Association of State Wetland Managers - Protecting the Nation's Wetlands.

The Compleat Wetlander: Regulatory Uncertainty is Bad for Business—Bad for Wetlands, Too

Improving the economy and creating jobs is a high priority. Governors and state legislatures are hard at work nationally. Finding ways to become more business friendly is a common goal.

Everyone knows there are tough choices ahead. Budgets are in the red. There are two ways to balance a budget—raise taxes or cut programs. Federal, state, and local governments are trying to cut programs in ways that will also create jobs. It is evident that program cuts will be painful and important services will be lost. Voters will be unhappy. Elected officials will be under enormous pressure to demonstrate that balanced budgets have created jobs. That is why it is important to make good decisions that will be attractive to business.

The problem for businesses is not lack of money. Numerous analyses and reports point out that the private sector is sitting on $1.3 trillion in assets. But businesses are unwilling to invest in uncertain times. They want to know that they can make money by spending money. One requirement for businesses is knowing what the rules will be going forward. This includes tax, health care and environmental laws. In early January an article on the need for regulatory certainty showed up in my e-mail box describing industry concern over rollbacks in EPA regulations.

Industry Desire for Regulatory Certainty May Blunt GOP Assault on EPA
http://insideepa.com/Inside-EPA-General/Inside-EPA-Public-Content/industry-desire-for-regulatory-certainty-may-blunt-gop-assault-on-epa/menu-id-565.html

A couple weeks later I caught the tail end of a radio interview of Andre Liveris, CEO of Dow Chemical. When asked why the U.S. wasn’t competing successfully against other parts of the world he answered:

“Well, (in the U.S.) I not only have high taxes, I have uncertain taxes. Right now, I have more regulations coming at me that are not fact-based, not science-based, not data-based. I actually don’t even know what my costs are going to be in the next five years. And so I’m sitting back waiting for regulatory reform.”

For the entire interview go to: Manufacturing is Vital Component to U.S. Economy
http://www.npr.org/2011/01/25/133201751/Manufacturing-Is-Vital-Component-To-U-S-Economy

A Google search on regulatory uncertainty and its impact on business will yield many news articles on the topic about many kinds of regulations. Most are not about environmental laws, but some are.

There will be a number of bills introduced throughout the country this year to change water pollution protection programs. A number seem directed at weakening these programs to provide a more friendly business environment. Unfortunately these changes work against creating regulatory certainty in two ways.

First, there is a time period between when the law is changed and new rules are put in place, staff are trained and the new law gets implemented. At best this takes at least a year. Often agencies do not receive resources sufficient to train staff. This leads to inconsistent application of laws.

Second, laws are frequently poorly written, and as the CEO of Dow Chemical states, “are not fact based, science based or data based.” It may even be unclear what the law is intended to achieve. This makes laws challenging for state or federal agencies to interpret. Laws that require facts, sound science and good data to support decisions are more likely to be successful.

Another challenge is that laws that would create certainty may be dead-in-the-water politically.

Here’s a case in point. In the early ‘90s I was at a meeting hosted by the National Governor’s Association about wetlands and agriculture. On the third day of the workshop a panel of state wetland managers was asked what could be done to simplify the Section 404 dredge and fill permitting program.

The answer: Get rid of the confusing exemptions for agriculture, silviculture, etc. Regulate all activities for wetlands of a specific size and larger. It would be easy to implement and be predictable.

There was dead silence in the room. Everyone there knew that this solution was totally unacceptable politically. There was no more discussion.

Regulatory uncertainty is also bad for wetlands and other aquatic resources. The U.S. Environmental Protection Agency reduced the number of enforcement cases it pursued following the Rapanos ruling. Lag in water-pollution enforcement traced to muddled court decision http://www.grist.org/article/wetlands4/ Gutting the Clean Water Act http://www.governing.com/topics/energy-env/Gutting-Clean-Water-Act.html This means that an unknown number of potential violations have occurred. In the past a number of state wetland managers have said anecdotally that when there is uncertainty about the regulations, violations increase.

There is a need to create more certainty, fairness and consistency in the administration of wetland programs. This should be a long-term objective of any regulatory program. However, the public debate is and has been muddled. Worse yet, it has often been on the wrong subject matter. There is a profound need to clarify Clean Water Act jurisdiction and move on to the topics that will create greater regulatory certainty, consistency and fairness.

Regulatory certainty can be improved by 1) consolidating permitting so that multiple permits can be address together; 2) establishing lines of communication before the application is filed; 3) establishing online applications; 4) utilizing sound science and new technology; 5) enhancing data management; and 6) requiring consistency in program management including evaluating permit decisions. In many states, program managers have sought support for undertaking these activities. Sometimes they have been successful. More information on these strategies can be found at: http://aswm.org/state-summaries

Additional News Stories about Regulatory Uncertainty
Regulatory Uncertainty Plagues Oil and Gas Industry
http://www.houmatoday.com/article/20110130/ARTICLES/110129358
Myths and Realities of Regulatory Uncertainty
http://www.progressivefix.com/myths-and-realities-of-regulatory-uncertainty
Regulatory Uncertainty killing American business, investment
http://www.redstate.com/jrichardson/2010/11/17/regulatory-uncertainty-killing-american-business-investment/
US firms hint regulatory uncertainty will not derail green plans
http://www.businessgreen.com/bg/news/1804924/us-firms-hint-regulatory-uncertainty-derail-green-plans
Government regulatory uncertainty puts ‘breaks’ on economy
http://radioviceonline.com/government-regulatory-uncertainty-puts-breaks-on-economy/
Uncertain of future regulation, businesses are paralyzed
http://money.cnn.com/2010/10/19/news/economy/business_paralysis.fortune/index.htm
Regulatory Uncertainty and Structural Unemployment
http://www.acoel.org/2011/01/articles/air/regulatory-uncertainty-and-structural-unemployment/

This entry was posted in wetlands regulation and tagged , , , , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

Web Analytics