EPA's carbon decision a clear case of backdoor regulation

So the eldest offspring is applying to grad school. And despite having watched one of her parents labor in the profession for her entire lifetime, she is considering going for a master's degree in (gulp) journalism. As part of the admissions process for one school, she was asked to list her picks for the Top 10 news stories of 2009.

This journalistic exercise, commonly conducted in newsrooms around the world at the beginning of every year, made for some interesting dinner conversation last week. For 2009, her choices more or less mirrored the entries on most of the lists published in the first half of January: the inauguration of Barack Obama, the economy's collapse, the health care reform debate, the death of Michael Jackson, the heightening war on terror in Afghanistan, Obama's earning the Nobel Peace Prize, the attempted Christmas Day bombing of a U.S.-bound airplane, the Fort Hood massacre, the death of Massachusetts Sen. Edward Kennedy, and the "Miracle on the Hudson" plane crash.

Based on the view from here, though, there was one important story missing from these lists. Perhaps that was because it was a bit subtle. Its ramifications, though, are decidedly unsubtle. This development has implications for virtually every business in America, including (or maybe especially) those involved in transportation and logistics.

The news broke on Dec. 7—appropriately, Pearl Harbor day, a date which will live in infamy. On that Monday (which also happened to mark the start of the Copenhagen climate change summit), the Environmental Protection Agency (EPA) announced it would begin developing regulations aimed at reducing carbon dioxide emissions. Given that almost 90 percent of U.S. economic activity currently relies on the use of fossil fuels, the EPA's proposed actions could eventually affect virtually every U.S. business and every U.S. citizen.

In its announcement, the EPA declared carbon dioxide to be an air pollutant under the federal Clean Air Act. In so doing, it granted itself the authority to embark on a sweeping regulatory undertaking and expansion of its own powers—whether Congress is willing to go along with it or not. Some call it "regulation without representation." A more appropriate term would be backdoor regulation, because that is simply what it is.

From a purely political standpoint, the timing of the EPA's announcement makes sense. Just weeks earlier, the news broke that scientists researching global warming had withheld evidence that contradicted their own theories about climate change. Once the news leaked out, the current U.S. administration no doubt saw the handwriting on the wall for both the Copenhagen talks and for its own carbon-reduction initiative, the plan popularly known as cap and trade.

With the prospects of getting cap and trade through Congress fading (and indeed, the Jan. 19 election of Massachusetts Republican Scott Brown to the U.S. Senate will likely seal the measure's fate), the administration needed a backup plan. Enter the EPA. If Congress doesn't act, it appears the EPA will step forward and implement its own set of carbon regulations with no accountability whatsoever to American voters.

The other senator from Massachusetts, Democrat John Kerry, not only sees nothing wrong with this egregious political move, he actually thinks it's a good idea. To quote the senator: "The message to Congress is crystal clear: get moving. If Congress does not pass legislation dealing with climate change, the administration is more than justified to use the EPA to impose new regulations."

As we said, regulation sometimes comes through the back door. Beware!