Clearing the Air: The McCubbins-Noll-Weingast Hypothesis and the Clean Air Act
By Craig N. Oren
INTRODUCTION
Something about the Clean Air Act seems to attract scholars. Since the Act took its current shape in the Clean Air Act Amendments of 1970, and especially since the revisions made by the Clean Air Act Amendments of 1977, a number of prominent commentators have sought to use the Act and its implementation as a case study to demonstrate different theses about administrative law, environmental law or legislative process. The Act has been cited as illustrating such varied (and at times conflicting) propositions as the limits of judicial review, the need for more precise legislation and the desirability of returning to the broad delegations of agency power characteristic of the New Deal era.
In a recent article in the Virginia Law Review, three leading authorities on governmental regulation and public choice theory — Matthew McCubbins, Roger Noll and Barry Weingast (hereafter “the authors” or “McCubbins-Noll-Weingast”) — join this distinguished company by arguing that the Act's history illustrates the linkage between administrative agency structure and political control. Unfortunately, the complexity of the Act and its history ensnare them. As a result, their paper is marred by errors of interpretation and fact that give an incorrect picture of the politics and provisions of the Clean Air Act Amendments and of the linkage between substance and agency structure.
The present commentary will point out the original article's flaws in the hope both of setting the record straight and assisting McCubbins-Noll-Weingast and their critics in refining and evaluating the theoretical insights of the original article. Thus, this commentary differs from other critiques of the original article, which accepted the authors' version of events while demurring from their conclusions. In addition, this critique will offer an alternate explanation of the effects of legislative characteristics on pollution policy that better fits the facts than the authors' hypothesis.
McCubbins-Noll-Weingast focus their discussion on the Act's Prevention of Significant Deterioration (PSD) program. This scheme is intended to protect against “degradation” of areas with air quality that is better than the national primary and secondary ambient air quality standards promulgated by the U.S. Environmental Protection Agency (EPA) under the Act. The program requires that new and modified “major emitting facilities” locating in such areas install the “best available control technology” (BACT) to limit emissions. This mandate compels almost as much pollution control by new sources in clean air areas as in “nonattainment areas” — that is, areas where the standards are violated.
The PSD program also imposes a system of increments that limits the cumulative amount of new pollution allowed in each clean air area above its pre-existing “baseline concentration.” The size of the increments varies with the area's classification, with Class I increments being the most restrictive and Class III the least. The entire nation, other than some national parklands and Indian reservations that are Class I, carries the moderate-growth Class II designation. A Class II area with, for instance, a baseline annual average concentration of thirty micrograms of sulfur dioxide per cubic meter, is restricted to an increase of twenty micrograms for a total of fifty micrograms, rather than allowed to increase to the federal ambient air quality standard of eighty. In this way, the PSD program establishes variable “tertiary” air quality standards for each clean air area that are stricter than the national primary and secondary standards that nonattainment areas must meet.
As McCubbins-Noll-Weingast make clear, the history of the PSD program has been acrimonious. The Clean Air Act Amendments of 1970 authorized the establishment of national ambient air quality standards (NAAQS) and required that states prepare and obtain EPA approval of state implementation plans (SIPs) to attain and maintain the standards. In addition, the 1970 Amendments empowered EPA to promulgate new source performance standards (NSPS) that would force categories of newly-built stationary sources (industrial facilities such as power plants) to control emissions as much as technologically feasible. But the Act did not explicity impose any obligation to keep exceptionally clean air from deteriorating to the levels of the national primary and secondary standards. EPA interpreted the statute to permit states to allow such deterioration. Nevertheless, the District Court for the District of Columbia concluded in Sierra Club v. Ruckelshaus that the Act prohibited EPA from approving state implementation plans that did not include measures to prevent significant deterioration of air quality superior to the standards.
After the district court holding was affirmed without opinion by the District of Columbia Circuit and an equally divided U.S. Supreme Court, EPA in 1974 established a nondegradation program and incorporated its requirements into all state implementation plans. While the Supreme Court was considering whether EPA had authority under the Act to establish the program, Congress codified PSD in the Clean Air Act Amendments of 1977. This process was far from easy; a proposed conference committee version was filibustered to death in 1976, necessitating a new round of contentious battles in the 1977 session. Despite much litigation over the meaning of the codification and a legislative attempt in the early 1980s to weaken it, the PSD program remains in place.
McCubbins-Noll-Weingast cite this history as illustrating the difficulty of using the legislative process to correct agency decisions in the implementation of a statute that deviate from the intent of the coalition that enacted the statute. The central problem, according to the authors, is that the incorrect agency decision itself alters the original political calculus. If, for instance, a statute has been passed by a coalition of moderate and extreme environmentalists, then an agency decision in favor of the extremists breaks the coalition, and it may not be possible for the moderates to find sufficient strength elsewhere to reverse the agency position without making unacceptable tradeoffs. This is particularly true if one house of a bicameral legislature favors the agency position, since the other house will be unable to overturn it unilaterally. Thus, the authors contend, Congress, though it would never have enacted PSD on its own, was able to respond to EPA's adoption of the program only with a statute that largely ratified the agency's decision. Legislators concerned about agency deviation from the intent of the enacting coalition must therefore rely not on the possibility of subsequent correction, but must instead design the agency's structure and decision-making processes in a way that minimizes the possibility that such deviation will occur in the first place. This might be done, for instance, by imposing procedural requirements that give the original coalition “time to mobilize its constituents before the agency undermines it by enunciating a noncomplying policy.” For example, even though Congress accepted the EPA's promulgation of PSD, according to the authors, Congress enacted the Clean Air Act Amendments of 1977 to impose procedural constraints on EPA rulemaking that are intended to prevent future deviations.
The present article will take up these contentions in turn. Part II reviews the history of the PSD program and of the 1970 and 1977 Amendments and concludes that McCubbins-Noll-Weingast are incorrect in their portrayal of the politics underlying the Amendments. Part III discusses the various structural changes made by the 1977 Amendments and argues that they illustrate the limitations as well as the possibilities of structural change. Thus, neither the authors' historical account nor theoretical analysis appear supportable.
Something about the Clean Air Act seems to attract scholars. Since the Act took its current shape in the Clean Air Act Amendments of 1970, and especially since the revisions made by the Clean Air Act Amendments of 1977, a number of prominent commentators have sought to use the Act and its implementation as a case study to demonstrate different theses about administrative law, environmental law or legislative process. The Act has been cited as illustrating such varied (and at times conflicting) propositions as the limits of judicial review, the need for more precise legislation and the desirability of returning to the broad delegations of agency power characteristic of the New Deal era.
In a recent article in the Virginia Law Review, three leading authorities on governmental regulation and public choice theory — Matthew McCubbins, Roger Noll and Barry Weingast (hereafter “the authors” or “McCubbins-Noll-Weingast”) — join this distinguished company by arguing that the Act's history illustrates the linkage between administrative agency structure and political control. Unfortunately, the complexity of the Act and its history ensnare them. As a result, their paper is marred by errors of interpretation and fact that give an incorrect picture of the politics and provisions of the Clean Air Act Amendments and of the linkage between substance and agency structure.
The present commentary will point out the original article's flaws in the hope both of setting the record straight and assisting McCubbins-Noll-Weingast and their critics in refining and evaluating the theoretical insights of the original article. Thus, this commentary differs from other critiques of the original article, which accepted the authors' version of events while demurring from their conclusions. In addition, this critique will offer an alternate explanation of the effects of legislative characteristics on pollution policy that better fits the facts than the authors' hypothesis.
McCubbins-Noll-Weingast focus their discussion on the Act's Prevention of Significant Deterioration (PSD) program. This scheme is intended to protect against “degradation” of areas with air quality that is better than the national primary and secondary ambient air quality standards promulgated by the U.S. Environmental Protection Agency (EPA) under the Act. The program requires that new and modified “major emitting facilities” locating in such areas install the “best available control technology” (BACT) to limit emissions. This mandate compels almost as much pollution control by new sources in clean air areas as in “nonattainment areas” — that is, areas where the standards are violated.
The PSD program also imposes a system of increments that limits the cumulative amount of new pollution allowed in each clean air area above its pre-existing “baseline concentration.” The size of the increments varies with the area's classification, with Class I increments being the most restrictive and Class III the least. The entire nation, other than some national parklands and Indian reservations that are Class I, carries the moderate-growth Class II designation. A Class II area with, for instance, a baseline annual average concentration of thirty micrograms of sulfur dioxide per cubic meter, is restricted to an increase of twenty micrograms for a total of fifty micrograms, rather than allowed to increase to the federal ambient air quality standard of eighty. In this way, the PSD program establishes variable “tertiary” air quality standards for each clean air area that are stricter than the national primary and secondary standards that nonattainment areas must meet.
As McCubbins-Noll-Weingast make clear, the history of the PSD program has been acrimonious. The Clean Air Act Amendments of 1970 authorized the establishment of national ambient air quality standards (NAAQS) and required that states prepare and obtain EPA approval of state implementation plans (SIPs) to attain and maintain the standards. In addition, the 1970 Amendments empowered EPA to promulgate new source performance standards (NSPS) that would force categories of newly-built stationary sources (industrial facilities such as power plants) to control emissions as much as technologically feasible. But the Act did not explicity impose any obligation to keep exceptionally clean air from deteriorating to the levels of the national primary and secondary standards. EPA interpreted the statute to permit states to allow such deterioration. Nevertheless, the District Court for the District of Columbia concluded in Sierra Club v. Ruckelshaus that the Act prohibited EPA from approving state implementation plans that did not include measures to prevent significant deterioration of air quality superior to the standards.
After the district court holding was affirmed without opinion by the District of Columbia Circuit and an equally divided U.S. Supreme Court, EPA in 1974 established a nondegradation program and incorporated its requirements into all state implementation plans. While the Supreme Court was considering whether EPA had authority under the Act to establish the program, Congress codified PSD in the Clean Air Act Amendments of 1977. This process was far from easy; a proposed conference committee version was filibustered to death in 1976, necessitating a new round of contentious battles in the 1977 session. Despite much litigation over the meaning of the codification and a legislative attempt in the early 1980s to weaken it, the PSD program remains in place.
McCubbins-Noll-Weingast cite this history as illustrating the difficulty of using the legislative process to correct agency decisions in the implementation of a statute that deviate from the intent of the coalition that enacted the statute. The central problem, according to the authors, is that the incorrect agency decision itself alters the original political calculus. If, for instance, a statute has been passed by a coalition of moderate and extreme environmentalists, then an agency decision in favor of the extremists breaks the coalition, and it may not be possible for the moderates to find sufficient strength elsewhere to reverse the agency position without making unacceptable tradeoffs. This is particularly true if one house of a bicameral legislature favors the agency position, since the other house will be unable to overturn it unilaterally. Thus, the authors contend, Congress, though it would never have enacted PSD on its own, was able to respond to EPA's adoption of the program only with a statute that largely ratified the agency's decision. Legislators concerned about agency deviation from the intent of the enacting coalition must therefore rely not on the possibility of subsequent correction, but must instead design the agency's structure and decision-making processes in a way that minimizes the possibility that such deviation will occur in the first place. This might be done, for instance, by imposing procedural requirements that give the original coalition “time to mobilize its constituents before the agency undermines it by enunciating a noncomplying policy.” For example, even though Congress accepted the EPA's promulgation of PSD, according to the authors, Congress enacted the Clean Air Act Amendments of 1977 to impose procedural constraints on EPA rulemaking that are intended to prevent future deviations.
The present article will take up these contentions in turn. Part II reviews the history of the PSD program and of the 1970 and 1977 Amendments and concludes that McCubbins-Noll-Weingast are incorrect in their portrayal of the politics underlying the Amendments. Part III discusses the various structural changes made by the 1977 Amendments and argues that they illustrate the limitations as well as the possibilities of structural change. Thus, neither the authors' historical account nor theoretical analysis appear supportable.
