DC Confidential. David Schoenbrod
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health completely.18 Because Congress uses a trick, the EPA gets tricky, too.
Congress could stop the lying now by choosing how much to cut total emissions of the most-widespread pollutants, but that choice would necessarily be a compromise between protecting health and holding down the costs of pollution control. In making that choice, the legislators would have to subject themselves to blame, both from voters who want more complete protection of public health and from voters who want lower pollution-control costs. Because Congress refuses to shoulder responsibility, the EPA must continue to set the supposed “health” goals on the basis of political feasibility. The second false assumption that the legislators built into the statute reduces the political feasibility of cutting pollution.
False Assumption 2: “Air pollution is a local problem.” Congress in 1970 assumed that unsafe levels of air pollution come primarily from nearby pollution sources. This assumption is false. A big part of the pollution that we breathe comes from factories and other sources hundreds or even thousands of miles away.19
The false assumption was, however, politically convenient for federal legislators. It enabled them to look to the states to require pollution sources within their borders to cut emissions sufficiently to achieve the mandatory air-quality goals the EPA had set. Members of Congress said this arrangement would give state officials the opportunity to allocate the cleanup burden among the wide variety of pollution sources in their jurisdiction. It has become clear today that this arrangement was nonsensical because a state on its own can do relatively little to reach the air-quality goals for the deadliest pollutants, fine particulates, and ozone, the bulk of which come from out of state.20
The Clean Air Act still requires the states to take the lead in cutting emissions, but in 1977 Congress added an embellishment. The statute now tells the EPA to tell the states to tell the pollution sources within their borders to protect downwind states from emissions. This circuitous response to a national problem has guaranteed complexity and years and years of delay. It is not good for anyone’s health, pocketbook, or faith in the democratic process. Congress still looks to the states to solve a national problem so that its members can shift the blame to them for the costs of controlling pollution. According to a report from the eminent National Research Council, this roundabout way of controlling pollution consumes
extensive amounts of local, state, and federal agency time and resources in a legalistic, and often frustrating, proposal and review process, which focuses primarily on compliance with intermediate process steps . . . and draws attention and resources away from the more germane issue of ensuring progress towards the goal of [protecting health].21
Members of Congress could get rid of the two false assumptions in the Clean Air Act by directly regulating the nationally important pollution sources. We know this because in 1990 Congress did directly regulate nationally important sources of one pollutant: acid rain.22
The acid rain came most prominently from sulfur and other pollutants emitted by power plants in the Midwest. In 1971, President Richard Nixon proposed placing a tax on sulfur emissions, which could have gone a long way in reducing acid rain. Groups as diverse as the National Association of Manufacturers, the Sierra Club, and the National Academy of Sciences supported the sulfur tax, but the idea went nowhere in Congress.23 And it’s no wonder: Passing such a tax would have required members of Congress to shoulder the blame for the burdens of pollution control. So they left the problem to the EPA.
As the concern about acid rain mounted in the 1980s, eastern states bitterly complained that it damaged forests, lakes, crops, and lungs. These states asked the EPA to regulate the emissions, but the agency refused to set a mandatory air-quality goal for acid rain because achieving such a goal would be politically infeasible. Quite apart from acid rain, Congress had many urgent reasons to revise the Clean Air Act, but the acid rain issue got in the way. Legislators from Eastern states, faced with angry constituents, would not support any revision that failed to cut acid rain, while legislators from the Midwest feared that supporting cuts in acid rain would anger their constituents. The legislators could not dodge their constituents’ anger by telling the EPA to impose the duties needed to control acid rain because (1) cutting emissions from Midwestern power plants was the chief way to cut acid rain, (2) cutting these emissions would impose costs on plant owners that would force the state utility commissions to increase electricity rates, and (3) the power plant owners and state commissions would tell consumers that it was Congress that had caused their electricity bills to jump. The impasse helped cause years of crisis in air pollution control.
To break the impasse and end the crisis, Congress eventually took a new tack in pollution control: Congress itself would decide how much to cut acid rain emissions but let the sources of pollution rather than the regulators decide where to cut acid rain emissions. This new approach reduced the cost of pollution control and so made it more palatable to Midwestern legislators. The administration of President George H. W. Bush recommended this approach and Democrats and Republicans in Congress joined in passing it.
Here, more specifically, is what Congress did: It prohibited any plant from emitting sulfur without an allowance to do so and kept the number of allowances within an annual cap that would decline to 50 percent from current levels of sulfur emissions. The allowances were distributed among power plants but could be bought and sold. Such trading meant that a plant that faced a high cost to cut emissions could save money by buying allowances from another plant that could make extra cuts in its emissions at a lower cost.
This cap-and-trade approach achieved the 50 percent cut in sulfur emissions that Congress promised on schedule and saved electricity consumers and plant owners billions of dollars, compared to traditional regulation. Moreover, cap and trade vastly simplified the government’s job, reducing it to doing the bookkeeping needed to ensure that no plant’s emissions exceed the allowances it holds. The entire program would now be run by fewer than fifty EPA staffers, compared to the many thousands of federal and state staffers required to regulate pollution the tricky way. Finally, because the program required that firms emitting more than their allowances must pay a steep automatic penalty, they have an almost-perfect record of compliance, far better than with traditional regulation. As a candidate for president in 2008, Barack Obama, stated: “A cap-and-trade system is a smarter way of controlling pollution” than traditional top-down regulation. With top-down regulation, as Mr. Obama explained, regulators dictate “every single rule that a company has to abide by, which creates a lot of bureaucracy and red tape and often-times is less efficient.”24
With the acid rain program, Congress indulged in neither False Assumption 1 (that there is a completely safe level of emissions) nor False Assumption 2 (that pollution is a local problem) but instead used the “smarter way” to cut pollution.
The tax approach that President Nixon proposed in 1981 is like the cap-and-trade approach in these respects and also in requiring members of Congress to take a measure of responsibility for the burdens of pollution control. It took nineteen years of delay and a crisis for Congress to take that responsibility.
The failure in reducing lead in gasoline and the eventual success on limiting acid rain are only the beginning of the evidence that by leaving the hard choices to the EPA, Congress harms the public. Although Congress promised in 1970 that the agency would achieve health-based air-quality goals for the most widespread pollutants by the end of the 1970s, most Americans still breathed air that violated these supposedly mandatory goals into the 1990s. Congress also promised in 1970 that the EPA would promptly protect health from less widespread but especially hazardous pollutants. Yet, the EPA was unable to deal with the great bulk of these pollutants until Congress took some responsibility in 1990. The greatest gains in controlling pollution have come in those rare instances where Congress did take responsibility; examples include not just the acid rain program but also cutting emissions from new autos by more than 90 percent, requiring new cars to use lead-free gasoline, and totally eliminating chemicals that destroy stratospheric ozone.25
Given Congress’s successes when it finally took responsibility for the hard choices required to solve environmental problems, it should also apply the cap-and-trade approach to other widespread pollutants. That is what the Breaking the Logjam project of New York