The Air War at Home: An environmental policy that everyone should love.

In the last week of November, the Bush administration handed down a new regulation that will simultaneously reduce air pollution and increase energy conservation, all without costing either taxpayers or consumers a dime. Is everybody happy? Not hardly.

The Natural Resources Defense Council instantly condemned the decision: "The Bush administration decided to allow corporate polluters to spew even more toxic chemicals into our air, regardless of the fact that it will harm millions of Americans." The Sierra Club described the new rule as a step backward into barbarian darkness: "The president is trying to give polluters permission to ignore modern technology and keep fouling our air." To Sen. James Jeffords of Vermont, Bush's action was a "devastating defeat for public health and our environment." And Paul Krugman warned readers of the New York Times to "breathe while you still can."

Actually, when you think about it, it's a miracle any of us can breathe at all, what with all that arsenic poisoning us. Yet it's a very odd thing: At almost exactly the moment that each environmental scare story exhausts its fundraising potential, along comes another, even more horrific than the last. It's safe to say that the excitement over Bush's revisions to the Clean Air Act won't be the last environmental blowup. It may, however, very well prove to be the silliest.

To understand just how silly, you have to brace yourself for a little regulatory history.

The story begins a quarter-century ago, when Jimmy Carter stumbled into a Washington political crossfire over his plan to reduce America's dependence on foreign oil. One obvious way to achieve that reduction was to use more coal -- and less oil -- in factories and power plants. Unfortunately, coal is a very dirty fuel. To appease environmentalists, the Carter administration drafted a Clean Air Act in 1977 that allowed existing plants to continue in business -- but that required them to install expensive anti-pollution technology if they changed or expanded. This rule was called "new source review," and for 20 years few paid it much attention.

The power shortages that began in California in 1999 and spread through the western United States got people paying attention again. For the first time since the days of fat neckties, electricity became a sexy topic. And suddenly a lot of people began to notice the perverse effects of the new source rule.

Imagine you own a coal power plant built in 1952. If you decide to upgrade your plant -- say by adding an additional generator, a new one that will produce more power with less fuel and less pollution -- you will trigger a new source review that will force you to spend millions to clean up the otherwise protected, older part of your facility. If, however, you decide to forget about modernization and continue to run the plant the way your grandfather did -- why then, you are free to pump as much coal ash into the atmosphere as you like. Result: Rather than build a cleaner new generator, you'll probably just shovel more coal into your old dirty one.