Ecosystem services and the Clean Water Act: strategies for fitting new science into old law.

• Author: Ruhl, J.B.

1. INTRODUCTION II. DEFINING POLICY SPACE FOR ADMINISTRATIVE REFORM III. STRATEGIES FOR INTEGRATING ECOSYSTEM SERVICES INTO EXISTING REGULATORY PROGRAMS IV. THE CLEAN WATER ACT A. Section 404 Dredge and Fill Program--The Direct Protection Approach B. Section 303 Water Quality Standards and TMDL Program--The Performance Metric Approach V. CONCLUSION I. INTRODUCTION

   The Clean Water Act (CWA) (1) has proven to be a remarkably effective and adaptive law over its forty-year history. It is widely credited with being the catalyst for the great strides our nation has achieved in improving water quality and protecting public health. (2) But it is an old law, and it has not been updated through significant legislative reform in over two decades. (3) In that time, it has become apparent that the statute's statutory structure has failed to keep pace with scientific advances, one prominent example being research on ecosystem services. (4)

   Ecosystem services flow to human communities in four streams: 1) provisioning services are commodities such as food, wood, fiber, and water; 2) regulating services moderate or control environmental conditions, such as flood control by wetlands, water purification by aquifers, and carbon sequestration by forests; 3) cultural services include recreation, education, and aesthetics; and 4) supporting services, such as nutrient cycling, soil formation, and primary production, make the other three service streams possible. (5) As research that has emerged and burgeoned over the past decade has shown, aquatic resources provide bountiful supplies of ecosystem services to human populations, including through groundwater recharge, storm and flood mitigation, sediment control, water purification, climate regulation, water supply, and recreation. (6) The connections between the CWA, the central objective of which is "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters," (7) and the conservation of ecosystem services thus seem obvious and numerous, yet nowhere in the CWA are these connections made explicit. (8) This Article addresses the questions of whether, where, and how those connections can be drawn so that new knowledge about ecosystem services can be integrated into decision making under the CWA.

   To be sure, the CWA is not the only environmental law that has fallen behind the times in this respect. Ecologists and economists have been forging the theory and application of the ecosystem services concept since the mid-1990s, (9) but only in the past few years has the concept begun to register in any meaningful way in federal environmental policy. (10) Many of the environmental laws Congress passed in the 1970s have undergone little more than superficial reforms, if any, in the past twenty years, (11) meaning new scientific concepts such as ecosystem services often find no clear home in existing statutes. This gradual scientific atrophying of environmental statutes has put tremendous pressure on administrative agencies such as the United States Environmental Protection Agency (EPA) to adapt regulatory programs to stay up to date with new knowledge and emerging policy challenges. In some cases agencies have carried out sweeping reforms at the administrative policy level, such as the broad reforms the United States Department of the Interior accomplished for the Endangered Species Act (ESA) (12) in the 1990s. (13) But the latitude agencies have to engage in substantive administrative reform in the absence of substantive legislative reform depends on the text and interpretations of the existing statutes on the books. (14) Each statute thus presents its own specialized "policy space" within which an agency could, if so inclined, adjust the regulatory program through administrative reform to reflect new knowledge.

   This Article explores the administrative reform potential that exists for integrating new knowledge about ecosystem services into CWA regulatory programs as an example for all environmental laws. Part II of the Article reviews the relevant general rules of federal administrative law governing agency interpretation of the policy space available under statutory authority. (15) Part III then explores the strategies an agency such as EPA can use under those rules to integrate the concept of ecosystem services into regulatory programs by searching for statutory provisions to support what I call "direct protection" authority and "performance metric" authority. Part IV of the Article turns to the dredge and fill permit program of section 404 of the CWA (16) and the water quality standards and total maximum daily load (TMDL) program of section 303 of the CWA (17) as its case studies, showing how opportunities for and obstacles to the two integration strategies arise in the structure and text of the statute. The Article closes with some thoughts on a more overarching agenda for working ecosystem services into existing federal environmental protection programs.

2. DEFINING POLICY SPACE FOR ADMINISTRATIVE REFORM

   Initiating regulatory reform in the context of stale statutory authority can be a significant challenge for an agency. Social and economic interests entrenched in and benefitted by the status quo are likely to attempt to bring political pressure on the agency to protect their interests. (18) On the other hand, whatever conditions have prevented Congress from acting for so long in the relevant field are likely also to dampen the prospect of legislation negating the agency's regulatory reform. (19) Much of the action in this context thus plays out in court as interests opposed to the agency's reform agenda, whatever form it takes, seek judicial review and rejection of the agency's decision as inconsistent with existing substantive and procedural requirements. (20)

   Although judicial review of agency action can take many forms and involves numerous matters for judicial consideration, the key questions in the regulatory reform context are, as Table 1 summarizes, whether the proposed reform is consistent with the Constitution, authorized by relevant statutory authority, and compatible with the agency's existing regulations. (21) If the answer to all three of those questions is affirmative, then all the agency need do, if even, is announce the agency's position through what is loosely described as "guidance." (22) Although there is a point at which a substantial change in approach could be deemed to require promulgation of new legislative agency regulation, (23) the reality is that agencies can accomplish a tremendous amount of incremental regulatory reform through guidance and other "gray law" mechanisms. (24)

   Significant regulatory innovation, however, is often going to require more significant changes to the existing regulatory regime for which mere guidance will not suffice as the sole or even primary implementation mechanism. At one extreme, agency reform action that is inconsistent with constitutional principles would require an amendment to the Constitution, which is a highly unlikely prospect. The more salient issue, therefore, is whether a proposed regulatory reform requires new statutory authorization or only a new agency regulation.

   From the agency's perspective, being able to carry out the initiative without need of new legislation may often be preferable, but it is not always clear whether the existing statute will allow it. If the new proposed regulation extends, departs from, or conflicts with prior agency regulations and practice, the agency thus must predict whether the proposal is permissible under the existing statute. In making this prediction, the agency must walk the line between two types of error: a false positive, in which the agency incorrectly concludes existing laws allow a new regulatory innovation, and a false negative, in which the agency incorrectly believes existing laws do not allow the regulatory innovation.

   One of the key principles of federal administrative law provides considerable latitude for agencies in navigating between these two types of regulatory reform error. In Chevron U.S.A, Inc. v. Natural Resources Defense Council, Inc. (Chevron), (25) the United States Supreme Court held that ambiguities in statutes within an agency's jurisdiction to administer are congressional delegations of authority to the agency to fill the statutory gap in a reasonable fashion. (26) Filling these gaps, the Court explained, involves difficult policy choices that agencies are better equipped to make than courts. (27) Thus, if a statute is ambiguous, and if the implementing agency's construction is reasonable, Chevron requires a federal court to defer to the agency's construction of the statute, even if the agency's reading differs from what the court believes is the best statutory interpretation. (28)

   Chevron has many nuances (29) and has received considerable favorable and critical attention in legal and policy scholarship, (30) but its core principle remains quite active and enforced in the courts in the context of an agency regulatory promulgation interpreting the agency's organic statutes. Indeed, more recently the Supreme Court explained that Chevron applies even when an agency is not merely extending existing policy, but also when it has completely changed directions under its statute. (31) In National Cable & Telecommunications Association v. Brand X Internet Services (Brand X) , the Court held that

   if the agency adequately explains the reasons for a reversal of policy, "change is not invalidating, since the whole point of Chevron is to leave the discretion provided by the ambiguities of a statute with the implementing agency." "An initial agency interpretation is not instantly carved in stone. On the contrary, the agency ... must consider varying interpretations and the wisdom of its policy on a continuing basis," for example, in response to changed factual circumstances, or a change in administrations. (32) The...