WASHINGTON - What happens next in the long-running U.S. drama over limiting greenhouse emissions could come down to a duel over whether rules or laws should dominate the policy landscape.

The Environmental Protection Agency's declaration Monday that greenhouse pollution poses a health hazard clears the way for regulation to cut emissions of carbon dioxide and other chemicals that spur climate change. The EPA has already set in motion regulations that target emissions from motor vehicles and will determine how much carbon comes from stationary sources like factories.

Given slow progress in Congress on crafting a bill to curb climate change, EPA may lead the way, even though the Obama administration has repeatedly said it prefers legislation.

Here are ways the process could play out:


This is what the Obama team wants. As EPA Administrator Lisa Jackson said Monday, it is not a question of either/or but both/and.

The reason is because legislation is comprehensive; it can be economy-wide, Jackson said. It can give business absolute certainty that we are on the road to clean energy, that the investments they want to make ... will be profitable ones, because they know that this country is on the road.

The problem is the timetable in Congress. Mired in contentious debate over healthcare, climate change is unlikely to make it through the Senate by the end of the year. Ultimately, though, EPA regulations could act as a backstop to any action on Capitol Hill.


With the way clear to regulate various sectors of the U.S. economy to limit greenhouse gas emissions, the EPA is well-placed to go forward on limiting global warming pollution from cars and factories.

The agency has already started doing so: automakers will know by next March how much more fuel-efficient their vehicles will have to be in the 2012 model year. Legislation in Congress does not address this issue directly, so it is likely to proceed no matter what happens in the Senate.

Starting in January, the biggest U.S. greenhouse emitters will participate in an EPA national registry to collect data on how much of these heat-trapping gases they emit. The program will cover about 10,000 facilities, accounting for up to 85 percent of U.S. greenhouse gas emissions.


Carbon-capping legislation narrowly passed the U.S. House of Representatives but is so far stalled in the Senate. A compromise might be reached but that is unlikely to happen before the first of the EPA's proposed regulations take effect.

The divide is not necessarily between environmentalists and industrialists. Some businesses, such as those in the U.S. Climate Action Partnership, have clamored for a federal law to limit emissions to provide investment certainty.

Other industries, represented by the U.S. Chamber of Commerce, oppose so-called cap-and-trade legislation on the grounds that it would hamper businesses as the country struggles out of a painful recession.

Congressional climate skeptics pose another obstacle to legislation. One of the most vocal of this group, Republican Senator James Inhofe, has vowed that the Senate will not approve a cap-and-trade bill.


If Congress fails to pass a climate change bill, EPA regulations could go forward but would be vulnerable to litigation from business interests. The argument would likely turn on potential damage to the economy, including the impact on job creation due to added costs of complying with new environmental rules.


The lag in congressional action means President Barack Obama will go to the international climate change meeting in Copenhagen next week with no firm legislation to show U.S. commitment to limiting planet-warming emissions.

However, Obama is still riding a wave of global enthusiasm because of his stark difference from former President George W. Bush on this issue. With that advantage, the EPA's actions, however limited, offer evidence to the world community that the United States wants to lead in solving the climate change conundrum.

It also shows skeptical fast-developing countries -- China, India, Brazil, South Africa and others -- that the United States is moving in the right direction, whether through regulation or legislation.

(Editing by Paul Simao)