Texas Down One in Battle with EPA Over Carbon Permits

Texas lost the latest round of its battle with the Environmental Protection Agency over carbon regulations Dec. 30. The U.S. Court of Appeals declined to issue a stay preventing the EPA from directly issuing carbon permits in the state. Texas is the only state which has refused to comply with an EPA mandate to create and implement a carbon permit system for manufacturers.

As a result of the court's refusal to enter a stay, when Texas companies want to build or upgrade power plants or oil refineries, they will be required to get a permit directly from the EPA. Seven other states have voluntarily agreed to the EPA issuing permits in those states pending their development of new regulations governing carbon-dioxide emissions.

In 2007, the U.S. Supreme Court ruled that the Clean Air Act authorizes EPA to regulate carbon emissions. The EPA issued regulations which are set to take effect January 2.

As Business Week reported in November, the EPA regulatory approach is premised on states themselves determining the "best available control technology" and requiring its use. But when Texas' Republican governor Rick Perry balked, EPA decided to issue permits itself to ensure Texas companies' ability to comply with federal law.

The EPA's regulation of carbon emissions is in direct response to Congress' failure to adopt carbon offset regulation. The Obama administration decide to regulate under existing environmental authority rather than wait out the political process. Numerous Republican Congress members oppose carbon permits and claim that they will increase economic instability. Similar arguments were put forth when acid rain regulations were proposed in the 1980s, but ultimately proved groundless, Sierra Club's Neil Carman told carbonoffsetdaily.

The Texas battle seems to be as much about state supremacy as about carbon-dioxide regulation. Perry's labeling of the federal carbon-dioxide emission rules overreaching by the federal government is similar to the cry of Republican governors and legislators recently on a range of issues from health care to immigration rules. Incoming Speaker of the House John Boehner (R-Ohio) have committed themselves to repealing the national health care reform law known as the Affordable Care Act, passed by the last session of Congress.

Republicans have similarly fought off federal control with numerous candidates last fall campaigning on promises to supplant federal immigration law with state laws aimed at punishing illegal immigration.

Likewise, Texas seems determined to throw off federal control at the expense of clean air. The Texas Commission on Environmental Quality apparently downplays the effects of carbon dioxide emissions in lockstep with the Republican governor. The agency's FAQ "What pollutes the air in Texas?" describes the effects of nitrogen oxides and volatile organic compounds with no mention of carbon dioxide.

Yet while Texas underestimates the significance of its carbon dioxide output, Newsweek in 2008 called Texas "the CO₂ State," noting that if it were a country, it would be the world's eighth largest emitter of carbon dioxide. The latest data from the Energy Information Administration on carbon dioxide emissions released in October documents 2008 CO₂ emissions and pegs Texas' output at 622.7 million metric tons. Not only is its output the highest in the nation, it exceeds the next largest state output by 230 million metric tons.