congress. As the Waxman-Markey House bill showed in late June, there is nothing resembling consensus in the congress on how to deal with climate policy. Moreover, U.S. federal legislation has to account for, and dovetail with, a daunting array of state-level initiatives.

The upshot: the chances of anything coherent and meaningful emerging from a U.S. congressional effort are slim. And for the current Canadian federal government, worried that U.S. legislation might threaten the oilsands economies of Alberta and Saskatchewan and by extension the larger Canadian economy, that’s not necessarily a bad thing.

Well, now that neighbor and trading partner has the ability to cut the Gordian Knot of congressional and state consensus. And because the new EPA “finding” is specifically focused on motor vehicles, the Canadian government faces a potential climate policy threat on a new front: auto manufacturing. The centre of this industry is Ontario, which the feds have also gone to great lengths to help during this recession.

Canada has for four years had at hand the very same tool the U.S. administration just acquired—the ability to simply regulate carbon dioxide (CO2), the principal GHG, without having to navigate controversial legislation through a minority Parliament. The former Liberal government added CO2 to Schedule 1 of the Canadian Environmental Protection Act (CEPA) in November 2005

This means that if Obama decides to develop climate policy from the White House, Canada could harmonize its own regulations very quickly. In a way, this makes our government’s job easier. Pundits constantly harp on the need for Canada to lobby congress when it comes to policy that affects Canada. But on the climate file, when it comes to the auto industry, there is now the opportunity to work directly with the administration.

The question is, how active will Obama be in developing climate policy? So far he has seemed happy to let congress do the heavy work. But congressional climate legislation deadlines have red-shifted lately: the senate majority leader said last week he won’t get around to climate change until April 2010. There is pressure to do something meaningful at the climate conference in Copenhagen, where the president will attend the leaders’ part of the summit.

And will the U.S. administration attempt to expand the EPA finding to other sources of GHGs, like coal-fired power plants? Coal plants are an easy target, though they are not the culprit in cities (Masters in Health Care has an excellent article on the truly dangerous sources of air pollution). I have speculated in earlier posts about the effects of a ruling against these sources (see articles). It would be earth-shaking.

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