by Stephen Lacey
April 02, 2018

Stephen Lacey: This is The Interchange, conversations about the future of energy from Greentech Media. I'm Stephen Lacey. Shayle Kann is away. He'll be back next week. In this episode I sit down with former EPA chief Gina McCarthy. What's it like seeing the Trump administration take a wrecking ball to her life's work on public health and climate change?

Gina McCarthy: What's it like? It's not fun, let's just start there. They came in with a things-to-do list, and that things-to-do list seems to have been written by business without regard at all for the public health and the environmental impacts that would result.

Stephen Lacey: This is an anomalous moment in the history of America. After all, environmental policy over the last four decades has been more or less bipartisan, at least much more bipartisan compared to today. I figured it was a good time to check in with Gina. This moment demands an explanation. When I say the Trump administration is going after her life's work I'm not embellishing. She's devoted her entire career to this area, and was partly responsible for some of the most important climate laws we're talking about today. The legal decision to use the Clean Air Act to regulate greenhouse gases, the North East Carbon Cap and Trade System, and, of course, the Obama era Clean Power Plan that was developed when she took the helm of EPA in 2013.

Gina doesn't neatly label herself an environmental progressive. She's just super passionate about public health and climate. She's been criticized by many on the left for not doing enough and for supporting the Obama administration's all-of-the-above approach. She's known for running an open regulatory process with business involved, making sure they have a voice in rule making. I recently paid Gina a visit at Harvard's Center for Health and the Global Environment where she now serves as director. I can confirm that she does not have a secret $43,000 phone booth like the new guy sitting in the EPA, although that would have made a great podcasting studio. The conversation was wide in scope. We hopped from politics, to the future of the economy, to the market forces at work in the energy sector, to Scott Pruitt himself. We started with what else? The toxic partisanship in environmental politics.

Gina McCarthy: The vehemence of the partisanship now is what I think I do find surprising because I worked for five governors. I was appointed by Governor Dukakis, and I worked for, I think, two years for Governor Romney, and we made progress all the time during those years. We may have had differences in terms of the rate of the progress, but we never went backwards. We never questioned the mission. They all understood that we needed to protect resources and public health. It just wasn't like this before. Frankly, it's one of the most disturbing things that has happened over the course of at least my lifetime in this career.

Stephen Lacey: A lot of people are searching for the answer of why, and, clearly, it's partly a function of money. There also seems to be a divergence between the local politics and the national politics. Then when you actually get down to the local level there's a lot less disdain for environmental regulations. What are your thoughts on what drives that wedge in environmental politics?

Gina McCarthy: Stephen, I think we've all sort of scratched our head to try to figure that out. Clearly, money plays a role. I think money in politics plays a role, not just individual businesses that see an economic advantage to deregulating, but, really, I think there's a concerted effort to have this be a campaign that is launched. I also think that the fact that the pollution challenges that we faced early-on that were so visible have diminished because of our success.

It's what makes the United States a great place to live is the fact that we do have really strong environmental standards, and we enforce those standards. It really provides everybody an opportunity to have a healthy living existence. I know we have communities left behind. I know we still have pollution challenges. I know we have to reinvest in things we already invested in if we want to keep them current and successful and efficient. Most people, I think, look outside and don't remember that Los Angeles and Pittsburgh and Tulsa, Oklahoma were all Beijings at one time. We cannot afford to go back there, so we have to keep the messages strong and have people understand that we have to keep investing in this or we will, indeed, lose it.

Stephen Lacey: What do you think your greatest accomplishments were at EPA?

Gina McCarthy: Well, Stephen, I went there to really work on the equality in climate first. That was the office that I first managed as an assistant administrator. I went there to try to accomplish a couple of things in particular. I wanted to really work on the cross-state air pollution rule, is what we ended up calling it. Basically, I knew in New England we could never achieve clean air no matter how much we spent in order to reduce pollution because there were a lot of other, mainly power plants in other states that were simply sending their dirty air outside their own state boundaries. It was sort of weaving its way through the air to New England, and I didn't like it. I thought it wasn't fair. I thought it wasn't appropriate, and I knew that that's not what the law called for. I wanted to take care of that issue. I just wanted everybody to be treated fairly and not have certain regions be so dramatically impacted by pollution that we could not ourselves correct. We needed the federal government to stand up.

I wanted to do the mercury and air toxic standard, which was how do you reduce a neurotoxin that's being emitted in a way that's reasonable where the technologies are there and get everybody up to speed on that. I thought that was important for our kids and our future generations. I really wanted to take action on climate, but during the first term of the Obama administration the work was really focused on getting Congressional action. As we all can painfully remember it fell short by two votes in the senate from moving forward with a cap and trade regime for greenhouse gases.

That's why, really, when the president and I discussed whether or not I wanted to stay on in the second term and, indeed, take over in Lisa Jackson's great footsteps at EPA, what we talked about was climate. That's what I really wanted to do from day one was to really make progress on what I think is the most significant public health challenge of our time, which is why we're sitting here at this school of public health.

Stephen Lacey: Okay, so you decide that you want to step up efforts to combat climate change. You need to develop some kind of regulatory construct to step in where Congress wouldn't. Is that something that you want to do? You know how hard it is to craft that kind of rule. You know how long it's going to take. You have this deadline of the end of the second term. A lot of people maybe assume that the EPA just wants to step in all the time and regulate, regulate, regulate. As you hinted to you're trying to do something that Congress would not do. Is there a preference for some kind of legislative action? I'd like to know kind of what goes into that decision to develop a rule like the Clean Power Plan.

Gina McCarthy: Well, let me just be clear, Stephen. I'm not new to this issue. I have been working on the issue of climate change for a long time. Remember, it was Mass. versus EPA that actually pushed this all the way to the Supreme Court that tested the Supreme Court on whether or not the Clean Air Act was an appropriate tool to use to regulate greenhouse gas emissions and, indeed, was it required.

Stephen Lacey: Right, this is the legal foundation-

Gina McCarthy: That's correct.

Stephen Lacey: ... of developing regulations for climate change.

Gina McCarthy: I was part of the whole group that was looking at these issues and recognizing that climate change was happening, and knowing that we needed to have tools to begin to more effectively address this quickly and deeply because the climate was changing as we were sitting and thinking about it. I've been working since before that. I actually helped to formulate and craft the regional greenhouse gas initiative here. I knew that there was a responsibility that the Supreme Court clearly articulated to EPA that wasn't being moved on.

It wasn't that I was guessing whether or not EPA had the authority or responsibility. The Supreme Court made that pretty clear as long as the regulation you're looking at is looking to reduce emissions in a sector where it's impacting health or wellbeing. I knew we had to do something. The administration was very clear originally, and I supported this wholeheartedly, was that if Congress acted, that there may be a more flexible tool that could be built on over time to address climate change in a way that might be more effective than a single regulatory standard.

When that failed, however, we knew that there was still an obligation on the part of EPA. Well before I became administrator we started exploring those issues because we were in litigation about it. We had been challenged why we weren't regulating in concert with that early Supreme Court decision. We didn't want to be forced into it. We wanted it to be a broad enough discussion, so we started well before we ever put pen to paper in the second term to have a discussion on how we would do this reasonably, how you could do it understanding how the energy system worked, understanding the transition that was happening to clean energy and to investments in energy efficiency, which continued to escalate in a great way.

We wanted to know how the utilities as well as other stakeholders, including environmental advocates, envisioned an administrative executive response to this, as opposed to a more systemic cap and trade or price on carbon, which we did not have the authority to do. That was solely in Congress' bailiwick. We were really implementing and understanding, not just our authority, but our responsibility to regulate greenhouse gases under the existing Clean Air Act.

Stephen Lacey: There's a whole subgenre of energy journalism quoting utility executives who are responding to the Clean Power Plan and saying, "This is where the industry is headed." You can just go down the list and you can see pretty much every major utility executive speaking at a conference or speaking to a journalist and saying, "We're going to be building renewables and natural gas. This is where things are headed, and this is why we think we can meet the requirements of this regulation." Around the 2013 timeframe when you stepped into the EPA was when things really started to shift. Before 2012 I think a lot of people's perception was that the Obama administration was talking about climate change, but talking about it as if there were some economic trade-offs.

Then when we started to see the cost of renewables come down, natural gas really have a major impact in the power sector, there was a noticeable shift in the politics. There didn't seem to be a talk of a trade-off. It was, "Wow, the industry can meet this. This is where investments are headed, so we're just doing what's in line with what's the private sector is doing already." How did that shift the public conversation around the Clean Power Plan and climate change in your eyes?

Gina McCarthy: I think it had a big impact, and let me explain. First of all, a lot of the recovery money that president Obama spent went into renewable energy, clean energy and energy efficiency. That ended up, I think, combining with what was happening in the market anyways, which was to, basically, ensure that clean energy was winning. And it is, and it remains the winner today in the marketplace. What you saw us do with the Clean Power Plan is we spent a great deal of time talking to people so that we could build on the shift that was already happening. Stephen, what most people don't understand is regulation is really in place to protect public health consequences that result from markets that don't consider and integrate public health into the market itself. Once markets do, then they take off on their own.

What we did with the Clean Power Plan was to recognize that clean energy and energy efficiency was moving then. There were opportunities. We took maximum advantage of those. We were very moderate in setting goals, I think, moving forward. Knowing as I know with utilities, when they figure out how to make money, they're going to just jump on it. That's what we have seen, so we didn't need to go tough, but we went long. Our goal was go to 2030 because, really, when you have a market that's shifting, and when you see these technology leaps happening that made that market shift like that, the thing you want to do with a regulation is to provide certainty to the investment community so those technology leaps keep happening.

Don't settle for what we have now. Make sure that you're rewarding it out as far as you can because, as I think you and I know, the clean energy train has left the station, and it's moving. We just wanted to make sure it continued to have an engine behind it, and that the United States was where that innovation what happen. This is where we wanted to send that long signal because I believe very firmly, as president Obama often said, that the country that leads in clean energy is going to be the strongest country in the world. I never wanted to cede that to any other country. That's what the Clean Power Plan was really all about.

The utility world responded wonderfully to the Clean Power Plan. They knew they could do it, which is why they're still saying pretty clearly, all the major players, that they can do this, and they're going to keep investing in the same exact way that the Clean Power Plan ask them. It's why states are doing better, so many of them are doing better, than where we even anticipated they would be in 2022. I think the major problem we have with this investment strategy, if you could call it that, in this administration is that they're just sending the wrong investment signals. They're ceding economic growth and jobs to China and other countries. It doesn't make any sense for the people or the businesses in this country.

Stephen Lacey: What has it been like seeing administrator Pruitt try to unravel what took you years to build up?

Gina McCarthy: What's it like? It's not fun. Let's just start there. It's sort of upsetting only because I'm not seeing any of these rollbacks framed in the way that I would expect from somebody that disagreed with policies, which is, "I think I can get to the mission of the agency better in another way," where the mission of the agency is public health and environmental protection. If this was being done in the name of better protection, less expensively or more efficiently, then I'd feel better about it, but that's not how it's being portrayed. It is just simply, in my opinion as I look at it, they came in with a things-to-do list, and that things-to-do list seems to have been written by business for the sole purpose of reducing cost to business without regard at all for the public health and the environmental impacts that would result.

Stephen Lacey: That's a really interesting point because I think it gets us to a more fundamental question of what is the agency's mission. That has gotten lost, I think. Describe that a little bit more for me, what the agency has set out to do. Of course, ask anybody across the political spectrum do they want to see less heavy-handed regulation? Do they want to see the most efficient measures taken? Of course. But what we're seeing is an administrator who is working for business, not the goal of public health. Square that for us a little bit more.

Gina McCarthy: I would have the same goal. Every president has the same goal, and I don't blame them. Every business person would like to see things done that provided them maximum business opportunity with less-cumbersome regulation. One of the things that we really desperately tried to do is exactly that. We called it E-enterprise. How do we work better with states? How do we work better with the business community? How do we get more efficient transactions so that these are not overly-burdensome or delaying opportunities for businesses and jobs and moving forward? That was always part of the agenda. What we're missing in this administration is a simple acknowledgement that their job is to protect public health and the environment. That is fundamentally, that's EPA's job. That's the job Congress gave them. Their job was to do it by implementing and enforcing the regulations.

There is just simply no discussion of those issues, that I can see, of any substance, as opposed to looking at this as an opportunity to roll back regulations to reduce costs. I really have, because it's not a very sophisticated strategy legally or to gain momentum among the populace that you're, basically, obligated to protect. It also is not consistent with how all of my republican colleagues who held my position have looked at life. They're just as distraught about it as I am because there are ways in which you can always do better, and you should strive for those.

Example after example of this administration rolling back, not just regulations, but rolling back the work of the agency and the money that goes to the agency that are really fundamental to core protections that we have relied on for a long time. They're cutting voluntary programs. If you don't like heavy-handed regulation why would you not like Energy Star? It is exactly building actual business for people in the United States who sell appliances, who build buildings and rent them out. There's ways of doing this job that have been enormously successful and are, in no way, costing businesses money. Those are still being rolled back, so there is something more here than finding a better way to meet the mission of the agency. It is ignoring or simply giving short shrift to the actual mission of the agency.

Stephen Lacey: How do you create space within the conservative movement to talk about these issues? You look back at pretty much everything, appliance standards, efficiency programs. They've had bipartisan support historically, and that's changed pretty dramatically. Meanwhile, you have someone like administrator Pruitt who is working for, seemingly, just a small subset of the business community because you actually look at the Fortune 500 list, the vast majority of those companies are investing in renewables and have some kind of climate action plan. It's a small subset of oil and gas companies that are fighting this, and that list is getting narrower and narrower.

Gina McCarthy: Yes.

Stephen Lacey: You have the business community that is pushing for this. Privately, a lot of republicans do agree with doing something about climate change, are very excited about the clean energy transition. Publicly, how do you take all of that and create space for them to be able to take a bold position, whatever the conservative position is?

Gina McCarthy: Well, I think that what I try to explain to people is to keep their eye on what's happening in the real world. We spend an awful lot of attention on rhetoric. We spend an awful lot of attention on announcements that we're leaving the Paris agreement without recognizing that can't happen for years, recognizing that they're trying to roll back the Clean Power Plan, roll back the clean water rule.

If you look at each of those proposals you'll see that they're not particularly robust in identifying a legal or a science or a process issue foul that was created, or identifying a better way to get to the mission of the agency. I think the most important thing to remember is you've got to look at what the real world is doing, not how this administration is portraying it because as much as they want to say that the Clean Power Plan is hated by every utility, as you've noted it really isn't. It is actually entirely consistent with where energy is going.

Stephen Lacey: I could count on one hand how many utilities are really opposed to it.

Gina McCarthy: Can anybody really not sort of chuckle a little bit when you realize that the highest renewable energy users are Iowa and Texas? This is not just a costal issue. This is a whole shift in how we produce energy. The frustrating thing for me is that many of these issues are being done because it's saving money, but it's also saving lives because it's directly reducing traditional air pollutants, and is bringing us closer towards a low-carbon future. There is no penalty here. There's nothing happening here that you can't embrace.

Now, I will absolutely acknowledge that with the reduction in coal, which has been happening since the 80s because it's no longer competitive, you have communities and individuals in need. There is no question about that, but I don't see the Republican at this point or this administration embracing that challenge other than to tell them they can reverse the future by going backwards. You and I know that's never going to happen.

It's a disservice to those people and those communities that deserve better from our government than to tell them that things are going to be great if you make a few tweaks here and there and make it harder to do renewable energy or disinvest in energy efficiency because the market has already dictated that strategy. It's a clean energy future, and we can embrace it if we meet our responsibility to help those that have been left behind. If this country that is the richest and strongest in the world isn't able to do that and feels the need to just cajole a few people, then it's extremely disappointing.

Stephen Lacey: Touch on that a little bit more. Tell me about what it's like being on the receiving end of coal's out-sized impact on the political environment.

Gina McCarthy: When you raise the issues of what's happening in coal country and loss of jobs, that it's a very visceral response that you receive from people, and rightly so. Really, at the bottom of all this, I think, is significant funding and money from the fossil fuel industry, not specifically the coal industry because I think very few people would be less concerned about Exxon Mobile or Chevron than the folks that are losing their jobs or getting sick in the coal mines or communities that are disadvantaged. It makes sense to put folks in the coal industry out in front.

This really is all about a shift in society. We tend to be able to live with that when it has to do with cellphone improvements over time and technology. This particular issue seems to be, I think, worked hard by many to be the front face of climate change, the few that are left behind. I'm not suggesting that they're not worth the effort just because they're a small number compared to, for example, the folks working in clean energy dwarf the number of people working in coal country.

There is a challenge here and else where, if I can get a little bit higher up, Stephen. There's a real challenge to define a rural economy. That's not just in the United States, it's else where. Just think about it, we are urbanizing like crazy as a world and as a country. There are many areas in which people used to thrive in rural areas, and they're no longer thriving. This doesn't just have to do with the shift away from fossil fuel to renewable energy.

There's a real challenge to figure out how to allow people to live where they've traditionally lived, maintain those vibrant communities that really define their sense of place and family. Just ignore the fact that that world is changing and tell them they've got a buck it up. That's not going to work. There's real challenge to figure out how to revisit rural communities and build a structure of an economy that will allow them to maintain their sense of community while the rest of us, like me, enjoy living an urban area. That's a challenge, not just here, but everywhere.

Stephen Lacey: It gets us to this bigger conversation about the future of economy as more jobs get automated, as people get pushed into service jobs out of industrial work. It's a conversation we're not really having. The warnings from experts are getting louder. The clear market signals are there, but in politics we're just not having the conversation at all. Talking about climate impacts and clean energy jobs and the energy transition is one subset of that bigger conversation. We've moved farther away from even beginning to have that conversation, it seems.

Gina McCarthy: Automation is a big deal. People's ability to go to school for a technical job or an engineering job and think 10 years from now they'll still be viable is a real challenge. The pace of change today is unbelievable. People my age feel it all the time because we can't even possibly keep up. It worries me a lot because people don't react well to change. If you look at it, the coal industry started to go down in terms of their viability in the 80s as a result of automation. That's where job loss was happening.

Change is happening in every sector now. I think it's going to be very challenging to figure out how we deal with it and to look at the way populations and food are shifting in a way that's going to maintain our ability to have healthy communities and individuals. That's just not in foreign countries or the developing world. I see that in the developed world as well. It's going to be very challenging.

Stephen Lacey: We've gotten so lost in the political intrigue on maybe what regulation is being rolled back next, what announcement did Trump make in the Rose Garden, who did he fire this time, that we're completely lost, the national conversation around what is ailing rural communities and what is causing this shift in politics in the first place. We just need to completely reframe the conversation, which is not exactly easy. It's easy to say behind a microphone, but it's something that is completely lost in today's politics.

Gina McCarthy: I actually think we can get that back again, but I think we need to remember that information is power just like it was before. Having smart people get together and realize that a dysfunctional government erodes everybody's life. People have to step back, and this is people of every persuasion and Republicans and Democrats. We just have to get back to what brought this country together, the kind of core values we all share. We do have to talk about the folks that are left behind.

It's not just in the rural areas, but in many of the urban areas you see minorities and low-income populations that continue to be heavily-impacted by pollution. There's just work to do on all ends, but, in many ways, it starts people-to-people. It starts with people getting more engaged, people learning and reaching out to one another. That's something that I think has eroded as well that we definitely need to get back.

Stephen Lacey: For those who may not understand the legal mechanics behind developing and unraveling a rule at EPA, why is it so difficult for Scott Pruitt and the Trump administration to unwind these rules?

Gina McCarthy: Well, Stephen, the great thing-

Stephen Lacey: And do you think they can?

Gina McCarthy: It's meant to be difficult. Democracies are meant to provide stability. That's why we love to live here. We don't want to be overthrown every four years. It's meant to be hard to do. Rule-making at the federal level is a difficult venture. It requires a following of the law in a way that requires really rigorous understanding of how the courts have looked at this, what Congress intended, what they said, how should we interpret it, what kind of rules do you need to put in place? What kind of policies or guidance do you need to provide?

It requires an understanding of the science that is tremendously difficult and has grown over time to a level of sophistication so that we can look at both what the strategies are that can get you the public heath benefits as well as what those cost and what the likely ramifications are so you can move forward in a way that's steady and that people will accept. It requires years of outreach and comment process. Every comment that we receive in a rule-making, which we're required to take comment, we actually have to answer those in a document so that the courts know we considered comments appropriately.

It's a very rigorous and lengthy process of public engagement, science, legal analysis. The challenge that this administration has, I think they are many. First of all, they didn't come in with looking at what had been done in a rigorous way to look at what they liked and didn't like, what the opportunities were for new policy engagement, which they have every right to do. Instead, they came in with a list of things they didn't like, and they took a lot of shots out of the gate at delaying those in inappropriate ways that didn't follow the public process. They have been slapped back on numerous occasions by the courts saying, "Hey, wait a minute. There's a public process here." They haven't engaged the career staff in the discussion of the law and the science and the process so that they would know how to apply some kind of new policy discretion to rules that were already done.

If you look at the proposals that they have out to roll back rules, you'll see that they just lack the kind of robustness that a democratic process requires because it's not just what the executive branch wants. It's what Congress said, and it's how the courts are going to look at those decisions. They've made a lot of announcements. They haven't made a lot progress. I like that because their idea of progress is my idea of rollbacks.

Stephen Lacey: I guess if there's anyone who would be able to make progress on that it would be someone like Scott Pruitt who's spent his career suing the EPA and working on behalf of companies. He kind of knows the EPA from the outside in better than anyone from a legal perspective.

Gina McCarthy: He has, but he's not an environmental lawyer. Every sector has their expertise. There are the best and brightest minds at EPA. The career staff are taught to allow policy discretion. If you win an election you have a right to your own policy, you just don't have your right to your own set of facts. You don't have a right to cut public process out. You don't have a right to ask businesses in this country to live in uncertainty that is manufactured, rather than based on a real effort to do the mission in a way that is better for everybody and more efficient.

Stephen Lacey: Scott Pruitt, interestingly, has not decided to touch the endangerment finding. That has upset part of the Republican donor class. There are a lot of Republicans who would like to see him, basically, attack the legal underpinning of creating greenhouse gas regulations. He hasn't done that. Why do you think he hasn't done that, and what does that tell us?

Gina McCarthy: I have to believe that he does know that this issue has been brought to the Supreme Court three times just to look at the endangerment finding. In all three they used very positive language to say how much the science was robust. I don't think there's a lot of room for them to win in that argument. What I do know is they are taking great pains to try to reduce the staffing at EPA and cut the budget, particularly the science budget.

They're questioning whether or not we should even have scientists that look at, for example, the toxicity or public health impact of an exposure to a pollutant or a chemical, as if they don't want to learn anything new so they can't be challenged as to how to apply it. The work of the agency is all about advancing the science so you understand the challenge of climate change, so you understand what chemicals' impacts are and can regulate them properly. There's more than one way in which you can erode the ability of the agency to move forward under the law than to go to the courts and challenge something.

I think they are selectively moving forward to cut the legs out of the agency, which is a science agency, by changing science policies, by constraining our ability to work with science professionals, by looking at cutting out laboratories that do vital work to understand the science and work with states to ensure protections are in place. They're doing their best to get at this a number of different ways, but maybe even Scott Pruitt understands that the endangerment finding is pretty solid and the science is solid. He, I don't think, is willing to test that at this point, but you never know.

Stephen Lacey: I always ask, are you an optimist?

Gina McCarthy: Very much so. Even in the face of what's happening in Washington D.C. I always try to remind people that this country is great. Our democracy is the best. While they're trying to roll back things, I feel like I did my job as best I could, and I'm going to stand by that. I think, in the end, we all value our kids, our health, our families, our communities. We'll get back to a place where that's obvious in terms of decisions being made in Washington.

Stephen Lacey: Gina, thank you so much.

Gina McCarthy: Stephen, it's been my pleasure. Thanks.

Stephen Lacey: Thanks a lot to Gina McCarthy for taking the time. Big thanks to all of you as well. Show your support for the show by giving us a review on Apple podcast or anywhere you subscribe. Send a link to your friends and colleagues. Hit us up on Twitter. We're currently putting together another show on blockchain. We just had our event in New York City, so we gathered a bunch of interviews from that, and we're just talking through some different concepts for an upcoming episode. We've been gathering a bunch of material, and Shayle is going to be back for that one, so stay tuned. In the meantime, I'm Stephen Lacey. This is The Interchange, weekly conversations on the future of energy from Greentech Media. We'll catch you next time.