CPR Perspective: Devolution

The States' Role in Environmental Protection: The Debate Over Devolution

Background

Almost all federal environmental laws divide the job of controlling pollution between the federal government and the states. Some laws, like the Clean Air Act, require the federal government to set the standards that sources of pollution must meet and tell the states to find a way to meet the standards. Under other statutes, such as the Clean Water.

Act and the Resource Conservation and Recovery Act (dealing with hazardous waste), the federal government sets requirements for polluters and then allows states the option of running the day-to-day regulatory programs that implement these requirements. In this system, for example, states write pollution permits and bring enforcement actions against violators. The states are always free to adopt more stringent regulatory requirements if they wish to do so. But no state program can adopt less stringent requirements. If, in the course of running its pollution control program, a state falls significantly short of the benchmarks established by EPA, EPA can withdraw the state’s authority to run the pollution program, and instead run the program itself. (In bureaucratic parlance, this action is called the withdrawal of EPA’s “delegation” of authority.)

When Congress passed the major federal environmental statutes, it embraced a strong federal role in pollution control because:

• uniform national standards crafted by the nation’s “best and brightest” technical experts are efficient, avoiding the need to reinvent the wheel 50 times;
• all citizens should receive equal protection;
• businesses should compete on a level playing field;
• states would avoid a “race to the bottom” in competing for new industries;
• pollution does not stop short at state lines and, in many places, strong federal laws are the only way to control so-called “transboundary pollution.”

At the same time, Congress understood that many states might prefer to run their own regulatory programs rather than having the federal government step in. The combination of federal and state powers described above – known as “cooperative federalism” – was the compromise resulting from the desire to maintain a strong federal role in pollution control while at the same time giving the states the opportunity to implement these national programs.

State environmental agencies are increasingly starved for resources, making it difficult or even impossible to carry out their federal statutory mandates. Some states lack not only resources but the political will to police local industries who threaten to move elsewhere if the regulatory climate is not “friendly” to business. EPA also suffers from limited resources and a failure of political will, and has withdrawn or threatened to withdraw state delegations on only a handful of occasions.

Many states resent their federal partner, engaging in open rebellion against the “unfunded mandates” that are imposed on them by federal authorities. Business lobbyists have persuaded legislatures in over half the states to pass laws prohibiting state regulators from imposing requirements than are any stricter than the federal requirements, making federal requirements the ceiling -- not the floor -- of environmental protection. States and regulated industries also argue that “one-size-fits-all” regulation saps the economy. They bristle at tough national standards and fight to tailor regulations so they apply to “local conditions.”

 Obviously, states differ in their approach to environmental protection. Some do an outstanding job on specific programs – better, even, than the federal EPA. Other states are dreadfully deficient. The result is that their citizens are exposed to far higher levels of harmful pollutants than the federal government deems safe. Many have reported that states try to attract business by offering to relax environmental protections. Powerful corporate interests are more likely to capture weak state bureaucracies than they are to capture even a weakened central, federal agency.

Equally as troubling, EPA has never made an effort to gather data or develop a template for the amount of resources states must commit to the implementation of federally-delegated programs. The Agency does not have reliable information about the size of state budgets for such programs, and passively accepts the fact that such budgets are most often a product of a wide range of factors (e.g., population, economic health, local politics) that have absolutely nothing to do with the regulatory burden (e.g., number of regulated facilities, scope and depth of pollution problems, presence of nationally treasured natural resources) the state must support. Without such information, EPA cannot explain to the states in a fair and clear way what they must do to hold up their end of the delegation bargain.

For these reasons and because government agencies are as competitive as other institutions, EPA and the states have an uneasy, and sometimes overtly hostile, relationship. In an effort to improve what it calls the “federal/state partnership,” EPA launched the National Environmental Performance Partnership System, or NEPPS, some five years ago. The program allows states to cut their own individual deals with EPA both with respect to how they spend federal program grants and how they run their programs. The result is a patchwork of different oversight regimes that makes no one happy. Some EPA regional offices maintain rigid oversight that too often focuses on minutiae rather than ensuring strong protection of public health and the environment. Other regional offices make life easier for themselves by allowing the states to do what they wish, regardless of statutory mandates, regional priorities, or past performance deficits. Neither result fulfills the goals Congress had in mind when it divided the crucial job of improving and safeguarding environmental quality between them.

• states have not devoted sufficient resources to implementing federal environmental requirements;
• states lack the political will to enforce the law;
• states and the federal government engage in constant sniping that undermines their ability to do their respective jobs;
• we do not have basic information that would allow us to address problems with how the system is working.

Our approach, which would relax requirements for high-performing states and tighten them for poor-performing ones, address each of these problems with cooperative federalism as it exists today.

CPR's Perspective

Strong federal standard-setting and oversight is as important today as it was when Congress wrote cooperative federalism into pollution control statutes. The weakening of federal authority harms public health and weakens environmental protection. When the states fight unfunded mandates, they fail to acknowledge the fact that they would be responsible for protecting public health from the adverse effects of toxic pollutants; delivering clean drinking water; safeguarding precious natural resources; and curbing transboundary pollution whether or not the federal government played any role.

While it is certainly true that the federal government sometimes acts irresponsibly, creating programs without bearing any fiscal responsibility, the vast majority of federal environmental regulations is designed to preserve these crucial public resources. Further, regulatory gaps brought about by drastic departures from national standards result in hidden costs, and we have no reason to believe that these costs are offset by the marginal inefficiencies of uniform requirements.

In a series of reports issued over the last few years, the National Academy of Public Administration (NAPA) recommended that EPA continue to devolve authority to the states, but that it adopt a system of “differential oversight,” whereby it would give leeway to high-performing states, but keep poor performers on a much shorter leash. NAPA is generally conservative in its outlook, and made this recommendation as part of a study that was funded by Congress.

Despite initial enthusiasm for this proposal, EPA has never adopted it. EPA is afraid to target poor state performers in public. To address this crisis in environmental protection and the role of the states:

• Congress and the Administration should impose a system of accountable devolution, periodically evaluating the states and placing them into categories that reward good performance with federal deference but subject weaker state programs to more rigorous review.
• EPA should develop a database that closely tracks existing spending and performance by states that are running federal environmental programs.EPA should develop guidelines for state environmental spending that reflect the regulatory burden state agencies must support.
• EPA should have available teams of personnel able to take over the worst state programs on short notice, using a system of “deterrence-based withdrawal” to motivate states to improve.
• Congress must appropriate funding sufficient to allow EPA to make these reforms.

It’s easy to write a law, and much harder to make sure it is implemented and enforced, fairly and aggressively, throughout our vast country. Governments at all levels struggle to be effective and efficient, and must remain accountable to their citizens. In areas as important as protecting public health and the environment, everyone – no matter where they live -- deserves equal protection. Making states responsible for delivering on this crucial goal is a key part of EPA’s mission.