The EPA and Carbon Dioxide: What Next?

Sunday morning I was sitting at the breakfast table reading the paper. A headline caught my eye, and I told my wife that the U. S. Environmental Protection Agency just decided that carbon dioxide is a pollutant that endangers public health and welfare, which is the first step toward regulating it.

"Carbon dioxide?" she asked. "Don't we breathe that out?"

"That's all right," I said, "you'll still be able to breathe in as much as you like."

Bad jokes aside, with this finding the EPA is taking a giant step into an uncharted region of U. S. environmental regulation, a step bristling with enough ethical issues and questions to keep me writing for several columns. But I'll try to limit myself to this one for the time being.

It was President Richard Nixon who founded the Environmental Protection Agency in 1970, back when rivers in certain industrial areas routinely caught fire and everyone from Rachel Carson to Carl Sagan was forecasting various kinds of environmental doom. The spate of new regulations that the young agency promulgated raised enough furor among manufacturers to exceed my threshold of attention for political events, which was then very high. I remember wondering what the world was coming to if the federal government could tell you what you could and couldn't send up your own private smokestack. I even knew a few pioneering environmentalists back in my high-school days, in particular a young woman who thought that founding the EPA was the only good thing Richard Nixon ever did.

Gradually, corporate America was dragged, sometimes kicking and screaming, into a world of environmental regulations. Former industrial heroes such as Thomas Midgley (1889-1944), who was awarded and feted during his lifetime for discovering both tetraethyl lead to improve gasoline's octane rating, and chlorofluorocarbons ("Freon") for use in refrigeration systems, became post-mortem villains as first leaded gasoline, and then CFCs, fell under the ban of the EPA and other regulatory agencies worldwide. Now that some of the environmental dust has settled, most reasonable people would agree that some amount of environmental regulation is a good thing. We have seen what its absence does in areas of the former Soviet Union and elsewhere, and have witnessed the comebacks of species such as the bald eagle, whose existence was threatened by the pesticide DDT.

That being said, I should point out that regulation of carbon dioxide, should it ever take place (and it looks like either the EPA or Congress will do just that), is a different breed of cat, for several reasons.

First of all, there is the sheer scale of carbon dioxide emissions. Every time anybody anywhere burns a fossil fuel—coal, oil, or natural gas—they make carbon dioxide. DDT, CFCs, and even tetraethyl lead were special chemicals made for specific purposes, and after varying amounts of trouble, acceptable substitutes were found or other ways of achieving the same purposes were discovered. None of these chemicals was used as the primary energy source for the nation's transportation, electric utility, and manufacturing industries. In 2002, the U. S. derived over four-fifths of its energy from burning carbon-containing compounds, and that fraction hasn't changed much since then. If we stopped burning carbon tomorrow, we'd go back to the energy consumption rates of perhaps 1920, when the well-wired house had maybe four electric outlets in all and a family of five with one car was doing quite well to drive ten miles a day. Substitutes for carbon-based fuels—primarily nuclear energy, with wind, hydroelectric, and other renewables coming up far in the rear—are available, but not any time soon in the scale required.

Another fundamental difference between carbon dioxide regulation and everything else the EPA has done up to now is the nature of the science and other events on which the finding is based. I know I'm up against everybody from Al Gore on down when I say that the connection between global warming and anthropogenic emissions is less than crystal-clear. On the bus ride from scientific observations to the conclusion that humanity is committing collective suicide by continuing to burn carbon-based fuels, there are a number of places to get off. One can question whether the current trends are largely due to human activity versus natural causes. One can even question whether a moderate amount of global warming will in fact be the earth-stopping catastrophe that it is portrayed to be. There is no better way to gain the fascinated attention of a bored elite than by forecasting some giant disaster that requires expansive governmental intervention to fix. Few remember the popularity of Paul Ehrlich's 1968 book The Population Bomb, which forecasted a worldwide overpopulation nightmare that would come to its ghastly fruition somewhere about now. Instead, we're finding that industrial advancement in developing countries leads so rapidly to declining birthrates that the problem in many countries is not too many births, but too few. Mr. Gore's film "An Inconvenient Truth" may find itself in a similar situation some day.

For reasons that are more geopolitical than environmental, I would like to see the U. S. move away from fossil-fuel imports in a reasonable, coordinated fashion that doesn't smuggle in social engineering or class warfare under a guide of environmental protection. Maybe the EPA's carbon-dioxide finding is a step in that direction. I don't know. But for the reasons listed above and many others besides, it bears most careful watching in the coming months.

Sources: The EPA's news release about its finding is at http://yosemite.epa.gov/opa/admpress.nsf/0/0EF7DF675805295D8525759B00566924. The New York Times article I read at the breakfast table is at http://www.nytimes.com/2009/04/18/science/earth/18endanger.html. A useful chart developed by Lawrence Livermore Labs from which I obtained information about U. S. energy use can be found in the Wikipedia article "Energy Conservation" at http://en.wikipedia.org/wiki/File:USEnFlow02-quads.gif.

Welcome to Online MBA Guide Readers: A special welcome to readers of the Online MBA Guide who may have found us. I recently learned that this blog was included on a list of 50 best business ethics blogs by the editors of that blog (see the article at http://www.onlinembaguide.net/50-best-business-ethics-blogs). True, we're No. 50, but at least we're on the list!