REPLACING THE EPA

We Need To Replace the EPA with a new Environmental Solutions Agency, Engage in Smarter Regulation of the Environment, And Put an End to the Economically Harmful War on American Energy
--DISCUSSION DRAFT--

Summary
America is faced with a challenge, and with that challenge comes a historic opportunity. The challenge is rethinking how we can protect the environment and public health, such that we do not needlessly sacrifice jobs, economic growth, and the creation of new wealth. The Environmental Protection Agency (EPA) has transformed from an agency with the original animating and noble mission to “protect human health and to safeguard the natural environment”1 into a job-killing, centralizing engine of ideological litigation and regulation that blocks economic progress at every turn while failing to fulfill its basic mission of protecting human health and the environment in an economically affordable manner. In the name of safeguarding the environment, the EPA has become a tool of ideologues to push an anti-business agenda that would never survive the scrutiny of the American voter. Even worse, the EPA has become the bureaucracy of choice for Presidents to exert more control over the decision making of the private sector and local and state governments, stifling the very innovation and entrepreneurship that is necessary to achieve and protect a clean environment. The EPA’s current attempts to regulate greenhouse gases such as carbon dioxide, and thereby the entire American economy, are the latest and definitive proof that the EPA is acting well beyond its original mandate. The EPA should be replaced with an agency dedicated to bringing together science, technology, entrepreneurs, incentives, and local creativity to maintain a clean environment. The result will be a stronger economy that generates more American jobs and more American energy at lower cost while protecting human health and safeguarding the environment through smarter regulations.

The Environment Is Cleaner and Americans Are Living Longer
The EPA is currently 40 years old. For the first half of its existence, the EPA did a noteworthy job of cleaning up the environment. The result is that the environment – air, ground, and water -has been remarkably clean for some time by various technical measures.
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Environmental Protection Agency – Our Mission and What We Do: http://www.epa.gov/aboutepa/whatwedo.html
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For example, the EPA creates air quality trends using measurements from monitors located throughout the United States. Since 1980, America has reduced carbon monoxide emissions by 80%, nitrogen dioxide emissions by 48%, and sulfur dioxide emissions by 76%. Lead has also been reduced by an astounding 93%.2 With respect to emissions of toxics, data from the EPA’s Toxic Release Inventory similarly shows increasing reductions over time. Water quality is a similar story. A report on man-made chemicals in drinking water released in 2008 by the U.S. Geological Survey concluded: The laboratory analytical methods used in this study have relatively low detection levels – commonly 100 to 1,000 times lower than State and Federal standards and guidelines for protecting water quality. Detections, therefore, do not necessarily indicate a concern to human health but rather help to identify emerging issues and to track changes in occurrence and concentrations over time …. The annual mean concentrations of all compounds detected in finished water were less than established human-health benchmarks, and concentrations of most compounds were several orders of magnitude less than human-health benchmarks. With the exception of one detection of atrazine at one site, maximum measured concentrations of all commonly detected compounds in finished wates were less than established humanhealth benchmarks.3 It thus comes as no surprise that Americans’ life expectancy collectively has continued to rise over the decades. According to the U.S. Centers for Disease Control: In 2006, life expectancy at birth was 77.7 years, increasing by 0.3 years from 77.4 years in 2005. This increase is typical of the average annual changes that have occurred during the last 30 years. Throughout the past century, the trend is U.S. life expectancy was one of gradual improvement and this trend has continued into the new century.4

Despite the Record of Environmental Improvement and Protecting Human Health, the EPA is Increasing Its Regulatory Burden on Society
Data from the White House’s Office of Information & Regulatory Affairs (OIRA) confirm that the EPA is increasing, not decreasing, the pace of its issuance of burdensome regulations. On
2 3

Environmental Protection Agency – Air Quality Trends: http://www.epa.gov/airtrends/aqtrends.html For more information, see generally F. Hayward, Index of Leading Environmental Indicators 2009 (Pacific Research Institute) (available at http://www.pacificresearch.org/docLib/20090414_Env_Index_09.pdf). 4 National Vital Statistics Reports, Vol. 58, No. 21, United States Life Tables, 2006 (available at http://www.cdc.gov/nchs/data/nvsr/nvsr58/nvsr58_21.pdf).
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January 26, 2011, Rep. Cliff Stearns (R-FL) noted that in April 2010 the Obama Administration had issued 190 economically significant regulations (those with an impact of $100 million or more), and that by December of 2010, that number had climbed to 224. At the same hearing, OIRA Administrator Cass Sunstein answered “about 500” in response to a question about how many new regulations had been issued since the Obama Administration took office. Not all of those 500 regulations are from the EPA, but OIRA data confirm that the EPA remains the dominant issuer of major new regulations within the federal government bureaucracy. So what risks are EPA regulating, given that the environment is dramatically cleaner and human health is improving? The answer is ever and ever more miniscule risks, without regard to a thoughtful analysis of whether elimination of such risks is warranted based on fundamental principles of risk assessment (which of course takes into account exposure) and cost-benefit analysis (which takes into account whether the costs of regulation exceed the benefits). Examples of this regulatory overreach abound. For instance, the EPA has decided that, since milk contains oil, it has the authority to force farmers to comply with new regulations to file “emergency management” plans to show how they will cope with spilled milk and how they will train “first responders,” while also requiring them to build “containment facilities” if there is a flood of spilled milk. The EPA has also proposed new particulate emissions standards that would regulate farms so stringently that even driving a tractor across a field could trigger federal oversight, as the EPA believes the dust produced from such a routine activity is a threat to public health. There is also strong evidence that the EPA, through regulatory overreach, bears a considerable amount of blame for the national resurgence of bed begs. By the early 1990s, bed bugs had largely been eliminated due to the use of several pesticides, including Propoxur. But in the mid1990s the EPA banned Propoxur and other similar pesticides. At the University of Kentucky, the academic headquarters for studying bed bugs, researchers concluded in January 2010 that “today’s products are not as effective as the ones we had previously.”5 Even though the EPA admits that part of the growing bed bug problem is due to “ineffective pest control practices,”6 its ban on proven pesticides remains intact. Nor is EPA’s overreach limited to imposing new regulations; it also includes administering existing rules on an ad hoc basis. For example, in 2006 Shell Oil acquired leases to drill in the Beaufort and Chukchi seas, and the EPA granted the company an air quality permit shortly thereafter. But after several environmental organizations sued, the EPA sent the permit back for further review using a more restrictive and complicated methodology. Although Shell appealed the decision, achieving a reversal is such a time-consuming and uncertain process that the company recently decided it would rather scrap its current plans and focus on other future prospects. Since 2006 Shell has spent more than $3 billion just in lease costs and annual payments while the federal government, particularly the EPA, waffled on its decisions and held up permitting. To date, a half decade has passed and EPA has still not been able to issue a usable

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College of Agriculture, University of Kentucky: http://www.ca.uky.edu/news/?c=n&d=531 Environmental Protection Agency – Bed Bug Information: http://www.epa.gov/pesticides/bedbugs/
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permit for Shell to even begin to explore for what oil and gas may exist in the Beaufort and Chukchi seas.7 But perhaps the most egregious example of EPA overreach is the agency’s new regulatory program targeting emissions of greenhouse gases. The EPA maintains that it is obligated under the Clean Air Act to regulate carbon dioxide, an obligation that was borne from an “order” by the U.S. Supreme Court. Both parts of the claim are completely dubious. The Clean Air Act's statutory language clearly indicates that it was not intended to address carbon emissions. The Supreme Court, however, said that if EPA classified carbon dioxide as a pollutant that impacts public health, then it could regulate it under the Clean Air Act. The EPA then predictably issued its official “endangerment finding” in December 2009 declaring carbon a threat to the public. But, since the Clean Air Act was not intended to address carbon dioxide, the EPA said it had to rewrite the law to make feasible such regulation, specifically by changing the threshold requirements for regulating covered “pollutants.” The Clean Air Act, and its subsequent amendments, were all passed by Congress and signed by the President, meaning no federal agency has the power to rewrite any of them at its own discretion. If the Clean Air Act was intended to address carbon dioxide, then why would it need to be amended to make regulation allowable? Less well-known is the extent to which the EPA’s climate assault already has crept into everyday life for most Americans. Thanks to the EPA’s new greenhouse gas emissions standards for automobiles, Americans are already being urged to drive lighter, less safe cars. On January 31, 2011, the EPA closed the comment period on a new rule that will dictate the amount of diesel fuel that heavy-duty trucks will be allowed to burn in the future. As proposed, this rule would prohibit trucks, through the use of technology, from idling their engines to keep the driver safe and warm in extreme weather conditions such as those that have gripped much of the United States this year. Given a choice between saving a trucker’s life or imposing another regulatory assault on America’s trucking industry, the EPA has chosen the latter. Such a decision is quite perplexing when you consider that the EPA is supposedly dedicated to protecting public health. Simply put, the regulatory system at EPA is fundamentally broken. How is the EPA getting away with all of this? There are several factors. For starters, the EPA claims that all of its regulations provide stunning benefits at minimal costs. If you look a bit closer, however, you will see that the EPA is now measuring “benefits” through the use of nonquantifable factors such as “human dignity.” Other problems include partnering with environmental groups through tactics such as “cooperative litigation” under which environmentalists sue the EPA for alleged non-enforcement of the law, then the EPA settles the litigation through an agreement that binds the EPA to even more regulatory actions. The approach at the EPA generally is “if we can measure it, we should regulate it.” Such a position not only contradicts basic economics, but also defies common sense.

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Alaska Dispatch, Feb. 3, 2011: http://www.alaskadispatch.com/dispatches/arctic/8614-alaska-offshore-drillingdelay-roundly-denounced-by-governor-delegation
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Prior Efforts At Reforming EPA Have Failed
The story of EPA overreach is not new, and the repeated failures of reform highlight just how broken the EPA has become. A long line of Republicans and Democrats alike have attempted to fix them. These efforts are reflected, to some degree, in (1) disparate statutes such as the Administrative Procedure Act, the Paperwork Reduction Act (PRA), the Small Business Paperwork Relief Act, the Data Quality Act, and the Regulatory Flexibility Act; (2) various regulatory review and reform executive orders that numerous Presidents have issued and endeavored to enforce over the decades, including but not limited to E.O. 12866 and President Obama’s new executive order on regulatory review; and (3) “good guidance” and related policy documents issued by the Office of Management & Budget’s Office of Information & Regulatory Affairs (OIRA). OIRA was created in 1980 under PRA and since that time has adopted a mission of providing “adult supervision” over federal agencies and their tendency to engage in regulatory overreach. Historically, these and related principles have fallen under the rubric of “regulatory reform.” The precursor of all modern regulatory reform efforts was the “Quality of Life” review process begun by President Gerald Ford.8 In 1978, President Jimmy Carter established the Regulatory Analysis Review Group (RARG). Regulatory reform was a basic component of the administration of President Ronald Reagan. President George H.W. Bush deviated little from the “commonsense government” approaches of President Reagan; for example, President Bush replaced RARG with a Council on Competitiveness to review all federal regulations to weed out those that inhibited U.S. competitiveness. In its most recent incarnation, the modern regulatory reform movement was initiated more than 15 years ago by President Bill Clinton, who at that time wrote these words: “Our country needs a government that is smaller and more responsive – that has lower cost but a higher quality of service – that moves more authority away from the federal government to states and localities, and to entrepreneurs in the private sector – that has more common sense and seeks more common ground … “That kind of change in government is important for three reasons: First, government needs to change along with the people it serves. After all, we have moved through a rapid transition at the end of the Cold War, and at the end of the tranditional industrial economy. We’ve moved into a global economy with new challenges, new conflicts characterized by a high rate of change, rapid movement of money and capital, and a revolution in information technology. In that environment, the model that we have used to deliver government services and fill public needs is simply no longer relevant to the present, let alone the future.
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The following history is largely taken from M. Weidenbaum, “Regulatory Process Reform: From Ford to Clinton” (Cate Institute) (available at http://www.cato.org/pubs/regulation/regv20n1/reg20n1a.html).
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“Second, even though we have cut our huge budget deficit in half, we need to eliminate it completely. Yet we still need to invest more money in critical priorities that help people convert … the the twenty-first century global economy: life educating and training young people and adults, research and development, and new technologies. Our objectives are to build the American economy, to strengthen the American society, and to free up investment so that the American people can live to the fullest of their potential… “Third, we need to cure the anxiety and alienation many people feel toward their government. People will regain confidence in government if we make it work better … “Above all, this is about fundamental values. Go back and read the Declaration of Independence and our Constitution. Americans created our government to do those things that can only be done by government – by all of us working together … “We in the government have a moral obligation to make government work right – to use the hard-earned money of the America people only in ways that further the public interest. If we can’t do that, we can’t justify being here and we can’t justify taking the money.”9 President Clinton’s noble efforts were joined by the Congress. In 1995, the Republicancontrolled House, during the 1st session of the 104th Congress, passed the Job Creation and Wage Enhancement Act of 1995 (H.R. 9) by a vote of 277-141. H.R. 9 included the following findings: “The Congress finds that: (1) Environmental, health, and safety regulations have led to dramatic improvements in the environment and have significantly reduced human health risks; however, the Federal regulations that had led to these improvements have been more costly and less effective than they could have been; too often, regulatory priorities have not been based upon a realistic consideration of risk, risk reduction opportunities, and costs. (2) The public and private resources available to address health, safety, and environmental concerns are not unlimited; those resources need to be allocated to address the greatest needs in the most cost-effective manner and so that the incremental costs of regulatory options are reasonably related to the incremental benefits. (3) To provide more cost-effective and cost-reasonable protection to human health and the environment, regulatory priorities should be based upon realistic consideration of risk; the priority setting process must include scientifically sound, objective, and unbiased risk assessments, comparative

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Vice President Al Gore, “Common Sense Government: Works Better and Costs Less” (1995) (foreword by President Bill Clinton).
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risk analysis, and risk management choices that are grounded in cost-benefit principles. (4) Risk assessment has proven to be a useful decision making tool; however, improvements are needed to both the quality or assessments and the characterization and communication of findings; scientific and other data must be better collected, organized, and evaluated; most importantly, the critical information resulting from a risk assessment must be effectively communicated in an objective and unbiased manner to decision makers, and from decision makers to the public. (5) The public stake holders must be fully involved in the risk-decision making process. They have the right-to-know about the risks addressed by regulation, the amount of risk to be reduced, the quality of the science used to support decisions, and the cost of implementing and complying with regulations. This knowledge will allow for public scrutiny and promote quality, integrity, and responsiveness of agency decisions. (6) Although risk assessment is one important method to improve regulatory decision-making, other approaches to secure prompt relief from the burden of unnecessary and overly complex regulations will also be necessary.” H.R. 9 also included a variety of regulatory reform measures. The bill ultimately died in the Senate, which instead took up its own regulatory reform effort that same year: S. 343, the Comprehensive Regulatory Reform Act of 1995, sponsored by Sen. Bob Dole (R-KS). That bill failed to pass. Since that time, Congress has not taken up a comprehensive reform of the regulatory system with a focus on the EPA. So why did some of the prior bipartisan regulatory reform efforts fail to achieve their wellintentioned and lofty goals? In some instances, as in 1995, Congress came close but fell short. In other instances, the reforms enacted by Congress – such as the Data Quality Act – failed to include mechanisms such as judicial review, which had the effect of rendering them ineffective. But the primary reason why prior regulatory reform efforts failed is because they endeavored to work within the current system by reforming, not replacing.

Replace Not Reform
An anti-business and anti-economic development ideology is so entrenched inside the EPA that mere reform of the agency is no longer a workable option if the goal is a clean environment through more technological development, more entrepreneurship, and more economic growth. The EPA’s current embedded methods are simply inconsistent with those goals, so efforts just to work within the agency’s flawed structures are destined for failure. For these reasons, the EPA should be replaced with a new and improved Environmental Solutions Agency (ESA) complete with a new charter and a new mission. The new ESA will be a successor agency to the EPA, incorporating the statutory responsibilities of the old EPA while making necessary changes that will eliminate the job-killing regulatory abuses and power grabs of the old EPA.
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Principles of the New Environmental Solutions Agency
The ESA will be organized under the following principles:            Maintaining a clean environment and protecting public health Sound, peer-reviwed science Smarter, more cost-effective regulation Risk assessment Transparency Adherence to statutory mandates Performance standards instead of command and control regulation States rights Support for technological development and entrepreneurship Judicial review rights where necessary and appropriate to ensure agency compliance Limited cooperative litigation

These principles are perfectly in line with what Americans value: a clean environment, a strong economy, and limited government. Consider the polling data American Solutions compiled in 2007:     73% of Americans believe we can have a healthy economy and a healthy environment; 79% of Americans believe we will solve our environmental problems faster and cheaper with innovation and new technology than with more litigation and more government regulation; 72% of Americans believe that entrepreneurs are more likely to solve our energy and environmental problems than bureaucrats; 88% of Americans believe we must rely on innovation and technology if we are going to compete successfully with India and China

The current EPA is simply unfit to carry out the will of the people it was designed to protect because it relies on an operating model that the American people reject. The EPA’s bureaucratdriven, litigation and regulation system is not only unpopular, but it’s also an inferior and outdated strategy for addressing 21st century problems. It’s time for a new approach based upon new principles that emphasize solutions, not more red-tape and more unnecessary bureaucracy.

Replacement of Federal Agencies Has Been Done Many Times Before
Replacing federal agencies has been done many times before; in fact, the history of the federal government confirms that agencies and departments – including regulatory agencies – come in and out of existence as times change and agencies outlive their original missions. The Office of Strategic Services (OSS) was replaced by the CIA in 1947. The Nuclear Regulatory Commission replaced the Atomic Energy Commission in 1974. In fact, even the creation of the EPA involved replacing through reorganization and consolidation many federal research and standard-setting offices, all to boost efficiency and eliminate waste.
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In 2010, President Obama acknowledged the utility of replacing federal agencies when his Secretary of Interior Ken Salazar replaced the Minerals Management Service with the Bureau of Ocean Energy Management, Regulation, and Enforcement. (Unfortunately, this particular replacement strategy was to increase the size of government, not increase efficiency and effectiveness.) Replacing the EPA with a new and improved Environmental Solutions Agency would be rooted in decades of comparable federal government reorganizations, including the actions taken to create the agency itself 40 years ago.

Replacement Can Also Address Cultural Problems
Case Study: New York City A perfect example of how replacement-through-cultural-change can lead to dramatically improved results within a government agency is Mayor Rudy Giuliani’s decision to replace New York City’s welfare offices with “Job Centers.” In his book Leadership, Giuliani describes how he recognized that New York City was “being destroyed by the preaching of entitlement,” a cultural institution that “locked people into poverty.” Instead of continuing to dole out entitlements to people who were out of work, Mayor Giuliani changed emphasis and focused on the solution: getting people back to work. That kind of transformation would not have been possible had the mayor simply reformed how public assistance was distributed; it required a cultural shift to make people think about what will actually fix the problem. Giuliani’s decision to enact cultural change through a replacement effort was a nearunprecedented success. From 1996 to 2003, the city’s welfare caseload dropped by 57%. Five years after the mayor’s plan took effect, the percentage of single mothers who were employed jumped from 42% to 61%. For single mothers without a high school diploma, employment jumped from 16% to 42%. Over that same period, the poverty rate dropped from 27% to 20%. These remarkable accomplishments came about not because the mayor pushed to abolish public assistance, but because he knew that the system was fundamentally broken and was doing nothing to get people back to work. It was a bold proposal that paid enormous dividends because it replaced the problem with a clear solution. This is why a fundamental cultural shift is also needed in the way the federal government approaches safeguarding the environment. The EPA has built up forty years of internal standards and procedures that are simply unfit to deal with 21st century problems. The EPA’s model is based on the idea that environmental problems can only be addressed by adding more regulations and more bureaucrats. The emphasis is not on solutions, but rather creating new ways to clamp down on economic growth. Like Giuliani’s decision to change attitudes about welfare, it’s time for Americans to demand that the federal government change its attitude about protecting the environment.

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Principles To Limit the ESA’s Regulatory Authority
In order to ensure that the new Environmental Solutions Agency does not revert to the abuses of the EPA, a new set of limiting principles on regulatory authority will be codified in law and rigorously enforced, which will include, but not be limited to: 1. Regulatory Powers Limited to Matters Involving Interstate Commerce. The U.S. Constitution places limits on the exercise of federal power through the enumeration of specific powers that the federal government can exercise, with other powers retained by the several states or by the people themselves. Specifically, the Interstate Commerce Clause in Article 1, Section 8 of the Constitution provides Congressional authority to regulate commerce among the states with respect to protecting the environment. A federal environmental agency does not therefore have the authority to regulate environmental matters that do not involve or affect interstate commerce. A new and improved ESA will strictly adhere to this constitutional requirement. Moreover, on a practical basis, most pollution is inherently local, which is why every state has its own regulatory authority to deal with pollution and other environmental concerns. These statebased regulators are often very effective, as they not only live in the area they are in charge of regulating – and thus have a better understanding of local environments – but also because they regularly meet with businesses and citizens to discuss best practices. For this additional practical reason, any pollution or environmental impact that does not affect interstate commerce should not be within the jurisdiction of the Environmental Solutions Agency. The ESA will thefore have the burden to prove that every proposed regulation is addressing an environmental challenge that affects interstate commerce. 2. Mandatory Analysis Detailing Impact on Jobs. Every environmental regulation represents a new cost to businesses, and those costs result in higher prices passed along to consumers and the loss of jobs. Regulations should be cost effective, and they should also be developed in a way that minimizes job losses. Under the EPA’s current practice, analyses of job loss from proposed regulations are either non-existent or woefully inadequate, often times confusing subjective matters (i.e. “human dignity”) with concrete objective assessments of costs and benefits. For example, the agency’s carbon regulations have begun to take effect, but the EPA has not yet issued a full analysis of the impact on jobs these regulations will have, even though the Clean Air Act (under which the EPA has assumed its power to regulate CO2) explicitly requires such an assessment be made. The Environmental Solutions Agency will be forced to create a comprehensive jobsimpact report for each regulation, both as it is being proposed and at regularly scheduled intervals after implementation to assess how well or poorly the regulation has done to protect jobs. Requiring such a report will force regulators drafting new rules to think more deeply about what costs will be incurred and how their regulations will impact not just the environment, but also the American workforce. 3. Regularly Scheduled Cumulative Cost Impacts. The current EPA is supposed to perform cost-benefit analyses for each new proposed regulation, but the studies assess cost in a vacuum and irrespective of how that cost could change if other proposed regulations go into effect. The ultimate cost can only be accurately determined by
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assessing the “cumulative” cost -- how a particular mandate will interact with other proposed or existing regulations, especially if pending regulations are set for full approval. Because future restrictions impact current business decisions, in particular infrastructure investment and job creation, the ESA will be required to provide a cumulative impact analysis for each mandate or regulation that was proposed or went into effect during a pre-determined period of time (i.e. every five years). 4. Permit Certainty. The EPA recently voided a previously-approved permit issued for the Spruce No. 1 mine in West Virginia. This marks the first time in the Clean Water Act’s entire forty year existence that an approved permit has been retracted by the EPA. This sets a dangerous precedent for all future operations, as the EPA’s decision means all currently approved permits are now subject to agency review, which in turn means no company that has followed the rules and obtained the necessary approval can have any confidence or certainty about its operations. As Sen. Joe Manchin (D-WV) said on February 3, 2011: “I believe it is fundamentally wrong for any bureaucratic agency, including the EPA, to regulate what has not been legislated, to have absolute power to change the rules at the end of the game and to revoke a permit, as the EPA did in southern West Virginia’s Spruce Mine, after it was lawfully granted and employees were hired.”10 The Environmental Solutions Agency, upon granting a permit, will honor that contractual obligation, even if Congress later changes the law under which the permit was issued. For the economy to function properly, companies need investment certainty, and contractual obligations must be upheld. If laws change, then the permit approval process will have to change with it. But permits legitimately sought and obtained – even if under different parameters – should always be honored. If extreme circumstances (i.e. emergency to public health, national security) dictate the withdrawal of a permit, the federal government will be required to provide just compensation to the permit holder. 5. The “Keep Them Honest” Provision. When the current EPA issues a new rule or regulation, entrepreneurs and business owners must begin changing their long-term strategies to comply with new requirements. This process necessarily incurs a cost, sometimes significant, even while the EPA’s proposal is still pending. If the regulation is challenged in court and overturned, a process that could take years, business is still stuck with the tab for adjusting its operations, a cost that often includes laying off employees. The Environmental Solutions Agency will be held responsible for the costs incurred by companies who shift their operations and reallocate capital to comply with rules that cannot stand constitutional muster in the courts. There is no reason a small business owner should have to suffer from misguided and irresponsible rule making, and this “Keep Them Honest” rule will help guarantee that the ESA’s decisions are fully within the confines of the law and not based upon an ideological bent or the political goals of a particular administration.
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Office of Senator Joe Manchin: http://manchin.senate.gov/record.cfm?id=330863
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6. Greater Deference to State Regulatory Authority. One crucial element of the Environmental Solutions Agency will be to give state environmental authorities more authority in enforcing rules and regulations pertaining to pollution. Although state and local authorities are often the most capable of regulating state-level activities, recent trends have served to centralize more and more power in the federal EPA. For example, hydraulic fracturing – a technique used to obtain natural gas from shale deposits and which has been employed more than one million times – has been safely and effectively regulated by state authorities for decades. But new rules and regulations currently under consideration by the EPA could strip this power from the states and put federal authorities in charge. Similarly, the federal EPA recently took over the authority to regulate certain forms of air pollution from the state of Texas, even though the state’s existing regulations have helped achieve a considerable decline in ozone and nitrogen oxide emissions. Such decisions by the federal EPA have consequences beyond a blatant repudiation of federalism and state-designated powers. Each new federal restriction comes with new administrative and enforcement costs, new compliance costs for businesses, and new costs for American consumers. Consistent with the new agency’s commitment to limit its jurisdiction to interstate commerce, the Environmental Solutions Agency will allow states more leeway in addressing state-based and localized sources of pollution. When pollution crosses state lines, the ESA will supervise state-determined regulatory reduction efforts and compliance. 7. Enhanced Risk Assessment and Communication Tools, and Requirements That They Be Used. The EPA must be required to apply established principles of risk assessment, risk characterization and risk communication. Legislation to accomplish these common sense goals passed the House in 1995 as H.R. 9 – it’s time for Congress to finish the job. 8. The Data Quality Act Should Be Amended to Provide Judicial Review Rights. Unfortunately, the courts have interpreted the Data Quality Act to not include the right of judicial review. This is an easy fix by Congress, and can be done in the same legislation creating the Environmental Solutions Agency. 9. EPA’s Environmental Justice Policy Must Be Modified To Include An Assessment of Economic Harm to the Poor and Disadvantaged, With Resulting Negative Impacts on Their Health, Whenever a Regulatory Program Halts the Construction of New Job-Creating Infrastructre. 10. Congress Should Limit the Standing Doctrine to Ensure that Only Those Entities With A Demonstrable Interest in a Matter May Litigate. With the tacit support of the EPA, a well-funded cottage industry of environmental groups now challenges every new infrastructure project in the United States, from coal to solar. Converting the phrase “If you build it, they will come” to “If you endeavor to build it, we will sue you,” these groups serve no environmental purpose but instead have become a powerful network of

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lobbyists and lawyers devoted to the cause of thwarting free enterprise and economic development. 11. EPA Funding of Environmental Groups and Related Activities Should be Assessed. The EPA hands out millions of dollars in grants each year. Congress should know where that money is going.

Current EPA Regulatory Powers and Practices To Be Eliminated or Modified
When Congress recently called for industry leaders across the country to identify regulations they deemed burdensome, the EPA was the number one target of complaints; representatives from the agriculture, energy, manufacturing, business, and iron and steel sectors all listed EPA rules and regulations as the top impediment to growth.11 Because the Environmental Solutions Agency will complement the business community instead of operating in spite of it, the new agency will naturally have to undo many of the duplicitous and needlessly burdensome regulations already on the books. For example, the EPA is currently pursuing a series of new regulatory actions ranging from clamping down further on sulfur dioxide and nitrogen oxide emissions to new mandates on industrial boilers. Many of these rules are set to go into effect in the next 3-5 years, a timeline to which most energy companies will find it nearly impossible to adhere. Construction of new plants to comply with these regulations could take five or more years alone, and licensing and permitting can take longer than three years as well. These mandates, coupled with an unrealistic timeline for compliance, translate directly to shutting down a considerable number of America’s coal plants, as many as 30% if you include the costs imposed by pending regulations on carbon dioxide. The monetary costs imposed by these regulations are upwards of $200 billion in increased capital expenses, a cost that will lead directly to considerably higher energy prices for American consumers. In terms of jobs, this translates to about 1.2 million jobs lost starting in 2015. Ironically, many companies would be able to comply with these mandates were the timeline extended to allow for reasonable capital adjustments. But once again, the EPA’s model of regulation and litigation is intended to thwart economic development; sustaining economic growth while protecting the environment is a principle completely foreign to the current EPA. The fact that its own proposed regulations would drive jobs and investment overseas to countries like China and India (two countries rapidly expanding investments in oil and coal development) apparently matters little to the fundamentally flawed Environmental Protection Agency. The following is a list of some of the rules or policies or claims of power that will be abolished or, at the very least, fundamentally overhauled: 1. Eliminate EPA’s Asserted Power to Regulate Carbon Dioxide. The Clean Air Act was written to address numerous air pollutants, including nitrogen oxides and sulfur dioxide,
11

Wall Street Journal, February 7, 2011: http://online.wsj.com/article/SB10001424052748703989504576128132645791552.html
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that contribute to ozone pollution and acid rain. It was not, however, intended to regulate carbon dioxide. The EPA’s decision to regulate carbon dioxide under the Act actually confirmed that fact: Under the EPA’s plan, the Clean Air Act would have to be rewritten to delinate that carbon will be regulated at a different threshold than other air pollutants. Miraculously, the EPA has granted itself the power to rewrite its own statutory authority, a power that is constitutionally reserved only for Congress. If the Clean Air Act must be changed to justify the regulation of carbon, then it’s clear that the law as written was never intended to cover carbon. Otherwise, why would a change be necessary? 2. Stop the Enforcement of Regulations That Provide Little or No Environmental Benefits. For example, the EPA’s own economic analysis of new National Ambient Air Quality Standards (NAAQS) for nitrogen dioxide concluded that the costs of this regulation would dramatically outweigh the benefits. In fact, under virtually all possible scenarios the EPA found that the benefit in dollars would be zero. While the Environmental Solutions Agency will continue to uphold standards necessary to achieve and safeguard clean air, including a fairer and more accurate implementation of the Clean Air Act, there is absolutely no justification for a regulation that imposes millions of dollars in costs and minimal-at-best benefits. 3. Stop the Enforcement of Regulations that are Cost Prohibitive. For example, in June 2010, the EPA proposed the National Emission Standards for Hazardous Air Pollutants for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters. Also referred to as the “Boiler MACT” rule, this proposal sets limits on mercury, hydrogen chloride, and other hazardous air pollutants (HAPs). While reducing these emissions is necessary, the EPA’s proposed rule is so stringent that virtually none of the covered entitites will be able to comply with it. The Industrial Energy Consumers of America (IECA), which represents several companies employing 750,000 people, has noted that of their six best performing units, “none can comply with the standards” as set forth by EPA. While pollution reduction always incurs a cost, it is important to craft regulations that are actually feasible to achieve. If covered sources cannot meet the requirements, the result will be either perpetual and economy-wide noncompliance, or a complete shut down of industry. Neither of these are acceptable options, and it should be noted that the EPA has requested an extension for the review period for this new rule because of the massive costs it would impose. The Environmental Solutions Agency will cancel the existing proposal and work to reduce mercury emissions and other HAPs in a way that protects public health and America’s economic competitiveness. In fact, a bipartisan group of U.S. Senators (18 Democrats and 23 Republicans) wrote to the EPA in September 2010 asking for the EPA to redo the boiler rule, and that fundamental review will be one of the first major actions taken by the ESA.

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Conclusion
Protecting Human Health and Safeguarding the Environment is Possible through Smarter Regulation and a Stronger Economy that Generates More American Jobs and More American Energy at Lower Cost It is a demonstrable fact that expanding affordable energy supplies leads to economic growth. Access to affordable energy has been a path out of poverty for hundreds of millions of people around the world, and sustaining access to affordable energy means sustaining a healthy and prosperous populace. For example, China’s poverty rate has been more than cut in half since 1990 as its access to inexpensive energy has dramatically expanded. India is on a similar path. America’s own path toward becoming the strongest economy in the world was due in large part to its commitment to developing affordable and abundant domestic energy supplies. The way to keep energy affordable is to encourage and incentivize technology and entrepreneurship. Free and open markets have brought countless populations out of poverty, and have led not only to higher standards of living but also cleaner and safer environments. The poorest nations in the world are also the worst offenders when it comes to protecting the environment and public health, while the strongest economies are able to maintain the necessary technological capabilities to keep the air, land, and water clean. America’s commitment to a clean environment is unquestionable, and Americans rightfully demand that the proper safeguards be put in place to combat air pollution, to keep our rivers clean, and to protect the public’s health. But Americans also recognize that economic growth and technological innovation are the best ways to achieve these ends, complementing basic environmental standards and common-sense regulations. Maintaining a clean environment does not require bigger government; it requires a bigger commitment to what works. Since the EPA’s first operating budget (fiscal year 1970), the agency’s workforce has more than quadrupled, which coincides with the EPA now costing taxpayers more than ten times what it did forty years ago. At more than $10 billion, the EPA’s budget exceeds the GDP of about 60 countries worldwide, and it has entrenched in the American psyche the notion that protecting the environment must come with high costs and a destructive culture of litigation. But by emphasizing a culture of economic growth, innovation, and technology, the Environmental Solutions Agency can achieve and safeguard the same goals – clean air, clean water, improved public health – for much less cost to taxpayers through regulatory reform and smarter regulatory approaches. This will result in a clean environment while preserving and expanding economic growth and domestic energy resource development. It also will minimize frivolous litigation that, while cast in the guise of environmental protection, is actually used by the EPA and environmental groups to stifle economic progress and job growth to the detriment of all Americans. By providing regulatory clarity and consistency through a new Environmental Solutions Agency, American businesses will create more jobs and generate more wealth, which will contribute to an even safer environment. It will be a welcome change from the job-killing policies being carried out by the current EPA.

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