EPA

$7 Billion or More in New Taxes for Virginians Under EPA Mandate

by Hans Bader on December 1, 2010 · 1 comment

in Deregulate to Stimulate, Economy, Environment

The EPA told Virginia earlier that it would impose costly measures on Virginia Counties, measures so costly that they would result in record property tax increases in places like Fairfax County Virginia. The measures were designed to make the Chesapeake Bay cleaner. The EPA left open the door to less costly measures to achieve the same goal if Virginia could suggest any to the EPA’s liking.

Virginia has now attempted to do just that, submitting a $7 billion plan to make water going into the Chesapeake Bay purer. But The Washington Examiner reports that the EPA will likely reject it in favor of more costly measures.

So it looks like Virginia taxpayers will be paying at least $7 billion, probably a lot more, to comply with the EPA’s costly mandates. (Virginia, like most states — but unlike the federal government — has a constitutional requirement that it maintain a balanced budget, so it can’t just borrow and spend the $7 billion, it has to raise taxes to pay for it, or dump the cost on its municipal governments to raise themselves through higher property taxes.)

Virginia officials have been critical of the EPA’s proposed measures, calling them a “massive unfunded federal mandate.” 

In addition to higher property taxes, homeowners in liberal Washington suburbs face costly new “green building” regulations at the hands of local governments. For example, the Arlington County Board is also mulling new energy regulations that could increase the cost of home renovations by as much as 40 percent.

Taxpayers in Maryland counties like Montgomery may also end up paying increased taxes due to the EPA’s Chesapeake Bay regulations.

EPA at 40 — Doing an End-Run Around the Legislative Process

by Fran Smith on December 1, 2010 · 1 comment

in Energy, Environment, Global Warming, Regulation

The Environmental Protection Agency is 40 years old.  It came into being under a Republican president, Richard M. Nixon, and opened its offices on December 2, 1970.  In January of that year, Nixon had signed the National Environmental Protection Act, and on the last day of December 1970, he signed the Clean Air Act of 1970.

Fast forward to the year 2010, with an EPA now with almost limitless powers in the environmental arena — regulating greenhouse gas emissions, policing carbon dioxide as a pollutant, and expanding the purview of the Clean Air Act, without congressional approval.  As CEI’s Marlo Lewis wrote,

. . . EPA has positioned itself to determine the stringency of fuel economy standards for the auto industry, set climate policy for the nation, and even amend provisions of the Clean Air act–powers Congress never delegated to the agency. The Endangerment Rule is both trigger and precedent for sweeping policy changes Congress never approved. America could end up with a pile of greenhouse gas regulations more costly than any climate bill or treaty the Senate has declined to pass or ratify, yet without the people’s representatives ever voting on it.

Here’s more from a coalition letter trying to roll back these expanded powers:

Is climate policy to be made by the people’s representatives or by politically unaccountable bureaucrats, trial lawyers, and activist judges?

Only one answer to that question passes constitutional muster. EPA has no authority to do an end-run around the democratic process. Climate policy is too important to be made by an administrative agency without new and specific statutory guidance from Congress.

Republicans are now in control of the House, and with six additional seats in the Senate, they, working with moderate Democrats, should be able to pass legislation suspending or overturning EPA greenhouse gas regulations. We, the People, can “take back our government” only if our representatives stop administrative agencies from legislating.

Massive Property Tax Increases Coming for Homeowners in Northern Virginia

by Hans Bader on November 8, 2010

in Environment, Legal, Natural Resources, Regulation

Homeowners in Northern Virginia may face massive, record-setting property tax increases of 20 percent or more in the upcoming year.

One reason is the EPA’s costly proposed stormwater regulations, which it plans to impose on counties near Washington, D.C., in the name of cleaning up the Chesapeake Bay. The Washington Examiner reported on Sunday that these new regulations would cost Fairfax County alone nearly $4 billion, resulting in an annual property tax increase for a typical homeowner by $650:

“In Fairfax County, which is expecting to pay as much as $3.75 billion over the next 15 years to meet the EPA’s new standards, property taxes would have to be increased by 14 cents per $100 of a home’s assessed value, Randy Bartlett, the county’s storm water director, said. “For an average Fairfax home, assessed at $459,228, the new tax would add nearly $650 to its owner’s annual property tax bill.”  Increases may be even higher in some other localities with smaller populations: according to a study, ” it could cost each affected city and county between $259 million and $386 million a year for the next 15 years.”

The EPA left open a glimmer of hope for homeowners, conceding that its plan is not “the most cost-effective way” to clean up the Bay, and claiming that it would be open to “cheaper alternative plans” submitted by the State of Virginia.

Nevertheless, its plan “could cost Virginia, Maryland and the District billions of dollars each.”

Tax hikes might also occur because of a pending case in the Virginia Supreme Court that could shift some of the burden of property taxes from businesses to homeowners.  In counties like Arlington, property taxes are higher on businesses than on homeowners (an additional 12.5 cents per $100 of assessed value), but that may violate the state constitution.  The Virginia Supreme Court may soon issue a decision striking down counties’ practice of levying higher real estate tax on businesses than homeowners, notes the Arlington Sun-Gazette.  The net result will be to reduce commercial property taxes, thus requiring the counties to either raise homeowners’ taxes to make up for the lost revenue, or cut government spending.

Virginia’s Arlington County won’t cut spending, thanks to its all-liberal, one-party County Board: despite the recession, Arlington County officials have already suggested to public employee unions that they will resume raising public employee pay soon (which had been limited recently to modest step increases).  Indeed, in 2010, the Arlington County Board raised taxes by ten percent to go on a billion-dollar spending spree.  Arlington voters rewarded them for this by reelecting a County Board member who voted for this increase, despite his utter incompetence in managing the regional Metro subway system.  So increased taxes on homeowners are the way Arlington County will make up for any lost revenue if the Virginia Supreme Court strikes down the real estate surcharge on businesses.

EPA Ozone Standard Would Destroy 7.3 Million Jobs, Study Estimates

by Marlo Lewis on October 18, 2010 · 1 comment

in Environment, Global Warming, Precaution & Risk

A recent study by the Manufacturer’s Alliance/MAPI finds that EPA’s proposed revision of the “primary” (health-based) national ambient air quality standard (NAAQS) for ozone (O3) would have devastating economic impacts.

NAAQS Basics

NAAQS are emission concentration standards expressing EPA’s judgment of how low air pollution levels must fall to “protect public health” with an “adequate margin of safety” and to “protect public welfare” from harmful effects on agriculture, animal life, and buildings. The Clean Air Act obligates States to come into attainment with NAAQS via EPA-approved emission control measures known as State Implementation Plans (SIPs). The Act requires States to attain primary NAAQS within five or at most 10 years. There is no statutory deadline for attaining “secondary” (welfare) NAAQS. Failure to attain NAAQS results in sanctions, such as loss of federal highway grants.

Staggering Job and GDP Losses

In January, EPA proposed lowering the primary ozone NAAQS from 75 parts per billion (ppb) to between 60 and 70 ppb. MAPI estimates that a primary ozone NAAQS set at 60 ppb would:

  • Impose annual compliance costs of $1.013 trillion between 2020 and 2030 (equivalent to 5.4% of projected GDP in 2020).
  • Reduce GDP by $687 billion in 2020 (3.5% below the baseline projection).
  • Reduce employment by 7.3 million in 2020, a figure equal to 4.3% of  the projected 2020 labor force.

In a companion report, the Senate Republican Policy Committee (SRPC) shows the MAPI-estimated job losses and “energy tax” burden (compliance cost + GDP reduction) each State would incur if EPA implements a 60 ppb ozone standard. The biggest losers are California, Pennsylvania, and Texas, although nearly all States face multi-billion dollar energy taxes and thousands to tens of thousands of lost jobs:

  • California, with a 12.4% unemployment rate and 2.2 million unemployed job seekers, would incur a total State energy tax of $210 billion and lose 846,000 jobs, during 2020-2030.
  • Texas, with 8.3% unemployment and one million unemployed job seekers, would pay a $452 billion energy tax and lose 1.6 million jobs.
  • Pennsylvania, with 9.2% unemployment and almost 585,000 unemployed jobs seekers, would pay an $85 billion energy tax and lose 351,000 new jobs.

Costs Increase as Intensity and Scale of Effort Increase

How can the impacts be so punitive? One reason, says MAPI, is that “the marginal cost of incremental reductions increases very rapidly as the standard is tightened.” As is often said, picking the low-hanging fruit is easier and cheaper than harvesting from the top of the tree. As MAPI puts it:

Initial reductions in ozone are relatively less expensive because the reductions can be achieved by using existing technologies (“known controls”) to reduce ozone precursors. As standards are tightened, more expensive technologies are required and at some point new technolgies (“unknown,” yet-to-be-developed controls) are presumed [by EPA] to emerge and then be implemented.

Another reason is that ever-larger reductions in ozone-precusor emissions are required to achieve the same incremental decline in O3 concentrations. On this point, MAPI sites EPA’s July 2007 Regulatory Impact Analysis (p. 4-12):

  • Reducing O3 from 84 ppb to 79 ppb requires 102,000 tons of additional nitrogen oxide (NOx) reductions.
  • Reducing O3 from 79 ppb to 75 ppb requires 321,000 tons of additional NOx reductions.
  • Reducing O3 from 75 ppb to 70 ppb requires 1,004,000 tons of additional NOx reductions.
  • Reducing O3 from 70 ppb to 65 ppb requires 2,239,000 tons of additional NOx reductions.

The implication of those numbers is startling. To reduce O3 from 84 ppb to 79 ppb, States must reduce NOx emissions by 20,400 tons for each 1 ppb decline. However, to reduce O3 from 75 ppb to 70 ppb, States must reduce NOx emissions by 136,600 tons for each 1 ppb decline. To reduce O3 from 70 ppb to 65 ppb, States must reduce NOx emissions by 247,000 tons of NOx emission reductions for each 1 ppb decline. In other words, achieving a 5 ppb decline in O3 from 70 ppb to 65 ppb takes 12 times the NOx reductions required to achieve a 5 ppb decline from 84 ppb to 79 ppb. The effort is greater by more than an order of magnitude. Presumably, an even greater effort would be required to reduce O3 from 65 ppb to 60 ppb.

The dramatic increase in the scale of effort is evident from the sharp increase in the number of counties that fall out of attainment as the standard is tightened from 84 ppb down to 60 ppb.

85 Counties with Monitors Violate the 1997 (84 ppb) Ozone Standard

counties-with-monitors-violating-the-8-hour-1997-80-ppb-ozone-standard

322 Counties with Monitors Violate the 2008 (75 ppb) Ozone Standard

counties-with-monitors-violating-the-2008-8-hour-75-pbb-ozone-standard

Up to 650 Counties with Monitors Violate Proposed (60-70 ppb) Ozone Standards

counties-with-monitors-violating-proposed-8-hour-ozone-standards-60-70-ppb

Source: EPA, http://www.epa.gov/glo/pdfs/20100104maps.pdf; Congressional Research Service: http://www.fas.org/sgp/crs/misc/R41062.pdf

Of the 675 counties nationwide that have ozone monitoring stations, 85 counties violate the 84 ppb (1997) ozone standard, 322 violate the 75 ppb (2008) standard, and 515 to 650 counties violate proposed standards ranging from 70 to 60 ppb. More than 96% of all counties with monitoring stations violate the most stringent standard EPA is considering. Most of the nation’s 3,140 counties do not have monitoring stations. Many more than 650 would likely have to deploy both new technologies and “unknown” technologies to come into attainment with a 60 ppb standard.

How Dangerous Are Current Ozone Levels?

A predictable response to the MAPI and SRPC reports is that ozone kills and we should do everything possible to protect “the children.”

Joel Schwartz and Steven Hayward of the American Enterprise Institute analyze the literature on ozone and health in their book, Air Quality in America: A Dose of Reality on Air Pollution Levels, Trends, and Health Risks.  They present substantial evidence that ozone at current levels is a relatively minor health risk:

  • In about one third of the cities examined in a Johns Hopkins air pollution study, ”higher levels of particular matter and ozone were associated with lower risks of premature death.”
  • After adjusting for “publication bias” (the tendency of researchers to submit for publication only those studies that confirm their initial hypothesis), a World Health Organization (WHO) analysis “concluded that higher ozone was associated with lower respiratory mortality.”
  • When properly analyzed, a much-touted California Air Resources Board (CARB) study on ozone and childhood asthma actually shows that no areas in California have ozone levels high enough to affect childhood asthma risk.
  • The same CARB children’s health study found no association between ozone standard violations and growth in children’s lung function.
  • Large increases in asthma prevalence have coincided with large declines in air pollution indicating that “asthma incidence and air pollution are unrelated.”
  • EPA’s proposal to revise the standard down to between 60 and 70 ppb is based on a study that found a small (1-1.5%) average reduction  in lung function in 30 healthy young adults who breathed laboratory air averaging 60 ppb for 6.6 hours. To get this result, the subjects alternately exercised on stationary bicycles and tread mills for six 50-minute periods. This is equivalent to several gym workouts in a row, well beyond the exertions that people in  ”sensitive populations” (infants, people with respiratory disease, the elderly) typically undertake.
  • Moreover, the ozone concentrations measured by outdoor monitors may exceed the actual levels people breath by as much as 65%, because surfaces near the ground (streets, buildings, even clothing) destroy ozone. A laboratory study of the effect of 60 ppb ozone is more likely monitoring the effects of outdoor ozone of at least 100 ppb – well above the current standard.

EPA and CARB characterize ozone as a deadly peril, which is hardly surprising. Regulatory agencies exist to regulate. The scarier the assessment, the greater the apparent rationale for expanding the scale and scope of regulation. On the flip side, as my colleague Ben Lieberman observes, the “non-attainment industry” would take a huge hit if the Nation finally did come into attainment with all applicable air quality standards. To stay in business, the regulatory establishment must continually campaign for tougher standards as U.S. air quality improves.

Schwartz and Hayward ask: If current ozone levels are so deadly, then how come EPA and CARB project such tiny health benefits from reductions in those levels? For example, EPA estimated that switching from the pre-1997 ozone standard of 120 ppb averaged over 1 hour to the tougher standard of 84 ppb averaged over 8 hours would reduce hospitalizations for asthma attacks by only 0.6%. CARB estimated that adopting its even tougher 70 ppb standard would reduce emergency room visits for asthma by 0.35%. Even these small benefits are likely to be overestimates since the projections are “based on a selective reading of the health effects literature that ignores contrary evidence,” Schwartz and Hayward argue. And I’ve got to wonder, given the multitude of factors that influence hospitalization rates, how would EPA and CARB ever know whether a tiny reduction in hospitalization rates were due to their regulations rather than to a host of other unrelated causes?

Wealthier Is Healthier, Poorer Is Sicker

The irony is that adopting costly new air quality standards may actually impede improvements in public health. The resources available to protect public health, safety, and the environment are finite. Consequently, policymakers should set priorities to target limited resources on the most serious risks. Forcing the private sector to spend trillions of dollars to achieve miniscule or non-existent health benefits hinders rather than advances public welfare. Moreover, because people use income to enhance their health and safety, regulations that destroy jobs, lower wages, and increase the cost of consumer products can literally be lethal. Spare-no-expense, health-at-any-cost regulation ignores the obvious connection between livelihoods, living standards, and life expectancy.

A prosperous economy supports the development of improvements in health care and makes those improvements more widely available. In contrast, a faltering economy diminishes investment in R&D and curbs spending on life- and health-enhancing goods and services. Unemployment is stressful and is associated with unhealthy habits such as smoking and excessive drinking. Several studies (here, here, here, here, and here) confirm what common sense tells us — that poverty and unemployment increase the risk of sickness and death. As the late Aaron Wildavsky observed long ago, wealthier is healthier. An ozone NAAQS that imposes trillion-dollar energy taxes on our struggling economy and destroys over 7 million jobs is likely to do much more harm than good.

Private Employers Cut 39,000 Jobs in September

by Hans Bader on October 7, 2010

in Deregulate to Stimulate, Economy, Employment, Energy, Environment, Global Warming, Healthcare, Labor, Legal, Regulation, Stimulus to Nowhere

The private sector shed 39,000 jobs in September.  Liberal journalists claim this was “unexpected.”  This reveals their shaky grasp of economics.

If you were an employer, why would you hire somebody in an economy that’s barely growing, when you could be hit by all sorts of employee-related expenses in the future, the way employers have already been hit by increased costs due to Obamacare?  Employers are worried about additional costs that could force them to lay off newly hired workers if Congress passes cap-and-trade global warming legislation (which would impose massive costs on many industries, requiring cutbacks in production).  Recent EPA rules aimed at global warming will wipe out at least 800,000 jobs, with a blizzard of additional new rules expected to follow.  And the stimulus package, despite its $800 billion cost, did little for employers, wiping out export-sector jobs, and funneling green-jobs money to foreign firms.  (The current weak “recovery” actually began in June 2009, before the stimulus package even began being spent.)

Thanks to steadily-expanding government red tape, every time you set a worker’s pay, or have to fire a lazy or incompetent employee, you now face the risk of being sued  (You are less likely to hire someone if you can’t fire them later if they turn out to be lazy or incompetent).  Employees who are fired for even good reasons often turn around and sue the employer for age, race,  sex, or disability discrimination, or for the “hostile work environment” they claim existed during their employment due to things like overheard remarks.  Getting meritless lawsuits tossed out is expensive — years ago, it was typically $25,000 on legal bills if the employer succeeded in getting rid of the lawsuit at the earliest possible stage (on a pre-trial motion to dismiss), $75,000 at the next stage (”summary judgment”), and $250,000 if the employer won at trial.  Under a legal double-standard called the Christiansburg Garment Rule, if the employer wins, the worker seldom has to pay the employer’s legal bills; but if the worker wins, the employer has to pay the worker’s legal bills as a matter of course (or even a multiple of the employee’s legal bills if the lawsuit is brought in some liberal states like New Jersey (see  Rendine v. Panzer (1995)).

You are much less likely to hire someone if you can’t avoid being sued by them later over the pay package you negotiated with them when they were hired.  That’s now a real possibility for employers.  Setting employee pay has gotten harder under the Obama administration due to the 2009 Lilly Ledbetter Fair Pay Act, the first law signed by President Obama, which essentially eliminates the deadline for bringing pay discrimination claims against employers, meaning that employees can wait many years after their pay is set, and sometimes even after they are fired, before bringing a lawsuit against their employer. (Some courts have even allowed employees to use the new law to challenge demotions many years after they occur, under the theory that their demotion indirectly affected their pay.) The Ledbetter Act was named after Lilly Ledbetter, who waited until she was about to retire before suing over alleged pay discrimination, meaning that the supervisor who allegedly discriminated against her was dead and unable to defend himself against discrimination charges by the time the jury decided her case.  (Ledbetter testified in her deposition that she knew of the pay disparity by 1992, but didn’t file a complaint with the EEOC until 1998).  The Ledbetter Act overturned the deadline applied by the Supreme Court in its 5-to-4 ruling against Ledbetter.

The Obama administration wants to make it even easier to sue for discrimination through bills like the Civil Rights Restoration Act and the Paycheck Fairness Act.  The Paycheck Fairness Act would require equal pay for some employees who do unequal work, and allow them to seek unlimited punitive damages against their employers.  Right now, most pay discrimination claims require a showing of unequal treatment (that is, intentional discrimination), although, under Title VII of the Civil Rights Act, big employers can be ordered to pay very limited amounts (back pay, not emotional distress or punitive damages) for certain practices or pay scales that have an unintentional “disparate impact” on women or minorities (like paying people more because they have a high-school diploma, if the job supposedly doesn’t really require a high-school diploma).  The Paycheck Fairness Act would import such standards into the Equal Pay Act, which covers even tiny employers (unlike Title VII), and subject them not merely to back-pay claims, but to uncapped punitive damages and claims for “emotional distress” over pay disparities.

It would require the employer to prove in court things that no tiny employer could ever afford the legal-fees to demonstrate.  Under the Paycheck Fairness Act, an employer would have to show an overriding “business necessity” and lack of any alternative to justify the use of certain factors “other than sex” in setting pay scales.  This is worrisome, because even under existing laws that allow lawsuits over “unintentional” discrimination, employers have been forced to spend hundreds of thousands of dollars on expert witnesses to show that a challenged practice was reasonable, only to have the courts say that that was not enough, that the practice had to be more essential (and more closely-related to technical requirements like “content validity” and “construct validity”).

Ethanol: Following the E10 to E15 Debate

by Brian McGraw on September 29, 2010 · 1 comment

in Energy, Ethanol

The ethanol industry was patiently waiting for the EPA to approve an increase from 10 percent ethanol blends to 15 percent in gasoline. They are still waiting, but no longer patiently.

Numerous groups have voiced their opinion to keep the blend wall at 10 percent, or at least not to approve the increase until further testing is done. Despite the fact that the opposition comes from organizations such as the National Council of Chain Restaurants (this one is admittedly confusing), the Engine Manufacturers Association, and the Motorcycle Industry Association, the domestic ethanol industry is convinced this is an enormous big-oil conspiracy to keep the ethanol industry from succeeding. Did they just finish watching JFK?

From the reading I’ve done, it looks like 15 percent blends of ethanol aren’t going to have any negative effects on newer car engines — and EPA statements have hinted that the industry will get their 5 percent increase this year. But there is evidence that it can cause harm in non-automobile engines — like outboard engines used in boating, which explains why ESPN ran an article covering the issue.

Why is this confusing the ethanol industry? As the ESPN article says:

The lack of general public understanding of the differences between E10 and E15 increases the risk that boaters may misfuel their engines once E15 becomes readily available at gas stations.

The average citizen has no idea what E10 or E15 or E85 are. They might buy E15 rather than E10 and use it, potentially damaging very expensive equipment.

The underlying issue here is that the Renewable Fuel Standard is mandating huge blends of ethanol into our fuel supply, but the EPA isn’t permitting a high enough blend that will allow the mandate to be met. This highlights the absurdity of government energy policy. One government organization mandates a policy and another government organization sets policy making the original initiative impossible to obtain. This is one of the many reasons why consumers, not governments, should decide what they want going into their fuel.

And yes, the oil companies oppose the increase — as they should. They have absolutely nothing to gain from this, and will lose money as each gallon of gasoline sold now contains less refined oil and more ethanol. To some, it is downright shocking that a company would oppose policies that would have the direct effect of making their industry less profitable.

New EPA Rules Will Cost More than 800,000 Jobs

by Hans Bader on September 28, 2010 · 2 comments

in Deregulate to Stimulate, Economy, Employment, Energy, Environment, Global Warming, International, Politics as Usual, Regulation, Zeitgeist

New EPA rules will cost more than 800,000 jobs, probably far more, according to a newly released congressional report.  That includes the EPA’s first set of rules “for Greenhouse Gas Emissions,” and “new standards for commercial and industrial boilers.”  Indeed, the boiler rules alone could cost close to 800,000 jobs.

This shouldn’t be a surprise.  In 2008, President Obama admitted that under his greenhouse gas regulations, people’s utility bills would “skyrocket,” and coal-fired power plants would go “bankrupt.”  The EPA’s own internal documents show that the administration’s global warming regulations will result in a massive “loss of steel, paper, aluminum, chemical, and cement manufacturing jobs.”

It’s not just the administration’s global warming regulations that will wipe out jobs. The stimulus package contained so-called “green jobs” funding, 79 percent of which went to foreign firms, replacing American jobs with foreign green jobs.  A recent biofuel program actually wiped out jobs rather than creating them as intended, while costing taxpayers a lot of money.

The administration’s energy policies presume that central planners know better than private citizens and companies about how to create jobs and allocate capital.  But government officials, unlike private companies, have little incentive to make economically wise decisions, since they don’t pay the cost of their own mistakes, but rather pass them on to taxpayers.  The Justice Department, for example, often ignores the misconduct and constitutional violations committed by its own employees, while the federal Energy Department is one of the biggest violators of America’s environmental laws.

Regulation of the Day 151: Water Heaters

by Ryan Young on September 27, 2010 · 4 comments

in Environment, Health and Illness, Nanny State, Regulation, Regulation of the Day

The EPA recommends setting your water heater to no higher than 120 degrees Fahrenheit. But OSHA recommends setting it to 140 degrees Fahrenheit. Why the difference?

“If you turn your water heater down to 120 degrees Fahrenheit; you will cut your water-heating costs by 6-10 percent,” says EPA. Doing so also uses less energy.

But 120 degrees is not hot enough to kill the Legionella pneumophila bacteria. Legionnaire’s disease causes both flu-like and pneumonia-like symptoms. The disease is most often caught by inhaling the spiral-shaped bacteria via water mist, such as in the shower or near a lake or stream. That’s why OSHA recommends setting your water heater hot enough to kill the bacterium – 140 degrees.

Legionnaire’s disease got its name when the Pennsylvania American Legion celebrated America’s 1976 bicentennial at a hotel with contaminated water. More than 200 people were treated for pneumonia. 34 died. The newly discovered Legionella pneumophila bacteria turned out to be the cause. That and other bacteria are why OSHA recommends 140 degrees.

EPA and OSHA are free to publish all the recommendations they want. But hopefully they won’t impose one standard or other on the entire country. One is expensive; the other would kill people.

Fortunately, you are still free to set your water heater how you choose. If you place a high value on saving money and energy, and you have your health, 120 degrees is the way to go. But if you are elderly or infirm, or you have children in your household, 140 degrees is probably better for you. When it comes to your water heater, you know best. Hopefully OSHA and EPA will continue to recognize that.

(via Sam Kazman)

Motion to Stay Makes Strong Case Court Should Overturn EPA Global Warming Rules

by Marlo Lewis on September 22, 2010 · 3 comments

in Global Warming, Legal

Last Thursday (September 16, 2010), three groups, each led by the Coalition for Responsible Regulation (CRR), filed motions with the D.C. Circuit Court of Appeals to “stay” (put a hold on) the Environmental Protection Agency’s recently finalized greenhouse gas regulations.

The EPA regulations at issue are:

  1. The Endangerment Rule, which finds that greenhouse gas (GHG) emissions endanger public health and welfare, thereby obligating EPA to develop and adopt GHG emission standards for new motor vehicles.
  2. The Tailpipe Rule, which, per the Endangerment Rule, establishes first-ever GHG emission standards for new motor vehicles.
  3. The Triggering Rule, which holds that when the Tailpipe Rule takes effect (Jan. 2, 2011), “major” GHG emitting facilities will be “subject to regulation” under the Act’s Prevention of Significant Deterioration (PSD) pre-construction permitting program and Title V operating permits program.
  4. The Tailoring Rule, which amends the PSD and Title V definitions of “major emitting facility” to avoid the “absurd result” of EPA and State environmental agencies having to process an estimated 41,000 PSD permits and 6.1 million Title V permits every year.

The groups filing the motions are: (1) a coalition of business associations led by the National Association of Manufacturers; (2) the State of Texas; and (3) a coalition of public policy advocates. The industry group is asking the Court to stay the Endangerment Rule, the Triggering Rule, and the Tailoring Rule, although not the Tailpipe Rule. Texas and the advocacy groups ask for a stay on all four regulations pending the Court’s review and decision to uphold or vacate the rules.

One point the motion makes is unarguable. Granting a stay can cause no harm to public health, even if one assumes global warming is a big problem. After all, EPA itself estimates that the Tailpipe Rule — the only rule for which environmental effects are estimated — would avert less than 1/100th of a degree Fahrenheit of global warming by 2100. Thus, if the Tailpipe Rule survives judicial scrutiny, delaying its implementation by six months to a year would have no discernible environmental impact. Besides, the stay would not affect the National  Highway Traffic Safety Administration’s (NHTSA) recent revision of fuel economy (CAFE) standards, and the overwhelming lion’s share of emission reductions required by the Tailpipe Rule actually comes from the new fuel economy regulations.

In contrast, the motions argue, EPA’s rules are already harming the economy. The dubious legal basis of both the Tailoring Rule and EPA’s efforts to bully States into immediately amending their permit programs ”now impose a terrible uncertainty tax on our struggling economy, as no business is able to make plans or investments in reliance on a regulatory scheme so clearly at odds with the plain language of the Act.” Businesses and State permitting agencies will incur additional losses if they make investments based on EPA’s rules and the rules are subsequently overturned. Best to put the regs on hold until the Court rules on their legal bona fides.

The Competitive Enterprise Institute (CEI) is a party to the advocacy group motion, which makes a powerful case that the regulations should be stayed and, ultimately, overturned. Lest anyone suspect that I’m tooting my own horn, I had absolutely no role in either developing or drafting the motion.

Big Picture

As can be surmised from the description above, EPA’s four rules are interdependent. The Endangerment Rule authorizes and, indeed, compels EPA to establish GHG emission standards for new motor vehicles. The emission standards, promulgated via the Tailpipe Rule, make GHGs subject to regulation under PSD and Title V, according to the Triggering Rule. To avoid administrative paralysis, economic disruption, and political backlash, the Tailoring Rule exempts all but the largest GHG emitters from PSD and Title permitting requirements over the next six years, raising from 100/250 tons per year to 75,000/100,000 tons per year the cutoff for regulation as a “major” emitting facility.

This custer of regulations is a classic case of bureaucratic self-dealing. As discussed elsewhere, EPA has positioned itself to determine the stringency of fuel economy standards for the auto industry, set climate policy for the nation, and even amend provisions of the Clean Air act—powers Congress never delegated to the agency. The Endangerment Rule is both trigger and precedent for sweeping policy changes Congress never approved. America could end up with a pile of greenhouse gas regulations more costly than any climate bill or treaty the Senate has declined to pass or ratify, yet without the people’s representatives ever voting on it. Overturning EPA’s GHG rules is a constitutional imperative.

The Arguments

The motion to stay advances new arguments — or improved versions of familiar arguments — for overturning each of the four EPA rules. The following sections summarize and excerpt some of the motion’s key insights.

EPA Outsourced Its Endangerment Judgment

Section 202 of the Clean Air Act requires the Administrator to determine the dangerousness of air pollution from motor vehicles based on her “judgment.” Instead, the motion points out, quoting EPA’s Endangerment Rule:

“the Administrator … rel[ied] on the major assessments of USGCRP, IPCC and NRC as the primary scientific and technical basis of her endangerment decision.” 74 Fed. Reg. at 66,510.14
EPA specifically declined to undertake “a new and independent assessment,” id. at 66,511, preferring to “plac[e] primary and significant weight on these assessment reports in making her decision on endangerment.” Id.

Which means:

. . . the only “judgment” EPA really made is that IPCC can be trusted to have made the endangerment assessment required by the Act. But the Act does not authorize entities other than EPA to make that assessment. See, e.g., U.S. Telecom Ass’n v. FCC, 359 F.3d 554, 565 (D.C. Cir. 2004) (“[F]ederal agency officials … may not subdelegate to outside entities—private or sovereign—absent affirmative evidence of authority to do so.”).

In effect, EPA asks the Court and the American people to trust that the IPCC did its job objectively, adhering to U.S. Government standards of scientific integrity. “But neither this Court nor the interested public can determine whether IPCC in fact did so, because the innumerable choices made by its many authors are not in the record.” The Climategate emails reveal instances of behavior inconsistent with U.S. information quality standards, such as Climatic Research Unit Director Phil Jones vowing to keep peer-reviewed research contrary to his views out of the next IPCC report “even if we have to redefine what the peer reviewed literature is.”

Bottom line: The Endangerment Rule embodies “a scientific judgment made by IPCC, and then adopted by EPA, not supported by any record that this Court can review. This is error.”

EPA Fails to Make the Judgment Required by Sec. 202

“Endangerment,” the motion observes, “is not a scientific term with defined endpoints. It is not an objective measure, like the boiling point of water, but a value judgment, like ‘bad.’ And so before EPA finds ‘endangerment,’ it first must define it.” In other words, EPA must explain its judgment in terms of climate-related metrics like temperature, precipitation, or wind speed, such that the public can understand which changes in climatic variables constitute endangerment, and which do not. “EPA has failed to do so.”

To clarify this point, the motion compares EPA’s  endangerment finding for motor vehicle GHG emissions with the agency’s 1973 endangerment finding for vehicular lead emissions. In the earlier rule, EPA provided quantitative information relating lead emissions to atmospheric concentrations, the latter to blood lead levels, and blood levels to brain function. In addition, EPA analyzed how regulation of lead in gasoline would reduce atmospheric concentrations, reduce lead levels in blood, and, thus, improve public health. Thus, “By the end of the rulemaking, EPA had fully explained all of the choices it made along the path of converting available scientific knowledge about lead toxicology and exposure into a policy-based finding of endangerment from automotive lead emissions sufficient to justify regulation, and allow—and survive—judicial review.”

In contrast, EPA “jumps from the tautology that ‘greenhouse gases cause a greenhouse effect’ to ‘greenhouse gases endanger public health and welfare’ sufficient to warrant exactly the level of GHG reductions that happen to result from NHTSA’s imposition of the CAFE standards required by the Energy Policy and Conservation Act.” The motion continues:

It is as though EPA, in Ethyl [Corp. v. EPA, 541 F. 2d1, 1976], were defending a rule to ban leaded gasoline because lead is a poison at some unknown dose; cars burning leaded gasoline can emit lead, which has some unknown effect on atmospheric lead concentrations; and banning leaded gasoline would yield some unknown but trivial reduction in atmospheric lead levels, possibly mitigating by some unknown (but at best trivial) degree the unknown adverse effects that may result from atmospheric lead, although it is very, very possible that the ban would accomplish absolutely nothing at all.

“If anything,” the motion comments, “EPA should face a far greater burden to explain its policy choices here than it did in Ethyl. Lead is strictly a poison, whereas carbon dioxide is a natural component of clean air, ingested by all plants and exhaled by all animals. Life on Earth depends on the very ‘danger’ that EPA is trying to prevent.” Carbon dioxide is not only plant food, it also helps keep the Earth habitably warm.

In short, “An endangerment finding under Section 202(a) does not simply identify a health and welfare risk, as EPA contends; it also establishes the criteria that will inform whether the emission standards adopted to address that risk are rational. . . . EPA here failed to do so, first by rubber-stamping the IPCC’s findings instead of making its own assessment of the evidence, and then by disavowing any obligation to explain the various policy choices it made to reach its ultimate judgment and regulatory response.”

EPA’s Assessment of the Scientific Record Is Logically Flawed

Quoting (or parroting) the IPCC, EPA argues that it is “extremely unlikely” (less than a 5% probability) that the warmth of recent decades can be explained without “external forcing” by greenhouse gas emissions. But this conclusion is inconsistent with other IPCC statements. The IPCC acknowledges three potential drivers of climate change: (1) changes in incoming solar radiation (e.g. due to changes in the Earth’s orbit or the Sun); (2) changes in reflected solar radiation (e.g. due to changes in low-level cloud cover); and (3) changes in outgoing longwave radiation (e.g. due to changes in greenhouse gas concentrations). According to the IPCC, scientific understanding of the Sun’s role in climate change is “low” and there is “significant uncertainty” with regard to cloud behavior and reflectivity. If there is significant uncertainty about two of the three main drivers, it is impossible for EPA — or the IPCC — to be 95% certain which is in the driver’s seat. In the motion’s words:

EPA cannot, and does not, explain how its 95% certainty is justified on the record. There cannot simultaneously be both “significant uncertainty” about primary climate drivers and 95% certainty that anthropogenic GHGs are causing any observed warming, yet EPA concludes there is. This fails even minimal standards of rationality.

EPA’s Administrative Record Fails to Establish Any Non-Trivial Benefits from the Tailpipe Rule

Citing Ethyl Corp. (541 F.2d at 31 n. 62), the motion argues that an administrative agency’s regulatory actions should “fruitfully” attack the problem being addressed. Yet, by EPA’s own admission, the Tailpipe Rule would produce imperceptible benefits, reducing projected global warming by 0.006-0.015°C and projected sea-level rise by 0.06-0.14 cm in 2100.

EPA’s GHG Tailpipe Limits Accomplish No Public Benefit (If Any) that NHTSA’s CAFE Standards Do Not Already Accomplish

About 95% of all GHGs emitted by motor vehicles is carbon dioxide (CO2) from fossil fuel combustion. As EPA’s Tailpipe Rule acknowledges (p. 25327), there is a “single pool of technologies . . .  that reduce fuel consumption and thereby reduce CO2 emissions as well.” Unsurprisingly, the motion argues, “The [new] CAFE standards and EPA’s Tailpipe Rule are virtually identical, with irrelevant differences in how the two standards address air conditioning.”

The case law is not favorable to agencies duplicating the regulations of other agencies. Alas, the Tailpipe Rule is not merely redundant, it also has “profound and pernicious effects” on the economy, if, as EPA contends, it subjects  millions of small stationary sources to Clean Air Act permitting requirements. In sum:

There is no rational basis for EPA to promulgate mobile source rules that do nothing more than reiterate other, independently effective legal requirements, and that offer no added environmental benefit but impose far-reaching and unintended costs on a source population (stationary sources) not even considered in the Endangerment Finding assessment.

The Tailoring Rule Is an Illegal Solution to a Legal Problem of EPA’s Own Creation

This is the most original part of the motion’s argument. To obtain a PSD permit to build or modify a “major” stationary source, the applicant must demonstrate the facility’s compliance with “best available control technology” (BACT) standards. EPA reads Section 165(a)(4) of the Clean Air Act as requiring BACT compliance and PSD permitting for major sources of almost any regulated air pollutant.** Since the Tailpipe Rule makes GHGs regulated air pollutants, major stationary sources of GHGs are subject to PSD and BACT, EPA reasons.

To reach this conclusion, however, EPA had to ignore statutory context. Sec. 165(a)(4) states:

No major emitting facility on which construction is commenced after August 7, 1977, may be constructed in any area to which this part applies unless . . . — the proposed facility is subject to the best available control technology for each pollutant subject to regulation under this chapter emitted from, or which results from, such facility [emphasis added].

In the foregoing, “this chapter” means the Clean Air Act. EPA reads the phrase “each pollutant subject to regulation under this chapter” apart from the qualifying and limiting phrase, ”in any area to which this part applies.” The “part” in question is Part C (Prevention of Significant Deterioration of Air Quality), and the “area” to which it applies is an attainment area. Part C is clearly distinguished from Part D, which addresses permitting requirements in non-attainment areas.

The distinction between attainment and non-attainment areas presupposes, and has no meaning apart from, the adoption of national ambient air quality standards (NAAQS) for the pollutant of concern. Properly construed, Sec. 165(a)(4) creates BACT and PSD obligations only in attainment areas based on a prior NAAQS rulemaking. Since there are no NAAQS for GHGs, there are no GHG attainment areas, hence no areas where Part C BACT and PSD requirements apply to GHG emitting facilities.

Since the Tailpipe Rule does not trigger BACT and PSD for stationary sources, there is also no need for EPA to play lawmaker and “tailor” — that is, amend– the PSD applicability thresholds. Similarly, because “Title V is intended solely to codify otherwise applicable requirements in permits issued to stationary sources,” and stationary sources have no new obligations as a consequence of EPA’s decision to regulate mobile source GHGs, there is no necessity to amend the Title V applicability threshold.

The motion sensibly concludes:

Having applied the Act to a “pollutant” under programs never intended for that “pollutant,” EPA is confronted with the need to undo the “absurd” results that follow by outright defiance of crystal-clear provisions of the statute, those setting forth the applicability thresholds. The far better—and only legal—choice instead is to avoid manufacturing overbreadth in the first place.

(If this argument is correct, then EPA bears a greater responsibility for Massachusetts v. EPA’s “legacy of absurd results” than I previously supposed.)

The Triggering and Tailoring Rules Treat the States as Vassals, Not As the Equal Sovereigns Contemplated by the Clean Air Act

EPA assumes it can simply command States to incorporate PSD permitting for GHGs in their State Implementation Plans (SIPs), or face imposition of an EPA-crafted Federal Implementation Plan (FIP). Not so, the motion argues:

Section 110(a)(2)(C) requires each State’s permit program to mandate permits only for “modification and construction of any stationary source within the areas covered by the plan as necessary to assure that national ambient air quality standards are achieved, including a permit program as required in parts C and D….” 42 U.S.C. § 7410(a)(2)(C). EPA has no basis, then, to disapprove a State’s permit program for failing to govern emissions of a pollutant for which there is no NAAQS.

EPA assumes that the Tailpipe Rule and Tailoring Rules will or at least should automatically revise State permitting programs and the SIPs governing them.  In so doing, EPA erroneously views the States as vassals, because “no sovereign can delegate to another the ability to make its laws. The State must by some affirmative act ratify any changes in pollutants and applicability thresholds incorporated from federal laws before they become effective.”

EPA’s rush to incorporate GHGs into State permitting programs also runs afoul of procedural requirements. Section110 of the Clean Air Act “allows at least 18 months after proper adoption of new SIP expectations before requiring their implementation by the States.” In addition, Section 166 allows States 21 months to submit a plan revision following an EPA rulemaking calling for the addition of new pollutants in the PSD program. “EPA, of course, has undertaken no such rulemaking, nor allowed any time for each State to respond.” Indeed, one of the rules EPA recently proposed to bypass the normal SIP revision process would “give States perhaps three weeks in December to respond to a call for revisions to their SIPs, or face a construction ban on January 2, 2011.”

A Stay Would Allow for Rational Policy Development

The House passed a cap-and-trade bill in June 2009, but in 2010 cap-and-trade died in the Senate. Senators mounted an unsuccessful effort to overturn EPA’s Endangerment Rule, but all 41 Republicans and six Democrats voted for the resolution of disapproval. “The 111th Congress evidently will adjourn unable to either ratify the current state of affairs or change it, but the 112th may be rather more willing to announce an opinion on behalf of the electorate. A stay would allow for the possibility that Congress finally will state its intentions to regulate GHGs under the Clean Air Act, or not, so that this Court will not have to speak for it.” ‘Nuff said.

** The Clean Air Act prescribes separate and tougher permitting requirements for major sources of toxic air pollutants and criteria air pollutants in areas failing to meet national ambient air quality standards.

Will Grading Cars Dispell or Enhance “MPG Illusion”?

by Marlo Lewis on September 2, 2010 · 2 comments

in Global Warming, Mobility

As discussed in my recent post “Obama’s EPA: School Marms R Us,” EPA and the National Highway Traffic Safety Administration (NTSHA) are proposing to revise the mandatory fuel economy label or “sticker” affixed to new cars to include letter grades based on the car’s fuel economy and carbon dioxide (CO2) emissions. Electric vehicles and plug-in hybrids would get an A+; the biggest, heaviest, gas guzzling SUVs would get a D.

To view the current sticker, click here. To see what the tut-tutting scolds at EPA and NHTSA want to replace it with, click here.

 Among other rationales for the new sticker design, the agencies claim that adding letter grades will help consumers make smarter purchases by combating something called the “MPG Illusion.”

The MPG Illusion refers to the common misperception that fuel savings from mpg increases are linear. People often assume that each additional 1 mile per gallon increase in a vehicle’s fuel economy reduces fuel consumption and gasoline expenditures by the same amount. Hence, some may conclude, if they can’t afford (or simply don’t want) a Toyota Prius, Chevy Volt, or some other high-mpg vehicle, there’s no point in buying a car with only modestly better fuel economy than their current vehicle. In reality, fuel consumption avoided and dollars saved decrease as mpg increases. Which is to say, the biggest fuel savings come from modest fuel-economy improvements in the lowest mpg vehicles. Some hypothetical (indeed fanciful) examples will make this crystal clear.

Suppose that your current car gets only 1 mile per gallon, you drive 100 miles per week, and gasoline costs $3.00 per gallon. This means you consume 100 gallons and spend $300.00 per week. If you replace that car with a 2 mpg vehicle, you’ll consume 50 gallons and save $150.00 per week. At the very bottom end of the scale, even a 1 mpg increase in fuel economy yields big savings.

Suppose now that your current car gets 99 mpg, you drive 100 miles per week, and gas costs $3.00. This means you consume 1.01 gallons and spend $3.03 per week. If you replace that car with a 100 mpg vehicle, you’ll consume 1 gallon and save 3 cents per week. At the very top of the fuel economy scale, the fuel and cost savings from an extra 1 mpg are negligible.

Turning to more realistic examples, EPA and NTSHA calculate (p. 28) that replacing a 10 mpg vehicle with a 15 mgp vehicle saves 33 gallons of gas for every 1000 miles driven whereas replacing a 30 mpg vehicle with a 35 mpg vehicle saves only an additional 5 gallons of gas for every 1000 miles driven. The same increase in fuel economy — in this case, an extra 5 mpg – saves more than six times as much fuel if the vehicle replaced gets 10 mpg rather than 30 mpg.

Professors Rick Larrick and Jack Soll of Princeton University put the MPG Illusion on the map when they published an article about it in Science magazine. They clearly explain the basic arithmetic in this Youtube video. Their illustrative case assumes a motorist who drives 100 miles per week. If the motorist has a 10 mpg vehicle and switches to a 20 mpg vehicle, he’ll cut his weekly fuel consumption from 10 gallons to 5 gallons — a savings of 5 gallons. If the motorist has a 25 mpg vehicle and switches to a 50 mpg  vehicle, he’ll cut his weekly fuel consumption from 4 gallons to 2 gallons — a savings of only 2 gallons.

“The key insight,” says Larrick, “is that improving inefficient cars, that have low mpgs, by even low mpg increases, saves a lot of gas.” Soll elaborates: “If you’re comparing two vehicles, one that gets 12 miles per gallon and the other that gets 15 miles per gallon, if you drive 10,000 miles in a year, you’ve saved about 170 gallons of gas [in the 15 mpg vehicle], and that comes out to be about $700.00 at $4.00 a gallon. So this [savings] is a significant amount even though the jump from 12 to 15 [mpg] may look pretty small.”

To counter the MPG Illusion, Larrick and Soll advise policymakers to express fuel economy in terms of the amount of fuel consumed per unit of distance traveled. Expressing fuel economy in the conventional way, as miles per gallon, leads people to “undervalue small improvements on inefficient vehicles” and “underestimate the value of removing the most fuel inefficient vehicles,” the researchers argue in Science magazine.

This, of course, is music to the ears of the anti-SUV crowd. Greenies would love to believe that the market for SUVs is sustained by an “illusion.” Because if that is so, then EPA and NHTSA can depress SUV sales just by making simple changes in how fuel-economy information is presented — just by redesigning the sticker! 

Years of SUV-bashing, fuel-economy prosyletizing, climate-change scaremongering, and high gasoline prices have failed to kill SUV sales. Could that have something to do with the attributes of the vehicles — their size, safety, and utility? I mean, there are objective differences between SUVs and cars greenies insist are “smart.” Just have a look! Nothing illusory about that.

If the MPG Illusion has anything to do with SUV sales, then you gotta ask: Who’s responsible for foisting the illusion on the public? Answer: the very people who’ve tried to brow beat us into believing that the only vehicle attribute worth considering is its mpg — the preachers and proselytizers of fuel economy! There’s no escaping the law of unintended consequences.

EPA and NHTSA  propose to combat the MPG Illusion in two ways. First, the sticker will estimate how many gallons of fuel the car will consume per 100 miles (as per Larrick and Soll’s advice). Second, the sticker will carry a letter grade. Presumably (the agencies don’t spell it out), EPA and NHTSA expect that bad grades will stigmatize gas guzzlers and discourage people from buying them.

Although the first option may counteract the MPG Illusion, the second will enhance it. As Larrick and Soll show, there is only a small difference in fuel savings between a 25 mpg car and a 50 mpg car. However, in the proposed EPA/NHTSA ratings (p. 37), the 25 mpg car gets a B and the 50 mpg car gets an A-. As anyone knows who has ever applied to college, an A- GPA is way better than a B GPA. The grading system implies that the biggest fuel savings are achieved at the top end of the scale.

On the other hand, a 14 mpg vehicle gets a C- whereas a 17 mpg vehicle gets a C. That 3 mpg increment is a big deal in fuel savings, according to Larrick and Soll. Yet how many car buyers will be impressed because a particular vehicle is rated C rather than C-? Except in jest, I’ve never met anyone who boasted of getting solid Cs in high school or college.

In short, the proposed EPA/NHTSA grading system perpetuates the MPG Illusion, which, unfortunately for fuel-economy zealots, cuts both ways. The illusion of linearity not only under-values savings from fuel-economy improvements in low-mpg vehicles, it also over-values savings from fuel-economy improvements in high-mpg vehicles.

EPA and NHTSA, apparently, want to manipulate the MPG Illusion rather than actually dispell it. They don’t like the illusion when (as they believe) it promotes SUV sales, but they like it when (as they hope) it promotes hybrid, plug-in hybrid, and electric vehicle sales. But the attempted manipulation fails, because the grading system, like the MPG Illusion, both over-values high-end mpg improvements and under-values low-end mpg improvements.

Grading cars actually means grading the people who buy them. People who buy cars with super-low or zero emissions are A or A+ people. Those who buy gas guzzlers wear dunce caps. The South Park spoof on the “Toyonda Pius,” Smug Alert, all-too-accurately depicts the greener-than-thou pretension of EPA and NHTSA’s proposed grading system.

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