1. Carbon Dioxide Is a Pollutant
2. The McIntosh-EIA Report: a Flawed Study

1. CARBON DIOXIDE IS A POLLUTANT

In his letter to Senator Hagel, President Bush wrote that carbon dioxide is not considered a pollutant under the Clean Air Act. This, of course, is just a hair-splitting interpretation of current law, one that provides no logical basis for the president to drop his promise to seek a new law to control CO2. But it is worth noting that the president is also wrong in his legal claim. CO2 is a pollutant under the Clean Air Act, as well as in the real world.

How does the Clean Air Act define "air pollutant"?

The act says that an air pollutant is any "physical, chemical, biological, [or] radioactive . . . substance or matter which is emitted into or otherwise enters the ambient air." (CAA, sec. 302(g)) CO2 is certainly a chemical substance and it is emitted into the ambient air when fossil fuel is burned in vehicles and power plants.

Is there anything in the act that suggests Congress considered CO2 an air pollutant?

Yes. In section 103(g) of the act, Congress explicitly included emissions of CO2 from fossil fuel power plants in a list of air pollutants that it directed the Environmental Protection Agency to include in pollution prevention programs. Section 103(g) of the act calls for "[i]mprovements in nonregulatory strategies and technologies for preventing or reducing multiple air pollutants, including sulfur oxides, nitrogen oxides, heavy metals, PM-10 (particulate matter), carbon monoxide, and carbon dioxide, from stationary sources, including fossil fuel power plants." (Emphasis added)

It is correct that this section by itself does not allow or require EPA to regulate any of the listed pollutants, including CO2. Those authorities exist in other sections of the act and EPA has used those authorities to regulate other pollutants listed in Section 103. The fact that EPA has not regulated CO2 to date does not transform CO2 into a "nonpollutant." In the early 1970s, EPA had not acted to control lead pollution, but it was clearly a pollutant because of its potential adverse effects on health and the environment. EPA did subsequently establish regulations for lead.

Isn't CO2 a "natural" part of the atmosphere?

Yes, but a pollutant is a substance that causes harm when present in excessive amounts. CO2 has been in the atmosphere since life on earth began, and in the right amounts CO2 is important for making the earth hospitable for continued life. But when too much CO2 is put into the atmosphere, its becomes harmful. We have long recognized this fact for other pollutants. For example, phosphorus is a valuable fertilizer, but in excess, it can kill lakes and streams by clogging them with a blanket of algae.

In the case of CO2, fossil fuels have stored carbon for hundreds of millions of years. Over the last 150 years, by burning fossil fuels, humans have released that carbon into the atmosphere in a geologic instant of time. We now are burning billions of tons of fossil fuels every year. This has caused CO2 to build up in the atmosphere much as an excessively rich diet causes life-threatening deposits to build up in human arteries. Scientists agree that if today's fossil-fuel burning trend continues we will build up concentrations of CO2 in the atmosphere at ever-increasing rates. This build-up of CO2 threatens our health and environment, just as excessive cholesterol threatens our bodies. Scientists expect accelerating global warming to trigger severe droughts, floods and storms; destroy coral reefs and habitats; and increase the incidence of certain diseases.

What can we do to reduce carbon dioxide pollution?

Electric power plants emit 40 percent of U.S. carbon pollution, and unless they change their current practices their emissions will increase dramatically. Fortunately, there are simple, affordable measures that can put us on a path to reducing carbon pollution from our electric generators:

• Retiring and repowering inefficient, outmoded power plants can simultaneously cut emissions of carbon dioxide, sulfur oxides, nitrogen oxides and mercury.
• Reasonable steps to make our homes and businesses more energy efficient will further cut carbon dioxide and other pollutants from electricity generators.
• Increasing our reliance on renewable fuels (such as those grown on American farms) and natural gas is one more method to cut carbon and other pollution.

Motor vehicles are the second biggest source of carbon pollution. We have the know-how to build cars and sport utility vehicles that pollute less and do less damage to our wallets. We do not need technical breakthroughs, because the technology is available today. What we need is political leadership.

2. THE MCINTOSH-EIA REPORT: A FLAWED STUDY

In his letter to Senator Hagel, President Bush cited a Department of Energy report that concluded it would be too costly to regulate carbon dioxide. That report is seriously flawed and contradicts a number of authoritative reports that reached the opposite conclusion.

What report did President Bush refer to?

The so-called Department of Energy report is actually a report by the Energy Information Administration (EIA), a statistical agency housed within DOE. The report was prepared at the request of then-Rep. David McIntosh (R-Ind.), one of Congress' most active opponents of mandatory reductions in carbon dioxide emissions and the Kyoto Protocol. In preparing the report for McIntosh, EIA ignored the findings of the DOE's much more thorough report, "Scenarios for a Clean Energy Future," as well as input from independent reviewers and analysts at the Environmental Protection Agency and Resources for the Future.

Is the McIntosh-EIA report consistent with other analyses?

No. The McIntosh-EIA report is contradicted by four other recent studies that conclude major multi-pollutant reductions can be achieved at modest costs. There are five recent studies of the costs of multi-pollutant programs for the electric sector. Four of them conclude that the costs will be moderate; only the McIntosh-EIA report assumes the costs will be high. Other studies published in the last six months by EPA, Harvard University, Environmental Law Institute-Resources for the Future, and the DOE, all conclude that multi-pollutant program costs would be quite reasonable. (See U.S. EPA, "Technical Assistance on H.R. 2569, the Fair Energy Competition Act of 1999," January 2001; "Coal or Gas: The Cost of Cleaner Power in the Midwest," H. Lee and S.K. Verma, Harvard University, John F. Kennedy School of Government, August 2000; "Cleaner Power," Environmental Law Institute, November, 2000; U.S. DOE, "Scenarios for a Clean Energy Future," November 2000.)

What are the major substantive flaws in the McIntosh-EIA report?

• The McIntosh-EIA report overstates total program costs by ignoring gains from energy efficiency. The report analyzes an assumed future where virtually no added effort is made to use electricity and natural gas more efficiently. Because the computer modeling assumptions made by EIA assume that unconstrained growth in electric generation will be very high, the model must apply very large charges to achieve the required pollution reductions. In November 2000, DOE published a comprehensive study showing that sound efficiency policies could achieve large multi-pollutant reductions from electric generators at a net savings to the consumer. (See "Scenarios for a Clean Energy Future," U.S. DOE, November 2000.)
  
  
• The McIntosh-EIA report overstates costs by analyzing a program that is not being considered. The McIntosh-EIA model does not analyze a genuine multipollutant cap and trade program. Instead, it assumes the equivalent of a carbon tax on top of emission controls for sulfur dioxide and nitrogen oxides. The EIA model does not account for recycling the carbon tax revenues in a realistic manner. The result is that the EIA model allows all electricity generators to charge consumers based on the highest costs experienced by the most expensive generating unit in the country, even though the average costs for generators would be far less than the costs to control the most expensive unit. This assumption greatly inflates the calculated "costs" of the program. In fact, these estimates are not costs at all but are tax revenues or windfall profits that would be received by electricity generators if Congress were to allow such an approach. Since no bills have proposed the approach used by EIA, its report amounts to an analysis of an imaginary policy that conflicts with approaches actually being considered by Congress.
  
  
• The McIntosh-EIA report overstates program costs by assuming an artificial future with no additional controls under current law. The EIA report calculates costs by comparing estimates for controlling pollution in new legislation to a hypothetical future where no additional control requirements occur under current law. This is a completely unrealistic assumption that ignores the facts of current policy. EPA's promulgated air quality standards for smog and soot (ozone and fine particles), recently upheld by the Supreme Court, will require large additional reductions in sulfur dioxide and nitrogen oxides, yet EIA ignores these requirements. EPA is under a court order to adopt controls on mercury from coal-fired power plants, but EIA ignores this requirement. The United States has committed under the Senate-ratified Rio Climate Treaty to adopt programs aimed at returning U.S. carbon dioxide emissions to 1990 levels, but EIA ignores this commitment. EIA assumes that no additional controls will occur under current law over the next 20 years beyond requirements in current regulations. This results in an unrealistically low-cost "reference case" assumption, which causes EIA's estimates of multipollutant policies to be grossly overstated.
  
  
• The McIntosh-EIA report overstates costs of reducing CO2 by failing to analyze mercury controls. The EIA report does not include any controls on mercury, even though all multipollutant bills require such controls. Mercury control requirements, when combined with controls on other pollutants, will promote replacing old, inefficient plants with modern, high-efficiency gas-fired plants. These new plants would reduce all four pollutants significantly, including carbon dioxide. Yet, by ignoring mercury controls, the McIntosh-EIA report assigns all of the costs of switching to a new fuel source to carbon dioxide only, thus making CO2 costs appear higher than they are.

Related NRDC Pages
Responsible Energy Policy for the 21st Century
Testimony of David Hawkins before Senate Subcommittee, 3/21/01

last revised 3.16.01