[SUITERS] Continuing our look at the 40th anniversary of the Clean Air Act. Three years ago, the Supreme Court ruled that carbon dioxide is a pollutant and that the government can in turn regulate CO2 emissions if it decides that CO2 endangers human health. Well, last year, EPA said exactly that. And now it's ready to regulate carbon emissions from stationary sources -- power plants, industrial facilities, factories -- for the first time ever.

But Texas, the state with the highest carbon emissions, it's governor, Rick Perry, is refusing to go along with that, accusing the EPA of overstepping its bounds.
As a result, the EPA now says it will bypass Texas regulators and seize control of the state's permitting program.

But should the EPA even try to regulate carbon? Is it overstepping its authority in trying to do so, and is the Clean Air Act the right way to do it?

Joining us for theMIX, two men extremely well versed in the Clean Air Act. Roger Martella is a former EPA general counsel during the George W. Bush administration, now with the Sidley Austin law firm here in Washington, D.C. And David Doniger, with the Natural Resources Defense Council, worked at the EPA in the Clinton administration and he helped rewrite the Clean Air Act amendments. Gentlemen, thank you both for being with us.

January 2nd -- GHG regulations go into effect through the EPA, for cars, power plants, things like that. What do you think?

[DONIGER] I think it's the right thing to do. It's EPA doing its job to protect our health, to protect the environment. It's the job Congress gave EPA, to watch the unfolding of science and to take action to curb pollution that it determines is dangerous.

[SUITERS] Roger, the EPA says it's a danger to human health, the Supreme Court calls it a pollutant. Something has to be done.

[MARTELLA] Well, the Clean Air Act, over 40 years, probably is the most effective environmental law anywhere in the world, and it has a great track record of showing it can really improve the nation's environment. The problem is it was not designed to address what is the next challenge, global climate change.

And there's two fundamental distinctions with climate change that make it ineffective at addressing greenhouse gases from factories. And first of all is the notion that the Clean Air Act was set up to address pollutants where there's a relationship between where they're emitted and where they're having impacts. If you have a pollution problem in California, you can get at facilities in California. Climate change, greenhouse gases are global. There's no nexus there.

And the second concern is that there's no technology that exists, unlike in other cases in the past 40 years, where you've been able to put on technology to reduce greenhouse gases. The EPA doesn't have a solution for reducing greenhouse gases, and what we end up with without more of a global policy is the notion that facilities will move to other parts of the world, emit more greenhouse gases, and actually exacerbate the problem we’re trying to solve.

[SUITERS] I think everyone in Washington would rather see legislation over regulation. That's the mantra I keep hearing repeated over and over again. Roger, is regulation a viable stopgap if we're going to, as David suggested, get legislation to cap our carbon emissions at some point?

[MARTELLA] Regulation, I think, in the context of greenhouse gases is going to be a futile effort. I mean, EPA has shown it can get some greenhouse gas reductions from cars and perhaps from the motor vehicle sectors, but when it comes to stationary sources, these are facilities that don't have to be in the United States. And if they can't retrofit their technology to meet these emission standards EPA is proposing, that removes any incentive for them to stay here. They will move to other parts of the world.

[SUITERS] David, Roger called it a futile effort, and I saw you smiling.

[DONIGER] I don't think it's futile at all. First of all, the threat that the Clean Air Act is going to drive industry offshore has been made for 40 years. And there is no credible evidence that that's been a driver to send factories overseas.

[SUITERS] Is the point about regulation moot, though, because the new Congress comes in? Decidedly Republican in the House. More so Republican in the Senate. Will they stop EPA from regulating altogether?

[DONIGER] There's no question that there will be efforts to stop. I think it really depends, frankly, on where the American business community is. Where does it see its interest to lie? And many companies are saying what they really are troubled by is the continued uncertainty. If the Congress were to pass a timeout, such as Senator Rockefeller proposed, all that does is prolong uncertainty.

[SUITERS] Roger, uncertainty is one complaint. Another is that this will be a job killer, domestically.

[MARTELLA] Right, and this gets to a point I'd like to address from David, the same point, which is he says there's no empirical evidence, there's no evidence to show that, in fact, factories are going to move to other parts of the world. In fact, there's very significant empirical evidence coming from the best source possible, which is Congress. When Congress was looking at cap-and-trade legislation, looking at climate change legislation, it carved out a whole sector of industry, called "energy intensive, trade sensitive" industries. These are steel manufacturing. Not power plants, but cement facilities. Heavy industry, that Congress itself was concerned would relocate to other parts of the world, and Congress felt like it needed to protect these industries, protect these jobs.

[SUITERS] Talk about what Congress may do to stop this regulation. There is one state out of 50 that is pushing back. That's the state of Texas. Republican governor there, Rick Perry, issued a statement to us at "energyNOW!" about that plan to push back against the EPA.

Quoting, “The EPS’s misguided plan paints a huge target on the backs of Texas agriculture and energy producers by implementing unnecessary, burdensome mandates on our state’s energy sector.”

Can Texas be the one holdout and stop EPA from regulating greenhouse gases?

[MARTELLA] Texas's primary concern is, they would rather EPA take the time to get this right. They feel like they're shoving a regulatory system down Texas's throat, and the basic principle of the Clean Air Act going back to 1970 is the notion of cooperative federalism, that states take the lead in implementing the federal policies.

Here EPA is taking an exception from that and saying, "We're going to implement our federal policies at the state level.” So Texas is basically saying, "We want to go back to the origins of the Clean Air Act, 1970, preserve cooperative federalism. That may take more time -- normally it takes a couple years to do so -- but we have to uphold the principles that went back to the 1970s, of the Clean Air Act to begin with, and not make an exception here.”

[SUITERS] David, isn't EPA shoving this down every state's throat?

[DONIGER] No. 49 states are cooperating. 49 states are ready to implement the permit program that starts in January. Texas is all by itself. Texas has got everything upside down and backwards. It's an "Alice in Wonderland" theory. The governor is grandstanding to Tea Party elements in his state. His attorney general failed utterly to convince the D.C. Circuit that it was going to be harmed. In fact, the steps the state is resisting will avoid the harm that the state is trying to pin on EPA.

[MARTELLA] David says these 49 states are cooperating. I would call it more acquiescing. They're acquiescing to the notion that EPA is -- contrary to established Clean Air Act precedent going back 40 years -- basically taking over these programs because it's trying to accelerate this scheme much quicker than what the Clean Air Act would normally say.

[SUITERS] So they're accepting the regulation.

[MARTELLA] They’re accepting it.

[DONIGER] EPA is throwing each of these states a life preserver, to keep the industrial permitting process going the way it should be. And Texas is the only place that's treating this life preserver as though it was a torpedo.

[SUITERS] How much can the EPA get done in the year to come when its administrator is constantly being called to Capitol Hill and constantly having these legislative roadblocks thrown into her way?

[DONIGER] Well, I hope that the oversight process is principled and done the way it's supposed to be and not an exercise in harassment. I hope also that the Republicans learn from the experience they had in the mid-'90s, where the full-throated attack on our public health and environmental protections backfired, and they got their fingers burned in the Gingrich Congress. EPA needs to do its job. EPA needs to respond to data. EPA needs to follow the science. I think they're doing an admirable job at that. And I think it's going to backfire on the people who are too zealous in Congress.

[MARTELLA] I agree with David that the agency has important things to do, and everyone needs to be cognizant of letting the agency do a job. There probably is legitimate oversight topics to go to, but there's a fine line, at the same time, of what's some legitimate questions to ask versus how does this become a distraction that we're not protecting public health and welfare, and so, hopefully, people will exercise judgment and discretion in balancing those factors.

[SUITERS] A good conversation about a complex issue. David Doniger with the NRDC and the Clinton era EPA. Roger Martella with Sidley Austin and the George W. Bush EPA. Gentlemen, thanks again for joining us. Happy holidays.

[DONIGER] Thank you very much.

[MARTELLA] Thank you. You, too.