The White House is reviewing a suggestion by the US environmental agency that global warming is a threat to public health and welfare.
Such a declaration by the Environmental Protection Agency would be the first step to regulating carbon dioxide and other greenhouse gases under the US Clean Air Act and could have broad economic and environmental ramifications.
The Supreme Court two years ago directed the EPA to decide whether greenhouse gases, especially carbon dioxide from burning fossil fuels, pose a threat to public health and welfare because they are warming the Earth. If such a finding is made, these emissions should be regulated under the Clean Air Act, the court said.
"I think this is just the step in that process," said White House press secretary Robert Gibbs, noting the Supreme Court ruling.
But several congressional officials, also speaking on condition of anonymity, said the EPA is moving to declare carbon dioxide and other greenhouse gases a danger to public health and welfare and views them as ripe for regulation under the Clean Air Act.
Such a finding "will officially end the era of denial on global warming", said Ed Markey, a Democrat whose Energy and Commerce subcommittee is crafting global warming legislation. He said such a finding is long overdue because of the Bush administration's refusal to address the issue.
Many business leaders argue as did President George W Bush that the Clean Air Act is ill suited to deal with climate change and that regulating carbon dioxide would hamstring economic growth.
"It will require a huge cascade of (new clean air) permits" and halt a wide array of projects, from building coal plants to highway construction, including many at the heart of Barack Obama's economic recovery plan, said Bill Kovacs, a vice-president for environmental and technology issues at the US Chamber of Commerce.
But Abigail Dillen, an attorney for environmental group Earthjustice, dismissed the dire economic warnings from business groups about carbon dioxide regulation.
"It's to their interest to say the sky is falling, but it's not... The truth is we've never had to sacrifice air quality to maintain a healthy economy. The EPA has discretion to do this in a reasonable way."
An internal EPA planning document that surfaced recently suggests the agency would like to have a final endangerment finding by mid-April. But officials say regulations would involve a lengthy consultation process.
When asked about the EPA document on Monday, Gibbs emphasised that "the president has made quite clear" that he prefers to have the climate issue addressed by Congress as part of a broad, mandatory limit on heat-trapping emissions.
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