A Double Win in the Dusky Gopher Frog Case

By a vote of 8-0 (Justice Kavanaugh did not participate), the Supreme Court today gave a rational reading of both the Endangered Species Act (ESA) and its own power to review administrative agency actions. The decision in Weyerhaeuser v. U.S. Fish & Wildlife Service is an important win for property owners against arbitrary agency decisions. See Cato’s amicus brief here.

The case arose when the Fish and Wildlife Service (FWS), which administers the ESA on behalf of the Secretary of the Interior, designated a large parcel of land in Louisiana owned by Weyerhaeuser and a group of family landowners as critical habitat for the endangered dusky gopher frog, a small population of which lives today in Mississippi. The problem, however, was that the frog had not lived in Louisiana for decades and, worse still, the land in question, far from being critical habitat, was no habitat at all since it was unsuitable for sustaining the frog’s life cycles. On appeal, FWS did not dispute that critical habitat must be habitat; it argued instead that habitat includes areas that would require “some degree of modification” to support a sustainable population of a given species. In her dissent from the Fifth Circuit’s decision, Judge Priscilla Owen nicely summarized the immense practical implications of that view: “If the Endangered Species Act permitted the actions taken by the Government in this case, then vast portions of the United States would be designated as ‘critical habitat’ because it is theoretically possible, even if not probable, that land could be modified to sustain the introduction or reintroduction of an endangered species.”

Fortunately, Chief Justice Roberts, writing for the Court, today carefully parsed the ESA’s language to avoid that result. And of equal if not greater importance, he did the same to sustain the Administrative Procedure Act’s “basic presumption of judicial review” of agency action, finding here that the ESA requires the Secretary to take into consideration economic and other impacts before making a critical habitat designation. The economic impact to these plaintiffs of losing their right to develop their land was estimated to be $34 million—all to preserve a frog’s uninhabitable habitat. No wonder the decision was 8-0. Still, the plaintiffs had to go all the way to the Supreme Court to vindicate their rights.

The Court sent the case back to the Fifth Circuit to be resolved consistent with today’s opinion.

Green Energy Mandates Could Double Your Electric Bills

Business and homeowner utility costs could double in many states if environmental groups succeed in enacting draconian solar and wind power mandates in states across the country.

Yet these mandates will have almost no impact in cleaning the air or reducing greenhouse gas emissions.

In Arizona and Nevada, voters will decide on Nov. 6 whether to adopt renewable mandates requiring local utilities to buy at least 50 percent of their electric power from green energy—mostly, wind and solar power.

At least a dozen other states are set to ramp up their mandatory standards (also called “renewable portfolio standards”) in 2019. California is set to move to 60 percent legally mandated renewable energy by 2030 and 100 percent by 2045.

These mandates come with a steep price to American families and businesses. Residents in states with existing high mandates must often pay between 50 percent and 100 percent more on their electric bills than residents of states where utilities are free to rely on the market and purchase electric power from the lowest-cost sources—often coal, natural gas, or nuclear power.

Because lower-income households spend five to 10 times more as a share of their incomes on energy than do high-income households, high renewable portfolio standards are a regressive—and unduly burdensome—tax on the poor.

Ironically, these green initiatives are usually sponsored by billionaire liberal funders, such as investor Tom Steyer of California.

While the natural growth of renewable energy sources is a positive development, mandates are an economically disastrous method that crowds out the market for affordable electricity.

Today, the United States produces more than 75 percent of its electricity from natural gas, coal, and nuclear power. Less than 10 percent comes from solar and wind power.

Given the massive federal subsidies of more than $150 billion between 2009 and 2014 to the wind and solar industries, that is an amazingly small percentage.

Comparing the states with the most stringent renewable portfolio standards (25 percent or more) with the states with low ones (10 percent or less), and then with states with none, reveals a pattern.

States with high renewable portfolio standards have electric power rates that are about 27 percent per kilowatt hour more expensive than states with low ones, and about 50 percent higher than states without them.

The Heartland Institute estimates costs could total an extra $1,000 per year per household, compared with current electricity costs, at the proposed rate increase in Arizona.

This could mean tens of thousands of dollars of higher costs for a business, depending on energy usage. For manufacturers, it could mean $100,000 or more of extra costs.

Lower-income families would be most adversely affected by stricter green energy requirements. This is because poorer households typically pay about seven times more as a share of their income in energy costs than do wealthier families.

Middle-class families pay at least twice as high a share of their income in energy bills than do the rich.

One of the critical flaws of renewable energy requirements is that they almost all squeeze out two of the most dominant and cleanest forms of energy used across the country—natural gas and nuclear power.

But from an environmental and clean air standpoint, and for the purposes of reducing greenhouse gases that may be linked to climate change, this distinction makes no sense.

It appears simply to be a multibillion-dollar corporate welfare giveaway to the solar and wind industries at the expense of ratepayers.

Even coal that is burned in Arizona, Nevada, and other states is much cleanertoday than it was 20 or 30 years ago. All of this is evidenced by the dramatic improvement in air quality nationally over the past 35 years.

Only a small percentage of this clean air progress is due to renewable energy, because over most of this period, wind and solar power have been fairly inconsequential sources of U.S. energy production.

Since 1980, total emissions of the six principal air pollutants have fallen by 67 percent.

To put that in perspective: That reduction occurred amid a dramatic expansion of the U.S. economy. Gross domestic product increased by 165 percent, vehicle miles traveled increased 110 percent, the U.S. population grew by 44 percent, and energy consumption increased by 25 percent.

For these reasons, the “clean energy” initiative is best thought of as a regressive tax imposed on those who can least afford it.

Again, this “tax” could cost middle-income and lower-income American families about $1,000 more per year in utility prices. These mandates could also negatively affect business productivity and move jobs to areas with more energy choices.

Americans deserve affordable, abundant, and reliable energy. Renewable energy mandates are a “green tax” on homeowners and small businesses that can least afford it.

Commentary by Stephen Moore and Andy Vanderplas. Originally published at The Daily Signal.

This Bill Eases ‘Recovered’ Species Off Endangered List

It will be easier to take wildlife off the endangered and threatened lists if Congress passes a bill introduced by Rep. Andy Biggs, R-Ariz.

“The Endangered Species Act has been used as a sword instead of a shield,” Biggs told The Daily Signal in a phone interview.

His bill would streamline the process of removing a species from the endangered list if the nation’s secretary of the interior “receives an objective, measurable, and scientific study demonstrating a species has recovered,” the Arizona Republican said in a press release.

Enacted in 1973, the Endangered Species Act provides a “framework to conserve and protect endangered and threatened species and their habitats,” according to the U.S. Fish and Wildlife Service.

Biggs’ bill is one of several measures introduced last week by House Republicans aimed at updating the Endangered Species Act.

His legislation includes provisions addressing the issue of a species being “wrongfully listed,” as well as penalizing those who “intentionally submit false or fraudulent data in order to cause a species listing.”

The bill would also provide a way for the U.S. Fish and Wildlife Service to “promptly take action when a species is wrongfully listed, rather than letting the problem linger in federal bureaucracy,” according to the press release.

“This will allow us to focus resources to protect species that actually need it,” Biggs said in a written statement.

The Fish and Wildlife Service currently lists 1,459 species of wildlife considered at risk of extinction in the United States, from the red wolf to the Kemp’s ridley sea turtle to the Northern sea otter. Classifications include endangered, threatened, and experimental populations.

Biggs so far has 23 co-sponsors, predominantly from Midwestern states. No Democrat has signed on as yet.

The Trump administration has begun to push related reforms through the Interior Department. The Western Governors Association, meeting last month, advanced its own version of bipartisan reforms. Wyoming Gov. Matthew Mead, a Republican, has been a leader in the effort.

Biggs told The Daily Signal that some environmental groups want to take control of private property and economic activity in the name of defending a species, and that such groups “don’t want to delist species that have come back.”

Some colleagues on the other side of the aisle have given the “usual diatribe” about proposed reforms, Biggs said, arguing that he and other Republicans are “out for the big bucks and don’t care about animals.”

But Rep. Kurt Schrader, D-Ore., has co-sponsored certain measures in the package of bills.

Other Democrats “don’t want to give in on environmental issues at all,” Biggs said.

Kevin Mooney contributed to this report.

Report by Jeremiah Poff. Originally published at The Daily Signal.

More Power to the States Will Enhance US Energy Dominance

In the midst of a growing global economy, the world’s demand for energy is booming.

In 2017, global demand for energy grew by 2.1 percent, more than double the previous year’s rate. Oil, gas, and coal accounted for about 80 percent of global energy consumption with oil alone accounting for 32 percent of global consumption.

Producers in the United States have stepped up to meet that demand. The U.S. has been the world’s leading natural gas producer for nearly a decade. Domestic oil and gas production has increased 60 percent since 2008.

Despite America’s energy dominance and the economic benefits that accompany it, an abundance of natural resource potential in the U.S. remains untapped.

Why? A key reason is the federal government owns and manages those resources. Federal regulations and federal land ownership have rendered vast quantities of recoverable oil and natural gas onshore and offshore either inaccessible or costlier to extract.

The current leasing and permitting process has frustrated people of all political beliefs. On average, the federal processing of an application for permit to drill in the last year of the Obama administration was 257 days, while state processing has typically been 30 days or fewer.

While the Interior Department is working tirelessly to reduce permitting delays, this massive time disparity prevents market forces from working effectively. When prospective drillers have to wait many months to get approval, the prospect of drilling in a timely manner can often be implausible.

Even though many federal proposals are approved, fluctuations in the price of oil combined with a long waiting period create the type of uncertainty that often prevent prospective drillers from even attempting the process. Authorizing states to manage onshore and offshore resource production for a greater percentage of the revenue than the current system will create a new and better system that permits industry to better respond to changing market conditions.

Last week, the House Natural Resources Committee held a hearing to discuss enhancing state management of natural resources on federal lands and waters. Draft legislation introduced by the committee would empower states to have more control over the leasing, permitting, and regulations of oil and gas production.

It would also authorize a state to approve or disapprove of each lease sale offered in federal waters if the area is within the state’s administrative boundaries. The amount of royalty revenue a state would collect would depend on how many lease blocks a state approved.

State control, local governance, and private-sector participation would result in more accountable, effective management. While the federal government can simply shift the costs of mismanagement to federal taxpayers, states have powerful incentives for better management of resources on federal lands. State governments can be more accountable to the people who will directly benefit from wise management decisions or suffer from poor ones.

Opponents of the proposed legislation said this bill would give oil and gas priority over other economic interests a state may have. For instance, coastal states have stated concerns that offshore drilling would possibly hurt their tourism and fishing industries.

But states like Louisiana have proven you can have your oil and seafood, too. In 2014, the Louisiana oil industry generated $44 billion for the state economy and another $36 billion when including related infrastructure and refining activity.

In addition to energy production, seafood and tourism industries stand out as significant contributors to Louisiana’s economy. Louisiana represents 30 percent of the commercial fishing for the continental United States and are substantial producers of shrimp, oysters, crawfish, and crabs. Annually, the industry creates $2.4 billion in economic growth for Louisiana.

These industries work hand-in-hand for the economic benefit of the state.

Opponents of the draft legislation have also held inconsistent views on the principles of federalism. The proposed legislation would empower states with a choice that, under the current system, they simply do not have.

Under current law, the Department of Interior could easily make choices for all states and allow for energy exploration in federal waters, regardless of whether those states want it or not. The proposed legislation would at the very least give states a say in the decision.

As Chairman of the Natural Resources Committee Rob Bishop, R-Utah, pointed out during the hearing, Democrats seem to only want federalism in certain cases. The same Democrats who now want federalism in the case of coastal states did not want federalism in the recently reversed case of the Bears Ears Monument issue in Utah. They’ve opposed empowering states to oversee natural resource production and other land use decisions on federal lands.

Bishop noted the hypocrisy of the Democrats specifically by contrasting their rejection of the wishes of local citizens in the Utah case with their support of the wishes of citizens who opposed drilling on federal waters. Federalism seems to have been lost to the Democrats and their current stance is, at best, inconsistent.

A Washington-centric approach to management stifles creative, collaborative solutions to competing interests that could be resolved at local, state, or regional levels without the added baggage of national political battles and federal regulatory processes. While states and local communities may not always make perfect decisions, the best environmental policies are site-specific and situation-specific and emanate from liberty.

The Natural Resources Committee should be commended for introducing draft legislation that would improve the current process by engaging the appropriate stakeholders and better aligning incentives for economic development and environmental protection.

Commentary by Nicolas Loris and Bryan Cosby. Originally published at The Daily Signal.

How ‘Green’ Energy Subsidies Transfer Wealth to the Rich

When the Golden State Warriors, who won three of the last four NBA championships, signed All-Star Demarcus Cousins, sports pundits across the country offered the same opinion: The rich just got richer.

In many respects, the same holds true for energy subsidies.

Federal energy programs promise ambiguous policy goals such as abating climate change, spurring innovation, or reducing dependence on foreign sources of energy. But they often lead to situations that help the rich at the expense of middle- and lower-income Americans. That’s because when the federal government gets involved in the energy business, it transfers billions of dollars to the production and consumption of politically preferred sources and technologies—and many of those involve the poor transferring money to the rich.

For instance, a recent study by the Pacific Research Institute found that more than 99 percent of subsidies for electrical vehicles go to households with incomes of $50,000 or higher, and nearly three-quarters go to households with an annual income of $100,000 or more.

Poorer Americans can’t access the $7,500 tax credits because of the high prices of electric vehicles, even after accounting for the generous subsidies, which means they help pay for the subsidies through their taxes but can’t themselves get eligible for the subsidies or other benefits, such as carpool lanes.

To make matters worse, some major car companies are forced to sell electric vehicles at a loss to comply with state mandates and regulations. As Wayne Winegarden of the Pacific Research Institute explains:

California, along with the nine states that have adopted California’s policy, mandates that zero-emission vehicles (ZEVs) comprise a set percentage of the automobile market. The mandated minimum market share for ZEVs is currently scheduled to grow from 4.5 percent of sales in 2018, to 22 percent of the market by 2025; and Gov. Jerry Brown is even contemplating a complete ban on sales of cars with internal combustion engines after 2040.

Complying with these mandates requires companies to maintain ZEV credits that equal their share of the mandate, based on the company’s specific sales. Acquiring sufficient credits requires manufacturers that do not sell enough ZEVs to either sell ZEVs in California at a loss, purchase credits from companies whose ZEV sales exceed their credit requirements, or pay a $5,000 fine per credit that the company is short.

Consequently, the sales mandate has become a subsidy to companies, such as Tesla, that sell more ZEV-qualified vehicles than required by the mandate; and, a penalty on companies whose ZEV sales fall short of the required mandate. The $700 million earned by Tesla via these credit sales, which does not even account for all the credits Tesla has amassed, exemplifies that these subsidies and penalties can be substantial.

Energy subsidies benefit not only wealthy individuals, but also wealthy companies in the form of blatant corporate welfare. The federal government’s loan guarantee program is another subsidy program where government-backed loans have, time and again, gone to companies that simply don’t need any support from the taxpayer.

You don’t have to scratch too far beneath the surface to see that some of these projects have financial backing from giant tech firms, massive energy utilities, large investment banks, and other successful corporations.

The Department of Energy’s Advanced Technology Vehicles Manufacturing program granted more than $1 billion in loans for Nissan and Ford to retool their factories. This program is simply a transfer of wealth from taxpayers to these massive companies. These companies should have no trouble financing a project without government-backed loans if they find it is worth the investment.

Eliminating favoritism in markets will benefit all Americans—individuals and businesses alike—not just the privileged few.

Commentary by Nicolas Loris and Bryan Cosby. Originally published at The Daily Signal.

Why the Curbelo Carbon Tax Is a Non-Starter

It feels like beating a dead horse, but the “conservative” carbon tax proposal is still hanging around.

A number of conservative groups are so tired of the mislabeled carbon tax that they’re pushing Congress to take a nonbinding vote to help finally put the issue to rest. That vote—based on a nonbinding resolution introduced by Rep. Steve Scalise, R-La.—is scheduled for Tuesday in the House of Representatives “expressing the sense of Congress that a carbon tax would be detrimental to the United States economy.”

The proposed vote comes just after a new group, Americans for Carbon Dividends, is pitching a “conservative” carbon tax that would “put America in the driver’s seat of global climate policy.”

The plan developed last year by a group of notable conservatives like former Secretaries of State James Baker and George Shultz sets a gradually increasing tax on carbon dioxide emissions. To account for the inevitable increase in energy costs, the taxes would be redistributed to all Americans equally.

Ideally in their world, this would make carbon dioxide-heavy goods and activities more expensive, creating pressure to innovate or lose customers.

Because the tax would target energy, a basic building block of the economy, the plan tries to mitigate the hit to businesses with a border tax adjustment to prevent other countries from “free-riding” and help U.S. companies compete in countries that don’t tax carbon dioxide.

The final part of the plan calls for sweeping deregulation of what would be, when combined with the other parts of the plan, redundant climate regulation. This would include most or all of the Obama-era climate change regulations like the so-called Clean Power Plan.

The market-flavored approach of the Carbon Dividends Plan may seem like a great compromise to the creators. However, some fundamental flaws and unwelcome implications immediately become apparent. The plan lacks details precisely because those details would clearly reveal the negative implications of the plan’s implementation.

Levying a price on carbon dioxide will directly raise the cost of electricity, gasoline, diesel fuel, and home heating oil. The carbon tax itself would be regressive, affecting poor Americans who spend a larger share of their income on energy, over 80 percent of which in the U.S. comes from carbon-based resources.

Even assuming that Washington could keep its hands off a new revenue stream, the redistributed dividends would not remedy this problem either, as they would be equally distributed to all Americans, whether they’re Bill Gates or a low-income family struggling to pay their electricity bills.

Furthermore, a rebate check wouldn’t undo the economic damage caused by a carbon tax. Any carbon tax would weigh down on the economy. The direct impact on energy prices is just a part of the economic harm.

Energy is a necessary component for just about all of the goods and services consumed, so Americans would pay more for food, health care, education, clothes, cleaning supplies—you name it.

The real kicker is that if you take government models at their word, a carbon tax would have almost no impact on global temperatures. But with no specific global temperature reduction goal in mind, this particular carbon tax plan fails to have a clear purpose. So much for being in the driver’s seat.

Ironically, the U.S. has been on a sustained downward slide in carbon dioxide emissions without any carbon tax. Over the last four years (2014-2017), U.S. emissions of carbon dioxide have fallen; comparatively, Europe has increased emissions over the same four-year period. For nine of the last 18 years, the U.S. has led the world in carbon dioxide emissions reductions.

The carbon tax needs to be called out for what it really is: just another tax. A carbon tax would have massive implications on the American economy regardless of what the initial tax rate is set.

A centrally-planned taxation and wealth redistribution system is clearly not a good plan for Americans, let alone one sold as a truly conservative solution.

Commentary by Bryan Cosby and Katie Tubbs. Originally published at The Daily Signal.

Good and Bad Environmental Amendments to the ‘Minibus’ Bill

This week, the House of Representatives is expected to bring to the floor its second “minibus” package of the appropriations season. The bill combines the appropriations bills from the interior, environment, and related agencies subcommittee and the financial services and general government subcommittee.

The House Rules Committee has given the green light as of now for many amendments to be considered on the floor. The following are just some of the environmental-related amendments.

The Good Amendments

  • Stops unjustified restrictions on genetically engineered crops(Amendment 35, sponsored by Rep. Ralph Abraham, R-La.). 

This amendment helps to ensure that the federal government is not blocking the use of agricultural biotechnology, which plays a critical role in American agricultural production. Specifically, this important but narrow amendment “prevents the enforcement of limitations or prohibitions on the use of genetically modified crops in commercial agricultural operations conducted on National Wildlife Refuges.”

  • Ends Diesel Emissions Reduction Act grants to contribute to deficit reduction (Amendment 65, sponsored by Rep. Gary Palmer, R-Ala.).

This amendment eliminates Diesel Emissions Reduction Act grants, which, while relatively small, fund projects that are appropriately managed at the state and local levels. The government has spent hundreds of millions of taxpayer dollars over the years to develop clean diesel technology, such as retrofitted tractors, cherry pickers, and electrified parking spaces.

  • Prohibits funds for methane rule (Amendment 138, sponsored by Rep. Markwayne Mullin, R-Okla.).

In 2016, the Obama administration published a final rule to regulate methane emissions from oil and gas sources. This amendment would block funding for the enforcement of this rule that was part of the Obama administration’s efforts to address climate change. The costly methane rule will drive up energy priceswhile having negligible, if any, climate benefits. Further, government intervention is unnecessary since energy producers already have an incentive to capture and sell methane, as it has valuable economic use for the production of electricity and heat.

  • Prohibits use of the social cost of carbon (Amendment 139, sponsored by Mullin).

This amendment would prohibit funding for regulation or guidance that utilizes the social cost of carbon. The Environmental Protection Agency is using three statistical models to estimate the value of the social cost of carbon estimating the economic damage that 1 ton of carbon dioxide emitted today would cause over the next 300 years.

These models arbitrarily derive a value for the social cost of carbon and are highly sensitive to reasonable alterations in inputs. By placing a significantly high arbitrary price on carbon dioxide emissions, agencies can inflate the benefits of regulation or inflate the costs of a new project.

Congress should prohibit all federal agencies from using the social cost of carbon for any purpose, especially regulatory rule-making.

  • Blocks implementation of burdensome ozone standard (Amendment 143, sponsored by Rep. Glenn Grothman, R-Wis.).

This amendment would prevent funds from being used to implement or enforce the 2015 National Ambient Air Quality Standard for ground-level ozone.

When a third of the nation’s population lives in areas that have not met the current standard, adopting an even more stringent standard is at best premature and is becoming more expensive to meet tighter standards with smaller margins of tangible benefits. Congress should restore accountability in the face of an EPA that is increasingly setting American economic policy as it sets environmental policy through the ozone standard.

  • Blocks funding for environmental justice grants (Amendment 163, sponsored by Rep. Jody Hice, R-Ga.).

The EPA’s “environmental justice” programs were originally designed to protect low-income commu­nities from environmental harm. However, the EPA now too often goes beyond this purpose to prevent job-creating businesses from developing in low-in­come communities, thus blocking the very econom­ic opportunity that the communities need.

The Bad Amendments

  • Blocks WOTUS repeal (Amendment 25, sponsored by Rep. Don Beyer, D-Va.).

This amendment would strike existing language in the appropriations bill that would repeal the Obama administration’s infamous “waters of the United States” rule. This rule is a major federal power grab and an attack on private property rights. It would regulate almost any water imaginable, from most ditches to so-called waters that are actually dry land most of the time.

  • Blocks language that would reduce the regulatory burden on farmers and ranchers (Amendment 26, sponsored by Beyer).

This amendment would strike existing language in the appropriations bill that would allow farmers and ranchers to engage in normal farming activities and other critical work on farms (e.g. constructing irrigation ditches) without having to get a Section 404 dredge and fill permit under the Clean Water Act.

  • Prohibits the EPA from changing the coal ash rule (Amendment 29, sponsored by Rep. Gerry Connolly, D-Va.). 

In 2015, the Obama administration published a final rule imposing requirements on the disposal of coal ash from coal-fired power plants. On March 1, 2018, the EPA proposed rules to amend the Obama administration coal ash rule. These rules would provide states greater flexibility in implementing their coal ash permitting programs.

The proposed amendment would block the EPA from offering this much-needed flexibility and making any changes or modifications to the existing coal ash rule.

The House should utilize the appropriations process to push for critical environmental reforms and to block efforts to undermine those reforms. Legislators often talk about past EPA overreach. This current minibus bill is a way to go beyond words and take action.

Commentary by Daren Bakst and Katie Tubbs. Originally published at The Daily Signal.