Deputy Administrator Perciasepe discusses outlook for regulatory action

What is the outlook for pending regulations coming out of U.S. EPA? During today's E&ETV Event Coverage of a Pew Center on Global Climate Change and Georgetown Climate Center event, Bob Perciasepe, deputy administrator at EPA, discusses upcoming Clean Air Act regulations. He also addresses how proposed cuts to EPA's budget could delay regulation of greenhouse gas emissions.


Eileen Claussen: We are really delighted to be able to present our next speaker to you. Bob Perciasepe has held so many leadership positions on climate and environmental issues, that it's hard to know where to start.

He's currently enjoying a return engagement at EPA as deputy administrator under Lisa Jackson. You know, as a top ranking public official at EPA, Bob posts his schedule on the EPA website for everyone to see.

And I thought it would be interesting to share a few highlights from a recent day in the life of Bob Perciasepe, as part of my introduction.

The day started with what was billed as an early-morning meeting and then proceeded to daily briefing, another meeting, a meeting with staff, a program update meeting and then another meeting with staff.

After lunch there was a staff meeting, a program update meeting, another meeting, another meeting, and then a program update meeting to end the day. Now, I'm an EPA veteran myself and it all sounds very familiar.

So, number one, I'm really glad that Bob could step away from all of those meetings to join us here today and, number two, I am so glad I'm no longer in the government.

Bob is back at EPA after serving as chief operating officer with the National Audubon Society. He originally worked at the agency during the Clinton Administration.

And, at the time, the National Journal called him a "key utility EPA player due to his service as assistant administrator in both the Water Pollution Office and the Air Pollution and Radiation Office."

He was secretary of the environment for the state of Maryland from 1990 to 1993, received a master's degree in planning and public administration from Syracuse, received his BA in Natural Resources at Cornell and, Bob, it's great to have you here.

Bob Perciasepe: Thank you. Thank you all. It's really my pleasure to be here and to not be at one of those meetings. It is kind of a relentless march from-those of you who have ever had those kinds of jobs and, not to make it sound any worse than it really is, it's actually a joy to be in public service and to dedicate a large amount of your personal life to this kind of endeavor and to, you know, have the kind of mission that EPA has that is inspiring to most of the staff that are there.

So you get up every morning, you know, pretty much with a jump in your step and ready to go, but you do feel like you wake up on Monday morning and go to sleep on Friday night. That is definitely a phenomenon.

But there are plenty of people in the world who work at much harder jobs and some of them are in the armed forces protecting the country overseas and I don't think they have the same kind of problems that we do here. They have bigger problems.

Eileen, thank you for that introduction and thank you for inviting me to come. I feel a little bit like a weight on my shoulders listening to some of the discussion earlier and realizing you're going to have all these questions for me.

But I'll start with something simple, these are challenging times. And I'll talk a little bit about fiscal challenging-challenges, and then political challenges.

On the fiscal front you can start right at your own home and in your own family and the impacts. Almost all of us, according to the polls, knows somebody who has been affected by the recent recession.

Many of us have retirement funds that may have been affected by the recent recession and some of us probably even have houses that may have-their value may have been affected by the recent recession.

We certainly have people in our family who have been affected in such, so we have to be-we have to start cognizant of the fact that we live in a time right now that's kind of unique in the country's history in terms of the economy.

And I know that that weighs on a lot of folks minds and is one of the issues that often is brought up somehow in the same breath or sentence as when some people are talking about some of the work that EPA and our partners at the state are working on.

So, you think of it at home, and to go to the state and the local governments, which Eileen pointed out I spent a good part of my career working at, they have already been hit with a wave of austerity.

As the state budgets are tightened and city budgets are tightened, this is a-you could see the tumult in many parts of the country. And embedded in that tumult in many parts of the country have been significant-has been significant reductions in state environmental agency resources and capacity.

So, that's another thing that weighs on the fiscal side of the challenges we face in the current situation. Last week, I know all of you were riveted and watching carefully when we submitted the EPA's budget to public scrutiny last week.

But I want to say, you know, that budget for EPA was a 13 percent reduction from our 2010 budget. We don't have a 2011 budget, which could be another whole speech, but the 2010 budget compared to what we submitted for Congress to review for fiscal 2012 is 13 percent less than it was in 2010.

There's a lot of different things that went on in there, but, believe me, being like the chief operating officer guy, there were a lot of tough choices that had to be made to get to that 13 percent, maintain our basic functionality and capacity and, at the same time in that budget, increase our support to state environmental agencies.

And so that balance was tough to make and they were difficult for EPA to make and they were definitely some tough choices, particularly when we wanted to make sure tribes and states had some additional resources, given the demands of the job and given the status of some state budgets.

So, we have to realize these fiscal challenges. We have to take them into account as we are moving forward, but we can't make reckless cuts. We can't sacrifice the future for the present.

We have to make responsible adjustments in both our personal financial situation and, not to get into any personal financials, I could go on about that too, but this is a key pivot point in the country right now, the desire to deal with the problems people perceive today compared to how that will affect my children.

And I will get personal, my children. And we seem to be losing sight of that and it's in the budget process and in many other processes.

Ultimately, it's those future generations that we need to take into account as we're looking at what we need to do in the environmental front and also how we set up the country for economic rebound.

And I try to keep track of-there's probably a few economists in the audience. Go ahead, admit it, raise your hands. See, see, I told you! You thought I was going to ask if there were any lawyers in the audience.

Most of the economic analysis and prognostication that I've been seeing for the coming year is generally positive. You know, obviously the Middle East is of concern to some, but, again, I think we're all going in the right direction there and so we need to keep that in our head also not withstanding it.

So, we think, certainly at EPA, we have submitted a responsible budget that looks-tries to find that right balance, a significant reduction in our budget, but, at the same time, increases and maintenance of capacity in very important places, including our ability to provide technical assistance for greenhouse gas permitting.

Which I think was the subject of a little bit of discussion earlier. Now, these fiscal challenges and, again, I could go on, but I won't anymore on that, but I will circle back to the family a couple of times here.

Those fiscal challenges are accompanied by a number of political challenges. And I think most of us here are-I keep saying that, don't I?

Most of us here have a sense of what some of those political challenges are and the dynamic that's embedded in some of the financial tumult is also a political tumult.

And from our perspective at EPA, certainly, we see, on that landscape, a number of groups and individuals who are looking to not so much solve the fiscal problem, but really disable part of EPA's capacity to do its job.

The job, ironically that Congress set us out to do under the Clean Water Act, the Clean Air Act and I won't list them all, you know what they are.

So, I'd say most notably, and, again, this gets at what we're talking about here today, trying to move some of these things out of the way, so, most notably Clean Air Act, but not exclusively. There have been efforts to delay, weaken and, in certain cases, eliminate certain processes to be able to carry out those functions.

In fact, in some of the budget proposals that are currently being considered in Congress, not only do they reduce some of the capacity at EPA to carry out the very activities of some of the previous discussions we're talking about and the need to further clarify them in the minds of some, but also additional cuts to state programs.

So, you know, it's a political environment that is moving in that direction or has moved a little bit in that direction that's really causing another one of these landscape issues that we're here talking about today and that is involved with this entire process of where do we go into the future and what do we think about future generations?

There have been obviously claims that EPA is overstepping its authority or has bypassed Congress and we feel that those questions have been answered. They've been answered for going on for years now, not by EPA, but by the Supreme Court of the United States.

You know, EPA didn't pen that decision of the Supreme Court. That was done through the normal Supreme Court processes and we all know what those are, don't we?

When folks went to vote last November, you know, as best we can tell from all the surveys that have been done and I may mention a few in a moment, much to your chagrin, we are confident that people did not go to the polls to vote for dirtier air, dirtier water, and lack of attention to future challenges.

There may be different opinions on how to attack some of those things, but if you look at where we are today and where we were 40 years ago, I think it's worth looking a little bit there because, you know, can we learn from history?

Will history give us some indication of how things will unfold as we go into the future? You know, EPA has been in existence for 40 years. Many of you have been to certain events last year when EPA celebrated the 40th anniversary.

But the bottom line is if you drive around the country or more probably likely, you fly around the country and you land someplace in the United States and you go to a restaurant and you drink water, you're going to be pretty confident that that water is going to be pretty much the same as it was where you left.

That interstate confidence is because of the partnership between the federal law, EPA standards, and state implementation. If you have children, and I know I won't ask for a raise of hands here, I'm going to say a lot of people probably do, the amount of lead in their blood today is less than it would've been 40 years ago.

They all have a little lead, it's just ubiquitous in the environment, but every child in America has less lead in their blood today than they did 40 years ago because of actions taken by EPA and state partners and ultimately implemented by American ingenuity in business.

The population of the United States since I was born has doubled. I know that almost ages me, but I'm not going to get specific there, but was probably somewhere near 1950. The population of the United States has doubled.

The number of automobiles on the road has more than doubled, maybe almost tripled, not to mention trucks and other motor vehicles in surface transportation and the air pollution in the United States is down 50 percent.

Every sewage treatment plant in the United States has secondary treatment at least and many are now going even beyond that. And if you buy some vegetables in Houston or you buy vegetables in Chicago, you're pretty sure that they're not going to have excessive pesticide residue on those food products, vegetables or fruit.

Now, this is something we all take for granted today, yet this happened in the last 40 years. This was not something that happened by spontaneous combustion somehow in 1973.

You know, it happened through the hard work of American businesses, state regulators, federal standard setting under laws enacted by Congress that set up a framework to deal with an interstate set of issues around the country.

And what has happened, you know, through that time? You know, last year alone, just looking at the Clean Air Act and I know that there are a lot of Clean Air Act aficionados here today, 160,000 lives avoided premature death, just last year, 100,000 hospital visits were avoided just last year.

So, rolling back these protections or inhibiting the ability to maintain those gains because of the relentless march of our growth in this country which, as I just mentioned when I was talking to the economist a few minutes ago, is going to start going back.

It's not going to stay stagnant forever. We're going to want to grow. There's going to be a pent-up demand for all kinds of goods and services. And rolling back these protections or allowing them to degrade is ultimately going to affect the economic benefits that came with all those improvements.

And who's going to be affected by that the most? What did I start with? The families. Who's going to be affected by that the most is going to be the families of the United States who are not going to get the benefits or be able to maintain the benefits that have already been accrued through the years.

Those safeguards are in place now make workers more productive. They take fewer sick days. They allow consumers to spend less on medical bills and, therefore, they spend more on other things in the economy.

And they make a clear-and I want to make a clear point on this, they make a clear regulatory picture that can give certainty to American business, which then translates into investment in technology, new technologies and cost-effective tools that will help businesses grow.

This has been the history. This is what you see when you look back at all the other things that have occurred and all the other advances we have made in this country on environmental pollution.

You don't see a landscape littered with economic chaos. You see real growth in GDP that clean water, clean air and all those benefits actually contributed to, not detracted from.

A recent study estimated that a $520 billion investment in energy efficiency would yield a $1.2 trillion energy cost savings through 2020. That's a two dollars savings for every dollar you put in.

I'm going to give you some examples. I mean the Clean Air Act, over its history, is 30 to 1 benefits to cost. The University of Massachusetts study published two weeks ago on common sense Clean Air Act safeguards that we were working on, they could create 1.5 million jobs.

In our own research at EPA, our own Center for Environmental Economics looks at mainstream literature in terms of the effect of regulations and the spending that goes on. I have to remind us every once in a while that if a power plant, let's use something simple and straightforward, has to put on a scrubber, they have to order the steel.

They have to hire somebody to design it. They eventually have to hire somebody to run it and, of course, they can't take the electric generation overseas, so the impact on the environment is obvious.

The impact on the economy is a shifting of where we're spending money to invest in our future health and, at the same time, we are creating economic activity when these pollution control programs are implemented.

Between 2000 and 2008, the Environmental Protection Agency has grown steadily in the United States and it currently stands at over $300 billion a year. It's actually one of the-and there are many, but one of the business categories in the United States that's a net exporter.

The balance of trade in the environmental protection business in the United States is positive for us. The annual global market is continuing to grow as well and it's estimated to be over 700 billion this year and the United States currently leads the world in this industry and these things are related.

The fact that we've made the investment and innovation in our future health has led to economic activity. Let me repeat that. The fact that we have invested in our health for the future has resulted in economic activity and made the United States a world leader in that technology.

So, recognizing these possibilities, it's not the time to start figuring out how we stop doing that, especially with the challenges we see in front of us on both the continuing impacts from pollution, even in the face of that success, and, of course, the impacts down to our future generations of not addressing, in this generation, the problem of climate change.

Something else that's pretty important to note and it gets at the political challenge as well as the fiscal challenge, and that is that in survey, in poll after poll, vast majorities from every political spectrum of the United States public support more and stricter environmental protection.

USA Today reported 63 percent of Americans believe EPA needs to do more to reduce pollution and to protect the air and the water. A poll released last week by the American Lung Association found that three of four voters support EPA setting tougher standards on mercury, smog, and carbon dioxide.

That same survey had found 69 percent of the voters believe EPA's scientists should be setting those standards and 68 percent do not want Congress to impede that progress.

So, ultimately, the political atmosphere that is one of the challenges we face always, because political debate and political discussion is the lifeblood of our country. It shouldn't happen-I mean it shouldn't not happen, it should happen.

But it should be informed by and ultimately the atmosphere that it takes place in will be informed by the public opinion that I just mentioned. So, again, if I look back on the 40-year landscape, there's no evidence that the kinds of claims that we normally have to-that we hear about occur or have occurred.

In fact, they've actually created economic opportunity in the United States. Now, let me talk a little bit about EPA's work on climate change. All that was a setup.

Because I would want to ask why will it be different this time? You know, why would we expect when, time and time again, that's the kind of history we have, what are the things that will be different in the future? What do we think would be the cause of that?

And we've heard some thoughts and some ideas on that and those things should be debated and discussed, but I'm not going to-how many of you heard Janet McCabe this morning? I think most of you did, right?

She went through probably a more exhaustive than I think is probably appropriate for me to go through. But I want to hit a couple of highlights on what we are doing and I want you to hear this clearly.

Our intent is to do measured, common sense steps to make progress on this problem and not abandon our future generations. Now, everything we feel we're doing will be totally compatible with whatever comprehensive framework maybe in the future.

But right now we can and should be making these common sense stepwise approaches to make progress, because it sends the right signal to the economy and to the business community and there are investments that could be made that will continue to make improvement in the future.

But one of the things we've done and some of these I'll go around in a couple of different angles here. Renewable fuel standards, I think Janet probably had that on her list.

But when you look at what that is enabling by creating the certainty necessary for all of those different kinds of fuels to come together and try to figure out how they meet a standard so they can get into the marketplace, that creates an atmosphere of innovation and business opportunity.

And, of course, it's intimately linked, in the long haul, to the nation's energy security. Clean cars, you know, EPA and our state partners in California have been in the clean car business since the 1960's and even before. And more and more, those programs are aligned and mutually supportive.

A year and a half ago we announced a program with California and with the U.S. Department of transportation to bring all those different pieces together to have a greenhouse gas and a fuel economy of program that is compatible and aligned between all of those different entities, the highway, the fuel economy, the CAFE standard, the EPA tailpipe emissions for greenhouse gases and the California program.

We are now working with the same team and in very frequent conversation with the automobile industry, both domestic and international. Actually, they're almost all international, but headquartered in another country I'll put it that way, to look at what we'll do beyond 2016, post 2016.

And we're having very good discussions and I do not see that it will be-it won't be without choices and hard work, but I don't see a barrier to us repeating that common sense approach that we took the last time.

The Tailoring Rule on stationary sources, you know, I never would've thought, for instance, a stationary source program would have been called a Tailoring Rule the last time I was at EPA.

But, again, it's actually a totally appropriate name. We're trying to tailor the commonsense implementation of this program to build the capacity to make sure that we're able to carry forward and make progress.

And we're focusing on the most obvious, low-hanging fruit, energy efficiency. Now, we have announced that we're going to be looking at performance standards that will be more sector based.

But those standards-I shouldn't say but. Those standards will be developed, they will be proposed, there will be public comment, there will be back-and-forth and then there will be final comment.

You know, I'll point out yesterday, tangentially related, EPA went final with-I love this, I love this one even better than the Tailoring Rule, the Boiler MACT.

It sounds like the guy who's going to come and fix the boiler. He along with the Brick MACT, the bricklayer guy that will cover the boiler with bricks.

Most of you know MACT is Maximum Available Control Technology. It's a technology standard under the 1990 Clean Air Act amendments that set up technology standards for reducing hazardous and toxic air pollution.

And industrial, commercial, and institutional boilers are an interesting large number of sources and a very difficult array of situations that has to be taken into account in the rulemaking.

EPA went through an extensive review of many of the different comments that came in and yesterday we proposed a rule that gets the same amount of public health protection for half the cost of what was estimated to be in the original rule.

And I guess this is a point in time where I'll just simply point out, we're also doing a retrospective review back 20 years of some key significant rules EPA has done and how much we estimated the cost would be to implement those rules.

And we are going to look to see if those costs actually came true or whether they were actually less costly to implement. You know, anecdotal information that has been looked at-are the Clean Air folks from EPA here? Is there anybody from the-oh, hi, Rob, yes. I think you do work at the Air Program.

Well, Rob will flinch a little bit if I say anecdotally, but we do, do summaries of the cost of implementing the Clean Air Act and, certainly, you've all heard the story about the acid rain program.

But we're looking deeper and we're looking in a way that I hope will be able to be peer reviewed and help us develop a practice in our regulatory impact analysis that we're able to say how we can discount in the future the cost based on what is commonly called the learning of the regulated entities.

They learn-if you can truly level the playing field, competition, talk about market based, competition will take place over who can achieve that the most efficiently and with the less cost.

And guess what, that actually happens. Anyway, I'm not going to go off on that. That's another speech. You can invite me another time, I'll talk about that one.

So, I think, you know, even though our estimate was cut in half on the cost of implementing Mr. MACT, the boiler guy, the chances are very high that it won't actually cost even that much to implement it.

But I can't know for sure. I'm just saying it's likely. We also have estimated that implementing that rule is going to create jobs. I know that there have been analysis out there saying that it will cost the economy hundreds of thousands of jobs.

But when we look at it and we look at the jobs that will be created in the-directly from the rule and we haven't even looked at the indirect pollution control industry jobs. We will be doing that, but we just hadn't completed that work.

So, regulatory certainty is something that is pretty important and we're sort of like-we have this Catch-22 thing going on where we need to have regulatory certainty so that we can start to plan, invest, and innovate, but on the other hand, let's not do anything because we don't have that regulatory certainty or we don't what it might be.

Well, that's what the notice and comment and process is, similar to Exhibit A that I just gave you with the Boiler MACT. Innovations can pull us at a much faster pace and we're looking at the current work that's been going on and I am reliving this a little bit and I'm looking at you again, Rob.

I'm reliving this a little bit from my last time at EPA as the assistant administrator for Air. We're looking at the Utility MACT, the other guy that works on the electric industry, and there's a big focus there, as most of you know, on mercury.

Well, since I was at EPA and have come back, whole new technologies have been created to deal with mercury in coal-fired power plants that didn't-they weren't commercially available. They may have been on a bench level somewhere.

And so this process really , really does happen. This is not a theoretical thing and the idea that we don't think it will happen on something that people haven't looked at very closely, greenhouse gases, compared to what they've looked at with sulfur dioxide, nitrogen oxide, mercury and some of the metals.

We continue to have innovation even after 40 years of regulating those things. There continues to be innovation. We have very little history in terms of technology innovation.

A lot in the energy conservation, on the demand, the so-called demand side, but not a lot of history on the other aspects of technological approaches and looking at efficiency.

So, I think we have a lot to learn and moving forward with clarity on what the performance would be and looking at commonsense approaches under the best available control technology for energy conservation, I think, are very commonsense.

They're very orderly and will send the right signals for this country to start to make progress in this arena. I'm just going to make a few more comments here because I know that there are many state-because I've said hello to a number of you already, state regulators in the room and I've already mentioned that EPA worked pretty hard in our 2012 budget proposal to make sure we maintained a boost in capacity for states.

Because they are going to be on the front line of some of this work and we will be right behind them with teams of people to help on the technical assistance side, which is the way we are currently set up.

So I think I'm going to stop and simply say that it's important to note that both, not just the setting the standards and creating the certainty and moving forward for future generations, not just not losing ground on all the public health and environmental improvements we've made, but also making sure that we have the capacity to do the right job for the businesses that will be regulated.

And that we have the capacity and the sharing of technical knowledge between the federal and state governments to make sure that we can make progress and make timely decisions and not be-not be uninventive and uncommonsensical in terms of the kinds of requirements that we would want to see for energy conservation.

So, sensible, integrated, when I look at all those different things from cars to renewable fuels to stationary sources and using commonsense to make progress on a problem that is not going to go away and we have a responsibility to not only our own families, but the families of the future to not shirk off what we know we can start to do now and we know we can do it in a commonsense way.

[End of Audio]



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