Environment

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 by martha edenfield

The Trouble With Polluter Pays

The campaign to restore the Everglades to some portion of its past glory began almost a decade ago with a lawsuit. Today, as new lawsuits continue to spring up, one thing is coming into clear focus: Controversy over the Everglades restoration seems destined to live on long after the massive replumbing of the marsh is completed.

One of the latest lawsuits is the spawn of a recent Supreme Court ruling on the so-called "polluter pays" constitutional amendment approved by voters in 1996. Polluter pays, officially known by the moniker Amendment Five, was one of three citizen initiatives placed on the ballot by Save Our Everglades, a well-heeled environmental interest.

While Amendment Five dealt exclusively with pollution in the Everglades Agricultural Area and the Everglades Protection Area, it exposes Florida industries to a new threat that no business person can afford to ignore.

EVERGLADES LAWSUITS FOREVER?

In 1994, after years of acrimony, the Florida Legislature enacted the Everglades Forever Act, a program designed as the first step to restoration of the River of Grass. Immediately upon passage of the act, it was attacked by some environmental groups, including Save Our Everglades, a group formed by millionaire Orlando developer George Barley.

The Everglades Forever project was to be funded through several sources, primarily by a special levy on homeowners in South Florida and an agricultural privilege tax imposed on farmers in the Everglades Agricultural Area. The tax on farmers could be reduced if they decreased the amount of nutrients in stormwater runoff from their farms.

Some environmental special interest lobbies objected to the plan because it violated one of their prime directives: the elimination of all sugar farming in the agricultural area. Save Our Everglades set out on an effort to enact a penny-per-pound tax on sugar farmers through a citizens' initiative drive to amend the constitution.

When George Barley died in a 1995 plane crash, his wife Mary picked up the gauntlet. She continued the citizen initiative drive and, in 1996, the group got three amendments placed on the ballot: the penny-per-pound tax; a provision setting up an Everglades trust fund; and polluter pays.

Sugar farmers countered the penny-per-pound proposal with their own campaign to persuade voters to reject the tax. Penny-per-pound fell to defeat, stunning the environmental contingent. Voters did, however, approve the other two uncontested measures.

Polluter pays inserts the following language in Article II, Section 7 of the Florida Constitution:

(b) Those in the Everglades Agricultural Area who cause water pollution within the Everglades Protection Area or the Everglades Agricultural Area shall be primarily responsible for paying the costs of the abatement of that pollution. For purposes of this subsection, the terms "Everglades Protection Area" and "Everglades Agricultural Area" shall have the meanings as defined in statutes in effect on January 1, 1996.

This seemingly innocuous provision -- who could argue with forcing polluters to pay for their pollution -- inspired immediate controversy over just what the language in the amendment accomplished.

To clear up the confusion, Gov. Lawton Chiles requested an advisory opinion from the Florida Supreme Court.

ANSWERING WITH MORE QUESTIONS

The state's dilemma over Amendment Five centered on the question of whether it was self-executing, whether it required legislative action, or whether the Everglades Forever Act of 1994 implemented the amendment. The governor also asked the justices to define the term "primarily responsible" as used in the amendment.

On Nov. 26, 1997, the Supreme Court issued its response to the governor's questions. The court specifically found that the Amendment Five is not self-executing and thus demands legislative implementation "because it fails to lay down a sufficient rule for accomplishing its purpose."

The court read the amendment in concert with subsection (a) of Article II, Section 7, which establishes the state's policy "to conserve and protect its natural resources," and directing the Legislature to provide by statute for "the abatement of air and water pollution."

The court also ruled that the Everglades Forever Act does not implement the amendment, determining that, in adopting Amendment Five, voters had voted to effect a change. Interestingly enough, the court found no conflict between the Everglades Forever Act and Amendment Five. The justices merely found that the voters had asked for a change.

According to the court, construing the existing act as implementing legislation would "effect no change, nullify the amendment, and frustrate the will of the people." Thus, to make Amendment Five effective, the Legislature must enact supplemental legislation to carry out its intended purposes, and define any rights intended to be determined, enjoyed, or protected.

As to the phrase "primarily responsible," the courts found that the phrase is recognition that no one person or entity is responsible for 100 percent of the pollution within the Everglades agricultural and protection areas. Those within the agricultural area who are judged responsible, however, must pay their share of the costs of abating that pollution.

Individual polluters would, thus, bear their share of the costs of abating the pollution found attributable to them, while not bearing the total burden. In a footnote to the opinion, the court recognized that not all pollution within the affected areas is caused by polluters within the agricultural area. "Therefore, while polluters within the [Everglades Agricultural Area must pay for 100 percent of the costs to abate pollution they cause, Amendment Five does not require them to pay for the abatement of such portion of the pollution they do not cause."

AT ISSUE NOW

With this opinion, the Florida Supreme Court has placed the issue squarely before the Legislature for determination as to how the amendment should be implemented.

Some of the key issues that may be addressed by the Legislature are stated in the Supreme Court's opinion, including:

What constitutes "water pollution?" The amendment applies to "water pollution" of all types, not to phosphorous alone.

How will one be judged a polluter? Agriculture is not alone is polluting the Everglades Agricultural Area. State, local, and federal agencies have also contributed to the problem.

How will the cost of pollution abatement be assessed and by whom might such a claim be asserted? The answer to this should be based on science, but will likely be highly politicized.

The court specifically stated that the Everglades Forever Act was consistent with Amendment Five. Thus, the Legislature must determine how to reconcile the amendment with the existing Everglades Forever Act, which has separate provisions for how agriculture interests must pay for abatement of pollution in the Everglades Agricultural Area.

The Legislature may choose not to implement or to delay implementation of the amendment, which would maintain the status quo with the Everglades Forever Act provisions intact. However, Save Our Everglades has filed a suit in Orange County, Florida. The group wants the court to find the Everglades Forever assessment on South Florida taxpayers unconstitutional, based on the provisions of Amendment Five.

In all likelihood, the Legislature will take some action on implementation. The possible courses of action range from affirming the Everglades Forever Act as the implementing legislation, to amending the act's assessment formula, to creating a process for allocating costs in the next phase of the restoration project.

As with most complicated issues, the devil in this story can be found in details such as the definition of polluters and the apportionment of responsibility.

Beyond these questions, rests the bigger issue of what this episode portends for the business community at large.

FOR THE SOCIAL GOOD

Identifying the sources of pollution in natural systems, such as the Everglades, is primarily a scientific question. Who pays to clean up or abate that pollution, however, is a policy question. In addition to weighing the scientific evidence, policymakers must consider the economic and social repercussions of their decisions.

Businesses engaged in activities that pollute the environment are expected to control and abate their impact on the environment. With the exception of these direct and localized activities, however, the costs of broad-based environmental programs are assigned to all citizens. The body politic has determined that environmental protection is of widespread social benefit, thus all taxpayers contribute to it.

Additionally, some polluting activities are of such great social benefit that taxpayers bear some of the costs of cleaning the pollution these activities cause. Forcing Florida industries to bear the entire cost of environmental abatement and cleanup would result in the loss of benefits we now enjoy. Industries would either pass the costs on to consumers, raising prices and making Florida products uncompetitive, or they would simply shut down or leave the state.

All of these are reasons why Florida's environmental protection programs have not been based on a strict polluter-pays methodology. What's more, the polluter-pays methodology assumes that scientists and policymakers can accurately determine who pollutes what and how much. This is a task of such breathtaking complexity that it is impractical, if not impossible, to rely on it as a substitute for political decisions.

In the end, the polluter pays methodology is a scorched-earth tactic that will just make the resolution of controversial environmental issues more difficult, leading to more protracted and messy stalemates. That's bad news for the environment and for the economy.

Unfortunately, the nonproductive nature of the polluter pays methodology will not deter some environmental interest groups that see it as a way to shift the costs of their programs onto business. And that's why every industry in Florida should be on guard. The next polluter pays amendment may be your own.

OTHER ARTICLES:
Environmental Miscellany

Martha Edenfield is a partner in the law firm of Pennington, Moore, Wilkinson, Bell & Dunbar, P.A., and environmental consultant to Associated Industries of Florida.

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March/April 1998 -- Florida Business Insight, PO Box 784, Tallahassee, Fla. 32302
(850)224-7173, insight@aif.com

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