Predicting Our Environmental Future

The 1970s were the glory days for disco and environmental legislation. More than 70% of all of the current federal statutes were passed during that decade. The passage of new laws has slowed down since then, but if a business is to be successful, it needs to at least attempt to predict the environmental future. I thought it might be interesting to speculate on what the politicians are likely to do over the next four years.

Let me start by setting out the Democratic line. Democrats believe that everyone has an obligation to be a good steward of the land and pass it on to our children in at least as good a shape as it was received; that no environmental risk is acceptable; that expense should not be a consideration; that we have done so much damage to the environment that it is now a question of survival; and that anyone who does not believe that we should do whatever it takes to protect the environment is un-American. As in all things political, there are varying degrees of conviction on these points, but you get the idea. It’s a belief that the environment must be protected at all costs (literally). It is a compelling argument.

Now, the Republicans. Republicans believe that the environment must be protected but that it is one, of many, issues to be addressed; that funds are limited and that tough choices must be made to address health, education and defense considerations; that it isn’t unreasonable to require some sort of scientific support before throwing billions of dollars at a perceived problem; and that those who refuse to consider the whole picture are un-American. It is a firm belief that given limited dollars, it is appropriate and necessary to weigh the costs against the benefits when considering environmental regulation. It, too, is a compelling argument.

What does this mean to businesses? It means that when you have a Republican Congress or legislature, environmental regulation is going to have a lot of phrases like “risk-based-corrective-action,” “cost/benefit analysis,” and “scientific validation.” There will be relatively few criminal actions and new environmental regulation will be slow. With a Democratic Congress or legislature, you’ll hear about “no acceptable risk,” “compliance at any cost,” and “stewards of the land.” Watch for increased criminal prosecution and a lot more newspaper headlines about pending legislation.
 
Both political parties have well staked out positions.  For the past eight years, however, environmental regulations and enforcement, when discussed at all, has been about “balancing” and “risk analysis.” For the foreseeable future the rhetoric, and there will be a lot of it, is going to be about “protecting our children’s health” and “strong environmental leadership.” I don’t think business is really prepared for the change that’s coming on both the federal and state levels with regard to environmental enforcement. Like it or not, it’s probably going to look a lot like the 70s (but with better music).

Putting the Fund Back In Superfund

Since 1996, Superfund has not really been a “fund.” From 1980 to 1996, the Superfund program levied taxes on petroleum and chemical companies and on corporate profits for its operational costs, but Congress failed to reauthorize it in 1995, and by 2003 the fund was fundless. It looks like that’s going to change.

President Obama’s 2010 budget calls for reinstatement of the tax to support the Fund to the tune of $17.2 billion from 2011 through 2019. Also, $600 million of the stimulus package is to go to the Superfund program.

The interesting question here is not whether or not the tax will pass, but how will the money get spent. During the sixteen years that Superfund was funded, less than half of the fund was used to do any cleaning of the environment. For example, in 1996, of the $1.4 billion spent by Superfund, only $614 million (44%) was actually used for cleanups. The remaining funds were used to oversee the cleanups and to administratively and legally chase “potentially responsible parties” (that wonderfully contradictory phrase that is at the heart of Superfund liability).

If we’re going to do this again, someone needs to ask the question of whether significantly more of the funds should be used to actually clean the environment rather than spending the money on chasing the parties who, after several years of administrative and legal appeals, may or may not have the money to pay for the cleanup.

It’s just a thought.

How Did It Get Started: Politics and Environmental Law

I was recently asked why it is that the federal government has had such a love affair with environmental regulation over the past 40 or 50 years.  I think I know the answer -- deception

When Cleveland's Cuyahoga River caught on fire in 1969, things started to happen.  Since that time, environmental awareness has gone from relative obscurity to being one of the top ten issues of the day. Certainly some of this change was caused by environmental interest groups like Sierra Club and Greenpeace, but if the environment had depended only on these types of groups, people would still be dumping used oil in the backyard. The real push for environmental reform came on the political front—the dozens of federal and state statutes and the thousands of pages of regulation that were created between 1970 and today.

But why weren’t the interest groups enough? Why did we end up with environmental regulation that rivals the bankruptcy and tax codes in complexity and sheer volume? Isn’t the environment above politics? Why doesn’t everyone simply demand and support a clean environment? It’s because people don't always tell the truth.

Over several decades you have seen the opinion polls consistently report that 70% to 80% of the people support a clean environment. Only love for mom and apple pie poll higher.  When you compare the poll results, however, with the sales of environmentally friendly products and the willingness to pay more in taxes or fees to accomplish that goal, you quickly determine that someone has been . . . uh . . . fibbing. The poll question that was actually being answered was: “If someone other than you is required to pay for it, would you give your wholehearted support to a clean environment?”

Still, if you look around today, there are dozens of environmental statutes in place.   That was a result of a few political leaders in the 1970s being convinced that a need for a cleaner environment existed but that the private sector could not accomplish it because of the huge costs involved.  In short, it was an issue that they viewed to be perfectly suited to federal, and at a later stage state, regulation.

My point is that a clean environment is extremely expensive and most people want others to pay for it. If this wasn’t the case, we wouldn’t need to be told how and when and in what form we need to do something as obvious as keeping the planet clean. It is the huge costs of compliance coupled with the unwillingness of individuals to pay those costs that has made, and will continue to make, environmental regulation and politics great bedfellows.