Big Decisions in Air Quality Regulations, with Mary Nichols

Stay tuned for more episodes in our month-long spin-off series, “Big Decisions: The Future of US Environmental and Energy Policy.” Every Tuesday in October, RFF President Richard G. Newell and RFF Board of Directors Chair Sue Tierney will share guest-hosting duties and chat with leading decisionmakers, analysts, researchers, and reporters about the big decisions that will impact US environmental and energy policy in the years to come.

Notable Quotes

• Benefits of California’s multifaceted approach to environmental policy: “[California has] a complicated system, but these [programs] interact with each other. For example, if you have a regulation that has the utilities building more renewable energy projects and phasing out fossil fuels, they don’t have to buy as many allowances from the cap-and-trade program … I don’t know that we’ve got it perfect, but we’ve been able to reduce emissions and do it in a way that has not only not hurt the California economy, but I think demonstrably has been beneficial.” (14:30)
• Momentous change is necessary to achieve carbon neutrality: “If we [aim for] no longer putting more into the atmosphere than it can absorb, and taking out as much as we can and storing it in trees and soils or in geological formations, we can prevent the continued warming from going to catastrophic levels. If that’s the goal that we are willing to accept as a country … we’re going to have to move fast to make some big changes.” (22:13)
• Failures to respond to COVID-19 foreshadow similar struggles with climate: “You see the response to the COVID-19 pandemic, and … you see people demonstrating for the right to not wear a mask or violently protesting against measures to protect public health. The lack of a consensus around the need to protect public health and the lack of willingness to trust science need to be addressed seriously [if we want to protect the environment]. That’s probably the biggest challenge that I see.” (33:05)

Top of the Stack

• All We Can Save: Truth, Courage, and Solutions to the Climate Crisis edited by Ayana Elizabeth Johnson & Katharine K. Wilkinson
• The writings of Octavia Butler
• Squeeze Me by Carl Hiaasen

The Full Transcript

Richard G. Newell: Hello, and welcome to Resources Radio, a weekly podcast from Resources for the Future. I'm your guest host Richard Newell. This episode continues our month long spinoff series called “Big Decisions: The Future of U.S. Environmental and Energy Policy.” Regular hosts Daniel Raimi and Kristin Hayes are taking a well-earned month off. So we'll broadcast the special series in our same Resources Radio time slot every Tuesday in October, and we'll return to Daniel and Kristin in November.

My guest today is Mary Nichols. Noted as one of the 100 most influential people in the world by Time Magazine, Mary has consistently been at the forefront of efforts, both in California and across the nation, to address air pollutants, including greenhouse gases. In 1972, fresh out of Yale Law School, she filed one of the very first lawsuits under the Clean Air Act. Soon after that, she was appointed to California's Air Resources Board known as CARB, and Governor Jerry Brown appointed her as the board's chair in 1979.

During the Clinton administration, she headed the Air and Radiation Division of the US Environmental Protection Agency (EPA), where she implemented the sulfur dioxide cap-and-trade program that has been so successful at reducing acid rain and the human health impacts of SO2. In 2007, Governor Schwarzenegger appointed her to chair CARB for a second time where she has served since after being reappointed by Governors Brown and now Newsom.

Mary, these are just a few of your accomplishments in a truly remarkable career as an environmental lawyer and administrator. It's really a pleasure to welcome you to Resources Radio.

Mary Nichols: Well, thank you. It's great to talk with you.

Richard G. Newell: Mary, there's so many big decisions we face as a country in both environmental and other policy spheres. Before we get into those topics, I want to go back to the beginning of your career. I understand that at law school, you were particularly interested in criminal justice reform, but you later described to the Los Angeles Times how you got "hooked on smog." So tell us that story. How did addressing air pollution become your life's calling?

Mary Nichols: Well, “I moved to Los Angeles” is the short answer to that question. I didn't have any California connection, but I married somebody who had worked for a Los Angeles law firm. We both grew up on the east coast, but my husband was the son of a New York lawyer, and he wanted to be making his career in a different place and thought that Los Angeles was a place where anybody could come and make their way. But really Los Angeles and California in general really has been a place of great openness and mobility, and it certainly was for us.

So we struck out across the country and wound up here. My husband started as a litigation associate at a prominent law firm in town, and I went looking for a job and found a job with a public interest law firm that was just getting started because this is 1971 when the whole field just began. They had a grant from the Ford Foundation to work on environmental issues and they had all divvied up the issues. These are all people, all guys who had started this operation and nobody was doing anything about air pollution. It was pretty obvious that air pollution was the number one environmental issue in Los Angeles.

So I was the youngest. I was the kid. So I got assigned to do air pollution. I had to figure out what you could do about that in a law firm. At that point, there essentially was no body of law about air pollution at all, but the Clean Air Act had just been signed into law and was ready to be interpreted. It was at that point, an amazingly concise and powerful piece of legislation. And so I got to figure out how to bring some of the first cases under that new statute, which is something that I think every young lawyer dreams of.

Richard G. Newell: Yeah. I had never really fully appreciated how your career has really spanned the entire implementation of the Clean Air Act. That's amazing.

Mary Nichols: Yeah.

Richard G. Newell: So let's fast forward to today when we're facing a series of enormous problems, the pandemic, the country's racial reckoning, and of course the climate issue. Over the summer, you saw firsthand the devastating effects of wildfires in California. So you're a problem solver by nature. Do you see a clear path out of these predicaments? And as someone concerned with issues of environmental justice as well, how related are the solutions to all these major challenges?

Mary Nichols: Well, the solutions are related, or they need to be related. Going back to the very beginning of my history, as I think you know since you read up on me, the reason I was interested in criminal justice reform when I went to law school was that I had worked in the civil rights movement. And it was a place that clearly showed how systemic racism—which, we didn't call it systemic racism at that point, but that's what it was—affected the futures and the lives of whole segments of the population. And the legal system had something to do with creating those problems.

It also had opportunities, and there were really creative people working within that system, including on the prosecution side, who were looking for alternatives to long-term prison sentences, which left people when they came out without opportunities and with a stigma. We were trying to create other paths to divert people out of the system. Well, you layer environmental pollution on top of the societal challenges that people face, and the effects are synergistic, not just additive.

And so this connection has been recognized—finally, in a broad way—and is now part of the discussion about solutions. It has to be. And if you take what would be an urban air pollution problem, and then you look at it as part of a problem that affects the entire planet, it's easy to see how injustice on a global scale, but particularly the inability of large numbers of people to find ways to support themselves and to advance in their lives, is related to things like what they burn.

The fact that people don't have electricity and instead use oil or dung or coal or whatever, to heat their homes or to cook their food, is a fundamental source of a problem of greenhouse gas emissions as well as of air pollution that affects people directly and shortens their lives. You can't come up with solutions that don't involve attention to equity.

Richard G. Newell: When did the environmental justice issue really start showing up in a more prominent way in California?

Mary Nichols: Well, there were fledgling grassroots organizations active really from the ’70s on: groups that organized around the ports and the rail yards and other people who were organized to fight against a particular new power plant that was going to be burning oil or things like that. But the term “environmental justice” and the presence of organized environmental justice advocates in Sacramento was really just emerging at the same time that the legislature was passing the aboriginal climate legislation.

When the California legislature decided to adopt the Global Warming Solutions Act of 2006, otherwise known as AB 32 in California speak, they wrote into the legislation in addition to a requirement that the Air Resources Board come up with a plan to bring California back to 1990 levels of greenhouse gas emissions by 2020—which was then the Kyoto Agreement—that we at the CARB include in that effort an Environmental Justice Advisory Committee. And that environmental justice had to be considered as one of the criteria, like cost-effectiveness, that were to be included in the plan that CARB was creating.

Richard G. Newell: Yeah. So you brought up AB 32, and I want to come back to that in a minute. And earlier I had mentioned the cap-and-trade programs that you've overseen, from the federal Acid Rain Program to California's own emissions trading programs. I know that California's landmark AB 32 law to reduce greenhouse gases had scoping plans that described a major role for regulations and a relatively minor role for carbon pricing. But carbon pricing has grown over time, and I wonder in the event that there is federal climate action in the coming years, whether you see a similar template being followed.

Mary Nichols: Well, Governor Schwarzenegger who signed AB 32 into law, wanted the legislation to be based on a cap-and-trade program. He was very taken with the idea of market-based programs. And in fact, one of the reasons why he wanted me to come and run this program at the Air Resources Board was that he found out that I had been at EPA when the Acid Rain Program went into effect. And that was the first—and at that point, the only—cap-and-trade program that had ever actually been fully implemented.

So, he was very excited about that, but the Democratic-controlled legislature was not at all excited about it. In the end, the legislation that was sent to his desk simply said that the CARB could include a market-based program in the scoping plan if they made certain findings. But the governor was determined from day one that there was going to be a market-based program. And so my job was to figure out how to put that in there without completely upsetting the legislature, while also integrating it into a program that was going to be based on regulation.

Of course, it's a little bit of a misnomer to assume that these two things are completely opposed to each other: a cap-and-trade program and regulations. But the two things were presented as being stark opposites. To this day, the organized groups that fought having a cap-and-trade program in the legislation still are not in favor of it — even though it's been operating successfully for a decade now and has raised revenue that's been used to invest in a number of very progressive programs in environmental justice communities, and has also operated, as it was intended to, as a cap on emissions.

Nevertheless, to this day, there are groups that are highly opposed to the cap-and-trade program. Some of them would like a carbon tax and think that that could be more effective, more equitable. Others are just opposed to any kind of a pricing scheme that will allow people to pay to pollute.

Richard G. Newell: How do you think about that balance? I don't know whether it's an optimal balance or just a balance between carbon pricing and other regulations to draw down emissions.

Mary Nichols: I think we need solutions that are all of the above. I think we probably need a market program like a cap-and-trade program. How much it would cover the economy is a question that needs to be considered at the national level. Here, we've included industrial sources and fuels. We also have a market-based program that only applies to the suppliers of automotive fuels, which is called the Low Carbon Fuel Standard, which is a separate regulation. We have an emissions standard for motor vehicles, which directly regulates the amount of greenhouse gases that vehicles can emit, and we have a bunch of other regulatory programs, including a requirement for carbon-free energy.

So, it's a complicated system, but these things interact with each other. So for example, if you have a regulation that has the utilities going out and purchasing, or building more renewable energy projects and phasing out fossil fuels, they don't have to buy as many allowances from the cap-and-trade program. So, we have looked at this mix and I don't know that we've got it perfect, but it appears as though at least we've been able to keep the whole thing together, reduce emissions, and do it in a way that has not only not hurt the California economy, but I think demonstrably has been beneficial.

Richard G. Newell: Yeah. So AB 32 was only 13 pages long. I've even heard it compared to somebody jumping out of an airplane with the attempt of designing the parachute on the way down, yet the California Air Resources Board has successfully enacted so many pathbreaking programs on the basis of that relatively brief legislation, and it seems that a careful process has been at least one of the keys to that success. So do you agree with that? And how does the Air Resources Board go about designing and implementing regulations particularly given the complexity that you just laid out?

Mary Nichols: Well, CARB is an interesting example of how you can combine a very democratic process with a highly expert bureaucratic process. The board itself is comprised of appointees of the governor who have to be confirmed by the legislature. Half of them are elected officials at the local level who serve on their local air pollution boards, and the others are filling special seats with special qualifications like automotive engineer, or, in my case, attorney, or a physician—fields that were considered necessary to have in a really effective air pollution control program.

After AB 32 passed, the board increased in size again. We now have two legislative appointees who are to represent environmental justice communities or have expertise or experience in dealing with environmental justice issues. We also have two legislators who actually serve ex officio. So they are liaisons to the legislature because the legislature realized how important this program is and how difficult it would be for them to actually try to create the whole program themselves. So they were delegating clearly a lot of power to this unelected body, and they wanted to make sure that they kept an eye on what we were doing and that we were doing things the way they would like to see them done.

We had a history at the Air Resources Board, going back to the 1970s of doing things that were controversial in various communities at various times with these boards and commissions. And there are many of them. There's a history and experience and expectation that you really listen to the public and not just to the regulated community, although you have to listen to the regulated community as well. But we meet in open sessions. Our hearings take as long as they need to. And everybody is invited to come in.

When AB 32 passed, however, there was also a whole additional layer of advisory committees that were set up, including a committee of economists who looked at the design of the cap-and-trade program to see if they thought that it was the right way to do things; a technical advisory committee; the Environmental Justice Committee that I've already mentioned. And we set up a website and we had thousands of people literally from all over the state who wrote in with ideas and suggestions about how California should go about addressing global warming.

There was a huge amount of public interest in this program from the beginning. And while we don't get quite that level of attention at our monthly meetings anymore, we get a lot of interest from all kinds of different groups around the state, people with ideas for how we should be doing things differently or better, people criticizing the program for not being strong enough, and from time to time, for being too strong. But either way we do our work in a very public setting. I think it makes the program more durable, more sustainable.

Richard G. Newell: Yeah. One of the words that comes to mind as you're speaking about this is the word “trust” and the need to build trust in the legislature among the public. And also with whoever happens to be in the executive leadership at a time, it seems like it's incredibly important to the stability of this program.

Mary Nichols: I guess I should have said also, in response to your question, that in addition to this political process and the fish bowl that we operate in, we also have a staff of close to 1,500 people. A very large proportion of them are highly trained engineers and scientists and researchers who work on specific aspects of these problems and who interact with their peers in academia. We have a very long standing, strong tie to the University of California, so that we have graduate students and faculty members who are working on helping to solve the problems that we face as well.

Richard G. Newell: So I want to turn now back to the federal level and the current administration, and the word rollback has perhaps become the defining word of the current administration in relation to environmental policy. The New York Times recently counted 100 different environmental rules being reversed under the current administration. Many of those, including the reversal of vehicle emission standards, are issues at the forefront of your work in California, of course. So, I'm wondering in the event of a Biden administration where you would say the immediate priorities should be at the US EPA.

Mary Nichols: I think “transition” was the operative word there. The standards that are currently in effect for conventional air pollutants and greenhouse gases are not good enough to get us where we need to go. If we assume that we're still aiming—or we should be aiming—for a goal of carbon neutrality where we are no longer putting more into the atmosphere than it can absorb, and we're taking out as much as we can and storing it in trees and soils or in geological formations, and we can talk more about all of those things enough to prevent the continued warming from going to catastrophic levels. If that's the goal that we are willing to accept as a country, which would bring us back into the realm of all nations that signed onto the Paris Agreement, we're going to have to move fast to make some big changes.

Something like the plan that was adopted in the Obama administration—the Clean Power Plan—it's not good enough. We're going to have to find ways to leapfrog over some of our current regulatory problems. So I don't think we can do this all or much without legislation, although there's a lot we can do. One of the things we can do is with the cars and trucks and transportation system. So get back to the bargaining table with industry and come up with a way of looking at these regulatory programs going forward.

Just defaulting to where we were before Trump came into office is not going to be the right solution. I think we're going to have to find a way to continue to make progress, which is very much like the framework agreement that we came up with in California, that five companies have signed on to while we negotiate about a whole new set of standards, which is zero emission vehicles by the midpoint of this century.

Richard G. Newell: Yeah. So say a little bit more about that. There was a recent announcement in California. Maybe tell us a little bit about that and how you think that's going to proceed.

Mary Nichols: The governor recently signed several big executive orders relating to climate, but the one that I was most directly involved with is the one that deals with the transportation system. It will require that we move to zero emissions for new vehicles by 2035. Then, the fleet as a whole has to turn over by 2045, and that's going to include trucks and tractors and off-road vehicles. It's an exceedingly ambitious goal, which also will require huge investments as well as public and private investments in the infrastructure for fueling all these new vehicles.

It's a goal that not only fits the size of the problem, but it lays out an ambitious agenda that will give industry and local city planners and anybody who's thinking about what transportation is going to look like in this state in the next 25 years a path forward. And so it was greeted with the excitement by many, but also with a sense, even by the auto industry, that this is the path that they're on anyway. They may not like having deadlines or having state mandates to do this, but they understand that this is the direction that the world needs to go in and it's what's going to be demanded of them. And by and large, although it's a challenge, it's a challenge that they are already along the path of trying to succeed at.

Richard G. Newell: How much of the executive order needs to be followed up by any additional legislative action, or is it now in the hands of CARB to develop specific regulations? What else has to happen?

Mary Nichols: Well, the executive order is aimed at executive agencies. So it directs CARB and our sister agencies where needed to develop the regulations to actually implement it. I think it also, in a couple of places, specifically invites the legislature to also step up and adopt these goals and add additional requirements if they want to do that. Particularly, this is the case with respect to petroleum fuels in California, where because of existing legislation, the governor is not able to require the oil and gas industry to stop using fracking techniques for producing fuel.

And so the governor has asked the legislature to change that piece of legislation and give him something to sign. But in general, these are things that could be done without legislation. But if you want to have it be something that is widely accepted and something that the legislature wants to put its own stamp on, then they will want to come and put their hands on it as well.

Richard G. Newell: Interesting. So we've talked a little bit about technology specifically in the context of vehicles, but technology developments will of course be important more broadly in facilitating an energy transition and a reduction in emissions. So what do you believe should be the role of environmental entrepreneurs and venture capital in the coming years, and what are the levers that are available to policymakers to facilitate and support that kind of private sector innovation?

Mary Nichols: Well, the role of environmental entrepreneurs has been key to the creation and the implementation of our climate program going back to the beginnings of the vehicle emissions standards and of AB 32, both of which had very significant support from Silicon Valley venture capitalists and entrepreneurs who cared deeply about the problem of global warming, but also who saw an opportunity for California being a first mover and for the businesses that they are directly involved in.

Tom Steyer—just to give one example of a well-known individual who participated in the development of this program—is one of many people who have literally put their money where their mouths are, and who are believers that the private sector needs to play a role in making sure that these programs are created and delivered in a way that benefits the greatest number of people. So that's a given, and as it has turned out, California has attracted venture capital to a greater extent than any other state in large part because of this program. It's one of the reasons why other states have been so interested in adopting their own variations on this program.

Richard G. Newell: Exactly. Mary, you have really, truly extraordinary depth and firsthand experience in crafting environmental law and policy. And so I'm wondering, what do you think are some of the big environmental decisions that are out there looming on the horizon, either in the public or private sector that you think we aren't paying sufficient attention to right now? What should we be thinking more about?

Mary Nichols: Gosh, there's so many.

Richard G. Newell: As if climate change wasn't enough, right?

Mary Nichols: Yeah, I was going to say, what more do you want really? Well, I suppose I’d say the issues of air pollution as it affects people around the globe. Increasingly, in Los Angeles, the pollution levels that we see today are really a tiny fraction of what they were 40 years ago. Meantime, you've got other cities in China and India and in Indonesia and elsewhere that are just almost unlivable. The World Health Organization has declared that air pollution is the biggest threat to people's lives. So, I mean, other than wars, it's what we've done ourselves with our energy and transportation systems that are causing these problems.

So you've got to get to some kind of a global consensus about addressing them, and it has to be done in a way where there's a sense of shared responsibility. I think the thing that has made this so painful for me as a person who has worked in this area is watching how, not just Donald Trump and his administration, but other leaders of a similar kind of right-wing, populist bent have turned other countries backwards in terms of their willingness to address these issues that affect the health and wellbeing of their own people, as well as the planet.

Then, you see the response to the COVID-19 pandemic, and you see these same things playing out, but in a much starker and even less appealing fashion, when you see people demonstrating for the right to not wear a mask or violently protesting against being asked to take measures to protect not just their own health, but the public health. The lack of a consensus around the need to act to protect public health and the lack of willingness to trust science—just to believe that they know what they're talking about—need to be addressed seriously. That's probably the biggest challenge that I see.

So it's not any one issue. I mean, you could say that fresh water is probably, after air, the second biggest global problem, just finding enough of it. And of course, global warming makes that problem even worse. You know what it's doing to our ability to feed people, but it is all interconnected.

Richard G. Newell: Yeah. It's a good reminder that sometimes we can forget particularly when focused on very large complex issues like climate change that conventional air pollutants, and the role of science in decisionmaking, and of course US leadership are things that we can also take for granted, but need to constantly remind ourselves about. So Mary, this has been a truly fascinating conversation. But before we go, every week, we close with what we call our Top of the Stack feature. So I'm sure some of our listeners would be really interested to hear what you've read, what you've been watching, or what you've heard recently related to environmental issues that you've found particularly interesting.

Mary Nichols: Well, there's a new book which is sitting on my nightstand called All We Can Save, which I've just started dipping into, but which I think is going to be one of my favorite books of the year. But I have to say that, although I read a lot of stuff for my work and probably every book about climate that comes along, winds up on my shelf, because I feel like I have to keep looking at them. And people are now starting to write histories about smog and about the air program, which is also pretty exciting just because of having been a part of it all.

But for both entertainment and enlightenment, I like reading fiction. Some of it is dystopian like Octavia Butler, who saw what things were going to be like today decades ago and wrote about it. Or the current favorite of mine, the author Carl Hiaasen, whose latest book called Squeeze Me is a book about the effects of climate change in Florida, and about a president who strongly resembles our current president, and about pythons that escape from the swamps and cause all kinds of damage. It's hysterically funny and a great relief from the day-to-day work of actually implementing these programs.

Richard G. Newell: You've added a wide range of interesting reading to the stack. So thanks so much for that, Mary. Well, all that remains for me is to really sincerely thank you, Mary, for joining us this week. You've given us a lot to reflect on. Thank you.

Mary Nichols: Thank you. It was a great conversation.

Richard G. Newell: You've been listening to Resources Radio. Thanks for tuning in. If you have a minute, we'd really appreciate you leaving us a rating or a comment on your podcast platform of choice. Also, feel free to send us your suggestions for future episodes. Resources Radio is a podcast from Resources for the Future. RFF is an independent, nonprofit research institution in Washington, DC. Our mission is to improve environmental energy and natural resource decisions through impartial economic research and policy engagement. Learn more about us at rff.org.

The views expressed on this podcast are solely those of the podcast guests and may differ from those of RFF experts, its officers, or its directors. RFF does not take positions on specific legislative proposals. Resources Radio is produced by Elizabeth Wason, with music by Daniel Raimi. Join us next week for another episode.