Advice for EPA, Part 3: How to Restore Cooperative Federalism

I’ve given two previous rounds of advice to Trump’s nominee for Environmental Protection Agency administrator, Oklahoma Attorney General Scott Pruitt. In this post, I lend advice as to how the agency can achieve bipartisan environmental improvement by restoring harmony between itself and state governments. 

When it crafted legislation providing for federal environmental policymaking, Congress relied on America’s unique system of federalism. Virtually all of EPA’s enabling acts establish a division of responsibilities between the state and federal governments commonly known as “cooperative federalism.” In practice, this means that the federal agency sets standards which states are left to meet however they see fit, subject to EPA approval. States shoulder 95 percent of the costs of implementing federal environmental statutes, according to the Environmental Council of States.

Over the last 8 years, the relationship between states and the EPA has broken down, as cooperative federalism has ceded to coercive federalism. Two facts attest to this point.

First, the number of federal takeovers of state regulatory programs is way, way up. During the three presidential administrations prior to Obama, the EPA imposed 5 total Clean Air Act takeovers. During the Obama administration, EPA has imposed 56 federal plans on the states.

Second, an unprecedented and diverse number of states are suing the agency over its actions. For example, both of the EPA’s signature regulations—the Clean Power Plan and the Waters of the United States rule—were challenged by more than half of all states. By my count, 218 states (attorneys general, governors, or state regulatory bodies) participated in 12 lawsuits against major Obama-era regulations. This is not normal, and it evinces a troubling unwillingness of EPA to accommodate state interests.

In this context, Pruitt has an opportunity to restore a proper working relationship between the states and EPA on environmental policymaking. To this end, I recommend the following:

• EPA should give priority to hiring state officials as political appointees within the agency, for federalism reasons that I explain here.
• EPA should work to timely review State Implementation Plans (SIPs) to meet ambient air quality standards. Last summer, I performed a study of more than 700 Clean Air Act deadlines whereby the EPA had to review state submissions within 18 months. The agency missed 78 percent of these deadlines by an average of 1.9 years. As I explain here, this untimeliness drives the states nuts because it results in their having to try to meet moving targets.
• EPA would go a long way towards restoring cooperative federalism if it exercised restraint in imposing regulatory takeovers of state programs, unlike Obama’s EPA. Past administrations operated under the sound assumption that state elected officials care as much, if not more, about the quality of their own air and water than civil servants inside the Beltway. The Obama administration evidently disagreed, which led it to impose a record-breaking number of federal plans, as I note above. Under Scott Pruitt, the agency should return to past practice. Federal takeovers should be a means of last resort, not a policy cudgel.
• Finally, the EPA should implement the Supreme Court’s 2004 direction in Alaska Dept. of Environmental Conservation v. EPA, 540 US 461 (490-91) which calls for the agency defer to factual and legal conclusions rendered by the states. To be sure, the Court found that federal judges should defer to the federal agency on questions arising under a federal statute. Nonetheless, the Court noted that before a court has the opportunity to defer to the EPA, the agency should afford states the benefit of reasonableness review because the state is the regulator of first instance. Reasonableness review is a very generous standard. Basically, it’s the same standard that federal courts give to the EPA. Unfortunately, no subsequent EPA has evinced much desire to fulfill this guidance from the highest court in the land. Under Scott Pruitt, the EPA should publish a legal memorandum, perhaps even after notice and comment, that affirms the agency’s intent to follow through on the Supreme Court’s direction that the agency should respect state decision-making. 

By following these policies, Pruitt would improve public health and the environment by bettering environmental policymaking. As I noted above, states shoulder 95 percent of the costs of implementing federal environmental laws. Of course, states have limited resources, and every dollar they waste having to fight Obama-era power grabs is a dollar that cannot be spent on environmental improvement. More broadly, policymaking efficiency always increases when the policymakers better get along.

I expect that all of these recommendations would be welcomed by states of all political stripes (or, more precisely, of both political stripes). It is, after all, a policy built around respecting states as the lead environmental policymakers.