Air Pollution:

White House CEQ's Connaughton pushes for quick legislative CAIR fix

After a surprising decision by the U.S. Circuit Court for the District of Columbia to strike down U.S. EPA's Clean Air Interstate Rule (CAIR), the Bush administration has been working to reinstate the rule through a legislative fix. With the clock ticking on this session of Congress, though, is there enough time to pull the necessary votes together? During today's OnPoint, James Connaughton, chairman of the White House Council on Environmental Quality, discusses the administration's stance on how Congress should proceed. Connaughton also addresses how the CAIR decision will affect the Bush administration's environmental legacy.

Transcript

Monica Trauzzi: Welcome to the show. I'm Monica Trauzzi. With us today is Jim Connaughton, chairman of the White House Council on Environmental Quality. Chairman Connaughton, thanks for coming back on the show.

James Connaughton: Glad to be back.

Monica Trauzzi: OK, so just to start off by giving our viewers some background. In July, the DC Circuit Court of Appeals ruled that the administration's Clean Air Interstate Rule sort of went above and beyond EPA's jurisdiction. We're at a point now where options are being discussed, where do we go from here? There are several legislative proposals on the table and people want to move forward with it, it's just a question of what do we do? What is the administration's stance on what the preferred action is on how we move forward?

James Connaughton: Well, our top-line stance is we want to do what we can to, as quickly as possible, restore all the public health benefits that this major new rule is going to provide. This is going to cut sulfur dioxide emissions by 70 percent and nitrogen oxide emissions by 60 percent for power plants. And that was going to help all 28 states in the eastern United States meet tough new air quality standards. So, our goal is how do we get these investments in clean technologies and how do we get the public health benefits of cutting this pollution?

Monica Trauzzi: And Senators Voinovich and Inhofe have come forward with a proposal that would do just that and do it quickly.

James Connaughton: Right, obviously, we want to pursue appeal of the decision, but there's things we could do legislatively to, at least in the interim, make sure that these public health benefits are realized. Fortunately, you have Senators Inhofe and Voinovich pushing, you have Chairman Dingell and subcommittee Chairman Boucher pushing. We've been in talks with the Republicans on the House side and the states clearly want the core of this rule back again. This was a surprise to everybody and it's on that kind of intensity of desire to find a way to restore the core aspects of this rule that I think we can find some success.

Monica Trauzzi: On the other side, there are also many in Congress who believe that we can take this opportunity to strengthen the rules that were put forth by CAIR. Why not do that? Why shouldn't we just go back to the drawing board and discuss how we can make this even better?

James Connaughton: Well, first of all, I think we should all be clear, right now, in Congress and among the governors they are just getting their heads around this issue. It occurred during the summer. Everyone is just back now. It's largely been a discussion among those in the club. Now the governors are taking a closer look, now the members of Congress are taking a closer look, and two things are emerging. So one is we've got to get these public health benefits back online as quickly as we can get them back online and that's great. Two, there are some that want to initiate a new legislative process. There are others who suggest that EPA consider taking additional action and we can keep those going on track as well. So, can we preserve what we've got even as we move the conversation into looking for more? And I think with that sensibility we could find an approach that works for everybody.

Monica Trauzzi: And with the clock ticking on this session of Congress, what is the administration sort of doing behind the scenes to move the process along?

James Connaughton: So many phone calls you couldn't imagine. I've talked to nearly every governor. The members of Congress are talking to each other now. It's a bipartisan discussion. I had a great visit with the Southern governors and I have to say the leadership of the Southern governors in thinking through this early has been very important. But Governor Doyle, who is the head of the Great Lakes governors, he organized a discussion among all of their agency directors. And then the national Governor's Association and the Environmental Council of the States have all know had large group discussions. That's a lot of moving pieces and we're all trying to understand our relative perspectives on how to accomplish the two objectives, which is get the benefits back online now and then figure out how to carry the conversation going forward.

Monica Trauzzi: Do you think you're at a good point?

James Connaughton: Every week that's gone by, in the last four weeks, we've made a big step forward in finding that accommodation. I have to say I was particularly encouraged by the letter that 20 of the state commissioners sent to the Hill last week. They've framed out an approach that's got some good features to it. I think we'd consider a few modifications to that. And we're getting pretty close between the states in the administration and now we've got to work with the Congress and we also have to see where the other constituencies are. I'm pleased the unions strongly support full reinstatement of the core elements of this rule, both phases of the rule and the trading system. Most of the utilities I've talked to want it back so that they can plan their multibillion-dollar investments. And I know the environmental groups want the benefits of this rule as well. Now we're into more tactical discussions.

Monica Trauzzi: Why is it so important for you to fight this battle now? A lot of people say it's a long shot that something is going to happen. I mean, are the votes really there in Congress to move forward on this?

James Connaughton: Well, it almost doesn't matter how much the odds are. Every week we delay in restoring this rule is a week we're not getting multibillion-dollar investments moving to improve public health. This rule is going to prevent thousands of premature deaths. It is going to prevent tens of thousands of heart attacks. It is going to prevent tens of thousands of emergency room visits, avoid lost workdays, avoid school absences. All 28 states were relying on this rule to show EPA that they could comply with new air quality standards. If this rule is not back in place they have to go back to the drawing board and standing in the wings are the lawyers. If this rule is not reinstated each of the states will find a need to sue every other state and all the sources in each other's states. EPA estimates that's going to be about 126 state-by-state petitions dealing with dozens or more than dozens of sources. You're talking about a field day for lawyers and the air is not getting any cleaner while we're in the courtroom. So, the imperative is really this public health imperative and this is something we should be able to come together on, especially because there was so much support for the rule to begin with.

Monica Trauzzi: Going back to the actual court ruling, what went wrong? Why did the court make that decision?

James Connaughton: Well, I don't want to get into the weeds, but basically a few entities sued, the state of North Carolina, a major power company did, a couple of other states had positions in it, but all the litigants were saying keep the main core of the rule and then each of them was seeking their own particular piece of advantage or concern, but it was really on the margins of the rule. But the legal arguments they raised caused the court to consider whether, in fact, EPA could interpret the Clean Air Act in a way to create a regional cap on pollution and allow for trading. No litigant asked for that. The court, on its own, decided, well, if I buy into these fringe arguments around the core of the rule, then we're going to have to throw out the whole rule. So everybody was stunned. There's a big case of winner's remorse going on out there right now and it's because everyone realized the central importance of these pollution cuts and of these investments to really guarantee air quality and public health improvements.

Monica Trauzzi: Is this a sign of what's to come when we try to implement a comprehensive climate package?

James Connaughton: We have two signals going here. The way that the state's and the different interest groups, industry and the environmental groups and the unions, the way that we've all been able to mobilize, just in four weeks, when we've got a real problem, to solve it in a very specific way, I actually find encouraging. If this fractures, I would take that as a strong signal of just how difficult it's going to be to get further consideration of air pollution outcomes. And even more, it will complicate the climate change discussion even more. I mean it's hard enough to focus on CO2 from different sources, but if you're adding in nitrogen oxide, sulfur dioxide, and mercury, and you're trying to fully amend the Clean Air Act, that makes things a lot more complicated, a lot more expensive, and creates a lot more regional disparity. So this is going to be really a test. If we can come together, I see that as a good sign for the prospects of some pretty rational and focused action on both air pollution and climate change. If we can't, it's just more of the same and we really have to stop that.

Monica Trauzzi: This isn't just about public health though, it also has to do with the utility's bottom lines because a lot of them have invested in controls that would be in accordance with this rule. What would you suggest to utilities to do now that the rule is not in place looking forward? There's a little uncertainty there.

James Connaughton: Well, there's major uncertainty and uncertainty comes from the absence of a clear mandate requiring real pollution cuts. So if utilities don't have that, they can't go to their public utility commissions and put that into the rate case. They can't justify multibillion-dollar investments to their shareholders if they're not doing it in conformity with the specific legal requirement. And so, as I said, every month that we don't restore the core elements of this rule is a month when these investments will not be made. And some of the biggest and most important ones are going to be made in the next five to 10 years. You're talking about nuclear power plants. You're talking about large-scale, gigawatt scale renewable power plants and the transmission that goes with that, and you're talking about a new generation of coal plants that not only will cut air pollution, but will also be able to cut greenhouse gases. Well, they need to know today that there's a stringent legal requirement six years out in order to justify and plan for those investments. Right now, much of it is on hold. If we don't solve this now most of it will stay on hold.

Monica Trauzzi: With CAIR essentially falling apart, we're basically at the same place we were seven or eight years ago when the Bush administration first came into office. Taking a look at the big picture, what does this say about the Bush administration's environmental legacy?

James Connaughton: Well, actually the legacy remains strong in that we did succeed in dramatic cuts in diesel engine emissions and taking sulfur out of diesel fuel. We did succeed in designing a regulation in the absence of legislation that was going to require the largest single investment in air pollution control in the history of the world. It's a $50 billion program. The acid rain program was behind that at about 24 or $25 billion. And the fact that all the states recognize they at least want that much is a sign of the strength of this legacy, not the weakness of it.

Monica Trauzzi: CAIR was really seen as a key component of the Bush administration's environmental legacy. The fact that it's falling apart, does that hurt?

James Connaughton: The air-quality legacy, well, if it falls apart it will be because the interest that all came together was actually a strong consensus on moving forward with this most aggressive of plans, we will have made the effort. If it falls apart it will be for the reasons that all of us don't like, which if it falls apart, misperception, little P politics, some big P politics. And that would be unfortunate given the consensus around these cuts. It's a big deal to get everybody on board. Let's not lose that. And so we're making the effort. We're making the effort and I think this is one where everyone can come on board; we just have to be willing to take the step together.

Monica Trauzzi: We're in the home stretch of the Bush administration. What are your plans for January?

James Connaughton: Sleep, scuba diving, and being able to just clear my head for a little bit.

Monica Trauzzi: Sounds good to me.

James Connaughton: Then we'll see what happens from there.

Monica Trauzzi: All right, we'll in it right there. Thanks for coming back on the show.

James Connaughton: Thank you.

Monica Trauzzi: Thanks for watching. We'll see you back here tomorrow.

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