The NYT reports that the EPA is preparing to issue a formal endangerment finding in response to the Supreme Court's Massachusetts v. EPA decision. From what I hear, the finding will be made on or before April 30. Once made, this finding will trigger a wide range of regulatory initiatives under the Clean Air Act. As I've said repeatedly, I believe that the agency has little choice on this matter, and even if the Obama EPA were not inclined to pursue regulation of greenhouse gases, it could not be avoided legally.

The WaPo story on EPA's plans notes that the endangerment finding will conclude that climate change due to greenhouse gas emissions pose a threat to both public health and human welfare. This is potentially significant, as it would trigger broader regulation under the Clean Air Act's NAAQS provisions. (It was for this reason that some in the Bush Administration sought to limit any endangerment finding to "welfare," and exclude "health".)

A practical effect of the finding will be to increase the pressure for federal climate legislation. Assuming that greenhouse gas emission controls are desirable, the Clean Air Act is a particularly poor way to do it. The law is not particularly flexible or cost-effective, particularly if it were to be applied to greenhouse gases. The most popular alternative, right now, is to replace Clean Air Act regulation of greenhouse gases with a cap-and-trade regime. Such systems are theoretically quite efficient, but will operate as a hidden tax. A cap-and-trade system for greenhouse gases would also unleash a torrent of rent-seeking that could overwhelm the benefits of the plan. Far preferable, in my view, would be the imposition of a modest, revenue-neutral carbon tax, the replacement of traditional subsidies with prizes, and innovation-enhancing regulatory reforms.