The National Association of Manufacturers (NAM) and the Environmental Policy Alliance are each running TV ad campaigns attacking the Environmental Protection Agency's (EPA) forthcoming smog pollution reduction rule. But before members of the media repeat the ads' claims, they should know that NAM's ads are based on a misleading study, and that the Environmental Policy Alliance is a front group for oil and gas PR executive Richard Berman.
Environmental Policy Alliance And National Association Of Manufacturers Campaigning Against EPA Smog Pollution Standards
EPA To Finalize Smog Pollution Standards By October 1. The EPA will release the final version of a rule to reduce ground-level ozone -- the primary component of smog -- on October 1. The proposed rule is aimed at lowering ozone pollution from its current standard of 75 parts per billion (ppb) to between 65 and 70 ppb. The new level will help alleviate the smog pollution currently experienced by more than 140 million Americans, and is expected to result in net economic benefits by saving $3 in healthcare costs for every $1 spent on achieving compliance, according to EPA Administrator Gina McCarthy. [EPA.gov, 11/26/14; Federal Register, 12/17/14, American Lung Association, State of the Air 2014, accessed 8/19/14; Huffington Post, 11/30/14]
National Association Of Manufacturers Launched Attack Ad Campaign On Forthcoming Rule. The National Association of Manufacturers (NAM) recently launched state-based ad campaigns attacking the rule as too costly. The ad has been released in Wisconsin, Ohio, and Colorado so far, according to press releases on NAM's website. The National Journal reported that Jay Timmons, president of the National Association of Manufacturers, said: “We're rolling this out where the discussion has been most intense ... and ultimately we'd like to take this to all 50 states.” [NAM.org, 8/26/15, 8/25/15, 8/11/15; National Journal, 8/27/15]
Environmental Policy Alliance Also Released Ads Criticizing EPA Rule. The Environmental Policy Alliance released an ad on August 25 attacking the smog pollution rule and mocking the EPA as “EPA Police.” In the press release, senior research analyst Anastasia Swearingen called the smog rule “unrealistic” and “draconian,” and said the rule is not about reducing harmful smog pollution but “about controlling Americans' daily lives.” [PR Newswire, 8/25/15]
Environmental Policy Alliance Is A Front Group Run By Oil And Gas Flack Richard Berman
Environmental Policy Alliance Part Of Company Owned By Richard Berman. The Washington Post reported that the Environmental Policy Alliance is “a subsidiary of another group called the Center for Organizational Research and Education (CORE) that is run out of the D.C.-based PR firm Berman and Company,” of which Richard Berman is founder and president. [The Washington Post, 6/4/15; Berman and Company, accessed 8/27/15]
Berman Solicited Funding From Oil And Gas Industry Executives For Anti-Environmental Campaign. The New York Times reported that Berman solicited up to $3 million from oil and gas industry executives for a campaign against environmental protections and boasted of being able to keep donors' contributions and involvement hidden:
Mr. Berman solicited up to $3 million from oil and gas industry executives to finance an advertising and public relations campaign called Big Green Radicals.
Mr. Berman repeatedly boasted about how he could take checks from the oil and gas industry executives -- he said he had already collected six-figure contributions from some of the executives in the room -- and then hide their role in funding his campaigns. [The New York Times, 10/30/14]
Berman “Well Known” For Creating Front Groups To Attack Opponents. The New York Times reported that “Mr. Berman is well known in Washington for his technique of creating nonprofit groups ... that secretly collect corporate donations to finance the aggressive, often satirical media campaigns his team conceives” meant to undermine his opponents. Mother Jones also reported in 2009 that Berman is behind a number of front groups, many of which are often whitewashed by major media news outlets:
Nicknamed Dr. Evil -- a moniker he embraces -- he's the force behind several industry-backed nonprofits that share staff and office space with his very for-profit communications and advertising firm, Berman and Company. The firm promises clients it will not “just change the debate” but “start” one, and a range of companies, from Anheuser-Busch to Philip Morris to the casino chain Harrah's, have signed up for Berman's “aggressive” and “hard-hitting” advocacy. Some clients pay Berman and Co. directly, while others donate to his nonprofits -- but much of the cash winds up in the same place, via hefty management fees the front groups pay to Berman's company.
Berman's groups are designed to appear like independent research or grassroots advocacy organizations -- and a host of news outlets, from USA Today to the Wall Street Journal to the New York Times, have a bad habit of treating them that way. [The New York Times, 10/30/14; Mother Jones, September 2009]
The Hill Characterized Energy Policy Alliance As “Energy-Industry-Backed,” But National Journal Gave No Disclosure. In its reporting on the new ad campaign, The Hill described the Environmental Policy Alliance as “energy-industry-backed.” By contrast, National Journal made no such disclosure about either campaign, reporting merely that "[t]he Environmental Policy Alliance came out with its own ad branding the Environmental Protection Agency as cops ready to crack down on lawn mowing and parking spaces." [The Hill, 8/25/15; National Journal, 8/27/15]
NAM Campaign Is Based On Flawed, Debunked Study
Campaign Relies On Study By NERA Economic Consulting. NAM's campaign claims that the smog rule will cost the economy $140 billion per year in lost GDP and carry a total price tag of $1.8 trillion by 2040. These numbers come from a study commissioned by NAM and carried out by NERA Economic Consulting. [NAM.org, 8/26/15]
Experts Previously Criticized NERA Study's Methodology As Flawed. NERA first released a study on the EPA smog standards in July 2014, examining the economic impacts of ozone emission requirements of 60 ppb. But policy experts detailed the report's many flaws to Media Matters:
- The study calculated costs by extrapolating from “cash for clunkers” -- an economic stimulus program, not an environmental program -- to account for the non-existing technologies, which Michael Livermore, senior advisor at New York University's Institute for Policy Integrity, said was “an insane way” of doing so.
- NERA developed what Livermore called an “extraordinarily high and basically unrealistic picture” of how expensive the technologies that will be necessary for achieving the standards will be.
- The NERA model itself does not calculate any actual job losses, according to MIT lecturer and senior economist at Synapse Energy Economics Frank Ackerman, but instead converted their estimate for total income loss into “job-equivalent losses.” Ackerman called this job-loss calculation “fraudulent.”
- The report does not include any economic benefits that will result from reduced levels of ozone, which means that NERA's analysis answered a “senseless question,” according to Ackerman. [Media Matters, 8/20/15]
NERA Updated Its Study With Newer EPA Data, But Did Not Change Methodology For Calculating Costs And Job Losses. After the EPA released its draft rule, which is a final ozone standard of between 65 ppb and 70 ppb, NERA published a subsequent study in February 2015 that used the 65 ppb figure and “updated the costs of the known controls that EPA identified to attain the 65 ppb standard using EPA's new cost data.” However, its methodology remained largely the same, as Livermore confirmed in a phone call with Media Matters. The report's methodology still calculated “job-equivalent losses” rather than actual job losses and failed to include any economic benefits. The study's methodology for calculating costs for unidentified compliance measures -- by extrapolating from costs of the “cash for clunkers” program -- also remained the same, according to NERA's senior vice president and co-chair of the group's environmental practice, Anne Smith. [Federal Register, 12/17/14; NAM.org, February 2015; Phone call to Media Matters, 8/28/15; Bloomberg BNA, 2/27/15, via Center for Policy Integrity]
NRDC's Walke: Updated Report Attempts “To Conceal” The Fact That NERA Still Extrapolates From “Cash For Clunkers” In Its Methodology. John Walke, director of NRDC's Climate & Clean Air program, told Media Matters: “The second report simply re-dubs the methodology as a comparison to a 'vehicle scrappage' program” rather than directly calling it the “cash for clunkers” program. Walke called it “a clumsy attempt to conceal the fact that the vast, vast majority of the NAM report's absurdly exaggerated costs are drawn from an analogy to the 2009 economic stimulus program designed to help the Detroit automakers, not reduce ozone pollutants cost-effectively.” [Email to Media Matters, 8/28/15]
NYU's Livermore: “We Need To Stop Paying Attention” To Industry Reports On Cost Of Environmental Regulations. Livermore told Media Matters that the “major methodological issue” of NERA's study (the “cash for clunkers” extrapolation) was not addressed in the February 2015 study, and “because of that, they get hyper-inflated cost estimates.” He added that the EPA has a history of overestimating cost projections -- something that has been backed up by multiple reviews previously detailed by Media Matters -- and that industry estimates are generally “much more inflated than what EPA's estimating.” Livermore added:
Historically we've seen these forecasts of incredible costs never come to pass. ... It just turns out that when industry makes these predictions it's never accurate. When [the industry] cries wolf or says the sky is going to fall for thirty years about environmental regulations, but the sky never falls, at some point we need to stop paying attention. [Phone call to Media Matters, 8/28/15; Media Matters, 4/1/13]