Introduction
Environmental protection has brought huge benefits to the United States. The country’s air and water are cleaner than they were a generation ago. Hazardous wastes are better managed. Land once poisoned by toxic dumps is being reclaimed. These achievements, combined with continuing efforts to preserve and enhance natural resources, contribute daily to Americans’ health and their improving quality of life.
But these successes have not come cheaply. The country is now spending in the neighborhood of 2 percent of its GDP—more than $200 billion a year—in predominantly private funds to meet the standards that it has set. Although numerous studies find that, in the aggregate, the benefits of our environmental policies greatly exceed these costs, prudent stewardship requires the people who govern the United States to ask whether we are spending these outlays as effectively as possible—and whether we are getting the greatest possible environmental benefits for our money. We must also ask, of course, whether new problems have arisen that require new solutions.
In those instances where change is warranted, the reasons frequently seem technical. But it is in the nature of politics that the technicians themselves often are not able to make the necessary changes. That requires the attention and persuasive powers of people at the highest levels of government. And in the political atmosphere prevailing among policymakers today, that is an intimidating task. A Washington Post editorial, commenting in early 2003 on the policy climate, observes that the environmental debate “has lately become ludicrously, almost hysterically, polarized.… With surprisingly few exceptions, both environmentalists and industry lobbyists have convinced themselves that the environmental debate is a zerosum game. Every new regulation is calculated in dollars lost by one side; every failure is calculated in dead birds by the other side.”
This book is intended to build bridges between the specialists knowledgeable about these programs and the policymakers themselves—including the president—who must lead any successful drive to improve environmental management. The beginning of a new administration, whether a president’s first or second, is always a time for taking stock, reexamining current practices and prevailing ideas, and looking for new opportunities. In that large sector of federal responsibilities that concerns resources and the environment, many opportunities are available. This book presents some of the more prominent examples.
As a country and as a government, we have learned a lot during the last several decades about what works well in environmental management and what does not. It is clear that some present practices are obsolete, measured by current experience. Why? Circumstances change. New problems arise. Legislation that once was entirely satisfactory now often falls short, perhaps because of new scientific knowledge or new patterns in the regulated industries. Sometimes we have learned better ways to organize environmental programs, but old laws and regulations can hinder and even prevent improvement. And too often, the perfect becomes the enemy of the good when crafting legislation or regulations.
In the coming months, we suspect the country will increase its focus on energy and environmental issues. Concerning the former, there are reasons to believe that the rising energy prices witnessed over the last several years may be less transitory than in the past. The rapid economic growth of China and India, coupled with renewed growth in the western economic democracies, have added to global energy demand at a time when energy supplies have not kept pace. Instabilities in the Middle East, Venezuela, and Africa suggest that we should not be at all complacent about future supplies of crude oil, one of the most important energy forms on which we depend.
As regards environmental issues, the regulation of air pollution from coal-fired power plants, the need for mandatory federal action to reduce U.S. emissions of carbon dioxide and other so-called greenhouse gases, and federal policies toward the nation’s forests, parks, and other public lands all rank high as candidates for serious policy reviews. Similarly, attention may well focus on the fuel economy standards applicable to new vehicles.
We should acknowledge that some of the proposals put forward in this collection would require increased government spending at a time when the budget deficit makes it difficult to contemplate new programs. At the same time, at least one recommendation would reduce the deficit by increasing government tax revenues. A number of the memos suggest approaches for environmental protection, natural resource enhancement, or energy security, where tighter standards could be justified. Others suggest opportunities to either accomplish more for the money the country is spending now or achieve the current level of protection for less. No country, however wealthy, can afford to pass up these kinds of bargains. Approaches like those proposed for fisheries management, fuel economy standards, outer space policy, and auto insurance reform, for example, likely appeal to Republicans and Democrats alike.
Another caveat pertains to the comprehensiveness of the collection. In one sense, it covers a broad range of issues. The memos relate to programs overseen by multiple federal agencies, are pertinent to broad geographic areas, and would affect a large part of the U.S. economy. In all these respects, the issues they cover could be expected to have an impact on almost every citizen in one way or another. Nevertheless, it was never our intention to cover every environmental and energy topic—simply too many exist for us to have been able to prepare a memo on each. Thus, to take but a few examples, we say nothing about endangered species policy, the disposal of radioactive wastes, drinking-water regulation, or water availability in the American West. Astute readers also will note that our focus in this volume is domestic energy and environmental policy, even though many of the most serious problems in these areas fall increasingly outside the United States, most often in developing countries. Notwithstanding these omissions, a number of the memos overlap both in their scope and their recommendations. For example, it would make little sense to adopt both an economywide carbon tax and a modified version of the McCain–Lieberman Climate Stewardship Act, which would impose a cap-and-trade system on domestic carbon emissions.
Some of the policy recommendations are sweeping in scope and likely to be quite controversial, such as those advocating a major reorientation of air pollution control efforts toward greater control of particulates, or calling for the imposition of a carbon tax. Others deal with issues that are seldom front-page news. In some cases—public policy regarding antibiotic resistance, for example—this may be because an issue has yet to hit the headlines despite its obvious and growing importance. In other cases, such as the rehabilitation of abandoned properties known as “brownfields,” the issue may seem esoteric despite the aesthetic and financial blight they can pose to communities and their inhabitants.
The president will find no recommendation here for a wholesale reorganization of the federal government to improve energy policymaking, or for a thorough overhaul of the multiple and often mutually inconsistent statutes under which the U.S. Environmental Protection Agency operates. Neither is there a recommendation to require presidential appointees to have significant experience in the areas they are selected to lead, though that is to be desired. We suspect that political determination ought to be left to others, because recommendations like these would trigger so much political upheaval and institutional angst that even the hardiest souls would shy away from them.
How, then, can we think of the memos presented here? As an environmental and energy policy agenda for an administration, they can be approached in several different ways. A few represent novel and even daring policy approaches; others are extensions or revisions to ideas that have been discussed previously in policy circles.
Although all the ideas presented in this volume command support in some segment of society, no claim is made about their universal appeal. For some, the adversely affected groups are well defined and confined to a small number of economic sectors, such as commercial fishermen or NASA contractors. In contrast, other proposals—most notably, those designed to mitigate climate change—affect a much wider swath of society, although in some cases the authors have made efforts to limit negative impacts. Because of the preliminary nature of many of the policy ideas contained in this volume—and the fact that for many of them, the costs depend on critical details that still need to be worked out—we have not asked the authors to put specific price tags on their proposals. Nonetheless, the careful reader will quickly gain an understanding of the relevant magnitudes involved, either on or off budget.
Key Themes
We present the policy proposals in four standard groupings: energy and climate; environment, health, and safety; natural resources; and information decision frameworks. At the same time, several cross-cutting themes are identifiable. The expanded use of market mechanisms and the greater emphasis on economic analysis in environmental decisionmaking are prominent elements of many of the memos. While one might expect as much from the largely economics-oriented RFF staff, the views expressed herein clearly mirror long-term policy trends in the United States and elsewhere. In some respects, the essays in this volume represent the latest installment in those trends.
A second theme of the volume is the call for reform of existing policies and programs. For example, Alan Krupnick’s proposal to deemphasize implementation of the ambient standard for ozone in favor of more rapid implementation of the fineparticulate standard is one such reform. In another essay, recognizing the management problems associated with the transboundary movement of air pollution, Krupnick and coauthor Jhih-Shyang Shih argue for greater emphasis on regional as opposed to state-level decisionmaking to implement certain provisions of the Clean Air Act. Additional examples of reform considered in the volume include Roger Sedjo’s call to revise and simplify major planning activities at the USDA Forest Service, Molly Macauley’s proposal to reform the NASA budget process, and Katherine Probst’s recommendation to reexamine spending priorities of the Superfund program. Echoing a theme of caution regarding deregulation, Timothy Brennan argues for a go-slow approach for introducing further competition in retail electricity markets.
A third identifiable theme of the volume is the need for new or more aggressive approaches to enhance environmental and natural resource protection in several important areas. For example, recognizing the growing resistance to antibiotics in the general population, Ramanan Laxminarayan calls for expanded federal efforts, including new incentive-based mechanisms, to reduce nonessential use of these medicines in both humans and animals. Recognizing the potential gains from revitalizing neighborhoods burdened with a legacy of contamination, Kris Wernstedt proposes new federal actions with an emphasis on largescale, areawide revitalization of multiple properties as opposed to the traditional property-by-property approach to brownfield revitalization. Michael Taylor calls for a presidential initiative to accelerate modernization of the U.S. food safety system. He seeks unification of the responsibility for food safety under a single authority, replacement of outdated inspection programs, and allocation of resources more closely tied to public health risks of food. In another essay, Alan Krupnick and coauthor Sandra Hoffmann suggest broadening the use of performance standards for regulating foodborne pathogens as a means of improving food safety at lower cost.
Drawing on the economic benefits literature, Dallas Burtraw and Karen Palmer advocate stringent and rapid restrictions on emissions of sulfur dioxide and nitrogen oxides from power plants. Important reductions in mercury emissions would be achieved as well. Modest limits on carbon dioxide emissions from the same sources also should begin now as an initial, efficient means of addressing climate change. Other essays in the volume call for broader, multisector approaches to reducing carbon dioxide and other greenhouse gases.
A fourth theme is that, despite the complexity and contentiousness of the issues, energy and climate change present many opportunities for new policy initiatives. For example, Ian Parry and Joel Darmstadter call for new efforts to limit our dependence on oil. Their recommendations emphasize both the demand and the supply sides of the equation. In another essay, Darmstadter calls for a national “green power” initiative, modeled on renewable portfolio standards now in operation in a number of states. Carolyn Fischer and Paul Portney propose introducing much more broadly tradable credits into the current Corporate Average Fuel Economy (CAFE) standards that govern the mileage requirements for new cars and trucks.
To thwart the possibility of global warming, several proposals call for mandatory, multisector actions. Robert Fri makes a broad-scale recommendation for U.S. leadership on the climate issue. Raymond Kopp, Richard Morgenstern, Richard Newell, and William Pizer advocate five specific revisions to Senators McCain and Lieberman’s Climate Protection Act, which was defeated in a 55–43 bipartisan vote in 2003. In another essay, Dallas Burtraw and Paul Portney make the case for a broadbased carbon tax, based on the need both to mitigate greenhouse gases and to address the growing federal budget deficit.
A fifth theme is that better information, along with broader decision criteria, is essential to improving both the effectiveness and efficiency of environmental management. While recognizing that expanded data collection may be costly and potentially inconsistent with the well-established goal of limiting paperwork and related burdens throughout society, a number of authors contend that the gains from better information clearly outweigh the costs. James Boyd and Leonard Shabman, for example, argue that gaps at all levels of government in basic information about water quality are major stumbling blocks to improving the overall quality of our nation’s rivers, lakes, and estuaries. They recommend a National Water Quality Monitoring Strategy, developed under federal leadership, and supported by changes to the Clean Water Act, as a means of improving water quality management.
In another essay, Spencer Banzhaf calls for the creation of a new statistical agency—a Bureau of Environmental Statistics—to centralize and coordinate national efforts to develop comprehensive, consistent statistics on the quality of the environment. He proposes to model the new agency after such proven enterprises as the Census Bureau, the Bureau of Labor Statistics, and the Bureau of Economic Analysis. Thomas Beierle’s memo recommends efforts to reinvigorate environmental information disclosure as a policy tool. Regarding the criteria used by the regulatory agencies and the Office of Management and Budget for evaluating regulatory options, Maureen Cropper advises that the current focus on benefit–cost analysis be expanded to include greater emphasis on cost-effectiveness as well.
A final theme concerns policy innovation. Just as we all recognize the societal gains from rapid advances in computers, medicine, and other science and technology areas, we need to encourage similar innovation in federal and state policies to improve management of natural resources and the environment. Some of the policies that seemed workable 20 years ago may not be appropriate today, particularly when we acknowledge some of the technological changes that have occurred in the intervening years. Ian Parry and coauthor Winston Harrington, for example, introduce the notion that the global positioning satellite systems being installed on many new vehicles offer the potential to revolutionize the way we pay for our car insurance. Imagine a reliable, efficient system to collect the same revenues that individuals now pay for car insurance, but on a per-mile basis rather than on the current fixed annual charges. As they argue, the potential safety and environmental gains from such a scheme may be considerable, not to mention the ancillary climate change benefits. An essay by Harrington, along with colleagues Karen Palmer and Margaret Walls, proposes a federal “policy auction” to encourage states to introduce innovative policies. The authors provide examples in the fields of waste recycling and the use of market mechanisms to relieve congested roads. In another essay, Parry and Elena Safirova focus on converting some existing high-occupancy vehicle (HOV) lanes into high-occupancy/toll (HOT) lanes. A final innovative proposal by James Sanchirico focuses on U.S. fishery management. To promote both economic growth and biological sustainability, Sanchirico proposes that the new president take aggressive steps to introduce measures to zone the oceans, analogous to the spatial management decisions routinely made regarding land use.
The president who takes office on January 20, 2005 will confront the competing approaches that loom large over questions of energy and the environment: Americans want cleaner air and water and healthy surroundings, but they also want inexpensive fuel, big cars and houses, and economic growth. A president has the platform to encourage changes in personal behavior to promote conservation and responsible stewardship of resources and to move the body politic toward consensus on appropriate policies. Inevitably, the postelection deliberations within and outside of the executive branch will center around options designed to address these competing approaches. We hope that the presidential memos presented here will be thought provoking and, most important, that they will make commonsense contributions to those deliberations.