The illusion of devolution in environmental law

Urban Lawyer

Volumn 38, Issue 4, 2006, Pages 1003-1014

  Nash, Jonathan Remy ^a  

^a TULANE UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

DEVOLUTION; ENVIRONMENTAL LEGISLATION; ENVIRONMENTAL PROTECTION; LOCAL GOVERNMENT; THEORETICAL STUDY;

EID: 33847068712     PISSN: 00420905     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Conference Paper

References (50)

1. Cf. New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J., dissenting) ("It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.").
2. See Richard L. Revesz, Rehabilitating Interstate Competition.' Rethinking the "Race-to-the-Bottom" Rationale for Federal Environmental Regulation, 67 N.Y.U. L. Rev. 1210, 1221-24 (1992).
3. See id. at 1222. For elucidation of the notion of a race to the bottom,
4. see id. at 1213-21. For theoretical critiques of the reasoning underlying the race,
5. see id. at 1233-44. For responses, see, for example, Kirsten H. Engel, State Environmental Standard-Setting: Is There a "Race" and Is it "To the Bottom"?, 48 Hastings L.J. 271 (1997).
6. By analogy at the international level, the solution to the problem of the race to bottom among nations is to have some uniform global floor for environmental protection. The questions of how such a uniform floor would be agreed to and enforced are difficult ones. See Jonathan Baert Wiener, Global Environmental Regulation: Instrument Choice in Legal Context, 108 Yale L.J. 677 (1999).
7. Clean Air Act § 109, 42 U.S.C. § 7409 (2006).
8. Id. § 110, 42 U.S.C. § 7410 (2006).
9. See id. § 116, 42 U.S.C. § 7416 (2006) (preserving the freedom of states and their subdivisions to "adopt or enforce (1) any standard or limitation respecting emissions of air pollutants or (2) any requirement respecting control or abatement of air pollution; except that if an emission standard or limitation is in effect under an applicable [state] implementation plan or under [certain sections of the Clean Air Act], such State or political subdivision may not adopt or enforce any emission standard or limitation which is less stringent than the standard or limitation under such plan or section").
10. See Revesz, supra note 2, at 1222.
11. Thus, while the race to the bottom and interstate pollutant transport may both call for federal intervention to resolve the problem, the solutions to the problems will take quite different forms - a uniform federal floor in one case and regulation of interstate pollutant transport in the other. See id. at 1222-23.
12. See Clean Air Act § 110(a)(2)(D), 42 U.S.C. § 7410(k)(5) (2006);
13. see also id. § 110(k)(5), 42 U.S.C. § 7410(k)(5) (2006) (mandating that the Environmental Protection Agency require a state to revise its implementation plan where the plan is "substantially inadequate... to mitigate adequately... interstate pollutant transport");
14. id. § 126(b), 42 U.S.C. § 7426(b) (2006) (authorizing "[a]ny state or political subdivision [to] petition the Administrator [of the EPA] for a finding that any major source or group of stationary sources emits or would emit any air pollutant in violation of the prohibition of section 7410(a)(2)(D)(ii) or this section.").
15. Id. § 123(a), 42 U.S.C. § 7423(a) (2006).
16. See Nathaniel O. Keohane, Richard L. Revesz & Robert N. Stavins, The Choice of Regulatory Instruments in Environmental Policy, 22 Harv. Envtl. L. Rev. 313, 325-47 (1998) (describing such a marketplace for environmental regulation).
17. For a treatment of environmental organizations as political actors demanding government action, see Todd J. Zywicki, Environmental Externalities and Political Externalities: The Political Economy of Environmental Regulation and Reform, 73 Tul. L. Rev. 845 (1999).
18. Revesz, supra note 2, at 1224.
19. See Jonathan Remy Nash, Environmental Superliens and the Problem of Mortgage-Backed Securitization, 59 Wash. & Lee L. Rev. 127, 128, 148 n.79 (2002).
20. Id. at 128.
21. See id. at 141-42 (describing the benefits of the secondary mortgage market).
22. See id. at 128-30.
23. See id. at 130 n. 10, 156.
24. See id. at 130-31.
25. For a detailed elucidation of the program, see Jonathan Remy Nash & Richard L. Revesz, Markets and Geography: Designing Marketable Permit Schemes to Control Local and Regional Pollutants, 28 Ecology L.Q. 569, 584-86 (2001).
26. See id. at 586. Allowances are in the first instance generally distributed to existing sources in rough proportion to their polluting history.
27. See id. at 585. A small number of allowances are auctioned off annually.
28. See id. at 585-86.
29. Because the program allows for unused allowances to be "banked" - that is, to be saved for use in a future year - the total sulfur dioxide emissions in a given year may exceed the total number of allowances issued for that year. See id. at 586.
30. See id. at 587.
31. See N.Y. Pub. Serv. Law § 66-k (2006). The legislative history of this bill clearly illustrates the legislature's concern with these economic and environmental concerns. In particular, the New York Legislature's statement of intent and findings noted "that acid deposition... in sensitive resource areas of the state degrades natural ecosystems, causes significant economic and environmental damage, including but not limited to declines in tourism, reduction in the economic productivity of lands, and undermines the public health." 2000 N.Y. Laws 36.
32. See N.Y. Pub. Serv. Law § 66-k (2006),
33. See id. § 66-k(2)(a). More precisely, the statute imposes an "air pollution mitigation offset equal to any sum received by any utility corporation, person or entity entering into contracts or engaging in the sale or trade of select SO2 allowance credits for use in operation, permits or for maintaining compliance with SO2 requirements in acid precipitation source sates, where such select SO2 allowance credits are found to have been transferred to the allowance deduction reserve account by a generating source located in an acid rain [sic] source state." Id. In turn, the statute defines "SO2 allowance credit" as "any SO2 credit issued to a generating source within the United States pursuant to the provisions of title four of the Federal Clean Air Act Amendments of 1990,"
34. id. § 66-k(1)(b), "select SO2 allowance credits" as "any SO2 allowance credit issued to generating sources located within the boundaries of the state of New York,"
35. id. § 66-k(1)(c), and "acid precipitation source states" as "New Jersey, Pennsylvania, Maryland, Delaware, Virginia, North Carolina, Tennessee, West Virginia, Ohio, Michigan, Illinois, Kentucky, Indiana and Wisconsin,"
36. id. § 66-k(1)(d). The statute also includes provision for a safe-harbor for sales of permits that include a restrictive covenant that, "at a minimum," meets the following requirements: the requirement to give notice to the [state public service] commission of any SO2 allowance transaction covered by the restrictive covenant; the requirement that any subsequent holders of the SO2 allowance covered by the restrictive covenant include an identical restrictive covenant in any document relating to the sale or purchase of the covered SO2 allowances; provisions restricting usage in acid precipitation source states; and provisions for the enforcement of the terms of the restrictive covenant by the state of New York.
37. Id. § 66-k(3)(a). The inclusion of a restrictive covenant decreased the value of allowances.
38. See Clean Air Mkts. Group v. Pataki, 194 F. Supp. 2d 147, 154 (N.D.N.Y. 2002) ("Allowances that originate in New York State have a market price of 2.5 to 5 percent less than allowances from the other 47 states subject to Title IV."), aff'd, 338 F.3d 82 (2d Cir. 2003).
39. See Clean Air Mkts. Group, 338 F.3d at 84 (describing the plaintiff as "an association of electricity generation companies, SO[2] emissions allowance brokers, mining companies, and trade associations.").
40. See Clean Air Mkts. Group, 194 F. Supp, 2d at 157-62.
41. See Clean Air Mkts. Group, 338 F.3d at 86-89.
42. See Clean Air Act § 209, 42 U.S.C. § 7543(b) (2006). Federal law authorizes California to set a more stringent standard; other states are then free to choose between the federal and California emissions standards.
43. See 2002 Cal Adv. Legis. Serv. 200 (Deering).
44. This is not to say that state governments will never agree to harmonization on their own. Consider, for example, the success of uniform state laws, especially the Uniform Commercial Code.
45. See, e.g., Samuel Issacharaoff & Catherine M. Sharkey, Backdoor Federalization, 53 UCLA L. Rev. 1353, 1360 - 64 (2006).
46. See id. at 1380-82.
47. Nash, supra note 15, at 143.
48. One state's higher environmental standard also might impose externalities on other states by removing the practical ability of other states to impose different standards. For example, if one state imposes a stringent standard for rear fender mudguards on trucks engaged in interstate commerce, pressure may be brought on other states not to enact standards that are inconsistent with that standard. Such statutes may, however, run afoul of the dormant Commerce Clause. See, e.g., Bibb v. Navajo Freight Lines, Inc., 359 U.S. 520 (1959).
49. Nash, supra note 15, at 171-77.
50. See id. at 177-81 (arguing that national secondary mortgage industry opposition to superlien statutes was not justified by the actual economic impact of those statutes, but rather by concern that such statutes were the harbinger of greater state disuniformity, and thus greater variation in the predictability of mortgage priority laws).