Thank you for the opportunity to address you on reauthorization of the Clean Air Act.
My comments today will primarily focus on those portions of the Clean Air Act dealing with stationary sources. With less than 500,000 people in Wyoming, I don't have much experience with mobile sources or most of the urban issues related to the Clean Air Act. We also have good "atmospheric ventilation," our clean air is often passing by at 30 miles per hour.
I think if you look at the results we have achieved in this country, the Clean Air Act has been very effective. It has focused on and addressed the issues.
However, since the original passage of the Clean Air Act, each reauthorization has added another layer to the Act. While each was effective in addressing the issues of the day, the layers do not necessarily complement each other. More importantly, some of the layers create disincentives for emission reductions and penalize facilities that voluntarily make early reductions.
I believe it is time to start with a clean sheet of paper. With respect to stationary sources, we need to start fresh and create a system that provides incentives for reductions.
The first priority must be human health. The current health standards, essentially the National Ambient Air Quality Standards or NAAQS, should be retained. It is paramount that we protect the health of those around facilities and our general population. I would ask that more emphasis be placed on good science and data related to what is needed to protect public health. One only has to look back on the debate over the proposed fine particulate and ozone standards to see the need for better science and better data.
Once we have protected public health, I believe the other goals related to stationary sources encompassed by the Clean Air Act are best served by a market-based system. I believe a properly constructed market system could provide incentives for emission reductions and incentives for the development of technology to reduce emissions.
Before I proceed I must give proper credit. Many of the particulars I will suggest were developed in a paper written by Mr. Bob Neufeld.
For a market system to work, a market must be created by some sort of limit similar to what was done for sulfur dioxide in the 1990 Clean Air Act Amendments. This limit usually takes the form of a cap or benchmark below which emissions must be maintained. Benchmarks would be set for each pollutant depending on the goal you wish to achieve. Benchmarks would need to be periodically reviewed. If the results desired are not being achieved, the benchmark would need to be lowered. Ideally, the benchmark would create a situation that achieves the goals and creates an economy that stimulates the development of new technology to accommodate growth.
However, we need to be realistic. The benchmark may need to be raised if it is so low that it is determined it cannot accommodate society. As much as we would all like to see air quality gains similar to those made over the last 30 years, we need to recognize the population is expanding and today's technology demands materials and power.
Remember, these are goals beyond health so I am not suggesting we sacrifice health for growth.
Setting the benchmarks would be a Solomon-like task. If we embroil them in the morass associated with today's rulemaking, like today's rules, needed adjustments will only happen through litigation. A system is needed that allows adjustments to balance reductions with societal needs. The Federal Reserve could serve as a model.
The parameters for the benchmarks must be clearly articulated and be closely tied to an intelligent national energy policy. I am concerned that today some decisions are being made to reflect agendas not articulated in the Act. I also believe we are dictating national energy policy through decisions made under the Clean Air Act. While the two must complement each other, energy policy needs to be thoughtfully debated in its own right.
If a market-based system is used, the initial allocation of emissions is again a taxing task. Most systems use historic emissions as the baseline. Unfortunately, that system penalizes the cleaner facilities and rewards dirty facilities. Basing allocations on a market-based value, I would suggest gross revenue, would be a system more consistent with market principles.
I believe there are vast opportunities for such a system. We would be able to create an environment where emission reductions can become revenue enhancers rather than revenue drains. We can create an environment that makes technology advances which reduce emissions very marketable.
When our concern is visibility, there would also be opportunities for interpollutant trading. The light-disrupting properties of a particle of one species should be able to be related to the light- disrupting properties of another species. While the trades may not be on a 1 to 1 basis, we should be able to equate the resource gains.
I am not so naive as to believe that in a market system everyone will comply because they are good citizens or because they are making money. It would require limits allocated or obtained through the market be contained in an enforceable permit and that those limits be closely monitored for compliance.
I also recognize that there would still be categories of emissions from these facilities, for instance fugitive emissions, that cannot be accommodated in the market.
While we have a good law, if we continue to layer old on new, we will stifle significant opportunity for innovation. However, if we build on the advances of the last thirty years, take advantage of today's technology and mold a system that addresses today's issues, we can achieve even more without rancor and confrontation.