Why Aren’t Businesses Hiring? EPA For One Reason …

As regular readers know, we’ve been talking about why businesses are sitting on the sidelines and not hiring at the moment. Businesses don’t like unsettled questions about the arena in which they must operate. Health care legislation will effect the cost of doing business. Until that is settled, there’s little incentive to take a chance and hire or expand their business. If it costs more to do so after the legislation is passed – and it seems it will, they’ll wait to see the eventual outcome (and cost) and adjust accordingly. Same with cap-and-trade.

However, in that regard, the EPA seems ready to proceed on it’s own schedule and businesses are not liking what they’re hearing:

Officials gather in Copenhagen this week for an international climate summit, but business leaders are focusing even more on Washington, where the Obama administration is expected as early as Monday to formally declare carbon dioxide a dangerous pollutant.

An “endangerment” finding by the Environmental Protection Agency could pave the way for the government to require businesses that emit carbon dioxide and five other greenhouse gases to make costly changes in machinery to reduce emissions — even if Congress doesn’t pass pending climate-change legislation. EPA action to regulate emissions could affect the U.S. economy more directly, and more quickly, than any global deal inked in the Danish capital, where no binding agreement is expected.

Bottom line – if the administration can’t get it done legislatively, they’ll just assume the authority and implement what they wish to do to restrict emissions and require “changes in machinery” unilaterally.

An EPA endangerment finding “could result in a top-down command-and-control regime that will choke off growth by adding new mandates to virtually every major construction and renovation project,” U.S. Chamber of Commerce President Thomas Donohue said in a statement. “The devil will be in the details, and we look forward to working with the government to ensure we don’t stifle our economic recovery,” he said, noting that the group supports federal legislation.

Can you imagine a more pervasive “emission” or arbitrarily applied set of mandates? Start asking yourself who the favored and unfavored industries are out there? Do you suppose coal fired power plants might be target one? And I’d guess that refiners would be in the same boat – unless they make ethanol.

The point of course is this is a perfect way to target and increase the cost of operating businesses that the EPA decides are the worst CO2 polluters. They’ll just write regulations that require costly renovations and changes. The net outcome, of course, is increased cost to consumers – most likely in their electricity bills, the cost of goods (transportation) and just about every other aspect of life you can imagine.

An endangerment finding would allow the EPA to use the federal Clean Air Act to regulate carbon-dioxide emissions, which are produced whenever fossil fuel is burned. Under that law, the EPA could require emitters of as little as 250 tons of carbon dioxide per year to install new technology to curb their emissions starting as soon as 2012.

The EPA has said it will only require permits from big emitters — facilities that put out 25,000 tons of carbon dioxide a year. But that effort to tailor the regulations to avoid slamming small businesses with new costs is expected to be challenged in court.

Legislators are aware that polls show the public appetite for action that would raise energy prices to protect the environment has fallen precipitously amid the recession.

Understanding that the public appetite for such action is very low, legislators are perfectly happy to let cap-and-trade languish. So the bureaucracy is being empowered to go where no elected politician dares at the moment. And if you’re a business, that means you’re still not clear what that means to you at the moment.

And so, you don’t hire. You don’t expand. You’re barely competitive in the global market as it is and now they’re talking about adding more cost? Yeah, that settles everything, doesn’t it? They’ll start hiring tomorrow.

[Crossposted at QandO]

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