At their annual meeting in March, state environmental commissioners passed out T‐shirts proclaiming: “The states are not branches of the federal government.” The bureaucrats’ joke was lame, but the irony is profound.
For a long time the states’ environmental enforcers were glad to subject their agencies to the federal Environmental Protection Agency in order to wrest power from their own states’ legislatures. Plenty of commissioners have supported the many federal laws enacted since 1970 authorizing the EPA to force state legislatures to give state agencies money and rule‐making power. The 1990 Clean Air Act, for example, coerces states to levy taxes to fund state air pollution control programs at levels set by EPA appointees in Washington.
Today, however, the state commissioners have wearied of their role in federal policy precisely because the EPA’s power grab has been so successful. Commissioners can’t explain to local communities and businesses why environmental mandates force them to spend major hunks of their budgets on projects that often have no discernible environmental benefit. Federal rules require emissions to be reduced, for instance, even if they do not threaten health. And federal rules control not just emissions, but also minute details of the internal operations of both pollution sources and state agencies.
Mugged by such realities, the state commissioners seized upon President Clinton’s and Vice President Al Gore’s promises during the 1996 campaign to let states and businesses find smarter, cheaper ways of protecting the environment. Shortly before the election, with the blessings of EPA Administrator Carol Browner, state commissioners started negotiating with EPA to “reinvent government.” Four months of hard bargaining produced a 16‐page agreement allowing states to deviate from rigid federal requirements when the EPA agrees that such innovations would save money and not harm environmental quality. Suddenly in February, however, the EPA official in charge of the talks killed the deal. In a “Dear Reinvention Ombudspersons” letter, Deputy Administrator Fred Hansen wrote that the states would be allowed to try only “minor, and I stress minor, changes.” Moreover, the EPA would get to decide how the states’ savings would be spent. The next day, the commissioners fired back a letter about “damaged trust” and “gross error.”
Why did the EPA insult the state agencies that had helped build its power? The agency had good reason to fear that the states would succeed. The central insight of “reinventing government,” if taken seriously, is that those closer to a problem can solve it better and more effectively. Given the opportunity, the states could reduce environmental costs without sacrificing environmental quality. Environmental policy might go the way of welfare– successful, federally sanctioned state experiments could lead to a wholesale devolution of power. This would be a disaster for the national environmental groups whose power is rooted in EPA regulation and for their political ally, presidential candidate presumptive Al Gore. They had the motive and the power to force Mr. Hansen to take the fall for killing the deal.
To justify its about‐face, the EPA played its trump: It insinuated that the states would despoil the environment. This is a big lie. When increasing air pollution created public concern in the 1960s, for example, many states and localities enacted meaningful laws. But Congress responded to the pleas of auto manufacturers and electric utilities to stave off state control by interposing an ineffectual federal bureaucracy. The resulting 1965 and 1967 Clean Air Acts both flopped. Then, when state and local laws were only beginning to take effect, severe smog struck the East Coast and California. Ralph Nader blamed Congress. It responded by passing the 1970 Clean Air Act, which gave the EPA power over the states. The EPA claims great success in reducing pollution from stationary sources. But according to a Brookings Institution study, the states’ 1960s laws reduced these pollutants three times more than those enacted in the 1970s, when the EPA was in charge.
The federal government does have a job to do in environmental regulation: It is uniquely qualified to solve interstate pollution not adequately controlled by states or interstate compacts, to protect the great national parks and to regulate nationally marketed goods, such as new cars. The EPA can also offer the states and the public information on local pollution levels and draft model pollution laws, but let them decide.
Congress likes federal mandates because they’re so expedient. And defenders of national control argue that the states, in vying to attract employers, compete to offer the most permissive environmental standards and so race each other to environmental catastrophe. But states won’t join such a race, because voters want environmental quality as well as jobs. Neighborhood groups, small businesses and local environmental groups– many of which distrust the national environmental groups– carry little weight in Washington, but have power back home. Indeed, states sometimes refuse to accept high‐pollution businesses at all. Competition among states is likely to produce a reasonable balance between environmental and other concerns. It certainly is more likely to produce what local voters want.