It is clear to Todd Myers that distant politicians and bureaucrats imposing rules from the top rarely have the incentives to make environmental policies effective
Todd Myers
Washington Policy Center
To justify onerous taxes and regulations, politicians and staff at government agencies often explain that they are the experts and giving them power is better than allowing the public – i.e. non-experts – to attempt to achieve policy goals. As a justification, this makes sense. Nobody is going to turn over power to people who admit they aren’t more knowledgeable or capable than average.
That rationalization often falls apart when faced with real-world challenges. Government officials routinely make large errors in the development of public policy, needlessly adding costs and restrictions. The cost of those failures, which can be very high, is invariably borne by the general public.
When government officials don’t pay the price for their mistakes, there is little incentive to get it right in the first place, or change direction when projections are wrong and programs fail to deliver the promised benefits. Ecology’s badly mistaken predictions about the impact of Washington’s climate policies on gas prices is a case in point.
“I’m highly confident it’s not going to be 46 cents per gallon.” Those were the words of Joel Creswell, the climate policy section manager at the Washington State Department of Ecology. He made that claim last November when asked about the potential impact of the state’s climate policies on gas prices.
Less than a year later, we know he was wrong. Gas prices in Washington state have increased about 40 cents per gallon more than Oregon since the new laws took effect and are expected to increase even more in the near future.
Despite Joel’s confidence, Ecology staff also seem to realize he was wrong, removing a similar claim on the agency’s web page.
Additionally, Creswell and other Ecology staff had been claiming the impact would be about five cents per gallon. Those claims have also been removed from Ecology’s website.
Having scrubbed those confident statements, Ecology staff are now more evasive. The web page now says, “Historically, gas is a volatile commodity — retail prices are affected by changes to production capacity, and supply and demand for crude oil.” It is a standard backtrack, and it dodges the real question of how much the State’s carbon tax caused the price to increase. When faced with failed predictions, government staff lament that the situation is complicated and hard to assess but maintain that they are experts.
Despite that, Ecology staff continue to claim their previous projections were “created to counter misinformation,” refusing to admit their own claims were the misinformation.
Experts are supposed to be the ones who can sort out the complexities, accurately assess risks, and make good decisions. Instead, government “experts” end up explaining why they failed to anticipate the very uncertainty they claim makes them expert.
There are many other examples.
Even before COVID, Sound Transit announced several cost overruns well into the billions of dollars. WPC’s former Transportation Director Mariya Frost noted that hundreds of millions in new cost overruns revealed in 2021 were “in addition to those reported in 2018 and 2019, including a $500 million overrun on Lynnwood Link, a $460 million cost overrun on Federal Way Link, and a $225 million overrun on East Link before construction could even begin.”
Despite these serious mistakes, the Sound Transit board approved a pay raise for the CEO in the midst of these overruns.
When COVID hit, Sound Transit announced additional cost overruns up to $6.2 billion, they blamed increases “on rising real estate prices…and a hot construction market that has pushed prices higher than expected.” These are the very factors that caused huge cost overruns on the first two phases of the Sound Transit program. What good is an “expert” if they continually fail to account for uncertainty?
The fact that government “experts” make such large errors, and the failure to honestly address them, have several underlying causes.
As Nobel Prize Winning Economist Daniel Kahneman notes, sometimes government agencies have incentives to underestimate costs. “Errors in the initial budget are not always innocent,” he wrote in his book Thinking Fast and Slow. Underestimating cost helps get programs adopted and government staff know “projects are rarely abandoned unfinished merely because of overruns in costs or completion times.” This certainly applies to Sound Transit. Ecology staff also said they felt compelled to respond to high-cost estimates of the state’s climate policies last year because “the cap-and-invest and clean fuels programs were in the development phase,” and, they argued, “these policies are important for our state…” Their motive was not transparency but advocacy.
Less nefariously, if government officials pay no price for being wrong, there is no punishment for wishful thinking. Agency staff who have faith in their own expertise can fall into the trap of overconfidence, and without the countervailing pressure of accountability for being wrong, they don’t take the time to examine their own biases.
Creswell was “highly confident” that the cost of the tax on CO2 emissions wouldn’t be 46 cents per gallon and that it would be around five cents per gallon. That turned out to be entirely inaccurate. His boss, Ecology Director Laura Watson, even went so far as to accuse others of “fearmongering,” while repeating the claim that the tax on CO2 emissions would only increase prices one to three percent.
Having been led astray by their overconfidence, they now can’t admit they were wrong, so they deny the problem exists. Washington residents looking for relief from the high energy prices won’t find help from agency staff who continue to blame everyone but themselves.
Many who work in government agencies do good and worthwhile work. There is a big difference between staff who work on the ground, solving problems and working with the public, and those who believe they can make sweeping policy decisions from afar. The closer people are to the problem, the more likely they are to receive feedback that provides an incentive to adjust.
There are also circumstances where government policy and oversight is necessary and effective, or at least the best option. Those instances of government success, like the Clean Air Act, are then extrapolated to a knee-jerk belief that government regulation, taxes, and subsidy are always the best option or the only option. That is obviously incorrect, but it is a comforting and self-aggrandizing belief for many politicians that on their shoulders rests the future of the planet.
Ecology’s continued inability to acknowledge their mistakes shows that without a change, Washington’s climate and environmental policies will continue to fail. It is time for the legislature to shift power to those who face the results of environmental policy directly. That may be government staff on the ground, who see results first-hand and are accountable to the local community. It may be individuals who care about their local environment or feel a financial price for using natural resources.
It is clear, however, that distant politicians and bureaucrats imposing rules from the top rarely have the incentives to make environmental policies effective.
Todd Myers is the director of the Center for the Environment at the Washington Policy Center.
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