Jason Grumet

If elected President, Barack Obama will give EPA the green light to regulate carbon dioxide under the Clean Air Act, Bloomberg.com reports. Bloomberg’s source is Obama’s energy adviser, Jason Grumet, who also serves as executive director of the self-styled National Commission on Energy Policy (NCEP).

This is all very odd. NCEP is the leading proponent of a price-cap “safety valve” to limit the energy and economic impacts of a carbon trading program (see p. 21 of this report). NCEP touts its safety valve proposal as the moderate middle between the regulate-at-any-cost Left and the regulate-under-no-circumstances Right. Supposedly, the safety valve would take the economic risk out of regulating carbon, because the government would commit in advance to sell as many permits as might be needed to keep carbon prices within a preset cost ceiling. Under the original NCEP plan, for example, the government would guarantee that carbon permit prices do not exceed $7.00 per ton in the first year, and do not increase by more than 5 percent annually.

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