UPDATE 8-EPA cleared to regulate US emissions as Congress stalls

Mon Dec 7, 2009 9:37pm GMT

(For a TAKE A LOOK about the Copenhagen climate summit, click on [ID:nLL527527]. For an overview of climate change stories, click [nCLIMATE])

* EPA move strengthens Obama's hand at Copenhagen

* Manufacturers say ruling endangers economy, jobs

* Legal challenges likely if EPA regulates before Congress (Updates with details on how move could affect business)

By Timothy Gardner

WASHINGTON, Dec 7 (Reuters) - The U.S. Environmental Protection Agency on Monday cleared the way for regulation of greenhouse gases without new laws passed by Congress, reflecting President Barack Obama's commitment to act on climate change as a major summit opened in Copenhagen.

The EPA ruling that greenhouse gases endanger human health, widely expected after it issued a preliminary finding earlier this year, will allow the agency to regulate planet-warming gases even without legislation in Congress.

The agency could begin to make rules as soon as next year to regulate emissions from vehicle tailpipes, power utilities and heavy industry under existing laws.

Obama and his Democratic allies in Congress will still pursue legislation in Congress, which has been slow to act. But the EPA move gave a timely push to the president's aims of securing short-term limits to harmful emissions.

It was expected to inject some optimism into the two-week United Nations meeting in Copenhagen, which Obama is due to attend next week, but was criticized by some U.S. business groups who fear it could push up costs.

"EPA has finalized its endangerment finding on greenhouse gas pollution and is now authorized and obligated to make reasonable efforts to reduce greenhouse pollutants," said Lisa Jackson, the EPA administrator. "This administration will not ignore science or the law any longer."

The Supreme Court ruled in 2007 that the EPA had the right to regulate emissions of the gases under the Clean Air Act. But under the administration of former President George W. Bush, the EPA said Congress was the right place to frame action.

Business groups said the EPA announcement would hurt the economy and endanger jobs just as the country emerges from a deep recession.

Legislation by Congress would be more palatable politically for Obama, because it would represent a compromise between business, politicians and other interests rather than through an imposed ruling.

STRONGER HAND IN COPENHAGEN

The EPA ruling applies to six gases scientists say contribute to global warming, including the main one, carbon dioxide.

There had been fears that Obama, who has made fighting climate change one of his priorities, would arrive almost empty handed at the U.N. conference because climate legislation has stalled in Congress.

"The EPA move strengthens Obama's hand at Copenhagen," said Joe Mendelson, global warming policy director at the National Wildlife Federation. "It gives him additional authority that if Congress doesn't pass climate legislation, the agency can put the country on the path to meet his climate goals."

Obama will pledge at Copenhagen that the United States, the world's second largest emitter of greenhouse gases, will cut emissions by roughly 17 percent by 2020 from 2005 levels.

World leaders hope to reach an agreement at the meeting on getting rich and developing countries to share the burden in fighting climate change.

The climate bill has been delayed in the U.S. Senate by a debate over a sweeping reform of healthcare, but lawmakers hope to pass a bill in the spring. Climate legislation passed narrowly in the House of Representatives in June.

The Obama administration has always said it prefers legislation over action by the EPA.

CONGRESSIONAL ACTION

If the EPA acts alone it could face a slew of legal challenges, including from business groups who say the action would overstep the administration's authority, as well as from environmentalists who seek stronger steps.

But the administration had pressed the EPA to prod business to support efforts in Congress, and to show the world Washington is committed to fighting climate change.

Democratic Senator John Kerry said the EPA move was meant to spur Congress to act. But he said "imposed regulations by definition will not include the job protections and investment incentives we are proposing in the Senate today."

Republicans said the move was equivalent to imposing an energy tax. "By seeking to sharply curtail carbon dioxide (and thus energy usage), the EPA is in effect working to decrease economic activity," the Republican Study Committee said.

One business group was quick to criticize the EPA.

Keith McCoy, vice president of energy policy at the National Association of Manufacturers said the EPA was moving forward with an agenda that will put additional burdens on manufacturers, cost jobs and drive up the price of energy."

The EPA decision, which now will be open for public review, does not preclude legislation. Any new regulations could take a long time to implement, giving Congress room to act.

Still, big industry could learn about changes soon. Jackson said car makers will know by the end of March about required increases in fuel economy standards for cars built for the 2012 model year.

"All industries will be called upon to reduce carbon emissions," said Dave McCurdy, chief executive of the Alliance of Automobile Manufacturers.

An administration proposal unveiled in September would require a boost fuel efficiency by 40 percent by 2016 and aim to cut carbon emissions by 21 percent by 2030. (Additional reporting by Ayesha Rascoe, Roberta Rampton, Deborah Zabarenko, Tom Doggett, Tom Ferraro in Washington and Richard Cowan in Copenhagen; Editing by Simon Denyer and Chris Wilson)