During an address before a joint session of the Indiana State Legislature, Ronald Reagan once quipped, “If the Federal Government had been around when the Creator was putting His hand to this State, Indiana wouldn’t be here. It’d still be waiting for an environmental impact statement.” These remarks were from a speech given in 1982, and although tongue-in-cheek, their meaning unfortunately still rings true 33 years later.
The federal government continues to roll out rules and regulations that are often overly burdensome and unnecessary. This has a particularly chilling effect on business and economic growth. What’s more, the Arizona business community is increasingly concerned that the regulatory agenda of the current administration unfairly impacts Arizona, and has the potential to cause significant economic harm to our state.
Last week I sent a letter to Sen. John McCain outlining five federal rules, primarily driven by the Environmental Protection Agency (EPA), that illustrate this concern:
First up, the EPA’s carbon emission rule for electric power plants. In this proposed rule, the EPA has assigned Arizona one of the most stringent reduction goals in the country – 52 percent carbon emission reduction by 2030, with an aggressive interim goal to achieve more than three-quarters of that reduction by 2020. Arizona’s utilities would need to retire a majority of the coal-fired generating facilities in the state to meet this goal. This transition is not economically feasible and would threaten the reliability of Arizona’s electricity supply.
Next, the EPA and the U.S. Army Corps of Engineers (USACE) issued a final rule changing the definition of “waters of the United States,” under the Clean Water Act. This brings vast swaths of land under the federal government’s jurisdiction and disproportionately impacts Arizona as a result of our unique landscape and infrastructure. For example, Arizona’s canal systems, drainage systems, ditches, and private property will be subject to federal government control, which limits our ability to manage water allocation and usage locally. According to a recent economic analysis, our system of canals is responsible for 30 percent of Arizona’s gross state product, yet the EPA found the definitional change would “not have a significant economic impact.”
The EPA is also considering a rule that would lower the air quality standard for ozone. Under the EPA’s proposed range, the entire state of Arizona stands to be classified as a non-attainment area. Such a designation brings significant consequences, including permitting delays, restrictions on construction, and threats to our federal transportation funding, all of which will undoubtedly make it more difficult for Arizona to attract and retain businesses.
Arizona is further disadvantaged by these environmental regulations because of the cost of proving so-called “exceptional events” and their frequency in our state. As we all know, Arizona is home to frequent dust storms during the summer months. These exceptional events occur regularly in Arizona and contribute to artificially poor air quality readings. Under the EPA’s current Exceptional Events Rule, a state can be subject to a non-attainment designation and other significant consequences unless it can prove that a poor air quality reading is the result of an exceptional event.
Finally, the federal Endangered Species Act lists hundreds of species as endangered or threatened, many dozens in Arizona. This results in high costs to industry by hindering development and economic growth and imposing exorbitant compliance costs even when the designation does not give an accurate picture of the species’ status.
Government regulation and oversight serves an important purpose. However, the federal government has a responsibility to ensure the regulations it promulgates are fair, equally applied, and result in an articulable benefit. Recent environmental regulations demonstrate a failure to recognize the limits of federal authority and to meaningfully engage the states to develop regulatory schemes that safeguard public health and safety, acknowledge the unique qualities of the individual states, and support a robust and growing economy.
Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry.
The Arizona Chamber of Commerce and Industry is committed to advancing Arizona’s competitive position in the global economy by advocating free-market policies that stimulate economic growth and prosperity for all Arizonans. http://www.azchamber.com/.