In this paper, I am to take EPA's three most sweeping pollution control statutes—the Clean Air Act, the Clean Water Act, and the Resource Conservation & Recovery Act (RCRA)—and spell out how each of them deals with federal/state relations. Beyond that, I am supposed to plant the question in your minds whether the existing allocation of responsibilities makes sense, and how it might be reformed if it doesn't. I think we could ask that question either by taking each statute as a whole or by comparing them with each other, and I plan to do a little of both. Finally, Turner Smith agreed that I could also set out some broader, more philosophical principles on how to allocate these duties.

These will be my own personal views.

Let me start, then with how the three EPA statutes before us are actually constructed.

The Present Pattern

The subject of our discussion is the allocation of responsibilities between state and federal governments under three environmental statutes. To be provocative, let me begin by making what I actually think is a very fair point—that in any basic sense, the three laws at issue do not allow states much discretion at all. There are some parts of the regulatory scheme that states may implement if they choose, and others that they are forbidden to implement. If a state does not take on the responsibilities that Congress has allowed it to assume, however, the only consequence is that the federal government must discharge them. If a state does take on the responsibilities, it still remains subject to detailed federal oversight to make sure it conforms to the basic congressional requirements. Fundamentally, then, Congress has decided that all the regulatory requirements of the Clean Air Act, the Clean Water Act, and RCRA amount to national responsibilities that should be pursued whether or not the states agree with them.

Indeed, one might argue that the opportunity afforded the states to operate some of these programs is more of an effort to conscript them into federal service than it is an acknowledgement of their autonomy. Some states engaged in disputes with EPA have found that threatening to give the program at issue back to the federal government is an effective bargaining tactic. Faced with the task of actually operating a program for which it really lacks the resources, EPA has often tended to give some ground when this prospect [12 ELR 15070] is raised. A system that can work in this manner is hardly an uncalculating gift to the states.

On the other hand, the three statutes we are considering almost always allow states to adopt standards stricter than the federal minimum.

Within these two boundaries, the Clean Air Act, the Clean Water Act and RCRA move more on the level of administrative convenience than on any philosophical level in allocating responsibilities between state and federal governments. I think that by using three basic categories it becomes quite easy to anaylze how each of them addresses this problem. These are health and welfare standards, methods of attaining those standards, and finally, technology-based regulations.

Health and welfare standards are environmental goals that the law seeks to achieve. Typically, they are set in terms of a given level of purity of some part of the environment, such as the air or the water.

The Clean Air Act emphasizes these standards far more than the other two statutes before us. By now you may have thought of the primary and secondary national ambient air quality standards, the basic building blocks of the Clean Air Act, as the major example of what I am discussing. We should also include the entire prevention of significant deterioration (PSD) program, as well as the rules for visibility protection, under this heading. These programs have a definite environmental purpose—to preserve or maintain very clean air in regions where that is important—whatever you may think of how they achieve it.

Where the Clean Water Act is concerned, health and welfare goals are set almost exclusively by the water quality standards each state must establish with EPA approval. Beyond that, the Clean Water Act uses the concept only a negative way. That is, it allows municipalities and major heat sources to obtain relief from standards that would otherwise apply if they can show that their discharge, even after the relief, will not cause environmental harm.

Finally, RCRA embodies health and welfare standards in two ways. The hazardous waste program is built around certain listed or identified wastes; those that are listed or identified are supposed to be those that, in essence, 'pose a substantial present or potential hazard to human health or the environment' when improperly dealt with. Ultimately, these wastes must be treated, stored and disposed of under standards designed to protect 'human health and the environment.'

This area—health and welfare standards—is the only one of the three we are discussing that lacks a consistent pattern as to who sets the standards at issue. Under the Clean Air Act and RCRA, the federal government sets these standards. Under the Clean Water Act, however, states set water quality standards. Though the federal government must review and approve the standards, the scope of that review is probably more limited than in many other areas. The review is particularly constricted, moreover, where it involves the basic choice of how to use the water—for industrial, agricultural, recreational, or fish and wildlife purposes. States have a good deal of discretion as to which of these uses to select for any given stream.

The second class of regulatory actions that we find in each of these three statutes is what I would call means to attain standards. These requirements translate general statutory standards—and the health and welfare standards in particular—into actual limitations on discharges from individual plants, or other concrete measures to protect the environment.

Under the Clean Air Act, state implementation plans (SIPs) from the major vehicle for these requirements. Many of these plans in turn work by requiring the sources they cover to obtain permits. Beyond that, the Clean Air Act explicitly requires new sources over a certain size, wherever located, to obtain permits that will assure compliance with various legal requirements.

Under the Clean Water Act, of course, the national pollutant elimination discharge system (PDES) permit is the pervasive, all-purpose vehicle for putting the statutory standards into effect. All discharges into the waters of the United States must obtain such a permit.

Finally, under RCRA, each hazardous waste treatment, storage, or disposal site must also receive a permit.

The statutory allocation of responsibilities for actually making this machinery work is remarkably similar from statute to statute. States may take over and operate all of this machinery if they choose. There are no "reserved" sources that must be permitted or otherwise regulated by the federal government, with the limited exception of some sources on Indian land.

Similarly, the general pattern of the statutes—with some major exceptions for the Clean Air Act—is to allow or require EPA review of the state's decision. State implementation plans, for example, must be formally approved by EPA, while NPDES and RCRA permits are subject to EPA "veto."

Technology-based standards account for the third and last major category of regulations under these statutes. Under the Clean Air Act, this includes new source performance standards (NSPS), all emission controls on new motor vehicles, and the alphabet soup of regulatory requirements—variously entitled RACT, BACT and LAER—that both new and existing stationary sources must meet.¹

Under the Clean Water Act, technology-based standards are reflected in the "effluent guidelines" for both new and existing sources, and in several different levels of stringency, around which the statute is largely constructed. They are also found in the requirements for "secondary treatment" that govern requirements for publicly owned sewage treatment plants.

Finally, RCRA contains no explicit provision for technology-based requirements, although EPA has adopted what amounts to at least pieces of such an approach in setting some of its disposal standards for hazardous wastes.

Technology-based requirements are set almost exclusively at the federal level. Indeed, it is hard to see how, from a logical standpoint, it could be done any differently. Technology-based requirements in federal statutes typically require all similar sources wherever located to meet a standard derived by balancing technology against economics. One can question the wisdom of such a rule—I do. But I think we must admit that as long as it exists it must have a central focus. States are allowed to interpret those requirements for themselves; without central review, the congressional aim of similar treatment for technologically and economically similar sources will in all probability be largely negated.

[12 ELR 15071]

The one exception from the general requirement for national uniformity is that states may make decisions on the proper level of technology on a case-by-case basis when granting permits or drawing up SIPs under the Clean Air Act. Even here, however, EPA has established an elaborate—and, I believe, on the whole quite successful—informal mechanism for drawing these decisions towards a national norm.

Justifications for Federal Involvement

As I set out the basic mechanics of our statutes, I have attempted to compare them to each other in a rough, common-sense way. I think by now, however, you will agree that confining the debate within the terms that Congress had already accepted tends to diminish its intellectual sparkle. To be blunt, Congress has never confronted the question, "which pollution control responsibilities properly belong to the states, and which to the federal government;" with any degree of rigor.

For that reason, I will now set out five possible touchstones for justifying federal involvement in this field. To structure the presentation I will start with those that present the strongest case for federal involvement, even under a conservative, 'state's rights' approach, and will conclude with those that present the weakest case judged by those standards. I think we will find that there is little relation between the strength of the argument and the degree to which Congress has actually been willing to accept it.

Let me start with the justification of preventing one state from polluting another. Long before today's environmental regulatory statutes were ever conceived, the Supreme Court granted relief in an interstate pollution case. Justice Holmes, writing for the Court, reasoned that by entering the Union, each state gave up its sovereign rights of self-help against outside invasions of its territory by pollution and that the assertion of federal power was appropriate to compensate for this sacrifice.²

I do not see how any reasonable person could question this logic. What is surprising, then, is to see how little attention it receives in present law. The provision of the Clean Air Act—Section 126—that deals most directly with interstate air pollution is one of the most poorly articulated and unworkable in the entire statute. The Clean Water Act allows states some control over discharges outside their boundaries that may affect their waters, but these provisions appear to have been little used to date. RCRA leaves such questions as pollution of interstate aquifers completely unmentioned.

Congress's failure to address these issues means that very little thought has been given some of the more conceptually interesting issues in the field of pollution control. Suppose, for example, that a rural state wants to preserve very clean air. Suppose, in addition, that it is willing to place very tight controls on its own industry. In what circumstances, then, should that state be able to insist that other states adopt similar controls to keep their pollution from interfering with the air quality goals it has chosen?

Obviously any policy that allowed states discretion to enforce their own policies on others in this manner could allow a small, rural state national power over others out of all proportion to its population. One alternative is to deny states any effective direct power over each other and to attempt to roughly satisfy everyone by the kind of broad-brush federal program we have now. That may indeed be the only practical way to address the issue, but I think it is unfortunate that we have not seen more efforts to explore whether any possible middle ground exists.

The second possible touchstone for federal involvement is for protection of uniquely national areas. These are tracts of lands—national parks and wilderness regions—that have been set aside because of their environmental significance of the nation as a whole, and in particular for future generations. Much of the value of these areas rests or may rest on their freedom from pollution. It therefore seems sensible to adopt federal programs to protect them from pollution for the same reasons that led to their being set aside as federal areas.

As you know, there is already a program aimed explicitly at accomplishing that goal in the Clean Air Act—the PSD program—although it only directly covers two of the five pollutants for which EPA has established air quality standards, and applies to many areas other than parks and wilderness. In addition, a doctrine of "federal reserved rights" has grown up in western water law. This doctrine holds that when the federal government sets aside land—for example as a national park—it also implicitly reserves the rights to enough water to preserve the suitability of the land for the purpose for which it was set aside. In other words, no person in the area surrounding Yellowstone may take water from the same watershed in quantities that would endanger the wildlife habitat in the park or its scenic beauty.

What is interesting here is the complete absence of any similar theme in either the Clean Water Act or RCRA. Water and groundwater quality are issues that may not be as pressing in the fate of our national parks as air quality or water quantity. Yet there are sites—for example, in the Everglades—where they could be very important.

This is a topic I am considering seriously at present. I do believe that injecting these considerations into the Clean Water Act would be very difficult, but well worth trying. If successful, it could well give that statute some of the philosophical coherence that it almost entirely lacks at present.

The third possible ground for federal regulation is where the economics of the activity being regulated are so nationally integrated that there is really no other way to regulate it. I have not been able to think of as many examples of this as I expected. The three that spring to mind are regulation of new motor vehicles, of air travel, and—perhaps—of interstate transport of hazardous wastes.

With these three categories of regulatory justification, I think we cover the categories where the case for federal intervention based on conservative principles is philosophically indisputable. Yet very little regulation—comparatively—under the "big three" environmental statutes is justified by these reasons. I think this is too bad. I am not at all sure that in a world where the issues had been thought through and more environmental regulation was based on such grounds, we would have less environmental regulation. We might well have more. But whether it was less or more it would be better thought through, more defensible, and more interesting. Even if you feel that is too sweeping a claim, I think you will agree that we should at least think more than we have about such matters, and that our regulatory efforts would be the better for it.

Let me turn now to the final two justifications for regulation, [12 ELR 15072] moving once more from the stronger to the weaker, judged by right-of-center principles.

The fourth justification is that, to control interstate competition and to grant all citizens a certain minimum level of health and welfare protection, the national government should set minimum nationally uniform health and welfare standards. This approach, of course, lies behind such centerpieces of current law as the national ambient air quality standards and the regulation of waste disposal under RCRA Subtitle C.

The reasoning is essentially indistinguishable to my mind from the reasoning behind most of the social welfare measures that began fifty years ago, whether they are environmental laws, Social Security, or federal home insurance. I am not suggesting that this is not a perfectly good justification. Indeed, this approach is now part of our culture, and very few persons propose doing away with it. I think, however, that it is interesting to point out that the current Administration has done relatively little to qualify or to question this philosophy in the environmental area. I would attribute at least some of this inaction to the long-standing lack of attention to issues of state's rights and national areas, since that has left the alternatives to our current centralized environmental control program basically undeveloped.

The fifth justification for environmental regulation is that nationally uniform technology-based standards should be established for a variety of reasons. Those reasons most commonly given are to create "equity" between different plants in the same industry and between different states, and to ensure that environmental progress will continue by making sure that new plants are cleaner than the old ones they replace.

These are unsophisticated reasons in my book, and, I think, according to most academic comment. Going into the matter in detail would take me beyond my subject. The case for having technology-based standards at the federal level is theoretically weak because the case for technology-based standards in general is theoretically weak, not because the states could do it better. Very briefly, the argument on this point runs as follows: because technology-based standards are not based on any environmental purpose, they will overcontrol in some places and undercontrol in others, and will waste money in any event. It would be far more efficient—and effective—to decide what our environmental goals are and move directly to achieve them than to rely on a statutory approach that does not even pretend to directly address the problems in which we are truly interested.

This concludes my prepared remarks. I hope I have accomplished my objective—to give you something to think about and be a bit provocative in the process.

Further Remarks

I would like to call to your minds how far questions of federalism go beyond law per se and as a matter of policy go beyond the Environmental Protection Agency (EPA).

A number of recent law review articles have dealt with federalism as though it were a question of where might lie the proper boundaries of the federal courts' power to order states to do things or the Congress's power to enact statutes that impose certain obligations on states. To me, those are not the most interesting questions. The real changes that we have seen over the years in federal/state relationships have come out of developments that are pretty clearly within the power of Congress to enact and the courts to enforce. Two basic developments in this area have been shared regulatory programs and nonregulatory programs that are federally funded but state-administered.

The development which is probably more specific to EPA is shared regulatory programs. Congress enacts a statute that establishes some regulatory goals but allows the states to take over at least certain aspects of those programs and to run them if they wish to do so. The three statutes on which I will be focusing—the Clean Air Act, the Clean Water Act, and the Resource Conservation and Recovery Act (RCRA)—are of this type.

The other type of program is a nonregulatory program that is federally funded but administered by states. To some extent we have that at EPA because EPA grants supply a high percentage of the money for state environmental programs. Looking outside EPA, however, we see many more programs that fall into this category: Medicaid, Medicare, food stamps, highway funding, and housing subsidies are just a few examples.

The tendency of these developments is to turn the states into regional offices of the federal government. Obviously, when you have change of this magnitude there will be action and reaction, but from the legal or scholarly standpoint I do not think that anyone has tried to determine with any degree of precision what these programs have meant for the states' roles.

That is the background of federalism against which I will discuss environmental law.

If we had a generally satisfactory and smoothly running system of environmental law, we would say, "All right, we have this system; now, let us see how we can adjust it so that it better fits our federal values or makes our federal system work better." Instead, we have two systems that are limping along. If we talk about adjusting our current environmental law to federalism, we cannot dismiss from our minds the question of what changes will make environmental law itself work better and how those changes will play in with our federalist thinking. Thus, we have loosely defined federalism concerns and environmental laws that could use some improvement, and we need to consider how to put them together into a better system.

Now, let me turn to the three statutes that I have been asked to discuss—the Clean Air Act, the Clean Water Act, and RCRA. In the most basic sense, these statutes do not allow the states much discretion. They set up federal systems designed to attain certain goals which the states may partially administer. This is a departure from what I see as a pure form of federalism in which a state may make more choices than whether the required program will be carried out by the federal or state government.

We can break down these statutes' provisions into three classes: environmental goals, methods for attaining those goals, and technology-based standards.

The environmental goals are basically federal with state involvement in ways of meeting those goals. The Clean Air Act requires an ambient air quality standard and PSD program nationally and RCRA includes national waste listings and treatment, storage, and disposal standards. The Clean Water Act is somewhat of an exception since its water quality standards are primarily set by the states; but if the states do not exercise their power, the federal government will step in. Under each of these statutes, the state can submit a program to EPA and EPA will evaluate it and approve it to [12 ELR 15073] the extent that it meets the requirements of the law. States will then take the individual regulatory actions that are needed to attain the goals of the program as approved by EPA.

It is the consensus of this conference's speakers that state/EPA agreements should be shorter, review of permits or SIPs should be less intensive, and delegation should be more freely granted. But, on the most basic level, changing the degree of federal intervention in the approval or oversight of these state programs will not change the basic philosophical position of the states. Being free means being able to choose one's own goals, not just being free to choose the means that one will use to reach other governmental bodies' goals.

In discussing greater state autonomy, another consideration is the move to give greater autonomy to the sources of pollution, particularly to regulated industry, to meet standards. An example of this is the bubble policy where the regulatory agency essentially tells the industry, "We want a certain reduction, but it is up to you to decide how to achieve it." A similar idea is environmental auditing where the enforcement agency allows the company to audit its own attainment of standards without governmental interference unless the regulations are not met. This is relevant to our discussion of federalism in two ways. First, to the extent that it works, it will reduce the role of any government, state or federal, in running the machinery of environmental compliance and will diminish the importance of which level of government undertakes those functions. Second, there is the potential for conflict between state and industry or between state autonomy and economic efficiency. State autonomy in choosing how to meet goals means that they can also choose more intrusive ways of doing so. If there is a less intrusive means of accomplishing their goals which is more economically efficient, the possibility of a clash between the state's and industry's desired results exists.

The final point I would like to make about state autonomy as to the means of achieving goals is that the tight compliance deadlines in current law construct the states' ability to debate how to attain those standards. The system suffers when it lacks that type of experimentation.

Now let me turn to the third class of measures in these statutes—technology- based standards. These standards are not scrutinized when statutory amendments are considered, and yet I would like to suggest that this is an areas which has been heavily criticized as economically inefficient and is rife with federalism concerns.

Technology-based standards are a more constraining form of regulation than a command that you meet a standard by a certain date. Perhaps that would be justified if an important federal goal requiring those means existed. But, by definition, technology-based standards are not necessary to meet air or water quality goals, and the further goals which they serve—preventing interstate competition or long-run environmental deterioration—are general, elusive ones.

Our present environmental system needs to be adjusted. In order to improve that system we must consider how our federalism concerns and our health and welfare goals do and should interact.

Discussion

GEORGE FREEMAN, JR.: Excluding the problem of municipal power plants, in a comparison between the Clean Water Act's and Clean Air Act's controls over industrial and other sources, there is less friction and far greater efficiency under the Water Act than under the Air Act. The benefits of the Water Act are more certain technologically and factually and will generally occur in the same state or community where the costs will be imposed. Portions of the Clean Air Act do not work in that manner.

Let us go back to the Constitution and start with its division of powers. In the grey areas where the principle of the federal interest to be protected is remote or speculative, it is because the Constitution deliberately denied the federal government the police power. It seems that a lot of federal legislation in the 1970s was an attempt to turn the commerce power into police power.

WILLIAM PEDERSEN, JR.: The Clean Water Act does have a much more workable procedural system than the Air Act. Its system of source-specific permits, issued for a fixed time with requirements that cannot be changed during that time, is a very good idea. Part of the convenience of the Clean Water Act is that it is not an ambient-based statute. I do not regard that as a virtue, however. We can make our decisions without giving much consideration to the wider ramifications and that also just about assures inefficiency of results— overcontrolling or undercontrolling.

Similarly, the new source performance standards (NSPS) are properly federal in order to provide assurance that emission levels will not go up over time, but there are much more efficient ways to accomplish this. For example, the NSPS could be replaced by a national cap on sulfur emissions. Power plants, as a whole, would not be allowed to emit more than a set amount of tons in a year.

As for the commerce power and the police power, it can certainly be argued whether as a matter of political philosophy or institutional design it is good for the federal government to have so much power or whether it has exercised it wisely. I do not think there is any doubt, however, that as a legal matter it has that power.

J.G. (GUS) SPETH: Are the implementation difficulties of the water quality standards something that can be regarded as a result of the more effluent and technology-based standards approach in the Clean Water Act or does it not reflect more fairly upon the concept of federalism? In some areas, such as Section 208 of the Clean Water Act, we had a major opportunity for the state role which has not been taken advantage of. Generally, though, the Clean Air and Water Acts and RCRA confine the states' discretion, even in the implementation phase.

Increasing flexibility may be needed in state roles and participation, as well as in the discharger's or emitter's roles, but we may not be able to achieve that goal in all areas simultaneously. The sense of control the public wants to have would possibly be loosened to too great an extent.

Coming from a state in the deep South which is inclined to compete vigorously for industry through relaxation of pollution control requirements, I was surprised to hear the interstate competition justification for technology-based standards dismissed so readily. I believe it is a factor that merits consideration.

Another justification for technology-based standards is the ease with which they can be administered. They have [12 ELR 15074] resulted in a more simple, effective and widely agreed-upon administration of water pollution control.

On the question of the constitutionality of regulatory programs, there is no doubt that the regulatory programs are going to be upheld on constitutional groups. Also, a recent decision of the Supreme Court, the Pennhurst School case, deals with the power of Congress to use spending controls to buy favorable state behavior.³This case seems to suggest that Congress is going to have to be much more careful in linking state grants with the requirements that are imposed on the states as a condition of receiving those grants.

PARTICIPANT: The states' water quality approach to enforcement does not work. The technology-based standards do work. In Delaware, we took the water quality route long before the federal government showed much interest in it, and it did not clean up the water.

TURNER SMITH, JR.: Mr. Pedersen, in your paper you comment that the provisions of the Clean Air Act which are directed at dealing with spillover effects, and interstate problems, are not well developed, and this is where you see one of the clearest rationales for federal action. We have dealt with interstate issues on a broader basis by trying to control everyone at a level that will satisfy the downwind states. I am not usually in favor of technology-based limitations, but to the extent that they are used as a surrogate for the conceptual goals of the more sophisticated water or air quality standard system and allow one to side-step political problems by treating different areas generically, they may be a preferable system.

PEDERSEN: Because of the interstate problems, a new federalism system should enable states to have rights against each other without having to resort to a national solution that submerges the issue by imposing a minimal standard on everyone.

FREEMAN: We have the anomaly that certain types of technology-based standards actually harm the receiving body rather than benefit it. This particularly occurs where you are providing for either acid or alkaline treatment for certain effluents and the natural stream background is different from the general premise on which the standard was based.

Technology-based standards have also been corrupted by the political process. Too often, political concerns for regional economic preferences have led to perversions of pollution-control acts.

The third major problem I have seen with technology-based standards is in the technology-forcing area. When plants are required to invest huge sums in capital investments to meet standards that have never been achieved in practice, that is an abuse of the system.

Because of international competition, these costs place American industry at a disadvantage where pollution control costs are eventually imposed on our society at a greater magnitude than they must be incurred abroad.

SMITH: In sum, we are saying that the technology-based standards lose their rationale when they are too far removed from the ambient standards. One way to prevent that from occurring is to use a variance mechanism which would allow them to be adjusted on a case-by-case basis. State grants of waiver would need to be guarded, however, to prevent interstate competition for industry. If there were no federal ambient standards, states would compete with each other at the risk of the public health and welfare. That is an important reason for imposing some sort of national uniformity or at least national oversight of an ambient standard system. The real question is whether you are willing to allow states to take advantage of their geographic location.

It seems to me that to the extent that Gus Speth argues that existing source technology-based standards are justified to prevent competition among states, he is implying that if a state has substantial rivers with little industry nearby, it should not be permitted to take advantage of that position. That seems to be a debatable proposition.

1. Reasonably Available Control Technology; Best Available Control Technology; Lowest Achievable Emission Rate, respectively.

2. Georgia v. Tennessee Copper Co., 206 U.S. 230 (1906).

3. Pennhurst State School and Hospital v. Halderman, 451 U.S. 1, 101 S. Ct. 1531 (1981).

12 ELR 15069 | Environmental Law Reporter | copyright © 1982 | All rights reserved