Gina McCarthy: How would she change EPA?

Gina McCarthy's Senate nomination hearing was as much about the role of the Environmental Protection Agency as her ability to direct it. How should Gina McCarthy enforce regulations on oil, gas, and coal, and do those regulations hurt or help the economy?

On paper, the goal of Thursday's Senate Committee on Environment and Public Works meeting was to consider the nomination of Gina McCarthy to head the US Environmental Protection Agency. In practice, it was equally a referendum on the agency's considerable regulatory powers.

What are the costs and benefits of regulating fossil-fuel energy production? Do savings on health and infrastructure outweigh losses in employment and production? 

McCarthy has a reputation for being a tough regulator. As head of EPA's Office of Air and Radiation, she helped draft new regulations curbing emissions of mercury and soot from power plants. Just last month the EPA passed stronger standards for car tailpipe emissions and sulphur levels in gasoline.  

Critics say those measures slow economic development and amount to an insignificant reduction in global greenhouse gas emissions. They say they lead to the closure of coal plants that underpin the economies of entire communities. Many Republicans – particularly those from fossil-fuel-heavy states – are wary of McCarthy.

“If confirmed as administrator, I am concerned that Gina McCarthy would continue to foster this administration’s radical environmental and anti-coal jobs agenda,” said Senator Mitch McConnell (R) of Kentucky in a statement Tuesday. “Vast overreach and burdensome rules and regulations that stifle job creation have been the bedrock of this administration for too long."

Droughts, hurricanes, and smog have economic consequences as well. Last month Congress approved a $51 billion aid package for victims of superstorm Sandy. McCarthy and other backers of environmental protection say those costs will continue to rise, and that the long-term savings associated with clean air and water far outweigh any immediate loss in employment or production. 

The annual benefits of EPA regulations amount to somewhere between $83 billion and $560 billion, according to the US Office of Information and Regulatory Affairs (OIRA). Those regulations cost between $23 biliion and $29 billion each ear, according to OIRA.

The libertarian Competitive Enterprise Institute puts the costs much higher. They say EPA regulations cost the US economy $353 billion each year.

"The economic exposure associated with climate change is large, not just domestically but also as a national security issue," McCarthy said during Thursday's hearing.

The climate challenge, McCarthy added, is an opportunity for developing a clean-energy economy. She has worked for both Republican and Democratic governors, and stresses the importance of taking "reasonable" measures to protect the country's environmental legacy.

"We are regulating greenhouse gases as pollutants, but we’re doing it in common sense steps so that we can ensure the economy will continue to grow," McCarthy said.