Post image for Regulatory Capture Comes Full Circle at the EPA

By 1970, it was commonly held that New Deal era regulatory agencies had been “captured” by the industries they were supposed to oversee. According to this influential school of thought, industry’s political spending and also its close cooperation with regulators led to cozy relationships that undermined effective oversight. The most conspicuous manifestation of regulatory capture was a “revolving door” of employment between regulatory agencies and industry.

The 1970 Clean Air Act was supposed to be the antidote to regulatory capture. The law was unusually long and detailed; it was, moreover, replete with deadlines, which were then a novel legislative tool. Most consequential of all, Congress empowered environmental special interests to litigate in order to enforce the law’s many duties. By so crafting the statute, Members of Congress intended to supplant agency discretion with legislative direction and public oversight, and thereby curtail the possibility of regulatory capture.

Since the enactment of the Clean Air Act, environmental special interests have prospered, primarily by leveraging the unique authorities they were accorded in the statute. In 2012, for example, NRDC and Sierra Club had revenues of approximately $100 million and $80 million, respectively. Thus enriched, both organizations now operate sophisticated campaign to influence political outcomes.**Moreover, by employing a legal strategy known as “sue and settle,” these environmental groups have seized EPA’s regulatory initiative. (Paradoxically, “sue and settle,” which is a means of contemporary regulatory capture, is made possible only by virtue of the Clean Air Act’s many deadlines—i.e., the supposed “solution” to regulatory capture in 1970.) In short, environmental special interests are exhibiting virtually all of the behaviors that defined regulatory capture 40 years ago…

…including a revolving door. Consider the following, non-comprehensive list of current and recent EPA political appointees that have come from green litigation groups (and vice-versa): [click to continue…]

Post image for Will EPA’s Carbon “Pollution” Rules Implement the Defunct Waxman-Markey Bill?

Will EPA’s Carbon Rules implement the defunct Waxman-Markey cap-and-trade bill?

That’s a question I addressed in a previous post and more recently in a comment letter to EPA on its proposed Carbon Rule for new fossil-fuel power plants. Today’s post offers a more complete discussion.

The Waxman-Markey bill (H.R. 2454), officially titled the American Clean Energy and Security Act (ACESA) of 2009, aimed to rapidly phase-out coal-based power in the U.S. via three types of carbon dioxide (CO2) regulation:

  1. New source performance standards (NSPS) for coal-fueled power plants (section 116). New coal power plants permitted between Jan. 1, 2009 and Jan. 1, 2020 would have to achieve a 50% reduction in CO2 emissions. The only technology capable of meeting that standard is carbon capture and storage (CCS), which can make new coal power plants 5 times more expensive than new natural gas combined cycle (NGCC) plants (see Table 2 of this EIA report). Unless heavily subsidized, utilities planning to build coal power plants would “fuel switch” and build new NGCC plants instead.
  2. A cap-and-trade program covering all major emitters (Title III). Existing coal power plants and other major emitters would have to achieve aggregate CO2-equivalent greenhouse gas emission reductions of 3% below 2005 levels by 2012, 17% below by 2020, 42% below by 2030, and 83% below by 2050.
  3. A combined efficiency and renewable electricity standard (Title I). Utilities would have to supply increasing percentages of electricity from a combination of efficiency upgrades and renewable sources (6% in 2012, 9.5% in 2014, 13% in 2016, 16.5% in 2018, and 20% in 2020-2039).

Let’s consider the parallels — both obvious and tacit — between the Waxman-Markey regulatory Troika and EPA’s Carbon Rules. [click to continue…]

Post image for The Fix Is In: On Ozone NAAQS, EPA Relies on EPA Science

On Monday, in draft comments to EPA’s “Second Draft Policy Assessment for the Review of the Ozone National Ambient Air Quality Standards,” the Clean Air Scientific Advisory Committee (CASAC) endorsed the agency’s decision to set the lower bound of a national ozone standard at 60 parts per billion.

CASAC’s  finding could have terrible consequences for the U.S. economy. As I’ve explained in a previous post, the D.C. Circuit Court gives controlling weight to CASAC’s assertions. As such, these draft comments legitimize an ozone standard—i.e., one set at 60 ppb—that EPA estimates would cost $90 billion annually. Such a standard would plunge 97% of the country into “non-attainment,” which triggers ultra-stringent controls.

Given the stakes, you’d think EPA and CASAC would rely on only the latest, most independent science, right? Alas, that isn’t the case. Instead, all of the clinical studies cited by CASAC in support of the 60 ppb standard were created by the EPA—the organization that proposed the limit. Thus, the science on which the economy’s fate hinges suffers from a troubling absence of independence. Moreover, all of the non-EPA literature (on health impacts of 60 ppb ozone) cited by CASAC does NOT support a 60 ppb standard. This dichotomy is further disconcerting.

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The federal government’s third National Climate Assessment was released yesterday with one message that was repeated throughout the media.  That message is: Climate change is already disrupting the economy, people’s lives, and ecosystems across the country.  IT’S REAL!  IT’S HERE!  IT’S NOW!  AND IT’S BAD!

Here are the first few paragraphs of a story from the Washington Post.

The government’s newest national assessment of climate change declares that increased global warming is affecting every part of the United States.

The report released Tuesday cites wide and severe impacts: more sea-level rise, flooding, storm surges, precipitation and heat waves in the Northeast; frequent water shortages and hurricanes in the Southeast and the Caribbean; and more drought and wildfires in the Southwest.

“For a long time, we have perceived climate change as an issue that’s distant, affecting just polar bears or something that matters to our kids,” said Katharine Hayhoe, a Texas Tech University professor and a co-author of the report. “This shows it’s not just in the future; it matters today. Many people are feeling the effects.”

The federal climate assessment — the third since 2000 — brought together hundreds of experts in academia and government to guide U.S. policy based on the best available climate science.

A quick internet search produced several hundred similar stories.

There are two obvious problems with the National Climate Assessment.  The first is the fact that the global mean temperature has not increased in the past seventeen years.  This means that the Assessment is claiming that the effects (disruption) are preceding the cause (warming).  I guess the disruption will really be bad if temperatures do actually start to go up.

Global Mean Surface Temperatures 1997-2014

Global Mean Surface Temperatures 1997-2014

The second problem with the Assessment is that it does not recognize that all climate disruptions are not created equal.  Does the Obama Administration really think that Americans have already forgotten the past five months of winter?  The fact is that cold, snowy weather is much more disruptive to people’s lives and the economy than hot weather.

As a reminder, here are a few highlights from the winter just past: [click to continue…]

…When I see a headline like this: “Americans Are Outliers in Views on Climate Change.”

The article comes from the New York Times. Here’s the chart that makes the reporter’s point:

According to a recent Pew poll, the figure for the U.S. is closer to 30%

According to a recent Gallup poll, the figure for the U.S. is closer to 30%

On the one hand, this chart may represent Americans’ famed frankness relative to the rest of the world. After all, national populations that purportedly care much more about the supposed threat of catastrophic climate change, like Germany and Japan, are turning to “dirty” coal in increasing volumes as they turn away from nuclear power. When it comes to choosing between carbon intensive electricity and no electricity at all, the Germans and Japanese are going with reliable power, global warming be damned.

On the other hand, perhaps the chart is evidence that the U.S.A. really is a City Upon a Hill. In a world rife with clear and present dangers to the immediate welfare of living human beings, among which climate change (“a rich man’s issue“) is decidedly not included, God bless Americans for keeping their priorities in perspective. For my view on the matter, see this interview with SNL. [click to continue…]

Post image for WaPo Gets Another Koch Fact Wrong

In an article today about the White House’s doom and gloom National Climate Assessment, Washington Post reporter Darryl Fears goes out of his way to tar those opposed to economically disastrous and ineffective global warming policies as being under the thumb of libertarian businessmen Charles and David Koch:

Other contrarians include libertarians at the Cato Institute, founded by Charles and David Koch, brothers whose multi-billion dollar fortune is partly derived from fossil fuels, and are well-known to deny the impacts of climate change.

Cato researchers Paul C. Knappenberger and Patrick J. Michaels said the assessment was “biased toward pessimism, the opposite of how Wolfe described it. As a resource, it is meant to justify “federal regulation aimed towards mitigating greenhouse gas emissions.”

However, in an effort to deploy the tired progressive guilt by association argumentum ad Kochum, Fears falls flat: the Cato Institute was not “founded by Charles and David Koch.” As the first line of the Cato Institute Wikipedia article correctly states, Cato was founded “by Ed Crane, Murray Rothbard, and Charles Koch.” If you don’t trust Wikipedia, here’s Will Wilkinson mentioning the three Cato founders in The Economist: “Charles Koch founded the Cato Institute in 1977 with Ed Crane and Murray Rothbard.” To be clear, that is but one brother Koch, not two, as a Cato Institute founder. To be even clearer, Charles was one of the Cato founders, not David. Good? Great.

This isn’t the first time a Washington Post reporter has thrown truth out the window in a sad attempt to smear the Kochs and the organizations they support. Recently, Post reporters Steve Mufson and Juliet Eilperin were caught publishing massive falsehoods regarding Koch Industries’ Canadian oil sands lease holdings. John Hinderacker produced an excellent smack-down of Mufson and Eilperin’s incredibly lazy reporting and their subsequent mealymouthed walk-back.

I know the newspaper business is struggling, but maybe the Post should consider hiring a fact checker for all things Koch. This is just getting embarrassing.

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Today, the Competitive Enterprise Institute sued the White House Office of Science and Technology Policy (OSTP) for flouting the Freedom of Information Act. CEI’s Chris Horner asked OSTP to produce work-related emails that OSTP’s Director, John Holdren, stored in an email account at his former employer, the environmental-pressure group Woods Hole Research Center. OSTP has resisted producing them.

What is ironic about this is that OSTP’s Director, soon after taking office, lectured OSTP employees about not conducting official business using private email accounts, and about the need to forward all work-related communications to their agency email account in order to comply with federal record-keeping laws. (See May 10, 2010 Memo from OSTP Director John Holdren to all OSTP staff, Subject: Reminder: Compliance with the Federal Records Act and the President’s Ethics Pledge, at 1, available as Exhibit B to the letter at this link.)

Apparently, the longer an official is in power, and the less he fears losing power, the less he cares about government transparency and the rule of law. The complaint is reposted immediately below. [click to continue…]

Post image for Carbon Emissions Rule: New Way to Skin the Cat — or Same Old, Same Old?

During his first presidential campaign, then-candidate Barack Obama told the San Francisco Chronicle that his plan for a cap-and-trade program would “bankrupt” anyone who builds a coal-fired power plant. Cap-and-trade died when it was exposed as cap-n-tax — a stealth energy tax that would cause electricity rates to “necessarily skyrocket.” Following the November 2010 defeat of 29 House Democrats who supported the Waxman-Markey cap-and-trade bill, President Obama vowed to find “other ways of skinning the cat.”

If you trust the Obama administration, the “cat” to be skinned is global warming. If you distrust the administration, the “cat” on the cutting board is the coal industry.

Regardless, EPA’s Carbon Pollution Rule, which would establish first-ever new source performance standards (NSPS) for carbon dioxide (CO2) emissions from new fossil-fuel power plants, appears at first glance to be one of those “other ways.” However, in a recent commentary, Nathan Richardson of Resources for the Future argues that, with a little editing, EPA can turn the “carbon pollution” rule into the legal framework for cap-and-trade. [click to continue…]

On this morning’s Platts Energy Week with Bill Loveless, FERC Commissioner Philip Moeller gave a bombshell interview regarding the clear and present danger to electric reliability posed by the EPA.

By way of background, “FERC” stands for Federal Energy Regulatory Commission, and included among its responsibilities is helping to ensure that the lights stay on. While regional transmission organizations bear the primary burden for maintaining the reliability of the grid, the 2005 Energy Policy Act authorizes FERC to establish mandatory reliability standards for interstate power transmission. As such, Commissioner Moeller is well-positioned to assess threats to the grid. And according to him, EPA’s ridiculous Utility MACT has created the possibility of rolling blackouts. Excerpted transcript and video are posted below:

FERC Commissioner Philip Moeller: “We’re closing an enormous amount of coal generation, through a variety of rules, and a good number of those plants are set to retire next April. (Editor’s note: here, Moeller is referring to EPA’s absurd Utility MACT, which threatens to retire up to 25% of the nation’s coal fleet, starting next spring). But most people would say about 90% of that capacity was running and used and necessary during the polar vortex events. So the question is: Are we going to have mild weather for the next 2-3 years? If so, we can probably get through it. But if we have more extreme weather events, like we had this winter, and that power is no longer available, we could be in a real situation that’s not good for consumers.

Platts Energy Week: Are regional blackouts a possibility?

FERC Commissioner Philip Moeller: They are a possibility.

Post image for Economic Freedom Improves Air Quality – Study

A new study by the Fraser Institute in Canada finds that economic freedom is an important cause of air quality improvement.

The study compares average airborne concentrations of particulate matter and economic freedom in 105 countries around the world. The authors, Joel Wood and Ian Herzog, find that in 2010, the 20 countries that were most economically free had average concentrations of particulate matter that were nearly 40% lower than the 20 least-free countries.

Of course, correlation does not prove causation, and other variables often associated with economic liberty, namely wealth and democracy, also foster air quality improvement. Nonetheless, the authors find a “robust” relationship between economic freedom and air quality after controlling for other factors:

After controlling for the effects of income, political freedom, and other confounding variables, we find that a permanent one-point increase in the Economic Freedom of the World index results in a 7.15% decrease in concentrations of fine particulate matter in the long-run, holding all else equal. This effect is robust to many different model specifications and is statistically significant. This effect is in addition to a general 36% decrease over time due to unidentified factors.

The study is based on urban concentrations of airborne particulate matter smaller than 10 microns in diameter (PM10) from the World Bank’s World Development Indicators and on the Fraser Institute’s Economic Freedom of the World (EFW), which in turn is largely based on data from the International Monetary Fund, World Bank, and World Economic Forum. The EFW index “reflects the size of government; the quality of the legal system and strength of property rights; soundness of money; freedom to trade; and burden of regulation.”

So why does economic freedom promote air quality improvement?

  • Property rights defined and secured through a strong justice system enable people to protect themselves and their property from pollution.
  • In contrast, government regulations that preempt private, court-enforced “negotiations between those benefiting from and those being hurt by a polluting activity” prevent “an efficient distribution of the right to the environmental resource” and “cause inefficient levels of pollution.”
  • Freedom to trade “is key to ensuring that new, cleaner technologies can be adopted across borders.”
  • “Bureaucratic inefficiency, the influence of special-interest groups, and the prevalence of state-owned enterprises can all hinder the ability of a government to improve the environment effectively.”
  • State-run firms shielded from market discipline are wasteful resource consumers.

The last point is more important than generally realized. In this connection, I’m pleased to post Hoover Institution scholar Mikhail S. Bernstam’s splendid out-of-print book, The Wealth of Nations and the Environment. Published in 1990, the book is something a post mortem on the Soviet Union. The Soviet empire collapsed largely because it went bankrupt. Economic decline however did not mean less pollution but more. Our worst ecological nightmares were daily realities of people living in the USSR and other eastern bloc countries. Why is that? [click to continue…]