The Volokh Conspiracy

Back in 2007, Congress created a biofuels mandate under which oil companies are required to use a minimum amount of cellulosic ethanol each year.  The mandate was supposed to encourage the development of a domestic cellulosic ethanol industry.  This has not happened.  Several years after the mandate was imposed, there is still no commercial cellulosic ethanol production.  This gets the oil companies off the hook, right?  Nope.  As the New York Times reports, companies are still paying fines, totaling nearly $7 million, for failing to meet a blending quota for a substance that does not exist.  Were that not bad enough, this year the cellulosic ethanol quota will increase, as will the fines for failing to meet it.

Who would defend mandating the use of a substance that, for all practical purposes, does not exist?  Not the renewable fuel industry.  As the NYT reports, they acknowledge that commercial production of cellulosic ethanol remains years away.

“From a taxpayer/consumer standpoint, it doesn’t seem to make a lot of sense that we would require blenders to pay fines or fees or whatever for stuff that literally isn’t available,” said Dennis V. McGinn, a retired vice admiral who serves on the American Council on Renewable Energy.

The EPA, on the other hand, defends the mandate:

Cathy Milbourn, an E.P.A. spokeswoman, said that her agency still believed that the 8.65-million-gallon quota for cellulosic ethanol for 2012 was “reasonably attainable.” By setting a quota, she added, “we avoid a situation where real cellulosic biofuel production exceeds the mandated volume,” which would weaken demand.

AEI’s Ken Green has trouble making sense of the EPA’s rationalization:

So what’s most important about biofuel quotas is that they prevent us from over-producing a product that we can’t produce so we don’t weaken demand for the product that the government mandates we use.

As Green notes, Congress might as well have mandated oil companies blend gasoline with rainbows and unicorn sweat.

Over at RegBlog (an indispensable resource for those interested in regulatory policy), Lewis & Clark Law Professor William Funk comments on the stakes in the Sackett case:

Many environmentalists fear that a decision by the Court in favor of the Sacketts would hamstring environmental enforcement, on the theory that if defendants may delay compliance during lengthy judicial review proceedings, substantial harm to the environment may occur even if EPA eventually prevails. Moreover, if obtaining judicial review would delay compliance, then defendants might be induced to seek judicial review simply to put off the cost of compliance, even if the defendants knew they were likely to lose in the end. However, this fear is unfounded. The Administrative Procedure Act is clear that obtaining judicial review of a compliance order does not by itself relieve a person from the requirement to comply with that order pending judicial review. Instead, that Act provides that a person may seek a stay of the order first from the agency and then from the court if the agency denies the request, but that request will be judged on its own merits. For example, with respect to the Sacketts, it is unlikely a court would stay EPA’s order to cease and desist from further damage to the alleged wetlands, but it might well stay the requirement that the Sacketts restore the wetlands until a determination of the validity of EPA’s order. Thus, the judicial review the Sacketts seek would not enable continued harm to the environment during the review proceedings.

One need not view EPA as a rogue agency – or even as Dirty Harry – to appreciate the need for providing a judicial check on agency action. Even in good faith EPA has made errors in the past, and it and will again in the future; after all, it is staffed by humans. Knowing that persons may be able to seek judicial review, rather than be coerced into compliance out of fear of large penalties, provides a healthy incentive for EPA officials to ensure that their decisions are based on sound facts and law that will be readily upheld in courts. Absent that incentive, the tendency noted by Lord Acton – that power tends to corrupt and absolute power corrupts absolutely – could lead an agency to rely more on coercion than law. It is an essential element of the rule of law that government action be subject to judicial review, and here EPA’s order likewise should be subject to review.

Here are my prior posts on the Sackett case:

• Court to Consider Administrative Compliance Orders
• Sackett v. EPA
• Sackett Oral Argument

At SCOTUSBlog, Lyle Denniston characterizes the oral argument in Sackett v. EPA as “A Weak Defense of EPA.” Perhaps that’s because the EPA’s position, applied in this case, is difficult to square with traditional notions of due process.  Denniston highlights one passage of the oral argument (transcript) that highlighted the nature of the government’s position:

JUSTICE ALITO: Mr. Stewart, if you related the facts of this case as they come to us to an ordinary homeowner, don’t you think most ordinary homeowners would say this kind of thing can’t happen in the United States? You don’t — you buy property to build a house. You think maybe there is a little drainage problem in part of your lot, so you start to build the house and then you get an order from the EPA which says: You have filled in wetlands, so you can’t build your house; remove the fill, put in all kinds of plants; and now you have to let us on your premises whenever we want to. You have to turn over to us all sorts of documents, and for every day that you don’t do all this you are accumulating a potential fine of $75,000. And by the way, there is no way you can go to court to challenge our determination that this is a wetlands until such time as we choose to sue you.

The federal government’s attorney did not have much of an answer other than to say that, in most cases, there would have been some prior communication between the landowner and the EPA or Army Corps alerting the landowner to the potential problem, at which point the landowner could have filed a permit. Yet whether a permit is necessary in the first place is part of what is at issue, which prompted Chief Justice Roberts to characterize the federal government’s position as: Since you didn’t ask us whether we could regulate your property, we get to do it. After all, Roberts noted later, most landowners will not violate the order and risk the resulting accumulation of penalties just to get their day in court. As Justice Scalia noted later, in most cases, if the government is threatening to prosecute you, rather than “wait for the prosecutor to drop the hammer,” you may go to court to seek a declaratory judgment to resolve the question. Yet here, where the government has done more than merely threaten prosecution, no such pre-enforcement review is available. Worse, refusing to comply with the government’s order is, itself, a legal violation. It would be one thing to defend this sort of system where time is of the essence — such as where prompt action is necessary to prevent severe, ongoing contamination, such as from a hazardous waste spill. It’s quite another to try and defend this as “due process” when what is at issue is a the deposit of clean fill on a half-acre plot of land that may not even be within the scope of federal regulatory jurisdiction in the first place.

UPDATE: At Legal Planet, Richard Frank comments:

There seems little doubt from the oral arguments that the Sacketts will prevail before the Supreme Court, and that the lower court decisions will be reversed. (Having attended today’s arguments, I count at least seven justices siding with the Sacketts, and it’s conceivable that the opinion may even be unanimous.) The more difficult–and intriguing–question is how sweeping or narrow a decision will the justices issue? Will the anticipated ruling against EPA be confined to enforcement of the Clean Water Act, or might it extent to a host of other federal environmental laws that EPA frequently enforces through the issuance of ACOs? And will the Court base its decision on exclusively on statutory grounds, or will it follow the urging of several of Sacketts’ amici to find that the lack of judicial review of ACOs represents an unconstitutional deprivation of due process?

Today the Supreme Court hears oral argument in Sackett v. EPA, a challenge to the federal government’s claim that landowners (and other regulated entities) may not obtain pre-enforcement review of an administrative compliance order under the Clean Water Act.  I previewed the case before.  Here is how the WSJ reports on the case this morning:

Based on “any information”—even a newspaper article or an anonymous tip—the Environmental Protection Agency can issue an administrative compliance order directing a property owner to stop discharging pollutants or restore a damaged wetland. The government says such directives, similar to stop-work orders by local zoning inspectors, allow it to respond rapidly to prevent environmental damage.

But business groups contend that the EPA acts as a judge and jury, forcing property owners either to comply, often at great expense, or risk penalties of up to $37,500 a day if the agency later obtains a court ruling to enforce its directive.

Challengers say that by issuing compliance orders without first giving property owners a chance to contest them in court, the EPA skirts the federal law and the Fifth Amendment guarantee of due process.

The NYT editorializes on the case today as well, suggesting that the Sacketts must lose because (gasp) their position might benefit corporations.

This case goes far beyond the Sacketts’ right to fill in their lot without a permit. If the Supreme Court allows them to seek pre-enforcement review, it will be handing a big victory to corporations and developers who want to evade the requirements of the Clean Water Act.

One fact the NYT (and many commentators) ignore is that allowing pre-enforcement review of administrative compliance orders does not relieve regulated parties of the obligation to comply with such orders.  Judicial review does not automatically stay enforcement of the order, so allowing regulated entities their day in court does not necessarily entail allowing them to  continue to engage in allegedly polluting behavior.  It does, however, prevent agencies from using enforcement leverage to force compliance with rules that may not even apply.  In the Sacketts’ case, for instance, the whole question is whether their land is subject to federal regulation in the first place.  Granting pre-enforcement review does not automatically entitle them to continue building their house, but it does prevent the EPA from piling on penalties before the jurisdictional question is answered.

The briefs for the case are on SCOTUSBlog, and here’s an article in Regulation by PLF attorney Tim Sandefur, advocating the Sacketts’ position.

The Discovery Channel’s “Deadliest Catch” reality show chronicles the exploits of several Alaskan king crab fishing vessels and their crews operating in the Bering Sea.  The title for the show derives from the fact that Alaskan king crab fishing is one of the deadliest jobs around.  If the environmental conditions weren’t perilous enough, the traditional “derby” management of the fishery encouraged boats and their crews to fish fast and furiously so they could catch as much as possible before time ran out.  At least that’s how it was when the show began.

After the first season, catch shares were adopted in the Alaskan king crab fishery, eliminating the race-to-fish and increasing fishery safety as a result.  As ship captain Scott Campbell explains:

Since August 2005, we fish under a much better system called “catch shares,” which are also in place in some other fisheries. Now regulators divide up how much crab the fleet can catch among individual fishermen, as opposed to collectively, so we can fish at our own pace during significantly longer seasons. Tighter Coast Guard requirements have also improved safety.

I believe catch shares have saved lives in Alaska because crabbing deaths are much less common now.

Catch shares have not only improved safety, they have also created incentives for greater sustainability.

Catch shares have brought other benefits. Now we have a stake in protecting crab populations for the future. Because we aren’t in such a race against the clock, we’re able to get more young and female crabs we don’t keep back into the ocean unharmed. When we find an area has too many juvenile crabs, there’s time to go somewhere else instead.

Fishermen are earning more and the jobs now are more stable because we have much more time to catch crab. We can plan better because we know in advance how much crab we’re allowed to catch.

Further evidence that property-based resource management systems are superior than traditional regulatory alternatives.

Others have commented on President Obama’s decision to punt on the Keystone XL pipeline project.  Ordering additional review pushes the decision past the next election and enables the Administration to evade responsibility should the project ultimately fail.  As those who study environmental law know, delays of this sort are often enough to derail major projects for good — and that’s certainly the outcome some environmentalists anticipate.

The CFR’s Michael Levi suggests environmentalists are being short-sighted, as “the tactics and arguments that have won the day are ultimately as likely to retard clean energy development as they are to thwart dirty fuels.”

oil pipelines are hardly the only pieces of energy infrastructure that will require government approval in coming years. This is particularly true if the United States wants to build a new clean-energy economy.

The country has already seen strong opposition to offshore wind energy in Massachusetts, including from environmental activists and local landowners, on the grounds that it will ruin spectacular ocean views. Solar plants will need to be built in sunny deserts, but local opponents continue to insist that the landscape blight would be intolerable. New long distance transmission lines will have to cross multiple states in order to bring that power to the places that need it most. Once again, though, a patchwork of local concerns and inconsistent state regulation is already making the task exceedingly difficult. . . .

Energy experts often note that it would be impossible to recreate today’s energy infrastructure, given the intensity of opposition to pretty much any new development. The environmentalists’ victory against Keystone XL will only reinforce that judgment. But realizing their broader vision — a low-carbon economy that enhances the nation’s security and helps avoid dangerous climate change — will require defeating the same sort of local opposition that they have just embraced.

The experience of Cape Wind confirms this conundrum, as I have noted for some time.

Last month, the X-Prize Foundation announced the winners of the Wendy Schmidt Oil Cleanup Challenge.  The challenge was created to spur the development of more effective oil spill cleanup methods.  Specifically, the challenge offered $1.4 million in prizes for the development of removing oil from the ocean’s surface.  The aim was to double the industry’s best oil recovery rate in controlled conditions.  The winning team, Elastec/American Marine, demonstrated an oil recovery rate more than three times the industry’s previous best and was awarded the top prize of $1 million.

This is another example of how technology inducement prizes can spur the development of valuable technologies, and further evidence that such prizes are far more cost-effective than ex ante R&D grants or government investments in speculative ventures like Solyndra.  The latter may be more politically popular, but prizes would be a better use of taxpayer dollars.  As I’ve argued at length, if we’re serious about problems like global climate change, we should invest more in prizes and less in conventional approaches to government-sponsored R&D.

(Thanks to Roger Meiners for the pointer.)

Global population is believed to top 7 billion. Is this a problem? Does 7 billion people constitute “overpopulation”? Nicholas Eberstadt doesn’t think so. In today’s Washington Post, Eberstadt punctures five “myths” about global population.

The myths:

1. The world is overpopulated.
2. Rapid population growth keeps poor countries poor.
3. For all its ethical problems, China’s one-child policy boosts its economy.
4. If your population declines, your economy does too.
5. The world will have 10 billion people by 2100.

Eberstadt’s essay underscores the principle that institutions are more important than absolute numbers.  Whether a given region or society can accommodate a given number of people is a more function of the underlying economic institutions (and technological capabilities) than the total number of people or rate of population growth.  In addition, there is every reason to believe that global population growth will slow in the coming decades, and even turn negative, as birth rates tend to decline as wealth and education improves.

In 2002, federal reguators predicted it would take between 18-months and three-years for the proposed Cape Wind energy project in Nantucket Sound to receive federal approval.  Nearly ten years later, the project is still awaiting full federal clearance, and has yet to begin construction.  Full operation remains at least two years away.

On Friday, the Cape Wind project suffered yet another setback when the U.S. Court of Appeals for the D. C. Circuit vacated and remanded the Federal Aviation Administration’s determinations that the project would pose no hazard to air traffic.  A unanimous three-judge panel concluded that the FAA had failed adequately explain the basis for its decision.  Even though formal FAA approval is not required for the windfarm, the Interior Department has made its approval of the plan conditional upon FAA clearance and full compliance with any FAA-recommended mitigation measures.  So until the FAA can provide an explanation for its “no hazard” determination the D.C. Circuit will accept, construction will be on hold.

Friday’s decision is not merely a setback for Cape Wind.  It worsens the climate for offshore wind energy development more generally.  The longer and more uncertain the regulatory process for such projects, the harder it will be to encourage private firms to invest — and the more difficult it will be to expand wind power offshore.

The Cape Wind experience also shows that it does not take much to gum up the regulatory gears for new projects of this sort.  Opposition to Cape Wind has been driven by a few dozen families willing to invest their time and money to influence the regulatory process — and it’s worked.  It does not matter whether a proposed project is popular with local residents, as a relatively small group of naysayers can exploit existing regulatory requirements to slow things down in the hope of eventually killing the project altogether.  If other offshore wind projects are to succeed where Cape Wind has (thus far) failed, they must prepare for similar opposition, and encourage regulatory reforms that will streamline wind project development and approval.

Last Friday, the Environmental Protection Agency announced that it planned to propose regulations governing the disposal of wastewater from hydraulic fracturing.  The WSJ reported on the announcement and initial reactions here.

Last Thursday, at a congressional hearing, Assistant U.S. Fish and Wildlife Service Director Gary Frazer said that the Interior Department’s Office of Science Integrity would conduct an independent evaluation of the work of FWS biologists accused by a federal judge of being dishonest with the court and acting in ‘”bad faith.”  As the Los Angeles Times reports, Frazer said the FWS stands behind the work of its scientists but the Department will seek an independent assessment from outside experts nonetheless.

Frazer’s comments were delivered at a House Science Committee Subcommittee on Oversight and Investigations hearing on “The Endangered Species Act: Reviewing the Nexus of Science and Policy” at which I was also a witness. In my testimony, I focused on the broader issue of how science is and should be used in under the ESA, and made three basic points.

First, it is important to ferret out genuine instances of scientific misconduct or science politicization.  At the same time, it is essential to recognize that science merely informs, and does not dictate, policy. Species conservation is not – and cannot be – a wholly scientific exercise. Whether a given species is at risk of extinction may be a scientific question, but what to do about it is not. The likelihood that habitat loss or the introduction of an invasive species will compromise a species chance of survival in the wild is a question that can be answered by science. On the other hand, what conservation measures should be adopted to address such threats, and at what cost, are policy questions. Science can – indeed, must – inform such inquiries, but science alone does not tell us what to do. Insofar as debates over conservation policy are dressed up as scientific disputes — or instances of science abuse — we hamper our ability to assess competing policy options and pursue optimal conservation strategies.

Second, the structure of the ESA both undermines our ability to base conservation decisions on the best possible scientific information and creates substantial incentives to manipulate science so as to influence policy outcomes. The former occurs because the ESA makes the presence of endangered or threatened species a liability to private landowners. As a consequence, private landowners are often reluctant to allow government or other researchers to conduct surveys or engage in other species-related research on their land. This means the ESA makes it more difficult to know which species are most in need of help and where they are.

The ESA creates incentives for interest groups and others to try and manipulate science because certain science-based determinations, such as whether a species is “endangered,” are triggers for non-discretionary regulatory measures. This means that if an interest group wants to influence regulatory outcomes, it is in their interest to try and influence the initial scientific determination. This explains why there is so much controversy and conflict over species listing decisions. The Act itself turns what should be primarily a scientific inquiry — whether the best available science indicates that a species meets a given definition of what it means to be endangered or threatened — into a high stakes proxy battle over regulatory policy. This is not good for science, and further complicates the quest for optimal conservation measures.

For those interested, my full testimony is here. Portions of my testimony are based on my chapter in Rebuilding the Ark. An archived webcast and the written statements of the other witnesses should be available here, as are pictures from the hearing.

A Daily Caller story claiming the Environmental Protection Agency is “asking for taxpayers to shoulder the burden of up to 230,000 new bureaucrats — at a cost of $21 billion” in order to regulate greenhouse gas emissions under the Clean Air Act has caused a bit of a stir on the internet (see, e.g., here, here, and here). The critics are correct that the Daily Caller flubbed the initial story. The numbers aren’t new and the EPA isn’t asking for billions of dollars for tens-of-thousands of new hires. But the critics miss the real significance of EPA’s arguments, which is that treating greenhouse gases as “pollutants” under the Clean Air Act, as called for in Massachusetts v. EPA, leads to absurd results.

First, the EPA is not asking for additional resources. What the EPA is asking for is permission to ignore the plain text of the Clean Air Act so as to make the task of regulating greenhouse gases more manageable. The brief at issue is quite clear on this point. The specific figures are an illustration of how it is simply unmanageable to try and regulate such emissions, carbon dioxide in particular, under statutory provisions designed for traditional air pollutants that are emitted by far fewer facilities. The obvious answer to this problem would be to recognize that greenhouse gases are not what Congress had in mind when it told the EPA to regulate “pollutants” under the Clean Air Act, but this option is foreclosed by Massachusetts v. EPA.

Second, the EPA’s claim that regulating greenhouse gases under the Clean Air Act would overwhelm the agency’s existing resources and effectively require the hiring of thousands of new employees is not new. I detailed this problem in this Reason essay and HJLPP article. The Obama EPA noted this problem it first proposed the Tailoring Rule in 2009. The Bush EPA (and others) also made this point when arguing that the Act should not be interpreted to apply to greenhouse gases. The Supreme Court was not convinced, however. Indeed, the Massachusetts v. EPA majority briefly considered, and dismissed, the claim that regulating greenhouse gases under the Clean Air Act would be impractical.

Third, the real problem with the EPA’s argument is that the agency is asking to ignore the plain text of the Clean Air Act. Specifically, the statutory provisions at issue require regulating facilities with the potential to admit more than 100 or 250 tons per year of regulated pollutants. As the EPA admits, this is impossible for the agency to do without increasing the agency’s total budget more than ten-fold. But the EPA’s solution is just as much of a problem, because what EPA wants to do is replace the Act’s express numerical thresholds with new thresholds of its own invention, based on the EPA’s judgment of what it wants to do when. Yet there is no precedent for administrative revision of statutory text in this fashion — and for good reason. It is one thing to allow an agency to twist potentially ambiguous language so as to avoid an absurd outcome, but quite another to allow an agency to rewrite clear statutory provisions, such as express numerical thresholds. Interpreting “pollutant” to mean only traditional air pollutants does far less violence to the Act’s text and structure than replacing 100 and 250 with numbers the EPA finds more convenient. But the source of this problem is not EPA overreaching or overzealous regulators within the Obama Administration, but the Supreme Court’s decision in Massachusetts v. EPA. If the Court had not misread the statute, we would not have to worry about bloggers and journalists misreading the EPA’s briefs.

The LA Times reports on a Mythbusters investigation into whether motorcycles are a more environmentally friendly mode of transportation than cars, at least with regard to their fuel consumption and emissions. The investigation involved road-testing vehicles of each type from the 1980s, 1990s, and 2000s while monitoring the vehicles’ fuel consumption and emissions. The results:

Motorcycles were indeed more fuel-efficient than cars and emitted less of the greenhouse gas carbon dioxide, but they emitted far more smog-forming hydrocarbons and oxides of nitrogen, as well as the toxic air pollutant carbon monoxide. For the most recent model year vehicles tested — from the ’00s — the motorcycle used 28% less fuel than the comparable decade car and emitted 30% fewer carbon dioxide emissions, but it emitted 416% more hydrocarbons, 3,220% more oxides of nitrogen and 8,065% more carbon monoxide.

So, if you’re primarily concerned about greenhouse gas emissions — and don’t need to transport passengers or much luggage — motorcycles might reduce your environmental impact. But if you’re concerned about traditional air pollutants — the kind that can affect people’s health here and now — motorcycles are far worse. This should not surprise, as automobiles are subject to far more stringent emission control requirements — and it’s that much easier to add emission controls to a car than a bike as well.

Earlier this month President Obama asked the Environmental Protection Agency to shelve a proposal to tighten the National Ambient Air Quality Standard for ozone this year. The Administration was apparently concerned about the cost a tighter standard would impose, and the EPA is required to consider revising the standard in 2013 anyway. Does this mean metropolitan areas are off the hook for additional environmental controls? Nope. Even without a tighter standard, many metropolitan areas will have to adopt more stringent pollution controls in order to meet the revised ozone standard adopted by the Bush Administration in 2008, as EPA Administrator Lisa Jackson confirmed in House testimony yesterday. The WSJ reports:

Testifying before a House subcommittee, Ms. Jackson said her agency would enforce an ozone standard of 75 parts per billion, adopted by the EPA in 2008. Until now, the standard had been suspended because of the EPA’s intention to introduce a more stringent measure, and the 1997 standard of 84 parts per billion prevailed.

There are 52 areas where air quality fails to meet the 2008 standard, the EPA said in a memo to state officials. Among them are Baltimore, San Diego, Dallas-Fort Worth and parts of Los Angeles. Ms. Jackson said the EPA would enforce the standard in a “common-sense way” to minimize the burden on state and local governments.

In practical terms, this shows how the Obama Administration’s decision not to tighten the ozone standard this year will not have a significant environmental effect in the near- to medium- term. Those areas with the worst ozone pollution do not meet either standard, so such areas would be required to adopt more stringent regulations either way. As for areas that meet the 2008 standard but would fail to meet more stringent requirements, the compliance date for a revised standard would be years off anyway, so if a more stringent standard is adopted in 2013 as many expect, the practical effect will be small.

While the EPA now plans to enforce the 2008 standard, there is some question whether it will be the standard for long. Not only is a scheduled revision only two years away, but legal challenges against the rule by both environmentalist and industry groups are pending in federal court as well. Given the EPA’s poor record of defending Bush-era air quality rules, it’s certainly possible one of these challenges will succeed.

Terry Anderson of PERC argues that it’s time for a “Green Tea Party”: “a movement that brings environmental quality through economic prosperity.”

The GTP’s platform would be that only prosperity and incentives can drive environmental improvements. The first plank: Wealthier is healthier. From the U.S. to the former Soviet Union, data show that economic growth is necessary for environmental improvement, not its enemy. Such growth requires a strong private sector, not more federal spending and red tape. The second plank: Incentives matter. The GTP would use a carrot instead of the regulatory stick to improve environmental quality, and let energy markets and prices dictate energy sources. A replacement for fossil fuels will be found only when entrepreneurs can make a profit from cheaper, cleaner and more efficient energy.

Specific policies Anderson identifies that make economic and environmental sense a GTP could endorse include requiring federal land management agencies to turn a profit, expanded reliance on water markets, and the expansion of catch-share fisheries management.

UPDATE: Here’s PERC’s Green Tea Party site and the platform.

Two weeks ago, President Obama asked EPA Administrator Lisa Jackson to shelve plans to tighten the National Ambient Air Quality Standard for ozone, leaving any reconsideration of the current standard until 2013. This past week, the EPA announced it was delaying the planned release of proposed regulations to control greenhouse gas emissions from power plants under the Clean Air Act. This is the second time EPA has delayed publication of these rules.

Viewed together, these decisions suggest the Obama Administration is making a conscious effort to moderate its regulatory policy, particularly in the environmental area. If so, why would this be? Could it possibly make political sense for the Obama Administration to acquiesce to GOP attacks on environmental protection? After all, as Ann Carlson noted at Legal Planet, environmental protection remains popular,and polls suggest relatively few Americans believe environmental regulation costs jobs (though it can).

It is inconceivable that the Obama Administration believes that these moves will placate Tea Party opposition or win plaudits from across the aisle. But that’s not the point. Nor is aggregate popular opinion on these questions particularly relevant to the political calculus. Rather, as I noted in comments to Ann Carlson’s post, what matters are the views of marginal voters and, in particular, marginal voters in politically significant states. That is, the opinions of moderates and independents in Ohio, Pennsylvania and West Virginia matter more than the views of environmental activists in San Francisco or Washington, D.C.

Viewed in this light, the political rationale of these decisions is easier to understand. Insofar as these moves are politically inspired, it would appear the aim is to placate those potential constituencies in battleground states most sensitive to the costs of new and impending environmental regulations. Think coal and power company unions, small businesses in what remains of the industrial midwest, and moderate Democrats in state and local governments whose enthusiasm is essential for voter turnout. These sorts of groups are more likely to notice whether the Obama Administration appears to be moderating the EPA’s regulatory zeal or tightening the screws, and such issues may influence their votes.  There’s a reason Joe Manchin (D-WV) ran against environmental regulation, and the White House is certainly understands where proposed environmental rules would have the greatest economic effect.

None of this means that the Obama Administration’s decisions were politically driven — I have no deep inside sources — or that they are politically wise.  The ozone NAAQS decision was almost certainly political, but the latest decision may well have been influenced by other concerns.  But if the Obama Administration is deliberately trimming the EPA’s sails, the political calculus is easy to understand.

The New York Times tries to provide some perspective to the renewed debate over the economic effect of environmental regulation, and the effect of regulation on jobs in particular.  The story was prompted by President Obama’s decision to ask Environmental Protection Agency Administrator Lisa Jackson to withdraw a proposed revision of the National Ambient Air Quality Standard for ozone.  Business groups and many local government officials cheered the move; environmentalist groups were dismayed.

Part of the problem in evaluating the costs of regulation is that there have been few systematic studies of such costs after regulations are imposed.

“Regulations are put on the books and largely stay there unexamined,” said Michael Greenstone, an economist at the Massachusetts Institute of Technology. “This is part of the reason that these debates about regulations have a Groundhog’s Day quality to them.”

Mr. Greenstone has conducted one of the few studies that actually measure job losses related to environmental rules. In researching the amendments to the Clean Air Act that affected polluting plants from 1972 and 1987, he found that those companies lost almost 600,000 jobs compared with what would have happened without the regulations.

But Mr. Greenstone has also conducted research showing that clean air regulations have reduced infant mortality and increased housing prices, and indeed many economists argue that job losses should not be considered in isolation. They say the costs of regulations are dwarfed by the gains in lengthened lives, reduced hospitalizations and other health benefits, and by economic gains like the improvement to the real estate market.

The NYT story did not provide links to Prof. Greenstone’s research, so I added them above. For those interested in the subject, a third paper by Greenstone looks at the extent to which air quality improvements can be attributed to the federal Clean Air Act. Prof. Greenstone is, among other things, the former chief economist of President Obama’s Council of Economic Advisers.

The story closes with a quote from current Obama Administration “regulatory czar” Cass Sunstein, who’s in leave from the Harvard Law School.

“My view is that the Republican claim that ‘job-killing regulation’ is a redundancy is as ridiculous as the left-wing view that ‘job-killing regulation’ is an oxymoron,” said Cass Sunstein, head of the White House Office of Information and Regulatory Affairs. “Both are silly political claims that have no place in a serious discussion.”

I agree with Professor Sunstein that the debate over whether regulation kills or creates jobs is not very productive. As a general matter, when a firm is forced to spend money complying with environmental regulations, such expenditures are likely to take the place of more productive investments.  Some of these expenditures may benefit other firms, such as those which sell products or services that assist with compliance, but are still unlikely to offset the negative effects of the initial diversion.  As a consequence, whether or not there are net economic benefits from environmental regulation will usually depend on the magnitude and nature of the other benefits the regulation provides — benefits that may or may not translate into job creation. Even if an environmental regulation generates net economic benefits, this does not necessarily translate into increased employment.  But whatever the effect of regulation on jobs, and even assuming the effect could be predicted with any accuracy, this is only one factor to be weighed when considering the desirability of regulation.

UPDATE: Matt Kahn notes that Clean Air Act regulation is not uniform across the nation, and insofar as regulations adopted pursuant to that law have reduced employment in some parts of the country, this has been offset by greater job creation elsewhere.  Indeed, this differential effect is one reason why the Clean Air Act was amended to impose greater restrictions on “cleaner” areas, as B. Peter Pashigian documented in a 1985 paper.

Another interesting aspect of Clean Air Act regulation, relevant to President Obama’s recent decision, is that the economic consequences of tightening a NAAQS may be severe, but they are anything but immediate.  Once a new NAAQS is finalized, state and local governments have many years to develop plans to come into compliance, so no direct regulatory burden would have been imposed on private firms for many years.  Thus whatever the merits of withdrawing the NAAQS revision proposal, and deferring any tightening to 2013, it will not do much for the economy in 2011, except insofar as one believes the prospects of tighter environmental regulations in the future is a significant impediment to investment and job-creation in the present.

President Obama today told the U.S. Environmental Protection Agency to set aside plans to tighten the National Ambient Air Quality Standard for ground-level ozone (aka “smog”). The proposed tightening was fiercely opposed by business groups as well as state and local governments, as the latter are charged with developing plans to meet the standards. In addition to the anticipated costs of metting the new standards, opponents pointed out that the EPA is required to review its air quality standards every five years, and would have to review the standards in 2013. The ground-level ozone standard was last revised in 2008, but the Bush Administration did not tighten them as much as environmentalist groups had wanted.

The text of the  President’s statement released by the White House is below the jump.

Continue reading ‘White House Halts New Federal Smog Standards’ »

I reviewed Douglas Kysar’s Regulating from Nowhere: Environmental Law and the Search for Objectivity for the Spring 2011 issue of The New Atlantis.  Overall, I found Kysar’s book thoughtful, provocative, wide-ranging and well-written, but not persuasive. In many ways, I think Kysar pursues the wrong quarry, and ignores some of the deeper problems in contemporary environmental law. Nonetheless, the book presents many arguments worth considering and engaging.   Here is how the review concludes:

If Kysar’s ultimate concern is for a greater recognition of and reaching toward the environmental values he holds dear, his complaint should be less with CBA and utilitarian calculus than with the centralized regulatory structure in which they are used to impose one-size-fits-all policies. In selecting the wrong target, Kysar embarks on a journey to the wrong destination. Were we to take Kysar’s advice, we would no longer “regulate from nowhere,” but we would still regulate from nowhere good.

The full text of the review has just been made available online here.

Wind power provides substantial environmental benefits, not the least of which is that it produces electricity without emitting greenhouse gases or traditional air pollutants.  It can also be useful source of distributed power.  But (like anything else) it also has its drawbacks, such as its unsuitability for baseload power and (as some environmentalists are increasingly realizing) the threat it poses to birds.  The federal government estimates wind power kills almost one-half million birds per year — a number that will dramatically increase if wind power expands in accord with the federal government’s plans. Those areas best for wind production are often those areas that pose the greatest risk to birds.

Today’s Washington Post reports on a Fish & Wildlife Service investigation of the deaths of several golden eagles at a California wind farm.

Over nearly 30 years, none of the nation’s 500 wind farms, where 35,000 wind turbines operate mostly on private land, have been prosecuted for killing birds, although long-standing laws protect eagles and a host of migrating birds.

If the ongoing investigation by the Fish and Wildlife Service’s law enforcement division results in a prosecution at Pine Tree, it will be a first. The conservancy wants stronger regulations and penalties for the wind industry, but the government has so far responded only with voluntary guidelines.

The story also notes that the guidelines have been watered down to accommodate industry complaints. The LA Times has more here.

The Great Lakes states are concerned about the potential spread of Asian carp, an invasive species not native to North America, into the Great Lakes. They fear the carp could have significant negative ecological and economic consequences for the region. For the past few years, these states have sought (unsuccessfully) to obtain an injunction requiring the closure of locks that could help prevent the carp’s spread.

Yesterday, the U.S. Court of Appeals for the Seventh Circuit rejected their petition, largely on the grounds that various state and federal efforts to contain the carp are underway. Judge Wood’s opinion for the court in Michigan v. U.S. Army Corps of Engineers summarizes:

. This appeal requires us to consider . . . the environmental and economic harm posed by two invasive species of carp, commonly known as Asian carp, which have migrated up the Mississippi River and now are poised at the brink of this man-made path to the Great Lakes. The carp are voracious eaters that consume small organisms on which the entire food chain relies; they crowd out native species as they enter new environments; they reproduce at a high rate; they travel quickly and adapt readily; and they have a dangerous habit of jumping out of the water and harming people and property. . . .

. . . In our view, the plaintiffs presented enough evidence at this preliminary stage of the case to establish a good or perhaps even a substantial likelihood of harm – that is, a non-trivial chance that the carp will invade Lake Michigan in numbers great enough to constitute a public nuisance. If the invasion comes to pass, there is little doubt that the harm to the plaintiff states would be irreparable. That does not mean, however, that they are automatically entitled to injunctive relief. The defendants, in collaboration with a great number of agencies and experts from the state and federal governments, have mounted a full-scale effort to stop the carp from reaching the Great Lakes, and this group has promised that additional steps will be taken in the near future. This effort diminishes any role that equitable relief would otherwise play. Although this case does not involve the same kind of formal legal regime that caused the Supreme Court to find displacement of the courts’ commonlaw powers in American Electric Power, on the present state of the record we have something close to it. In light of the active regulatory efforts that are ongoing, we conclude that an interim injunction would only get in the way. We stress, however, that if the agencies slip into somnolence or if the record reveals new information at the permanent injunction stage, this conclusion can be revisited.

Most of the GOP’s Presidential hopefuls have been savage in their criticism of the Environmental Protection Agency (EPA). Indeed, some have called for the agency to be dismantled.  Could this possibly be a good idea?  I’m all for criticizing the inefficiency and ineffectiveness of federal environmental regulation — I’ve certainly done my share — but the agency is not about to disappear, no matter who is elected President, nor would simply closing the agency down be a good idea.

The NYT‘s latest “Room for Debate” poses the question: “What if Republicans Closed the EPA.” Here’s my contribution:

There’s plenty not to like about contemporary environmental regulation. Most of today’s regulatory infrastructure was erected decades ago, and it has not aged well. Federal laws designed to control the nation’s heaviest polluters and maintain regional air quality are a poor fit for the broader environmental problems of today. Yet opposing the Environmental Protection Agency, by itself, is not a serious environmental policy. If Republican candidates are serious about reducing regulatory burdens while maintaining the nation’s historic commitment to environmental conservation, they need to articulate an alternative environmental vision more consonant with conservative values.

What would an alternative environmental vision look like? It would have to marry traditional conservative commitments to property rights and limited government with a genuine concern for environmental conservation. It would embrace technological innovation and ecological entrepreneurship and comprehend that one-size-fits-all approaches rarely fit much of the country very well. It would recognize that the same federal government that enforces environmental protections often subsidizes and encourages the very environmental degradation that regulatory programs are designed to prevent. It would also understand that well-intentioned environmental regulations are often themselves an obstacle to environmental progress.

A good place to start would be targeting environmentally harmful subsidies, such as those for ethanol and polluting industries, and identifying regulatory requirements that penalize conservation and frustrate the development and deployment of cleaner technologies. Another useful step would be to create an ecological waiver process, through which states and localities could seek relief from prescriptive requirements. Such a process was essential to welfare reform and could facilitate meaningful environmental reforms as well.

Improving environmental quality does not require the maintenance of a massive centralized, regulatory bureaucracy in Washington, but restoring rationality to environmental policy is not as simple as shuttering the E.P.A.

Biodiversity loss may be a serious environmental problem (I certainly believe it is), but scientists have had a hard time figuring out how many species are disappearing and how fast. One difficulty is the lack of consensus on how many species there are in the first place. Approximately 1.2 million species have been identified, but conventional (and often poorly substantiated) estimates of the total number of extant species have ranged from 3 to 100 million species. But researchers may be closing in on a more reliable estimate. A new study in PLoS BIology estimates the number of species at approximately 8.7 million. As the Washington Post reports, the new study is getting positive reviews, as it represents the most rigorous effort to estimate species numbers based upon what is known about cataloged species to date. As a consequence, this estimate should displace some of the speculative (and unfounded) numbers that have been thrown around in the past.

Population growth and climate change demand increases in agricultural productivity — increases that can only be achieved through the use of modern biotechnology. Yet excessive and scientifically unjustified regulatory restrictions hamper the development of more productive crop strains, particularly where they are needed most.  So argues Penn State biology professor Nina Federoff in today’s NYT, and she’s right.

In 2010, crops modified by molecular methods were grown in 29 countries on more than 360 million acres. Of the 15.4 million farmers growing these crops, 90 percent are poor, with small operations. The reason farmers turn to genetically modified crops is simple: yields increase and costs decrease.

Myths about the dire effects of genetically modified foods on health and the environment abound, but they have not held up to scientific scrutiny. And, although many concerns have been expressed about the potential for unexpected consequences, the unexpected effects that have been observed so far have been benign. Contamination by carcinogenic fungal toxins, for example, is as much as 90 percent lower in insect-resistant genetically modified corn than in nonmodified corn. This is because the fungi that make the toxins follow insects boring into the plants. No insect holes, no fungi, no toxins.

Yet today we have only a handful of genetically modified crops, primarily soybeans, corn, canola and cotton. All are commodity crops mainly used for feed or fiber and all were developed by big biotech companies. Only big companies can muster the money necessary to navigate the regulatory thicket woven by the government’s three oversight agencies: the E.P.A., the Department of Agriculture and the Food and Drug Administration.

Conservatives are often criticized for adopting ideologically or politically motivated positions on scientific questions — and they should be. But the Right has no monopoly on the politicization of science. As the debate over agricultural biotechnology shows, progressives can be just as guilty, and the effects can be just as grave.

It has been clear for decades that the means through which a crop strain is developed has no bearing on the health or environmental risks such a crop could pose. The scientific consensus here is broader and more stable than on climate change and other contentious environmental questions. The National Academy of Sciences, British Royal Society and EU have all concluded that modern biotech techniques are no more dangerous than traditional crop modification methods. Nevertheless, due to progressive environmental activism and fear campaigns, crops developed with modern biotechnology are subject to greater regulatory scrutiny. As Federoff notes, a reactive precautionary stance may have been justified years ago when biotechnology was new, but there is no scientific justification for such a position today. Yet progressive environmentalists continue to oppose modern agricultural biotechnology — and the supposed defenders of scientific integrity have little to say about it.

UPDATE: Chris Mooney thinks I sideswiped him unfairly with the final link of this post.  I disagree, and have responded in the comments to his post.  My comment is reproduced below.

Chris –

I’m sorry you thought it was a sideswipe, but I think the charge was justified. I ran a search on your blog for “biotechnology” on your blog and little of substance comes up. While you acknowledged the problem of anti-science anti-biotech activism in your book, you’ve had very little to say about it since. Why is this a problem? Because the anti-scientific anti-biotech view has very real consequences. You may like to think that liberals are open to science on this issue, but why do we see no evidence of this in actual policy? Why are GMOs subject to greater regulatory scrutiny than their non-GMO equivalents? Why has no “liberal” administration done anything about this? Sure, the anti-Greenpeace activism hasn’t prompted a broad social movement, but it hasn’t had to. As the article to which I linked discusses, the current regulatory process adopts the precise anti-GMO bias that the NAS and its foreign equivalents have warned against. Given this fact, I think it’s fair to find your relative quiet on this issue rather conspicuous.

Does a decline in crop diversity threaten future food production? A report in the August 2011 National Geographic suggests so. The article, “Food Ark,” reports that the “extinction” of food varieties could be a real problem.

Food varieties extinction is happening all over the world—and it’s happening fast. In the United States an estimated 90 percent of our historic fruit and vegetable varieties have vanished. Of the 7,000 apple varieties that were grown in the 1800s, fewer than a hundred remain. . . . .

Why is this a problem? Because if disease or future climate change decimates one of the handful of plants and animals we’ve come to depend on to feed our growing planet, we might desperately need one of those varieties we’ve let go extinct.

But it’s actually not at all clear that available food varieties are dwindling at such a dramatic rate. As I’ve noted before here and here, the research of Paul Heald and Susannah Chapman suggests that available crop varieties are actually increasing. In the case of apples, for example, Heald and Chapman show that the number of varieties available to apple farmers today is nearly four times greater than in 1900.

Particularly misleading is this graphic, which purports to show “our dwindling food variety.” Based upon a 1983 study by the Rural Advancement Foundation International, it compares commercial seed house offerings from 1903 and varieties maintained in the National Seed Storage Laboratory eighty years later, finding a shocking 93 percent decline in available varieties. But this is not an apples-to-apples comparison. Had the study instead compared commercial seed offerings in 1903 with those available from contemporary seed catalogs it would have found no appreciable decline. In fact, that is the point of this Heald and Chapman study, which found contemporary seed catalogs offer just as many crop varieties as the RAFI study found in 1903.  Some varieties available in 1900 are no longer around, to be sure, and available varieties of some crops have declined while others have climbed, but the overall variety has not “dwindled” as National Geographic suggests.

What about the future? As the National Geographic author explains, it took centuries of careful selective breeding for farmers and breeders to develop crops and livestock breeds suited to various climates and regions. True enough. But the article gives little consideration to how modern biotechnology techniques have accelerated and honed this process. Developing new breeds and strains occurs with greater speed and precision than ever before. Modern biotechnology is no panacea, but combined with the actual trends in the availability of various crop varieties, it provides much reason for optimism, rather than gloom.