Cap-and-trade legislation approved last week by the Senate Environment and Public Works Committee would still allow the U.S. Environmental Protection Agency (EPA) to regulate greenhouse gases. Unlike its House counterpart, the Senate bill does not exempt greenhouse gases from coverage under the Clean Air Act.

The Senate bill, introduced by Sens. John Kerry (D-MA) and Barbara Boxer (D-CA), takes a more logical approach than the House bill. The Kerry-Boxer bill would exempt greenhouse gases from certain parts of the Clean Air Act, including the National Ambient Air Quality Standards program and the hazardous air pollutant program, but still allow EPA to consider greenhouse gas emissions at other times, like during the pollution permitting process.

The Kerry-Boxer bill would change the definition of “major” air pollution source as it relates to greenhouse gases. Under the bill, a source would not be considered major until it emits 25,000 tons of greenhouse gases in a year. The threshold for major sources is usually 250 tons, but since greenhouse gases are emitted in greater quantities, a higher threshold is warranted.

David Sassoon from SolveClimate.com has more:

The choice of the 25,000-ton threshold is no accident. It is what EPA already proposed under a "tailoring rule" it developed, published in the Federal Register and now in a period of public comment. It is what Administrator Jackson has called a "common sense" approach to using the Clean Air Act to help fight global warming, and removing the threat that EPA would regulate ridiculously small sources of CO2 emissions. 

The tailoring rule and another EPA rule that would limit vehicle emission are combining to keep the pressure on Congress to act. Many businesses would prefer cap-and-trade legislation to EPA regulation and are making their opinion know to lawmakers. (Still, any form of climate legislation is likely on hold until 2010.)

Will the final bill allow EPA to regulate greenhouse gases? Who knows. EPA’s Clean Air Act authority was offered as a sacrificial lamb during House negotiations in order to win over the support of moderate lawmakers and some in the power industry. Senators will likely try to strip the modified authority if and when other committees consider the bill or when the bill reaches the Senate floor.