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President Donald Trump’s move this week to direct the Environmental Protection Agency to start rewriting the Clean Power Plan has dismayed environmentalists.
Investors should pay heed as well.
True, the Obama-era policy, which aimed to push utilities to move to cleaner fuels and away from coal, had already been held up by the Supreme Court, and legal experts say it could take years for the Trump administration to unwind policy. Utilities are expected to continue their shift away from coal and toward cleaner-burning fuels, which is already well-advanced.
Even the EPA agrees it’s too early to predict what will happen.
“Right now it’s a little too early to tell,” Illinois EPA spokesperson Kim Biggs told MarketWatch. “We’re reviewing things as information comes available to us. We haven’t taken any actions in response to the proposals.”
This week’s action follows Trump’s order that the EPA start the process of repealing a regulation Obama had introduced to bring more of the nation’s waterways under federal jurisdiction as a way to protect drinking water.
All told, actions to rein in what Trump deems as unnecessary and burdensome regulations may end up causing pain in other ways, possibly for decades to come, if it encourages companies to revert to past behavior.
Environmentalists fear easing regulations will encourage companies to engage in activities that will put public health at risk, making air and water dirtier and raising greenhouse gas emissions. Those fears are not unfounded — some companies have a history of actions that created public health issues even when regulations were in place that should have prevented them.
Those actions have often come at the cost of steep fines and penalties and in some instances have sent companies into bankruptcy. In other instances, reputations built over years have been crushed by negative publicity.
Here are five examples:
Volkswagen’s emissions cheat
The German car maker is a textbook case of a company flouting environmental laws for profit. Volkswagen /zigman2/quotes/206736865/delayed DE:VOW +0.28% earlier this month pleaded guilty to criminal charges for rigging diesel-fueled vehicles so that they would pass government emissions tests in a scandal that badly hurt the company, its reputation and arguably even damaged the good name of corporate Germany.
See also: Is the EPA holding your diesel hostage?
The charges included conspiracy to defraud the U.S., commit wire fraud, violate the Clean Air Act, obstruction of justice and import violations. The company is paying a $2.8 billion criminal fine and a $1.5 billion civil penalty. It has also made previous civil settlements and is being investigated in other countries. The emissions cheating took place for more than a decade, during which time the company was polluting beyond legal limits and lying to its customers. The EPA uncovered the deception in September 2015 and said the cheat devices allowed cars to spew emissions that were up to 40 times above acceptable limits.