Today 19 free market organizations released a coalition letter in support of Rep. Steve Scalise’s (R-La.) amendment to H.R. 367, the Regulations From the Executive in Need of Scrutiny Act of 2013. Read the letter below.
[Update: The House passed the anti carbon tax amendment 238-176]
Letter to Congressman Scalise on HR 367 by Competitive Enterprise Institute
Under both the Clean Air Act and Clean Water Act, the EPA has the authority to “disapprove” a state’s strategy to meet national environmental standards. A regulatory disapproval is no small matter as state officials spend countless hours and taxpayer resources crafting plans to comply with a newly finalized EPA regulation. When the EPA issues a regulatory disapproval, the agency effectively throws all of this work out the window.
Since President Obama took office, the number of regulatory disapprovals has skyrocketed. Previously, the EPA issued 44 disapprovals during President Clinton’s second term, 42 during President George W. Bush’s first term and 12 during Bush’s second term. But during President Obama’s first term, the EPA issued an unprecedented 95 disapprovals — more than a 190 percent increase from the average number of disapprovals during the previous three four-year presidential terms.
Even more alarming is the precipitous increase in the number of EPA takeovers of state regulatory programs. “Federal implementation plans,” or FIPs, are the EPA’s most aggressive action, as a FIP entails the complete usurpation of a state’s regulatory authority. From 1997 through 2009, the EPA imposed only two FIPs. But since Obama’s first inauguration in 2009, the EPA has imposed 19 FIPs, representing a 2,750 percent increase in the number of FIPs from the average number of FIPs rate during the previous three four-year presidential terms.
Both the data and the chart comes from a report I recently wrote for the American Legislative Exchange Council, titled “The U.S. Environmental Protection Agency’s Assault on State Sovereignty.”
Sometimes, the sub-headline says it all.
The Wall Street Journal published a telling article yesterday, titled (online) “BMW Launches Its First Mass-Production Electric Vehicle.” That’s a good summation, but the true lede was buried in the sub-headline: “Auto Maker Needs to Boost Sales of Electric Cars To Meet Regulatory Requirements.”
As the sub-headline suggests, BMW didn’t build the i3–the titular electric car–because it plans on making money. In fact, according to reporting by the Wall Street Journal’s Joseph White, ‘The i3, which starts at €34,950 in Germany, could lose €197 million a year on an operating basis…’ So the car is a loser.
BMW’s launch of its new i3 is actually quite instructive on current events. This morning, we reported that newly confirmed EPA administrator Gina McCarthy believes that climate change regulations are an economic stimulus. The i3 is proof to the contrary.
Instead of meeting actual demand, BMW is selling the i3 to meet mandates. In the American market, President Obama’s EPA in 2010 established greenhouse gas regulations that effectively require fuel efficiency improvements. The European Union had already implemented the same sort of regulations. Thus, the international car market has been skewed by the hand of government. BMW, by building the i3, is reacting to this dirigisme. BMW Chief Executive Norbert Reithofer told the WSJ that, “If you look around the world, [at] the emissions regulations, in the United States, in the European Union, even in China…cars like the BMW i3 are a must.” Simply put, the BMW i3 is a real-world industrial response to EPA climate regulations.
Yesterday, EPA administrator McCarthy said the President’s climate plan was ‘an opportunity to “bend the curve” and could “fuel the complementary goals of turning America into a magnet for new jobs and manufacturing.”’ As I explained in the previous paragraph, the agency already has “bent the curve” of the auto market, and the result of these market manipulations is a car company that builds a money-losing car for non-existent customer demand.
Does this sound like wise economic policy?
EPA administrator Gina McCarthy gave her first public speech in her new role yesterday, before the Harvard Law School. In it, she explained that there’s a big misunderstanding among the American people about Obama’s authoritarian climate policies. A lot of us—myself included!—had presumed that the purpose of EPA regulations is to “do something” about global warming.
Wrong!
Administrator McCarthy told Harvard law students that EPA regulations to control greenhouse gas emissions have a purpose altogether distinct from global warming. “The truth,” she said, “is we need to embrace cutting carbon pollution as a way to spark business innovation. We need to cut carbon pollution to grow jobs. We need to cut carbon pollution to strengthen the economy.”
OK….Climate regulations aren’t about the climate; rather, they’re about “growing jobs” and “strengthening the economy.” Which makes sense only in newspeak.
As an aside, McCarthy’s use of Orwellian language is apt. Any cog of authoritarianism worth her salt will tell you that propaganda is paramount. In a June 25 speech unveiling an authoritarian climate plan, President Obama announced that Congressional inaction on policy is a pretext for the Executive to enact that policy by administrative fiat. Administrator McCarthy was quick to follow orders.
This economic stimulus, moreover, is to be executed not by the Federal Reserve, nor the Treasury Department, but by the Environmental Protection Agency. Talk about mission creep!
As reported by GreenWire’s Jason Plautz, McCarthy said the President’s climate plan was ‘an opportunity to “bend the curve” and could “fuel the complementary goals of turning America into a magnet for new jobs and manufacturing.”’
Of course, she’s got it backwards. Since 2009, EPA has been “bending” the curve in electricity markets by breaking the back of coal, thereby destroying jobs*and manufacturing.
*Jobs are a poor metric relative to wealth creation, but it’s always an affront to common sense whenever the executive branch imposes politicized regulations that destroy jobs.
In 1977 amendments to the Clean Air Act, the Congress created the Clean Air Scientific Advisory Committee (CASAC), a body of scientists whose job is to advise EPA on the setting of National Ambient Air Quality Standards (NAAQS).
NAAQS is the primary regulatory regime established by the Clean Air Act. The regulation does exactly what its name suggests–it establishes numerical nation-wide ambient air standards for “criteria” pollutants (sulfur dioxide, lead, particulate matter, ozone, nitrogen oxides, and carbon monoxide). There are two types of NAAQS: primary and secondary. Primary NAAQS are set at levels requisite to protect public health, with an adequate margin of safety, while secondary NAAQS are set at levels necessary to protect public welfare.
EPA is required to take CASAC’s advice into account, and, when it publishes any NAAQS, the agency must explain any differences it had with CASAC’s advice. In 2006 and 2008, George W. Bush’s EPA promulgated revised primary NAAQS for particulate matter and ozone, respectively. Both of the regulations were set at levels that were less stringent than the range recommended by CASAC.
In a 2009 ruling, American Farm Bureau Federation v. EPA, the D.C. Circuit Court rejected Bush’s 2006 primary NAAQS for particulate matter. The court reasoned that the agency had inadequately explained its differences with CASAC’s advice.
In a ruling announced last Monday, Mississippi et al. v. EPA, this same court upheld Bush’s 2008 ozone primary NAAQS, despite the fact that it was less stringent than what CASAC had recommended. This time, the court found that EPA had adequately explained the difference.
By the Court’s own admission in the Mississippi et al. v. EPA opinion, there are no clear cut criteria by which EPA’s reasoning is judged. The primary standard seems to be derivative of whether CASAC’s advice is rooted in science versus policy considerations. The former (science considerations) is construed as pertaining to the component of the primary NAAQS that is requisite to protect public health. The latter (policy considerations) is the component of the primary NAAQS that represents an adequate margin of safety. The Court reasoned that EPA’s discretion rises along a decision-making continuum, from “science” to “policy” differences with CASAC. CASAC’s judgment matters more for science–in practice, determining a NAAQS level requisite to protect public health. EPA’s judgement matters more for policy–in practice determining the NAAQS level necessary to achieve an adequate margin of public safety. In this instance, the judges found that CASAC hadn’t explicitly stated which parts of its recommended ozone NAAQS were science-based reasoning, and which parts were policy-based reasoning. In the face of this uncertainty, EPA’s explanation met the low bar by which an agency’s decision is deemed reasonable.
In a June 25 speech unveiling a new, authoritarian climate plan, President Obama explained that Congressional inaction was a pretext for his administration to fight global warming by executive fiat.
Newly-confirmed EPA Administrator McCarthy got the message loud and clear. According to InsideEPA, McCarthy said in a July 22 video memo to agency employees, “We have a clear responsibility to act now on climate change. That’s what President Obama has called on us, and the American people, so that we protect future generations.”
It is noteworthy that she didn’t mention the Congress. By significant bi-partisan margins, cap-and-trade policies have died repeatedly in the Senate. Of course, EPA’s authority to regulate climate change is derivative of the Clean Air Act. And yet, as my colleague Marlo Lewis has explained aptly,
EPA claims that its greenhouse-gas regulations derive from the CAA as interpreted by the Supreme Court in Massachusetts v. EPA*. But in the last Congress, after almost two decades of global-warming advocacy, Congress declined to give EPA explicit authority to regulate greenhouse gases, when Senate leaders mothballed cap-and trade legislation. A bill authorizing EPA to do exactly what it is doing now — regulate greenhouse gases under the CAA as it sees fit — would have been dead on arrival. The notion that Congress gave EPA such authority when the Clean Air Act was passed in 1970, years before global warming emerged as a public concern, defies both history and logic.
*[As an aside, the Supreme Court is now in the process of determining whether it will revisit Mass v. EPA by choosing to review the D.C. Circuit’s decision to uphold EPA’s climate regulatory regime.]
There’s another troubling aspect to McCarthy’s video memo. In it, she said that the agency will be taking an “all hands on deck” approach to implementing regulations to reduce greenhouse gases. Specifically, MCarthy was speaking about diverting EPA’s limited resources into a regulation known as the New Source Performance Standards for greenhouse gases. Here’s the problem: This regulation is a discretionary responsibility. That is, EPA chose to do it. The Agency didn’t have to.
EPA’s power relative to the States increased last Friday when the 10th Circuit Court of Appeals, by a 2-1 majority decision, ruled that the agency acted reasonably when it disapproved Oklahoma’s Clean Air Act plan to improve visibility. As I explain below, the court’s majority opinion in State of Oklahoma, et al. v EPA is questionable because it hinges on the credibility of an “independent” consultant hired by EPA. In fact, this consultant is biased and unqualified. She is a go-to, anti-coal litigation witness for environmental organizations like the Sierra Club, and, more importantly, her analysis is demonstrably wrong.
At issue is a Clean Air Act regulation known as Regional Haze. Amended to the law in 1977, the purpose of the Regional Haze program is to improve the view at National Parks and other federally-designated areas. Because it is an aesthetic regulation—and not a public health mandate—the Congress granted States a unique degree of power vis a vis EPA, relative to other regulatory regimes established by the Clean Air Act.
The Regional Haze rule’s most significant regulatory mandate is known as Best Available Retrofit Technology (BART). The Clean Air Act requires that States determine BART for all fossil fuel plants built between 1962 and 1977.
In 1999, the Clinton administration EPA promulgated rules for establishing BART. These rules were challenged by States and industry for being insufficiently deferential to States’ unique prerogatives under the Regional Haze program. In a 2002 decision, American Corn Growers v. EPA, the D.C. Circuit Court of Appeals agreed with the petitioners, and remanded the rule to the agency. The court’s opinion explained that, “states…play the lead role in designing and implementing Regional Haze programs” generally, and that, in particular, the Clean AirAct “giv[es] the states broad authority over BART determinations.”
The legal history is clear: Congress wanted States to choose BART.
President Barack Obama unveiled a climate change plan in a speech Tuesday at Georgetown University in Washington, D.C. A transcript of the speech is available here, and a copy of the president’s climate memo is available here.
In the speech, the president struck a far different tone than he did during the presidential debates last year. Back then, on stage during the debates, President Obama was a friend of fossil fuels, and he never mentioned climate change. Indeed, he tried to present himself to the right of Romney on energy policy. On Tuesday, he was a different man. He presented climate change as an existential threat to our children. At one point, he asked whether “we will have the courage to act before it’s too late.” I think it’s fair to question where the president’s courage was when he was up for election.
Another troubling aspect of President Obama’s climate plan is that it is avowedly authoritarian. In his speech, the president effectively declared that the Congress won’t enact climate policies, so he’s going to impose them. Sort of like a king. The president is using congressional inaction as a pretext for a power grab, and that is worrying.
The most important component of the president’ climate plan is an order for EPA to re-propose greenhouse gas regulations for new power plants and also propose such regulations for existing power plants. He didn’t specify what these regulations would entail, but there are clues that they will result in a ban on the construction of new coal fired power plants. For starters, EPA’s original proposal effectively outlawed new coal power plants, so it’s clearly an agency priority. Also, on page 19 of the president’s new climate plan, the administration states that, “going forward, we will promote fuel switching from coal to gas for electricity production.”
In addition to these regulations, the plan includes more subsidies for green energy, fuel efficiency standards for trucks, and federal expenditures on adaptation. The last one is the most dangerous of the three, because virtually any infrastructure improvement can be portrayed as necessary in the face of a changing climate. The upshot is that this adaptation initiative, in practice, would likely become a subsidy slush fund.
On Monday, May 20, in room 406 of the Senate Dirksen Office Building, the Competitive Enterprise Institute held a Congressional staff and media briefing on “EPA’s FOIA Scandals: ‘Richard Windsor,’ Gina McCarthy, and the Abuse of Power,” given by Chris Horner, author of The Liberal War on Transparency and CEI Senior Fellow. Video of Chris’s presentation is available below.
EPA’s FOIA Scandals: “Richard Windsor,” Gina McCarthy, and the Abuse of Power from CEI Video on Vimeo.
Last week, the Wall Street Journal gave a fascinating snapshot of the stupidity of the global solar market. As it is with all good news reports, the first paragraph says it all:
BEIJING—Solar-panel makers in China are open to raising prices and limiting exports to the European Union as a way to avoid steep trade tariffs, industry representatives said Thursday.
Allow me to put this in perspective. European consumers want solar panels. Indeed, they are forced to want them, due to Soviet-style green energy production quotas enacted by the EU. That’s the context: Europeans wanting/having to buy this product.
Against this backdrop, manufacturers in China are OFFERING to raise prices. They aren’t colluding to make more money; rather, they are voluntarily raising prices against their better judgment. Why? Because EU officials are threatening to raise prices by slapping tariffs on imports of Chinese solar panels (which, again, are products that Europeans want to buy).
Keep in mind as well that the EU’s threatened tariff would co-exist with national-level subsidies, known as “feed in tariffs,” designed to suppress the price of solar panels. This is true in Germany and Spain, off the top of my head, and likely true in other countries.
So there’s an EU policy that forces Europeans to buy solar panels. Yet there is also an EU policy meant to make solar panels much more expensive. Finally, there are several European policies meant to make them much cheaper. Got that?
Such are the endless and inefficient complexities wrought when government creates an industry out of whole cloth, as any member of the Gosplan could have told you.
RSS Updates 
RSS E-Mail Updates 
CEI.org