A speech by Russ Harding, senior environmental policy analyst for the Mackinac Center for Public Policy, delivered at the state capitol in Lansing, Feb. 3, 2004

Thank you Diane and good afternoon. It’s a pleasure to be here and I thank you for stopping by to hear some thoughts I’d like to share with you this afternoon. What I’d like to talk about is: SEVEN ENVIRONMENTAL CHALLENGES FACING MICHIGAN; talk about perceptions a little bit on those issues; and what I think are facts, or reality, and some policy recommendations that some of you may be interested in or want to consider as you debate, discuss and work on those types of issues.

There is much fiction surrounding environmental issues in Michigan. If you look at any poll of residents, generally people will say they think conditions are getting worse. However, the empirical data, whether it be in land, air or water will conclusively show that, in fact, we have a better environment than we’ve had in many years. Air quality, water quality has improved dramatically. There certainly are challenges to be faced but the perceptions and the reality on this issue often are far, far apart — I think more so, than in many public policy issues.

So, let’s get into it. I think most of you know that most of our environmental laws are relatively new, came into being about 1970, and we have federal law which the states implement on behalf of the federal Environmental Protection Agency (EPA). Michigan is no exception to that. There are also state laws passed, but much of what is done in environmental protection from a regulatory standpoint is done through federal delegation on the Clean Water Act, Clean Air Act, and other federal laws.

Let’s start with air. The perception is that air quality has gotten worse in Michigan. Yet, we have been in compliance for all the air pollutants now for a decade, including carbon monoxide, the ozone or smog, sulfur dioxide, fine particulate matter – all the major air pollutants, which we measure and monitor. If you’ll look at any chart of the empirical data the air emissions have gone down. They’ve gone down even during the economic expansion of the 1990s; they’ve gone down every year. This has been a tremendous achievement in an industrial state like Michigan. However, environmental groups and others have been saying quite vociferously during the last year that the air is getting worse because Michigan is out of compliance.

What’s the reason for that? It’s because the standards have been changed. The goal posts have been moved. For example, we had a standard for ozone, which was 120 parts per billion measured over one hour. The new standard is 80 parts per billion. So, this standard has been lowered significantly.

But if people don’t understand or know about this, and the news spreads far and wide that about 25 counties in the state of Michigan are out of compliance — including the county we’re sitting in, Ingham, people are going to think pollution has gotten worse. And the fact that the state is out of compliance is going to have significant ramifications for the state of Michigan in terms of economic development.

Interestingly enough, if you were to take and shut down every smoke stack in the state; if you did not allow anyone to drive an automobile in the state of Michigan during the summer, you would still see background levels of ozone at 50-60 parts per billion. As I said, the new standard is 80. You don’t have to have a Ph.D. in environmental engineering to figure out quickly there’s not much room for error in that standard. So that is why so many counties will be out of compliance.

What’s the policy that Michigan should be looking at as a result of that? First of all, it would be helpful to understand that about 50 percent, and I’m using approximate numbers here, of the air emissions in the state of Michigan come from the mobile side — tailpipe — the other 50 percent come from stationary sources such as manufacturing and utilities. So, it’s about half and half. I would advocate that as the Michigan Legislature deals with this very tough issue, it’s going to be extremely important that we come up with a balanced portfolio of reductions. If the onus is laid on the smoke stacks for stemming the tide of pollution, that will be a very, very heavy and unfair constraint to manufacturing. On the other hand, with many tailpipe programs and others that can be very politically unpopular with the public, there’s some difficulty there.

We have an opportunity here in Michigan to make these reductions in the most cost-effective manner possible and one way we can do that is to ensure that we use the Air Trading Rule that Michigan passed some years ago. Without spending a lot of time on this, basically the way it works is that one source can trade with another source where it may be cheaper for that source to make reductions and sell those credits in the open market. And that’s less cost for everybody and more flexibility and has the advantage, of course, of overall reduction in air emissions.

What I would suggest we look out for is attempts by groups or even by state agencies to make that a very difficult rule to use; to put so many constraints on that rule that trades become very, very difficult to accomplish in the marketplace. And if that happens, people won’t do the trades because it’s not in their best interest. We don’t get the reductions and we end up with a much higher cost of doing business.

On the other hand, we do have a tremendous opportunity in Michigan, which some other states have taken, to use such innovative programs. And not necessarily just looking at more onerous regulations piled on top of regulations. For example, anybody heard of vehicle scrapage, more commonly called "cash for clunkers?" This is one program that has been very effective in California, and it’s an entirely voluntary program. It’s not mandated in any form. Vehicles that are old, which are the highest polluters, are purchased to get them off the road. They don’t purchase vehicles sitting in people’s back yards. Only vehicles that are registered and being driven are eligible for the program. I think programs like this one can get a lot of credit with the federal government, can reduce air emissions and can do it in a way that doesn’t penalize Michigan’s competitiveness.

On water quality, again, the perception is that it is getting worse in Michigan and that there are more beach closings. The fact is that water is actually cleaner by any long-term quality measure. There is a huge difference between point and non-point pollution. For those of you not familiar with that term, point pollution would generally come from the end of a pipe, non-point would be diffused sources. It might be runoff from construction areas or it could be agricultural. Michigan has done a magnificent job, probably one of the best in the nation due to the importance of water in our state, of dealing with point pollution, that which comes out the end of a pipe.

The remaining water quality issues are non-point, that is, diffuse runoffs, which are much, much harder to deal with. Let me just say that precisely the wrong thing to do is to try to deal with non-point pollution in the same way we have dealt with point pollution, by imposing a very strict, regulatory regime. This is not going to work very well. And I think many, many people recognize that; certainly I know many staffers at the state Department of Environmental Quality (DEQ) have come to recognize this over the years. Yet, there is still a tendency to cave in to political pressure from certain interest groups, which says, "Well, this worked for the end of the pipe so let’s do it that way for farms, let’s do it that way for subdivisions," or whatever. That should be resisted. That’s going to lead to a heavy, heavy bureaucracy, getting things done very slowly, with not a lot of water quality improvement.

For example, during my tenure as director I strongly resisted putting all farms in this state under "concentrated animal feeding operation" or CAFO permits having to do with discharge of agricultural runoff. Now I didn’t resist that because I don’t want clean water; I resisted it because I don’t believe that it’s going to be effective. We have a tremendous opportunity to work cooperatively with agriculture in the state to reduce water pollution. But it was always interesting, I was under a lot of pressure to issue permits for discharge, called NPDS permits. Some of you may be familiar with that term. Michigan law says you’re not supposed to discharge into the water, period, from an agricultural operation. Yet people wanted me to issue permits, allowing discharge. That would lead to a huge bureaucracy and is not going to be effective anyway. We will need to look at working very closely in the agricultural community — if I had time we’d talk more about strategies and I’d be happy to take questions and discuss that further at the end.

From a policy standpoint, the agency gets water quality monitoring reports continuously, as required by law. But if you’ll look at those reports in any given year you will find that industry is cleaner than municipalities. Now I don’t want to offend any of our municipal friends here, but the fact of the matter is that the private sector consistently does a better job managing water quality than municipalities do. Now there are a lot of different reasons for that, and a lot of different types of dischargers, so I’m not trying to pick on municipalities. But I would say that we have a tremendous opportunity — one that other states have taken, and which has not been used much in Michigan — to look at private operation of many of those resources. Over the years, other environmental commissioners around the country have had very good success with this idea in a lot of major cities. Michigan ought to be looking much more closely at this option, in which I think the cost can be less, the bureaucracy can be less. We all know we’ve got huge problems with the Detroit system. And you know we could talk all day on that, I won’t go there. But I think there are opportunities there and we should examine them.

Let’s talk about land quality. I think that’s an issue we sometimes hear as "land use." Again, perception is a problem. The general perception is that Michigan is suffering from urban sprawl and is running out of open space.

The fact is that most of Michigan remains undeveloped. Forest cover has actually increased by 2 percent during the last 20 years in the state of Michigan. That’s amazing when you actually look at what’s going on. We have more forest now than we did 20 years ago. Less than 10 percent of Michigan is developed. Less than 10 percent. And yet land-use issues are constantly used as a sort of boogieman for every possible ill that we can be faced with. Unfortunately, this is vastly oversimplifying the problem. There certainly are ways to develop things smartly and with minimal impact and a lot of those things make sense to do.

But we need to start really looking at what we’re doing here with land use. First of all, I would stay away from central planning. It didn’t work in Eastern Europe and I don’t think it will work in Michigan. And if you try to create a land-use agency at the state level, or a land-use czar, or whatever you want to call it, you’re setting yourself up for great difficulty. Local government should be making these types of decisions, that’s why we have zoning. Local government is the most accountable to the people it represents and serves. I don’t think you want somebody in Lansing making land-use decisions in your home district. You certainly don’t want these decisions made in Washington. Does anybody here want Washington to make those decisions? I don’t think so. And so we need to be careful.

I know regionalization is a common buzzword, you hear a lot. And there could be advantages to regionalization. But there also could be significant disadvantages. We need to talk about both sides of that equation. One thing I’d be very concerned about in regionalization is that we don’t create, again, more bureaucracy. Sometimes it is difficult enough for those of you who have to interface with government to do it with a government you know and can work with, but when you start dealing with such a larger area and more distant governments, with more hoops to jump through, we have to be real careful about that.

Brownfield redevelopment needs to continue to be encouraged and we’ve done a relatively good job. Michigan’s generally been rated the No. 1 state in the nation for that. We’ve passed the right laws, we need to keep implementing and funding those. I think most people agree, we should try to reinvest in our cities and use that infrastructure wherever possible. But let me say this, as hard as I worked on that, as many of you know, and I worked with some of you in this room to help write that law, change that law and actually go to a "true-polluter" pay in 1995, away from a "deep-pocket" pay model that we had prior to that. When we made those changes and we worked on that really hard through the years, put a lot of resources into it, we still knew it was not going to be the answer.

And I think the answer is much more complex. Brownfield redevelopment is a piece of the puzzle, but what is critical is that we get the basics right in our cities. That means we need to have safe cities and we need to have good schools and we need to have low taxes. And when those cities — I don’t know if you want to call them "cool," call them whatever you want — but when those cities are attractive places for people to live and raise their children and invest their lives, then those cities will be successful. You can have every grant program in the world and you can try to do every kind of incentive in the world, but if you don’t have the basics right, I don’t believe it’s going to work.

The other thing on land quality perception is that Michigan is not adequately protecting its wetlands. The fact is that all wetlands are not created equal. We have a problem in this state because we try to save every postage-stamp sized wetland. And we have an answer to that. We passed a law back in the 1990s. We need to use that law; we need to encourage it. States like Florida have done a great job with what is called "wetland mitigation banking." This provides a mechanism for establishing new wetland areas, or "banks," in advance of anticipated losses. Wetlands established in a mitigation bank provide "credits" that can be sold to permit applicants, or used by the bank sponsor to meet permit conditions. This is a much more flexible arrangement for developers and it is also much better for the environment, because you actually have a functioning ecosystem, rather than some little piece of wetland cut off by a freeway in southeast Michigan. So we really need to use that, we need to get smart.

But that won’t work everywhere. There are certain high value wetlands, coastal marshlands and other things that you can’t mitigate. But I’ll tell you, those are the exceptions, they’re not the rule. Most wetlands are areas that weren’t wetlands, have been left alone and maybe they’re low and they now have plants growing on them and are classified as wetlands.

The other thing I’d say on wetlands is it is imperative that the Department of Environmental Quality, the Department of Transportation and state agencies respect private property rights. In government circles, there is a tendency to somehow think that only government has the solutions, that people cannot be good stewards of their own property. Certainly, people need to follow the laws that are written, but there needs to be a respect for private property ownership and a willingness and ability to work with the people that own the land, to accommodate what they need to do, while at the same time protecting the environment.

Water quantity. Perception: Michigan is not protecting its groundwater, leading to potential groundwater shortages. Fact: Michigan has abundant groundwater supplies and is not in danger of groundwater shortages.

It’s interesting that you will not see auto assembly plants in Phoenix, Arizona. I grew up in Phoenix, went to high school in Scottsdale. I don’t remember a single auto assembly plant. We simply did not have the water out there for that. No state, east of the Mississippi river, allocates groundwater. No state. Minnesota, where the Mississippi has its source, has a water allocation program in its arid western half.

When I worked for the Arizona land department many years ago, the single largest division in the entire state bureaucracy worked for the water allocation program. A huge undertaking. Why would we want to do this in Michigan? We have passed a law, we dealt with the issue of mitigating where there are concerns, where there can be local impacts on groundwater, from heavy withdrawals, we need to address those. We need to have good hydrogeologic studies done. We’re also addressing that as a state, I think that’s a positive thing. We do not need to hire 100 more state employees to tell everyone they need a water permit before they can use groundwater. That’s not going to gain any environmental advantage, and it’s going to create more government. I just cannot understand why we’d want to do that.

The other thing that I would like to say is we should be very careful about trying to measure surface water and groundwater interface and try to keep that not too technical. My background is in geology, but there are many variables when it comes to surface water. Anyone familiar with the Perrier — or now Nestle — issue in Big Rapids, where they bottled the water plant (bottles of water) and we issued that permit under my watch? By the way that was a slam-dunk decision technically for the agency, very prolific aquifer, with the amount being withdrawn we had very good hydro-geo data, we had very little concern about that. The local judge recently issued an injunction against operating that plant; the appellate court is now dealing with that. I predict it will be overturned, the bar is set so low by this judge that you wouldn’t be able to process cherries, conduct any kind of economic activity at all in the state. One of the things I found fascinating in his decision is that he goes on and on about his trips in his canoe and his daughter getting married — it read more like "Gone With the Wind" or something than it did a legal decision. But all that aside, he was concerned because the water was lower when he was in his canoe. Since then the water is above historic levels. But this just illustrates the danger — that there are so many variables and factors in groundwater discharge and interface between surface and groundwater. Without getting too technical and going further into that, you should avoid that pitfall.

Exotic species. Perception: The ecosystem of the Great Lakes is being destroyed by the introduction of exotic species. Fact: There is a serious threat to the Great Lakes by the introduction of exotic species. I wouldn’t go so far as to say that it’s being destroyed, but it is a serious problem. The zebra mussel is a poster child for that problem; I think you’re all familiar with the zebra mussel. Now, some people like it because the water’s clearer. But it has affected the ecosystem of the Great Lakes. And of course we’re all concerned about what "the next zebra mussel" will be — you’ve all heard about the flying Asian carp, for example. You might not want to be in a jet ski if a flying Asian carp’s in the vicinity. So, we have these exotic species that we’re very, very concerned about.

Let me say this though: The shipping industry is an environmentally friendly industry. We transport on the Great Lakes many, many tons of various commodities, whether it is coal or iron ore or whatever. I would not want to see that many trucks put on our streets, our interstates, transporting all that material with all the associated air emissions.

So, it’s a very friendly industry but we do need to get those ships sanitized. The St. Lawrence Seaway is the entry point into the Great Lakes, we’ve got an opportunity to do that. We need to do it. We do need to help the Coast Guard and so I think this problem needs to be addressed.

The only other thing I’ll say on that is let’s not make the mistake on this issue that we’ve done in a lot of environmental issues: Let’s set the standard, let’s make them get the job done, but let’s not tell them how they have to do it. If they want to use chlorine as a process, which we do with our wastewater discharges, or if they want to use another system, let the various shipping companies innovate, as long as they meet the standard and let’s not prescribe how to do it. I think that would be a mistake.

I’d like to finish on the issue of waste. Perception: Michigan is running out of landfill space. The importation of Canadian trash is leading cause of the problem. Fact: There is not a shortage of landfill space in Michigan. Now, I’ve always found that as environmental director, one of the most frustrating issues to deal with is trash. Part of the reason, I think, is that environmental issues can be very difficult for the public to understand. They get awfully technical. But people can understand trash. They take it out to the curb, they notice the landfills, etc.

It would be a serious mistake to attempt to try to close our borders to the movement of trash. We export, and have exported for many years, more hazardous waste to Canada than we import and we move trash between border and states all the time. The interstate commerce clause considers it a commodity. Now, I don’t like what Canada’s doing, I suspect most of us don’t because I think they’re not being responsible in terms of dealing with their issue. But I think the solution to that is a political one. I think there will be some changes made there, but we should resist the effort to close those borders. Now, I know some say the way to deal with this is to penalize ourselves and we can easily do that by imposing a $3.00 tipping fee. Now, this mystifies me. Maybe I’m not smart enough to understand it. We’re going to impose a tax on our citizens or individuals, and our businesses and we’re not going to have any impact on Canadian trash coming in. We’re going to make the cost of doing business in Michigan higher for both families and businesses. We know what’s happened to manufacturing. So, I think we need to seriously look at this. I don’t understand where we’re going with that. It doesn’t make any sense at all. We need to continue to step up and urge our congressional delegation to use every means possible to put pressure on Canada. I think you’re going to see some big changes from Toronto coming but we need to be really careful about penalizing ourselves in order to solve this problem.

Let me just finish by saying that the United States of America has the most prescriptive, top-down command and control, environmental regulatory system in the world, bar none. I’ve been in Germany, I’ve looked at their system. I’ve been in Canada. Nobody does it to the prescriptive manner we do. We have made an awful lot of environmental gain, I think most people would agree the last 20 years, 30 years. We had rivers catching on fire in Ohio, we had city blocks you couldn’t see across because of smog. The environment’s gotten much better. We have not solved every challenge in front of us.

But we need to think very carefully about continuing to try to solve everything by more regulation. I’ll just share with you a discussion I had with a person who worked in hazardous waste in Michigan DEQ who I respected, highly knowledgeable. This person told me, ya know Russ, I can’t even understand these regulations, much less tell people exactly what they have to comply with. They’re that complicated.

A single air permit for an auto assembly plant here in Lansing is 600 pages in length. Just for the air permit. Instead of regulating businesses and people to death, we need to tap the strength of the marketplace. We need to be innovative. I was thinking just the other day that if we were building automobiles the way we do environmental protection in this country, I don’t think any of us would have bothered to go to the Detroit auto show. How many went to the auto show this year? Probably a number of us did.

Because if we built cars the way we protect the environment, we could still be looking at Model T’s. We stifle innovation, we prescribe everything that has to be done and how it has to be done. If we’re going to make that environmental gain which I think most citizens in Michigan really want to see, we’re going to have to do it in a cost-effective manner, we’re going to have to tap the marketplace, we’re going to have to be innovative. There are a lot of ways to do that, and I hope that in coming months the public debate will shed some light on how we might do that.

#####

Russ Harding is senior environmental policy analyst with the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich.