Now that EPA officially says carbon dioxide (CO2) is a dangerous air pollutant, what’s it mean for business?

It’s high time to embrace concepts like energy efficiency or energy conservation or whatever you want to call it. Most smart money’s on those who are looking for ways to use less energy and rely more on power made by renewable sources like solar, wind and geothermal to reduce their company’s carbon footprint.

Reason: EPA’s action gives the Obama administration the ticket to force radical changes throughout the American economy to reduce greenhouse gas (GHG) emissions. So, the fewer GHG emissions your facility creates directly, or indirectly by buying electricity produced by burning fossil fuels, the cheaper it will be for you to operate and the fewer regulatory hassles you’ll have to deal with.

Benefit: Whether your company makes these changes willingly or not, everybody can claim green credits for reducing GHG emissions and helping fight climate change.

In the short term, the biggest changes flowing from this “endangerment” finding is that it clears the way for EPA to:

1. impose tailpipe standards on GHG emissions from cars and trucks.  It will be the first time EPA sets GHG tailpipe emission standards, and
2. force industrial facilities to actually control and reduce their GHG releases by installing what’s known as best available control technology.

EPA is expected to break regulatory speed records to get both Clean Air Act rules out in final form by March 2010.

At first, EPA says regulation will be limited to the 13,000 largest facilities — the ones that emit 25,000 metric tons or more of GHGs a year. But many fear EPA will be forced to regulate smaller facilities as well, and all EPA has to do is to lower this 25,000 ton threshold.

There’s already precedent to do this. Oregon’s GHG reporting rule, for example, starts by regulating those that emit 25,000 metric tons per year. But in year two of the program, the reporting threshold falls to 2,500 metric tons per year. The reporting threshold in Washington state is 10,000 metric tons per year.

The tailpipe GHG emission standard will force U.S. automakers to make more fuel efficient vehicles.

Normally, the auto industry would raise all kinds of ruckus to avoid making more efficient cars. However, now that GM and Chrysler fell into bankruptcy and were bailed out by the U.S. taxpayer, President Obama gets to call the shots on this issue, so they won’t be able to oppose the new standards.

Most agree that EPA’s regulation will be far tougher on industry and business than the proposed cap-and-trade program being negotiated in Congress.

Obama has said he prefers the national cap-and-trade program and will restrain EPA if Congress approves emission trading program legislation.

Tags: endangerment finding, GHG emissions