President Obama unveiled drastic new regulations on Tuesday to curb greenhouse gas emissions. Steve Hayward, a PERC board member, previewed the president's speech earlier this week on CNBC's "The Kudlow Report" with Larry Kudlow.
Our federal government prefers spots and is moving forward with a million-dollar-a-year plan to remove 9,000 striped owls from 2.3% of 14 million Western acres of protected spotted owl habitat. Our government is shooting wood owls with stripes to protect those with spots; to stop the stripes from breeding with the spots.
It had to come to this.
The 1990 listing of the Northern spotted owl under the federal Endangered Species Act (ESA) gave the bird totem status in management decisions.
It didn’t work. Spotted owls declined 40% over 25 years. Timber sales on federal government-managed lands dropped too. Oregon harvests fell from 4.9 billion board feet (1988) to less than 5%, 240 million board feet (2009). Beyond the jobs and business profits from making lumber, the Federal and County governments used to benefit from these harvests too. Harvests down: tax receipts down. Today, with cutbacks in Federal budgets and sequestration, the States are arguing about how much of your tax dollars the Federal government should give them to keep impoverished County governments afloat in timber-rich areas.
On the merits, the court rejected challenges to the EPA’s determination that the emission of greenhouse gases causes or contributes to air pollution that which may be reasonably anticipated to endanger public health or welfare (the “endangerment finding”) and rejected claims that the EPA’s new standards for GHG emissions from mobile sources were arbitrary and capricious. This was to be expected. As I’ve noted before, judicial review of these sorts of decisions is highly deferential, and the EPA did not have to do much to support its decision. Even if the industry challengers had been able to convince the court that climate change is not that big of a deal, this would not have been enough to overturn the endangerment finding, provided the EPA gave a sufficient explanation of its conclusions — which it did.
The more interesting parts of the opinion concern whether the petitioners could challenge the EPA’s decision to regulate stationary source GHG emissions generally, and the EPA’s adoption of the tailoring rule in particular. On the former question, the court concluded that industry petitioners could challenge a decades-old EPA determination that the regulation of a pollutant from mobile sources under Section 202 of the Act triggers stationary source regulations. This was because there were some plaintiffs who had never-before been subject to stationary source regulation under the Clean Air Act because it was not until carbon dioxide was treated as a pollutant that these plantiffs emitted enough of a regulated substance to fall within the Act’s controls.
This small victory on ripeness was but a prelude to a loss on a larger question: Whether large emitters of greenhouse gases could challenge the EPA’s decision to forego regulation of smaller sources. No, the court concluded, because the industry petitioners did not satisfy the requirements for Article III standing to challenge the EPA’s failure to regulate someone else. However great the injury some industry groups may suffer from GHG regulation, the court reasoned, forcing the EPA to regulate additional sources would provide no meaningful redress. It does not matter that the EPA’s tailoring rule flatly contradicts the plain text of the Clean Air Act and represents a dramatic assertion of agency discretion over a detailed, legislatively crafted scheme. If there’s no standing, the suit cannot proceed.
This decision will be the last stop for most, if not all, of the industry challenges to the GHG rules. En banc and cert petitions may get filed, but I can’t see either the full D.C. Circuit or the Supreme Court having much interest in the endangerment finding or the EPA’s mobile source rules. If any claim has a chance to go on, it would be the standing argument. If there’s an issue in this case that could catch the Supreme Court’s attention, this would be it. Among other things, it could giver the Supreme Court the opportunity to address how recent standing decisions affect standing claims based upon alleged competitive harm (i.e. the harm suffered by company A due to the government’s favorable treatment of company B). Still, I would not bet on it. In all likelihood those who oppose GHG regulation under the Clean Air Act will have to direct their attention to Congress. They’re done in the courts.
Q: Ecology is about preserving resources while economics is about exploiting them. How does one reconcile these two disciplines?
A: In a way, I think they are both about emergent properties. Ecology is about the spontaneous order that appears in the world through the interaction of different species — the pattern that you see. And economics is about the same thing in society. So they are both bottom-up fields for me. They’re both about how order emerges from the interaction of individuals.
Q: Are you suggesting economics could learn something from Charles Darwin and ecology could learn something from Adam Smith?
A: This is one of my crusades, actually. As someone who was an ecologist and nowadays writes a lot about economics, I am fascinated by the parallels. Charles Darwin read Adam Smith, so there is sort of an ancestral connection between the two fields. And there is a lot going on in evolutionary biology and ecology that is very parallel to what is occurring in economics and vice versa. People like F.A. Hayek knew this and went across to evolution to pinch ideas, so I think there is a very fruitful dialogue between ecology and economics.
A: I don’t think so because I think that the amount of resources we have depends upon our ingenuity. In other words, the more prosperous we get, the more frugal we get in our use of resources. Land is a good example: We use less and less land to produce the same amount of food because we’re getting better at it. We’re applying fertilizer or irrigation or whatever it is. The same is true for the amount of steel in a bridge; it is a lot lower than it was 20 years ago, etc.
So actually we are shrinking the amount of resources we need to run society at the same time that we are growing them, because there are more of us and we’re becoming more prosperous. I actually think the richer we get in this century, the more comfortable the resource position is going to be because we’re going to be better at recycling, better at finding resources, and better at using them frugally.
Q: That is somewhat counterintuitive. The more we use, the more we’re going to have, the more frugal we’re going to be, and the wealthier we are going to be.
A: Until now, the problem has been called the Jevons Paradox, which says that the cheaper you make energy, the more people will use it. And that’s true with a lot of resources. But there is evidence that the Jevons Paradox is reaching its limits with some resources. Land is a good example, again. We are actually reforesting land all over the world, we’re taking land out of farming all over the world, because even though there are more of us every year, and even though more of us want to eat chickens and pigs and all these land intensive forms of food, we still, even with this profligacy, can’t keep up with our increasing efficiency, our productivity. So actually we taking land out of agriculture and turning it back to nature reserves. And as the population growth rate falls in this century, I think that process will accelerate.
Q: So what would your response be to those who argue that we should literally go “back to nature,” back to pre-industrial times?
A: I think if seven billion people tried to go back to nature it would be a catastrophe for nature. A hunter-gatherer basically needs a thousand hectares to support himself and even at that level he can extinguish species. We know that there was a problem with hunter-gatherers wiping out species in the past. So imagine if each of us needed a thousand hectares—it can’t be found. There wouldn’t be room for any places that were off limits. So I’m afraid we would have a much larger impact on nature if we tried to live lower-tech lives than if we try to live high-tech lives.
Q: So you have this optimistic view on the future of not only human well-being, but of nature and the environment itself. What might stand in the way that could possibly derail that view?
A: There are things that could go wrong. The birth rate could start going back up in some countries and the general greed with which we want to increase our use rate. For example, if we all want to have private jets maybe there is a problem. But, in a way, I think the biggest threat comes from politics – from people saying, “No, we must not use a technological advancement like genetically modified food,” or, “No, we mustn’t allow prosperity to increase because that’s bad for nature.” And, “We mustn’t use fossil fuels; we must go back to using biofuels, wood, and crops.” Well, that’s a disaster. That’s taking land that could be producing natural habitat and putting it to human use again. Most of what environmentalists are demanding in the environmental movement would actually increase the human footprint, not decrease it, because they want biofuels, renewable energy, and organic food. These are things that take up more and more land. And I think that’s a pity. I think we should be trying to take up less and less land.
Q: And so we have come full circle. What stands in the way of your optimism would be top-down politics and the wrong kind of activism. If we leave people and nature to its own bottom-up devices as Darwin has shown us in ecology, we can do it through economics as well.
A: I think that is absolutely right. There is far too much top-down thinking in the world, trying to ordain the solution rather than let the solution emerge.
Last Thursday, at a congressional hearing, Assistant U.S. Fish and Wildlife Service Director Gary Frazer said that the Interior Department’s Office of Science Integrity would conduct an independent evaluation of the work of FWS biologists accused by a federal judge of being dishonest with the court and acting in ’”bad faith.” As the Los Angeles Times reports, Frazer said the FWS stands behind the work of its scientists but the Department will seek an independent assessment from outside experts nonetheless.
Frazer’s comments were delivered at a House Science Committee Subcommittee on Oversight and Investigations hearing on “The Endangered Species Act: Reviewing the Nexus of Science and Policy” at which I was also a witness. In my testimony, I focused on the broader issue of how science is and should be used in under the ESA, and made three basic points.
First, it is important to ferret out genuine instances of scientific misconduct or science politicization. At the same time, it is essential to recognize that science merely informs, and does not dictate, policy. Species conservation is not – and cannot be – a wholly scientific exercise. Whether a given species is at risk of extinction may be a scientific question, but what to do about it is not. The likelihood that habitat loss or the introduction of an invasive species will compromise a species chance of survival in the wild is a question that can be answered by science. On the other hand, what conservation measures should be adopted to address such threats, and at what cost, are policy questions. Science can – indeed, must – inform such inquiries, but science alone does not tell us what to do. Insofar as debates over conservation policy are dressed up as scientific disputes — or instances of science abuse — we hamper our ability to assess competing policy options and pursue optimal conservation strategies.
Second, the structure of the ESA both undermines our ability to base conservation decisions on the best possible scientific information and creates substantial incentives to manipulate science so as to influence policy outcomes. The former occurs because the ESA makes the presence of endangered or threatened species a liability to private landowners. As a consequence, private landowners are often reluctant to allow government or other researchers to conduct surveys or engage in other species-related research on their land. This means the ESA makes it more difficult to know which species are most in need of help and where they are.
The ESA creates incentives for interest groups and others to try and manipulate science because certain science-based determinations, such as whether a species is “endangered,” are triggers for non-discretionary regulatory measures. This means that if an interest group wants to influence regulatory outcomes, it is in their interest to try and influence the initial scientific determination. This explains why there is so much controversy and conflict over species listing decisions. The Act itself turns what should be primarily a scientific inquiry — whether the best available science indicates that a species meets a given definition of what it means to be endangered or threatened — into a high stakes proxy battle over regulatory policy. This is not good for science, and further complicates the quest for optimal conservation measures.
Last month, the X-Prize Foundation announced the winners of the Wendy Schmidt Oil Cleanup Challenge. The challenge was created to spur the development of more effective oil spill cleanup methods. Specifically, the challenge offered $1.4 million in prizes for the development of removing oil from the ocean’s surface. The aim was to double the industry’s best oil recovery rate in controlled conditions. The winning team, Elastec/American Marine, demonstrated an oil recovery rate more than three times the industry’s previous best and was awarded the top prize of $1 million.
This is another example of how technology inducement prizes can spur the development of valuable technologies, and further evidence that such prizes are far more cost-effective than ex ante R&D grants or government investments in speculative ventures like Solyndra. The latter may be more politically popular, but prizes would be a better use of taxpayer dollars. As I’ve argued at length, if we’re serious about problems like global climate change, we should invest more in prizes and less in conventional approaches to government-sponsored R&D.
Looking around the stand, Laurie Wayburn, co-founder of the Pacific Forest Trust, which manages this 2,200-acre forest plot for the Fred M. van Eck Forest Foundation, sees a variety of things: thick, straight trees that will generate millions of dollars for the foundation; a healthy forest that filters drinking water and stores carbon dioxide; and a maturing, complex habitat for a variety of animals, including the endangered northern spotted owl.
The adage that northern spotted owls compete with forest jobs should be left to rest. There is value in old-growth forests, but to argue that preserving land is the only way to safeguard the owl is myopic. Forests are dynamic and so are species. Interestingly, science is too.
Science is the knowledge and inquiry of the natural world. Science demonstrates what is and what could be under varying conditions. Science does not, however, measure relative values.
Science cannot tell us whether timber jobs or acreage set aside for spotted owls is better. That is value based. Nonetheless, the Endangered Species Act makes it clear that species on the brink take precedence over other land uses.
In the early 1990s it was heartily argued that the northern spotted owl was competing with timber jobs. Indeed, it was determined that the primary threat to the northern spotted owl was decreased old growth as a result of timber harvest. A couple of decades later the forests have changed, the management has changed, the threat to the owl has changed, but policy argues for more of the same: preservation.
What does science tell us about the forest policy to protect the northern spotted owl?
Owls like mature, old-growth forests. But they also like managed forests.
In 1990 it was presumed that decreased old growth acreage in the Pacific Northwest was the primal threat to the northern spotted owl. In 2011 it was determined that the barred owl, a competing species that displaces the spotted owl, is the greatest threat.
Under the 1994 Pacific Northwest Forest Plan, 24 million acres of federal land was designated as northern spotted owl habitat. Seven million of those acres prohibit timber harvest. Harvest in the Pacific Northwest has declined by more than 80 percent as a result. Timber consumption has not similarly declined, so timber is cut elsewhere to meet demand.
Forests are dynamic and have changed between 1994 and 2003. About three percent of the habitat set aside for owls was lost to wildfire and insect infestation. Set aside forests are aging and becoming more vulnerable to fire and insect infestation over time. Newly matured national forest acreage suitable for owl habitat increased by about eight percent.
Founded 30 years ago in Bozeman, Montana, PERC—the Property and Environment Research Center—is the nation’s oldest and largest institute dedicated to improving environmental quality through property rights and markets.
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