The EPA’s Regulatory Agenda and Small Business America

By at 3 December, 2014, 1:24 pm

Center for Regulatory Studies

Higher costs, limited business formation and growth would result from EPA’s proposed rulemakings

By Karen Kerrigan-

On December 1, I submitted comments on behalf of SBE Council and the Center for Regulatory Solutions (CRS) regarding the EPA’s proposed “Clean Power Plan” to regulate carbon dioxide emissions from existing fossil-fueled power plants under Section 111(d) of the Clean Air Act. Our comments were one of more than 1.6 million received by the EPA on the controversial rulemaking.

New business formation and entrepreneurship remains at an all-time low in the U.S., and EPA's radical regulatory agenda would impose new costs and erect new barriers to entry, which would further damage America's policy ecosystem. An accountable regulatory system at EPA would take small business concerns and impact into consideration.

New business formation and entrepreneurship remains at a historic low point in the U.S.  Unfortunately, EPA’s radical regulatory agenda would impose new costs and erect new barriers to entry for entrepreneurs. America’s policy ecosystem for small business needs to be more competitive, not more costly and complex. An accountable and transparent EPA regulatory process would take small business concerns and impact into consideration.

These proposed regulations are one piece of President Obama’s Climate Action Plan (CAP). The CAP is a comprehensive list of regulatory actions and other steps to implement the President’s climate change agenda. The President is employing an inflexible and onerous regulatory model despite the rhetoric in CAP. Rather than relying on private sector innovators to create new technologies to drive efficiencies and develop cleaner ways of producing and using energy, EPA bureaucrats are calling the shots and trampling on the authority of the states. CAP is a far-reaching medley of federal mandates that will result in higher energy costs and decimate the coal industry. The approach will harm innovation and investment, and fails a basic cost-benefit test for small businesses. (See SBE Council’s “EPA’s Proposed Horror Reg.”)

The CAP’s core policies will act as a massive new tax on all Americans, including entrepreneurs and small businesses. The centerpiece of the CAP is EPA’s Clean Power Plan (CPP), a new federal mandate to address carbon dioxide emissions from existing fossil-fuel fired power plants. NERA Economic Consulting has estimated the regulations will result in double-digit energy cost increases ($366 billion over a fifteen year period.)

As urged by SBE Council and CRS in our comments to EPA, the proposed power plant rule needs to be withdrawn, and the agency should abandon its extreme plan to regulate carbon dioxide under the Clean Air Act.

The rationale underlying our position, as detailed in our comments, is straightforward. EPA’s proposed rule:

• Is illegal, stretching far beyond the narrow boundaries of Section 111(d) of the Clean Air Act (read some of the issues in a December 1 story on a twelve-state coalition that filed a brief against the EPA rule here);

• Imposes high costs with no meaningful benefits. Electricity will be more expensive for small business owners and entrepreneurs, which will slow economic growth, harm competitiveness, and destroy jobs (see SBE Council’s The EPA’s Plan to Kill Coal and More.) There will be no effect on global temperatures and climate change – the CPP will prevent less than 0.02°C of global warming by 2100; and

• Threatens the reliability of the nation’s bulk electric power system, which raises the prospect of blackouts and brownouts, thus increasing operating expenses and uncertainty for small businesses, as well as reduced output and revenues.

Whether it’s the potential for blackouts, higher energy costs, or the prospect of fewer jobs and opportunities, there are significant reasons why America’s small businesses and entrepreneurs oppose EPA’s CPP – and why they believe it should be scrapped altogether. Special interests drove the rulemaking process, and the voice and concerns of small businesses were ignored. SBE Council and CRS will continue to vigorously oppose this excessive regulatory overreach.

Meanwhile, EPA Releases its Ozone Regulation: On November 26, the EPA unveiled its controversial ozone regulation. Directed by court order to finalize the regulation by October 1, 2015, EPA proposed lowering existing ozone standards to a level between 65 and 70 parts per billion.

More stringent ozone standards will impose costly new regulatory mandates on small businesses and obstruct new business expansion. The proposed regulation is so far-reaching in its impact that President Obama put the rule on hold in 2011 out of fear it would hurt his reelection chances and the economy.

Here are previously published CRS resources on the EPA’s latest regulatory move:

Huge Challenges Ahead for Manufacturing Under EPA Ozone Rule, May 29, 2014

EPA Science Advisors Ignore the Law on Ozone, July 1, 2014

EPA’s Ozone Regulation: What Non-Attainment Really Means, September 8, 2014

EPA Moves Closer to Finalizing Most Expensive Rule in Agency’s History, September 12, 2014

EPA’s Forthcoming Ozone Rule Could Be Most Expensive in U.S. History, by Kevin Neyland (CRS, Senior Fellow), September 25, 2014

Asthma Rates Have Increased While Ozone Levels Have Fallen, October 23, 2014

SBE Council and CRS will remain highly engaged on this rulemaking. Combined with other intrusive EPA initiatives (like the CPP) the U.S. could become a dead-zone for new manufacturing and much-needed business formation if the ozone regulation moves forward. America’s energy renaissance is also threatened, which means the innovative small business owners and their hard-working employees who drive our energy sector are at great risk.

The message sent by voters in the 2014 elections was all about effective, accountable government and the need for Washington to advance policies that encourage business formation and growth, quality jobs and economic opportunity for all. The ideological and out-of-touch bureaucrats who run EPA’s regulatory machine do not have to worry about the American voters because they are unaccountable. That must change, and it will when the new Congress convenes next year. In addition to broader regulatory reform measures that SBE Council and CRS will push, we look forward to working with our pro-enterprise friends in the new Congress in challenging specific regulations that would do great damage to small businesses and entrepreneurship in America.

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council (SBE Council). The Center for Regulatory Solutions is a project of SBE Council.

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