The president's challenge is to tackle climate change without appearing to hinder job growth. Obama pushed to deliver on climate

Jan. 2 isn’t just your ordinary Sunday.

It’s the day the Obama administration will officially start regulating greenhouse gas emissions, and critics have issued dire predictions of economic destruction.


With all the fiery rhetoric about how damaging the regulations could be, the White House is under pressure to fulfill its pledge to tackle climate change while avoiding the appearance that it’s hindering job growth.

GOP lawmakers have already launched a series of efforts to hamstring the Environmental Protection Agency — and that’s before the rules have even officially kicked in. Those efforts are expected to increase in frequency and in force in the next Congress as Republicans claim the House majority and industries continue to lobby furiously against the greenhouse gas regulations.

Incoming House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) last week accused EPA of advancing a “long regulatory assault” against domestic energy producers. “The EPA has its foot firmly on the throat of our economic recovery,” he said. “We will not allow the administration to regulate what they have been unable to legislate.”

Blasting the agency’s climate rules has become popular sport in both chambers of Congress and even among some Democrats.

Sen. Kit Bond (R-Mo.) earlier this year called EPA’s suite of climate rules a “policy of pain.” Sen. Lisa Murkowski (R-Alaska) warned of the “economic train wreck” that will ensue if the rules go forward.

Sen. John Rockefeller (D-W.Va.) — who led an effort to block the climate rules — predicted dire economic consequences. “In the face of a January launch date, I think it is irresponsible to wait any longer — we must call a timeout on these regulations,” he said. He’s since given up on getting a vote on his bill this year.

“I think there will be a lot of ‘I told you so,’” said Sen. Jim Inhofe (R-Okla).

President Obama and top EPA officials insist they would have preferred comprehensive climate legislation to a regulatory scheme, but they say they’re legally bound to regulate greenhouse gases under the Clean Air Act after the 2007 U.S. Supreme Court decision in Massachusetts v. EPA that ordered EPA to determine whether the heat-trapping gases endanger public health and welfare.

And within the confines of the law, the administration argues it’s doing the best it can.

“The Clean Air Act is a tool,” EPA Administrator Lisa Jackson said in an October interview. “It’s not the optimal tool, but it can be used, and in fact, I’m legally obligated now to use it.”

And she’s refuted the horror stories from EPA’s critics. “The rules that we’ve put forth so far have been smart sensible rules,” she said. “Major regulations are always met — are often met — with doom-and-gloom dire predictions of economic ruin, and there is no history to bear that out.”

So what actually happens on Jan. 2? For all the political rhetoric surrounding the climate regulations’ kickoff, the answer isn’t quite as sexy as one might think.

EPA has determined that Jan. 2 is the date when greenhouse gases officially become “subject to regulation” under the Clean Air Act. What that means immediately — and what’s causing uproar among industry — is that new and upgraded industrial facilities like power plants and refineries will be forced to install technologies to curb their greenhouse gas emissions.

At first, the greenhouse gas rules will only apply to new and modified plants that would already trigger control requirements based on their emissions of other pollutants regulated by EPA, like soot or smog. Starting in July, large plants will fall under EPA’s rules based only on their greenhouse gas output. EPA says phasing in those rules will allow states and other permitting authorities to get used to the process.

“We’re setting up the process to work as smoothly as possible under existing law,” an EPA official told POLITICO last week. “We’ve been talking to the states about this coming day” for nearly two years, that person added, so they’ve had a lot of time to prepare.

Overall, EPA estimates that about 1,600 pre-construction permits per year would include greenhouse gas control requirements. EPA predicts that about 700 sources that would already apply for those permits based on their output of other pollutants, in addition to about 900 more sources, will be forced to limit their carbon dioxide emissions.

But how exactly will they have to do that? It depends.

In some states, where they aren’t immediately able to regulate greenhouse gases under their own permitting programs, EPA plans to step in until they can revise their state laws or regulations. The agency is also planning to take over greenhouse gas permitting indefinitely in Texas, where state officials have staunchly refused to get in line with the Obama administration’s climate policy.

Regulators will determine on a case-by-case basis exactly how to enforce emission reductions under the new rules. EPA issued a guidance document in November pushing efficiency as the best way to curb emissions, but the requirements will vary depending on the individual plants.

That leaves a lot of uncertainty, said Jeff Holmstead, an industry attorney who served as EPA air chief during the George W. Bush administration. EPA’s guidance “doesn’t really clarify things very much” for industry, he said. “It’s much more about process than it is about standards.”

Industry officials have warned that long delays could occur as authorities work to issue greenhouse gas permits for the first time and as opponents of new projects challenge the emission control requirements in court.

“It’s a mess. It’s great for lawyers, but it’s bad for anybody who wants to build anything," Holmstead said, adding he'd be surprised if many major greenhouse gas permits are issued next year.

Ben Grumbles, who served as Arizona’s top environmental chief until December, said he doesn’t envision immediate permitting problems in Arizona but said there’s a great deal of uncertainty about what will happen down the road as the debate plays out in Congress and the legal battle over the rules continue.

“We don’t envision a big train wreck after Jan. 2 on the question of permitting and the mechanics of getting coverage under the Clean Air Act,” said Grumbles, who also served as a top EPA official in the George W. Bush administration. “We do anticipate that in 2011, there’s going to be significant debate and discussion over those greenhouse gas emission regulations.”

To be sure, some states say they’re expecting no trouble at all. “We’re equipped, we’re staffed, we’re ready,” said Stuart Clark, air quality program manager at the Washington State Department of Ecology.

Several state air regulators told POLITICO they expect that implementing the new climate rules will be much like the other clean air programs they’ve implemented in the past.

“There are no new problems being created by the addition of greenhouse gas emissions,” the EPA official said. “It’s going to be still the same permitting program with still the same structures and still the same setup.”

Joe Mendelson, director of global warming policy at the National Wildlife Federation, said the buildup to the climate regulations is reminiscent of the uproar leading up to Y2K. “This is a lot of ballyhoo about something that’s not going to be very disruptive,” he said.