As expected, EPA has issued a proposed rule for phasing out HFCs, as required by the so-called AIM Act that was sneaked in with the monster Omnibus Stimulus Bill in February. The severe problems with AIM are explained in my two prior CFACT articles:
Economically destructive cap and trade for HFCs is here
2. Crazy HFC phaseout is coming (part 2)
The biggest and most ridiculous problem is that a widely used harmless chemical is being eliminated in the name of climate change. HFCs were substituted for CFCs, at great expense, because of the bogus ozone depletion scare. Now they too are being replaced because of another phony green scare: climate change. In fact this is by far the biggest climate change mandate to become law to date.
The second biggest problem is that this complex cap and trade program is being implemented without the needed information about who uses HFCs, how much they use, whether there are viable substitutes, etc.
EPA is flying blind, and flying fast, a dangerous combination. The law calls for a truly stupid fast rule making, given that EPA does not have the data it needs to build a workable cap and trade program. Final rules are due in September so there is no time to get it right. Economic disruption is almost guaranteed, the only question being how bad will it get?
The just issued proposed regs reflect this deep data shortage problem very strongly. In fact this is the strangest proposed rule I have ever seen. The basic idea of notice and comment rule making is that the entities being regulated get to point out the problems with the proposed rules, which hopefully are then fixed in the final rules. The HFC proposal is not working that way, far from it. Here is a quick look at just some of the crazy strangeness.
To begin with, EPA is now asking for the data it needs in order to write properly working rules. There is actually a provision for doing this in the laws that govern agency rule making. It is called an “Advanced Notice of Proposed Rule Making” or ANPRM. Here the agency basically announces that the are planning on proposing certain sorts of regulations and they need certain information to go on when they do that.
EPA has essentially skipped over the ANPRM stage. As a result a lot of the needed rules are not in the proposal, rather they are awaiting the needed data.
Here is a glaring example. EPA lists a whopping 83 categories of industrial activity that it says might be affected by the HFC phaseout. This is a cap and trade system so it is crucial to know how each of these categories fits into the program. But instead of making a proposal in this regard they are asking for the basic data they need in order to make such a proposal.
This asking rather than proposing implies that the first time the regulated entities will see the resulting rules will be in the final version. There will be no notice and comment on them. This may well be a violation of the Administrative Procedures act, which governs agency rule making.
EPA actually admits that they do not know what they are doing. This would be very funny if it were not so serious. They say they will only implement the final rules for one or two years. After that they will propose a new set of rules, based on what they have learned.
Clearly this is rule making by trial and error. In this case the errors may well include the disruption of dozens of industrial categories, harming untold thousands of commercial entities, plus hurting the consuming public that depends on them. As I pointed out in my second prior article, certain medical devices depend crucially on a proper supply of HFCs. So does the manufacture of a lot of vital electronic devices. Supply chain disruption could be devastating.
There are also lots of specific problems with the rules as proposed. They severely limit growth, innovation and new entrants. The use of HFCs will now be under detailed EPA control. The paperwork alone is staggering. EPA (under)estimates it to cost $4.5 million a year!
EPA’s supposed justification of this looming disruption is truly laughable. Their purported cost-benefit analysis actually quantifies the idiocy of climate alarmism.
EPA claims that if we keep using HFCs they will cost almost $300 billion in future climate damages due to the next 30 years of emissions. I am not making this up, but they are. In fact the claimed damages are much greater than that, as $300 billion is just these fictitious damages discounted to present value at 3%.
In short, a widely used, effective and harmless chemical has now been nationalized in the name of climate change. No good can come from this, but lots of bad can. Stay tuned.