http://www.governing.com/archive/2002/aug/pollute.txt

Governing Magazine/August 2002

FEATURE: POLLUTION

THE POLLUTION PUZZLE

The federal government isn't solving it. States are giving it a shot.

By Tom Arrandale

Among all the states, New Hampshire hasn't usually ranked as a
trailblazer on protecting the environment. But in the past few years,
Granite State officials and residents have grown alarmed that global
warming could kill off its colorful maple forests and wreak havoc with
coastal resorts. This spring, New Hampshire responded with a
groundbreaking state law that could pave the way for cost-effective
national controls on climate-changing greenhouse gases.
 As far as New Hampshire is concerned, "ignoring global warming is not
the answer," says Kenneth A. Colburn, the state air-quality director
who helped draft the program. But since ignoring it is precisely what
the federal government has done, New Hampshire decided to craft its
own "multi-pollutant" emission controls for the state's three aging
coal-fired electric generating stations.
 Colburn, now director of the air-quality association for eight
Northeastern states, expects the East Coast's big industrial states to
follow suit and perhaps extend multi-pollutant regulations to other
industrial sectors. That, in turn, will put pressure on Midwestern
states, such as Ohio and Michigan, that currently balk at carbon
dioxide controls they fear will cost their economies dearly. In time,
Northeastern states are counting on a domino effect that will prod the
federal government to fashion a comprehensive response to global
warming.
 On the other side of the country, the biggest state domino of all is
tackling another primary source of greenhouse gases. In July, the
California legislature passed a bill to limit carbon dioxide from
automobile exhaust. If it survives an expected challenge in the
courts, the measure would force dramatic changes in the cars Americans
drive in the future. The Golden State, which one auto industry
official recently called "the center of the environmental regulatory
universe," already has the country's toughest restrictions on ozone,
soot and other air pollutants.
 That's because California wrote many of its environmental regulations
before federal laws went into effect, and it has gone its own way ever
since with minimal interference from EPA. Increasingly, other states
have exercised the option to adopt California standards. But they also
are no longer content to merely follow the leader. Even the smallest
states have begun flexing their muscles on a variety of fronts because
the federal government hasn't been agile enough to cope with emerging
environmental threats of national proportions.
 At the same time, state regulators are trying to adapt conventional
regulatory strategies to deal more effectively with serious hazards
right in their own backyards. In those efforts, however, they've run
into a major obstacle--the federal government's own hidebound system
for by-the-book environmental regulation that's still stuck in the
1970s.
 During the 1990s, for instance, New Hampshire's environmental
services commissioner, Robert W. Varney, grew all too aware that raw
sewage was seeping down coastal streams to contaminate shellfish beds
and toxic mercury was building up in New Hampshire's lakes and rivers.
But because the federal government hadn't deemed those to be the
country's most imminent environmental risks, neither could New
Hampshire.
 That's the way the nation's pollution-control system has always
operated. The U.S. Environmental Protection Agency for years compelled
state governments to concentrate on carrying out federal cleanup
rules, rather than on investigating what's actually harming the local
environment and coming up with sensible solutions. In New Hampshire,
Varney finally persuaded EPA to let the state shift funds from federal
program grants to clean up shellfish beds and implement a mercury-
control strategy. The state hasn't exactly turned into environmental
paradise, but at least it has gotten a start on correcting previously
overlooked problems "that are very high priorities for New Hampshire,"
Varney says.
 A year ago, Varney left state government and started commuting to
Boston as EPA's New England regional administrator. He saw the new job
as a chance to build on New Hampshire's record and help the Northeast
make even more impressive strides toward more effective environmental
protection. But when Varney is asked how much authority he's got to
rework EPA's rigid regulatory rules so that New England can focus on
its most pressing problems, he replies, more than a bit ruefully, "not
enough."
 Varney's not the type to give up on trying new approaches. But doubt
is growing in many quarters about the ability of government at all
levels to tackle the nation's remaining pollution challenges. Critical
policy decisions at the federal level have been mired in political
deadlock for the past decade. And even as states have begun using some
new and nimbler tactics to address environmental threats, many
regulators feel they have made only marginal progress and are getting
discouraged. It's becoming clear that the whole system needs to be
overhauled before more substantial progress can be made.
 In a 2000 report, a National Academy of Public Administration panel
concluded that the nation's present pollution-control system "will not
solve the most pressing of the nation's outstanding environmental
problems." Mary A. Gade, Illinois' former environmental protection
director and a member of the NAPA panel, says, "It's not that the
current system hasn't done good things, but now it's just limping
along."
 In addition to atmospheric pollution, the nation's unresolved
environmental issues include the consequences of traffic congestion,
suburban sprawl and contaminants that flow from farmlands, lawns and
public parks to choke rivers, lakes and coastal bays. EPA's
prescriptive top-down procedures may work fine to curb industrial
emissions, but they're not adaptable enough to manage these widely
dispersed--but cumulatively severe--environmental hazards.
 The NAPA panel recommended that whoever took office as EPA
administrator in 2001 break new ground with innovative campaigns to
curb greenhouse gases, reduce urban smog and keep fertilizers from
polluting waterways. If anything, though, national environmental
policy has become even more bogged down in partisan strife. Last year,
Bush pulled back from a campaign pledge to implement a "four-pollutant
program" to simultaneously curtail utility discharges of smog-forming
nitrogen oxide, sulfur dioxide, toxic mercury and carbon dioxide.
 And his EPA administrator, former New Jersey Governor Christine Todd
Whitman, has moved painfully slowly despite being handed the best
chance in years to transform EPA's approach and turn state governments
loose to deal with new kinds of challenges. So to the extent that they
are able, governors, legislators and state regulators have begun
taking matters into their own hands, crafting laws and regulations on
threats from hog farms to global warming.
 Oregon imposed CO2 limits on newly built power plants five years ago.
Illinois, New York, and Connecticut have also begun fashioning multi-
pollutant programs to cut NOx and SO2 below what federal rules
require. This June, North Carolina Governor Mike Easley signed a law
that requires the state's 14 coal-fired powerplants to cut smog-
forming SO2 emissions 78 percent by 2009 and NOx emissions 74 percent
by 2013. With federal action on nitrogen oxides stalled in legal
maneuvering, "quite frankly, we felt we needed to do it ourselves,"
says Senator Stephen M. Metcalf, one of the North Carolina law's
sponsors.
 Through a variety of measures, state governments are forging ahead to
inventory the greenhouse gases they create and design some ways to
curb them. Minnesota and Montana provide incentives to plant trees;
Nebraska is exploring farming methods to lock carbon into soil; North
Carolina and Wisconsin are working on controlling methane from manure
collecting in animal feedlots. During Whitman's tenure as governor,
New Jersey incorporated greenhouse gases in industrial permits and
negotiated an agreement with the Netherlands for trading CO2 emission
cutbacks. New Jersey is on track to meet its 2005 goal of cutting
greenhouse gases 3.5 percent below 1990 levels.
 On the other hand, 16 state legislatures went on record opposing U.S.
ratification of the Kyoto Treaty on climate change that the Clinton
administration negotiated. The Michigan legislature prohibited state
agencies from drafting greenhouse-gas-reduction plans, and West
Virginia adopted a law barring the state from working with EPA on
voluntary climate-change programs. Vice President Dick Cheney is
widely assumed to have taken charge of how environmental policy
influences energy production, and environmental groups have concluded
that "clearly, Whitman's an absentee landlord," says Frank O'Donnell,
a lobbyist for the Clean Air Trust.
 When the White House picked Varney to take over EPA's office in
Boston and several other experienced state regulators moved into EPA
regional posts, it seemed to signal a changing of the old guard. And
Whitman and her aides say they want the new regional administrators to
work hand-in-hand with state pollution commissioners to implement
innovative regulation. But so far Whitman hasn't followed through by
instructing EPA's career staff to give states the benefit of the doubt
when they come up with new ideas for meeting pollution goals. "That
would take an incredible commitment to change the bureaucracy, and I
think the administrator's talking more about it than she's committed
to it," says Russell J. Harding, Michigan's environmental quality
director.

In fact, not much has changed in the way that EPA operates since
President Nixon created the agency to administer the federal
environmental standards imposed in the 1970s. Congress enacted the
Clean Air Act, the Clean Water Act and several follow-up laws because
it was clear that state health authorities weren't protecting the
public against raw sewage and industrial discharges into the nation's
water and air. In most cases, the statutes direct EPA to issue permits
that specify what equipment a facility must install to meet federal
standards. EPA or state regulators conduct periodic inspections to
make sure factory managers are keeping the controls operating, and
government lawyers enforce those limits by levying fines for
violations and sometimes pressing legal charges in court.
 EPA's one-size-fits-all technology standards brought major sources of
contamination under control. But uniform rules give businesses no
incentive to develop cheaper controls that cut emissions more than the
federal government requires. In addition, it's simply not practical
for government regulators to issue permits and then inspect for
millions of small, widely dispersed sources that cumulatively cause
serious problems.
 This statutory scheme has other troublesome consequences. Power to
write and enforce standards remains concentrated in semi-independent
air, water, drinking water and waste offices inside EPA headquarters.
Parallel offices in EPA's 10 regions distribute federal grants to
state agencies, then keep an eye on how closely they follow permitting
and enforcement procedures.
 Although it made sense administratively when separate federal
pollution laws first went onto the books, EPA's media-by-media
specialization inhibits its ability to respond holistically to today's
bigger environmental picture. The stovepipe structure fragments
decision-making authority and keeps headquarters, regional and state
program staffs focused on following by-the-book procedures to enforce
"end-of-pipe" standards for what regulated facilities discharge. EPA's
organization "deals poorly with complex, multilayered environmental
and economic problems," the NAPA panel's report found. "As
constituted, the agency cannot possibly be the protector of the
nation's environment, despite the expansive responsibility implied by
its name."
 States now have established full-fledged regulatory agencies that
assumed most day-to-day responsibility for making sure national
standards are met. State agencies write 90 percent of pollution
permits, handle three-quarters of enforcement actions and cover nearly
75 percent of the cost of pollution regulation. But EPA hasn't
adjusted to the states' increasing competence. Nearly half of EPA's
18,000 employees are still based in the regional offices. State
agencies complain that EPA headquarters and the regional staffs meddle
too often, second-guess too much and balk when states come up with new
approaches they think will produce better results.
 "EPA looks at an issue as a question of air or water or toxic waste,
but states look at it as a question of what it does to community X or
river valley Y," says University of Wisconsin political scientist
Donald F. Kettl, a NAPA panel member. "The difference has been
extremely difficult for EPA to address. It's one of the hardest
problems we've got in government."

As part of the Clinton administration's reinventing government
initiatives, EPA Administrator Carol M. Browner approved experimental
programs that granted leeway for state agencies and some industries to
try "cleaner, cheaper, smarter" compliance mechanisms if they pledged
to achieve better--not lesser--pollution-control performance. EPA
regional offices and the Environmental Council of the States, whose
members are state pollution-control chiefs, also negotiated
"performance partnership agreements" de-signed to give state agencies
more flexibility to identify neglected problems and figure out ways to
correct them.
 In the 1990s, EPA's New England region demonstrated the potential for
innovative thinking. John DeVillars, Varney's predecessor at the
Boston regional office, broke up the region's separate air, water and
waste offices and assigned nearly half the staff to new ecosystem
protection and environmental stewardship units responsible for dealing
with all forms of pollutants. The reorganization also set up state
units within the EPA region to work directly with the six state
environmental agencies.
 The Massachusetts Department of Environmental Protection, meanwhile,
persuaded EPA to accept a groundbreaking strategy that has brought
emissions from 2,300 dry cleaners, printers and photo-processing shops
under government supervision for the first time. Working with small
business trade associations, the Massachusetts Environmental Results
Program drafted workbooks that explain potential problems, including
some in Korean aimed at the state's large number of Korean-owned dry
cleaners. It holds owners personally responsible for auditing their
discharges and certifying they're complying, and the DEP staff double-
checks compliance by inspecting a percentage of the businesses. "We've
had great success when we're able to show EPA that we can achieve
equivalent or superior results with less process," says Lauren Liss,
the current Massachusetts environmental protection commissioner.
 Other states have begun taking advantage of self-regulating audits by
private firms that are adopting environmental management systems to
account for wasteful pollution discharges. New Jersey replaced
separate air, water and waste permits with facility-wide permits for
companies that demonstrate superior pollution-control results.
Wisconsin and Oregon are working on "performance track" compacts with
conscientious companies. The firms commit to seeking superior results,
and state regulators stand back and let plant managers devise the most
efficient ways they can get there.

It's taken so much effort to put new approaches in place, however,
that some state officials have all but given up on. In retrospect, "we
all thought we could innovate more than we have, that it would be an
easier thing to do," says Robert E. Roberts, a former state
environmental secretary and ECOS director who recently took over as
EPA's Rocky Mountain regional administrator. Before launching
successful experiments, state officials have to brave a gauntlet of
EPA program officials and enforcement lawyers who resist procedural
changes that they fear will weaken federal enforcement authority. Says
Michigan's Russell Harding, "anything you do is going to be second-
guessed, and the lawyers are never going to be happy."
 As a result, Harding adds, "some innovations may be more cumbersome
than the program we had before." Since 1995, 35 state pollution-
control agencies have signed performance partnership agreements with
EPA regions that state leaders hoped would clear the way for more
experimentation. But Delaware canceled its agreement because EPA's
staff fought so tenaciously to keep channeling funds through their own
air, water and waste programs. "It was almost like the United Nations
Security Council--each individual program could veto something," says
Robert Zimmerman, Delaware's deputy natural resources director.
Instead of combining regulatory efforts in sensible ways, the
partnership "almost became an add-on to what we were already doing."
 Whitman's staff wants to reinvigorate the partnership system and is
working to integrate state agencies into EPA's nationwide planning
process. The agency also is drawing on state expertise to draft a
nationwide state of the environment report to set benchmarks to judge
future progress. And Whitman is reconsidering the Clinton
administration rule to tighten EPA supervision of new state programs
for controlling polluted runoff to rivers and lakes.
 Nevertheless, more than a few state officials say EPA's entrenched
staff goes out of its way to sabotage state initiatives they think
stray too far from tried-and-true procedures. Of course, rank-and-file
EPA regulators think they're simply enforcing federal pollution
control laws the way Congress wants them to. Harding, Michigan's DEQ
director, thinks it would take congressional legislation endorsing
regulatory innovation to change the agency's antagonism to state
inventiveness. Gade, a former EPA attorney, suggests going further--
abolishing the regional offices and using resources the agency now
spends overseeing the states to perfect scientific research and data-
processing technology to accurately target priority environmental
problems.
 "The states in the past 10 years have come into their own and are
capable of doing virtually everything," Gade says. "It's time to say,
'What new tools do we have available?' You could see a federal-state
partnership that's equipped to deal with the challenges of this
century in a collaborative, creative and flexible way that really
could accomplish environmental goals."


CITIES TAKE THE SEWER PLUNGE

When it comes to wastewater, the U.S. Environmental Protection Agency
isn't hesitating to tell local governments what they have to do.
 Municipal wastewater agencies have spent billions of dollars on new
sewer lines and improved wastewater-treatment plants to comply with
standards that EPA drafts and imposes. EPA regulates most municipal
pollution sources by requiring local government agencies to get
federal discharge permits--the same as factories, power plants and
other indus-trial facilities. Now, federal engineers and lawyers are
pushing local governments hard to fix leaky or overloaded systems that
spill raw sewage from time to time and violate federal water pollution
standards.
 In April, for instance, Baltimore agreed to pay a $600,000 EPA fine
and spend $940 million over the next 14 years to correct defective
sewer pipes and connections that discharge untreated wastes into the
Chesapeake Bay. Baltimore's chronic overflows have released more than
100 million gallons of raw sewage over the past six years, and
addressing the problem will force governments to double the rates for
1.6 million users of the regional sewage system. "We're not the first
city to be whacked by the federal government on this, and we won't be
the last," Baltimore Mayor Martin O'Malley said when announcing the
settlement with EPA and U.S. Department of Justice environmental
lawyers.
 Around the country, EPA is using its water-quality authority to force
localities to raise billions more dollars to make sure that their
treatment systems can handle surges of sewage in even the foulest
weather. After spending $1.7 billion to upgrade its system to meet
federal standards, Cleveland's regional sewer district expects it will
have to commit another $1 billion or so to prevent overflows from
antiquated combined sewers that collect both sewage and stormwater
running into city streets. The mixed streams both funnel through
treatment plants; rainstorms or sudden snowmelts can overwhelm the
system, carrying raw sewage into the Cuyahoga River and its
tributaries. EPA has begun using its enforcement powers to get tough
with mayors and city councils that balk at the cost of remedying the
problem.
 More than 700 U.S. cities and towns still rely on combined sewer
systems built as long as a century ago--before sewage was handled
separately and treated before being discharged. In 1994, EPA approved
new rules for combined sewer systems that will require local
governments to correct the problem at a cost of at least $45 billion,
and probably much more. It would be prohibitively expensive to tear up
streets to install completely separate systems, so most cities are
building huge underground tunnels to collect and hold stormwater
surges and then release the water slowly when treatment plants can
handle the load.
 Atlanta, for instance, plans to bore three tunnels a combined 20
miles long, 100 feet beneath the city's streets. The tanks could store
300 million gallons of tainted water, then funnel it into two new
treatment plants. Atlanta's average wastewater bill is expected to
climb from $31 to about $65 a month to pay for the system. Threatened
with $275 million in EPA fines, the Pittsburgh regional sewage system
is working on a $3 billion project. EPA and the U.S. Department of
Justice have also reached settlements that order Boston, New Orleans,
San Diego, Honolulu, Miami, Cincinnati and Mobile, Alabama, to correct
chronic sewage overflows.
 What's more, EPA is following up rules for combined-sewer overflows
with new regulations requiring local governments to curb overflows
from aging sanitary sewers that aren't connected to stormwater systems
but nonetheless are springing leaks or can be inundated by surges
after rainstorms. That has become a problem for cities that grew
rapidly after World War II and used brick or unreinforced concrete
pipes that are now prone to corrode or collapse, creating blockages
that back up into homes or spill onto streets. To correct its
overflows, Oklahoma City has begun replacing 1 percent of its 2,200
miles of sewer lines every year with more durable PVC plastic pipe.
Fairfax County, Virginia, has reduced overflows by two-thirds through
stepped up monitoring, maintenance and repairs to its sewage lines.
 In addition, EPA requires municipalities with 100,000 or more
residents to get federal permits for the runoff they discharge from
streets into separate stormwater-collection systems. They must devise
plans to control the contaminants that run off the surface into the
system. A pending set of regulations for smaller communities will set
forth best management practices they'll be required to adopt to limit
polluted runoff.
 Mayors contend that EPA ignores what meeting all those requirements
will cost the ratepayers whose monthly bills must pay off construction
loans and cover operating expenses of upgraded sewage systems. In the
1970s, the federal government picked up 80 percent of the cost of the
first round of sewage-treatment improvements through direct grants,
but now it offers low-interest loans that sewage systems must pay
back. That is reviving local officials' complaints from a few years
ago about unfunded environmental mandates. As Baltimore's O'Malley
contends, "Unfortunately, our federal government is a lot better at
sending lawyers to cities than they are in sending dollars."
 In some cases, EPA has agreed to stretch out deadlines for
controlling sewage overflows. Three years ago, EPA's Boston regional
office negotiated a compromise two-step program for correcting
combined-sewer overflows into the Merrimack River from Manchester, New
Hampshire. The city agreed to spend $52.4 million over 10 years on
projects that will capture 93 percent of wet-weather overflows. EPA
and the city will monitor the improvements during that time before
settling on whatever additional steps will be necessary. As part of
the deal, Manchester is also investing $5.6 million on preserving rare
and sensitive swamps, controlling streambank erosion and other related
projects.
 EPA has made tentative moves toward linking sewer controls to its
efforts to deal with upstream contamination from septic tanks, animal
feedlots and other "non-point" sources. On the Charles River in Boston
and Cambridge, Massachusetts, for instance, the New England regional
office launched a coordinated Clean Charles 2005 program that has
brought citizens groups into a project to make the river suitable for
swimming. The program used traditional permit enforcement to target
combined sewer overflows and industrial discharges. But intensive
monitoring by volunteers also found that part of the river's pollution
was coming from sewage pipes clogged with grease and from illegal
hookups that piped raw sewage straight into stormwater drains.
--Tom Arrandale

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