Every Breath You Take

November 26, 2002
By PAUL KRUGMAN
www.nytimes.com

Last week the Bush administration announced new rules that
would effectively scrap "new source review," a crucial
component of our current system of air pollution control.
This action, which not incidentally will be worth billions
to some major campaign contributors, comes as no surprise
to anyone who pays attention to which way the wind is
blowing (from west to east, mainly - that is, states that
vote Democratic are conveniently downwind).

But this isn't just a policy change, it's an omen. I hope
I'm wrong, but it's likely that last week's announcement
marks the beginning of a new era of environmental
degradation.

Some background: The origin of new source review lies in a
big policy mistake 30 years ago. The original Clean Air Act
imposed strict rules on new sources of pollution, but it
grandfathered existing power plants, refineries and so on.
The idea was that over time, as old facilities closed down,
strict rules would become the norm.

What happened instead was predictable: In order to keep
their exemptions, polluting industries poured money into
existing facilities rather than build new ones. In an
attempt to close this loophole, the Environmental
Protection Agency began requiring companies that invested
in existing facilities to demonstrate that they were merely
doing maintenance, rather than creating new capacity that
was supposed to face stricter regulation.

Everyone agrees that this was an awkward fix. It was a
recipe for endless legal battles between companies and the
E.P.A., and in some cases it deterred investments that
would actually have made the air cleaner. Most experts also
agree on the solution: a so-called cap-and-trade system, in
which existing facilities are granted emissions licenses
that they can sell to others if they succeed in reducing
their own pollution. This would end the litigation, and
provide businesses with broad-based incentives to clean the
air.

But in the early years of the Clean Air Act,
environmentalists didn't trust market solutions enough to
endorse cap-and-trade. By the time they changed their
minds, it was too late. Polluters had lost interest in
improving the way the emission-control system works,
figuring that in a political scene increasingly dominated
both by money and by conservative ideology they could buy
themselves the right to spew at will. And so it has turned
out.

True, the Bush administration says that it favors a
cap-and-trade system; it has even introduced legislation to
that effect. I could explain the defects of the Clear Skies
Initiative - its conspicuous failure to deal with
greenhouse gases, the glacial pace at which it proposes to
reduce emissions of those pollutants it does control (many
estimates say that it would actually allow more pollution
than would a strict enforcement of current law). But it's a
moot point: Last week's announcement is, I believe, a
signal that even Clear Skies isn't going to happen.

Aside from cynicism (which has been an almost infallible
guide to administration environmental policy so far), how
do I reach that conclusion?

Here's one reason: If a cap-and-trade system is just around
the corner, why not wait and introduce the whole system at
once? As the E.P.A. press release last week correctly
declares, "under the Clear Skies Initiative, NSR [new
source review] would no longer be necessary." But then why
did polluters so badly want an immediate end to such review
before a new system could be put in place? And why was the
administration willing to accept lots of bad press for a
clearly anti-environmental move, if it was seriously
planning to impose new controls in the next year or two?
The obvious answer is that both the polluters and top
administration officials know that Clear Skies is,
figuratively and literally, a smokescreen.

Here's another reason: As long as new source review was in
effect, the regulated industries had an interest in
fundamental reform; a sensible cap-and-trade system could
have both reduced pollution and increased profits. But now
the polluters have gotten what they want; they would be
hurt, not helped, by new restrictions. There's no longer
any basis for a deal that clears the air.

Administration officials still insist, of course, that they
plan to proceed with clean air measures. And it's possible
that they will eventually do the right thing. But don't
hold your breath waiting. In fact, it might be a good idea
to breathe deeply now, while you still can.

http://www.nytimes.com/2002/11/26/opinion/26KRUG.html?ex=1039339356&ei=1&en=90dcbcae13c10824