Outperforming EPA

Published August 1, 2000

Contrary to popular opinion, America’s focus on solving environment problems originated at the state and local level, not in Washington. And despite three decades of federal dominance in the environment policy-making arena, there is compelling evidence that state agencies are doing a better job solving real environment problems than are federal regulators.

The federalization of environment policy

The federal government’s takeover of environment policy began with the enactment of the Clean Air Act in 1970. Later, the federal government’s reach was extended to include statutes governing everything from drinking water and food safety to cleanup of hazardous waste sites. EPA would later claim its use of the federal regulatory “stick” was responsible for reductions in pollution.

David Schoenbrod, an adjunct scholar at the Cato Institute and professor of law at New York Law School, disagrees. “The belief that it took the federal government to make the states act comes from federal officials who claim credit for what state officials had already been accomplishing.” According to The Brookings Institution’s Robert Crandall, “assertions of the tremendous strides EPA has made are mostly religious sentiment.”

Far from engaging in a “race to the bottom,” the evidence suggests states were bidding up environment standards before EPA arrived on the scene. Though state environment officials have been relegated to a secondary position over the past three decades, they have used the powers left to them in innovative ways that contrast with the top-down, command-and-control system that characterizes the federal regulatory structure.

States aim for timely, cost-effective cleanup

Nowhere is this more evident than in state efforts to accomplish what EPA has failed to do: clean up contaminated sites in a timely fashion and at a reasonable cost.

Enacted in 1980, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), better known as Superfund, has a liability scheme that renders it unworkable and cleanup standards that are prohibitively expensive. It typically costs $25 to $30 million to clean up a single Superfund site, and the average cleanup requires 10 years. It is not uncommon for economic activity to grind to a halt in the proximity of a Superfund site, as people fear being dragged into the statute’s liability web.

Having seen property values plummet and livelihoods destroyed by the federal program, state environment agencies have responded by developing their own approaches to cleaning up contaminated properties. State cleanups of these properties not only return them to their communities, where they can be put to residential, commercial, or recreational use, but also are designed to keep them from ever landing on Superfund’s dreaded National Priorities List (NPL), where they could be tied up in litigation for a decade or longer.

Hoping to avoid the pitfalls of the federal program, state environment agencies have developed approaches that are generally performance-based with a heavy emphasis on innovation.

Minnesota, for example, cleans up sites for less than $5 million each, with work completed in three to five years. By 1995, California, New York, and Wisconsin had each remediated approximately 200 sites–or about as many each as the entire federal program had managed to clean up in 15 years.

Pennsylvania leading the way

While not all hazardous waste sites are contaminated enough to be considered for the federal Superfund program, the presence of chemicals in the soil is sufficient to hinder redevelopment. Cleaning up these “brownfields,” the name given to abandoned industrial sites in urban areas, and returning them to productive use has become a major preoccupation of state environment agencies.

Pennsylvania’s Department of Environmental Protection (DEP) has developed a brownfields redevelopment program based on three statutes approved by the state legislature in 1995. The Pennsylvania program standardizes cleanup procedures, sets realistic cleanup goals, grants liability releases to owners, developers, and other parties, and provides some funding assistance for cleanups.

Since the Land Recycling Program’s inception, cleanups have been initiated at over 300 sites, with over 100 already completed. Most of the cleanups are conducted at private, not taxpayer, expense.

Unlike the Superfund program with its stringent cleanup standards, Pennsylvania officials sought from the outset to avoid what DEP Secretary Jim Seif refers to as this “purity and Garden of Eden approach.” Seif’s point is that chasing the last molecule of contamination is ultimately self-defeating, because it makes cleanups so expensive they are put off indefinitely.

Pennsylvania’s cleanup standards are risk-based–set at levels determined to be adequately protective of human health and the environment, taking into account the prospective future use of the property. Thus, standards for residential property are stiffer than those for industrial sites.

One of the most intriguing elements of the Pennsylvania program is how it deals with the tricky problem of liability. Here, too, the contrast with Superfund is striking.

In place of Superfund’s joint, several, and retroactive liability scheme, the Pennsylvania program releases owners or developers of a site from liability associated with the cleanup, as long as the remediation is done according to the standards and procedures in the law. Pennsylvania extends this liability protection to financiers, such as economic development agencies, lenders, and fiduciaries.

Once remediation is done, DEP grants a release of liability to the landowner, and the program provides protection against citizens’ suits.

Illinois a second model

Another state that has tried to learn the lessons of Superfund is Illinois. In 1993, the Illinois Environmental Protection Agency developed its own brownfields program, the Tiered Approach to Corrective Action Objectives, or TACO. It gives landowners a choice between three cleanup options: to baseline levels generally protective of human health, to site-specific levels, or to a level dictated by what Illinois officials call “formal” or “common sense” risk assessment. Upon completion of a cleanup, the state issues a “no-further-remediation” letter.

State approval of a remediation is based on either “engineering controls” or “institutional controls”:

  • An “engineering control” is “a barrier designed or verified using engineering practices that limits exposure to or controls mitigation of the contaminants of concern.” Engineering controls typically include clay, asphalt, or concrete caps and are put in place to serve as permanent barriers to further contamination. Should these barriers fail, the state can void the no-further-remediation letter.
  • An “institutional control” is defined by TACO as “a legal mechanism for imposing a restriction on land use.” The most widely used institutional control is the no-further-remediation letter itself, which states what can and cannot be done on the site. TACO is unique among state programs, in that it employs land-use restrictions as part of the remediation process when these are more cost-effective than cleaning up the property to base-line levels.

Like Pennsylvania, Illinois has moved away from Superfund’s joint and several liability scheme. In its place, Illinois uses propositional liability, so that who is required to pay coincides more closely with who is at fault for the contamination.

TACO has gradually won acceptance by the owners of contaminated property. Over 700 have signed up for the program, with 225 sites already having been cleaned up.

Obstacles remain for innovative states

The nation’s landscape is pock-marked with abandoned gas stations, chemical plants, oil refineries, and other industrial or commercial properties where contamination, and the ever-present threat of liability, create barriers to redevelopment. State environment agencies have identified over 100,000 such sites, though the actual number could be five times that many.

By cutting red tape and seeking to cooperate with owners and developers of affected properties, states have shown that cleaning up contaminated sites need not be the nightmare that Superfund has been.

As welcome as state efforts are, however, there are inherent limitations on how effective they can be. Those limitations are rooted in the Superfund statute itself, which does not exempt sites cleaned up by state programs from the federal cleanup standards and liability requirements of Superfund.

Even after sites have been cleaned up with the seal of approval of the requisite state agency, and even if EPA is not directly involved in administering the cleanup, “the sites are still subject to the substantive requirements of the federal law, and these can be enforced through private litigation,” notes James DeLong, a lawyer and adjunct scholar at the Competitive Enterprise Institute.

If Superfund is ever to be reformed, it is the states who will provide the model for that long-overdue undertaking. They will do so for reasons as simple as they are illuminating.

As Becky Norton Dunlop, former Secretary of Natural Resources for the Commonwealth of Virginia puts it, “It is absurd to continue to operate the federal government as though citizens in the several states care less about the quality and condition of the environment in which they live, work, and raise families than do federal bureaucrats hundreds of miles away.”

Bonner R. Cohen is a senior fellow at the Lexington Institute in Arlington, Virginia.

For more information

on the innovative brownfields cleanup programs operating in Pennsylvania and Illinois, visit those state’s Web sites at http://www.dep.state.pa.us/dep/deputate/airwaste/wm/landrecy/default.htm and http://www.epa.state.il.us/land/taco/index.html.