acid rain came most prominently from sulfur and other pollutants emitted by power plants in the Midwest. In 1971, President Richard Nixon proposed placing a tax on sulfur emissions, which could have gone a long way in reducing acid rain. Groups as diverse as the National Association of Manufacturers, the Sierra Club, and the National Academy of Sciences supported the sulfur tax, but the idea went nowhere in Congress.23 And it’s no wonder: Passing such a tax would have required members of Congress to shoulder the blame for the burdens of pollution control. So they left the problem to the EPA.
As the concern about acid rain mounted in the 1980s, eastern states bitterly complained that it damaged forests, lakes, crops, and lungs. These states asked the EPA to regulate the emissions, but the agency refused to set a mandatory air-quality goal for acid rain because achieving such a goal would be politically infeasible. Quite apart from acid rain, Congress had many urgent reasons to revise the Clean Air Act, but the acid rain issue got in the way. Legislators from Eastern states, faced with angry constituents, would not support any revision that failed to cut acid rain, while legislators from the Midwest feared that supporting cuts in acid rain would anger their constituents. The legislators could not dodge their constituents’ anger by telling the EPA to impose the duties needed to control acid rain because (1) cutting emissions from Midwestern power plants was the chief way to cut acid rain, (2) cutting these emissions would impose costs on plant owners that would force the state utility commissions to increase electricity rates, and (3) the power plant owners and state commissions would tell consumers that it was Congress that had caused their electricity bills to jump. The impasse helped cause years of crisis in air pollution control.
To break the impasse and end the crisis, Congress eventually took a new tack in pollution control: Congress itself would decide how much to cut acid rain emissions but let the sources of pollution rather than the regulators decide where to cut acid rain emissions. This new approach reduced the cost of pollution control and so made it more palatable to Midwestern legislators. The administration of President George H. W. Bush recommended this approach and Democrats and Republicans in Congress joined in passing it.
Here, more specifically, is what Congress did: It prohibited any plant from emitting sulfur without an allowance to do so and kept the number of allowances within an annual cap that would decline to 50 percent from current levels of sulfur emissions. The allowances were distributed among power plants but could be bought and sold. Such trading meant that a plant that faced a high cost to cut emissions could save money by buying allowances from another plant that could make extra cuts in its emissions at a lower cost.
This cap-and-trade approach achieved the 50 percent cut in sulfur emissions that Congress promised on schedule and saved electricity consumers and plant owners billions of dollars, compared to traditional regulation. Moreover, cap and trade vastly simplified the government’s job, reducing it to doing the bookkeeping needed to ensure that no plant’s emissions exceed the allowances it holds. The entire program would now be run by fewer than fifty EPA staffers, compared to the many thousands of federal and state staffers required to regulate pollution the tricky way. Finally, because the program required that firms emitting more than their allowances must pay a steep automatic penalty, they have an almost-perfect record of compliance, far better than with traditional regulation. As a candidate for president in 2008, Barack Obama, stated: “A cap-and-trade system is a smarter way of controlling pollution” than traditional top-down regulation. With top-down regulation, as Mr. Obama explained, regulators dictate “every single rule that a company has to abide by, which creates a lot of bureaucracy and red tape and often-times is less efficient.”24
With the acid rain program, Congress indulged in neither False Assumption 1 (that there is a completely safe level of emissions) nor False Assumption 2 (that pollution is a local problem) but instead used the “smarter way” to cut pollution.
The tax approach that President Nixon proposed in 1981 is like the cap-and-trade approach in these respects and also in requiring members of Congress to take a measure of responsibility for the burdens of pollution control. It took nineteen years of delay and a crisis for Congress to take that responsibility.
The failure in reducing lead in gasoline and the eventual success on limiting acid rain are only the beginning of the evidence that by leaving the hard choices to the EPA, Congress harms the public. Although Congress promised in 1970 that the agency would achieve health-based air-quality goals for the most widespread pollutants by the end of the 1970s, most Americans still breathed air that violated these supposedly mandatory goals into the 1990s. Congress also promised in 1970 that the EPA would promptly protect health from less widespread but especially hazardous pollutants. Yet, the EPA was unable to deal with the great bulk of these pollutants until Congress took some responsibility in 1990. The greatest gains in controlling pollution have come in those rare instances where Congress did take responsibility; examples include not just the acid rain program but also cutting emissions from new autos by more than 90 percent, requiring new cars to use lead-free gasoline, and totally eliminating chemicals that destroy stratospheric ozone.25
Given Congress’s successes when it finally took responsibility for the hard choices required to solve environmental problems, it should also apply the cap-and-trade approach to other widespread pollutants. That is what the Breaking the Logjam project of New York Law School and New York University School of Law recommended.26 The project brought together environmental experts, including me, from across the political spectrum to show how to reform the Clean Air Act and other obsolete environment statutes. One of the experts who worked with me on the air-pollution recommendations for the project was Ross Sandler, my litigation partner at the Natural Resources Defense Council and now my New York Law School colleague. The leaders of the project—Richard Stewart, former chairman of the Environmental Defense Fund; Katrina Wyman, his colleague on the NYU faculty; and I—wrote a book, similarly titled Breaking the Logjam, outlining our recommendations. The book received favorable endorsements from high environmental officials appointed by presidents of both parties.
When Richard Stewart and I met with people from both parties on Capitol Hill, they praised the project’s recommendations and said they wished that Congress had already enacted them. After all, the recommendations would produce healthier air at less cost. Yet, they also doubted that they could get them enacted. Why? Updating the Clean Air Act to build upon the success of the acid rain program would require legislators to take responsibility for hard choices on how clean to make the air. On the other hand, if they left the act unchanged, they could continue to pin most of the blame for both the dirty air and the burdens that the Clean Air Act does impose on the EPA and the states.
In sum, leaving the Clean Air Act unchanged was good for legislators but bad for us, their constituents, because a something-for-nothing statute made them look good to us even as they harmed us. And so it remains that Congress last revised the Clean Air Act in 1990, more than a quarter century ago, although we have since learned much about smarter ways to control pollution.
Congress began down the road toward something-for-nothing legislation in pursuit of laudable ends. The passage of the Civil Rights Act helped build popular support for legislation to deal with other instances of unfairness in our society.27 It was unfair that the poor had to rely for medical care upon the quirks of charity and local government, especially as the costs of care escalated. It was unfair that pollution increasingly poisoned us and our environment. Moreover, the American government undeniably had the capacity to do more to address these problems, as was evident from its outstanding successes. The government had, as already noted, gotten the people through the Great Depression, won World War II, invented the atomic bomb, built the interstate highway system, come to preside over the world’s richest economy, and put humans on the Moon.
While these earlier successes had not come from using the Five Tricks, Congress would resort to them in dealing with the new challenges of health care and pollution.
