Michael Tubman's blog

Yesterday, EPA announced the public release of reported greenhouse gas (GHG) emissions from large facilities across the country. Under legislation signed by President George W. Bush, most large sources of GHG emissions, including refineries, power plants, chemical plants, car manufacturers, and factories emitting more than 25,000 tons of CO₂ equivalent a year, have been reporting their annual emissions electronically to EPA since 2010, while small sources are specifically exempted from the rule. Now, in accordance with the law, EPA is making that data public.

Some similar information was public already. Power plants have been required to report their CO₂ emissions since the 1990 Clean Air Act Amendments, while many other companies have voluntarily reported their emissions through programs like the Carbon Disclosure Project

While Environmental Protection Agency (EPA) regulations on greenhouse gases (GHGs) and other air pollutants are on firm political and legal footing, attacks on them continue. Claims have been made that the costs of regulation are extreme or, contradictorily, that the government has not conducted any cost analysis of these regulations.

On the side that the costs are too high, one figure bandied about recently is that all government regulations are costing the economy $1.75 trillion annually, and $280 billion of that stems from compliance with existing environmental regulations. Those figures came from a study by two Lafayette College professors done for the Small Business Administration (SBA). Yet, as widely reported, the Congressional Research Service, and even the professors themselves have disputed the methodology of the study and its use in the current frenzy of political shots at environmental regulations. In a Congressional Research Service (CRS) report, the methodology of the SBA report was faulted for, among other things, allowing for double counting of costs. The Lafayette College study simply adds together other previous studies on individual regulations, regardless of the approaches and methodologies of those calculations. The CRS report quotes the Office of Management and Budget (OMB) as having written that such a methodology is an “inherently flawed approach.”

More distressingly for those who care about making informed decisions about the economic impacts of regulation, that large figure is not balanced against any benefits those regulations might have. According to the CRS report, the authors of the Lafayette College stated that they were never asked to include benefits in their analysis. The authors were quoted as saying the report was “not meant to be a decision-making tool for lawmakers or federal regulatory agencies to use in choosing the ‘right’ level of regulation. In no place in any of the reports do we imply that our reports should be used for this purpose. (How could we recommend this use when we make no attempt to estimate the benefits?)” On the contrary, as we have explained before, the benefits of Clean Air Act regulations have far outstripped the costs in major studies.

As for those who say no economic analyses were ever done of these regulations, all federally promulgated regulations undergo a cost-benefit analysis before implementation. This requirement stretches back many presidential administrations, with each administration offering adjustments to the process. The basis for current analysis is found in Executive Order 12866, signed in 1993 by President Clinton, which provided a significant overhaul to the review process and, among other things, requires

Each agency [to] assess both the costs and the benefits of the intended
regulation and, recognizing that some costs and benefits are difficult to
quantify, propose or adopt a regulation only upon a reasoned determination
that the benefits of the intended regulation justify its costs.

President Obama reaffirmed the inclusion of cost-benefit analysis in the regulatory process in Executive Order 13563 at the beginning of 2011.

Turning specifically to the GHG regulations implemented by the Administration, where regulatory requirements have been imposed the analyses required by OMB have been conducted and are readily available. Some critics have complained that there was not a cost-benefit analysis done of the EPA’s 2009 Endangerment Finding for GHGs. Such claims miss the fact that the Endangerment Finding was a scientific ruling that GHGs cause climate change, posing a threat to public health and welfare, and motor vehicles emit GHGs contributing to those risks. Since there were no regulatory requirements to reduce GHG emissions in this rulemaking, a cost-benefit analysis was inappropriate.

When it comes to actually reducing GHGs from emitting sources, such analyses would be appropriate, and federal agencies are required to include them as part of the rulemaking process. EPA has done so. The first rule on GHGs , the light-duty vehicle GHG emission standards promulgated jointly with Department of Transportation’s Corporate Average Fuel Efficiency standards, was issued with a Regulatory Impact Assessment that offered almost five hundred pages of detailed qualitative and quantitative analysis of the costs and benefits of the rules. The findings were that the GHG standard for light duty vehicles has an estimated cost of $52 billion and benefits of $240 billion: benefits outweighing costs by better than 4 to 1.

Upon the implementation of the light duty vehicle standards, the New Source Review program for stationary sources of GHGs was automatically triggered – without any regulatory action taken by EPA – therefore no separate cost-benefit analysis was legally required of this step. However, when EPA went through the regulatory process to create the tailoring rule to lower the compliance requirements for stationary sources, it was required to undertake an analysis. The Regulatory Impact Assessment of EPA’s tailoring rule is available on its website and includes an in-depth qualitative and quantitative analysis of the reduced permitting costs from the tailoring rule regulation now in effect for stationary sources. As EPA continues its rulemaking for New Source Performance Standards for utilities and refineries, fully documented regulatory impact analyses will be conducted and made available for comment with the proposed rule.

Thus, despite the claims to the contrary, EPA has in the past and will continue in the future to analyze the costs and benefits of GHG regulations. It is also clear that, to date, GHG regulations imposed by the EPA under the Clean Air Act have vastly greater benefits than costs.

Michael Tubman is the Congressional Affairs Fellow

A witty observer of the human condition Mark Twain wrote, “Few things are harder to put up with than the annoyance of a good example.” He likely would have had a few choice quips about opponents of greenhouse gas (GHG) regulation who have a lot to put up with these days. They continue claiming that new regulations are a de facto construction moratorium, a burden on the economy, the illegal act of unelected bureaucrats, and doomed to be overturned by Congress. Yet the facts themselves provide overwhelming evidence to the contrary.
 

Before the Environmental Protection Agency (EPA) began regulating GHGs this January, there were claims that these regulations would shut down entire industries and create a construction moratorium on new projects. In reality, the New Source Review program requires new sources of pollution and major modifications to existing sources of pollution, like power plants, refineries, and factories, to install the best available control technology to reduce GHG emissions. EPA’s guidelines for implementing these requirements focused mainly at increasing energy efficiency of facilities without requiring expensive add-on controls or fuel switching.
 

Despite these dire warnings, there are plenty of examples of how this scenario did not occur. Even before the regulations were in place, Calpine voluntarily and successfully underwent a determination of the best available control technology for its new natural gas power plant in the Bay Area. In a more recent example, one of the most vociferous industrial opponents of the regulations, Nucor Steel, came to Congress to testify at a hearing about the impossibility of compliance with the regulations, but the company had by that point already received a permit under that program for a facility in Louisiana. More permits have also been issued, and others are on the way.
 

Other attacks have fixated on the legality of the new regulations. Yet, in the 2007 case Massachusetts v. EPA, the Supreme Court ruled explicitly that EPA had the authority to regulate GHGs under the Clean Air Act if the Agency determined that they posed a significant threat to public health and welfare. This threat was overwhelmingly demonstrated in the 2009 endangerment finding, which documented the risks of climate change posed by GHGs. This endangerment finding was issued by the Obama Administration, but the Bush Administration had come to exactly the same conclusions. A Supreme Court ruling in favor of regulation is a hard example to be confronted with, but that hasn’t stopped opponents.
 

Although there has been little problem with implementation of these new requirements, it has taken the political rhetoric some time to catch up with the facts. Some on Capitol Hill have remained fixated on these regulations. This debate came to a head, as votes were taken to repeal or delay the EPA regulations. In the Senate, votes on four different permutations failed to meet the required 60-vote majority. The Baucus Amendment would have codified EPA’s tailoring rule and exempted agricultural sources from EPA GHG regulations. It failed 7-93. The Stabenow Amendment would have allowed EPA to continue work on drafting regulations, but it would have delayed implementation of existing GHG rules (except for the existing transportation standards) for two years, excluded the agriculture sector, and expanded some manufacturing tax credits. It also failed 7-93. The Rockefeller Amendment would have delayed the implementation of all EPA GHG regulations (except for car rules) by two years. It failed 12-88. The McConnell Amendment was a version of the Whitfield-Upton-Inhofe proposal that would have explicitly prohibited any GHG regulation using Clean Air Act authorities and repealed the EPA’s scientific finding about the dangers of climate change. The preferred bill of the Minority, it failed 50-50. In the House, a standalone bill (The Energy Tax Prevention Act) mirroring the McConnell amendment passed by a substantial, largely partisan majority, but with the failure of all four proposals in the Senate, it was clear that there was no hook to conduct a House-Senate conference on the legislation. For those who wanted a Congressional rebuke for action on climate, these votes should have served as an example of political opposition to repeal of regulatory authority.
 

In the face of those votes, opponents tried one more political maneuver: holding the federal budget hostage to the inclusion of the failed McConnell Amendment. After threatening a shutdown of the federal government to oppose regulations that have been shown not to prevent new facilities from being permitted, not to lead to economic destruction, and which were upheld by the Senate just days earlier, opponents eventually relented and withdrew their demands.
 

It has been tough to put up with these examples, but some opponents of the regulations are finally accepting the results. “I think this is probably the end of our EPA little session here,” said Sen. Jay Rockefeller (D-WV). “I’m not going to be pushing for another vote,” echoed Sen. Carl Levin (D-MI). After everything that has occurred on this matter, and regardless of other attempts that might be made, it’s clear that the existing regulations are here to stay and the path forward for future reasonable regulations has strong economic, legal, and political foundations. In the coming months, EPA will turn to the next step in its legally-required regulatory process, proposing New Source Performance Standards for the utility and refining sectors.
 

Our leaders should use their energies to ensure that these regulations result in low-cost emissions reductions rather than continuing to fight battles for which the outcomes are already known. There is a real possibility for positive engagement in this process but only if one is willing to take a rational look at the challenges and potential policy tools available. For those that want to continue to fight past battles in the face of all that has happened, another Twain quote comes to mind: “Denial ain’t just a river in Egypt.”

Michael Tubman is the Congressional Affairs Fellow

Most Americans can recall from social studies class and Schoolhouse Rock that a bill becomes a law through a process of introduction, committee work, and votes in both chambers of Congress before being signed by the President. Yet in reality, Congress influences policy decisions and administrative actions in ways that are more complex and potentially less transparent.

The Constitution gives Congress the power of the purse over government. Congress passes annual appropriations bills that fund the various programs of the federal government, and the necessity for Congress to pass these bills every year makes them an attractive target to attach riders – legislative provisions not directly related to the bill at hand. Appropriations riders are added to a bill by a small number of Congressmen to avoid an open debate on the merits of a particular policy, relying instead on the political and practical necessity to pass the larger funding bill.

Several rider efforts have succeeded in prohibiting funding or delaying environmental programs, much as some are talking about doing to prevent EPA from implementing greenhouse gas regulation under the Clean Air Act. Unlike policy decisions set in authorizing legislation, funding restrictions only apply for the year of appropriations covered and must be renewed on an annual basis. Unfortunately, once the precedent is set, it is common for riders to reappear for multiple years, usually without an up-or-down vote on that specific policy decision.

When it comes to climate change, Rep. Joe Knollenberg (R-MI) took a bill that failed to gain any traction in the committee process and turned it into a barrier to productive climate work through the appropriations process. Reacting to the Kyoto Protocol, drafted in December 1997, Rep. Knollenberg introduced HR 3807, in May 1998, which would have prohibited the use of funds for “for rules, regulations, or programs designed to implement, or in contemplation of implementing, the Kyoto Protocol.” A broad reading of the phrase “in contemplation of” would have stopped federal funds from being used for any work on climate change, even educational workshops. When the bill failed even to move out of the Republican controlled committee to which it was referred, Rep. Knollenberg turned to the appropriations process, where he attached the bill as a rider to the appropriations bill that included FY1999 funding for EPA. The same language was included in several appropriations bills. In addition to the EPA bill, it was also included the next year for FY2000 funding. As a result, Rep. Knollenberg was able to inhibit the Clinton Administration’s climate change work without going through the regular process of enacting legislation.

Other environmental priorities have been the targets of appropriations riders and defunding efforts. These riders became popular shortly after the political upheaval of 1994, but the effects were often much longer lasting. Beginning in Fiscal Year 1996, a rider was attached annually to the transportation appropriations bill preventing increases in the Corporate Average Fuel Economy (CAFE) standard known as the “CAFE freeze rider.” Like the proposed riders on greenhouse gas regulation, this rider was in reaction to an action by the Clinton Administration, in this case an advanced notice of proposed rulemaking by the National Highway Traffic Safety Administration. The recurrence of this rider continued until Fiscal Year 2001 when the rider was dropped in favor of a study on raising CAFE standards, ultimately yielding to bipartisan support for new standards much later than initially anticipated. 

Environmental advocates have also used riders to avoid open policy discussion and votes. One of the longest running annual appropriations riders was a prohibition on offshore oil and gas leasing off the East and West coasts and certain parts of Alaska. That rider was included in appropriations bills for 27 years, from 1981 to 2008, without ever being a stand-alone piece of legislation passed by Congress.

The lesson of these and the plethora of other riders included on appropriations bill every year is clear: these provisions have staying power. The inclusion of a one-year delay on greenhouse gas reductions could easily continue for two years – or even twenty. According to the scientific information available, we don’t have the luxury of waiting that long to reduce our emissions. Instead, the United States should proceed with the prudent and reasonable series of regulations that have been outlined and are being implemented under existing law following the 2007 Supreme Court ruling in Massachusetts v. EPA. 

Michael Tubman is the Congressional Affairs Fellow

When the Congress returns from Easter Recess next week, 116 days will remain on the legislative calendar before Election Day on November 9.  This relative dearth of time has led some proponents of climate action to worry whether there is enough political appetite for Congress to pass comprehensive climate and energy legislation while midterm elections loom.  Certainly, the November elections are on the minds of legislators.  However, elections have always factored into Congressional decision-making and action.  Government accountability through elections is what our Republic is founded on, after all.  Despite impending campaigns, nearly every major environmental law of the last 40 years has been passed during an election year.

In general, Congress has a history of making big policy decisions during election years.  USA Today recently found that over the last 20 years, Congresses have actually passed 70% more laws in election years than in other years.  What’s more is that these laws are not just limited to post office dedications and other less-than-essential topics.  Comprehensive legislation has often passed in election years, including the 1994 crime bill, 1996 welfare reform, 2002 McCain-Feingold campaign finance reform, and even the health care reform bill this year.

Turning specifically to environmental laws, 22 major laws (listed below), beginning with the National Environmental Policy Act signed in 1970, were enacted in election years.  For example, October 1986 – just weeks from Election Day – saw the passage of significant amendments to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund).

A clear precedent for climate change legislation passing in 2010 is the Clean Air Act amendments that passed in late 1990.  Just as President Obama campaigned on passing climate legislation, President George H.W. Bush campaigned to enact new air pollution laws.  Bush worked with a group of bipartisan legislators to have a revolutionary package of amendments introduced in the House by Rep. Dingell (D-MI) and in the Senate by Sen. Chafee (R-RI).  This package included a cap-and-trade program for power plant emissions of acid rain-causing NO_x and SO₂.  After the bipartisan bills easily passed both chambers by mid-year, the conference committee, led by Sen. Baucus (D-MT), agreed to a compromise bill that passed 401-25 in the House and 89-10 in the Senate.  Passage occurred by these wide, bipartisan margins on October 26 and 27 – not bad for two weeks before an election.

Comprehensive climate and energy legislation should be the next in the series of major environmental laws passed in a midterm election year.  Like the Clean Air Act amendments of 1990, other environmental laws have required bipartisan compromise.  Democrats and Republicans have had to reach agreement on environmental policy before and they can do so again, even in an election year.  Making good public policy is the best politics, and a strong bipartisan effort on the serious challenge of climate change is something that both parties should be accountable for in November.

Environmental laws passed in election years since 1970 include:

• National Environmental Policy Act (1970)
• Clean Air Act Amendments (1970)
• Occupational Safety and Health Act (1970)
• Marine Mammal Protection Act (1972)
• Coastal Zone Management Act (1972)
• Clean Water Act (1972)
• Safe Drinking Water Act (1974)
• Fisheries Conservation and Management Act (1976)
• Toxic Substances Control Act (1976)
• Resource Conservation and Recovery Act (1976)
• Federal Land Policy and Management Act (1976)
• Comprehensive Environmental Response, Compensation and Liability Act (1980)
• Nuclear Waste Policy Act (1982)
• Superfund Amendments and Reauthorization Act (1986)
• Emergency Planning and Community Right-to-Know Act (1986)
• Ocean Dumping Act (1988)
• Shore Protection Act (1988)
• Oil Pollution Act (1990)
• Clean Air Act Amendments (1990)
• Pollution Prevention Act (1990)
• Food Quality Protection Act (1996)  
• Safe Drinking Water Act Amendments (1996)

Environmental laws passed in non-election years include:

• Endangered Species Act (1973)
• Clean Air Act Amendments (1977)

Michael Tubman is the Congressional Affairs Fellow

This provocative question is raised by a new website, Climate Conservative, that launched today.  The site challenges some of the ideological dynamics about climate change and encourages conservatives to look beyond the echo chamber of talk radio to the facts and history of climate change.  It traces conservative thinking about environmental action through conservative thinkers from Edmund Burke to Barry Goldwater and Ronald Reagan and relates how such thinking should apply to tackling the problem of climate change.

The website features some radio ads that are set to go on air in selected markets this week as well.  The ads highlight steps President Reagan took on international environmental cooperation, remarkably, described in his own words.  For instance, Reagan overruled skeptics about the effects of ozone-depleting chemical to pursue the Montreal Protocol to remarkable effect.  It’s a fantastic parallel to the current need of conservatives to take on climate skeptics and do what’s environmentally and economically right for the country.

ANCHORAGE - "Hello.  I'm a Republican, and I believe in climate change."  These words opened a presentation at the Alaska Forum on the Environment and indicate that, here in Alaska, issues surrounding climate change have often transcended the partisanship that sometimes dominates the issue 3,000 miles away in Washington.

This bipartisanship has evolved because probably no place in America is the evidence of climate change more clearly on display than in Alaska.  Climate change’s leading edge is in the Arctic, and temperatures in Alaska have risen 4 degrees or even more depending on location.  With warming and its impacts visible to all and being increasingly analyzed on a local level, discussions of climate change, especially as it relates to adaptation, take on a tone all too unfamiliar inside the Beltway.

ANCHORAGE - Alaska is a big state, with big mountains, big wildlife, and big development projects.  It’s also a place of big changes: the state has warmed more than 4 degrees, creating tremendous pressures on the natural environment and society.  But in a place where the people are always looking for the next big economic driver, like a $40 billion Alaska natural gas pipeline, uncertainty about carbon regulation is an Alaska-sized problem.

In a letter to Secretaries Clinton, Geithner, and Locke, Attorney General Holder, and US Trade Representative Kirk, 19 business groups, including the National Association of Manufacturers, argue that new “indigenous innovation” programs are designed by the Chinese government to find “national champions” of industry that can be advantaged in a variety of sectors, including green technology, and create "barriers to competition."  The Hillicon Valley technology blog over at The Hill notes that this concern comes in the context of rising trade conflicts between the United States and China. 

This attention comes on the heels of increasing concern over China’s leadership in clean energy technology. As noted in this weekend’s New York Times piece on the subject, the country has become the world’s largest manufacturer of wind and solar generation equipment.  Through industrial policy, China is trying to take advantage of the growing export market for power sector equipment of all types, especially clean energy.

We should have expected that China would be a strong competitor in the clean energy sector.  Regardless of the outcome of continuing international climate negotiations, countries from Europe to most U.S. states to China itself have already made unilateral policy choices to increase the use of clean energy technology in the coming decades for a multitude of reasons.  The demand will be tremendous for the manufacture of clean energy technologies, and there is potential for fortunes to be made in their export.

What should the appropriate policy response be?  As the authors of the letter suggest, the US should promote fair access for American goods and services in foreign markets.  Protectionist responses and trade wars have never helped any country grow its economy and create jobs.

But reducing protectionism is not enough to regain the American lead in the clean energy sector.  The US needs to have a policy of its own that encourages innovation and gives the right incentives for US companies to compete globally.  America is a land of innovation, and we should be the ones taking advantage of these new and growing markets, not ceding them to competitors.  Part of the answer is for the US to put a price on carbon. Doing so would encourage innovation in the private sector and provide regulatory certainty for companies to make investments here in clean energy technologies.  American ingenuity is second to none, and Congress needs to work on a climate and energy bill that provides the right framework for our businesses to flourish.

Michael Tubman is a Congressional Affairs Fellow

COPENHAGEN - Governor Chris Gregoire made a presentation about the successes of Washington state in building a clean energy economy at an official COP 15 side event hosted by us and the World Business Council on Sustainable Development.  A packed room listened to how the experience of the Washington out West should provide insight for national policymakers of the Washington in the East.

She detailed how, given an appropriate state policy framework, the private sector has made significant innovations in technology, making Washington a national leader in solar manufacturing and the state with the 5th most wind energy production. All of this development occurred despite the fact that the state does not have large wind or solar energy resources.  The lesson here is that the innovativeness and drive of American business should never be underestimated, and there is nationwide potential for growth in a clean energy technology.  New and existing American companies will find ways to flourish given the right incentives.

The Governor also spoke about states leading the way in implementing cap-and-trade programs to reduce greenhouse gas emissions.    She pointed out that a multistate and multi-Canadian province effort, the Western Climate Initiative, is underway to enact a cap-and-trade program covering 20% of the US economy - despite the delays in development of a national program.  The WCI is the not the only state-level effort underway, with the Midwestern Greenhouse Reduction Accord signed in 2007.  Both of these efforts follow on the heels of an ongoing cap-and-trade program in the Northeast, which, as Gregoire pointed out, has proven that cap-and-trade programs can tackle greenhouse gas emissions without damaging the American economy – an important piece of empirical evidence as the nation and the world look towards developing emissions-reduction policy.

Of course, the government cannot do it alone.  The people in Washington state have a commitment to technology, whether it’s aerospace, software, clean energy, or coffee.  Now its time for legislators in Washington, DC to show the same commitment to technology promotion and emission reduction.

Michael Tubman is the Congressional Affairs Fellow