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shertex · #3 02-11-2015, 04:36 PM

Quote:

Originally Posted by Skippy

I get a subscription wall. Care to summarize?

I do too when I go straight to WSJ....somehow it lets you through when you go through Real Clear Politics link. Anyway, here's the article:

The diesel engine is a wonder of torque and thermal efficiency, but it emits soot and other unpleasantness. The Environmental Protection Agency is a wonder among regulatory agencies, having discovered authority to regulate diesel-engine pollution in other countries.

Or maybe not so wonderful: Supreme Court Chief Justice John Roberts has more than once criticized what he has called “the growing power of the administrative state,” by which he presumably means arbitrary power. Here’s such a case: Sweden’s Volvo last month appealed to the high court to overturn EPA penalties imposed on Volvo engines not built in America, not sold in America, unlikely ever to end up in America, and not subject in any way to the EPA’s statutory jurisdiction.

Volvo will be supported by a National Association of Manufacturers friend-of-the-court brief written by none other than liberal superhero Laurence Tribe of Harvard. Across the spectrum, philosophical types share a distaste for unauthorized behavior by government enforcers, in this case via the increasingly popular and troubling method of the arbitrary consent decree.

But there’s so much more to the Volvo story. If consistent and impartial parenting is the way to healthy-minded children, the EPA is a Freudian disaster, raising a bunch of regulatory tattle tales and industrial saboteurs.

In 1991, the EPA ignored complaints from several makers of non-road engines that rivals were cheating, in order to save fuel, on emissions rules for oxides of nitrogen (NOx). Then environmental groups took up the same complaint, whereupon the agency demanded face-saving consent decrees with numerous engine makers, including two Volvo affiliates.

In essence, the engine makers apologized by agreeing in 1999 to accelerate by a single year compliance with a new emissions standard scheduled to take effect in 2006.

Meanwhile, with another NOx standard looming in 2010, Navistar sued the EPA claiming rival engine-makers were seeking to meet the rule with a defective technology. In turn, Navistar’s competitors sued claiming the EPA was unfairly favoring a defective technology pursued by Navistar (these are only the barest highlights of what became a truck-makers’ legal holy war).

While all this was going on, a Navistar joint-venture partner, Caterpillar, complained that 7,262 Volvo stationary engines made in Sweden before 2006 had violated the 1999 consent decree. Now let’s credit Caterpillar with a certain paperwork ingenuity: The Volvo engines were not imported to the U.S. and were made by a Volvo affiliate that wasn’t a party to the consent decree. EPA itself happily certified the engines under its then-current NOx standard, only changing its mind four years later, prodded by a competitor with a clear interest in damaging Volvo’s business.

To complete the parody, a federal district court would later agree that the 1999 consent terms “do not clearly apply” to the engines in question, but upheld an EPA penalty anyway because Volvo otherwise might enjoy a “competitive advantage” against engines to which the consent decree applied.

Volvo would not be relegated to the poorhouse if it paid the $72 million fine. The company has persisted in its fight, says outside counsel Joe Hollingsworth, mainly because it’s highly annoyed (not his exact words) at how the company has been treated.

Let it be said that the EPA’s NOx regulation must have done some good for the American people, though how much good is hard to know. The EPA relies on dubious extrapolations to estimate the benefits to public health. What’s more, the agency appears to have stopped publishing estimates of NOx pollution after 2005. Maybe that’s because the EPA’s focus has shifted to climate change, and its NOx regulations actually increase greenhouse emissions by increasing fuel burn.

Weighing cost against benefit is always a good idea no matter how heroic-sounding a regulation’s stated purpose. The same NOx rules just ended the 70-year U.S. career of the most successful freight locomotive in history, built by Electro-Motive Diesel. Now U.S. railroads face a locomotive shortage, inevitably leading to increased emissions as freight shifts from rail to truck.

One cost seldom mentioned but evident in the Volvo case is the cost of politicizing entire sectors of the economy. Wastefully, companies become obligated to fight each other with lobbyists and lawyers instead of competing in the marketplace.

So here’s Mr. Roberts’s chance. Interested parties will be filing their briefs in the next few days arguing why the Supreme Court should hear the Volvo appeal. If reining in arbitrary bureaucratic power is important, an opportunity is at hand.