Undermining the Endangered Species Act

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

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

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

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.