It is no doubt that every country in the world cannot sustain themselves without the use of natural resources. They must be consumed for creating the necessary supply of energy required to provide a range of functional economic activities.  Much of the energy production in the United States is sourced by private companies. The Department of Homeland Security mentions that “more than 80% of the county’s energy infrastructure is owned by the private, supplying fuels to the transportation industry, electricity to households and businesses, and other sources of energy that are integral to growth and production across the nation.”

I do not necessarily think that this is a bad thing. I am an advocate for private ownership and become weary when introduced with the idea of substantial government control over such a vital sector of the economy… a sector in which every other sector of the economy relies on. While the beliefs of political bipartisanship have shifted over the years, I usually side with advocates for governmental deregulation. This remains all but true with respect to environmental regulation.

A recent article by Coral Davenport talks about some of the Trump Administration’s proposed actions against the U.S. Environmental Protection Agency. Historically, the EPA has been responsible for employing experts in the field of natural science, biology, and engineering to conduct research and experiments aimed towards creating regulatory standards. The EPA does not create laws. It is through Congress that laws governing the public are passed, but Congress has given the EPA the power to create rules and regulations that it believes are necessary for compliance with a particular law. The Trump Administration has commanded numerous restrictions on the federal agency including elimination of research tied to global climate change and automobile standards. The executive actions include a 31% cut in the EPA’s budget, more than any other agency. These actions have clear implications, to reduce the ability for the EPA to fund their operations involving the regulation of private business and the private energy sector.

So what is really being proposed?

Although Donald Trump does not believe in global warming, I seriously doubt that his administration doesn’t believe in the empirical science surrounding the adverse health effects resulting from various sources of emissions, or the risks associated with hydraulic fracturing. This is not my argument. What I believe is being implicitly proposed through the actions involved with de-funding the EPA is the encouragement of a free-market governing the environmental regulatory process.

How would this market facilitate regulation?

Currently, since the EPA is a federal agency, the amount of funds allocated depends on the mandatory and discretionary expenditures set by the legislative and executive branch of government. Ideally, citizens vote for the representatives responsible for making these decisions. Funds that are allocated to the federal agencies are collected through taxing the public, open market purchases by the fed, and the purchasing of bonds. Under a free-market approach to environmental regulation, private companies will charge prices for creating and enforcing environmental regulation. Either way, the average U.S. citizen is paying for environmental regulation. This is not the issue. The disadvantages involved with a free-market approach to environmental regulation will generate from the lack of demand for environmental regulation and the involvement of money.

Opponents of the EPA are those who have vested interests in companies that contribute to environmental damage. I do not mean that they are proponents of environmental damage! Large private energy companies are very rich and create lots of jobs for people. They pursue process and product innovation to achieve large-scale efficiency, but I believe that the product and process innovations involved with energy production are a direct result of government regulation. If environmental regulation emerges in a free-market, the playing field will become largely unbalanced. While this poses a significant problem in any market, it is especially threatening when looking back to history and observing the horrible effects environmental deregulation has produced. The firms with deep pockets will use their resources to change the policies of those who are in charge of enforcement.

What if no one decides to pay for a private company to create regulations? Will the large electricity and oil producers pollute the Earth to no end? It is unclear. I do not want to allow for the possibility of such a tragedy. If the EPA becomes obsolete I can only hope for another governmental agency to take its stead. If the adverse environmental effects of pollution affect everyone, then it makes sense for everyone to pay for the regulation intended to reduce or eliminate such occurrences. The EPA already has the infrastructure and processes in place to do this, and it should not be de-funded.

Why Funding the EPA is Important: Regulating the Energy Sector