As EPA moves to regulate greenhouse gasses under the Clean Air Act, the symbolic politics of fact-free fear are picking up predictable steam. New York Times reporter John Broder observed in a piece filed on Dec. 30 that: "With the federal government set to regulate climate-altering gases from factories and power plants for the first time, the Obama administration and the new Congress are headed for a clash that carries substantial risks for both sides."
Broder outlines the political stakes and the lines in the sand that are about to be drawn but then also notes that the new rules apply:
... only to those planning to build large new facilities or make major modifications to existing plants. The environmental agency estimates that only 400 such facilities will be affected in each of the first few years of the program. Over the next decade, however, the agency plans to regulate virtually all sources of greenhouse gases, imposing efficiency and emissions requirements on nearly every industry and every region.
That is the point being missed. EPA has historically been quite careful about gradually phasing in environmental rules to minimize economic disruption. EPA has a highly decentralized organizational structure with 10 regional administrators in the field and each having the same clout as the associate and assistant administrators in Washington. This has made the agency wide open to influence by the economic and political elite operating at the state level. Corporations with major facilities work with their local governors and mayors as well as their local congressional delegation to lean on the regional administrator to moderate policies. EPA's regional administrators are political appointees who tend to respond to political pressure. EPA then quietly ensures that regulatory compliance schedules are negotiated to provide sufficient time for companies to adjust. EPA is a serious regulator, but its strategy has always been gradualism and accommodation -- probably to a fault. The idea that the EPA's regulatory decisions are made by environmental zealots is absolutely ludicrous.
In general, the total benefit of federal regulation far outweighs the costs. In OMB's "2010 Report to Congress on the Benefits and Costs of Federal Regulations," OMB estimates that:
The estimated annual benefits of major Federal regulations reviewed by OMB from October 1, 1999, to September 30, 2009, for which agencies estimated and monetized both benefits and costs, are in the aggregate between $128 billion and $616 billion, while the estimated annual costs are in the aggregate between $43 billion and $55 billion. These ranges reflect uncertainty in the benefits and costs of each rule at the time that it was evaluated.
According to this analysis, EPA issued 30 major regulations from 1999 to 2009 at an estimated cost of $25.8 billion to $29.2 billion against estimated benefits ranging from $81.9 billion to $533 billion. As a society we have really not taken leave of our senses. When we make policies, the benefits generally outweigh the costs. Of course, for any given corporation or particular factory in any given financial quarter, the costs may be far higher than the benefits. And the costs might be borne by one group while the benefits may be felt by another. Still the idea that environmental rules kill jobs and destroy our quality of life is deceptive propaganda. It is part of a subtle and symbolic political campaign with the goal of delegitimizing government's role in protecting the environment.
The persistence of the argument against environmental regulation continues to amaze me. The acceptance of the idea that these rules only impose costs and do not generate benefits is a tribute to the power of interest groups in American politics. Let me provide an example from my hometown to illustrate the benefits of environmental regulation. Here in New York City in the mid 1980's we stopped dumping raw sewage into the Hudson River. The Federal Water Pollution Control Act was enacted in 1972 and the "draconian" water rules were not implemented in New York City until the plant came on line fourteen years later in 1986. In fact, secondary treatment of sewage did not begin until 1991. In effect, EPA gave New York two decades to comply with 1972 water law.
Corporations are given plenty of time to comply as well. EPA gave New York many years to comply with rules even though the Hudson was filthy. While the Hudson River was always beautiful to look at, it was not a place you wanted to get too close to, especially on a hot summer day. There is a reason why Riverside Drive was built a quarter mile from the Hudson River with a train track and road between people and the floating sewage. While the Hudson is far from pristine, it is much cleaner today than it was twenty years ago. Today, you can run, bike or hike on a new path that runs right along the river. Moreover, the value of real estate along the west side waterfront has risen dramatically over the past quarter century.
Our antiregulatory zeal is hard to figure out, and at the very least, is very inconsistent. We seem willing to ensure that the food we eat and the toys we give our children are free of poison, but seem reluctant to keep our land, air and water free of toxics. The cleanliness of restaurants in New York is aggressively regulated by the city's government, but we are allowed to toss electronic waste like old laptops into the garbage where it eventually pollutes our groundwater.
Climate rules will be put into place just as slowly as water and toxic rules. They will have the effect of encouraging the transition to a fossil fuel free economy. They will not "kill" jobs, but give birth to new employment and contribute to a reduction in the costs of adapting to climate change. It is true that it is difficult to connect the costs and benefits of climate change within a single jurisdiction. Sewage is easier to understand. It is true that some of our competitors, like China, may not pay their "fair share" of the costs of greenhouse gas reduction. However, if we manage a smoother and more rapid transition to lower cost renewable energy, we could still end up doing well by doing what is right.
Since I am a student of politics, I may be amazed by the persistence of fact-free political dialogue, but I shouldn't be. Our Congress seems particularly prone to symbolic debate largely devoid of real content. We are clearly headed into a period that will be characterized by a propaganda assault on environmental regulation. We need to be prepared to push back.