A Clean Air Fog

Jonathan S. Martel
Arnold & Porter
Washington, DC
Jonathan_Martel@aporter.com

Public debate about environmental policy often has very little to do with the truth. That's because no one wants to confront directly the conflict between health risks and monetary costs in determining how clean our environment should be.

Instead, when new environmental rules are proposed, opponents too often turn to hyperbole about "rollbacks." Public fears are stirred up as a political tool, while real public understanding is disserved. A case in point is the clean air fight that erupted this summer over the Environmental Protection Agency's announced intent to reform the regulations governing emissions from older power plants.

Finding the balance between costs and risks requires us to confront limits in our resources, determine what level of risk is acceptable, and challenge our own ideal that life and health are worth any price. This trade-off is what makes choices regarding air pollution so difficult. It's an honest debate that virtually everyone tries to avoid.

In the past, Congress has avoided the issue. The Clinton and Bush administrations and the Supreme Court all agreed in this respect in Whitman v. American Trucking Associations (2001): In the Clean Air Act, Congress intended that the EPA should establish national air quality standards based on health criteria alone, without considering costs.

But it is an illusion that the government really can promise the public that we will not trade health risk for money. The truth is that as serious health risks decline with stricter standards, the counterbalancing considerations of cost for ever-lower levels of pollution loom larger and larger.

What 'Routine' Is

With the fundamental issue of air quality goals (i.e., the ends) so clouded, it is not surprising that debates over how best to clean the air (i.e., the means) are equally deceptive, confusing the press and the public alike. The Washington Post reported on June 14 that the EPA is proposing "a major relaxation of clean air enforcement rules" known as New Source Review for coal-fired power plants and other industrial sources. But that misses the point of what's really being suggested.

The current New Source Review rules require that plant operators install costly state-of-the-art emissions controls when the plants are built or, for those already built when the rules were adopted, when the plants otherwise make a "non-routine" physical change that significantly increases emissions. The Clinton EPA began enforcement actions against a number of coal-fired power plants on the grounds that various projects the older plants had undertaken over the last 25 years were not "routine" and thus triggered the requirement to upgrade emissions controls. And the Bush EPA has continued those cases.

But for the future, the Bush administration is proposing to define more clearly and more broadly what routine is. The administration is also suggesting that Congress should ultimately scrap the New Source Review program for power plants in favor of a market-based emissions trading program, which the administration calls its Clear Skies Initiative.

The proposed EPA policy has led to an uproar from environmentalists and some members of Congress, who warn that the change in rules would give "outdated" power plants the promise of "eternal life." These groups, as well as a June 17 New York Times editorial, claim that, when Congress wrote the relevant Clean Air Act amendment in 1977, lawmakers' intent was merely to grandfather older plants until they needed major repairs, at which time they would have to update their emissions controls.

That rhetoric is inaccurate and defies common sense. In the current cases, the EPA's allegation has not simply been that utilities have been making costly non-routine repairs to aging plants. That alone is not sufficient to trigger the requirement to upgrade pollution controls.

The second and crucial prerequisite for the New Source Review standards to kick in is that the non-routine repairs must significantly increase emissions. The EPA is arguing that the power plants fixed parts that were breaking down before their repair such that the plant had to be taken offline. Thus, the EPA contends, the repairs allowed the plants to increase their operating time and their energy output. And that, not surprisingly, would also increase their emissions.

Haphazard Policy

This is where defining the EPA's proposed new policy as "a major relaxation" of the rules misses the reality for the rhetoric. The idea that New Source Review holds all new and repaired plants individually to the strictest of environmental standards might sound good. But critics overlook the undisputed fact that even a non-routine repair can be made without triggering New Source Review, so long as it is made before the component breaks and thus does not affect operations or emissions.

To use a car analogy, if you replace your tires before they start to wear thin, you won't affect how your car runs or how much pollutants it emits. The old power plant can be kept in service forever under the current law. Power plants can avoid emissions controls as long as they maintain their equipment before it breaks.

This haphazard policy may have represented the best science of its day, but that was almost 25 years ago. Today, New Source Review as the basis for determining how plants meet emissions standards is nonsensical. It is vastly more sensible to determine the overall level of acceptable emissions and, then, to require utilities collectively to keep emissions under those limits using an emissions trading system and the measurement and tracking technology already installed on these plants.

New Source Review dates from a time when we simply did not have the high-tech systems needed to administer this so-called cap-and-trade alternative. Until equipment was widely installed on power plants to measure and track exactly what emissions were occurring on a continuous basis (for purposes of meeting existing clean air regulations), it was difficult to administer a program for emissions trading. Now that this equipment has been installed, it is the New Source Review program, rather than power plants, that is outdated.

Market-based emissions trading is more flexible than New Source Review, it can deliver the same or greater benefits, and it can do this at lower cost. Congress has already adopted the cap-and-trade approach in 1990 for controlling the particular emissions that produce acid rain. In short, a cap-and-trade program like one being considered by the Bush administration should be applied to control and lower power plant emissions across the board.

The Acceptable Debate

So what is all the fuss about? It's not really about New Source Review at all. New Source Review is simply one means to achieve clean air, reflecting a 1970s philosophy that it made sense to impose the burden of upgrading emissions controls on existing plants when they were out of service for other non-routine work. No one can seriously contend, however, that New Source Review is the best means to control emissions for large power plants today, when the technology exists to permit a cap-and-trade program.

Rather, the real issue is the ends - how much to reduce emissions over what period of time, taking the costs of emissions controls into account. Fundamentally, some Americans simply don't trust the Bush administration to set as low a level of "acceptable emissions" as they would prefer. They think that ongoing lawsuits about past repairs will result in settlements or judges imposing more stringent levels of emissions than the administration is willing to set - or, at least, that rhetoric about New Source Review "relaxation" will create political leverage to press for more stringency in Congress. This is about how much pollution is too much pollution, and the balance between costs and health.

But as the politicians and even the Supreme Court agree, no one really wants to talk directly about how to strike that balance.

Jonathan S. Martel, a partner in D.C.'s Arnold & Porter, concentrates his practice on Clean Air Act matters, environmental litigation, and counseling. Previously, while serving in the EPA's Office of General Counsel, Martel was involved in the implementation of the Clean Air Act Amendments of 1990.

This article is reprinted with permission from the August 12, 2002, issue of Legal Times (www.legaltimes.biz). Copyright 2002 NLP IP Company. All rights reserved.