Thursday, July 11, 2013

The Residual Designation Authority Bombshell

Yesterday brought big news in the water quality world.  American Rivers, the Conservation Law Foundation, the Natural Resources Defense Council, and several other environmental groups filed “residual designation authority” petitions for stormwater discharges across EPA Regions 1 (New England), 3 (mid-Atlantic), and 9 (southwestern states and California).  That may sound like an obscure and technical act, but here’s why it’s actually a very big deal.

Storm drainFor years, urban stormwater runoff has been one of the United States’ greatest unsolved water quality challenges.  Urban runoff is second only to agricultural runoff as a source of water quality impairment, and on a per-acre basis, urban development is generally more damaging to water quality than agricultural use.  But EPA has struggled to regulate urban stormwater runoff.  For years, EPA barely regulated urban stormwater runoff at all.  The 1987 Clean Water Act amendments compelled EPA to act, but even today, many point sources of urban stormwater runoff escape coverage under the National Pollutant Discharge Elimination System.  The gaps are particularly salient for areas that are highly developed but lightly populated (shopping malls, for example).  These areas generate a lot of polluted runoff, but they generally aren’t industrial and therefore escape coverage under the industrial program.  They also often lack sufficient population to be included in the municipal permitting program (which covers census tracts based on their population density).  Those gaps—and the weak coverage of the many sources that are subject to permitting—have real costs.  Water quality impairment now is a pervasive feature of our urban and suburban landscapes.   

Several years ago, the Conservation Law Foundation (one of the organizations that filed yesterday’s petitions) discovered a potential legal remedy for this issue.  Buried in the depths of Clean Water Act section 402 is a provision requiring EPA (or a state with delegated permitting authority) to require permits for any stormwater discharge that EPA or the state administrator determines “contributes to a violation of a water quality standard or is a significant contributor of pollutants to waters of the United States.”  For years, no one had paid any attention to that provision; one industry lawyer later referred to it as “the sleeping giant.”  But CLF filed RDA petitions in Vermont, Massachusetts, and Maine.  Each petition led to major expansions—albeit over relatively small geographic areas—in the scope of Clean Water Act permitting coverage.

A few images illustrate the impact of the change.  The three images below show the Long Creek watershed in Maine. 

Long creek 1

This first image at the top shows the extent of permit coverage under EPA’s municipal program. As you can see, most of the watershed is not included, despite a high level of commercial development.

Long creek 2
This second image shows the extent of permitting coverage under the industrial program.  In combination, these two images show the geographic extent of permit coverage as of 2009.

Long creek 3

This third image shows the extent of Clean Water Act permitting coverage after EPA granted CLF’s petition (since the figure was created, the extent of permit coverage has expanded slightly).  For the Long Creek watershed, this was a transformative regulatory change.

And that’s what makes yesterday’s filing so important.  The environmental groups aren’t just asking for this regulatory change in a few small, test-case watersheds.  They’re asking for the change across huge swaths of the country.  In terms of the potential scale of impact, the closest recent analogy is the Decker v. Northwest Environmental Defense Center case, which seemed poised—until the Supreme Court granted cert and then reversed the Ninth Circuit—to expand Clean Water Act permitting requirements across much of the forestry sector.  I’d argue that these petitions call for an even more ambitious effort, and that they probably address an even larger water quality problem.

There’s much more that could be said about these petitions, but I’ll stop there for now.  Readers interested in learning more about these issues might be interested in the articles here and here, both of which discuss Long Creek and RDA in more depth.  The website of the Long Creek Restoration Project, which documents some of the innovative work that continues to take place in that watershed, is here.  And for an older post explaining why urban stormwater issues are more important and interesting than most environmental lawyers realize, see here.  And stay tuned.  This is an issue worth following.

-Dave Owen

 

July 11, 2013 | Permalink | Comments (0) | TrackBack (0)

Wednesday, July 10, 2013

Weighing Short Term Knowns with Long Term Unknowns in Environmental Policy - a Law and Economics Perspective

Grocery Bag Bans and Foodborne IllnessOver the next two weeks I will be participating in George Mason University School of Law's Law and Economics Center Economics Institute for Law Professors. Yesterday, Joshua Wright gave a fascinating presentation that included discussion of his recent paper "Grocery Bag Bans and Foodborne Illness." In the paper, Wright and his co-author presented empirical analysis of the health effects of the many, and increasing, jurisdictions that have instituted plastic bag bans or taxes. In short, when such a ban goes into place or when bags are taxed, people shift to substitutes. These substitutes largely take the form of re-usable cloth (or other) bags. The problem, however, is that people by and large do not wash their reusable bags. These bags become contaminated with a wide variety of nasty bacteria and other contaminants, leading to an increase in both illness and death. In fact, the data demonstrates that both emergency room visits and deaths linked to these contaminants increased by 25% after plastic bag bans or taxes were instituted. This translates into, for example, between 5 and 6 extra deaths a year in San Francisco County. The purported benefits that supporters of the plastic bag ban in San Francisco put forth and which Wright's paper cites are the prevention of over 100,000 marine animal deaths per year to plastic entanglement and reducing the consumption of over 12 million barrels of oil required to produce plastic bags used in the United States annually.

The overarching point of Wright's presentation is that often our policy choices are based on conventional wisdom ("convenient wisdom") and the unintended consequences of policies should be brought to light through empirical data and economic analysis. The argument is not unlike the "Freakonomics" argument that parents are more willing to allow their children go play in the homes of children who's parents own a pool than those who own a gun, even though the data demonstrates that their children are far more likely to drown than to die by firearm accident in those homes. I fully agree that more information is always better, and that policy-makers should take into account as many variables as possible when making policy decisions. 

There are a few things that bother me about relying too heavily on this approach, however. The concerns I have do not lead me to conclude that the approach should not be taken, but rather that this type of data should be passed on to policy-makers with the appropriate caveats that short term known harms may very well be outweighed by incalculable long term unknowns, and that those "known unknowns" should be detailed to the fullest extent possible.

First, I am concerned with how the benefits and harms may be presented in these types of studies: 100,000 marine animals or some number of barrels of oil versus human lives. This is not necessarily a problem of the researchers in these studies, as they may very well be merely passing along the purported harms avoided posited by the advocates of the policy (here, the supporters of the bag ban). And yet, when the results are pitched as human lives versus a limited number of other harms not directly related to immediate human life and death considerations, it is easy to see how policy-makers might choose the policy that would avoid immediate human deaths (i.e. a bag ban reversal).

Second, and relatedly, the problem is that future yearly human deaths associated with plastic bag production are largely unquantifiable. In other words, short term knowns are more easily quantifiable through this type of empirical analysis, whereas long term, aggregated harms (which may indeed result in far more average deaths per year than 5-6 in a particular jurisdiction) or avoided benefits do not lend themselves to the same type of empirical analysis. At the very least, any empirical data that is produced is based upon projections and models, not upon identifiable deaths that have already occurred. It is incredibly difficult if not impossible to calculate the aggregated contribution of plastic bag production on climate change and sea level rise, that may lead to increased death through heightened storm disaster events, expansion of disease vectors, or its contribution to increased sexual dysfunction or cancer incidence through phthalate or BPA-like chemicals that are taken up through the human body through contact with plastic bags or bioaccumulation from plastic bag pollution in the oceans. So when policy-makers have a choice between two policies, "Policy 1 (with data) vs. Policy 2 (with no or uncertain data)," there is a bias toward the policy based upon short term, quantifiable data.

These biases, of course, appear all the time in the face of uncertainty. It reminds me of the recent Louisiana Coastal Master Plan, which plans to invest $50 billion over the next few decades on projects to mitigate coastal land loss through sediment diversions, levee, dam, and other human-built construction, etc. A recent report notes that Louisiana has the highest rate of relative sea level rise in the world, because as sea levels are increasingly rising, the land in Louisiana is rapidly sinking due to the historical diversion of the Mississippi River. A full 85% of Louisianans support the investment. I am willing to bet that 85% of Louisianans would not identify themselves as ardent environmentalists (though I argue that environmentalism is not a partisan issue and we all should consider ourselves environmentalists) or as citizens who love tax expenditures on government programs. Yet the support is widespread. This is because the short term known (immediate engineering and other feats aimed at making us feel like we can forestall sea level rise) outweighs the long-term unknown (will those projects work and would it have been better to invest those funds into adapting to coastal land loss by moving out of areas likely to be lost). In fact, the science is far from certain that sediment diversions will actually undo much of the damage that has been done along the Mississippi River, meaning that we may not be able to rebuild land in order to forestall sea level rise impacts. There is a strong chance that some of these mitigation efforts will be throwing good money after bad, at least in some areas where political pressure is to "save our coast!" Yet, imagine you have two candidates running for office in Louisiana. Candidate A, knowing that 85% of the Louisiana populous wants to save the coast, says "I will support saving your coast, investing billions in coastal restoration through sediment diversions and human-built construction that will forestall sea level rise impacts." Candidate B says "there is likely not much we can do over the long term to save significant portions of the coast, considering the rate of sea level rise and the models of future climate change impacts and atmospheric carbon concentrations. Let's take that money and invest it in adapting to coastal land loss by moving you out of areas likely to be inundated." Who gets elected? My bet is on Candidate A, even though (and perhaps because of the fact that) Candidate A AND the people who voted for him/her will be dead and gone by the time it becomes clear whether the $50 billion investment failed or not.

Ultimately, I think that empirical data on short term effects is very important and should be taken into account by policy-makers - more information is never a bad thing. But, so much of economics is about using finely tuned formulas to project short-term effects, while the long-term unknowns are largely incapable of being assessed with the accuracy that economic analysis typically prefers (hence the pervasiveness of discount rates, often inappropriately calculated when assessing the availability of resources to future generations). Policy-makers need to take these analyses with a grain of salt, recognizing that much larger policy goals stretching over much longer time periods are at stake. Today's policies are not just aimed at current residents of San Francisco, but have effects on citizens the world over and in the centuries to come.

- Blake Hudson

July 10, 2013 | Permalink | Comments (0) | TrackBack (0)

Tuesday, July 9, 2013

NJ Supreme Court Decides Key "Just Compensation" Issue in Harvey Cedars v. Karan

Yesterday, the New Jersey Supreme Court issued its long-awaited decision in the important “just compensation” case of Borough of Harvey Cedars v. Karan, a case previously discussed on this blog here and here.  In a victory for governmental entities, the Court broadly construed the range of benefits resulting from a government project that must be considered to offset the compensation due to a landowner whose property is partially condemned to facilitate that project.

                                                                         *******
New Jersey statutory law states that where the government condemns part of a landowner’s property for a public project, the landowner is entitled to compensation not only for the property taken but also for any damages to the remaining property.  Here, the Borough of Harvey Cedars condemned an easement on a strip of Karan’s oceanfront property to enhance and maintain a larger sand dune than the one in existence.  Karan sought compensation for an alleged reduction in the value of the remainder in light of the new dune’s blockage of some of Karan’s ocean view.  A jury awarded Karan $375,000 in damages to the remainder, and an appellate panel upheld that award. 

The New Jersey Supreme Court reversed.  The unanimous decision overturns the appellate ruling that had upheld a trial court judge’s decision to exclude evidence of any benefits to Karan’s home resulting from the dune project when those benefits are akin to the benefits conferred on the public as a whole. 

The Court’s opinion is available here.  What the decision means moving forward is not entirely clear on my initial reading.

Practically, it would appear that coastal towns considering significant dune building and beach replenishment projects post-Sandy will be quite relieved.  The ruling below posed the distinct possibility that many shore protection projects simply would be far too expensive to execute, given the hundreds and hundreds of easements necessary for such projects to proceed. 

Doctrinally, the Court left some stones unturned in remanding the case for a new trial.  The Court swept into the dustbin of history what it called the at times “obscure,” “confusi[ing],” and “bedevil[ing]” distinction between “special benefits” (appropriate to offset a reduction in value) and “general benefits” (inappropriate to offset a reduction in value).  However, the Court replaced an approach reliant on that distinction with a market valuation approach that may not prove as easy to apply as the Court’s opinion suggests.  The new approach excludes consideration of “uncertain” or “indefinite” benefits when determining compensation due for damage to the remainder, but includes consideration of benefits that are “not speculative” and “reasonably calculable” at the time of the taking “regardless of whether those benefits are enjoyed to some lesser or greater degree by others in the community.” 

Theoretically, the decision is sure to frustrate proponents of strong individual property rights.  Yet it seems the decision also could be criticized on at least two levels by those amenable to the ultimate result.  For one, the Court arguably if implicitly perpetuates the idea that a landowner’s “right to exclude” is normatively superior to other “rights.”  Moreover, regularly citing the work of economist Bill Fischel, the Court assumes that whether takings compensation is due when property rules change is dependent solely on an economic calculus of the costs and benefits of the change as it pertains to the claimant’s lot.

All in all, there is much to unpack in the Court’s 48-page decision. 

-Tim Mulvaney (tmulvaney@law.txwes.edu)

July 9, 2013 | Permalink | Comments (0) | TrackBack (0)

Important Article on GHG Trading and Hot Spots

For years, environmental activists have worried that emissions trading systems will create “hot spots.”  The fear, in a nutshell, is that even if the trading system succeeds in reducing overall levels of pollutants, pollution levels in areas with lots of emissions purchasers will rise.  It seems quite plausible to anticipate that the areas seeing increases will contain concentrations of older industrial facilities, and it seems equally plausible, based on years of environmental justice studies, to anticipate that those older facilities are more likely to be located in minority communities.  Trading systems therefore seem to threaten environmental justice.

Those fears played a central role in recent litigation over AB 32, California’s landmark climate change law.  Environmental justice groups challenged the law, arguing that its trading system would concentrate greenhouse gas emissions in lower-income minority communities.  While most GHG emissions are not toxic, and hot spots of GHG emissions would not themselves be a health issue, the activists feared spikes in associated emissions of toxic pollutants. 

A recent article by David Adelman ought to allay those concerns.  Adelman analyzed several national EPA databases on toxic emissions, and he discovered that even if industrial facilities do operate primarily as buyers in GHG emissions trading markets, they aren’t likely to create toxic hot spots.  The basic reason is straightforward: industrial facilities actually emit a relatively small share of toxic emissions, and the real driver of hot spot formation is the distribution and activity of mobile sources.  In other words, it’s the tailpipes, not the smokestacks, that matter most.

Here’s a key passage that summarizes the findings and their implications:

The secondary status of industrial facilities as sources of toxic emissions has particular relevance to concerns about GHG-trading regimes. A simple calculation illustrates this point: If industrial sources account for roughly ten percent of cancer risks from air toxics, as they do in many industrialized census tracts in Los Angeles, then a drop of twenty percent in toxic emissions from industrial sources would cause at most a two percent decline in cumulative cancer risks. This ten-fold factor limits the potential for inequities to arise at the scale of a census tract or county. Other factors, both economic and technical, reinforce this limit on inequities originating from GHG trading by industrial facilities. These findings suggest that a tradeoff often presumed between efficiency and equity will rarely exist for GHG-trading regimes in the United States, and that, where inequities are a potential concern, targeted policies could be adopted to mitigate them without compromising market efficiency.

And in closing:

It is my hope that the EPA data and preceding analysis will assuage concerns that toxic hotspots will be an unavoidable and substantial byproduct of implementing a national GHG trading regime. More broadly, I hope that this work will lower health-equity concerns about market-based regulations generally-including taxes.

Adelman’s article is filled with careful discussion of the strengths and weaknesses of the databases he uses and the limitations of his methodology.  Nevertheless, his conclusions seem powerful.  The article is well worth reading.

-Dave Owen

July 9, 2013 | Permalink | TrackBack (0)

Monday, July 8, 2013

New Report Compares State Shale Gas Regulation

            Resources for the Future has released a new report, The State of State Shale Gas Regulation, summarizing state shale gas regulation.  The report is authored by Nathan Richardson, Madeline Gottlieb, and Alan Krupnick at RFF, along with Hannah Wiseman at Florida State.  The report compares twenty-five regulatory elements—from well spacing rules to wastewater transportation—across thirty-one states with actual or potential shale gas production.  The report is written in a highly accessible style and format, provides valuable information about an extremely active area of energy and environmental law, offers some important insights, and also expresses its limitations clearly (see, e.g., Figure 3 on page 11).

            One of the key conclusions of the report is that state regulation of shale gas development exhibits considerable heterogeneity across states—that is, states are regulating differently.  This heterogeneity may or may not be a good thing.  On the one hand, with a rapidly developing area like shale gas development, and in which state rather than federal governance predominates, it makes sense that different states are experimenting with different regulatory approaches.  Moreover, physical differences across states may justify different types and levels of regulation.  (Political and economic differences also may lead to regulatory differences; whether politics and economics justify regulatory differences is a thornier issue.)  On the other hand, we should not take for granted that heterogeneity is beneficial—some regulatory approaches may be demonstrably better than others.  Hopefully the report’s comparisons will contribute to thoughtful debate in the states about the relative effectiveness of different regulatory approaches.

--Todd Aagaard

July 8, 2013 | Permalink | TrackBack (0)