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The Insider

Skepticism Rises Over Private Sustainability, ‘Cooperative Federalism’

EPA’s embrace of “cooperative federalism” and industry’s widespread trend toward so-called environmental, social and governance (ESG) sustainability-focused action are meeting a rising tide of skepticism from environmental groups and Democrats who say letting the private sector or GOP define those terms has left them open to abuse.

Inside EPA’s Environment Next has exclusive coverage of the growth of private and state-focused environmental governance. Environment Next is a free service to our subscribers featuring wide-ranging looks at coming developments for environmental protection and policy, including interviews, in-depth reporting and profiles of key figures, companies and other groups that are reshaping regulation and private governance on air, water, waste and climate change. The features offer a new way of reporting about the shift from command-and-control regulation to innovative, market-based measures and other efforts, including voluntary and industry-led programs.

This week, our David Clarke wrote about blue states’ attacks on the Trump administration’s claims of cooperative federalism to justify rolling back federal air, water, climate, waste and other policies and leaving them to the states instead. While most GOP-led states have welcomed that shift, Democrats say EPA’s opposition to their efforts to set even more stringent standards shows that the administration’s approach is far from cooperative:

From The Editor: States Show Assertiveness Resisting EPA ‘Uncooperative’ Federalism
Several states are showing assertiveness in pushing back against what they see as EPA imposing deregulatory mandates on them or undercutting state environmental protection efforts, suggesting that unlike the rosy picture of “cooperative” federalism the agency paints of its work with states the reality is becoming more like “uncooperative” federalism.

Most prominent among those conflicts is the Trump administration’s clash with California that started over vehicle greenhouse gas standards and has now boiled over to include threats to revoke the state’s delegated Clean Water Act authorities and yank federal highway funds over allegedly inadequate Clean Air Act implementation plans.

That fight has drawn rare push-back from the Environmental Council of the States (ECOS), which represents most state environment commissioners and rarely wades into partisan battles due to the need to keep harmony among its diverse membership. ECOS Executive Director Don Welsh in September wrote EPA saying its “unilateral” threats against California “violate” cooperative federalism principles and demanding a meeting with Administrator Andrew Wheeler to discuss them.

Welsh wrote that the administration’s conduct seems to violate the “Cooperative Federalism 2.0” principles that ECOS released in 2017, which the states expected to mark the end of a decades-old “top-down” model of state-federal policymaking.

Meanwhile in the private sector, ESG principles are continuing to gain vocal support from major companies -- especially in the finance sector, where announcements of new sustainability-focused investment initiatives or banking programs have become nearly a weekly occurrence. But many of the groups that have long called for the private sector to account for environmental harms are now warning that some ESG efforts define the term too broadly to be useful:

Finance Companies Promote ‘Sustainable’ Investment But Skepticism Grows
Finance and investment companies are pushing ahead with adoption of so-called environmental, social and governance (ESG) principles, including massive investment bank Barclays’ creation of a centralized Sustainable and Impact Banking group, but the trend is attracting growing skepticism over how the firms actually define ESG.

An Oct. 26 National Public Radio article says that despite the growth of ESG options, “no one can quite agree on what exactly qualifies -- or disqualifies -- an investment option from being marketed as sustainable. This has fueled skepticism among investors, activists and lawmakers alike regarding the legitimacy of ESG investing.”

For instance, some ESG funds completely exclude areas like fossil fuel infrastructure, while others are merely “‘tilted’ toward sustainability leaders and away from sustainability ‘laggards’ in a given industry,” meaning investors hoping to focus their money on green energy could still end up supporting oil and gas firms.

Despite that skepticism, the push for private-sector sustainability practices is continuing. For instance, a new study from the Australia-based policy research group the International Institute for Applied Systems Analysis (IIASA) that highlights changes the “land sector,” including forestry, farms and food-supply industries, could make to hit the global target of limiting climate warming to 1.5°C:

Policy group’s study details path toward carbon neutral ‘land sector'
A non-partisan international policy group’s novel study says efforts to reduce greenhouse gases from the “land sector” that includes agriculture and forestry could make the industry carbon neutral by 2040 and a “net neutral carbon sink” by 2050, which could help meet the United Nations’ goal of keeping temperatures below 1.5°C to prevent catastrophic climate change.

According to IIASA, the new roadmap goes beyond past efforts by identifying 24 land management practices that could contribute 30% of the mitigation needed to keep temperatures below 1.5°C, as called for in the Paris Agreement. Actions in the land sector, which already naturally sequesters 30% of carbon emissions, would also create other social and environmental benefits.

Environmentalists are also continuing their work to leverage new technology for public and private-sector use, as we showcased in our profile of the Chesapeake Conservancy and its use of artificial intelligence-driven land mapping to support restoration of the Chesapeake Bay:

Profile: Chesapeake Conservancy
Since its founding in 1985 the Chesapeake Conservancy has sought to leverage advanced data analysis to bolster the ongoing campaign to clean up the Chesapeake Bay -- but this year the Maryland-based nonprofit says it took a leap forward with that effort by making artificial intelligence (AI) a core part of its work.

Finally, this week Environment Next profiled the presidential campaign of Democratic billionaire Tom Steyer, who is a long shot for the party’s 2020 nomination but a potentially major player in future policymaking:

Presidential Profiles: Tom Steyer
Tom Steyer’s presidential bid is expected to fail given his low polling numbers and near-certainty he won’t even come close to being a viable Democratic primary contender, but his singular focus on climate change could help elevate the issue in a future Democratic administration and his ability to spend millions on Democrats winning could have important implications for whether Congress can approve new environmental legislation after 2020.

Environment Next will continue to cover the balance between federal, state and private-sector environmental governance, and the push and pull over the standards all sides are trying to meet.