**Written by Doug Powers
There’s good news on the fossil fuel emissions front this year: The election of Donald Trump as president has sparked an exodus from the EPA. Fewer cars being driven every day is good for the environment, and yet progressives are panicking about it:
Over 700 employees at the Environmental Protection Agency have quit or taken early retirement during the Trump administration so far, bringing the agency close to employment levels not seen since Reagan.
ThinkProgress, whose senior editor is scared of his plumber who he fears may have voted for Trump, is warning that the exodus will lead to “dirtier air” and “dirtier water.”
“Since Environmental Protection Agency Administrator Scott Pruitt took over the top job at the agency in March, more than 700 employees have either retired, taken voluntary buyouts, or quit, signaling the second-highest exodus of employees from the agency in nearly a decade,” the liberal blog reported.
“According to agency documents and federal employment statistics, 770 EPA employees departed the agency between April and December, leaving employment levels close to Reagan-era levels of staffing,” ThinkProgress said. “According to the EPA’s contingency shutdown plan for December, the agency currently has 14,449 employees on board—a marked change from the April contingency plan, which showed a staff of 15,219.”
It never ceases to amaze how many people genuinely seem to believe that the only thing standing between the human race and extinction is a federal agency created by Richard Nixon in 1970.
**Written by Doug Powers
Environmental Protection Agency administrator Scott Pruitt is mulling over how, or whether, to respond to demands from climate skeptics that he reexamine the science that obligates the EPA to issue costly carbon-emission regulations. While he has recently acknowledged that agency staff short-circuited the science review early in the regulatory process, he may not realize that the EPA inspector general’s office flagged this problem years ago, and the agency staff blew him off by means of a preposterous legal fiction that has long been in need of correction.
In 2009 the EPA issued the Endangerment Finding, which created a statutory obligation to regulate carbon emissions. In the lead-up to this decision the EPA had published its Technical Support Document. Numerous petitions for reconsideration were subsequently filed with the administrator citing evidence of bias and cherry-picking in this report, but all of them fell on deaf ears.
In April 2010, Senator James Inhofe (R., Okla.) asked the EPA’s Office of the Inspector General to review the adequacy of the peer-review process behind the Technical Support Document. The EPA was not happy with what he unearthed.
It turns out that the federal government has rules in place governing how the scientific basis for regulations should be reviewed. Guidelines from the Office of Management and Budget issued under the Information Quality Act impose varying requirements depending on the uses to which a scientific assessment will be put. The most rigorous process is for so-called Highly Influential Scientific Assessments (HISA). These are scientific assessments that will, among other things, lead to rules that have an annual economic impact exceeding $500 million.
The inspector general issued a lengthy report in 2011 concluding (pp. 15-22) that the EPA’s science assessment for the Endangerment Finding was highly influential, but the peer-review process fell short of the required standard. It even violated internal EPA guidelines, by failing to publicly report the review results and cutting corners in ways that potentially hindered the work of reviewers.
The EPA argued back, rather brazenly, that their report was not an assessment at all, merely a summary of previous findings by the U.N. Intergovernmental Panel on Climate Change, the National Climate Assessment, and other reports, and these documents — not any original research by the EPA — underpinned the Endangerment Finding.
The inspector general rejected this argument for several reasons. First, the EPA study clearly was an assessment, since it selected certain lines of evidence for emphasis or exclusion and used data not found in the underlying reports. Second, the guidelines do not allow an agency such as the EPA to rely on peer reviews conducted by outside groups such as the IPCC or the National Climate Assessment team. Third, the inspector general noted (p. 53) numerous occasions when the EPA cited the Technical Support Document as the basis of its Endangerment Finding.
The EPA then argued that even if it was an assessment, it was not “highly influential.” Since the Endangerment Finding was being issued on a “stand-alone” basis with no specific regulations attached, the investigation ended without resolution.
Thereafter the EPA proceeded to issue rules like the Clean Power Plan with impacts far exceeding $500 million annually. By declining to designate its science assessment as highly influential, the EPA skirted the need to conduct the required peer review, but in so doing it thwarted the intent of the statutory guidelines and undermined the ethical basis of its actions.
While the courts may not demand that this situation be rectified, Pruitt himself should. Administrative honesty demands it, especially since the determination has large potential economic ramifications. Specifically Pruitt needs to declare that the Technical Support Document was a Highly Influential Scientific Assessment that should have been reviewed as such in the first place, and he should see to it that such a review now takes place.
While climate activists may object, they have also spent years insisting that the science is settled, so if they are right, they have no reason to worry about the outcome. And if they are unhappy that this might delay the next round of rule-making, they should direct their ire at Pruitt’s predecessor, who ought to have undertaken the review back in 2011 rather than playing semantic games to justify evading statutory peer-review requirements.
Regardless of Pruitt’s views on climate science, he should agree that the regulatory process needs to be honest and procedurally sound. This alone gives him sufficient grounds to initiate the review that was supposed to have been done years ago.Ross McKitrick is a professor of economics at the University of Guelph and an adjunct scholar of the Cato Institute.
Ross Perot warned of a “giant sucking sound” when the original NAFTA was signed, but the new NAFTA being negotiated right now may coincide with a giant puffing sound. Marijuana legalization efforts in both Canada and the United States (and Mexico for medical marijuana) will, as with most goods and services these days, become intertwined with complex trade agreement rules on public health, investment, intellectual property and state-owned enterprises.
So will the North American Free Trade Agreement bring us free trade in cannabis? Or will the negotiators kill this buzz by carefully drafting language that excludes marijuana products from the trading system?
A few countries recently began legalizing marijuana for production and sale in their domestic market. But what about international trade? Why not allow consumers in foreign markets where marijuana is also legal to purchase high quality marijuana products from Colorado merchants?
We will get to that place someday, as countries’ experiences with these products makes them more comfortable with accepting marijuana products from abroad. But NAFTA is unlikely to achieve anything here, as the issue of legalization is still controversial and sensitive. For now, the Canada/United States and Mexico/United States borders will not see marijuana products flowing freely and legally. Instead, international trade in these products is likely to remain prohibited, with border barriers on these products probably justified under the standard trade agreement exceptions for protection of “public morals” or “public health.”
However, modern trade agreements cover more than simple border barriers, and more than two decades of experience with trade agreements after NAFTA was signed have shown us how domestic policy issues can lead to trade controversy and litigation. There are a number of areas in which NAFTA rules may have an impact on the marijuana marketplace as legalization progresses.
First, there is already some cross-border investment in marijuana, with U.S. companies investing in Canada (the company that owns Corona will pay $190 million for a stake in Canopy Growth Corporation, which sells medical marijuana in Canada and plans to sell recreational pot when it is legalized), and Canadians investing in the United States. These investments will be subject to NAFTA’s protections for foreign investment. Foreign investors who believe that domestic regulations on marijuana industry constitute “indirect expropriation” or do not accord “fair and equitable treatment” — two of the key obligations in the investment chapter — can sue the host government for damages in an international tribunal. Domestic regulation in the marijuana sector will be extensive and seems to be carried out in a clumsy manner at times. As a result, there may be opportunities for international lawsuits against these regulations.
Second, trade agreements have detailed protections for intellectual property, and marijuana producers are creating some valuable trademarks and patents. With regard to trademarks, controversial disputes over cigarette packaging have been going on in trade and investment tribunals for years, focusing on so-called “plain packaging” of cigarettes as well as health warnings on these products. Tobacco company Philip Morris has made headlines by bringing investment treaty disputes against the governments of Australia and Uruguay, and several governments challenged Australia’s plain packaging regulations at the World Trade Organization.
For similar reasons, the inevitable regulation of marijuana product branding could bump up against NAFTA’s trademark rules. And patents are proliferating in the area of cannabis for medical use. Different approaches by Canada and the United States to patent protection could also lead to trade conflict, as was the case already in a NAFTA complaint by pharmaceutical company Eli Lilly.
Third, some Canadian provinces plan on distributing marijuana through the state-controlled entities that currently sell alcohol. For example, the Liquor Control Board of Ontario, a crown corporation that is accountable to the Ontario Ministry of Finance, will oversee the retailing of cannabis across the province through stand-alone stores and an online ordering service. But in recent trade agreements, the United States has pushed for special rules on “state-owned enterprises and designated monopolies” where the activities of those entities “affect trade or investment between Parties within the free trade area.” Among other things, these entities must act in a manner that is based on “commercial considerations.” Similar rules are likely to be part of the NAFTA, and this could have an impact on Canada’s plans for the sales of marijuana products.
These are just a few examples. NAFTA rules on product standards, food safety standards and banking regulations may also give rise to concerns about the trade impact of marijuana regulation.
International trade in marijuana products is good for the same reasons that legalization of marijuana is good: There are considerable benefits from some of these products, prohibition does not work, and any harms can be managed through appropriate regulation. But it might be too early to expect significant liberalization of marijuana through trade agreements. Getting domestic markets up and running has been controversial enough, and additional negative attention for the industry due to international trade could make things worse.
With all this in mind, the NAFTA negotiators should think carefully about how the various rules and exceptions they are drafting might apply to marijuana products. Free trade in marijuana is probably coming someday, but for now the negotiators’ focus should be on crafting rules that keep controversy and litigation to a minimum.Simon Lester is a policy analyst at the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies.