Energy & Environment

The Pollution Puzzle

The federal government isn't solving it. States are giving it a shot.
by | August 2002

Among all the states, New Hampshire hasn't usually ranked as a trailblazer on protecting the environment. But in the past few years, Granite State officials and residents have grown alarmed that global warming could kill off its colorful maple forests and wreak havoc with coastal resorts. This spring, New Hampshire responded with a groundbreaking state law that could pave the way for cost-effective national controls on climate-changing greenhouse gases.

As far as New Hampshire is concerned, "ignoring global warming is not the answer," says Kenneth A. Colburn, the state air-quality director who helped draft the program. But since ignoring it is precisely what the federal government has done, New Hampshire decided to craft its own "multi-pollutant" emission controls for the state's three aging coal-fired electric generating stations.

Colburn, now director of the air-quality association for eight Northeastern states, expects the East Coast's big industrial states to follow suit and perhaps extend multi-pollutant regulations to other industrial sectors. That, in turn, will put pressure on Midwestern states, such as Ohio and Michigan, that currently balk at carbon dioxide controls they fear will cost their economies dearly. In time, Northeastern states are counting on a domino effect that will prod the federal government to fashion a comprehensive response to global warming.

On the other side of the country, the biggest state domino of all is tackling another primary source of greenhouse gases. In July, the California legislature passed a bill to limit carbon dioxide from automobile exhaust. If it survives an expected challenge in the courts, the measure would force dramatic changes in the cars Americans drive in the future. The Golden State, which one auto industry official recently called "the center of the environmental regulatory universe," already has the country's toughest restrictions on ozone, soot and other air pollutants.

That's because California wrote many of its environmental regulations before federal laws went into effect, and it has gone its own way ever since with minimal interference from EPA. Increasingly, other states have exercised the option to adopt California standards. But they also are no longer content to merely follow the leader. Even the smallest states have begun flexing their muscles on a variety of fronts because the federal government hasn't been agile enough to cope with emerging environmental threats of national proportions.

At the same time, state regulators are trying to adapt conventional regulatory strategies to deal more effectively with serious hazards right in their own backyards. In those efforts, however, they've run into a major obstacle--the federal government's own hidebound system for by-the-book environmental regulation that's still stuck in the 1970s.

During the 1990s, for instance, New Hampshire's environmental services commissioner, Robert W. Varney, grew all too aware that raw sewage was seeping down coastal streams to contaminate shellfish beds and toxic mercury was building up in New Hampshire's lakes and rivers. But because the federal government hadn't deemed those to be the country's most imminent environmental risks, neither could New Hampshire.

That's the way the nation's pollution-control system has always operated. The U.S. Environmental Protection Agency for years compelled state governments to concentrate on carrying out federal cleanup rules, rather than on investigating what's actually harming the local environment and coming up with sensible solutions. In New Hampshire, Varney finally persuaded EPA to let the state shift funds from federal program grants to clean up shellfish beds and implement a mercury- control strategy. The state hasn't exactly turned into environmental paradise, but at least it has gotten a start on correcting previously overlooked problems "that are very high priorities for New Hampshire," Varney says.

A year ago, Varney left state government and started commuting to Boston as EPA's New England regional administrator. He saw the new job as a chance to build on New Hampshire's record and help the Northeast make even more impressive strides toward more effective environmental protection. But when Varney is asked how much authority he's got to rework EPA's rigid regulatory rules so that New England can focus on its most pressing problems, he replies, more than a bit ruefully, "not enough."

Varney's not the type to give up on trying new approaches. But doubt is growing in many quarters about the ability of government at all levels to tackle the nation's remaining pollution challenges. Critical policy decisions at the federal level have been mired in political deadlock for the past decade. And even as states have begun using some new and nimbler tactics to address environmental threats, many regulators feel they have made only marginal progress and are getting discouraged. It's becoming clear that the whole system needs to be overhauled before more substantial progress can be made.

In a 2000 report, a National Academy of Public Administration panel concluded that the nation's present pollution-control system "will not solve the most pressing of the nation's outstanding environmental problems." Mary A. Gade, Illinois' former environmental protection director and a member of the NAPA panel, says, "It's not that the current system hasn't done good things, but now it's just limping along."

In addition to atmospheric pollution, the nation's unresolved environmental issues include the consequences of traffic congestion, suburban sprawl and contaminants that flow from farmlands, lawns and public parks to choke rivers, lakes and coastal bays. EPA's prescriptive top-down procedures may work fine to curb industrial emissions, but they're not adaptable enough to manage these widely dispersed--but cumulatively severe--environmental hazards.

The NAPA panel recommended that whoever took office as EPA administrator in 2001 break new ground with innovative campaigns to curb greenhouse gases, reduce urban smog and keep fertilizers from polluting waterways. If anything, though, national environmental policy has become even more bogged down in partisan strife. Last year, Bush pulled back from a campaign pledge to implement a "four-pollutant program" to simultaneously curtail utility discharges of smog-forming nitrogen oxide, sulfur dioxide, toxic mercury and carbon dioxide.

And his EPA administrator, former New Jersey Governor Christine Todd Whitman, has moved painfully slowly despite being handed the best chance in years to transform EPA's approach and turn state governments loose to deal with new kinds of challenges. So to the extent that they are able, governors, legislators and state regulators have begun taking matters into their own hands, crafting laws and regulations on threats from hog farms to global warming.

Oregon imposed CO2 limits on newly built power plants five years ago. Illinois, New York, and Connecticut have also begun fashioning multi- pollutant programs to cut NOx and SO2 below what federal rules require. This June, North Carolina Governor Mike Easley signed a law that requires the state's 14 coal-fired powerplants to cut smog- forming SO2 emissions 78 percent by 2009 and NOx emissions 74 percent by 2013. With federal action on nitrogen oxides stalled in legal maneuvering, "quite frankly, we felt we needed to do it ourselves," says Senator Stephen M. Metcalf, one of the North Carolina law's sponsors.

Through a variety of measures, state governments are forging ahead to inventory the greenhouse gases they create and design some ways to curb them. Minnesota and Montana provide incentives to plant trees; Nebraska is exploring farming methods to lock carbon into soil; North Carolina and Wisconsin are working on controlling methane from manure collecting in animal feedlots. During Whitman's tenure as governor, New Jersey incorporated greenhouse gases in industrial permits and negotiated an agreement with the Netherlands for trading CO2 emission cutbacks. New Jersey is on track to meet its 2005 goal of cutting greenhouse gases 3.5 percent below 1990 levels.

On the other hand, 16 state legislatures went on record opposing U.S. ratification of the Kyoto Treaty on climate change that the Clinton administration negotiated. The Michigan legislature prohibited state agencies from drafting greenhouse-gas-reduction plans, and West Virginia adopted a law barring the state from working with EPA on voluntary climate-change programs. Vice President Dick Cheney is widely assumed to have taken charge of how environmental policy influences energy production, and environmental groups have concluded that "clearly, Whitman's an absentee landlord," says Frank O'Donnell, a lobbyist for the Clean Air Trust.

When the White House picked Varney to take over EPA's office in Boston and several other experienced state regulators moved into EPA regional posts, it seemed to signal a changing of the old guard. And Whitman and her aides say they want the new regional administrators to work hand-in-hand with state pollution commissioners to implement innovative regulation. But so far Whitman hasn't followed through by instructing EPA's career staff to give states the benefit of the doubt when they come up with new ideas for meeting pollution goals. "That would take an incredible commitment to change the bureaucracy, and I think the administrator's talking more about it than she's committed to it," says Russell J. Harding, Michigan's environmental quality director.

In fact, not much has changed in the way that EPA operates since President Nixon created the agency to administer the federal environmental standards imposed in the 1970s. Congress enacted the Clean Air Act, the Clean Water Act and several follow-up laws because it was clear that state health authorities weren't protecting the public against raw sewage and industrial discharges into the nation's water and air. In most cases, the statutes direct EPA to issue permits that specify what equipment a facility must install to meet federal standards. EPA or state regulators conduct periodic inspections to make sure factory managers are keeping the controls operating, and government lawyers enforce those limits by levying fines for violations and sometimes pressing legal charges in court.

EPA's one-size-fits-all technology standards brought major sources of contamination under control. But uniform rules give businesses no incentive to develop cheaper controls that cut emissions more than the federal government requires. In addition, it's simply not practical for government regulators to issue permits and then inspect for millions of small, widely dispersed sources that cumulatively cause serious problems.

This statutory scheme has other troublesome consequences. Power to write and enforce standards remains concentrated in semi-independent air, water, drinking water and waste offices inside EPA headquarters. Parallel offices in EPA's 10 regions distribute federal grants to state agencies, then keep an eye on how closely they follow permitting and enforcement procedures.

Although it made sense administratively when separate federal pollution laws first went onto the books, EPA's media-by-media specialization inhibits its ability to respond holistically to today's bigger environmental picture. The stovepipe structure fragments decision-making authority and keeps headquarters, regional and state program staffs focused on following by-the-book procedures to enforce "end-of-pipe" standards for what regulated facilities discharge. EPA's organization "deals poorly with complex, multilayered environmental and economic problems," the NAPA panel's report found. "As constituted, the agency cannot possibly be the protector of the nation's environment, despite the expansive responsibility implied by its name."

States now have established full-fledged regulatory agencies that assumed most day-to-day responsibility for making sure national standards are met. State agencies write 90 percent of pollution permits, handle three-quarters of enforcement actions and cover nearly 75 percent of the cost of pollution regulation. But EPA hasn't adjusted to the states' increasing competence. Nearly half of EPA's 18,000 employees are still based in the regional offices. State agencies complain that EPA headquarters and the regional staffs meddle too often, second-guess too much and balk when states come up with new approaches they think will produce better results.

"EPA looks at an issue as a question of air or water or toxic waste, but states look at it as a question of what it does to community X or river valley Y," says University of Wisconsin political scientist Donald F. Kettl, a NAPA panel member. "The difference has been extremely difficult for EPA to address. It's one of the hardest problems we've got in government."

As part of the Clinton administration's reinventing government initiatives, EPA Administrator Carol M. Browner approved experimental programs that granted leeway for state agencies and some industries to try "cleaner, cheaper, smarter" compliance mechanisms if they pledged to achieve better--not lesser--pollution-control performance. EPA regional offices and the Environmental Council of the States, whose members are state pollution-control chiefs, also negotiated "performance partnership agreements" de-signed to give state agencies more flexibility to identify neglected problems and figure out ways to correct them.

In the 1990s, EPA's New England region demonstrated the potential for innovative thinking. John DeVillars, Varney's predecessor at the Boston regional office, broke up the region's separate air, water and waste offices and assigned nearly half the staff to new ecosystem protection and environmental stewardship units responsible for dealing with all forms of pollutants. The reorganization also set up state units within the EPA region to work directly with the six state environmental agencies.

The Massachusetts Department of Environmental Protection, meanwhile, persuaded EPA to accept a groundbreaking strategy that has brought emissions from 2,300 dry cleaners, printers and photo-processing shops under government supervision for the first time. Working with small business trade associations, the Massachusetts Environmental Results Program drafted workbooks that explain potential problems, including some in Korean aimed at the state's large number of Korean-owned dry cleaners. It holds owners personally responsible for auditing their discharges and certifying they're complying, and the DEP staff double- checks compliance by inspecting a percentage of the businesses. "We've had great success when we're able to show EPA that we can achieve equivalent or superior results with less process," says Lauren Liss, the current Massachusetts environmental protection commissioner.

Other states have begun taking advantage of self-regulating audits by private firms that are adopting environmental management systems to account for wasteful pollution discharges. New Jersey replaced separate air, water and waste permits with facility-wide permits for companies that demonstrate superior pollution-control results. Wisconsin and Oregon are working on "performance track" compacts with conscientious companies. The firms commit to seeking superior results, and state regulators stand back and let plant managers devise the most efficient ways they can get there.

It's taken so much effort to put new approaches in place, however, that some state officials have all but given up on. In retrospect, "we all thought we could innovate more than we have, that it would be an easier thing to do," says Robert E. Roberts, a former state environmental secretary and ECOS director who recently took over as EPA's Rocky Mountain regional administrator. Before launching successful experiments, state officials have to brave a gauntlet of EPA program officials and enforcement lawyers who resist procedural changes that they fear will weaken federal enforcement authority. Says Michigan's Russell Harding, "anything you do is going to be second- guessed, and the lawyers are never going to be happy."

As a result, Harding adds, "some innovations may be more cumbersome than the program we had before." Since 1995, 35 state pollution- control agencies have signed performance partnership agreements with EPA regions that state leaders hoped would clear the way for more experimentation. But Delaware canceled its agreement because EPA's staff fought so tenaciously to keep channeling funds through their own air, water and waste programs. "It was almost like the United Nations Security Council--each individual program could veto something," says Robert Zimmerman, Delaware's deputy natural resources director. Instead of combining regulatory efforts in sensible ways, the partnership "almost became an add-on to what we were already doing."

Whitman's staff wants to reinvigorate the partnership system and is working to integrate state agencies into EPA's nationwide planning process. The agency also is drawing on state expertise to draft a nationwide state of the environment report to set benchmarks to judge future progress. And Whitman is reconsidering the Clinton administration rule to tighten EPA supervision of new state programs for controlling polluted runoff to rivers and lakes.

Nevertheless, more than a few state officials say EPA's entrenched staff goes out of its way to sabotage state initiatives they think stray too far from tried-and-true procedures. Of course, rank-and-file EPA regulators think they're simply enforcing federal pollution control laws the way Congress wants them to. Harding, Michigan's DEQ director, thinks it would take congressional legislation endorsing regulatory innovation to change the agency's antagonism to state inventiveness. Gade, a former EPA attorney, suggests going further-- abolishing the regional offices and using resources the agency now spends overseeing the states to perfect scientific research and data- processing technology to accurately target priority environmental problems.

"The states in the past 10 years have come into their own and are capable of doing virtually everything," Gade says. "It's time to say, 'What new tools do we have available?' You could see a federal-state partnership that's equipped to deal with the challenges of this century in a collaborative, creative and flexible way that really could accomplish environmental goals."


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