Legislate, Don't Regulate, Says Chemical Lobby
By Margaret Kriz Hobson
Cal Dooley
President and CEO, American Chemistry Council
The EPA's plans to limit corporate emissions of global warming pollution are likely to have "very significant adverse consequences" on U.S. chemical companies, according to Cal Dooley, president and CEO of the American Chemistry Council. Dooley argued that companies would find more innovative ways to cut their emissions if Congress passed a climate change bill instead of allowing the EPA to regulate emissions under the Clean Air Act.
A former Democratic congressman from California, Dooley also headed up the Grocery Manufacturers Association and the Food Products Association. Following are edited excerpts of Dooley's recent interview with National Journal.
NJ: How does it look for climate change this year?
Dooley: There are a lot of moving parts. The chemical industry and ACC and our member companies have been very constructively engaged. We've met with members of Congress with the objective of seeing legislation crafted that would effectively reduce emissions while protecting our international competitiveness. We provide green solutions and green jobs and a lot of energy-efficiency products -- insulation and plastics and composites and lightweighting of vehicles and aircraft.... We have a vested interest in this policy being done right because it would actually encourage and increase demand for a lot of our products.Now that being said, a failure of Congress to pass climate change legislation, if the delay is only for a relatively short period of time, a year or two, is something that would not have significant adverse consequences to our industry -- with one very significant caveat. And that is, if Congress doesn't act on climate change legislation and the EPA continues down the path of regulating the emissions from stationary sources under the Clean Air Act, that will have very significant adverse consequences to the U.S. chemical industry.
NJ: What kind of adverse impacts?
Dooley: Right now, a lot of our companies are on the leading edge of developing some really terrific products. I have one company that has plans to build three photovoltaic manufacturing facilities in three different states. It has, in fact, been facilitated by stimulus funds and tax credits. If you have EPA regulating, it would put in place regulations under the Clean Air Act which they estimate would delay those plants for two to three years.And the reason for that is that because as EPA finalizes these rules, it creates a cascade of events that requires states to modify their legislation and their regulations. Once these regulations are finalized, EPA needs to provide guidance on what is the best available control technologies that companies would need to incorporate into their existing facilities or new facilities. There's absolutely no consensus or guidance on what the best available control technology is today. EPA has no guidance.
It creates such regulatory uncertainty that you're going to freeze literally hundreds of millions of dollars of investment in the U.S. chemical industry if EPA doesn't postpone the implementation of these regulations on stationary sources.
NJ: Would this kind of confusion occur if Congress passes new legislation?
Dooley: No. Most all the legislative proposals that we've seen provide basically a pre-emption of these regulations under the Clean Air Act. That's one of our highest priorities from an industry point of view. There needs to be a level of pre-emption under the Clean Air Act.We think it's absolutely important that you have a price signal [on greenhouse gas emissions]. And that ensures that the private sector will be allocating their investments in a way to most cost-effectively achieve the reductions in emissions. And it allows us to maintain our competitiveness internationally.
EPA regulating emissions under the Clean Air Act provides no price signal. It's basically a heavy-handed regulatory approach that isn't going to ensure that the private sector is making the investments that are going to be the most cost-effective.
NJ: The Clean Air Act requires EPA to designate which "best available control technologies" companies follow to control their pollution. Why is this bad?
Dooley: You would actually see the incorporation of best available control technologies under any legislation that sends the appropriate price signal. Actually, you might see a more robust adoption of technologies under legislation than you would see under the Clean Air Act. We're trying to encourage the administration and EPA to postpone the rules for up to two years in order to give Congress more time to act.
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