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Robert FriBack to OpinionRobert Fri

EPA does energy

As a major player in energy policy, the agency will have to evolve.

In the 1960s, America began to notice that its environment was a mess. Rivers caught fire, smog enveloped many big cities, and DDT was cutting a major swath through the bird population. So 40 years ago, Richard Nixon created the Environmental Protection Agency (EPA). No great environmentalist he, but Nixon knew an onrushing political freight train when he saw one.

Looking back at its first 40 years, EPA has been remarkably successful in cleaning up this environmental mess. The Aspen Institute recently summed up the agency’s 10 most important accomplishments and by any measure it’s an impressive record.

President Richard Nixon presided over the swearing in of William D. Ruckelshaus as administrator of the new Environmental Protection Agency on Dec. 4, 1970. Photo AP/Charles Tasnadi

But what often goes unnoticed is that EPA has also become a major player in energy policy. Its regulations determine how utility companies produce electricity. EPA makes the market for ethanol as a gasoline additive and is the source of consumer information about the fuel efficiency of every automobile sold in this country. By controlling mine drainage through its clean water program, the agency puts the brakes on coal mining. It administers the Energy Star program that labels the efficiency of major appliances. The fact is that, without EPA, the few energy policies we have would be considerably less effective.

All that pales, however, compared to what’s coming next. Because the Congress can’t get its act together, dealing with climate change has fallen to EPA, and that puts the agency in the thick of energy policy once again. That’s fine by me, but if EPA is to handle climate change in a way that makes sense for the energy system, then it needs to face up to the fact that regulating greenhouse gas emissions differs in crucial respects from successfully handling more conventional pollutants like sulfur oxides and smog. Three important differences come to mind.

First, balancing the benefits and costs of regulation is much harder. Every president since Nixon has insisted that EPA strike this balance to ensure that proposed regulations make sense. The analysis is tricky, but it’s usually possible to come up with a good estimate of the benefits of reducing health risks from environmental pollution over a reasonable time period (which is what environmental regulation is all about). Not so for climate. The benefits of mitigating the effects of climate change are real but they are very hard to quantify and they accrue over many decades. I worry that trying to fit greenhouse gas regulation into the standard benefit-cost model will bog down the process in irresolvable controversy. Bjorn Lomborg, founder of the Copenhagen Consensus, famously managed to confuse the climate issue in just this way, discounting the value benefits that occur over many years.

Second, reducing carbon dioxide emissions means a much bigger change in the energy system than environmental regulation has required in the past. Carbon dioxide and many of the conventional pollutants like smog or sulfur oxides are products of the combustion of fossil fuels. Until now, EPA’s approach has been to clean up the pollutants after combustion has produced them, but that’s much harder to do with carbon dioxide. In many cases, it’s just not feasible to remove the carbon dioxide after combustion produces it – in automobiles, for example. And even where it’s technically possible to capture carbon dioxide in an electric power plant, doing so requires a whole new network of facilities to sequester the gas for a very long time.  As a result, managing greenhouse gas emissions means changing out the entire energy infrastructure of the nation. That will take more time and money than simply cleaning up technology already in place.

Finally, we still have a lot to learn about climate change and how to manage it, and that means that regulation will have to adapt to new information as it rolls out over time. As science learns more about the causes and impacts of climate change, we will refine our estimates of the benefits of regulating it, and we may become more concerned— or less. Some new technologies will succeed and others will fail, so strategies for controlling carbon dioxide emissions will change. And some policies will work while others won’t, again requiring a change in regulatory strategy. Government regulation usually isn’t very adaptable but it will need to learn how to be if it’s going to manage the climate issue.

All this may sound a bit abstract but failing to account for these new regulatory facts could create a big practical problem. That’s because EPA at 40 is going to come under lots of pressure from both economic and political interests to pull back on climate regulation. I hope it doesn’t buckle under because climate is a problem that needs attention now. What worries me is that bureaucratic inertia in the agency will yield to the urge to do new things the same old ways. There’s already some evidence of that happening. If it does, EPA will make mistakes that give ammunition to those who think that we can postpone action on the climate problem once again.

Robert Fri is a visiting scholar at Resources for the Future, a nonprofit organization that studies natural resource and environmental issues. He has served as director of the National Museum of Natural History, president of Resources for the Future, and deputy administrator of both the Environmental Protection Agency and the Energy Research and Development Administration. Read his full bio.