Washington, DC..The Clinton Administration is now poised to allow open market trading of air emission despite an array of unresolved problems which could cripple enforcement of the Clean Air Act against stationary source polluters, according to a report written by U.S. Environmental Protection Agency (EPA) employees and released today by Public Employees for Environmental Responsibility (PEER). Because several states — principally, New Jersey, Michigan and Illinois — have already begun air emission trading, the Administration is rushing out a retroactive policy.

As part of its effort to “reinvent” government, the Clinton-Gore Administration has embraced the “market based solution” of emission trading which allows corporations to buy and sell the right to pollute. What is traded under these policies is a “credit,” representing emission reductions, to show environmental compliance. In traditional air emissions trading, trades are confined to one economic sector and only one type of pollutant at a time. Under this new plan, EPA would authorize inter- sector or “open market trading” (OMT) in which companies can increase or maintain current levels of “smokestack” pollution by removing mobile pollution sources such as old cars or converting diesel buses to hydrogen.

Under open market trading, corporate cost reduction would replace public health as the driving force behind improving air quality. The PEER report, Trading Thin Air, predicts direct yet uncontrollable public health consequences as state after state opts out of known attainment strategies and opts into new market-based regimes where everything is negotiable but little is verifiable. According to EPA specialists, major defects in the OMT plan include:

*The absence of “quantification protocols” — the means for creating a common, verifiable trading currency to ensure that a trade is an “apples-to-apples” exchange ( a failing repeatedly raised by EPA’s own Inspector General (IG));

* Lack of enforceability. OMT is utterly dependent upon an enforcement role which EPA cannot fulfill. EPA’s enforcement programs already have serious limitations and are in no condition to support the new, more complex responsibilities entailed in OMT; and

* “Environmental Justice” impacts. EPA’s concentration on OMT has indefinitely delayed air pollution control plans for urban “nonattainment areas” — disproportionately comprised of poor and minority populations suffering health consequences of smog.

“According to EPA’s own experts, open market trading in air pollution credits is not ready for prime time,” stated PEER Executive Director Jeff Ruch. “Political pressures are pushing the agency to take a giant leap into the unknown before it makes sure the bungee cord is firmly secured.”

While EPA struggles to finalize these policies, it has turned a blind eye to several states which have already proceeded with open market trading. In New Jersey, for example, credits representing approximately 770 tons of emissions are now being traded. As the number of states and sources begin trading, EPA has found itself in a frantic rush to “grandfather” these unauthorized pollution markets.

Trading Thin Air depicts EPA managers obsessed with the prospect of obtaining an election-year “win-win” solution that promises to decrease pollution while cutting back regulation, muzzling internal dissent by:

* invoking powers to override negative IG findings of “material weakness”;

* issuing a “gag order” warning employees of possible criminal prosecution or disciplinary action for the disclosure of “non-public information.” The December 1999 order, emanating ironically from EPA’s own Office of Civil Rights, followed embarrassing leaks of internal assessments regarding potential effects of OMT’s plans on poor and minority communities; and

* encouraging “demonstration” trades of essentially worthless emission credits (in lieu of meaningful pollution reductions or fines) in a tortured effort to show that a pollution marketplace can work.

“Conscientious employees can no longer safely express professional differences within EPA,” concluded Ruch.

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