Riley Moore’s Political Stunt Will Cost West Virginia Money

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Riley Moore is a nice young man from a prominent political family. He was elected to the House of Delegates in 2016 from the old 67th District (Harpers Ferry and Shepherdstown) and was on his way to becoming the House Majority Leader in 2018 when a funny thing happened – Jefferson County voters turned him out of office.

Trying another path to public office, Moore ran for West Virginia Treasurer and was elected in November 2022. One wonders why Treasurer is a political office, for which the successful candidate need only demonstrate political skills not financial ones.  Good thing for Moore, because he had no financial education or demonstrated financial skills. Before trying his hand as a politician Moore received a degree in Government and International Politics and had a job with a defense contractor.

As Treasurer, Moore has relentlessly pursued a political agenda. In the last eighteen months, he has taken credit for two “culture war” policies that became laws after approval by the Republican super-majority in the Legislature. No surprise there. Let’s call them Moore’s Law No. 1 and No. 2. Both laws attack considering “ESG” factors (environmental, social, governance) in the investment of state funds. In case you hadn’t heard, ESG investing is the latest boogeyman of the political right.

West Virginia needs easy access to the municipal bond market to fund its needs and also has $34 billion in pension funds to invest. It retains respected banks and investment companies to create a market for its bonds and to invest the pension funds. Like any other investor, the state wants to get a reasonable return on its investments while minimizing unnecessary risks. Consideration of ESG factors that have a material impact on a company’s health is an important part of a sound investment policy. To ignore these risks would be irresponsible.

Considering ESG factors is not political, it’s just smart business. For example, if we invest in a coal company, will that investment have eroded in five or ten years? What if the market for coal dries up because of tougher government regulations or cheaper gas and renewable energy sources? On the other hand, does a company that develops clean water technology give us the return we want and provide a safer long term place for our money? Considering ESG factors does not undermine the pursuit of return on investment — ESG investors still seek the best returns. But it also better protects those returns from risk.

Nevertheless, Moore and his allies insist on making investing state funds a political issue. To them even considering ESG factors is a practice of “woke” liberals that West Virginia should reject. In one of his shrill press releases, Moore told West Virginians that “the ESG crusade being perpetrated by the liberal elites must be stopped!” This is just nonsense politics about culture, not economics.  In this posturing for right-wing votes, Moore has threatened the stability of state investments and will cost West Virginians money in the bargain.  He either doesn’t understand why it is important for investment managers to consider ESG factors or doesn’t care.

Moore’s Law No. 1 was enacted in 2022.  It empowers Moore as state Treasurer to create a list of financial institutions that, in his opinion, unreasonably “boycott” or limit commercial relations with any company engaged in the fossil-fuel based energy business.  Moore is authorized to disqualify firms on the restricted list from competitive bidding for state banking contracts or refuse to enter a banking contract with such firm, regardless of how financially advantageous to the state that contract might be.

Moore’s restricted list includes five of the largest, most sophisticated financial institutions in the United States — BlackRock Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley, and Wells Fargo & Co. They provide banking services by generating a market for bonds issued by West Virginia state governmental units. The non-profit Sunrise Group commissioned a study of the costs to states who adopt anti-ESG legislation like Moore’s Law No. 1. The study estimated that in a single year of refusing to do business with these five firms, West Virginia would have to pay increased interest on its bonds of between $9 million and $29 million.

How have the five financial institutions targeted by Moore “boycotted” fossil-fuel energy companies to justify disqualification from doing business with West Virginia? Moore’s press release concerning BlackRock explained it – and you’d better cover your children’s ears for this one. BlackRock was disqualified because it “has urged companies to embrace ‘net zero’ investment strategies.” Seriously?

Isn’t this simply an effort to use politics to interfere with market forces, a practice free-market Republicans are supposed to hate? According to Dana Milbank, writing in the Washington Post, Moore and fellow Republican treasurers in other states are determined to “stop the free market no matter how much it costs.”  He reported that the Kansas Public Employees Retirement System expects that anti-ESG legislation could cause more than $1 billion in losses from early sale of assets and reduce returns by $3.6 billion over a decade. Arkansas public pension authorities said anti-ESG legislation there would cause them to lose $37 million per year.

West Virginia’s Treasurer doesn’t control the investment decisions for state pension funds. These funds are invested on the state’s behalf by banks and mutual funds at the direction of the West Virginia Investment Management Board and the Board of Treasury Investments. Periodically, our investments require these investment boards to vote as a shareholder on the direction of the corporations into which our funds have been invested. Moore’s law No. 2 requires these boards to consider only “pecuniary” factors when casting these shareholder votes. The law specifically states that “environmental, social, corporate governance, or other similarly oriented considerations are not pecuniary factors” unless they have an immediate financial impact.

When Moore’s Law No. 2 was enacted in 2023, he boasted by saying that the law was “leading the way to fight back against woke activists who want to use our state investments and retiree pension dollars to advance extreme political and social agendas.” Presumably he means saving the planet from catastrophic climate change.

The problems with Moore’s Law No. 2 are many, but the most significant is that it requires state investment board members who cast our votes to ignore long-term, systemic factors that, as fiduciaries, they can’t ignore. A 2021 study by the insurance giant Swiss Re estimated that by mid-century the world stands to lose 10% of its economic value from climate change. Moore’s Law No. 2 requires that our investment board trustees ignore this looming crisis and puts them in jeopardy of violating other state and federal laws regarding fiduciary duty.

Not to be unkind, but Riley Moore couldn’t think this stuff up on his own. Key features of Moore’s Law No. 2 are lifted straight from a template provided by the American Legislative Exchange Council to conservative legislators around the country. ALEC’s mission is to protect fossil-fuel energy industries at all cost, while instead claiming to be interested in small government. Moore’s Law No. 1 is based on a similar template that now even ALEC won’t support after complaints by the American Bankers Association that “government should not be dictating business decisions to the private sector.”

The point is that Moore’s legislative efforts do not spring from his own genuine concern about protecting West Virginia, as he claims, but rather from an ideological platform used by ultra-conservatives around the country. Other Republican-dominated states have passed nearly identical laws. Moore is taking advantage of this tool to become a Ron DeSantis clone, slaying the “wokeness” dragon. That plays to a certain crowd.

This all comes into better focus when you consider that Riley Moore is running for Congress. When the time comes, he will trot out his anti-ESG efforts to prove his conservative credentials. But his aggressive attack on the “liberal elites” and their evil conspiracy to halt climate change is just a boneheaded political stunt undertaken for the sake of publicity, without consideration of the costs it will impose on the average West Virginians Moore claims to protect.

Finding Where Your Rights End and Mine Begin

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I get annoyed by inane government rules and being told what to do by officious clerks. I have always had a small authority problem. I’ll wager I am not alone in this, but one of my developmental tasks toward adulthood was recognizing this as a personal failing. It is not evidence of some natural or constitutional right to be ornery.

Let me cut to the chase. “Individual rights” extremists have distorted what it means to live within a society of other people. Yes, this is America, the land of liberty. But an individual – even an American – has no constitutional right to live his or her life in such a way that it endangers or injures another person. When we choose to live among other people, we surrender some of the liberty we would otherwise retain if we lived in the wilds of Idaho.

Take property rights, for example. In Jefferson County one often hears that people have the right to use their own property the way they see fit. This is as much wishful thinking as anything, but it is wrong. It flies in the face of 500 years of Anglo-American legal history. A person has the right to use his property as he sees fit only so long as it doesn’t destroy the quiet enjoyment of his neighbor’s property.

Most of us have a grip on this concept — not even the most ardent rights fanatic would claim a constitutional right to locate a nuclear waste dump on his property. People who move to fancy subdivision communities with architectural restrictions know they can’t even paint their house the color they choose – but this is the price for living in that community.

Mandatory vaccination is another area where the community’s right overcomes even a sincerely held belief that vaccinations might be harmful to the individual. Mandatory vaccination laws have been upheld against constitutional challenge since 1905, when the Supreme Court upheld a law requiring smallpox vaccination. In Jacobson v. Massachusetts the Court said

[r]eal liberty for all could not exist under the operation of a principle which recognizes the right of each individual person to use his own, whether in respect of his person or his property, regardless of the injury that may be done to others.

And how about highway speed limits?  Anyone who claims a constitutional right based in personal liberty to drive 110 miles per hour on the public highways would rightly be considered a dangerous crank.

There are no more important rights in America than those created by the First Amendment. In the First Amendment, the Constitution explicitly says that the government shall not infringe the right of free speech. The text sounds absolute but, in fact, free speech rights have always been regulated as to time, place and manner of exercise. This is an infringement. Furthermore, whole categories of speech have simply been declared “not protected” by the First Amendment. Hate speech and obscenity are two examples.

The right to personal liberty, which is not explicitly created in the Bill of Rights and has no clear contours, is not absolute either.  It must give way to limitations like all other constitutional rights. The only mention of a right to liberty is in the Fifth and Fourteenth Amendments, which deal with how a person may be deprived of that right – by due process of law. These Amendments don’t tell us where the right might actually apply.

This leads me to the subject of guns.  Yes, there is a Second Amendment, but gun ownership and display have been traditionally limited and controlled by the federal and state governments in the public interest.  An example is the 1938 National Firearms Act imposing a $200 tax and a registration requirement on machine gun ownership, which was upheld by the Supreme Court against a Second Amendment challenge. The Amendment makes clear that the militia, and thus the gun ownership that supports them, are to be “well regulated.” Gun rights fanatics like to ignore this first clause of the Amendment because it is inconvenient to their personal rights argument.

By a one-vote majority in The District of Columbia v. Heller (2008), the Supreme Court found an individual right to possess a firearm and to use it for traditionally lawful purposes, such as self-defense within the home.  This case invalidated gun control legislation for the first time in American history.

But if a right exists to own or brandish military-style assault weapons, it is not a product of the Second Amendment. And it is not supported by any constitutional right of personal liberty. Even the West Virginia Bill of Rights provides no support.  It says only:

A person has the right to keep and bear arms for the defense of self, family, home and state, and for lawful hunting and recreational use.

Neither the West Virginia nor federal constitutions create a right to parade around in public with assault rifles just for the hell of it. So if you are a gun-packing Second Amendment enthusiast, we need to know where your rights end and mine begin. This language from the Heller opinion will help:

The Second Amendment right is not unlimited. It is not a right to keep and carry any weapon whatsoever in any manner whatsoever and for whatever purpose . . . . [This] opinion should not be taken to cast doubt on . . . laws forbidding the carrying of firearms in sensitive places such as schools and government buildings, or laws imposing conditions and qualifications on the commercial sale of arms.

The Supreme Court’s 2022 decision in New York State Rifle and Pistol Ass’n. took pains to point out that only handguns could be considered historically protected as weapons appropriate for personal self-defense.

So whatever right you have to own and brandish AR-15 assault rifles does not come from the Second Amendment.  It comes completely from West Virginia’s Republican-led Legislature. On this point, like so many others, this current bunch in Charleston is out of step with most Americans — Republican and Democrat. Fifty-four percent of all registered voters nationwide support banning assault-style weapons.

For the moment, nobody in the West Virginia Legislature has the courage to stand up to the loud mouths who peddle Second Amendment mythology. But if you’re one of those people who think that your “liberty” to walk around intimidating people in public with an AR-15 assault rifle over your shoulder is secure forever, think again. It is only a matter of time before we come to our senses on guns and when we do, your snake flag won’t help you.

What President Biden Could Do for the Environment in His First Ninety Days

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I recognize that some of my readers may be Trump supporters who would prefer not to see a Biden administration. And, of course, one should not count one’s chickens too early. That said, there can be little debate that the Trump administration has been more hostile to sound environmental policy than any administration in modern history. From the start President Trump identified environmental protection as the territory of Obama liberals and played strongly to his populist base and big fossil fuel industry donors by dismantling every protection in sight. So, a Biden administration has a lot of work to do restoring the positive direction set in previous administrations. Here is where I think he should start.

Rejoin the Paris Accords

Almost every nation in the world, including the United States, signed the Paris Accords in 2015. The central aim of the Accords is to coordinate a global response to climate change by keeping a global temperature rise this century well below 2 degrees Celsius and to find the means to limit the temperature increase even further to 1.5 degrees Celsius.

But Trump is a climate change denier, and his fossil fuel backers have a financial stake in things remaining as they are. On November 4, 2019, the Trump administration began the official process of withdrawing the United States from the Paris Accords, which will not be completed until the day after the November 2020 election. Upon withdrawal, the U.S. will no longer be committed to reach its emissions reduction targets under the Accords.

Why does this matter? First, the United States is one of the two largest emitters of greenhouse gasses in the world so relaxing our efforts to reduce these emissions will have a hugely negative effect on the world’s ability to reach the Paris goals. Second, the United States is an environmental policy and technology leader in world. Our absence from the Accords takes our gravitas and leadership out of the equation. It weakens our international soft power and opens the door to preening by the Chinese.

How could a Biden administration reverse Trump’s withdrawal? The Paris Accords are a non-binding expression of national commitment. President  Obama was able to enter the United States into the agreement through executive action, since it imposed no new legal obligations on the country. Candidate Biden has pledged to recommit the country to the Paris Accords, and can do so most likely through similar executive action. Legislation is also possible.  Experts believe that the United States could rejoin the Accords in a matter of a few months. It is inconceivable that other nations would oppose our rejoining.

Appoint Environmentalists to Head Environmental Agencies

What a concept. But President Trump’s first appointment to head the EPA was Scott Pruitt, a notorious climate change skeptic. As Oklahoma’s Attorney General, Pruitt sued the EPA 14 times. Pruitt’s replacement, Andrew Wheeler, is a former coal industry lobbyist who has proposed dubious rules limiting the kind of scientific information the EPA can consider. One that called on the EPA to consider only “double blind” studies of the sort used in drug trials was called “breathtakingly ignorant” by the Union of Concerned Scientists. The Biden administration should be able to improve upon the quality of the EPA Administrator in short order.

The Department of the Interior sets policy and manages the implementation of many environmental statutes through a group of key agencies, including the Fish and Wildlife Service, the Forest Service, the Bureau of Land Management, the National Park Service, and others. Having a Secretary with environmental sensitivity and purpose could make a huge difference.

President Trump has seemed mainly interested in using the Department of Interior as a conduit to reward his friends in the extractive industries by shrinking protected land and opening federal lands to resource exploitation. Trump’s first appointment to Interior, Ryan Zinke, has been called “the most anti-conservation Interior secretary in our nation’s history.” President Biden’s appointment of a Secretary of Interior will be significant and closely watched.

Revive Obama’s Executive Order Requiring All Federal Agencies to Enhance Climate Preparedness and Resilience

In 2013, President Obama issued Executive Order 13653 instructing all federal agencies to identify global warming’s probable impact on their operations and take the actions necessary to protect against that impact. The importance of this is obvious. In 2016 alone the United States suffered 15 extreme weather and climate-related disasters each exceeding $1 billion in losses. Moreover, the Pentagon has for years regarded global warming as a significant threat to American national security.

But in March 2017, shortly after taking office, President Trump rescinded Obama’s Executive Order. In this order, Trump clearly set out the reason for this rescission:

It is the policy of the United States that executive departments and agencies immediately review existing regulations that potentially burden the development or use of domestically produced energy resources [oil, natural gas, coal, and nuclear energy resources] and appropriately suspend, revise, or rescind those that unduly burden the development of domestic energy resources beyond the degree necessary to protect the public interest or otherwise comply with the law. “Burden” means to unnecessarily obstruct, delay, curtail, or otherwise impose significant costs on the siting, permitting, production, utilization, transmission, or delivery of energy resources.

It is not immediately obvious why unburdening the production of domestic energy required the rescission of Obama’s direction to plan for climate disasters, but there you have it. President Biden should immediately rescind this absurd Order and restore good sense to the nation’s efforts to protect itself against the effects of global warming.

Establish Science, Not Politics, As the Guiding Principle of Environmental Policy

President Trump has politicized agencies that are only effective and credible when they rely on the best science. This has happened since the beginning of the Trump administration. For example, he has marginalized the EPA’s Science Advisory Board by prohibiting any member but the Chairman from reviewing decisions regarding agency regulations. His 2021 budget proposes eliminating funding for that agency’s Climate Change Research Program. Pursuant to a direction from a Trump executive order EPA terminated the National Advisory Council on Environmental Policy and Technology. The BLM issued a final environmental impact statement for drilling in the Arctic National Wildlife Refuge and concluded there was no climate crisis.

The list of anti-science policies and actions during the Trump administration is quite long. These have been catalogued by Columbia University Law School’s “Silencing Science Tracker.” Within the first ninety days of a Biden administration, he could issue an executive order directing federal agencies to act only after giving heightened consideration to the best data and scientific opinion available, and he could restore to a prominent role the various science advisory bodies Trump has marginalized or dismantled.

Reversing Anti-Environment Regulations

President Biden will be unable in the first ninety days to reverse many of the harmful regulatory rollbacks and changes wrought by the Trump administration. All of these have been listed by the Harvard Law School’s Regulatory Rollback Tracker. This is because any such action must proceed deliberately and be based on a reasonable assessment of all factors, usually involving public testimony or input. He will not simply be able to change a regulation because he believes it is the ill-conceived product of the previous administration. Trump learned this lesson the hard way, most recently in connection with reversing Obama’s DACA order deferring deportation of children brought here illegally.

But President Biden can direct that these be triaged and that the process for reversing the most significant of them be started. The list is long and tantalizing. It includes Obama’s Clean Power Plan setting standards for power plant emissions, which the Trump administration repealed. The Clean Power Plan was a primary means to reach the nation’s Paris Accords emissions commitment.

There may be other, more important steps President Biden could take immediately to restore the correct course on the environment. The plate will certainly be full. One thing is certain — January 2021 cannot come soon enough for the environment.

Undermining the Endangered Species Act

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We have just been treated to another example of what happens when conservation voters fail to go to the polls or, worse, when they vote for candidates who are antithetical to sound conservation values. On August 12, 2019, the Trump Administration announced its latest effort to modify the Endangered Species Act (ESA), not in the interest of the imperiled species the Act was designed to protect, but to satisfy the oil, cattle and mining industries who contribute so heavily to the Republican leviathan.

The ESA has been an enormously successful program to save endangered species and is the model for the rest of the world. Among its successes are the restoration of the California condor, the American alligator, the bald eagle and the gray wolf. Nevertheless, the Trump Administration is convinced the ESA is antiquated and needs to be brought “into the 21st Century.” Secretary of Commerce Wilbur Ross, that paragon of official candor whose reason for adding a citizenship question to the 2020 census was found to be a lie, said:

The revisions finalized with this rulemaking fit squarely with the president’s mandate of easing the regulatory burden on the American public, without sacrificing our species’ protection and recovery goals.

The announcement was accompanied by supportive statements from 15 Republican lawmakers, and officials from the National Association of Homebuilders, the National Cattlemen’s Beef Association, and the Western Energy Alliance. The strong opposition of environmental groups wasn’t mentioned.

The ESA itself has remained untouched. Several attempts to amend the statute have failed, even though Republicans have controlled both houses of Congress. The Trump Administration has simply modified the regulations that control how the Interior and Commerce Departments will interpret and apply the ESA. A regulatory change of this type is easier to achieve — but also easier for the next administration to reverse. And no regulatory interpretation can contradict the actual statutory language.

What exactly are these regulatory modifications and what will they mean? The answers depend on an understanding of the way the ESA works. It creates a two-tiered approach to protecting plants and animals at risk. Species may be listed as either endangered or threatened. “Endangered” means a species is in danger of extinction throughout all or a significant portion of its range. “Threatened” means a species is likely to become endangered “within the foreseeable future.”

Economic Data on Industry Impact

The first Trump modification is to what factors may be considered when listing and delisting a species. The ESA says that such determinations must be made “solely on the basis of the best scientific and commercial data available” on the question of whether the species is in danger of extinction. The current regulation mirrors this language but adds the phrase “without reference to possible economic or other impacts of such determination.” The Trump modification eliminates this additional phrase.

This is a clear invitation to industry to bombard the Interior Department with data on the possible harm to the affected industries, which will certainly be exaggerated, when a listing or delisting issue is considered. But recall the statute says that listing and delisting decisions must be made solely on the basis of the best scientific and commercial data available concerning the extinction question. It does not include the economic impact on industry. Yet what purpose could collecting information on industry impact serve but to influence the ultimate decision? One commentator has likened this to considering cost before treating a patient who is having a heart attack. An obvious legal challenge is set up here because the modified regulation seems to contradict the statute.

Shrinking Critical Habitat

When a species is listed as endangered or threatened, a critical habitat must also be specified. This is the geographical area occupied by the species at the time of listing plus any additional area essential for the conservation of the species. The designation of critical habitat only affects federal agency actions or federally funded or permitted activities. Federal agencies are required to avoid destruction or adverse modification of critical habitat areas. Since the federal government owns enormous swaths of land in the West, a critical habitat designation could restrict the extent of federal land open for oil and gas drilling and mining.

Unlike on the question of potential extinction, the Interior Department must take into consideration the economic impact of a critical habitat decision. But this is not enough for the Trump Administration. The major change to this portion of the regulation relates to areas not occupied by the species at the time of listing, but that are deemed essential for the preservation of the species.  Now there will be a presumption that an unoccupied area is inessential unless there is a showing that without the unoccupied area the critical habitat would be inadequate. Moreover the Secretary will now be required to determine to a reasonable certainty that the area will contribute to the conservation of the species. The result of all this is that critical habitats will be smaller in the future.

Elimination of Climate Change When Determining Foreseeable Future

A species can be listed as threatened when it is likely to become an endangered species in the foreseeable future. Now the term “foreseeable future” will extend only so far into the future as the Secretary can reasonably determine that both the future threats and the species’ responses to those threats are likely. Under this new rule it would have been nearly impossible to designate the polar bear as threatened in 2010 because of the projected loss of sea ice. Officials then relied on climate models to predict the effect of warming on bear habitat 80 years into the future.

Writing in The New York Times, ecologist Carl Safina said

It used to be that animals did not need us. Now they do. Unless we value their existence, the modern tide will engulf and obliterate them. Their survival – like our great-grandchildren’s – is a moral matter. No religion has ever preached that our role on earth is to destroy, or leave less for those who’ll come after us. No wisdom teaches that it’s OK for a generation to drive the world to ruin. We are taught that we must safely pilot the ark.

This reference to the ark caught my attention. It is an apt metaphor, even if one is not inclined toward the scriptural view of the world. Noah carefully put all the animals on Earth into the ark, two by two, in order to preserve them from the deluge. We function as the modern day Noah. Except our current leadership in Washington is at the gangplank shouting “Hey! You two. Get out of line.”

Finding A Practical and Effective Solution for Carbon Emissions

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Can we talk? We need to stop wasting time and come up with a way to drastically reduce greenhouse gas emissions – now. The recent U.N. report on climate change should scare us into action if nothing else has. Earth’s surface temperatures are virtually certain to rise at accelerating rates between now and 2050, with many serious heat-related consequences, including the disruption of agriculture, wildfires and sea level rise. These will threaten world economic and political stability. This is no hoax. Existential threat would be a better term.

Many of the best minds today believe that the solution lies in putting the right price on the production of carbon-based fuels. Carbon producers like the coal industry create “externalities” – costs that are not part of the price of the coal paid by consumers.  Chief among these are the environmental effects of the greenhouse gasses emitted when coal is burned.  These costs are foisted onto the public in general.

Finding the right higher price for carbon would make carbon-based fuels less attractive than cleaner sources of energy, such as wind and solar. The right price for carbon would also encourage the development of energy efficient machinery and processes. Individual consumers would make better energy choices.

For those who believe the conservative ideology that free markets can solve all of our problems, here is a wake up call.  Free markets have totally failed us in pricing carbon. This is because neither the seller nor the buyer of carbon has an incentive to take externalities into account in the price.  Nearly everyone outside the Trump Administration – liberals and conservatives alike – believe that government must intervene. The question is how. There are two candidates for the job.

Cap and Trade

One system, called cap and trade, is currently in use in a group of New England states and California. Government’s role in a cap and trade system is to determine how much total carbon it will permit to be dumped into the atmosphere each year.  Government also sells permits to emitters up to the carbon limit and then supervises a secondary market.

Imagine that government decides it will tolerate 5 billion tons of carbon dioxide in year one.  It divides this amount into 1,000,000 permits worth 5,000 tons each.  The permits could be auctioned, generating revenue.  Some carbon emitters might be priced out of an auction, so they could go onto the secondary market to purchase pollution rights from emitters who, through technological improvements, do not need the right to emit all 5,000 tons authorized by their permit.

In year two the overall amount government will tolerate might be reduced to 4.5 million tons.  Each of the 1,000,000 permits in year two would authorize 4,500 tons, less pollution than the year before.  The price of these would be much higher than the year before at auction and also on the secondary market. The financial pressure on emitters to find ways to reduce their own carbon emissions would be intense. The carbon limit would be steadily reduced year to year until the goal is met.

The criticisms of cap and trade are several. First, emitters chafe at the government setting overall emission limits and call this “command and control,” a buzz-phrase for top down regulation. Actually these limits would be politically negotiated and might not be set low enough to avoid climate disaster. Second, if the overall limits are too low some emitters would be forced out of business, harming the economy. Third, and most important, cap and trade does not involve a mechanism to soften the impact of higher energy prices on consumers.  While environmentalists will favor the certainty that emissions would be reduced at predictable rate down to the level that will avoid climate disaster, this system would be subject to intense political pressure from emitters and consumers and would be politically unstable.

A Carbon Tax

The other method for solving the problem is a carbon tax. Under this method, government would decide the appropriate price for discouraging carbon emissions and then impose an escalating tax until that price is reached. This seems to be as much “command and control” as setting the carbon limit in a cap and trade system, but surprisingly conservatives seem to like the carbon tax better.

Voters in Washington state had the opportunity on November 6 to impose a “pollution fee” on emitters in that state. This fee would have operated exactly like a carbon tax. It would have been the first such tax to be adopted by ballot referendum anywhere.  Unfortunately voters turned down this measure 56% to 44% in what is now the typical divergence between rural and urban voters.

The Washington proposal was to impose a fee on large emitters, beginning at $15 per metric ton of carbon content and escalating $2 each year until it reached $55 per ton. For comparison, Sweden has the highest carbon tax in the world at $140 per ton. The Washington fee would have applied to fossil fuels sold or used within the state and electricity generated within or imported for consumption within the state.

The measure was expected to generate $2.2 billion in the first five years, which would have been directed to a trust fund. As a fee instead of  a tax, the proceeds could not be spent for general governmental purposes. Every cent raised would have gone toward solving climate-related problems, protecting the state’s environment or aiding communities affected by climate change or by the fee itself. This measure was designed to appeal to left-leaning and environmentally concerned voters.

An earlier measure for a carbon fee in Washington also failed because it was opposed by Democrats and labor. It aimed to gain support from more moderate voters by providing for the return of the proceeds from the fee directly to Washington residents, without reserving the money for alternative energy and conservation purposes.

The 2018 ballot initiative was opposed by petroleum producers who argued that the fee would not make a dent in global warming but would damage the state’s economy. They also argued the fee’s impact would be borne by consumers and small business. Commenting on the defeat of this measure, David Roberts, a reporter at Vox, wrote that “it’s difficult to avoid the conclusion that the public is not quite ready for state carbon taxes.”

A Carbon Tax With Public Dividend

So it is with healthy skepticism that I come to the recent proposal made by a group called the Climate Leadership Council (CLC), consisting of the heads of large energy companies and Republican heavy-hitters like James Baker, George Schultz and Janet Yellin. Their plan is called The Carbon Dividend.

This plan involves a tax on carbon-based fuel producers determined by the carbon content of the fuels.  For example, coal would be taxed at $96 per ton, natural gas at $2.28 per thousand cubic feet and oil at $18 per barrel. This would work out to an average of $43 per ton of carbon dioxide. It would increase 3 to 5% per year as determined in the legislation.The purpose, as with any carbon tax, is to raise the cost of carbon-based fuels to discourage their use relative to cleaner sources of energy. Exxon-Mobil has pledged $1,000,000 to promote the plan.

The tax would be imposed on energy producers at the point the fuels enter the economy. But the financial impact of the tax would be passed on to consumers, indeed the scheme won’t work unless the costs are passed on because part of the design is to get consumers to economize and make the right energy choices.

Unlike the Washington proposal just defeated, revenues from the tax would be distributed to the public in a carbon dividend paid monthly or quarterly through the Social Security Administration. It would not be devoted to developing alternative energy or softening the blow on communities affected by the tax like Southern West Virginia would be. The CLC estimates the dividend will be as much as $2,000 per year for a family of four and is intended to offset the higher cost of goods caused by the tax.

The CLC further estimates that two-thirds of American families would be financial winners because the increased cost of energy for them would be less than $2,000. This is because only higher income families consume enough to outweigh the dividend. The proposal banks on the carbon dividend becoming as popular as Alaska’s Permanent Fund dividend of $1,000 per year to citizens.

Why, you ask, would big oil companies be interested in a program that reduces the consumption of their products? One answer is that these companies are afraid of future lawsuits blaming them for the effects of climate change.  The Carbon Dividend plan would involve some sort of litigation immunity much like the settlement with tobacco companies. Perhaps a more important reason is that the plan involves a grand trade-off whereby current regulations on carbon dioxide emissions like Obama’s Clean Power Plan would be eliminated as “unnecessary.”

Obviously, there are things about the Carbon Dividend plan that will be unpalatable to the environmental community. But keep in mind how quickly we must act. It will be politically necessary to have leading Republicans and much of industry on board if we hope to do anything beyond arguing about what should be done.

I for one am willing to allow conservatives to have their “revenue neutral” solution wherein the government doesn’t get the proceeds from the carbon tax to spend in ways I would like — so long as the plan effectively reduces carbon emissions. On this point the CLC says that the Carbon Dividend plan will reduce emissions by 32% compared to 2005, meaning the U.S. would exceed the upper end of the Paris Accords which called for a reduction of 26-28%.

The real beauty of the Carbon Dividend plan is that it addresses the psychological resistance people have to acting in their own best interest on the climate issue. The threat of global warming lacks immediacy to most people. It is difficult to convince them to endure costs now that will benefit others in fifty years. The dividend provides immediate benefits for behavior that is required to secure a much larger, though long-term benefit. It would make political support for adoption much more likely and help to insulate the plan from amendment through later legislation. Because of this the Carbon Dividend might be the practical and effective solution we are looking for.

Trump Administration Abruptly Changes Migratory Bird Enforcement Policy

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For 100 years, the Migratory Bird Treaty Act (MBTA) has protected nearly 1000 bird species in the United States against being “taken” or killed except under prescribed circumstances. This statute prohibits hunters from intentionally killing birds without a permit, but has also been interpreted by courts and the Interior Department to prohibit incidental taking – the unintentional destruction of birds or nests through some instrumentality or activity like spraying pesticides or the erection of wind turbines. The MBTA is a strict liability statute. If a covered bird dies then misdemeanor liability is established despite the efforts or good will of the defendant.

The MBTA itself is silent about whether intent is a necessary element of the misdemeanor, but Congress has amended the statute several times without correcting the prevailing judicial interpretation that intent to harm birds is not required. In fact, the amendments carved out special areas where intent was necessary, strongly implying that in all other areas intent was unnecessary.

This interpretation was formally adopted by the Interior Department in a legal memo issued in the waning days of the Obama Administration. However, a new interpretive memo was issued in December 2017 by the Trump Interior Department reversing the Obama approach and essentially eliminating the enforcement of the MBTA against incidental taking.

This is an historic and meaningful about-face. Incidental taking cases are largely against the oil industry – the two largest prosecutions came after the Exxon Valdez spill and the Deepwater Horizon oil well disaster. Oil production activity is obviously not intentionally designed to kill birds, so without enforcement against incidental taking the overwhelming majority of large scale bird kills will have no legal consequences. Since private citizens have no right to file lawsuits to enforce the MBTA, the Trump Interior Department’s direction to Fish and Wildlife enforcement officials to lay off incidental taking cases is hugely significant.

The author of the new Trump enforcement memo is Dan Jorjani, a long-time advisor to billionaire oil man Charles Koch. The Obama interpretation also angered Harold Hamm, a billionaire backer of Donald Trump whose Continental Resources company was prosecuted for repeatedly failing to erect nets over waste oil pits. But seventeen former Interior officials, including Fish and Wildlife directors under Presidents Nixon, Bush I, Clinton, Bush II and Obama have repudiated Jorjani’s interpretation. And it is easy to pick apart Jorjani’s rationale. It is clear that in the Trump Administration good conservation policy and quality legal analysis has given way to rewarding small-government, libertarian political contributors.

The Trump memo justifies the enforcement change in two ways. First, three U.S. Courts of Appeals have ruled that prosecution of a corporation that unintentionally kills birds in the course of a business activity is inconsistent with the meaning of the word “take” as used in the statute. Two of these cases dealt with habitat destruction from cutting trees. The rationale in these cases was that when the statute was passed 100 years ago taking referred to hunting or capturing birds, clearly intentional conduct directed at birds. These courts were concerned with the unfairness of extending criminal liability to otherwise innocent business activity.

Several other Courts of Appeals have supported the Obama approach, but the Trump Administration has chosen to ignore those cases. The MBTA is an historic conservation statute with broad scope. It is the responsibility of the Interior Department to interpret the statute to give it broad effect. This is exactly what the Department has done for 100 years by considering as prohibited incidental taking without actual intent to harm birds. If Congress intended to exclude incidental taking from the scope of the statute, it could have said so on many occasions. But this issue seems beside the point. Since the statute also prohibits killing birds “by any means or in any manner” it is simply not necessary to resolve what the word “take” meant 100 years ago. Incidental, unintentional killing is clearly covered.

The second justification for the enforcement change is that the Obama interpretation was open-ended and could potentially have criminalized millions of Americans who merely have a large picture window into which a bird commits suicide, or whose cat behaves like a cat. This issue has been raised in many of the litigated cases but has never gotten judicial traction. One court explained that to get a conviction for incidental taking, the prosecution would still have to prove that the killing of birds should have been reasonably anticipated or foreseen from the nature of the defendant’s activity. This is not intent to cause a bird kill, but rather awareness that it could happen. The court said “[b]ecause the death of a protected bird is generally not a probable consequence of driving an automobile, piloting an airplane, maintaining an office building, or living in a residential dwelling with a picture window, such activities would not normally result in liability.”

Some commentators have remarked that the public has been whipsawed between an Obama enforcement approach that went too far and a Trump enforcement approach that doesn’t go nearly far enough. Clearly the Trump interpretation of the MBTA guts the statute and is unacceptable. But it is hard to escape the sense that interpreting a statute broadly to create potential (and actual) business liability without considering the intent of the business, or the efforts of the business to comply, is asking for trouble. Businesses caught up in MBTA enforcement have been frustrated and believe they have been treated unfairly. This has led them to seek political help, which they have now found.

Perhaps the best way through this mess is for Congress to amend the MBTA to confirm clearly that the statute reaches incidental taking, while requiring Fish and Wildlife inspectors to first warn a business with a structure or practice likely to harm birds, and allowing a substantial penalty reduction for good faith efforts to comply. Without this kind of balance the MBTA will simply be unstable, lurching from one enforcement interpretation to the next.

Rep. Alex Mooney Deals a Blow to West Virginia’s Mountain Streams

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Rep. Alex Mooney (WV 2nd) is celebrating the demise of the Interior Department’s Stream Protection Rule. This Rule, made effective in the waning days of President Obama’s tenure, would have created a buffer zone between mountain streams and mine sites and would have protected drinking water in accordance with modern technology. The Rule would have mainly affected mining done by mountaintop removal where mining refuse is pushed into stream valleys. But Rep. Mooney and his Big Coal backers claim that the Rule would have killed over 70,000 jobs in the coal industry. Unfortunately, Rep. Mooney’s grasp of coal economics and employment numbers is feeble, perhaps influenced by his ideological impulse to dance on the grave of the Obama Administration.

The scientific evidence of the harm done by mountaintop removal with valley fills is unassailable. In January 2010, Science Magazine published an article detailing that harm, written and researched by twelve preeminent scientists including one from WVU. They found that burial of headwater streams by valley fills causes permanent loss of ecosystems. Stream biodiversity and water quality suffer. As they emerge from valley fills, mountain streams are saturated with sulfate, calcium, magnesium and other harmful ions. These persist even after mine-site reclamation. Groundwater samples from domestic supply wells have higher levels of mine-derived chemicals than well water from unmined areas. The article, written before Obama’s stream protection Rule, concludes

mine-related contaminants persist in streams well below valley fills, forests are destroyed, headwater streams are lost, and biological diversity is reduced; all of these demonstrate that [mountaintop removal with valley fill] causes significant environmental damage despite regulatory requirements to minimize impacts.

Balanced against this certain environmental harm is Rep. Mooney’s rather hysterical claim that huge numbers of West Virginia coal jobs would have been lost under the Rule. It should surprise no one that Rep. Mooney’s numbers come straight from the National Mining Association. That group’s analysis asserted that as many as 77,000 jobs might be lost nationwide under the worst scenario, but possibly far fewer under more likely scenarios. Those are not all West Virginia jobs, or even Appalachian jobs. And there is good reason to doubt the bona fides of NMA’s numbers because they do not take into account the reclamation and compliance jobs that would be created by the Rule.

Congress required the Office of Surface Mining Reclamation and Enforcement to estimate the proposed Rule’s impact on employment, not just on coal jobs. In a document entitled SPR Myths vs, Facts, it debunks industry claims that between 40,000 and 77,000 jobs would be lost:

The final [Stream Protection Rule] will not have an adverse impact on jobs. The regulatory impact analysis (RIA) for the rule estimates overall that employment will show [an annual average] increase of 156 full time jobs. Where coal production is unprofitable under market conditions, jobs are predicted to decline by an average annual aggregate of 124 fulltime jobs. This will be more than offset by an average annual gain of 280 fulltime jobs needed to comply with the rule where mining remains profitable, such as additional jobs like heavy machine operators for materials placement and water sampling professionals. For purposes of comparison, the Energy Information Administration reports that total coal industry employment in 2015 was equal to 65,971, decreasing 12% from 2014.

In a February 22, 2017 opinion piece, the Morgan Messenger took Senators Capito and Manchin to task for claiming that rolling back the Rule would save state coal jobs. “They don’t do our state any favors by pretending to have turned back the loss of coal jobs,” the Messenger said, noting that coal jobs have been declining for years due to economic factors unrelated to environmental regulations. Rep. Mooney is guilty of the same and more. By accepting and further promoting the coal industry’s false narrative about a “war on coal” he delays the reckoning we in West Virginia must have about replacing coal jobs and severance revenues. He keeps us in the perpetual coal rut. The roll back of the Stream Protection Rule is no cause for him to celebrate.