True Leadership Coming to the EPA

My colleagues and I at NRDC were pleased at President-elect Obama's recent announcement that Lisa Jackson will head the Environmental Protection Agency. Lisa has been a strong, honest and knowledgeable voice for the environment as Commissioner of the New Jersey Department of Environmental Protection. Her vigorous advocacy for the Regional Greenhouse Gas Initiative (RGGI) showed true leadership. It is thus exciting news that the EPA will have her at the helm.

Jackson will have a tough job reversing many years of rollbacks and making up for lost time. In this blog post and the following two, I offer a few thoughts on some larger scale themes that might help a re-invigorated EPA. Others should also think hard and offer helpful suggestions as the task will require the support of all of us. (These ideas are taken from recent presentations I made at New York University Law School and Pace Law School.)

Right from the beginning, EPA needs to bring back the culture of enforcement, of making sure the laws on paper make a difference in the real world. Real enforcement has three components.

First we must be able to bring the cases. For years, access to the courts has been eroded by an ever-more constrained view of what is known as "standing," the shorthand term for who is entitled under law to bring cases to the courts. We must reexamine and find a way to restructure our understanding of public interest standing, so issues of broad concern, like many environmental matters, can be more easily heard by the courts. EPA should be sure to acknowledge the broad benefits of its actions so that such benefits can form the basis of their own and citizen enforcement actions. Also, the Department of Justice should re-visit and revise its policy of when to raise standing challenges in cases brought by public interest plaintiffs. (DOJ has often revised its policy on this issue in the past.)

Second we must actually bring the cases. Right now, frankly, most violations are ignored. In part, there just are not enough enforcement resources. For example, the Clean Air Act New Source Review (NSR) program mandates that upgraded power plants, refineries, and factories install state-of-the art pollution controls. These controls would avoid over 20,000 premature deaths each year and reduce hundreds of thousands of hospital visits every year. (Those are the EPA's numbers, not mine.) But the NSR program for years had been ignored or underutilized by the federal and state governments. Indeed, non-enforcement was such the norm that when the government at the end of the Clinton administration began enforcing the NSR program against power plants, industry squealed, even persuading the media and the incoming President Bush to take seriously the notion that aggressive law enforcement is unfair. When non-enforcement becomes a right, we have a sad state of affairs.

Third, we must insist making polluters pay the full penalties the law provides. Right now penalties are almost always cheaper than cleanup so it's almost always cheaper to wait to until caught. When scofflaws do this, the good companies that actually comply with the law have to compete in the market against the violators who have lower costs. That's not fair to those who follow the law.

Take another NSR example. After a decade-long battle, NRDC, EPA, New York and several other states and environmental organizations agreed to settle a lawsuit over American Electric Power's violations of NSR requirements. In the settlement, AEP agreed to install almost $4.5 billion of pollution controls that should have been installed a decade ago, to pay $15 million dollars in civil penalties, and to pay $60 million dollars in environmental mitigation projects. That's $75 million and that sounds like a lot. However, in the same year, AEP's revenues exceeded $13 billion. That's nearly 200 times the penalties and projects. More important however, AEP's violations allowed it to delay the installation of $4.5 billion of controls for a decade. That delay was worth hundreds of millions of dollars to AEP. Indeed, the penalty of $15 million is less than the time-value of that $4.5 billion for four weeks. (I'm not criticizing the lawyers who reached this settlement; over the years I've also been involved in many cases with penalties less than what they in theory should be. I was involved in the early stages of this AEP case. We cannot make the change we need in one case, but only through articulated policies and consistent practices supported from the top.)

Imposing real penalties -- that even when discounted by the risk of actually getting caught -- would exceed the benefits of polluting and would create financial incentives for compliance. It would shift the advantage to those who comply, creating a real "market-based" approach in the process.

Tomorrow I'll post the second part of this series on the changes we need in environmental law to ensure that the EPA, as well as independent advocacy groups like NRDC, can seek the levels of protection that are truly needed.