The EPA Finds on Endangerment...Which Means?

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To the relief of many environmentalists and scientists, last week the Obama administration's EPA found six greenhouse gases endangered public health and welfare -- as ordered by the Supreme Court. Many in business jeered and booed and issued misleading and false complaints with hyperbolic gusto. Also last week, the EPA issued a preliminary review of the energy bill released by Congressman Henry Waxman (D-CA) and Congressman Edward Markey (D-MA) and concluded that the cap and trade portion would not handicap the economy (pdf). Leaders in Congress said that cap and trade legislation might be preferable to EPA regulation. Of course sectors like the chemical industry as well as free-market think tanks and their dedicated columnists have gone apoplectic. How will Congress deal with all sides? How will the Obama administration -- led by its famous mediator -- mediate?

Industry's Place at the Table and Bush's EPA

The Environmental Protection Agency (EPA), found that high concentrations of the greenhouse gases carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride threatened human health and welfare. Environmentalists and lots of others, basically anyone who cares a whit about life or Earth or species, not to mention human health, etc., cheered -- action, finally. But as we know, this wasn't really such a bowl-me-over stupendous accomplishment. The Bush Administration's EPA had also found that greenhouse gases endangered human health and welfare (and they weren't the first) -- and famously smothered their findings.

Let's briefly recall some highlights. Consider that Congress passed the Clean Air Act and the Clean Water Act in 1970 under President Nixon. Industry and those in Congress whose dispositions trend radically free-market, or whose campaigns certain industries help finance, have since fought vigorously against the legislation.

The battles go back decades, familiar faces in familiar roles. For instance in 1983, when President Ronald Reagan steadfastly tried to undermine Clean Air and Clean Water, House Representative Barbara Boxer (D-CA) noted:

''They can't get the Clean Water and Clean Air Acts amended, the way they want to. So they weaken them through regulation, and defy the intent of Congress. They are the best at figuring out ways to legally undermine the will of Congress, but this time, in the E.P.A. case, we caught them.''

Boxer was a junior member of Congress in 1983. Did she know how many rounds were left to go? Some recent history, starting 20 years after Boxer's comment:

  • 2003: The states petitioned the Bush Administration to regulate CO2 emissions from motor vehicles. The administration refused, asserting that CO2 wasn't a pollutant under the Clean Air Act. (The states sued.)

  • April, 2007: Massachusetts vs. EPA finally ended up in the Supreme Court. The court ordered the EPA to determine whether greenhouse gases endangered human health and welfare, saying the administration needed to ground its assertions in some science, as required by the Clean Air Act. Acronym Required talked about the court's findings in "Supreme Court Rejects EPA & Coal Plants' Nonsense".

    In a darker moment of EPA history, the agency defended its mulish inaction by citing in testimony an old tobacco case, Brown v. Williamson. Then, the court ruled that the FDA couldn't regulate cigarette smoke on account of "tobacco's unique political history", which, the EPA reasoned, shared that of greenhouse gas's "unique political history". In addition, the EPA argued that it couldn't be effective against such a "global problem", and that tailgate regulation was the place of the Department of Transportation's National Highway Traffic Safety Administration (NHTSA). Any attempt at EPA regulation, the agency said, would would be "piecemeal" and cause "agency overlap". The Supreme Court categorically rejected all of these arguments. (Environmentalists -- my shorthand for anyone who cares a whit -- cheered.)

  • May 2007: Bush announced: "Today, I'm directing the EPA and the Departments of Transportation, Energy, and Agriculture to take the first steps toward regulations that would cut gasoline consumption and greenhouse gas emissions from motor vehicles." (Environmentalists -- and anyone who cared a whit --cheered.)

  • May 2007-November 2007: Bush's EPA hired a 70 person team to investigate endangerment, vehicle and fuel issues after the Supreme Court ruling. The EPA found that based on the "underlying science" CO2 emissions cause "consequences for public health". The resulting report included costs and benefits. At about 300 pages the EPA conducted the study in consultation with the DOT's NHTSA. The 2007 report budget --for six months of work? -- was $5.3 million. (Who knew?)

  • November 2007: EPA Administrator Stephen Johnson testified before the House Oversight and Government Reform Committee that he would propose EPA regulation by the end of the year. (Environmentalists cheered.)

  • December 2007: EPA finding of endangerment emailed to the White House Office of Management and Budget. Johson's proposal for regulating CO2 emissions was sent to the National Highway Safety and Transportation Agency (NHTSA). The documents disappeared into the black hole of the White House. (Few knew.)

  • March 2008: EPA administrator Stephen Johnson writes to Congressman Waxman to advise him that the EPA will issue an Advance Notice of Proposed Rulemaking (ANPR), rather than a finding on endangerment. (Business cheered.)

  • July 2008: The EPA follows through on Johnson's promise and releases the ANPR. (Business complained.)

  • July 2008: Jason Burnett (remember him?) resigned as the chief climate-change adviser to then EPA administrator Stephen Johnson, alleging that VP Cheney and the White House Council for Environmetal Quality redacted parts of CDC documents about greenhouse gases and human health. Burnett's move seemed overtly political, nevertheless, he helpfully detailed in a letter to Senator Boxer how findings on public health were manipulated by the White House: "CEQ requested that I work with CDC to remove from the testimony any discussion of the human health consequences of climate change". (Environmentalists gasped.)

Pressuring the EPA for the ANPR

How will the Obama administration's EPA differ from the Bush administration's? When Obama campaigned for President, he promised that industry would have a seat at the table, but not the only seat, which sounded great. But just as in the Bush administration, industry lobbyists still spend billions of dollars for their seats, while the majority of citizens, those who pollution disproportionately affects don't fund campaigns and rarely get seats. Will their Representatives really represent them despite their disproportionate campaign donations? How does it work when corporations don't play to compromise, don't accept "fair" solutions?

To get perspective on this, let's look quickly at the EPA's handling of the Supreme Court ruling last year via their Advance Notice of Public Rulemaking (ANPR). At the time of EPA Administrator StephenJohnson's decision last year to issue the ANPR we quoted from the Heritage Foundation's letter to -- as the conservative think tank put it -- "everyone that we could think of" in Congress.

The Heritage Foundation implored Senators and Representatives to pressure the EPA for an ANPR rather than find on endangerment. They said the extended public comment period would "start a record of" "cost[s] and burden[s] of carbon caps and Clean Air Act expansion". Note the Heritage Foundation didn't say "costs and benefits", but "cost[s] and burden[s]".

The Heritage Foundation also urged the EPA to issue an ANPR in a March 28, 2008 article published on its website, titled, "The EPA's Prudent Response to Massachusetts v. EPA". Heritage wrote "a wave of costly new regulations is the last thing the economy needs. An ANPR is the best option at this time."

The Response the EPA's ANPR

As the Heritage Foundation requested, the EPA issued the ANPR, so you'd think Heritage would be happy, maybe send a bouquet of flowers. Rather, they were extremely displeased, along with organizations like the US Chamber of Commerce. The Heritage Foundation issued warnings in dry, authoritative press releases filled with charts and graphs, like the October 29, 2008, "CO2-Emission Cuts: The Economic Costs of the EPA's ANPR Regulations". They warned that the ANPR would "damage the U.S. economy severely", cause a "large loss of national income" , "throw a monkey wrench into the production side of the economy", accumulate job losses that "exceed 50 percent" for some industries, in excess of "800,000 for several years".

Despite new technology investment, reported the Heritage Foundation, "more capital is destroyed than created." Heritage constructed a scary cliff-hanger of a bar graph that showed GDP sinking dramatically for nearly a quarter of a century. Yet analysis done EPA and non-partisan sources shows the opposite, that investment in green economy and reduction of destructive greenhouse gases will help the economy.

Of course you can get perspective on the Heritage Foundation's ominous forecasting by acknowledging the result of the past 8 years of deregulation -- the conservatives' ideal business model. Deregulation has not been good for labor or the economy. In 2008 job losses were 2.6 million, more than 3 times Heritage Foundation's yearly job loss scenario for the green economy. Under conservative tutelage, manufacturing has been decimated. 2009 has been even worse for jobs, the US economy has shed over 2 million jobs so far this year.

And Now, A New Round of Warnings for Endangerment

Now that the EPA has found on endangerment, as it is required to under the Clean Air Act, and as was ordered to by the Supreme Court, the right again comes out swinging, and has also found a cadre of columnist flacks willing to take up the rhetoric of deception. The thrust of these arguments is: 1) the EPA has suddenly grabbed unprecedented amounts of power, (no mention of the Supreme Court order), and 2) The EPA will ruin your life and steal your job.

Despite how misleading and misinformed, these pieces are being published by still working newspaper editors all over the US. With all the newspaper layoffs of talented journalists, somehow these hyperbolic, mendacious columnists and their (dare I say, shameless) editors seem unreasonably spared. Wrote the Augusta Chronicle: "The EPA recently announced it has authority to regulate greenhouse gas emissions.....You pretty much have to be a piece of antique furniture not to emit something".

"Antique furniture" in Maine turned out to be Northeast quaint compared to other commentators who used more extreme examples, like the EPA was "putting a gun to Congresses head". In California an LA Times columnist wrote "the EPA has launched its power grab over all that burns, breathes, burps, flies, drives and passes gas." (As an aside, the LA Times had more than 1200 people in its newsroom in 2001, and now has less that 600. And this guy remained in the keeper pool? Oh, and why is the public misinformed?)

The Obama administration certainly takes a different, far more skilled public relations tack than the Bush administration, with nods to the "left" and nods to the "right". However skilled the public relations of the administration, though, what will the end result look like? The idea that market based solutions are the best is not in question in the Obama administration. Senator Boxer generally aligns herself with the president in her cap and trade propositions and many agree that that tactic will be the most amenable to busiess. Even automakers have offered guarded support for the Markey/Waxman bill. But of course cap and trade is under attack from conservatives. Will congressional "compromise" successfully curb greenhouse gas emissions when no solution will satisfy conservatives? I guess we can hope.

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This reminds me of the dire predictions made by industry when Sarbanes-Oxley financial regulation was coming out. You'd have thought it would have bankrupted US industry. The truth is, the assumptions assume a frozen, status-quo, state in the business world - when in reality regulation becomes one driver that forces change and adaptation. In fact, as you point out, businesses today seem to be their own worst enemies in the long view, because when they survey their operation, they see the status quo as a defined revenue stream (often a nice, but unsustainable one). So they don't want to do anything that might impact this short-term uncertainty. Meanwhile, leaner, more hungry companies (esp in emerging markets) are rethinking the paradigms, and preparing to eat the lunch of these entrenched companies. Perhaps that's why Exxon invested $4M in alternative energy and 8-9 figures on lobbying and marketing in support of their status quo business.

The best thing ever to happen to these companies is if they're forced off the teat of their aging business models...

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