Environmental Policy “One” – Earth Day

 

Environmental Policy Presented April 22, 2018 Bill Gelineau for Governor

 

There are few items of governance that stir emotions more than discussions of the environment.    For some folks, it’s easy to have an intellectual exercise about the ideal rules of how people impact the environment.   For others, regulation can be at the core of their ability to make a living or to simply survive.

 

 My purpose here is to offer a clear set of ideas that I would recommend to the legislature and work to build a consensus to pass them.    As with other matters, the Governor can express disdain over business as usual with the use of the veto pen.    Only on things that a large majority of the legislature is willing to confront will they overcome a veto.    So, my goal would be to work with fair-minded legislators who care about clean air and clean water.    And to stand in serious opposition to those who disregard those priorities.

 

Many people perceive Libertarians as masters of cut-cut-cut.    However, most understand that pollution and other types of environmental degradation are, essentially, a property rights matter.

 

It should be understood that it is not my goal to be the “Libertarian Governor”.   If given the opportunity to represent my Party, I would use those philosophies as a guide to behavior – and not a set of chains.   I pledge to work with others who are currently in other political parties that share the goal of solving problems.

 

This proposal is not designed to solve all environmental issues – nor am I attempting, without additional counsel, to analyze all the interlocking connections and requirements as laid out in the Environmental Protection Act.    However, this is set out as the broad vision of concerns and attempts to address several large issues which have affected our state in the past few years.

 

The four specific cases and proposals here are involving water quality issues.    Our air, food supply, and other areas of our environment are deserving of discussion.   But, I’ve made water quality a primary point in the campaign.

 

Bill

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The broad areas that I will address in this proposal are covered in three areas;

1.    What role does the State play in ensuring an appropriate environment for all of our people?     This includes how the State organizes its relationship with political subdivisions – leadership responsibilities, financial controls, and a long-term plan for sustainability.

2.     How do we organize tax and fee policies to ensure the resources needed to meet the goals laid out? And what moral guideposts matter here to justify such things?

3.     Responsibility and regulation of corporate activity.  This is not to say that I’m not concerned about actions of individuals.   But, most pollution and other environmental impacts are the result of economic activity in the process of transport or manufacture of products and the consequential risks.

I accept as a premise that economic activity – which broadly has created wealth, opportunity, and the best standard of living in the history of mankind – is generally good.   All efforts to regulate should have a balance of impact and responsibilities.

These three ideas really could each be expanded into extensive discussion.   But, to aid in explaining how they work together, here are several specific proposals.

My tax and regulation policy on this is as follows.   And yes, a Libertarian used the “T” word.

1.      Assuming they meet the guidelines for approval, companies should not be summarily prevented from building or maintaining facilities. However, I believe it is appropriate for the Governor to appoint a commission of interested parties to determine what places, if any, would be designated by the legislature as permanently “out of bounds”.    It’s not clear to me that even the Straits would be so designated.

2.      Ultimately, when dealing with major environmental disasters, it comes down to this:

• How do we prevent them?

• How do we insure that the party causing the problem pays for it?

• What do we do when no liable party can be identified?

These are hard issues that challenge not only politicians, but companies, employees, and ultimately the environment itself.

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Proposal 1 –  Develop a solid list of substances and their risk category

Rather than get bogged down in too much detail, our state should adopt accepted standards of risk for substance contamination.   Most of these already exist via EPA standards.

Within current law, the DEQ will identify and categorize risks for use in application of the IFT shown in Proposal 2.

 

Proposal 2 – Broad application of the Industrial Facilities Tax

Under this proposal, the existing IFT would be utilized to ensure that any company involved in the use, transport, or manufacture of products which contain designated substances would be subject (with very limited exceptions) to the new application of this assessment.

I will submit legislation which would provide for assessments for companies which would be calculated under different possible categories.

1. Companies in which the value of the designated substances are a significant percentage of their gross sales. (for example, a company that moves oil across the state)

2. Companies who use small quantities of toxic substances as essential components of their otherwise non-designated products.

• Companies in Category A may be assessed some range – perhaps 0.25 to 0.40 % of Gross Sales.

• Companies in Category B may be assessed in a range. 2% to 3% of the wholesale cost of the product.

These are not designed to be specific numbers, but rather to point out that the modest number of companies affected could manage this process without inordinate impact.

The last few years have been very generous to business in Michigan.   Both State and Federal tax policy has provided enormous breaks – many of which I support as good for economic freedom and opportunity.   However, these assessments are not to be seen as taxes – but, rather as user fees needed to ensure that the public is not given the bill for the misuse or accident of the companies involved.

The ultimate goal of this fund is to ensure the necessary resources are available to clean up problems for which no company can be held liable.   To often, because companies become insolvent or problems are detected long after a company no longer exists, serious problems go without funding.     The IFT Environmental Rehabilitation Fund will be sequestered for these unique purposes.

 

Proposal 3  – Raise the level of limited liability of any company handling  these substances.

I will submit to the legislature a plan to raise the liability limits for companies handling these dangerous products.     In doing so, we will require a level of insurance coverage commensurate with the risk activity.

Appropriate mandated insurance liability will result in business handling these toxic substances being pushed by the marketplace to enact best practices for safe handling and maintenance of facilities – thus, reducing the risk of any disaster in the first place.

This is not a new idea.    Libertarians have long debated the value (or problems) with limited liability.   On balance, society has decided that unlimited liability is unwise and counter-productive.    But, thresholds which are too low allow bad actors to escape responsibility.

The entire purpose here is to do two things.  1) Make it less likely that companies involved in serious environmental problems do not simply declare bankruptcy and walk away; and 2) put appropriate insured resources in place to cover the costs of cleanup.

 

 

Proposal 4 –  Immediately legalize industrial hemp and related products.

Michigan continues to lose out on enormous economic opportunities due to the inability of entrepreneurs to develop hemp as a crop.    Many of our largest manufacturers are using imported hemp as a substitute for plastic.   Our agricultural sector could benefit from renewed opportunities to compete for this work.   Further, hemp as a crop-rotational can help with erosion control and revitalization of soil components.   Canadian farms exported almost $150 million in hemp products in 2016.   This is a product whose time has come.

The miniscule research projects now permitted in the Dept. of Agriculture  will not provide the basis for a competitive hemp industry.   It’s time to get the State out of the way and resume our place as a innovative agricultural engine.

Isn’t it time we stop running our State on fear?   

 

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Summary:

• We want to do everything reasonable to ensure that companies operating in our state follow accepted practices to PREVENT most environmental problems.

• Raising the limit of liability and mandating appropriate insurance as part of our regulatory regimen will help insure that companies will prevent problems from occurring. And, when environmental disaster inevitably occurs, companies held liable will have the resources (insurance) to make the public whole.

• Undoubtedly, we’re going to have problems whose cleanup is the responsibility of companies long out of business. The environmental fund recreated by the new IFT will make sure those resources exist to clean up damaged areas.

 

 

Lastly, I’d like to explain my vision of how this plan will help solve several problems now being discussed around our state.

Most politicians are unwilling to say out loud in any specific way what to do with these problems.    Here are four specific situations and how some these proposals will help.

 

• Line 5 – the Enbridge Corp oil line through the Strait of Mackinac.

There is no more “clear and present danger” to our environment than a possible oil spill in this sensitive area.   Information regarding the condition of the Line has changed even in recent weeks – so, I want to explain my proposal more generally.

It may be the case that an Environmental Impact Board might recommend that the Straits simply not allow new underwater facilities.   We should be open to the discussion.   But, at minimum, we should require Enbridge to engage the best practices to prevent any problems from occurring AND make sure they have the means to make it right should something happen.

 

• PFAS and other “super toxins”.

Some would have you believe that the science on this is incomplete or inconclusive.   BUNK.    There is no question that there are serious toxins already in our environment that need clean-up.

This plan will work affirmatively to help prevent any new substances being introduced into the environment.    Companies will be required to comply with reasonable and yet effective regulation via the insurance market to do all those things which needed to avoid higher premiums.    The private market will effectively require better action much the way Underwriter’s Laboratories did for electricity.

 

• The Western Lake Erie Algae Bloom – Agricultural Run-Off

Agriculture is one of the bedrock industries of our state.    Even automobiles pale in comparison to the historic, cultural, and sheer volume of value that all levels of this industry create.   From forestry to poultry – and from fruit trees to urban farms.   We in Michigan grow a lot of stuff.  And we do it well.

But, there are serious problems that our legislature has ignored.    We do not have checks in place to ensure that drinking water is secure.    The Western Lake Erie algae blooms have become an annual occurrence.  Pesticides; Animal Waste; Concentrated Animal Feeding Operations (CAFO’s) – all contribute to water quality issues – in many parts of our state.

Each of these problems would (with designated exceptions) be subject to the Enhanced IFT.

One of the standard for exception might be a family farm with revenue below a certain target in which the animals per acre is below a density.   (which is not a license for ignoring current rules preventing flushing waste down the local drain)

The point is that we need to stop pretending that these serious problems will go away.

 

• Flint Water Crisis

The problems in Flint are the by-product of many other problems that have developed over time.    This is not a simple problem – but, here are a few solutions that can help prevent new occurrence

Massive municipal water systems.  Let’s not fool ourselves – size matters.   Large, overgrown systems which become financial dependencies of our cities and counties lead to all kinds of problems.    Let’s do this:

1. Repeal mandatory hook up rules. Home ownership costs are driven by excessive mandate – and individuals do not have the power to manage their ownership in a municipal water system.    Let’s encourage private water system ownership.    Lake Bella Vista (Rockford area) is a shining example of how private water systems can work.

2. Cost assessment. Like so many other public sector jobs – people working for these systems should be paid on scale with similar skills in the private sector.      Many private systems provide service at a fraction of the price.

Sustainable Infrastructure. Like it or not, some of these aging systems will need to be replaced.

The State can provide planning assistance in organizing financing to get Flint and other cities’ systems up to grade.    Ultimately, the citizens of Flint must make choices about priorities – as do every other community in Michigan.

It’s unfortunate to see an “us versus them” mentality among some of people – blaming residents for the malfeasance of the water managers is unacceptable.    And it disappoints me to see folks whose local system is working fine not recognize that the individual water user in Flint did not manage their water system any more than they manage theirs.

 

Let’s find ways to work together toward a solution.

 

• Seeing the whole problem.

Real leaders know that the problems in Flint are repeated on a smaller scale in many parts of Michigan.    Learning all the aspects of risk will take a lot more work.    I pledge to continue working with others to find practical, workable solutions.

Some of our ideas will be heavily influenced by Libertarian thought, which emphasizes efficient, market-based solutions.    These may take years to implement.   But, we should rely on fact-based judgment and not rigid philosophy.

Some of these ideas will no doubt send the Libertarian purists into a froth.    That’s ok, too.   Our goal is to work in a positive direction and find solutions.   Hopefully, in time, we prove our worth by engagement and good ideas.