Delegating the Delegation, or Outsourcing Regulation

It’s bad enough that Congress long ago took up the bad and unconstitutional habit of delegating its lawmaking authority to independent regulatory agencies—what we and others refer to as the central feature of the Administrative State.  But this kind of unaccountable government is even more egregious when the regulators essentially outsource their assigned policymaking tasks to ideological interest groups.

That appears to be how the EPA came up with its recent proposed scheme to regulate greenhouse gas emissions under the Clean Air Act.  According to the New Yorks Times, the EPA essentially allowed the Natural Resources Defense Council to formulate the entire plan.  In one of those now typical New York Times evasions, the original headline read “How Environmentalists Drew Blueprint for Obama Emissions Rule,” but now the headline reads: “Taking Oil Industry Clue, Environmentalists Drew Emissions Blueprint.”  Nice bit of moral equivalence there, as if the oil industry had ever written an EPA rule.  But there’s no evading reporter Coral Davenport’s expose of what went down:

David Doniger and David Hawkins, and the scientist, Daniel Lashof, worked with a team of experts to write a 110-page proposal, widely viewed as innovative and audacious, that was aimed at slashing planet-warming carbon pollution from the nation’s coal-fired power plants. On June 2, President Obama proposed a new Environmental Protection Agency rule to curb power plant emissions that used as its blueprint the work of the three men and their team.

It was a remarkable victory for the Natural Resources Defense Council, the longtime home of Mr. Doniger and Mr. Hawkins and, until recently, of Mr. Lashof. . .

To crunch numbers, the council hired the same statistics firm used by the E.P.A. in order to ensure that the agency could more easily adopt the plan. The cost, Mr. Doniger said, was “a few hundred thousand dollars.”

EPA administrator Gina McCarthy rushed to denounce the story, but in a rather unconvincing fashion.  But there’s a much larger point to be made about this episode.

One of the hazards of government regulation from the very beginning was the problem of “regulatory capture,” according to which the industry subject to regulation (i.e., railroads, airlines, trucking, banking, etc) would dominate the agency and turn regulation into an anti-competitive protection racket.  This was certainly the case with airline and trucking regulation for decades, and still today with drug regulation and piles of state and local regulations that stifle new competition (just ask Ubercars).

With the rise of generalized, economy-wide regulatory agencies in the 1970s, the problem now is not industry-capture, but ideological interest-group capture.  The EPA is now effectively a partnership between government bureaucrats and environmental interest groups.  The recent greenhouse gas regulations are not the first set written effectively by the NRDC, and won’t be the last until Congress reasserts itself and puts an end to this kind of unconstitutional delegation of lawmaking authority.  Over to you, Philip Hamburger.

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