| August 24, 2012

The Oklahoman: Rejection of EPA cross-state pollution rule a victory for federalism

A recent D.C. appeals court ruling rebuking the Environmental Protection Agency for overstepping its authority by mandating emissions restrictions to reduce cross-state air pollution is a victory for federalism, The Oklahoman editorial board writes today.

We applaud the decision because it’s a victory for the American tradition of letting states decide some things for themselves. This was a theme hit on repeatedly at Tuesday’s National Policy Summit on Energy & Federalism sponsored by the Oklahoma Council of Public Affairs.

States such as Oklahoma, Texas and North Dakota are thriving because they’re leveraging their natural resources. They’ve unleashed the energy and enthusiasm of entrepreneurs and executives such as the ones who run Devon Energy Corp., where the summit was held.

State-based regulation, whether it’s over emissions controls, hydraulic fracturing or anything else with environmental concerns, is superior to the one-size-fits-all approach of the Obama administration’s EPA. States such as New York aren’t leveraging natural resources because of an aversion to fracking, among other things, and that is their right. The people of those states aren’t going off the grid, however. They’re just consuming gasoline, natural gas and electricity made from coal in other states.

Competitive federalism is a system in which states get to compete in the energy marketplace based on decisions made in state capitols rather than in the nation’s capital. The federal appellate court said the EPA broke the law with its cross-state pollution rules.

In other words, it's not necessarily the efficacy of the rule in question that matters most; it's whether the EPA has the authority to create and enforce the rule in the first place.

The so-called "Transport Rule" derives from the "good neighbor" provisions of The Clean Air Act and requires upwind states (read "Texas, Oklahoma and other states in the South and Midwest") to reduce emissions that pollute the air in downwind states (read "Mid-Atlantic and New England states"). Supporters of the rule contend it could prevent 34,000 premature deaths and save $280 billion a year in health care costs. Opponents argue that it would cost thousands of jobs and jeopardize the reliability of the nation's electricity supply. Indeed, to judge by the most extreme allegations on both sides, whether we forestall the rule or implement it, U.S. citizens face bleak results: We'll either breathe toxic gases and die prematurely or live in the dark and be jobless.

The question then becomes: Who do we want to decide the matter for us -- an agency of distant, unelected bureaucrats or state regulators who live a little closer to home? Technically, we've already answered that question in the Clean Air Act itself. The Act, passed by elected representatives, authorizes the EPA to set air quality standards, but allows states to devise a plan to meet them. The EPA has disregarded that portion of the law and attempted to force a federal implementation plan on the states -- and that's why the D.C. appeals court struck down the Transport Rule.

The EPA has no reason not to trust state regulators with their responsibilities: After all, as Oklahoma Corporation Commissioner Patrice Douglas excellently points out, state regulators live in the states they regulate and have a greater incentive to ensure pristine natural resources. "We live here; we drink the water,” Douglas says. Furthermore, state regulators in Oklahoma are bound by law to balance both the natural resources and the economic resources of the state.

To be sure, total devolution of environmental regulatory authority to the states might render industry compliance with regulations more complicated. It's difficult enough to sort out the details of the federal government's regulatory scheme, let alone the details of 50 state regulatory schemes. Different regulations in different states also fragment fuel markets, which has its own set of negative consequences.

In other words, a federalist approach to energy issues wouldn't be perfect from either an environmental or industry perspective -- but it would be more conducive to the preservation of individual liberty in a couple of ways. Not only is it easier to hold state legislators and state regulators to account than it is to hold federal legislators and regulators accountable, but it's also easier to move from a state that quashes individual freedom than it is to move from the country. At some point, we have to ask ourselves: Is cleaner air more important than liberty? Are lower gas prices?

That's why, as I wrote earlier this week, now is the time to have this conversation -- before federal agencies like the EPA so thoroughly consolidate power through the proliferation of regulation that regulatory rollback is impracticable if not impossible.

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