ENVIRONMENTALISTS ARE ON THE RUN
By Ann Reilly Dowd
Business leaders, local officials, and angry citizens are demanding an end to rules based on silly science and bad economics. This time, they just might win.
HERE’S A PREDICTION that doesn’t exactly sound like big news: In 1994. with the possible exception of a much needed reform of the Superfund law governing toxic waste dumps, no major environmental legislation will get through Congress. Ho-hum, you say? Wrong. The reason for this likely non-event is momentous—though largely unreported: For the first time since the green lobby swept through Washington more than two decades ago, environmental activists are on the run.
What’s driving them back is a loose but powerful coalition of business leaders fed up with excessive regulation; state and local government officials tired of footing the bill when Washington issues new cleanup calls; and a growing pack of farmers, ranchers, and other landowners angry at the way environmental laws increasingly erode private property rights. This crowd has no interest in rolling back or weakening most existing environmental protections—a good thing, since these by and large retain broad public support. Rather, their aim is to ensure that any new rule-making is based on sound science and sensible economics. Says Billy Tauzin (D-Louisiana), one of the movement’s leaders in the House of Representatives: "We can no longer ignore the costs government imposes when it regulates. The heartbeat of this movement is a call for restraint and responsibility as the cornerstone of our nation’s regulatory system."
Three reforms, dubbed the "unholy trinity" by opponents, dominate the anti-environmentalists’ agenda. First and foremost, they hope to enact legislation requiring an assessment of risks and a cost-benefit analysis whenever a federal agency issues a major new rule. Second, state and local officials want to pass a "no money, no mandate" law that would prohibit the federal government from imposing expensive new requirements without providing the wherewithal to pay for them. Third, property-rights advocates are demanding compensation when federal environmental actions severely limit the use and lower the value of private property.
Congressional support for these broad-based reforms is astonishingly strong. Last spring, despite stiff opposition from the green lobby, the Clinton Administration, and Democratic congressional leaders, the Senate passed an amendment sponsored by J. Bennett Johnston (D-Louisiana) that requires risk assessment and cost-benefit analysis on all major new environmental rules. The final vote: 95 to 3. A majority of members in both the House and Senate are also co-sponsoring "no money, no mandate" legislation.
On the private property front, opponents have derailed the Clinton Administration’s proposed Biological Survey, which would have empowered Uncle Sam to inventory all flora and fauna on every inch of America, including your backyard.
But while the reformers may have the votes, they don’t control the legislative agenda; the only way they can get their bills enacted is to attach them as amendments to whatever environmental or safety legislation the congressional leadership decides to move. To counter this tactic, green activists and their allies on Capitol Hill are prepared to pursue a "kill strategy"—and deep-six any legislation that provides a vehicle for such reforms. Likely result: continued gridlock.
Even so, the political momentum is clearly shifting away from the environmentalists. To better understand why—and what drives the reform rebellion—consider the case of Montana rancher John Shuler. One snowy September night he thought he saw a grizzly bear lumbering past his living room window. Wearing only his skivvies, he grabbed his rifle and raced outside room window. Wearing only his skivvies, he grabbed his rifle and raced outside to find three bears rampaging through his sheep herd. When he fired in the air to scare them away, a fourth grizzly emerged from the darkness and turned to attack. Fearing for his life, Shuler shot the bear, which eventually died. For his crimes against an endangered species, the Environmental Protection Agency fined him $4,000
Now travel with us to Pretty Prairie, Kansas (pop. 600). The town faces a potential financial crisis over an EPA requirement that it spend as much as $450,000 to build a new water-treatment plant or dig a new well. The EPA’s goal: to reduce nitrates in the water from 20 to ten parts per million, thereby lowering the risk of so-called blue-baby syndrome, a treatable blood condition affecting babies under 6 months. But only four babies that age now reside in Pretty Prairie, and all are red-cheeked and cooing. The town’s sensible solution: Buy the kids bottled water. No way, said the EPA. So the town offered to buy all 600 residents bottled water. The EPA still wants either that plant or a well.
Or consider the paper industry, picked by the EPA as a model for a new, more cost-effective regulatory scheme designed to approach pollution control holistically rather than source by source. Problem is, the rules adopted under this new tack will still cost the industry $12 billion over three years, more than its total profits over the past decade. Most incredible: a new rule to reduce methanol that requires the installation of steam strippers and scrubbers—at $3.6 billion over three years—even though less expensive venting could do the job. Says Red Cavaney, president of the American Forest and Paper Association: "We’ll have almost no new money for needed productivity and quality improvements or capacity expansion. This is out of control."
IT WASN’T ALWAYS that way. From Earth Day 1970 through the late 1980s, federal regulators focused on the big, obvious sources of pollution, like oil-and coal-powered plants belching black smoke into the atmosphere and chemical companies dumping pollutants into the waterways. "In those days we could use relatively blunt instruments, like technology standards," says Harvard economist Dale Jorgenson. "The costs were relatively cheap vs. the benefits. And America was in a stronger position fiscally and vis-à-vis its international competitors."
But beginning with the Bush Administration, Congress and the White House set ever more sweeping and costly goals. Among them: cleaning up toxic waste dumps, protecting an expanded list of endangered species, reducing greenhouse gases, and phasing out a whole new range of chemicals found to be toxic in laboratory animals. Result: The annual cost of environmental compliance, says the EPA, rose from $42 billion in 1977 to roughly $130 billion today, a pace well ahead of inflation.
What’s more, America’s cleanup bill is considerably larger than those of its principal competitors. U.S. environmental spending amounts to 2.2% of GDP, vs. 1.6% to 1.8% in Germany and 1% to 1.5% in Japan, says Paul Portney, an expert at Resources for the Future, a Washington think tank. The EPA predicts that by the year 2000 the U.S. total will hit $178 billion, or 2.8% of GDP—assuming no new environmental initiatives.
A big part of the problem is that America’s environmental policymaking has increasingly been driven more by media hype and partisan politics than by sensible science. Take Alar, a growth regulator that farmers used successfully for 20 years to improve the quality and appearance of apples. In early 1989 the EPA’s Science Advisory Board deemed Alar a probable human carcinogen, based on tests involving high doses administered for long periods to mice. With actress Meryl Streep in the lead, environmentalists issued high-pitched warnings. And CBS’s 60 Minutes magnified the message.
NOT SURPRISINGLY, panic set in. Parents poured apple juice down the drain. Stores pulled apple products off the shelves. U.S. apple growers lost some $100 million. But after five years of serious study, experts at the American Medical Association, Congress’s Office of Technology Assessment, and the World Health Organization concur that in the trace amounts present on apples, Alar poses no real threat to human health. Richard Adamson of the National Cancer Institute says the risk is less than that incurred by eating a well-done hamburger or a peanut butter sandwich.
Sadly, the case of Alar is more the rule than the exception. No one doubts, for instance, that prolonged exposure to asbestos increases the risk of cancer. But responding to public pressure, the EPA forced state and local governments to spend billions of dollars on removing asbestos from schools—even though the risk of premature death it caused was no more than 0.025 in a million. (By comparison, it’s ten in one million for playing high school football and 1,200 for long-term smoking.) Now scientists at EPA and the National Academy of Sciences agree that removal actually poses greater risks because it releases particles into the air.
DESPITE THE WAVES of panic that roll over America each year, some 500 scientists surveyed by the American Council on Science and Health have concluded that the threat to life from environmental hazards is "negligible." Smoking, drugs, and alcohol, they calculate, directly account for nearly 70% of the roughly one million premature deaths in America each year. Most of the rest stem from poor medical care, reckless driving, and unhealthy diet. Says ACSH President Elizabeth Whelan: "We’re swishing at ants while the elephants run wild."
The woes arising from headline hysteria are often compounded by foolish lawmaking. Classic example: the infamous Delaney clause, which governs safety in food additives and literally requires federal officials to achieve "zero risk." In 1958, when the law was passed, zero technically meant a risk of no more than one in a million. But now sophisticated measuring techniques routinely allow scientists to measure potential threats down to one in a trillion—a million times less than one in a million.
More damage was inflicted in the 1980s when a Democratic Congress—wary of Republican regulators appointed by Ronald Reagan and George Bush—passed a passel of sweeping environmental statutes and then deliberately barred the feds from considering costs when setting standards. Among the laws bearing this restriction are the Clean Air Act, the Clean Water Act, the Superfund Act, the Resources Recovery and Conservation Act, and the Safe Drinking Water Act. Says Harvard economist Robert Stavins: "Even when they want to do the right thing, regulators' hands are often tied."
But even when they aren’t so bound up, the regulators’ record is spotty. One reason, says John Graham, director of Harvard’s Center for Risk Analysis, is the federal government’s "obsession with the concept of a carcinogen." Typically, substances are classified as carcinogens if they produce malignancies in rodents at very high doses. But Graham points out the obvious: "The dose makes the poison." And the government rarely takes that into account. Whelan calls the phenomenon "mouse terrorism."
Nor is there any effort to systematically set overall environmental priorities, either within the EPA or across the federal government. Indeed, a 1987 EPA study concluded that there was an inverse relationship between what staffers considered the biggest risks and where EPA resources were being directed. Instead, the money moved with public opinion. Since then, little has changed. Laments Dale Jorgenson: "If we just regulated smarter, we could get the same environmental quality for half the cost."
Since the late 1980s, Congress has taken a few important steps to grant companies greater flexibility in achieving environmental goals. Under the Clean Air Act, for example, it created a market in sulfur dioxide emissions that allowed utilities to trade pollution rights.
But such market-based innovations remain rare. The more common practice is still to rely on stiff technology or performance-based rules that push up compliance costs and undermine creative pollution control efforts. Take natural gas, the clean, efficient darling of fossil fuels. Every President since Jimmy Carter has touted its virtues. Even so, the regulatory regime actively discourages fuel-switching, since it’s cheaper and easier to meet EPA’s percentage reduction goals with a dirty plant than with a clean one. And if you build a new plant that burns natural gas, you risk being classified as a "new source" of pollution and entering an even more terrifying regulatory hell.
Amoco tried to break out of this vicious circle by performing a joint study with the EPA of its Yorktown, Virginia, refinery. The idea was to figure out whether the company could achieve greater pollution control for less money if it was allowed to look at reducing emissions from the plant as a whole, rather than from specific sources. The answer was a resounding yes. Example: Amoco found it could achieve a far greater reduction in benzene emissions by spending $6 million to improve the way it loads gasoline into barges than by spending $30 million upgrading its waste-water treatment system. But because EPA regulations focus on sewage systems and ignore barges, that route wasn’t an option under existing laws. Overall, Amoco concluded it could achieve the same level of pollution control for 75% less if allowed to take a holistic approach.
RATHER THAN embrace these promising new experiments, however, many green activists continue to push ambitious and costly command-and-control-style initiatives. The most troubling may be a proposed ban on chlorine, advocated by Greenpeace, the National Resources Defense Council, and other environmental groups.
Their charge: Chlorine is contributing to higher dioxin levels in soil and water, which may in turn lead to sterility in animals and humans. EPA administrator Carole Browner has launched a study of how to phase out at least some uses of chlorine.
In response, chemical industry executives point out that there is no evidence that chlorine has led to either cancer or birth defects in humans. Indeed, a chlorine plant explosion that sent a cloud of dioxin over Seveso, Italy, in 1976 produced no medical problems except a higher incidence of acne and nonfatal liver disorders.
What is certain is that the cost of ban-fling chlorine would be astronomical—and crippling for many U.S. industries. Today, 85% of all pharmaceuticals, 96% of all pesticides, 98% of all municipal water treatment, and much of the paper, plastics, and baking industries depend on chlorine as a component or disinfectant. Replacing it would cost U.S. consumers $90 billion, according to an industry-funded study by Charles River Associates, a Boston con-suiting firm.
Moreover, such a ban could perversely increase health risks. The government of Peru is suing the U.S. for classifying chlorine as a possible carcinogen. Based on that listing. Peru removed chlorine from its water supply and thus helped pave the way for a cholera epidemic that killed thousands. Insists Edgar Woolard Jr., chief executive of Du Pont. which manufactures many chlorine-based chemicals: "There may be some chlorine compounds that should be taken off the market, but very few. Independent scientific analysis will show that the benefits far outweigh the risks. The thought of banning it is just foolish."
LIKE BUSINESS executives, many mayors and governors—including numerous liberal Democrats—are also fed up with Washington’s costly one-size-fits-all approach to regulation. Up in Anchorage, sewage can be so heavily diluted with rainwater and snow that it contains virtually no organic matter. But the EPA insists on strict compliance with a regulation that forces municipal water-treatment plants to remove 30% of organic materials before discharging treated water into the ocean. To meet this target, Anchorage has had to recruit local fish processors to dump 5,000 pounds of fish guts into its sewage system each day—just so it can then clean up to the EPA’s standards.
In Aspen, Colorado, Mayor John Bennett threatened to stand in front of government bulldozers rather than pay as much as $12 million to clean up lead deposits that were the remains of silver mining on Smuggler Mountain a hundred years ago. But even after blood testing showed that Aspen residents had below-average lead levels, the EPA refused to take the town off its Superfund cleanup list. Eleven years and $8 million later, Aspen is still fighting the EPA.
Columbus, Ohio, figures it will have to spend more than $1 billion between 1991 and 2000 to meet EPA mandates. By the turn of the century the average household there will pay $856 for environmental protection, more than for police or fire departments. And that will include spending some S24.000 a year to test for 43 pesticides not even used in the region. "Forcing us to expend scarce resources on unreal risks prevents us from tackling real ones like lead paint or violence on our streets," says Mayor John Lashutka. "That’s the tragedy."
The tragedy that farmers, ranchers. and landowners complain about is the rigidity—and frequent absurdity—of strict enforcement of laws designed to protect wetlands or endangered species. When such laws come into play, the value of any affected property can plummet overnight. But the government is not required to compensate owners for such losses.
It gets worse. In some towns in Riverside County, California, the only people who saved their homes from forest fires last summer were those who broke the law by digging fire breaks around them, thereby upsetting the habitat of the endangered Stephen’s kangaroo rat. In North Carolina, a 79-year-old man can’t harvest 40 acres of mature timber because authorities found an abandoned red-cockaded woodpecker’s nest there.
"Regular Joes are terrified of the environmental laws," says David Howard, vice president of the Alliance for America, a coalition of 552 private property groups nationwide. "Under the current regulatory system. you are guilty until proven innocent, and most people don’t have the money to fight the federal government in the courts. So rather than trying to work with the government to protect the species, the answer is often SSS. short for ‘shoot, shovel, and shut up.’"
FOLKS WHO RUN afoul of the wetlands laws have suffered even greater humiliations. Ocie Mills and his son Carey spent 19 months each in a Florida jail for dumping clean builders’ sand on an otherwise dry lot that a federal district court later ruled was probably not a wetland. Bill Ellen, a noted environmental engineer who runs a nonprofit wildlife rescue center in Virginia, spent six months in jail because during the construction of a wildlife refuge, he put two truckloads of fill in an area previously deemed not a wetland. Says University of Chicago law professor Richard Epstein: "These laws are berserk."
Altering those laws and others like them anytime soon hinges on breaking the current congressional stalemate on environmental issues. Voters may ultimately do that by their actions at the ballot box in 1994 and 1996. But a concerted push from the White House could make something happen sooner.
For now, however, Bill Clinton’s stance in this debate is—no surprise—a straddle. While he has signed an executive order encouraging (but not requiring) agencies to perform risk assessments and cost-benefit analysis, the President has sided with environmentalists in opposing the so-called unholy trinity of legislative reforms. Vice President Al Gore and First Lady Hillary Rodham Clinton have actively lobbied against them. Charges lobbyist Wayne Valis, who heads a coalition of business groups for reform: "This Administration talks the talk, but it doesn’t always walk the walk."
MIGHT IT DO BETTER in the future? In an interview with FORTUNE, EPA administrator Browner agreed that a new partnership between the regulated and the regulators is key. Indeed, she recently proposed a new "Common Sense" initiative designed to sweep away the legal impediments that bar companies like Amoco from taking a holistic approach to pollution control. Says Browner: "We need to create incentives for plant managers in companies all across the country to look for ways to get the most pollution control for the least amount of money. I need those guys working with me."
Three former EPA administrators— Russell Train, William Ruckelshaus, and William Reilly—believe what’s ultimately needed is a new federal agency of scientists and economists that would assess risks, weigh costs and benefits, and help policy-makers set government wide regulatory priorities. Another option might be for the President to create a high-level commission and charge it with hammering out a consensus on how to inject greater rationality and cost effectiveness into environmental rule-making. Such a body’s members would include Administration officials, Congressmen, business and labor leaders, and environmental activists.
True, the risk that this exercise might simply produce a toxic waste dump load of blather would be high. But if it were modeled on the bipartisan group led by Alan Greenspan that successfully tackled the controversial issue of Social Security reform in Ronald Reagan’s first term—and coupled with, say, a two-year moratorium on any new environmental mandates—a commission could spark meaningful change. Increasingly, it appears, an angry American public isn’t going to settle for less.
Source : Fortune, September 19 1994
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