EPA: The Dog Ate Our Homework
Last week 18 states sued the Environmental Protection Agency (EPA) after the agency refused to act on last year's Supreme Court ruling in Massachusetts v. EPA. The court had ordered the EPA to determine whether greenhouse gases presented a danger to public health and welfare, and if so ordered the EPA to form a plan for regulating them. The states' action was the latest move in the long tussle between the EPA and the states, the EPA and multiple Congressional committees, the EPA and various non-profits speaking on behalf of citizens, even the EPA and businesses who have a keen interest in slowing climate change.
On March 27th (PDF!), EPA administrator Steven L. Johnson sent a letter to Congressman Henry Waxman's (D-CA) Oversight Committee, outlining his plan to seek public comment on greenhouse gases and potential regulation. It was a short, simple letter but an elaborate Victorian lacework of excuses. The decision, he wrote, involved sifting through "options", "potential effects", "pending petitions","possible regulations", "careful considerations", "comment periods", "relevant data","drafts", "solicit[ations]" and "extensive briefings".
The Supreme Court ordered a ruling on the implications of CO2 from mobile sources, but administrator Johnson chose to expand his review to include as many stakeholders as he could think of -- "experts", "schools", "hospitals," "factories", "power plants", "aircraft and ships", "on-road vehicles", "off-road vehicles", "petroleum refineries", "Portland cement", "authorities", "power plants" and "industrial boilers". Procrastinators and students of a dog-ate-my-paper temperament should study his document for inspiration.
The 300 Page EPA Reports Had Already Found C02 Endangers Public Health
The science on CO2 is conclusive and the EPA knows it. The agency has already followed up on the 2007 Supreme Court ruling with a thorough investigation of their own. For that investigation, the agency recruited 60-70 experts to look at the greenhouse gas effect on public welfare (summary, PDF). The large EPA team found that, yes, global warming did endanger public welfare and detailed their result in a 300 page report. To note, this wasn't new news to them then either, since the EPA had also worked through the issues at stake in Massachusetts v. EPA back in 1999 and other investigations, that all documented the same health hazards.
Following their 300 page report, Johnson signed a proposal that would have reduced carbon dioxide from motor vehicles and brought fleet fuel economy to 35 mpg by 2018, a proposal which bested by two years the time-line in the energy bill recently signed by President Bush. Unfortunately Johnson's proposal for emissions regulation, the endangerment finding, and the 300 page document got lost somewhere between the EPA and the White House and NHTSA, leaving Congressman Waxman and his committee investigating what became of these EPA decisions and plans.
Now in 2008, nearly ten years after the initial request was given to the EPA, Johnson decides that rather than "rushing to judgment", as he put it in his latest memo, the EPA must continue to look at "complex issue[s]", "interconnections" , "lawsuits", "deadlines", possible "changes" and "ramifications", "permits", "thresholds", "requirements", "relevant information", "complexity", and "implications". The world is anxious for action on global warming. Why now, with the pressing urgency of climate change bearing down, is the EPA is overtaken by omphaloskepsis? Or is it mendacity?
Stalling: EPA Extends Public Comment and Oil Companies Weigh In
Congress wrote the Clean Air Act in 1970 to safeguard public health and welfare. Air quality regulation deserves public comment. But Johnson is proposing a comment period in the Advance Notice of Proposed Rulemaking (ANPR), despite having already received 50,000 public comments in 5 months when the EPA previously solicited comment. This new "public comment period", seems like nothing but an unnecessary stalling mechanism, one that will only solicit "public" comment from organizations who have already weighed in loudly.
Before Bush signed the energy bill and the EPA denied the California waiver, the EPA, OMB and the White House met regularly with many stakeholders, including those from the petroleum and auto industries. The Detroit News reported last year that Cheney and/or Bush met with "Detroit's three automakers" multiple times in 2006 and 2007. Public Citizen wrote a 54 page report last August (PDF) documenting how from 2001 to 2003, senior administration officials met with Department of Transportation's (DOT) National Highway Traffic Safety Administration (NHTSA) 45 times in order to produce an attributes model for determining fuel economy. Their considerations were incorporated into the CAFE standards.
As well, according to meeting records, the OMB held five "20-in-10" meetings last year and more in 2006, when the Office of Management and Budget (OMB), the EPA and DOE and the DOT/NHTSA gnashed over the President's proposal to raise fuel economy by 20% in 10 years. Stakeholders who attended these meetings included Shell, the American Petroleum Institute, Frontier Oil, Occidental Petroleum, BP, ExxonMobil, Chrysler, Honda, Toyota, Nissan, Hyundai, and Porsche.
The LA Times wrote in a March 28th article that Johnson's suggestion for more comment followed a memo circulated by the Heritage Foundation, an industry lobby group (or "think tank"), sent to "everyone that we could think of" in the White House and Congress as the lobby group said. The memo urged decision makers to pressure the EPA for the ANPR because this would make legislators look like they were doing something. As the lobby group put it, holding a public comment session:
"would allow all interested parties to send the EPA relevant information and start a record on important topics such as the cost and burden of carbon caps and Clean Air Act expansion without triggering the costly new regulations."
When the EPA found on endangerment (that GHG were a public health hazard) last year, it conducted "extensive analysis....about costs and benefits", according to Waxman's letter, before producing the plan that Johnson signed off on.
Now, the industry and its agent, the EPA, propose to expand the pool of stakeholders in order snag the regulatory process in a morass of bureaucracy. What's fascinating to us here at Acronym Required, is how quickly interested parties drop their typical ideological attachment to "efficiency" and "small government" when advocating an obstructive process that suit their ends.
Industry Meet and Bleat: EPA, NHTSA and the OMB
If we want to know what more "public comment" might look like with respect to "costs and benefits", we could get insight from glancing at a memo presented to the OMB and its Office of Information and Regulatory Affairs (OIRA) in a meeting November 15, 2007 with Chrysler executives. (The document we will be discussing doesn't have an author noted, but there's various fingerprints from oil companies, lobby groups and car manufacturers. Since the only company attendees at the meeting were Chrysler executives I will call it the document the "Chrysler document", the "meeting document", or the "document")
There are hundreds of other memos to the EPA, of course, but this one, the anonymously authored "Regulation of Motor Vehicle Greenhouse Gas Emissions under the Clean Air Act and the Energy Policy Conservation Act", (Whitehouse.gov/omb..) reads like an industry directive to the EPA role for how they should regulate greenhouse gases emitted from moving vehicles. After reading this, it doesn't take a vivid imagination to see the industry's prints on the EPA's current actions. The "simplest" solution, the authors of this document say, "...is for the EPA to abstain from attempting to set carbon dioxide standards" from vehicles "already subject to the NHTSA regime." [emphasis ours]
To quickly explain: The two government agencies that regulate motor vehicles are the EPA, and the National Highway Traffic Safety Administration (NHTSA) that resides in the in the Department of Transportation (DOT). NHTSA sets gas mileage targets through CAFE standards, and the EPA is charged with regulating motor vehicle emissions. The energy bill that Congress passed and Bush signed (H.R. 6) last December pertains to mileage standards. Carbon dioxide emissions are primarily responsible for global warming. Industry argues that the EPA should not regulate emissions because of "regulatory overlap" between the NHTSA and EPA, but this was already defeated by the Supreme Court, who rejected this overlap argument.
The meeting document defines the EPA's "primary mission" under the Clean Air Act as determining the "requisite technology", that will "address the potential problem of climate change" -- as if technology were the only solution (and the entire thrust of the Act). A quick aside: Politicians use the word "technology" because of its magical properties. It's a word that signals you are modern, smart, and forward leaning. "Technology" solves unsolvable problems and no one argues with it, it offends no one. "Technology" inevitably translates to more *business*, and business is always good, therefore "technology" is probably the only noun in the world that remains nonpartisan. Pollution problems have been solved with technology -- ie: scrubbers, catalytic converters, but despite its undeniably wondrous qualities, the word is too often used as an empty promise. The "technology" argument has been quite successful in staving off progress on global warming, as we mentioned in a previous post.
This industry document advises that if the EPA finds endangerment, which they did, then the agency should coordinate with NHTSA "a series of clearly defined steps, each of which involv[es] public participation", and successive "public comment" periods. The document precisely describes the very political maneuvering we're seeing today, so no one today should be surprised at the EPA's announcement.
But long after this document was made public, the press and politicians expressed shock over EPA actions like the agency's denial of the California waiver. Sometimes the press should really just pay more attention to the evidence. There was no room for surprise given the very public history of the climate change tussles.
Cues: "Technological Feasibility, Economic Practicability, Maximum Feasible"
The meeting document repeatedly cites the NHTSA's Energy Policy & Conservation Act of 1975 ("EPCA" or "the 1975 Act"), and its "balanced goals". The reason for the auto industry's adoration of the 33 year old NHTSA standard over the Clean Air Act and the EPA's updates to the Clean Air Act, is because the 1975 Act considered things like "technological feasibility" and "economic practicability", which allow for more input from the industry.
A favorite concept from the "1975 Act" is "maximum feasibility". "The document" insists that the EPA carbon dioxide standards should be "no more stringent" that the "maximum feasible" standards for fuel economy set under the NHTSA. Although the phrase "maximum feasible" seems straightforward, it is anything but. To be clear about what they mean, the authors spell out their own definition. It's not, they write, "the highest level of fuel economy that can be achieved by a single vehicle, or even by a fleet of vehicles, through the application of available technologies". "Maximum feasible" they say, gives the auto industry leeway to consider sector employment, consumer choice, and the overall health of the industry. In other words, "maximum feasible" is entirely subjective and by their interpretation. In this way, the fantastic 1975 Act,"ensured wide consumer choice by leaving maximum flexibility to the manufacturer". To be clear, the industry theorem therefore takes "maximum feasibility", and neatly redefines it as "maximum flexibility to the manufacturer", a whimsical redefinition if there ever was one.
The authors emphasize the part of the Clean Air Act 202(a)(2), that says the EPA should give "appropriate consideration to the cost of compliance". The document predicts that costs like "investment in tooling engineering research, and development" are a "primary constraining factors on the industry's ability to achieve higher average fuel economy levels on a fleet-wide basis", and that "NHTSA's own standard setting process under EPCA would...be the upper limit of what EPA could properly determine to be the most stringent standards". In other words, gut the intention of the Clean Air Act, and instead follow NHTSA's 1975 standard.
The document says the Clean Air Act should allow the EPA to: "set standards that take account of the limits on the investment capabilities and product cycles of the industry, just as NHTSA does...". The document advises the EPA to consider the financial resources of the industry, and weigh the "potential trade-offs between more stringent requirements in the near-term, and investments in longer-term strategies that seek to commercialize vehicles that do not require" carbon fuels. Of course, since 1975, for 30 years, the industry has spent all its effort undermining "longer-term strategies", so this is a bit of a canard.
Citing a petroleum industry case, the document recommends that whatever the EPA does, standards shouldn't require costs and if "additional technology" is needed, than the EPA can "properly decide to not adopt standards under the Clean Air Act". So first the EPA should define "requisite technology", then once it's defined, then the auto industry gets to waive ay action. The Chrysler document outlines all the ways the EPA can not regulate greenhouse gases, including "abstain from attempting..." regulation, a request that the EPA under Stephen Johnson seems quite agreeable to.
Automotive "Modernization" -- Back to the 70's?
Of course if we look back 30 years ago we get an idea of how antiquated and stuck the American auto manufacturing industry really is. In the 1970's the fuel efficient cars looked like the Plymouth Duster or the Chevy Chevette, and the impetus to innovate for customer choice was real because those rattletrap choices were truly dire. Today, "customer choice" is an encrusted artifact of advertising cynically used by auto manufacturers, especially when faced with regulation. Despite seductive rhetoric about "new technology", the auto industry is clinging to the good 'ole days and the loose regulatory framework of the NHTSA's 33 year old standard.
The document presented to the EPA in November, 2008 directs "what the Congress sought to achieve in the [1970's] EPCA and how those objectives should shape EPA's action under the Clean Air Act." The authors on last year's document quote Phil Sharp, former D-IN (now the president of Resources for the Future, an energy policy think-tank) who sponsored the 1975 Act. Apparently, three decades ago, during a congressional debate, Sharpe noted: "Serious unemployment in the auto industry" called for considerations to "preserve this important segment of the economy". Sharp urged the EPA to maintain "the health of the industry."
It's interesting that a 2008 document would pull a quote from a congressional debate three decades ago, but since the authors did, lets respond to Sharp circa 1970/2008.
Back to the 1970's. We know that "mid-century" is all the rage in fashion and home decorating, but while we tolerate (for the sake of argument) scaly old orange plastic chairs and brown shag rugs as retro fashion statements, we're not so keen on mid-century policy for 21st century problems. We need an evolved policy to "preserve the auto industry". Plus, if you think back, the Chevy Chevette got 40mpg highway, 28mpg city, better than many cars today. Surely we can do better with mileage and emissions in 2008, then in 1970 -- given our technology-centric society?
Today in 2008, the auto industry is swamped with losses. In the 1980's, when one auto company president suggested controlling the regulators, Reagan replied "Get control of them? We need to get rid of them."
Per Ronald Reagan and successive White House leadership, for the last 35 years deregulation spared the auto industry manufacturers, who chose to use the government's leniency and improvements in fuel efficiency to innovate gas consuming features rather than mileage standards that surpassed the "1975 Act" mandate. When sales sink up to 18%, as they now have, unemployment follows. Would today's crisis have been averted if a less permissive policy had been pursued?1
The auto industry would love to live forever in the 1970's. But if "the health of the industry" is truly still a goal, maybe the government's kindest move would be to shoot the industry, or drown it in the bathtub, or whatever libertarian types do these days with ponderous, surly sectors.
The Prognostications of New York Times
In a post last week we questioned the New York Times assumption that Congress would never alter the Clean Air Act to include cost benefit analysis.2 But perhaps they don't have to, if the Heritage Foundation is successful at urging members of legislator to bog down EPA action on global warming.
When legislation leaves it to industry to decide whether a particular environmental regulation to mitigate pollution or proven toxicants, the process towards resolution is well-rehearsed and elicits a predictable response -- YES, yes; way, way too costly! This is the problem. Costs and benefits must be considered, even though some people unilaterally criticize cost benefit analysis for public health and welfare. But on the emissions arguments and the Clean Air Act provisions, analysts correctly point out that costs are often overestimated. This is because the industry doesn't approach this exercise fairly, rather they seek to torpedo all regulatory initiative to preserve and enhance today's profits.
The document prepared for the Chrysler/OMB meeting underlines one of the points of our previous post: that costs and benefit analysis done by industry will prioritize industry profits; and forsake clean air, water, health and welfare.3
To run out the clock, the EPA broadened the emissions issue addressed by the Supreme Court to all greenhouse gas emitters. Expanding the Supreme Court's mandate so promiscuously will allow corporations and their lobby groups, maybe even some newly minted ones with deceptive names like 'Citizens For Fresh Air', (I made this up) to make wide, swinging estimates of costs in an attempt to freak the public out about lost jobs, economic gloom and doom and the exorbitant cost of regulation. This is a 30 year old trick though, and where did it lead the auto industry?
Consumer Choice, Sea to Shining Sea
In the US, school children sing national songs about the country's natural resources. Indeed, the country is famous for its natural beauty, the mountains, forests, canyons, fields and azure oceans. Children learn "America The Beautiful" early on. But once they grow to adults, the children naively adapt their thinking. They accept rhetoric from industry that rejects the idea that resources are really the citizens', rather they belong to industry, which uses and pollutes air, water, land, trees. Somehow citizens think that yes, what's good for industry trickles down to them. Then when pollution burdens public health, as with smog in California, industry reacts as if fouling the public's air and water is its right -- how dare citizens overstep their rights by demanding we control our pollution?
Trotting out the "costs" of regulation, industry rebuffs citizens as if they were encroaching, trying to steal its property. Regulation is hurting business, they cry! Once citizens and politicians subscribe to this rhetoric, regulation is easily overturned in the name of freedom. And subscribe they do, paying daily, yearly, for industry to pollute the nation's resources. If that doesn't work for businesses and their lobbies, they drag "jobs" onto the set.
When industry puts "jobs" onto the national bargaining table they present a coercive choice. Regulation or jobs? Clean air or jobs? Water or jobs? Glaciers or jobs? Species or jobs? Your health or jobs? Your kids health or jobs? Would most citizens walk up to a slouch on the street and ask to play 3-card Monte with them? No. But in just as obvious a con, citizens instinctively recoil from the "jobs threat" and snatch desperately at the "jobs" hand -- just as if it were really a "choice"! Addressing global warming is good for the economy, not bad.
Global warming is not a simple problem, but the Supreme Court has many times laid the groundwork for how the EPA needs to act. But the Environmental Protection Agency, in the name of its citizens but in the service of "free-markets", flouts the court, congress, states and constituents.
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1Deregulation that impacted environmental resources didn't start in the 1980's, but Reagan amassed huge gains in this direction, including cost benefit considerations. Many politicians are attentive to these analyses and some ascribe to more radical sentiments. Senator Tom Delay and Senator James Inhofe would dismantle agencies like NOAA, NEH, DOE, OSHA and the EPA, which they liken to the "Gestapo". (See for instance Delay, T., "No Retreat, No Surrender: One American's Fight" (p13)). Inhofe puts out regular press releases as ranking minority member of the Committee for the Environment and Public Works (EPW) which is led by Barbara Boxer stating that any global warming measure will cost jobs and wreak economic havoc.
2We previously wrote about Johnson's request to Congress that the Clean Air Act be "refurbished" to include "benefits, costs, risk tradeoffs, and feasibility in making decisions about how to clean the air".
3A 2007 draft report for Congress on costs and benefits of government legislation used Heritage Foundation information and the example of failed communist states to illustrate how regulation can wreak havoc on an economy. Of course the Soviet Union was famous for disasters like Chernobyl and for leaving a devastating, costly pollution legacy, so the example is ludicrously wrong that that state was keen on environmental regulation but flawed on other levels too. Not to mention how ludicrous it is to write a 2007 report to Congress that stoops to waste even one sentence linking clean air and water security with some interpretation of mid-century communism.
