The 23,000 citizens of Bainbridge Island in Washington State are showing how a combination of transparent price signals, online social networking and old fashioned community organizing can make a big difference in reducing energy consumption.
Located in Puget Sound, Bainbridge Island has been a major energy hog — with residents consuming 60% more electricity than the regional utility’s average customer due a large chunk of building stock not being up to modern energy codes.
Residents were offered a choice by the utility: pay for a new substation to support increasing energy demand, or reduce energy consumption. The island chose the latter — and in the process is helping train new workers, save residents money, and illustrate the power of collective action.
Helped by a grant from the Department of Energy’s Better Buildings Neighborhood Program — an initiative created through the stimulus package — island residents have created an online community network for monitoring energy use. In the first winter since the RePower Bainbridge project was rolled out, peak power consumption dropped by 10 megawatts. Over the next few years, the program will also facilitate efficiency upgrades for 4,000 houses and 150 businesses, while training around 65 people.
Watch the video below, produced by Climate Solutions, to see the local action that’s driving change in Bainbridge. You can also check out the Climate Solutions website for more great Solutions Stories.
Rising human carbon dioxide emissions may be affecting the brains and central nervous system of sea fishes with serious consequences for their survival, an international scientific team has found.
Carbon dioxide concentrations predicted to occur in the ocean by the end of this century will interfere with fishes’ ability to hear, smell, turn and evade predators, says Professor Philip Munday of the ARC Centre of Excellence for Coral Reef Studies and James Cook University.
“For several years our team have been testing the performance of baby coral fishes in sea water containing higher levels of dissolved CO2 – and it is now pretty clear that they sustain significant disruption to their central nervous system, which is likely to impair their chances of survival,” Prof. Munday says.
The authors “report world-first evidence that high CO2 levels in sea water disrupts a key brain receptor in fish, causing marked changes in their behaviour and sensory ability.”
We’ve known for quite some time about the threat global warming and human activity poses to marine life (see Nature Geoscience study concludes ocean dead zones “devoid of fish and seafood” are poised to expand and “remain for thousands of years“). And we’ve known the threat ocean acidification poses to shell-forming mollusks and crustaceans (see The Great Oyster Crash and Why Ocean Acidification Is “A Ticking Time Bomb” for Both Marine Life and Humanity and links below).
Here’s more on this ground-breaking new paper:
“We’ve found that elevated CO2 in the oceans can directly interfere with fish neurotransmitter functions, which poses a direct and previously unknown threat to sea life,” Prof. Munday says.
Prof. Munday and his colleagues began by studying how baby clown and damsel fishes performed alongside their predators in CO2-enriched water. They found that, while the predators were somewhat affected, the baby fish suffered much higher rates of attrition.
“Our early work showed that the sense of smell of baby fish was harmed by higher CO2 in the water – meaning they found it harder to locate a reef to settle on or detect the warning smell of a predator fish. But we suspected there was much more to it than the loss of ability to smell.”
The team then examined whether fishes’ sense of hearing – used to locate and home in on reefs at night, and avoid them during the day – was affected. “The answer is, yes it was. They were confused and no longer avoided reef sounds during the day. Being attracted to reefs during daylight would make them easy meat for predators.”
Other work showed the fish also tended to lose their natural instinct to turn left or right – an important factor in schooling behaviour which also makes them more vulnerable, as lone fish are easily eaten by predators.
“All this led us to suspect it wasn’t simply damage to their individual senses that was going on – but rather, that higher levels of carbon dioxide were affecting their whole central nervous system.”
The team’s latest research shows that high CO2 directly stimulates a receptor in the fish brain called GABA-A, leading to a reversal in its normal function and over-excitement of certain nerve signals.
While most animals with brains have GABA-A receptors, the team considers the effects of elevated CO2 are likely to be most felt by those living in water, as they have lower blood CO2 levels normally. The main impact is likely to be felt by some crustaceans and by most fishes, especially those which use a lot of oxygen.
Prof. Munday said that around 2.3 billion tonnes of human CO2 emissions dissolve into the world’s oceans every year, causing changes in the chemical environment of the water in which fish and other species live.
“We’ve now established it isn’t simply the acidification of the oceans that is causing disruption – as is the case with shellfish and plankton with chalky skeletons – but the actual dissolved CO2 itself is damaging the fishes’ nervous systems.”
The work shows that fish with high oxygen consumption are likely to be most affected, suggesting the effects of high CO2 may impair some species worse than others – possibly including important species targeted by the world’s fishing industries.
Catastrophic global warming from unrestricted emissions of greenhouse gases remains the gravest preventable threat to humanity, biodiversity and food security (see “Nature Publishes My Piece on Dust-Bowlification and the Grave Threat It Poses to Food Security“).
The time to act was along time ago, but now is better than waiting until we have irreversibly destroyed our ability to feed the 9 billion people we are projected to have by midcentury.
Credit: Image courtesy of ARC Centre of Excellence in Coral Reef Studies)
- Nature Geoscience study: Oceans are acidifying 10 times faster today than 55 million years ago when a mass extinction of marine species occurred
- Geological Society: Acidifying oceans spell marine biological meltdown “by end of century” — Co-author: “Unless we curb carbon emissions we risk mass extinctions, degrading coastal waters and encouraging outbreaks of toxic jellyfish and algae.”
How to Help Hard-Hit Communities, the Environment, and Our Economy
by Alon Cohen, Jordan Eizenga, John Griffith, Bracken Hendricks, and Adam James
This piece is a primer for a Center for American report on Rehab to Rent, which can be found here.
Half a million houses, many of them vacant and deteriorating, are languishing in a bloated U.S. real estate market, threatening to turn some cities into ghost towns, undermining the stability of working families, and proving to be an anchor on a shaky economy. Many of these vacant homes, nearly a quarter-million, are controlled by the federal government.
If the situation wasn’t already bleak enough, there are also more than a million additional American homes saddled with delinquent mortgages that are in the process of foreclosure. Chances are many of these homes will also end up as the property of the federal government. The only way to lower the inventory of decaying homes is to find a use for the ones we have before new ones swell the pool. Without assistance, the current “overhang” of foreclosed homes is expected to take four years to work back into the market.
The good news is the Obama administration and independent federal regulators are formulating plans to sell government-controlled foreclosed properties to investors who would bring them onto the rental market. The aim is to reduce the number of vacant homes which depress housing prices and burden the economy while meeting an increasing demand for rental homes. If made affordable these new rentals can help meet the needs of approximately 100 million American households—about half of all renters—who are “rent impoverished” today, meaning they devote more than a third of their monthly income just to housing. This is a key indicator of pent-up demand for new rental housing.
The Federal Housing Administration, or FHA, and the two mortgage giants Fannie Mae and Freddie Mac—both currently in government conservatorship—collectively own about 230,000 foreclosed homes, mostly from mortgages insured or securitized before the housing bubble burst. Unfortunately, only a small subset of these foreclosed properties are in good enough shape and in strong enough markets to be sold directly to families looking for a place to call home. For the rest, low home prices and weak demand for owner-occupied homes mean that selling hundreds of thousands of them into that market will depress prices for a long time to come.
In this paper we lay out a set of priorities for removing a portion of these properties from the glutted for-sale market by converting them to affordable rental units, a process we call “Rehab-to-Rent” or “R2R.”
With home prices slumping and rental demand and rents rising, these government-owned properties could earn a greater return for taxpayers and do more to promote an efficient and resilient housing market if they are taken out of for-sale markets and converted into rental units. Residents of these communities and American taxpayers who are on the hook for homes now owned by Fannie, Freddie, and FHA would be best served if these homes were rehabilitated, potentially retrofitted for energy efficiency, and then rented out at affordable rates.
The Federal Housing Finance Agency, or FHFA, which is responsible for Fannie Mae and Freddie Mac as their regulator and conservator, earlier this year solicited information from companies, community groups, governments, and other stakeholders on how to do this successfully. Our response was one of over 4,000 received, demonstrating a healthy appetite for this program.
When deciding what to do with these properties, we believe FHFA should focus on its congressional mandate to:
- Preserve and conserve the government-controlled assets and property of Fannie and Freddie.
- Ensure Fannie and Freddie support stable and liquid mortgage markets by operating in a financially safe and sound manner even though they are in conservatorship.
- Maximize assistance for homeowners, where warranted, and minimize preventable foreclosures.
We acknowledge a possible tension in this mandate, namely between maximizing short-term return to Fannie Mae and Freddie Mac—likely by selling the foreclosed homes they own to the highest bidder—and stabilizing local housing markets to benefit taxpayers generally by not flooding the housing market with the mass sale of foreclosed single-family homes. But we believe these goals can actually work in tandem if FHFA focuses on maximizing the medium- and long-term returns on these assets, which will in turn stabilize housing markets and neighborhoods hit hardest by the foreclosure crisis.
This paper offers key considerations for any Rehab-to-Rent initiative Fannie, Freddie, and FHA wish to pursue. It expands on the principles laid out in the Center for American Progress’s official response to FHFA’s request for information, focusing on how R2R could best work in the real world to serve multiple goals. This paper focuses exclusively on how a Rehab-to-Rent program could deal effectively with the continuous flow of so-called “real estate-owned,” or “REO” properties—industry parlance for lender-owned foreclosed homes—that are under federal government control. But we believe that its success could pave the way for similar private-sector initiatives to deal with the quarter-million foreclosed homes held by banks and other financial institutions.
This paper is the product of many hours spent with the underlying economic and housing data as well as conversations with stakeholders in both public and private spheres, including institutional investors, community-based nonprofits, rental-property managers, and representatives from federal, state, and local governments. Because many of those with whom we spoke are intimately involved in internal discussions about what to do with government-controlled foreclosed properties, those conversations took place with the understanding that we would not attribute statements to particular groups or individuals.
The results of our research are detailed in the main pages of the report, but briefly here we present a summary of our proposal.
How R2R would work
This paper is built on two assumptions: First, Fannie Mae, Freddie Mac, and FHA should each determine the best way to dispose of its own REO inventory because each of them brings separate business processes, corporate attitudes, and legal and financial tools to managing their portfolio of foreclosed-upon houses. Combining their inventories of foreclosed properties could have benefits to R2R, but the complexity makes it an unlikely prospect.
Second, Fannie, Freddie, and FHA should use multiple methods to dispose of their stock of foreclosed houses—determining which to sell to individual owner-occupants (referred to as the “retail market” in this paper), which to sell in bulk to investors and community groups, and which to hold as assets and possibly rent out through joint ventures for a period of time. Regardless of the configuration, any disposition strategy should target the same goals, namely:
- Maximize the long-term return of foreclosed single family homes to taxpayers • Stabilize local home prices by reducing the glut of foreclosed properties on the market
- Stabilize communities hit hard by the foreclosure crisis
- Expand affordable rental housing in markets with unmet need
- Expand the stock of energy-efficient homes
- Create new jobs and economic activity in depressed areas
With these goals in mind, we’ve set out benchmarks below by which any R2R strategy should be evaluated. Each benchmark may not apply to every government-controlled foreclosed property, but we believe that each should at least be considered for every community where substantial quantities of them exist. Let’s examine these benchmarks more closely.
Benchmark #1: Tailor strategy to the specific needs and market conditions of the community
As FHFA Acting Director Edward DeMarco stated in his testimony before Congress on November 3, 2011, a “single, national program for REO disposition” will not work. FHFA is rightly interested in “proposals tailored to the needs and economic conditions of local communities,” such as employment opportunities, industry mix, income-level, and the age and quality of the housing stock.
What is required instead is a set of criteria that will help FHFA identify a few fundamental traits that make R2R possible in a community and then look to bidders to make the case for viability in that community. Considerations include having sufficient numbers of government-controlled REO properties within a specific geographic area, unmet demand for rental housing, and financial incentive to invest in rental properties.
Benchmark #2: Ensure bidders have a track record and viable plans to rehabilitate and rent the units
If R2R is to have a measurable impact on communities or the balance sheets of Fannie, Freddie, and FHA then it will have to achieve substantial scale—at the very least tens of thousands of homes within a couple of years. Based on our discussions with Fannie and Freddie representatives, these institutions have around 60,000 to 90,000 foreclosed properties available for active sale right now; larger potential investors have told us they would purchase 10,000 to 25,000 properties immediately if they could. If even a fraction of this is achieved, tens of thousands of homes across the country will be moving into the hands of new owners to be held out for rent. A failure by any one of these new owners—even a partial failure, such as a big delay in rehabilitating properties—could have a large impact on the community where those homes are located.
While we don’t harbor idyllic notions of working within a perfect system, a top priority has to be to qualify buyers and property managers based on proven track records in property rehabilitation and market performance as well as demonstrated potential to provide local benefits through community engagement. Fannie, Freddie, and FHA should consider a bidder’s track record in acquiring, rehabbing, and managing scattered-site, single-family homes; primary location of operation; knowledge of the local real estate market; relationships with the community; and, where appropriate, the organization’s history of community and economic development.
Benchmark #3: Acquire properties for R2R in communities that will maximize long-term returns to taxpayers and stabilize housing markets
One of the most prominent issues in FHFA’s request for information was how to get the properties from the hands of the federal government to those who will responsibly manage them for rent. The primary focus here should be selling to responsible buyers under terms that are most likely to maximize long-term returns. In some instances, that may be an auction to a qualified bidder in order to yield the highest immediate reward. In others, a multiyear joint venture where Fannie, Freddie, or FHA holds the title while the joint venture partner rehabilitates, retrofits, maintains, and rents the properties could yield a greater overall return under certain circumstances.
Regardless of the resulting ownership structure, the process for transferring properties from the federal government for R2R must be carefully designed to avoid cherry picking, to accommodate consortiums of bidders and property managers, and to ensure that neighborhood stabilization remains a key consideration.
Benchmark #4: Expand the affordable rental housing market
At a time of high unemployment and stagnant middle-class wages, affordable housing is critical to our economic recovery. The more low- and moderate-income families spend on housing each month, the less they spend in stores, making businesses leery of investing and hiring new employees. People coming out of their homes due to foreclosure need a place to live, as do workers who need to move to find jobs and will need access to affordable rental housing.
Indeed, the need for affordable rental housing is unprecedented in recent history, therefore any disposition plan should include mechanisms to encourage its provision. One way to do this is by encouraging the participation of local community organizations with experience rehabilitating and managing affordable rental properties. But these nonprofits often lack the capital necessary to be competitive with certain classes of investors such as private equity groups. That is why it is important to provide low-cost seller financing to ensure the participation of mission-driven community groups.
Benchmark #5: Provide incentives to property owners to properly renovate properties and undertake economically justifiable retrofits
Hundreds of thousands of steadily deteriorating foreclosed properties sit vacant today. They will need to be rehabilitated before they can be rented. In some cases, especially when the federal government maintains some financial stake in the property through a joint venture (as we discuss later), this provides an opportunity to reduce the total cost of ownership through economically justifiable, energy-efficient retrofits.
Since individual owners will be rehabilitating many properties simultaneously in a relatively short time period in any Rehab-to-Rent program, they will have an opportunity to go beyond mere rehabilitation and improve home energy-efficiency performance through a deeper retrofit at marginal additional cost. If a new owner of these properties, for example, is already replacing windows or heating systems, energy savings can be achieved for little additional cost by installing higher-quality materials and mechanical systems. There are also social benefits of energy-efficient rental housing: it helps lower our dependence on foreign oil, reduces carbon emissions to help combat climate change, and lowers utility bills for tenants, many of whom are low- and moderate-income families.
Retrofits should be encouraged in any R2R program. Through financing and other methods, the federal government can offer incentives to property owners to conduct proven and cost-effective energy and water saving retrofits that can enhance the long-term value of the property.
Benchmark #6: Ensure sufficient measures are in place to monitor compliance
It is a given that with such an ambitious undertaking involving large numbers of buyers, things will occasionally not work as planned. It is imperative that the government sets up strong monitoring and contingency plans in place not to simply mitigate the risk of failure, but also to effectively respond if investors fail to meet certain compliance requirements. FHFA must monitor those who hold formerly government-owned REO properties out for rent and lay out clear penalties for noncompliance.
Fannie, Freddie, and FHA should restrict a poor-performing investor’s ability to acquire more properties, and for the most serious offenders, establish a mechanism for recapturing properties. The federal government should draw on its experience (both good and bad) in previous efforts to transfer properties from government to private entities, such as the Resolution Trust Corporation set up after the savings and loan crisis of the 1980s.
We take a more detailed examination of each benchmark later in this report, but first let’s turn to a detailed assessment of today’s foreclosed property market to understand more clearly how our Rehab-to-Rent approach can help resolve several festering problems resulting from the housing market crash and subsequently slow and uneven recovery.
You can find the full report on Rehab to Rent here.
Alon Cohen is a consultant for American Progress and also serves as senior vice president and general counsel for a Washington, D.C. startup; Jordan Eizenga is a Policy Analyst with the Economic Policy team at American Progress; John Griffith is a Research Associate with the Economic Policy team at American Progress; Bracken Hendricks is a Senior Fellow at American Progress and works at the interface of global warming solutions and economic development; Adam James is a Special Assistant on the Energy Team at the Center for American Progress.
New Jersey Gov. Chris Christie (R) has nominated Bruce Harris to the New Jersey Supreme Court. Harris will become the first openly LGBT justice on the court, as well as the third African-American. In a phone conversation with Garden State Equality’s Steven Goldstein, Christie expressed that he views the LGBT community as “an important part of New Jersey.” Though Christie previously vowed to veto any attempt to create marriage equality, he recently seems to have left the door open on the issue as state legislators prepare to introduce a same-sex marriage bill.
As our economy seems primed for recovery over the next two years, the best time for completing a heavy planning exercise for your “green business idea” is now. Timing is everything in business, and the present “lull” affords many aspiring entrepreneurs the opportunity to prepare in advance for the “impulse” wave that is sure to come shortly. Planning and preparation is key, but previous guidelines on how to find initial startup capital to get you past the critical early development stage have “morphed” into a moderately different profile.
Yes, the rules have changed dramatically over the past decade, and all for the betterment of “clean-tech” small businessmen. The “virtual” age has arrived, but one area that has become more challenging, however, is acquiring adequate financial funding, the primary reason that most startups fail early. The previous decade has literally “scrambled” the playing field. If you have substantial capital that you are willing to risk in your new pursuit, then you are well ahead of the game. If you are like most Americans that are under water on their home mortgages and struggling to find new sources of revenue, then the path to securing startup capital may prove more daunting than expected. Here is a list of potential funding sources, organized by increasing level of difficulty:
- “The 3-F’s” Friends, Family, and Fools: The people that already know and trust you offer the easiest path to obtaining early funding. This group includes any lines of credit or cash advance possibilities on existing family credit cards. Trying to sell friends on your concept is also a good training ground to prepare for the more difficult investor audiences.
- Vendors and Business Partners: These groups will naturally benefit from your success because you represent increased sales for them. Don’t be shy in asking for advances that will help you build inventory or for longer terms for paying bills. Everyone recognizes how slowly cash turns over these days. They, too, are waiting for new growth to fuel our economic recovery.
- Development Agencies or Incubators: Every state and major university has established one of these agencies or incubators in a region near you. Seek their support to gain access to their networks of financial and business support patrons. These groups can also assist in filing for grants, an “art form” that only the experienced hand can make work.
- Your Local Banker: Unless you have large deposits on account or an income level that will support new loan payments, your local banker will most likely shun any request on your part for a loan. Most banks have suffered heavy losses recently and credit rules are tight. If you do have home equity, they can help with an SBA loan application. They generally do not invest in the promise of an idea, but they do have broad networks of contacts that may be able to help you. Approach them with this intent in mind.
- Angel and Venture Capital Funds: This industry is still licking its wounds from years back, and most capital raised is used to shore up the poor performers in their existing portfolio. Each fund manager may see fifty or more potential “deals” in a month and may select only one a quarter for further study. They usually demand that you already have paying customers for your business solution. If you believe that you can compete at this level, then get prepared, but expect a four to six month timeline before any check is written.
- Online Funding Services: A number of online funding services and communities have sprung up to help entrepreneurs find funding outside their geographic area and existing networks. Some, like RaiseCapital.com, incorporate social networking features to help entrepreneurs connect with investors, others, like Prosper involve peer to peer lending. Others, like Small Business Loans Direct is provide merchant cash advances and small business loans.
When starting your new venture, be sure to leverage your local networks and seek small business loans directly from new “virtual” sources before approaching the more time-consuming and structured alternatives.
Water Minister Richard Benyon has launched a consultation in a bid to tackle bad debt in the water industry, which cost water suppliers more than £1.6bn last year.
The Department for Environment Food and Rural Affairs (Defra) consultation will look at the financial impact bad debt has on water bills, with the aim of implementing measures to lower bills. This follows on from the Government’s Water White Paper, which was released last month.
Water industry figures show that the level of outstanding revenue from domestic water customers in the UK was more than £1.6bn in 2010-2011, forcing the industry to write-off about £328m of household debt.
According to Mr Benyon, failure by some customers to pay their water bills adds an average of £15 each year to other customers’ water bills, which he said the Government is determined to see reduced.
Mr Benyon said: “I want to tackle the problem of bad debt in the water industry as people not paying their bills cost those that do £15 a year. It is just not right that responsible people have to pick up the bills of those who are not paying.
“However, mindful of the burden that regulation may impose, I want to explore whether we can take action through a voluntary approach. We will consider the consultation responses before making a final decision but we must find a way to fill the information gap which is at the heart of this problem.”
As a result, the consultation will consider two options, which include the introduction of a regulatory measure which would make landlords liable for the water charges in tenants’ properties if they fail to supply water companies with tenants’ details. It will also consider a voluntary alternative which would ask landlords and other data holders to share this information with water companies.
In addition, the Government, as part of the Water White Paper, recently announced measures to enable water companies to introduce new social tariffs for people struggling to pay their bills.
Youth Climate Activists Mic Check The Oil Lobby, Promise ‘This Will Not Be The Last Big Oil Hears From Us’Youth activists interrupted the State of the Energy Industry earlier this week to deliver the 99 percent’s message to polluters’ biggest lobbies, who were all gathered for a conference.
The annual event included addresses by American Petroleum Institute, American Gas Association, and the National Mining Association. During API President Jack Gerard’s speech, the activists yelled “mic check” and fact-checked the oil lobby. “Big Oil’s lies are hurting Americans, our economy, and our environment,” the group shouted. “API spends hundreds of millions of dollars corrupting our democracy. … Big Oil is raking in record profits at the expense of the American people.”
One of the protesters described her experience:
We all stood up. Our voices combined were deafening in that small room. I could see Gerard fuming under his smug grin. We were hurried out by Suits with nervous demeanor, but not before we were able to get a few powerful last words in. This was Big Oil’s crown-jewel forum – they’d been advertising this forum on NPR and even their top PR officials were talking it up online. It was clear they were embarrassed and totally caught off guard.
But this will not be the last one Big Oil hears from us. Oh no. We’ll be visiting them again and again, speaking truth to the lies, corruption, and corporate greed of dirty energy, and replacing it with a vision of transparent democracy and a just, clean energy future.
While the protesters promise to return, API is deploying an election-year “Vote 4 Energy” campaign to promote “drill, baby, drill” and deliver on its threat that rejecting the Keystone XL pipeline has “huge political consequences” for the president.
And yet, youth activists have spread the 99 percent’s environmental message across the world, recently. Thousands of protesters fought successfully against the Keystone XL pipeline, and youth voices grabbed attention at the Durban climate conference last month. Now, the 99 percent are taking that message directly to the doorstep of the oil industry.
Are Oceans Interior? We Must Make Sure NOAA Stays Strong No Matter Where it Resides
The Oscar Dyson, a NOAA vessel, headed to summer feeding grounds off the Alaskan coast to study whales that have been teetering on extinction for decades. Even though our oceans aren’t exactly part of the “interior,” moving the National Oceanic and Atmospheric Administration out of the Department of Commerce isn’t a bad idea if it’s done right. SOURCE: AP/ NOAA
by Michael Conathan
On January 13, President Barack Obama announced his plan to implement a sweeping reorganization of the Department of Commerce by consolidating six agencies involved in trade and economic competitiveness. One unintended consequence of this reshuffling is that by redesigning the Commerce Department, we now must find a home for the agency that comprised more than 60 percent of its budget—the National Oceanic and Atmospheric Administration, or NOAA, our nation’s primary ocean research agency.
In a December 2010 report, “A Focus on Competitiveness,” John Podesta, Sarah Rosen Wartell, and Jitinder Kohli detailed why President Obama’s proposed restructuring makes sense for America. But it’s worth taking a closer look at how such a move would affect NOAA and in turn affect how we manage our oceans.
The president’s plan would relocate NOAA to the Department of the Interior. In his remarks, President Obama went so far as to suggest that the Department of the Interior was a “more sensible place” for NOAA, and that it only ended up at Commerce at its inception in 1970 because then-President Richard Nixon was feuding with then-Secretary of the Interior Walter Hickle, who had publicly criticized President Nixon’s handling of the Vietnam War.
While this storied example of Beltway pettiness has circulated among ocean policy wonks for years, the reality is rather more complex. In fact, when NOAA was established in 1970, 80 percent of its budget and more than two-thirds of its employees came from the Environmental Science Services Administration—an agency that included the Weather Bureau, the Coast and Geodetic Survey, and Environmental Data Services—which was already housed at the Department of Commerce.
Since the announcement, many environmental groups have decried the move as potentially compromising NOAA’s scientific integrity by shifting the agency to a department that has developed a reputation for being industry friendly. Certainly, degradation of NOAA’s science-first attitude is to be avoided at all costs. Yet there is no reason the agency’s mission can’t be maintained under the auspices of Interior provided the agency retains its structural integrity and its budgetary clout.
Are oceans interior?
The greatest inconsistency about relocating NOAA may be the name of its possible new home. Suggesting that oceans should be considered “interior” is clearly a stretch. The United States’ exclusive economic zone—the area of ocean over which we have internationally recognized jurisdiction—extends 200 miles from our shores and is nearly one-and-a-half times the size of our land area. A stronger case could be made that the continent is interior to our oceans.
Still, while NOAA’s contributions to business and industry are numerous—try running a shipping company or planning farming operations without accurate weather forecasting, for example—it’s hard to make a case that NOAA is better suited to be managed alongside the Bureau of Economic Analysis, the International Trade Administration, and the U.S. Patent and Trademark Office (Commerce) than with the Bureau of Ocean Energy Management, the National Parks Service, and the U.S. Fish and Wildlife Service (Interior).
And let us not forget that Interior is a department that is, at its core, tasked with conservation. Listed first among its tasks in its mission statement is that it “protects America’s natural resources.” After all, Interior established our first national park at Yellowstone in 1872.
While Interior’s conservation ethic has been compromised in recent decades by interference from extractive industries like oil and gas, forestry, and mining, the Obama administration has made great strides in regaining control of our natural resource agencies. In fact, bringing NOAA into the fold may actually provide a positive example to other Interior agencies and drive the department back toward its conservation-oriented roots.
Ocean advocates would do well to recall that government reorganizations are cumbersome and don’t come along all that often. Thus, we must take the longer view of this effort. Rather than simply considering how NOAA would fare in today’s Interior Department, we should consider how it would interact in an ideal Interior Department. Viewed through that lens, the move takes on a more positive outlook.
Concerns about regulatory oversight
Under previous administrations, the Department of the Interior did about as good a job cementing its conservation reputation as BP and Halliburton did cementing the Macondo well in the spring of 2010. One need look no further than that disastrous oil spill, which exposed massive failures of oversight in Interior.
In the aftermath of the disaster, accusations abounded suggesting the agency had allowed the fox to guard the henhouse by, among other things, hiring a former BP executive to serve as deputy administrator for lands and minerals management. The independent National Commission on the BP Deepwater Horizon Oil Spill found that the Minerals Management Service (subsequently split into two agencies in Interior and renamed the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement) had committed a “serious and ultimately inexcusable shortfall in supervision of offshore drilling.”
Perhaps no environmental organization has been more vocal in its opposition to move NOAA to Interior than the Natural Resources Defense Council, whose president, Frances Beinecke, said the move “could significantly undermine efforts to safeguard our oceans and marine life.” As a member of the oil spill commission, Beinecke saw behind the curtain and knows exactly how dysfunctional the Minerals Management Service’s regulatory efforts actually were, so her opinion on the matter should not be taken lightly.
In short, it’s no secret that Interior’s modern-day oversight of natural resource extraction in our oceans has been inherently flawed. But thanks in no small part to the National Commission on the BP Deepwater Horizon Oil Spill’s efforts, the Obama administration has been taking steady steps to overhaul the problems exposed by the BP catastrophe.
And it’s possible that bringing NOAA and its history of fairly strong regulatory oversight could help turn the tide within a department that in recent years has too often caved to pressure from those it is tasked with regulating. It would certainly stand to reason that having NOAA under the same roof as the agencies that permit and regulate offshore drilling would give NOAA a stronger voice in offshore drilling decisions.
Maintaining NOAA’s integrity
NOAA’s potential move to Interior is sensible given that they share a conservation mission. And as just mentioned, NOAA could bring some much-needed regulatory experience to the department. The issue that remains is how to keep the agency operating most effectively after the transition—something we should strive for no matter which way the political winds blow.
Until midway through President Ronald Reagan’s term, the president held the authority to reorganize cabinet departments and federal agencies, but that provision of law expired in the early 1980s. Congressional Republicans will be loath to allow President Obama to score political points by executing a successful reorganization of government functions in the run up to an election. Many feel this political reality will prevent them from voting to reinstate this authority, but there is no guarantee.
Meanwhile, ocean advocates must recall that the president’s initiative is not fueled by their pet issue. Rather the reorganization of business and commercial agencies is the priority here, and shifting of NOAA out of the Department of Commerce is fallout, not fundamental. This decision will not be made on the merits of natural resource policy.
As such, they must prepare for the possibility that if the business community sees sufficient value in the red-tape reduction that could result from this move, it will pressure its political allies in the Republican Party to give in to President Obama’s request.
Should that come to pass, there are three key areas that must be addressed.
Maintaining scientific integrity
NOAA has a strong history of keeping its science free of interference from undue political influence. Last month, the agency released a new scientific integrity policy—something the Obama administration has vowed to implement for all federal agencies. According to the White House, these policies “will help ensure that federally supported science and scientific information remain undiluted and untainted—not only for policymakers but also for the public.”
NOAA’s was among the first to be released, and Francesca Grifo, the director of the Union of Concerned Scientists, calls NOAA’s policy “the best that I’ve seen.”
By contrast, she called the Department of the Interior’s proposal “sorely lacking in detail and public accountability.” She went on to say, “By itself, [Interior’s new policy] is insufficient. For example, it’s troubling that the new process for evaluating allegations of wrongdoing lacks transparency.” She ultimately gave the department a grade of “incomplete.”
Policies required by law, like the mandate that all U.S. fisheries operate under scientifically based annual catch limits, will remain in place regardless of which department claims jurisdiction over NOAA. More critical, however, will be ensuring NOAA’s science-first attitude remains paramount among the agency’s priorities.
Maintaining structural integrity
NOAA is comprised of five fundamental components—referred to as line offices—and it is attempting to establish a sixth. These are the National Ocean Service, the National Marine Fisheries Service, the National Weather Service, the Office of Oceanic and Atmospheric Research, and the National Environmental Satellite Data and Information Service. The current NOAA administrator is also attempting to set up an NOAA Climate Service to coordinate research efforts on global climate change.
While those seeking greater government efficiency may, at first blush, see more opportunity to pare off portions of these line offices to be combined with existing Interior agencies (handing over control of fisheries or protected marine resources to the U.S. Fish and Wildlife Service, for example), such efforts should be rejected. Over the course of NOAA’s 40-year history, these offices have come to be inextricably interwoven and any efficiency gained by splintering them apart would be overwhelmed by disrupting those decades of collaboration.
NOAA’s response to the Deepwater Horizon oil spill was a prime example of this collaboration. Personnel and data from all five line offices came together, bringing their specific expertise to bear from fisheries and protected resources to satellite and surface mapping of ocean currents, wind, and weather patterns, to coastal restoration and habitat concerns. This partnership and cooperation ensured NOAA’s response to this tragedy was far greater than the sum of its individual parts.
Maintaining budget priority
One of the biggest assets NOAA has enjoyed within the Department of Commerce is the size of its budget relative to the rest of the department. In recent years, the agency has represented approximately 60 percent of overall spending within Commerce. In fiscal year 2012 NOAA received $4.9 billion in funding, a figure that would still make it the elephant on Interior’s budget sheet—currently the highest funded agency is the National Park Service at about $2.6 billion.
But given Interior’s role as regulator of revenue-generating activities such as oil-and-gas production, mining, and other resource rents on public lands, a direct comparison of budget line items doesn’t tell the whole tale. Because activities regulated by Interior are critical moneymakers for the federal government, the department can often attract a higher degree of attention from Congress and other political entities.
While political leaders often promise the moon when it comes to prioritizing agency budgets, there are never any guarantees. In 1970, when President Nixon made the initial decision to place NOAA within the Department of Commerce, Steven Schanes was one of Secretary of Commerce Maurice Stans’s field generals. Schanes, who passed away in 2010, immortalized the budget concerns in a blog post in 2008:
Since there was very little likelihood of [NOAA receiving sufficient funding], I decided to make a special advance effort toward making NOAA effective after it came into our Department. In an early private meeting with [Office of Management and Budget Associate Director] Dwight Ink, I said, “Dwight, on behalf of the Secretary, I must tell you that we are not interested in acquiring NOAA unless you can assure us that the necessary funds will be provided to carry out the recommendations of the Stratton Commission [America’s first ocean policy commission that recommended establishment of NOAA] concerning research and services. We want to do the job right. Otherwise this entire exercise becomes one big public relations thing, and we’re just not interested.”
Dwight gave me the appropriate assurances.
A year later, our request for NOAA’s budget was cut so severely that very little of the Stratton Commission’s recommendations could even be initiated. Of course.
Ensuring NOAA’s voice continues to be heard by the secretary of its overseeing department as well as within the halls of the Office of Management and Budget—the office that consolidates and prioritizes departmental budget requests—and ultimately in cabinet meetings will be fundamental to its future success.
At the end of the day, the department in which NOAA resides is less vital to its underlying mission than the integrity and independence with which it carries out its mission. Regardless of which department houses the agency, we must continue to battle for adequate funding to carry out the vital recommendations of the Stratton Commission’s successor—the U.S. Commission on Ocean Policy, which produced its final report in 2004 and formed the basis for President Obama’s National Ocean Policy, which was finalized in 2010. Whether at Interior or Commerce, healthy oceans will remain fundamental to our nation’s economic and environmental future.
Michael Conathan is Director of Oceans Policy at American Progress.