EPA's Voluntary Compliance is a Government Shell Game

The mission of the Environmental Protection Agency is quite clear. As if the name of the agency weren't enough, the agency states quite plainly that its mission is "to protect human health and the environment." That's the whole mission; the EPA is not charged with "protecting human health and the environment unless such efforts would interfere with large business concerns, campaign donors, or anything else." There are other agencies geared toward supporting business, the economy, jobs, and even campaign contributions, I am sure. Each department should follow its mandate according to its own guiding principles without political considerations. That's the way it should be, but in my own experience working for a major American electronics manufacturer, I have seen how government agency managers appointed to positions of authority within these agencies by politicians, are more worried about making those politicians look good than in doing the job for which they are paid by the American taxpayers.

The level of pollution clouding the EPA's focus was made abundantly clear by Congressional testimony submitted November 8^th, 2007, by Stephen L. Johnson, the Bush-appointed director of the Agency. In his testimony, Johnson argued that the EPA should not have to regulate CO2 emissions as pollutants, even though a recent court decision classified CO2 emissions from automobiles as a regulated pollutant under existing law. Furthermore, he said, even if the EPA is forced by the legal ruling to regulate CO2 emissions from cars, the EPA would consider that the court ruling only applied to mobile sources and that CO2 emitted by power plants and other stationary sources was still not classified as a regulated pollutant. Texas oilmen, no doubt, raised a toast to his honor.

Even before that, the focus of the EPA's political appointees was clear. In a meeting of the New Product Planning group at Bose Corporation, of which I was a member at the time, one of the company's senior executives told us of the result of his meeting with EPA officials in Washington in order to direct our future product development goals. The meeting was on the subject of Energy Star compliance. The Bose executive told us that he went into the meeting expecting that Bose would be asked to include Energy Star compliance in all of its products going forward, and that he hoped only to wring, from them, as many concessions as possible for that acceptance.

In fact, during his initial meeting, that is almost exactly what happened. Two career EPA staffers, with dozens of years at the agency, made a passionate plea for Bose to begin implementing Energy Star compliance in all products as soon as feasible. They made compelling arguments and had laid all the groundwork for an agreement. At that point, the group was joined by a more senior EPA official -- one who was recently appointed, or hired by a recent appointee, according to the Bose executive. He told us that the official thanked his two direct reports for their efforts and dismissed them from the remainder of the meeting.

The Bose executive summed up the ensuing conversation as the Senior EPA official saying, "I don't know what those two were asking and I don't care. What we really want is to add Bose to the list of companies complying with Energy Star requirements on a voluntary basis. If you agree to make just one product that meets Energy Star requirements at some point in the near future, that's good enough for me." I'm sure that's a paraphrasing of the discussion, but it was certainly the end result. So instead of a large American manufacturer of consumer electronics products agreeing to implement Energy Star compliance across the board, the Bose executive told us that, as a result of this discussion, we must honor this agreement to include Energy Star compliance in one of the new products that was currently on our upcoming development list.

I argued that even though the agreement mandated a single Energy Star compliant product, we could and should, in fact, include it in all of our products, or at least all of those in which it was feasible. Because it was our job to define Bose product requirements, the senior Bose executive told us that we could choose to include it or not at our own discretion, but that the agreement required a single compliant product so we needed to commit to that.

In practice, every new product development project has to meet business requirements as well as functional requirements. If marketing determines that there is opportunity for a new home theater system at a retail price of $999, for example, then the manufacturing cost of the product is fixed by that decision. The retailers' margins get subtracted first, then the manufacturers' margins get subtracted, and you are left with the budgeted unit cost for the product. Every feature we add to the product costs money. When making the hard decisions about what to leave out of the product in order to meet the budget constraints, product developers are sometimes left with difficult choices. Should we eliminate Energy Star compliance or use a lower-capacity hard drive that won't store as many songs as the one originally planned? Without a direct mandate to the contrary, Energy Star compliance often comes out on the short end of that equation.

Once we had reached the collective decision that there was little or no marketing value to adding Energy Star compliance, some of us started including the requirement: "product will meet the intent of Energy Star requirements, but need not include labeling and communication requirements." In the end, we did meet the mandated one product, one of the powered Acoustimass home theater speaker systems, I think, and a few more besides. Other products met Energy Star's energy consumption requirements, but weren't touted as such because we needed to save the cost of the Energy Star labels in order to meet cost targets. Still others had no provisions to reduce stand-by power consumption.

While the company, as a manufacturer of electronic appliances, had been prepared to include Energy Star requirements across the board, the EPA's political focus on appearance over substance resulted in watering down that requirement to a single product. Because the individuals responsible for defining new products felt it was important, we made more than one product that fit that requirement.

While there are many individuals who are passionate about the stated mission of the EPA, just look at the exodus that occurred within that organization during the Bush Administration to see how that organization treated them and their views. In fact, in 2002, the EPA's director of civil enforcement, Eric Schaeffer, resigned according to an AP report on Newsday.com, saying that the Bush Administration "seems determined to weaken the rules we are trying to enforce." And further "that the message being sent by the Bush administration has prompted utilities accused of clean air violations 'to walk away from the table' and refuse to negotiate settlements." If those enforcement negotiations happened anything like the Energy Star compliance negotiations, then it's little wonder none of the offenders would cop a guilty plea. Remember that less than eight months prior to his resignation, Schaeffer had received an award commending him for his ability to force favorable settlement agreements with major pollution regulation violators.

Sources and Background Information:

www.epa.gov/epahome/whatwedo.htm

www.nyenvirolaw.org/PDF/Newsday-3-1-02-SenatePanelAfterResignation.pdf

www.sej.org/publications/watchdog-tipsheet/epa-gag-order-brings-call-for-johnson-resignation-part-1

www.philly.com/inquirer/online_extras/20081207_An_Eroding_Mission_at_EPA.html?page=1&c=y

www.energystar.gov/index.cfm?fuseaction=estar_partner_list.showPartnerResults&s_code=ALL&partner_type_id=MANUFACTURER&category_id3=ADVD&country_id=ALL&category_id_list=1%2C2%2C3%2C4%2C5%2C6&resultsperpage=20¤t_sort_column=NAME¤t_sort_order=ASC&layout=default

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