Of Elephants and Mouseholes

By | February 17, 2011

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[Illustrations, footnotes and references available in PDF version]

Summary: The Obama administration is rapidly promulgating greenhouse gas regula tions under the Clean Air Act, something it was arguably never designed to do. This series of regulations is fraught with difficulties as the Environmental Protection Agency is trying to redefine several provisions of the Act in order to apply them to greenhouse gases. This Working Paper examines the possibilities that the EPA could resurrect cap-and-trade as either best available control technology for prevention of significant deterioration permits or as the standard of performance under the new source performance standard program. In order to use either of these provisions to enact a greenhouse gas cap-and-trade program, EPA will have to find “an elephant in a mousehole.” The Paper also includes a discussion of how cap-and-trade would help EPA accomplish emission reduction goals that cannot be effectively pursued under a traditional application of the Clean Air Act.