The End of EPA’s Endangerment Finding Is a Bigger Deal Than the Iran War

By William Murray

“We are like dwarfs on the shoulders of giants.” — Bernard of Chartres

Two things happened in February that will change the world. The first is the Iran War.

The second is an event so obscure most Americans don’t even know it happened — the Feb. 12 repeal of the 2009 Endangerment Finding by the Trump Administration’s Environmental Protection Agency (EPA). This decision puts a knife into the kidney of all the major U.S. climate rules made under the Obama and Biden administrations. It was the legal underpinning for the Green New Deal.

Of the two events, the end of the Endangerment Finding is of a greater consequence, yet 21^st Century conventional wisdom — curated and gatekept by social media, the most unwise medium ever invented — makes it hard to fit one’s head around this argument. But here goes.

The Iran War is costing about $1-2 billion a day in direct costs, and several times that in indirect costs from higher energy prices across most of Europe and Asia, though less so in the United States, which is increasingly energy independent.

Meanwhile, the 2009 Endangerment is one of those “regulatory state” workarounds when Congress doesn’t pass a law or the Supreme Court passes on a tough decision. This administrative decision is the foundation of ALL modern climate regulation and global climate diplomacy. Its reversal has the Trump administration crowing about the $1.3 trillion in savings over the next decade to American citizens through cheaper automobiles, among other things.

This has made a lot of the right people unhappy.

In an interview with The New York Times, Jody Freeman, director of Harvard Law School’s Environmental and Energy Law Program, who happened to design the Endangerment Finding for the Obama White House, said the Trump administration wants “to not just do what other Republican administrations have done, which is weaken regulations. They want to take the federal government out of the business of regulation, period.”

Speaking as someone who worked at the EPA during the first Trump administration, Freeman is wrong. Republicans don’t mind environmental regulation based on good incentives that don’t penalize industries that are politically disfavored through no fault of their own.

But there is a human cost to all regulation that is essentially unpriced, and it is something Freeman and the Left never acknowledge. Federal regulation itself was invented by the government to improve human lives — think the Safe Drinking Water Act, the Clean Air Act, or the 1938 Fair Labor Standards Act that ended child labor.

The problem is that future choices forgone, which economists call opportunity costs, are nearly impossible to quantify and constrain, thereby stifling innovation and invention in almost unfathomable ways.

Consider the following counterfactual.

If the U.S. Supreme Court had made privacy laws stricter in the late 1990s, sharing pictures of strangers without their permission would have been illegal. This would have disincentivized early camera phone makers, Sharp and Sanyo, from including cameras in the first smartphones in the early 2000s and would have slowed or even undermined Apple’s decision to build the iPhone.

Less than 25 years after the first U.S. camera phone was released, the total value of mobile technologies and services globally exceeds $7 trillion, representing more than 6% of global GDP. Much of these trillions of dollars of newly created wealth exists in the share price of Silicon Valley firms, and the retirement savings of nearly 100 million Americans and the U.S. economy writ large.

What the Endangerment Finding did was create a domestic legal predicate to treat carbon dioxide as a pollutant under the Clean Air Act. That predicate, in turn, allowed Democratic administrations to commit America to the Paris Agreement and the broader U.N. climate regime that the U.S. Senate was fooled into accepting when it passed the United Nations Framework Convention on Climate Change (UNFCCC) in 1992.

It’s quite possible that the global climate regime created under UN sponsorship had a similar effect on energy-intensive industries to that a strict privacy law would have had on smartphones, which became the entry point for billions of people into the digital economy.

And now it’s ending.

By undoing the Endangerment Finding, you don’t just repeal a regulation; you repeal the regulatory superstructure that has saddled the United States with trillions of dollars in opportunity costs and billions in explicit costs every year.

Thus, however costly a short conflict with Iran would be, it hasn’t been nearly as much as the unpriced opportunity costs of the last 30 years under the UN Climate regime.

Once the U.S. is no longer legally bound at home, it can exit the international framework cleanly. And when America leaves, the dominoes fall in order. Russia, China, India, and Saudi Arabia — none of whom ever believed “the planet is dying” rhetoric anyway — will follow suit.

They never saw the climate treaty as anything other than a wealth-transfer mechanism from the West, and now the jig is up for the American Left and the European establishment.

Instead of this transhumanist dystopia, we have the possibility of returning meaningful heavy industry to the U.S., creating over a million good-paying craft jobs, while still maintaining strong environmental laws.

Indeed, fears of environmental backsliding could be easily remedied by Congress if it were to pass the Affordable, Reliable, Clean Energy Security Act (ARC-ES), introduced in Congress late last year by Rep. Troy Balderson (R-OH).

The ARC-ES bill would codify into law clear definitions of key terms like “affordable,” “reliable,” and “clean,” ensuring that investment risks are limited to cost-effective infrastructure projects only.

The bill would help America’s most affordable, reliable, and environmentally-friendly energy sources, including nuclear and natural gas, remain part of the energy mix — a crucial requirement for American households and businesses.

The fact that neither the ARC-ES nor the Endangerment Finding’s reversal of fortune is anywhere in the news tells you everything you need to know about the current state of global journalism.

This is no slight to the news coverage concerning Iran, which is compelling, but all over the place. It just shows how incentives for informing the public in the 21^st century about what truly matters in their lives are weak and getting worse. Perhaps one day someone will invent a better medium for information.

William Murray is a former speechwriter for the Environmental Protection Agency (EPA), the past editor of RealClearEnergy from 2015 to 2017, and currently the chief speechwriter for the Commodity Futures Trading Commission (CFTC).

This article was originally published by RealClearEnergy and made available via RealClearWire.