A MORE CONSERVATIVE APPROACH TO ENVIRONMENTAL LEGISLATION

For more than ten years, America has stood at the threshold of a new era in environmental policymaking, but hasn't stepped forward. The successes--and failures--of many of our landmark environmental laws (the Clean Air Act, the Clean Water Act, the Endangered Species Act, the Superfund program) have been clear since the 1990s. All have accomplished much, although at needless cost, and all are straining against their limitations, undermined by unforeseen complications and unintended consequences. They haven't met their goals completely, and they face uncertain prospects for getting the job done.

Enacted a generation ago, these laws have been revised only occasionally and incompletely, if at all. They were the first federal efforts to respond to important--and complicated--problems. It's not surprising that they weren't perfect; it's surprising they worked at all. By now, their strengths and weaknesses are well understood, and yet reforms have been halting at best.

Take, for example, the Clean Air Act. A vast army of state and federal bureaucrats is employed issuing thousands of permits, inspecting facilities, and litigating everything from medical science to speculative engineering questions. Rigid regulations require overly prescriptive and sometimes counterproductive approaches to complex problems. Perverse regulatory incentives hinder innovation, as companies focus on the letter of the law rather than the larger goal of environmental performance. Every sector of the economy--and every household--bears some of the cost of this inefficiency; in some sectors, the cost is considerable. Meanwhile, in some areas, air pollution remains a serious public health problem, despite 35 years of federal regulation.

To do better--to make further improvements in air quality, where it's needed, at less cost--we need a better regulatory approach. We need an approach that promotes less bureaucracy, less litigation, more flexibility and innovation--and perhaps most importantly, more reliable results. In broad terms, we know what is needed, but cannot agree on how to do it.

The success of the 1990 Clean Air Act's marked-based "cap-and-trade" program to control sulfur dioxide (SO2) emissions is uncontested. Even skeptics admit that the program has produced far greater reductions in pollution, far faster, at much less cost than anyone had imagined possible. This approach has two strengths: It gives companies an economic incentive to excel, and it is 100 percent effective. No lawsuits, no army of permit-processing civil servants, and no excuses. It offers perfect compliance at a minimal cost.

Extending this approach to other pollutants, and perhaps other industrial sectors, is the obvious next step. For three years now, President Bush has proposed doing just that, with no success. This year, once again, he called on Congress to establish a national trading program for SO2, nitrogen oxides, and mercury.

The President's proposal would cut power plant emissions of these pollutants by more than 70 percent--to levels 90 percent lower than they were when the Clean Air Act was first enacted in 1970. Environmentalists concerned about acid rain in the Adirondacks could hardly believe their ears when the President announced this initiative in 2002--it was all they had dreamed of--but they were even more surprised when the national environmental groups geared up to block the bill in Congress.

Since then, there's been heated debate over whether the caps are too high, whether the timetables are too slow, whether it's safe to "trade" mercury emissions, and whether it's wise to ignore greenhouse gases. These are reasonable issues to debate, and there are reasonable ways to resolve them. All that is needed is determination to get the job done, and for the first time, there are signs of seriousness from the administration.

Recently, the Environmental Protection Agency announced that it will move forward this year with implementing as much of the President's initiative as possible through regulation if Congress doesn't act first. If Congress is smart, it won't wait for the EPA. Policymaking at this level is properly the responsibility of legislatures, not the courts or bureaucrats, and the legislative process is far more likely to produce a carefully crafted compromise that accommodates valid concerns on both sides.

For example, the ability to adjust the caps is one of the strengths of a cap and trade system. This flexibility needs to be limited--frequent adjustments would be costly and inefficient--but it can be useful. Congress could use this feature to craft a simple compromise: Adjust the targets or timetables as needed to satisfy a voting majority (probably making them somewhat more ambitious), while requiring an independent review of new information about pollution levels, health effects, and the efficacy of the trading system. Every five years, the caps could be adjusted, with an appropriate phase-in period for the new targets to take effect. The trading system could even be expanded, over time, to include new industrial sectors, and the caps reset accordingly.

The way forward on air pollution is clear. The reform agenda for other areas is, in many cases, equally obvious. It is well understood, for instance, that the Endangered Species Act creates perverse incentives for landowners: If your land offers suitable potential habitat for an endangered species, call the bulldozers--quick! If the owls show up first, the cabin you dreamed of building will remain just a dream. It's no surprise that once a species is listed as endangered, there's almost no chance that it will ever recover enough to be delisted. A new law that offers landowners positive incentives to protect species, and some reasonable flexibility in accommodating competing needs, would serve us well. On issue after issue, conservative environmentalism can be built on a foundation of simply learning from our successes--and our failures.

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BANK NEEDS TO TAKE A STAND AGAINST PEOPLE-HATERS

Banking giant J.P. Morgan Chase is under pressure to condemn millions of people to perpetual poverty. Thanks to the short-sighted surrenders of two of its competitors, J.P. Morgan Chase's management is now facing serious harassment by the activist group Rainforest Action Network, who wants to dictate the bank’s lending policies in the developing world. Last week, RAN expanded its campaign against the U.S. financial services industry into tony Greenwich, Conn., to the very street where J.P. Morgan Chase's CEO, William Harrison, lives. RAN activists put up old-fashioned Wild West-type "Wanted" posters featuring Mr. Harrison as "Billy the Kid." The posters criticized the bank for "reckless investment in environmentally and socially destructive projects in dozens of countries" and urged Mr. Harrison's neighbors and friends to "ask him to do the right thing."

RAN wants to control J.P. Morgan Chase's lending policies in developing countries, especially with regard to energy projects and logging. As an extremist group that rails against oil, wood, and meat consumption, RAN wants to block lending to projects it claims may contribute to global warming or involve logging in "sensitive" areas. Given RAN's agenda, what’s next? Opposition to loans for ranchers and home builders?

What makes the stakes so high is that banking giants Citigroup and Bank of America have already caved in to RAN, following a similar poster assault near the home of Citigroup Chairman Sanford Weill in 2004. If J.P. Morgan Chase joins these capitulating capitalists, then that means the three largest financial services companies —­ thus, virtually an entire industry — will have ceded control of a portion of their businesses to anti-business activists and turned their backs on many in the developing world. J.P. Morgan Chase has so far held out against some of RAN’s more appalling tactics like rounding up second graders from Mr. Harrison's hometown in December, and transporting them to J.P. Morgan Chase's Manhattan headquarters to protest the bank during school hours — a stunt aptly described by Terence Corcoran of Canada’s National Post as "ideological child abuse."

But RAN’s latest brand of intimidation may be working. A J.P. Morgan Chase spokesman told the New York Times last week that the bank was "on track for April" in terms of a review of its lending policies as demanded by RAN. Let’s consider the consequences should Mr. Harrison give in to RAN.

“The real targets — the victims — of all these campaigns are the world’s poorest children and families,” point out Niger Innis and Paul Driessen of the Congress of Racial Equality. “Their countries are deprived of investment dollars to generate electricity, create jobs, improve health, education and nutrition, build modern homes and businesses, and instill hope for the future,” add Innis and Driessen. The World Health Organization reported in May 2002 that 5,500 children die every day from consumption of food and water contaminated with bacteria. The WHO painted a shockingly bleak picture for millions of third-world children: 1.3 million under the age of five die annually from diarrheal diseases caused by unsafe food and water; another 2.2 million die from respiratory infections caused or exacerbated by poor sanitation. This death toll equates to about 40 jumbo jets filled with kids crashing every day — a death toll that can only be alleviated by economic development.

CORE’s Driessen points out that 2 billion people around the world lack electricity. A billion people live on less than $200 per year; three billion live on less than $700 per year. As an illustration of the often disturbingly confused priorities of many environmentalists, a dam project in India’s Gujarat Province was halted after eco-activists pressured lenders to withdraw financial support. The dam had to be stopped because it would “change the path of the river, kill little creatures along its banks and uproot tribal people in the area,” one eco-activist smugly intoned. “The local ‘tribal people,’ however, don’t appear to appreciate her intervention,” wrote Driessen in his book Eco-Imperialism: Green Power, Black Death. “One resident angrily called the activists’ handiwork ‘a crime against humanity,’ because the project would have provided electricity for 5,000 villages; low-cost renewable power for industries and sewage treatment plants; irrigation water for crops; and clean water for 35 million people.”

People in the third world need economic development. It’s the only truly sustainable solution for them — and access to the financial services necessary for economic development is largely in the hands of lenders like J.P. Morgan Chase, with $1 trillion in assets and operations in 50 countries. Appeasing RAN would be an unconscionable and socially irresponsible business decision for J.P. Morgan Chase to make and would amount to a shameful betrayal of the millions who look to this nation and its lenders for hope.

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Many people would like to be kind to others so Leftists exploit that with their nonsense about equality. Most people want a clean, green environment so Greenies exploit that by inventing all sorts of far-fetched threats to the environment. But for both, the real motive is to promote themselves as wiser and better than everyone else, truth regardless.

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