The document is a policy memorandum from staffer Lyle Birkey to Congressman George Miller regarding an upcoming vote on blocking the EPA's regulation of greenhouse gas emissions. The memorandum recommends voting against the block for three reasons: (1) the costs of climate change from increased extreme weather will rise significantly if unchecked; (2) EPA regulation of greenhouse gases under the Clean Air Act will have initial costs but reduce costs over time as cleaner technologies are adopted; and (3) EPA regulation can boost the economy through job creation and making the U.S. more globally competitive in green industries.

1. POLICY MEMORANDUM
FOR CONGRESSMAN GEORGE MILLER
Prepared by Lyle Birkey
Assignment:
As a staffer for a United States Congressman, provide a policy brief
for an upcoming (hypothetical) congressional vote that would either
empower the USEPA to regulate greenhouse gas emissions or would
block the USEPA from regulation of greenhouse gas emissions.
Lyle D. Birkey
Energy Policy Analysis
Johns Hopkins University
Master of Science in Energy Policy and Climate
October 14, 2013

2. To: Congressman George Miller
From: Lyle Birkey, Staffer for U.S. Congressman
Date: October 23, 2013
Re: Blocking GHGs from Federal Regulation
1. INTRODUCTION
This policy memorandum addresses the upcoming vote to block the
Environmental Protection Agency (EPA)’s regulation of greenhouse gases under
the Clean Air Act (CAA), and specifically focuses on the impacts of such
regulation on the U.S. economy. The early evidence of climate change is already
incurring crippling economic costs and international scientific consensuses
project an acceleration of such economic liabilities. On the other side of the
debate, the administrative expenses associated with federal regulation of
greenhouse gases may be a costly venture for American taxpayers and may result
in higher energy prices passed onto the end consumer.
Through close examination of the economic expenses associated with either
avenue, this policy memorandum concludes that Congressman George Miller
should vote against blocking the EPA from regulating greenhouse gasses through
the CAA because (1) the cost associated with increased storms, wildfires and sea
level rise will rise as climate change becomes more severe on a multi-decadal
timeline, (2) the estimated costs of greenhouse gas regulation under the Clean Air
Act will come at a cost initially, but the costs will reduce as more efficient
technologies are installed, and (3) the regulation of greenhouse gases under the
CAA can boost the U.S. economy through job creation and global
competitiveness.
2. BACKGROUND
It is important to be clear about the historical context of the Clean Air Act in
order to understand our current judicial juncture.
A. What the Clean Air Act was originally designed to regulate
Although the Clean Air Act was originally passed by congress in 1963, the
Clean Air Extension of 1970 drastically broadened the Act to cover both
state and federal jurisdictions for both stationary and mobile source of air
pollution. The law encompassed four regulatory categories: National
Ambient Air Quality Standards (NAAQS), State Implementation Plans
(SIPs), New Source Performance Standards (NSPS), and National
Emissions Standards for Hazardous Air Pollutants (NESHAPs).
The National Environmental Policy Act (NEPA) was adopted in 1971,
establishing the EPA, which was intended to manage a variety of

3. legislation including the regulations of the Clean Air Act and its newlydefined component parts.
B. Recent Path toward Regulating Greenhouse Gases under the
Clean Air Act
Under section 202(a)(1) of the Clean Air Act, the Administrator of the EPA
is required to establish standards which are, “applicable to the emission of
any air pollutant from…new motor vehicles or new motor vehicle engines,
which in [her] judgment cause, or contribute to, air pollution which may
reasonably be anticipated to endanger public health or welfare.”1 The latter
portion of this language concerning the word “reasonably” and the phrase
“endanger public health or welfare” are where the EPA finds regulating
greenhouse gases to fall within their regulatory jurisdiction.
In the 2007 Supreme Court case, Massachusetts v. EPA, the court held
that, “greenhouse gases fit well within the Act’s capacious definition of ‘air
pollutant’” 2and therefore grants the EPA the authority to regulate
greenhouse gas emissions from new motor vehicles.
Since 2007, a number of cases have explored the EPA’s obligation to
regulate greenhouse gases. Most notably, the courts ruled that:
i.
Six GHGs threaten the health and human welfare of current and
future generations (commonly referred to as the “Endangerment
Finding”), and
ii.
The EPA could limit their guidelines of polluters to the largest
stationary sources emitting more than 100,000 tons per year of
GHGs which would exclude smaller factories, restaurants and farms
(commonly referred to as the “Tailoring Rule”).
The significant details of the “Tailoring Rule” are what bring us to our next
section.
C. The Current Status of the Debate
On October 15, 2013, the U.S Supreme Court addressed a primary
legislative question: “Whether EPA permissibly determined that its
regulation of greenhouse gas emissions from new motor vehicles triggered
permitting requirements under the Clean Air Act for stationary sources
that emit greenhouse gases.”
From the EPA’s viewpoint, this question kicks in another section of the
Clean Air Act which is called the, “Prevention of Significant Deterioration,”
or PSD. That section requires the EPA to regulate emissions from any
1
2
42 U.S.C. § 4521(a)(1). Retrieved from
549 U.S. 497 (2007); http://www.supremecourt.gov/opinions/06pdf/05-1120.pdf

4. emitter above 100 tons per year for any pollutant. In the case of GHGs,
however this would encompass everything from large apartment buildings
to small farms. Since the EPA must adhere to regulations which are
economically and technically feasible, this low threshold of GHG
emissions needed to be “tailored” to include the top emitters like coal-fired
power plants, but to exclude small businesses and agriculture. The
tailoring rule has raised the PSD standards to 100,000 tons of CO2 per
year.
Clearly this is still a contentious issue, which is what has led up to the
congressional bill that we are currently assessing.
3. COST OF INACTION ON CLIMATE CHANGE
A. Recent economic expenses related to climate change
The costs of climate-related issues are already beginning to become
evident. In 2012, climate-related droughts, super storms, hurricanes,
blizzards, heat waves, and wildfires in the United States were directly
responsible for 349 deaths and caused an estimated $139 billion in
damages. Over 3,500 monthly weather records for heat, rain, and snow
reached all-time highs in recorded history.
In 2012, the costs of extreme weather in the United States added up to
almost 1 percent of the nation's GDP. For comparison, this is roughly equal
to half of all the sales taxes states collected in 2012.3
B. Projected expenses for climate change BAU over the next 50
years
Projecting economic impacts almost a century into the future is of course
surrounded with uncertainty. Any complete projection, however, would
include substantial effects due to the growth of the U.S. population and
economy. With a bigger, richer population, there will be more demand for
energy and water – and quite likely, more coastal property at risk from
hurricanes.
Climatologists predict a range of outcomes that could result from
business-as-usual (meaning steadily increasing) emissions. The businessas-usual case is the worst of what the IPCC calls its “likely” predictions for
the A2 scenario. With every day that current trends in greenhouse gas
emissions continue, the business-as-usual case becomes more probable.
i.
3
Estimated Costs of Hurricanes under BAU
Ackerman, Frank, and Elizabeth A. Stanton. The Cost of Climate Change: What We’ll
Pay If Global Warming Continues Unchecked. Rep. Natural Resources Defense Council,
May 2008. Web. 23 Oct. 2013.

5. Annual damages caused by increased intensity of U.S. hurricanes
are predicted to total $422 billion in 2100 in the business-as-usual
case.4
ii.
Real estate losses and sea-level rise
Annual U.S. residential real estate losses due to sea-level rise are
predicted to amount to $360 billion in 2100 in the business-asusual case.5
iii.
Changes to the energy sector
Annual U.S. energy expenditures (excluding transportation) will be
$141 billion higher in the 2100 in the business-as-usual case as
compared to today’s climate conditions continued throughout the
century.
iv.
Droughts and Agriculture
Annual costs of business as usual for water supply could reach
almost $1 trillion per year by 2100. Anticipated gains in crop yields
may be small and would in any case vanish by mid-century.6
4. COST PROJECTIONS OF FEDERAL GHG REGULATION
Several industry-sponsored reports, such the American Council for Capital
Formation (ACCF), have quoted economic losses to federal regulation of
greenhouse gas to cost the U.S. 1.4 million jobs, would depress investment capital
by as much as $300 billion. On the other hand, economists and researchers who
have compared actual costs with initial projections report that regulations
generally end up costing far less than the dire predictions from industry and even
below cost projections by the Environmental Protection Agency itself.
A. Costs Estimates of Current Clean Air Act Regulation
In the EPA’s most recent Prospective Study – 1990 to 2020, the costs of the
Clean Air Act are severely overshadowed by the estimated benefits by a factor
of 30 to 1. While costs of the CAA amounted to $66 billion, the estimated
benefits from reduced health costs, prevention of early deaths, and increased
productivity due to reduction of suck days as totaled $2 trillion.7
4
Ibid.
Ibid.
6
Ackerman, Frank, and Elizabeth A. Stanton. The Cost of Climate Change: What We’ll
Pay If Global Warming Continues Unchecked. Rep. Natural Resources Defense Council,
May 2008. Web. 23 Oct. 2013.
7
United States. Environmental Protection Agency. Office of Air and
Radiation. The Benefits and Costs Ofthe Clean Air Actfrom1990 to 2020: Summary
Report. US EPA, n.d. Web. 24 Oct. 2013.
5

6. B. Costs to Industry
Environmental costs are a small percentage of industry revenues. According
to 2005 data from U.S. manufacturers, their total pollution abatement
spending represented less than one percent of the $4.74 trillion value of the
goods they shipped. The abatement costs include capital and operating costs
for all pollution controls, not just those related to clean air. Air pollution
control is responsible for less than half of these costs.8
C. Costs to Employment
Contrary to industry projections, historical environmental regulations have
accounted for less than “1/10th of 1% of job loss in the U.S.” An example of
this, the Clean Air Act was projected to result in severe job loss in the period
between 1990 and 1997 according to industry reports, but actually only 7,000
jobs were lost from the regulation compared to 10 million workers being laid
off for non-environmental reasons during the same time period.9
5. GHG Regulation and Job Growth
The regulation of greenhouse gases under the Clean Air Act can boost the U.S.
economy through job creation and global competitiveness. The effects of the
Clean Air Act’s Low Carbon Fuel Standards (LCFS), for example, are already
“creating over 150,000 jobs in clean vehicle research, development, and
production and another 150,000 are expected from the manufacturing
industry”10 according to a report from the Natural Resources Defense Council.
The Bureau of Labor Statistics (BLS) recently identified 3.1 million green jobs in
the U.S. These jobs extended into various economic sectors and demonstrated
faster growth than the overall economy. Manufacturing is the leading sector
producing these jobs and the BLS statistics show that a majority of these jobs are
accessible to workers without a college degree.11
In a similar study, the Northeast States for Coordinated Air Use Management
issued a report showing the economic benefit of requiring a10 percent reduction
in carbon pollution from all fuels over the next 10 years. This report argues that
the region would see employment increases by 9,490 to 50,700 jobs and gross
8
Goodstein, Eban, Kristen Sheeran, Peter Dorman, John Laitner, and Jonathan
Isham.Climate Policy and Jobs: An Update on What Economists Know. Issue brief.
Economics for Equity and the Environment Network, June 2010. Web. 25 Oct. 2013.
9
Ibid.
10
Gutis, Phil, Lisa Goffredi, Lise Stevens, Carlita Salazar, and Sue Rossi. Tech. N.p.:
n.p., n.d. Supplying Ingenuity: U.S. Suppliers of Clean, Fuel-Efficient Vehicle
Technologies. Natural Resources Defense Council, Aug. 2011. Web. 24 Oct. 2013.
11
Pollack, Ethan. Counting up to Green: Assessing the Green Economy and Its
Implications for Growth and Equity. Tech. Economic Policy Institute, 10 Oct. 2012.
Web. 28 Oct. 2013.

7. regional product increases by 2.1 billion to 4.9 billion over the next ten years. Not
only are there projected to be more jobs, but higher paying jobs with household
disposable income estimated to increase by 1 billion to 3.3 billion.12
These facts suggest that regulating carbon emissions and reinvesting in the green
jobs sector could be a boon for the U.S. economy.
6. Conclusion
Considering the factors outlined in this memorandum, the recommended action
by Congressman George Miller is to vote against blocking the EPA from
regulating greenhouse gas emissions under the Clean Air Act. The cost of climate
change is already costing the American public dearly, history has proven that
arguments declaring that the economy will suffer from GHG regulation under the
Clean Air Act have been empirically inaccurate, and current trajectories and best
available estimations show that GHG regulation will boost the economy and
make the United States more globally competitive.
12
Manion, Michelle, Arthur Marin, Andrew Dick, Jason Rudokas, Matt Solomon,
Allison Reilly-Guerette, and David Ganzi. ECONOMIC ANALYSIS OF A PROGRAM TO
PROMOTE CLEAN TRANSPORTATION FUELS IN THE NORTHEAST/MIDATLANTIC REGION. Rep. Northeast States for Coordinated Air Use Management, July
2011. Web. 26 Oct. 2013.