Environment and Energy Insights from NCPA's E-Team

Category: Federal Government

Replace EPA Tyranny with a Democratic 50 State Council

A new study by Jay Lehr of the Heartland Institute explains a five year plan that replaces the Environmental Protection Agency (EPA) with a 50 state “Committee of the Whole” group of environmental agencies. The plan effectively replaces the EPA, a federal entity that has been known to over exert its power and abuse power.

Net reduction in federal environmental spending of $6.2 billion a year.
15,000 EPA employees to 300 “Committee of the Whole” staff of six representatives from each state.
$20 million to each state ($1 billion).
Continued research and development at a national level ($1 billion).

Are you in favor of the EPA, or this new plan?

Jul 16, 2014 | 2 comments | by Lloyd Bentsen

The Limited Attention Span of our Federal Government

If you will indulge me, I feel like waxing philosophic about the impact that the many redistributive economic policies being promoted by the Obama Administration will likely have on our nation’s environment and natural resource management. Consider the many ways our federal government is redistributing incomes to help the “poor” in American society:

Much higher minimum wages are being urged for hiring unskilled labor, despite CBO predictions that this law would cost a half million American jobs.
An expensive and inefficient health care system is being forced on Americans to ensure everyone has medical insurance coverage, even though the CBO estimates the program will prompt millions of workers to decrease their participation in the labor force.
The federal income tax rate structure that is so progressive, that even the IRS reports how nearly half the tax filers do not pay any federal income taxes (see page 22).

The list goes on, but I won’t test your patience here. The bottom line is that the federal government is trying its very best to increase the cost of hiring unskilled labor while making the returns to becoming a skilled laborer much slimmer.

Further, the Fed has undertaken the largest Open Market Operations program in history, just to keep market interest rates at abnormally low levels. This action boosts business investment in physical capital, which is often justified as an attempt to increase GDP and employment (in the short run at least). However, this action also makes buying physical capital cheaper while unskilled labor is becoming ever more expensive to hire.

Even Bill Gates can do the economic math. Businesses will use more capital and hire less labor to produce our nation’s goods and services. They will invest more on technological innovation and less on developing industry-specific human capital. Nobel Laureate Gary Becker (who, sadly, passed away just recently) recognized that about 80% of the income differentials observed between skilled and unskilled labor in our economy are related to the economic returns to technological innovations. In other words, investing in capital and technology favors the skilled worker, not the unskilled worker.

In the past, middle class workers largely rose from the ranks of low-paying but skills-enhancing starter jobs to acquire the meaningful, industry-specific skills and valuable work experience that landed them their current, middle-income job. As these starter jobs disappear and the middle class slowly dwindles in number over time, there will be increasing calls for ever more income redistribution to rectify the gap between rich and poor — all in the name promoting equity.

Which brings us back to the quality of our environment and managing our nation’s natural resources. How will Congress respond to calls for redirecting funding to preserve our national parks and forests when entitlement programs for the growing ranks of low-income people are competing for the same federal dollars? How will scientific and economic criticism of federal lands use policy compete for scarce media time when ever more Congressional hearings will be held to consider ways to help the plight of America’s disappearing middle class? How will stories of federal bureaucratic bungling of natural resource management, or stories about innovative, market-based proposals for efficient and equitable natural resource uses, be able to compete for media attention that is stretched thin with stories of capitalism’s “failure” to maintain the middle class?

It seems clear to me that we are mindlessly following the voice of the “wizard” who can be seen busily pulling all the bureaucratic strings and pushing all the media buttons behind the grand curtain of government. Do we not see that he is feverishly trying to fix problems that he does not even realize are the result of his very own machinations?

Sigh… Excuse me, but I think I need an adult beverage…

May 07, 2014 | 1 comment | by Michael Stroup

Government Subsides Help Distort Science

A $500,000 study released this past Sunday in the peer-reviewed journal, Nature Climate Change, detailed how corn-based biofuels release seven percent more greenhouse gases in the initial five-year time frame compared with conventional gasoline. The study which was paid for by the federal government found that regardless of how much corn residue is taken off the field, the process contributes to global warming.

But administration officials who have devoted more than a billion dollars of taxpayer funds as well as the biofuel industry disagree. DuPont claims that the ethanol it will produce will be 100 percent better than gasoline in terms of greenhouse gas emissions. The Environmental Protection Agency (EPA) says the study “does not provide useful information relevant to the life cycle greenhouse gas emissions from corn stover ethanol”.

But there are reasons to doubt DuPont and the EPA. DuPont is getting billions in subsidies to produce biofuels. Federal subsidies help its stock price; the company would be foolish if it did not defend biofuels. Meanwhile an Associated Press investigation last year found that the EPA’s analysis of corn-based ethanol failed to accurately predict the environmental consequences. California regulators earlier declared that corn ethanol would not reduce global warming and may in fact make it worse. Other federal studies have reached the same conclusion. David Tillman, a researcher at the University of Minnesota who has researched biofuels emissions from the farm to the tailpipe, says the recent study is the best he has seen on the issue.

This controversy highlights several problems. Despite claims to the contrary, politics seem to play a part at the EPA. The EPA could have simply released a statement that research in this area is still developing and it is sticking with its initial conclusion that biofuels improve the environment. By issuing such a strong rebuke, it seems the organization is not open to new information. Real scientists know new discoveries come along all the time. Scientists do not offer blanket statements, but politicians do.

Further, no matter how well intentioned, subsidies distort the market. Reducing carbon emissions is a good goal, but when government picks a winner everybody else loses. We do not know if there is a better solution that corn-based ethanol. We do not know if the EPA is investing in real science or attaching itself to its preferred winner. The EPA’s role should be to judge the best solution the private sector develops. When the EPA provides subsidies to one technology over another, taxpayer money and possibly scientific integrity are lost forever.

Apr 23, 2014 | Leave a Comment | by Baruch Feigenbaum

EPA Proposal Promotes Fossil Fuel Use over Renewable Wood Use for Heating Homes

The latest example of big brother schemes brewing in Washington this year is the proposal of the Environmental Protection Agency (EPA) to significantly restrict solid particulate emissions from wood burning stoves. The Census Bureau estimated that 2.4 million U.S. homes use wood as a primary source for heating their homes. The EPA is proposing that manufacturers be required to reduce solid particulate matter emissions by any wood burning stove from the current level of 7.5 grams per hour to 4.5 grams per hour by 2015, and further reductions to 1.3 grams per hour by 2019 (see Table 3).

Mar 03, 2014 | 7 comments | by Michael Stroup

USSC Hears Case on EPA Power

The Supreme Court heard oral arguments yesterday in a case that revolved around the EPA’s authority to regulate greenhouse gases under the Clean Air Act.

In 2010, the EPA regulated emissions from vehicles in its so-called “tailpipe rule.” The agency said that promulgating the tailpipe rule triggered authority within the Clean Air Act that stationary sources that also emit GHGs — such as factories and plants, but even stoves, fireplaces, and campfires— can be regulated.

The issue in the case is basically whether it is permissible for the EPA to regulate stationary sources based on this separate regulation of vehicles.

Notably, that part of the Clean Air Act that would, according to proponents, justify greenhouse gas regulation sets emission thresholds at such low levels that schools and small businesses would be covered by the rule. To remedy this, the EPA simply raised those emissions thresholds. Was that a reasonable move, or an illegal exercise of authority? Swing vote Justice Anthony Kennedy told the solicitor general, “I couldn’t find a single precedent that strongly supports your position,” and Justice Alito said that there existed no precedent for such unilateral revision in “the entire history of federal regulation.”

Those who heard the oral argument report that Kennedy appears once again to be the swing vote on the issue. The Washington Times has the story here, and SCOTUS Blog has even more details here and here.

The decision should be out later this Spring.

Feb 25, 2014 | 1 comment | by Ann Norman

EPA vs Texas

A fight against the Environmental Protection Agency (EPA) was won in Texas this past week as the EPA allowed Texas significantly more flexibility when dealing with state permits concerning pollution sources. Giving Texas more control over the environmental impacts that occur within the state. A hard fought win for Texas as they have been working for years to gain back the control that the EPA stripped away from them.

The compromise on Texas’s clean air plan can be used as an example for other states hoping to gain back some of their rights concerning environmental regulation. By allowing the states the ability to implement locally tailored plans and permits, plants will no longer fear being shut down due to overly strict federal regulation. Less regulation is for the better as Texas currently houses 832 drilling rigs, which accounts for 47% of all US oil rigs and 25% of the entire worlds!

This has boosted oil and gas severance tax revenue to an amazing $900 million dollars which has funded several projects. The projects would utilize the surplus to fund the State Water Plan which was create in 1997 but never received funding until now. The legislature in total created two funds that;

The State Water Implementation Fund (SWIFT) will contain $2.5 billion to fund projects in the State Water Plan.
The State Water Implementation Revenue Fund of Texas (SWIRFT) will contain $3.5 billion for road, port and rail infrastructure projects.

In a state that led national job growth in 2013, is a powerhouse in the energy industry, and increased environmental standards without EPA involvement; even less federal involvement can only be for the better.

Feb 05, 2014 | 4 comments | by David Weisser