Paper: Reforms for the Clean Air Act and for Manufacturing

WASHINGTON—The administrations of George W. Bush and Barack Obama both recognized that manufacturing is one of the most heavily regulated sectors in the US economy. Both administrations sought to streamline federal regulations that can be economically burdensome for manufacturing. But neither had much success, according to a new article posted by Resources for the Future (RFF) and recently published in the Environmental Law Reporter. The study proposes a series of reforms that the US Environmental Protection Agency (EPA) or the Congress could take to address a key regulatory program under the Clean Air Act called New Source Review (NSR).

The NSR program is of special interest because it can affect the expansion of any major manufacturing facility or power plants in the United States—and any company that might want to build such a facility in the future. The authors, however, maintain that along with economic relief, their reforms are possible without substantially reducing the environmental and health benefits of the program.

The article is entitled “EPA’s New Source Review Program: Time for Reform?” The coauthors are Art Fraas, RFF Visiting Fellow; John D. Graham, Dean of Indiana University’s School of Public and Environmental Affairs; and Jeff Holmstead, partner at the law firm of Bracewell LLP. The authors state that, “Creative regulatory reforms can accomplish most or all of the anticipated environmental benefits at considerably reduced cost to the regulated industry and the US economy.”

Some of the reforms discussed could be taken administratively by EPA. Others would require changes to the Clean Air Act by Congress. Among the analyses and reforms introduced in the paper, the authors offer two potential statutory reforms: Allow permit applicants under the program to avoid certain NSR requirements by paying emissions fees that state or local environmental agencies would use to pay for or subsidize emissions reductions; or, more fundamentally, replace the NSR program with a comprehensive system of emissions fees for each of the pollutants covered by the program.

The authors also suggest several administrative changes: improved modeling methods, creative use of emission reduction credits and streamlined permitting procedures.

Read the full article: EPA’s New Source Review Program: Time for Reform?