An earlier post analyzed the use of the Congressional Review Act (CRA) to block the EPA's efforts to regulate greenhouse gases under the Clean Air Act.  In addition to Sen. Murkowski's proposed joint resolution that would block EPA's endangerment finding, at least two bills have been introduced in the House that would amend the Clean Air Act to remove EPA's authority to regulate greenhouse gases.

Last fall, the U.S. Occupational Safety and Health Administration (OSHA) announced proposed modifications to its Hazard Communication Standard, commonly known as HazCom, to make it more consistent with the United Nations’ Globally Harmonized System of Classification and Labeling of Chemicals.

OSHA will begin a series of public hearings on the HazCom changes around the country starting on March 2.

Today the New York Times and Greenwire report that EPA "may cut back some of its many voluntary programs in an effort to funnel resources toward regulations."  Over the past twenty years, EPA has established dozens of voluntary programs seeking to encourage businesses to improve their environmental performance even beyond what they are required to do by law.  Such programs include the well-known Energy Star program as well as lesser known programs like the Voluntary Aluminium Industrial Partnership or the Landfill Methane Outreach Program.

Shortly after EPA Administrator Lisa Jackson took office in 2009, she disbanded what had been EPA's flagship voluntary program, the National Environmental Performance Track.  Performance Track, established by President Clinton's EPA Administrator Carol Browner, recognized and rewarded companies that deployed systematic environmental management practices and made environmental commitments over and above compliance with existing regulations. 

In today's news report, Assistant EPA Administrator for Air Gina McCarthy states "that we've made tremendous progress with the voluntary programs, but if we're going to begin to regulate more effectively, some of the voluntary programs may no longer be the priority."  The report also quotes one of McCarthy's predecessors at the head of EPA's air office, Jeffrey Holmstead, who served under President George W. Bush, as stating that "There are some voluntary programs that are quite successful."

How successful are such voluntary programs? The fact that these programs are voluntary makes them hard to evaluate, as the types of companies that join them may well have been more environmentally committed from the outset.  All the observed differences between participating and non-participating firms probably cannot be attributed to the programs themselves, as PPR Director Cary Coglianese noted in a recently co-authored paper published in the Environmental Law Reporter.  

In another paper recently published in the Annual Review of Environment and Resources, Coglianese and his co-author Jonathan Borck review the social science research on voluntary environmental programs (VEPs) and conclude that, to date, the research indicates that even successful VEPs can have "but limited effects on pollution levels, and consequently, conventional or market-based forms of regulation will presumably remain necessary to achieve greater reductions at polluting facilities."  They write:

The relationship between VEPs and mandatory regulation is widely acknowledged, even if little studied, because VEPs are often proposed as alternatives to traditional forms of environmental policy.  It is even sometimes noted that firms can strategically exploit VEPs to try to stave off the imposition of future regulations. For example, some facilities that participated in EPA’s Strategic Goals Program (SGP) apparently viewed their participation in the program as an attempt to forestall new water pollution and hazardous waste regulations.  Firms presumably prefer VEPs to new regulations owing to their voluntariness and flexibility, which means any actions they take to address environmental or natural resource problems should be less costly than with mandatory rules.

 

For this same reason, VEPs should be preferred from the standpoint of overall welfare, at least if they achieve the same benefits at lower costs.  The question then becomes whether they can be expected to achieve the same benefits.  If environmental problems are truly externalities, it is not obvious that the average environmental benefits per participant from a voluntary program will be as high as the average environmental benefits per regulated entity from mandatory regulations.  Of course, we should never assume that the promulgation of a mandatory regulation will ensure full compliance with its terms. Regulatory noncompliance is a persistent condition.  Nevertheless, the risk of significant civil and criminal penalties probably can motivate action in a way that a certificate of recognition from a VEP cannot. Morgenstern & Pizer “find it hard to argue for voluntary programs where there is a clear desire for major changes in behavior.”

 

Even if VEPs can and do induce the average participant to make changes comparable to those made by the average regulated entity, there are far fewer participants in VEPs than there are polluting facilities that could be made subject to regulation. If effectiveness is a function of the number of affected organizations as well as the extent to which they lower their pollution levels, then even if the latter is held constant, the number of affected organizations is still usually much lower with a voluntary program. Usually, only a small fraction of the eligible facilities participate in a VEP, whereas regulations apply across the board to all relevant organizations.

 

A VEP that had substantial spillover effects, of course, could begin to resemble a mandatory regulation in terms of the scope of its impact. [Spillover effects are those effects a VEP has on other businesses and entities that do not participate in the program.] But there is reason to suppose that regulation has its own spillover effects that may be equal in magnitude to—or even greater than— the spillover effects from a comparable VEP. In fact, we may expect that regulations would travel even better down the two avenues by which spillover effects arrive. Regulation generally provides information to managers about best, or at least good, practices—namely, those required by regulation. Furthermore, firms face pressures from employees, investors, consumers, and others to comply with the law that are likely to be at least as strong as pressures to go beyond compliance with the law. An entire cottage industry of lawyers, consulting firms, and insurance companies exists specifically to inform companies of their regulatory obligations and help them comply with them.

 

Researchers have recognized the ability of regulation to induce firms to make environmentally beneficial investments. In their study of pulp and paper mills, for example, Gunningham et al. indicate that regulation led mill owners to make investments that over time have significantly reduced their water pollution. Of course, factors other than regulation may explain long-term trends in the developed world even better, such as the large-scale shift in manufacturing industries to developing economies. More research is obviously needed, as we know of no analysis that directly compares the efficacy of VEPs to that of regulation.

More data will be needed to conduct further research on the effectiveness of voluntary programs.   Unfortunately, as Coglianese notes in another recently co-authored paper published in the Ecology Law Quarterly,  "governments have not been collecting the data needed to be able to determine whether [many voluntary programs] are truly making a difference in achieving their goals."

The U.S. Environmental Protection Agency (EPA), which manages the U.S. interagency eRulemaking Program, announced yesterday that it has implemented several new upgrades to Regulations.gov, the government-wide portal for regulatory docket information.  Some of the changes include:

• a new rotating panel of images and video clips offering a preview to the latest Web site changes
• a dashboard of regulatory documents housed on Regulations.gov
• a new A-Z index of rules and proposed rules categorized by topic
• instructional video-clips highlighting site functions
• improvements to the site's homepage and search wizard

Users who have comments on the design and functionality of Regulations.gov can also participate in an online forum that EPA has established.  Background information about e-rulemaking can be found at E-Rulemaking.org, the Penn Program on Regulation's  website on the use of information technology in the regulatory process

Senator Lisa Murkowski (R – Alaska) is trying to prevent the EPA from regulating greenhouse gases under the Clean Air Act. Along with 35 other Republicans and 3 Democrats, she has invoked the Congressional Review Act (CRA) in an attempt to stop EPA from its current regulatory efforts to address climate change. 

The EPA’s current climate change efforts stem from a 2007 Supreme Court decision directing the agency to determine whether carbon dioxide and other greenhouse gases present a threat to public health and welfare.  On December 7, 2009, the EPA issued a formal “endangerment finding,” officially determining that greenhouse gases pose such a public threat.  

Now that the agency has made its finding of endangerment, the Clean Air Act compels it “to adopt emissions standards for cars, mandating that automakers produce more fuel-efficient vehicles,” as well as requires EPA to take other “action under other parts of the law,” as PPR Director Cary Coglianese explained last year in a Boston Globe op-ed. 

Murkowski now seeks to use the CRA to prevent the “economic train wreck” that she predicts will occur if EPA regulates greenhouse gases under the existing framework of the Clean Air Act.  The CRA, enacted in 1996, provides a fast-track (and filibuster-free and amendment-proof) procedure for Congress to “disapprove” of certain agency rules. If both houses of Congress pass a joint resolution that is either signed by the president or survives a presidential veto, the agency rule is prevented from taking effect. The CRA also then bars the agency from issuing any subsequent rule that is “substantially in the same form.” 

Can the CRA actually be used to block EPA from regulating greenhouse gases?   Consider first whether the Act’s fast-track authority applies to an “endangerment finding.”   By its terms, the Act affords Congress the opportunity to use fast-track procedures to disapprove only “major rules.”  

Is an endangerment “finding” even a “rule”?   EPA issued its finding in the Federal Register as a final rule, so it would be hard for the agency now to argue that it is not a rule. But not every rule counts as a rule covered by the CRA. The CRA specifically exempts rules “of agency organization, procedure, or practice that [do] not substantially affect the rights or obligations of non-agency parties.” Since the endangerment finding really only imposes a statutory obligation on EPA – namely, a duty to commence various standard-setting proceedings – it would appear exempt from the CRA.  An endangerment finding itself imposes no obligations on anyone outside of EPA. 

Even if the EPA’s finding were considered a rule for CRA purposes, it must still be a “major” rule.   In its Federal Register document, EPA specifically disavowed that its endangerment finding was a major rule under the CRA. Of course, an agency’s own determination is not what really matters. The Act says a rule is major if the White House Office of Information and Regulatory Affairs (OIRA) finds it is “likely to result in” any of the following: an annual impact on the economy of $100 million or more; major price increases; or other “significant adverse effects” on the economy.   But since the EPA’s final rule document went through OIRA review and approval with the statement that it is not a major rule under the CRA, presumably OIRA agrees. 

Of course, even if the EPA’s finding were covered under the Act, it is hard to see a Democratically-controlled House and Senate ever passing Murkowski’s resolution. It’s also hard to envision President Obama ever signing it. The CRA has only been used one time to disapprove an agency rule: OSHA’s ergonomics rule, which was issued in the closing days of the Clinton Administration and rejected by a Republican Congress and the newly inaugurated President Bush in early 2001. 

It is interesting, though, to consider what EPA could do if Congress did succeed in using the CRA to disapprove the greenhouse gas endangerment finding. If the Murkowski resolution prevailed, the EPA might well be forever barred from regulating greenhouse gas emissions, absent the passage of new climate change legislation.                                      

One might expect that for a normal rule, CRA’s ban on any subsequent action “substantially in the same form” would still allow an agency to go back and revisit a rule as long as it tries a different approach. As Adam Finkel, PPR Executive Director, argues in an upcoming paper with Jason Sullivan (Penn Law ’09), the CRA’s prohibition on substantially similar rules still “clearly allows an agency to regulate in the same area, as long as the revised rule has a significantly more favorable cost-benefit equation than the vetoed rule.” 

But an endangerment finding is a binary science-policy decision. The agency can either say “yes” or “no” that greenhouse gases threaten public health and welfare. If Congress formally disapproves the answer “yes,” presumably any subsequent answer “yes” would be “substantially . . . the same.” It is not even clear that, absent new authorizing legislation, EPA could revisit the issue years later if additional, stronger evidence came to light. The form of a subsequent endangerment finding would still be simply to say “yes,” there is a threat to public health and welfare.

Of course, with the CRA having been successfully used only once to block an agency rule -- and having yet to be interpreted by any court -- conclusions about its reach and impact must remain somewhat tentative. What Congress does with Senator Murkowski’s CRA proposal will definitely be worth watching. Even if her current resolution fails to pass, when the EPA eventually issues greenhouse gas emissions standards and other climate change regulations under the Clean Air Act, further attempts to use the CRA will undoubtedly follow.  

Last week, the White House announced the online availability of extensive government datasets through Data.gov, an initiative that is part of the Obama Administration’s new Open Government Directive.  

Data.gov is a website run by the Federal Chief Information Officers Council and its stated purpose is “to increase public access to high value, machine readable datasets generated by the Executive Branch of the Federal Government.”

The datasets on Data.gov come from many departments and agencies, with information ranging from how the federal government spends its money to how NASA maps the globe.  

Of special interest to anyone interested in regulation is the OMB dataset on the White House’s review of economically significant rules from 1981 to the present.

One effect of the release of these datasets may be to create more public pressure on industry to address regulatory problems even without more regulation. Publication of datasets such as OSHA’s list of work-related injuries by establishment, or EPA’s dataset on locations of major polluting facilities, may serve to change behavior by revelation even without regulation – at least, if firms want to avoid being publicly known as having injuries or emitting pollution.

Data.gov also has a nifty webpage showing how many times each agency’s datasets have been downloaded. As of this writing, the Commerce Department leads the pack, with over 160,000 downloads – not surprisingly, this is because the Census Bureau is part of Commerce. Other popular datasets are maintained by NOAA and the EPA.

Users interested in these new datasets should be aware they come in all formats. Some are available as Excel files, some as text files, and some in other formats altogether. In some cases this is understandable. Files that overlay onto GoogleEarth, such as maps of land surface temperatures, are not in Excel format, for example. 

In some circumstances, the accessibility of these data will still be challenging for ordinary citizens, even though they can be found on Data.gov. For example, EPA’s Toxcast data file includes technical information in what will likely be for many a hard-to-read text format. Depending on a researcher’s capabilities and needs, Data.gov’s varied formats may be either a small inconvenience or a larger barrier to the use of the data.

Still, Data.gov does provide a new source of data by and about the federal government. And the website is only expanding. The Obama Administration even welcomes your suggestions for what additional datasets to release.

On the eve of President Obama’s State of the Union address, the Penn Program on Regulation hosted a panel discussion at the Wharton School assessing the Obama Administration’s regulatory record to date. The panel included three former appointed White House regulatory advisors from both Democratic and Republican Administrations.  

Jim Tozzi (Reagan Administration), Sally Katzen (Clinton Administration), Susan Dudley (Bush Administration) (pictured left to right)

Just like any President finds upon assuming office, last January President Obama confronted a concentration of new regulations that had been pushed through in the closing weeks of his predecessor’s administration.  The Obama Administration, like past administrations, immediately took action to stop or delay new regulations that were still in the pipeline.   

In addition to halting or reviewing these so-called midnight regulations, President Obama issued a memo last January affirming the longstanding practice of White House review of new regulations. President Reagan first institutionalized this review process within the White House Office of Information and Regulatory Affairs (OIRA), a pision of the Office of Management and Budget (OMB) where regulatory review authority has remained in every administration since. The current process is governed by Executive Order 12,866 issued by President Clinton and retained by President Bush.

Although Obama affirmed that “centralized review is both legitimate and appropriate as a means of promoting regulatory goals,” he also called for his OMB Director to review the existing White House review process and “to produce within 100 days a set of recommendations for a new Executive Order on Federal regulatory review.” OIRA then took the rare, if not altogether unprecedented, step of soliciting public comment on possible changes to the executive order that governs the regulatory review process.  More than 175 comments were submitted and posted on-line, but to date the White House has not announced any recommendations.

On the same day he ordered his review of regulatory review, President Obama revoked Executive Order 13,221.  In his second term, President Bush had issued Executive Order 13,221 to make some relatively modest changes to President Clinton’s Executive Order 12,866. Among other things, Executive Order 13,221 made clear that, in addition to having their regulatory proposals reviewed, agencies also needed to submit proposals for certain non-binding, guidance documents for review. Although President Obama revoked Executive Order 13,221, his OMB Director nevertheless in March, 2009, issued a memo making clear to agencies that they still must submit significant guidance documents for OIRA review.

To date, no other changes to the White House regulatory review process have been announced. Having affirmed the fundamental process of centralized White House review, and having operated under the rubric of Executive Order 12,866 for a full year, the Obama Administration may well have concluded that the current process works sufficiently well to achieve the President’s objectives.

The Penn panel, introduced by PPR Executive Director Adam Finkel and moderated by PPR Director Cary Coglianese, featured academic and NGO commentary as well as perspectives from three former heads of OIRA.  Panel members included:

·         Susan E. Dudley, immediate past OIRA Administrator of the Office of Information and Regulatory Affairs (OIRA) and current director of the Regulatory Studies Center at George Washington University

·         Sally Katzen, former OIRA Administrator under President Clinton and currently the Executive Managing Director of the Podesta Group

·         Jeff Ruch, Executive Director of Public Employees for Environmental Responsibility (PEER)

·         Rena Steinzor, Professor of Law at the University of Maryland and President of the Center for Progressive Refor

·         Jim Tozzi, Co-Founder of the  Center for Regulatory Effectiveness and former Assistant Director of the Office of Management & Budget under President Reagan.

Today the Washington Post reported on disappointment over the Obama Administration's record on governmental transparency.  According to the Post:

More than 300 inpiduals and groups have sued the government to get records in the year since President Obama pledged that his administration would be the most open in history.

In case after case, the plaintiffs say little has changed since the Bush administration years, when most began their quests for records. Agencies still often fight requests for disclosure, contending that national security and internal decision-making need to be protected. 

The Administration disputes the Post's numbers and says that actually "22 fewer FOIA cases were filed in 2009 than 2008."  But of course, that still leaves a couple hundred FOIA suits. 

The Administration also points to other steps it has taken to release public information, from disclosing White House visitor logs to creating Data.Gov.  It does so by continuing to trumpet transparency as if more is always better.  "During the course of the president's first year in office, more has been done than ever before to make our government open and transparent," according to the President's spokesperson quoted in the Post story.

The Obama Administration's commitment to open government is laudable. Why, then, does it engender the kind of disappointment the Post reports?

From Obama's first day in office, the Administration's public relations strategy has set for itself a transparency trap.  As I have written elsewhere, the Administration's rhetoric creates high expectations and risks worsening public disappointment and cynicism because no matter how much information the Administration discloses "it will always be possible to make government more transparent."

To prevent further disappointment -- and to be fully open with the public -- the Administration would do well to acknowledge in its defense that there are, after all, justifiable limits to governmental transparency.  It is not just that "change takes time and persistence," as the White House claims.   Rather, any responsible administration needs to resist at least certain kinds of disclosures and, as a result, will still find itself subject to FOIA lawsuits. 

Tort Reform.  Death Panels.  Abortion.  The Public Option.  Add to the list of obstacles along the path toward health care reform a new issue: Open Government. 

Two of Obama's signature domestic policy initiatives -- health reform and transparency -- now appear on a collision course with each other.

Political commentators, editorial writers, bloggers, and politicians (even Democratic ones) are raising concern over the secrecy surrounding Democrats' final push to hammer out health care reform legislation.

In response to a reporter's question about the contrast between a secret reconciliation process and Obama's transparency pledges as a candidate, Nancy Pelosi lightheartedly quipped, "There are a number of things he was for on the campaign trail."

Transparency is a double-edged sword as a political strategy.  Trumpeting transparency helped distinguish Obama from Bush and his reputation for secrecy.  But it also has raised expectations that the Administration cannot -- and should not -- always meet. 

As I note in a recent paper,  "it remains unclear whether Barack Obama will ultimately earn the mantle of the 'transparency president' – or whether the unrealistic hopes for openness in government he has raised will, when unfulfilled, only serve to reinforce public cynicism about government." 

The University of Pennsylvania Press has just released the book, Import Safety: Regulatory Governance in the Global Economy, which addresses the unique regulatory challenges of protecting consumers from unsafe products in an era of globalization.  Governments around the world increasingly face new regulatory challenges because of expansive growth in trade and rapid changes in technological and economic conditions. Each year, more food, drugs, and other goods move across national borders than any single government entity alone can inspect and test. Government officials must try to regulate an expanding set of manufacturers and suppliers abroad, and hard economic times only accentuate the competitive pressures that lead firms to cut corners on safety. Rather than accepting the status quo, Import Safety presents and analyzes new ways of deploying traditional regulatory resources as well as innovative proposals for rethinking regulatory governance in an era of expansive international trade.  The book grows out of a conference organized by the Penn Program on Regulation, and held at the University of Pennsylvania Law School, in the spring 2009 that attracted leading scholars in law, economics, political science, and risk analysis. For more information, visit the book's website.