The Nickel Report

My daughter is on a high school team competing in “We the People: The Citizen and the Constitution” run by The Center for Civic Education to promote education about the Constitution and Bill of Rights. I have been privileged to have conversations with her about the Federalist Papers and some Supreme Court cases. She recently reminded me of the dissent in New State Ice Co. v. Liebmann, an opinion that may again become relevant to the evolution of environmental law, at least for those of us who live and function outside the Beltway.

How could a Depression-era case about the constitutionality of a certificate of public convenience and necessity be relevant to environmental law today? Well, there is a lot of discussion about ice manufacturing, which some might argue is relevant to climate change.

The case concerns an Oklahoma statute, which brings to mind a certain former attorney general from the Sooner State who is going to affect environmental policy. But that is not as relevant as the following passage, explaining disagreement with the majority view on the appropriateness of a state’s experimentation to solve social problems:

To stay experimentation in things social and economic is a grave responsibility. Denial of the right to experiment may be fraught with serious consequences to the nation. 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.

New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis dissenting). Thus, states were labeled the “laboratories of democracy.”

Famous examples of research and development in these laboratories include Massachusetts’s development of universal health care and Colorado’s more recent legalization of cannibis.

Less famous but ultimately more effective was the development in the mid-1990s of state voluntary remediation, brownfield and risk-based cleanup programs in response to the inefficiency and glacial pace of Superfund remediation. More contaminated sites have been identified, remediated and repurposed by states to revitalize urban environments (and give us industrial chic) than under any federal environmental program, and for far less money.

Similarly, state environmental audit privilege statutes (which EPA mimicked in its audit policy) allowed self-identification and correction of compliance issues without enforcement. Again, far more got accomplished with far fewer transactional costs. These improvements resulted from the initial work of a few courageous and forward-thinking states that applied common sense to solve a problem and a subsequent snowballing of such efforts nationwide. Ultimately, EPA incorporated the same principles into its programs.

The barrage of command and control regulation from Washington has pushed this sort of state innovation off the radar screen. Some might say that the Clean Power Plan purported to turn states loose a bit, but it defines the problem and restricts the tools available to make real solutions. Constrained and mandated creativity seldom if ever bears fruit. As we come to grips with the new reality of doing much more with far less, it’s time to revisit and unleash the creativity that states can offer.

The greatest hurdle to this approach is the lack of current funding for environmental protection at the state level. While states are responsible for the actual implementation of federal regulatory program requirements, which have increased dramatically, federal funding has dropped by 3 percent over the past three years. See Environmental Council of the States, Green Report (March 15, 2017). Moreover, some states, despite general improvement in the economy, are seeing reductions in tax revenue. As a result, many states, despite cost-saving efforts, have sufficient funding only to meet their mandates in the areas of policy, permitting and enforcement.

Without commenting on the current debate over health care reform, I am encouraged that Congress is evaluating block grants to fund state experimentation with health care solutions. As Congress considers a 31 percent cut in EPA’s budget, it might do well to consider fostering beneficial new state experimentation with a similar approach for environmental protection.