The chapter
introduces six themes and three frameworks of environmental law. The themes are
scientific uncertainty, market failures (including public goods, the tragedy of
the commons, collective action, and free riders and externalities), mismatched
scales, cognitive biases, sustainable development, and protected interests. The
three frameworks are environmental rights, utilitarianism cost-benefit
analysis, and environmental justice.
Scientific Uncertainty
Environmental
policy considerations frequently encounter scientific uncertainty. Some issues
like climate change and its impacts involve a high degree of uncertainty. Single
environmental problems may have multiple causes with magnitudes that are difficult
to quantify.
“Uncertainties over the magnitude of environmental
problems, their causes, and future impacts bedevil law and policy.”
Often, we are
faced with the choice of acting to pre-empt potential environmental harms, acting to prevent them without scientific certainty or to approve
them while cautiously gathering more data to reduce uncertainty in a kind of
trial-and-error approach. The authors give two basic strategies for addressing
scientific uncertainty. The first strategy is simply to develop better information. The second strategy
accords with the pre-emptive reduction of potential harm and is known as the precautionary
principle. While this approach may seem sensible on the surface it often
results in unnecessary prevention of potential benefits as well as in
preventing potential harms that are later revealed as less harmful. There are
many examples of this, and I have written about them when examining what I see
as the two main approaches to risk: the precautionary principle and what I call
the harm-benefit
feasibility approach. The authors
do acknowledge the limitations of the precautionary principle, noting that it often
“councils inaction in the face of uncertainty, no matter what the cost,
and that it makes it difficult to choose between risks. These risk-risk choices
where each choice has some risks are common in environmental policy considerations.
The question is often how well the problem must be understood before taking action.
Policy must consider science, but it must also consider effects on the economy
and on costs that may affect the poor.
Market Failures
Environmental
protection often must consider economic effects. If one state or country has
lax environmental rules compared to others, then businesses may choose to be
there to avoid regulatory costs, giving them an economic advantage over other
states or countries. Proper evaluation should include some kind of quantification
of the value of environmental protection, which should be seen as a public
good, something in the public’s interest. As a “good,” environmental protection
can be assigned an economic value and can be seen as having a supply and demand
dynamic where costs rise and fall with scarcity or abundance. If environmental
protection becomes scarce, the cost of polluting should rise. That often does not
happen at all. That is apparently what they mean by market failure, that the market
mechanisms for environmental protection are not leading to the desired result
which is increased environmental protection.
The authors
give four “distortions that result in market failure. The first is public
goods. This involves the quantification of environmental protection. Clean air,
clean water, and ecosystem services are clearly in the public interest. They
are valuable but they have no market value and no price. Policy, however, often
considers and estimates their value and price.
The second distortion
given is the tragedy of the commons which is basically a metaphor. The
traditional example is a growing sheep population grazing all the available public
grazing space, resulting in a loss of forage. If many people or businesses are
competing to produce a clearly finite resource, such issues can arise. The
atmosphere as a dumping ground for greenhouse gases has been a common example
for a long time. The issue is prevalent where there is open access to what are
often seen as public resources, such as farmers tapping a communal groundwater
aquifer for irrigating crops. How should that aquifer be protected against over-producing?
The third
distortion given is collective action and free riders. This collective
action problem occurs when a large number of entities (people or businesses) are
sharing a resource or a sink (such as the atmosphere). The more entities
involved, the more complex and costly is the effort to reach consensus. If some
entities voluntarily decide to reduce their exploitation of the resource or sink,
then others may be empowered to do the opposite to get even more market share
and make more money. These entities are known as free riders.
“Any solution to commons problems must overcome both the
high transaction costs in reaching agreement among many parties (collective
action) and counterproductive behavior by parties outside the agreement (free
riders).”
The last market
distortion given is externalities. Externalities are costs that must be
paid that are external to normal operating costs. In the context of environmental
protection externalities are basically regulatory costs for businesses. They
may also be environmental benefits of a protected environment that has benefits
such as ecosystem service, recreational value, water purification, or flood
control. They give a wetland as an example. In this case, the environmental
benefit is seen as a positive externality. In the case of pollution that is
emitted into the atmosphere, there is potential harm that increases with the amount
of pollution emitted. This regulatory cost in the face of environmental laws is
known as a negative externality. When the costs are acknowledged and paid by
the emitters or in the case of a positive externality where beneficial areas
are preserved and protected at some cost, this is known as the internalization of
externalities. If all negative externalities were internalized, then it would
be more costly to pollute, and environmental protection would be reinforced. If
all positive externalities were internalized, then benefits like ecosystem
services and resource conservation would be reinforced by being rewarded for preserving
or enhancing those benefits. One of the challenges of internalizing externalities is properly valuing the harms and benefits. Another is
consideration of the costs of regulation or of preserving benefits. The authors
note:
“One of the key goals of environmental law id to bring
environmental externalities to the marketplace.”
Mismatched Scales
The divergence
of natural boundaries and political boundaries is an example of mismatched
scales. Water and air move through the atmosphere and along water bodies. Only
natural boundaries affect where they go. The issue of pollution drifting from
one state to another is pertinent. The EPA’s ‘good neighbor’ provision of the Clean
Air Act requires that a state whose pollution drifts to another state must submit
documentation to the EPA indicating how it is reducing that air pollution that
drifts to nearby states. In 2024 the Supreme Court put a hold on the provision.
Its enforcement has also gone back and forth with changing political parties.
There are many
examples of mismatched scales in the form of these geographical spillovers.
Acid rain is a big one where sulfur dioxide emissions from power plants drift
with the prevailing weather to cause environmental harm in nearby states and
countries. The connectivity of the ecosystem does not always follow geography
such as where migrating bird populations may be affected by actions taken in a
specific place. Another example given is climate change, where fossil fuel emissions
may contribute to other problems in other places such as islanders or coastal dwellers
losing their land due to sea level rise.
Mismatched
political and natural boundaries also make management challenging. Each
locality and state affected has its own rules that must be integrated with federal
rules. Thus, jurisdiction is often an issue that makes collective action costly
and much slower than it needs to be. We see this a lot with electricity
transmission and power operators like regional transmission authorities and power
grid operators and with pipeline developers and FERC who must get many
different entities on board with transboundary projects. This has resulted in bogged-down, costly, slow, uneven, and inconsistent project development. There is
little doubt that we need permit reform to address some of these issues.
The authors
also mention the issue of federal public land use. Much of that land in the
U.S. is in the West and use of such land is regulated. There have been several
backlashes against the notion that some of those lands were being overgrazed by
ranchers. Such backlash has become a part of the anti-federal government movement.
Remember, the Bundys?
States or countries
that have different pollution standards are another variant of mismatched
scales based on political boundaries. There is no doubt that companies relocate
to take advantage of lower regulatory costs , sometimes due to lower
pollution standards. In some cases, it is difficult to blame them. If one
wanted to build a polluting entity, such as a refinery or a power plant, I am
guessing that it would be more expensive to build in California as opposed to
Texas. Elon Musk moved Tesla headquarters, and Chevron moved their headquarters
from California to Texas, no doubt in part for a regulatory cost advantage. Musk
had less to gain than Chevron and likely had other reasons as well.
The authors
note that scale problems also occur in time. Future harm from present action is
difficult to predict but must be considered. They give two examples where the potential
future harm is global: climate change and ozone depletion.
Cognitive Biases
Environmental
policy has to consider the possibilities and probabilities of environmental
impact, which are often not easy to discern due to scientific uncertainty. We all
know that uncertainty can be and often is exploited. Arriving at decisions and developing
nuanced opinions based on the best science can be difficult. Many people
develop cognitive biases that are often seen as irrational. This brings us into
the realms of psychology, human behavior, and risk perception. We often
conclude that some things are less or more dangerous than they really are. That
is known as the risk perception gap. These result in failures to properly
evaluate quantitative data and real risk. Add to these that there are many
ideological groups seeking to influence one’s views on environmental protection.
They often use numbers to propagandize their cases. This includes those who
seek more protection and those who seek less protection. Perceptions are often
not just based on facts but also on existing cognitive biases. These biases can
result in distortions which the authors call egocentric interpretations of
fairness.
Sustainable Development
The goal of
sustainable development is to deeply consider sustainability in the process of development,
to balance economic growth while minimizing environmental impact. While
development is a threat to the environment, poverty is also a boon to
alleviating poverty.
“By linking environmental protection and poverty
alleviation to economic development, sustainable development forged the key
insight that development and environmental protection efforts must be mutually
reinforcing.”
They also point
out that sustainable development considers intergenerational equity by
considering potential impacts on future generations. The goal of development is
not simply growth, but to give people access to what they need to survive and
prosper. The goal of sustainable development is to do that in a manner where unnecessary
harms are prevented. We must also develop within the constraints of the environment
in terms of resources and pollution. Decoupling of pollution and carbon
emissions from economic growth has been occurring for decades now in developed
countries, especially in the 21 years since this book was published. In many
cases, consumption of energy, pollution, and carbon emissions intensity have
dropped.
Protected Interests
Clashes of
competing interests are common in environmental policy debates. Protected
interests include the interests of future generations. The interests of
ecological entities such as a protected species are included. Environmental
advocates and regulators may be considered to be proxies of protected species
in some cases.
Three Analytical Frameworks of Environmental Law
The three
analytical frameworks of environmental law introduced are environmental rights,
utilitarianism and cost-benefit analysis, and environmental justice. These
frameworks are used in consideration of whether to permit activities of various
kinds that could have environmental impacts. Policymakers typically use one, two,
or all three of these general frameworks. Pragmatists may use all three. Utilitarianism
is always a consideration, and cost-benefit analysis is required at the federal
level for rulemaking. Consideration of the impacts of the policy implementation
is also required. An analysis is done to determine potential impacts on different
populations when screening for environmental justice risks.
Environmental Rights
It certainly
seems logical and sensible to assume that humans have a right to some degree of
environmental protection. Such a right is enshrined in the UN Declaration. They
note that the idea of environmental rights helped to lead to the establishment
of the federal regulatory apparatus, led by the EPA.
Realistically,
we cannot get rid of all pollution, but we can reduce it to less harmful
levels. Thus, we cannot guarantee a pollution-free environment for all. The
costs would be far too high. Thus, we have to accept compromises and tradeoffs.
Should future
people have a right to a clean environment, or should we be required to
conserve dwindling natural resources for them? Another very important consideration
is how this could happen and to what degree.
Environmental
rights can be of different varieties. Anthropocentric rights concern the rights
of humans. Biocentric rights concern the rights of species and biological
entities. Eco-centric rights concern the rights of ecosystems. It is debatable
whether the last two concerns should be regarded as rights since species and ecosystems
are not social or political entities.
Environmental
rights could also clash with economic rights, the right to employment, property
rights, or the right to self-determination. Thus, the environmental rights
framework must also consider potentially competing rights.
Utilitarianism and Cost-Benefit Analysis
This framework
considers and compares regulatory costs to societal benefit. It is not easy to
do but standard methods have been developed. The goal is to derive a monetary
value for each coat and benefit and determine if the benefits exceed the costs
or vice versa. Benefits such as avoided medical costs, lives or species saved, and
aesthetic value are tabulated against the costs of the regulation such as loss
of employment, reduction of development, and cost of pollution abatement
equipment. If a regulation is designed to save human lives, then a different method
may be used such as calculating the cost per life saved. This involves utilizing
the statistical value of a human life, which differs in different places due to
economic constraints.
Cost-benefit
analysis involves determining the costs and benefits of different policy alternatives.
As noted, this is now a requirement for federal environmental policy.
Tradeoffs are hard
to avoid and are nearly always a feature of environmental arguments. New regulations
can lead to higher product prices. higher energy bills, or less power grid
reliability. They can also lead to less money being spent on competing societal
needs. Cost-benefit analysis is hampered by the difficulty of getting all
parties to agree on the assigned cost or benefit values that underlie each
tradeoff. Another issue mentioned is that the costs of a regulation are often incurred
at the time of implementation, but the benefits won’t be realized until some
point in the future. Money is generally more valuable in the near term and that
is another consideration.
“Standard economic analysis states that these future
benefits should be discounted – i.e., given a reduced value compared to
current costs and benefits, because (1) most people would prefer a dollar today
to a dollar next year and (2) any monies saved today by not adopting a regulation
can be invested to generate a larger dollar sum in the future.”
Economists
often disagree on what this discount rate should be. Some argue for the private
discount rate considered individuals and businesses in economic rate of return.
Others argue for a social discount rate that does not reduce the value
of future benefits as much.
Scientific
uncertainty also plagues cost-benefit analysis. This can make cost-benefit
analysis seem like a crude way to estimate true costs and benefits, which are often
less apparent. After expected values are determined for each uncertain cost
and benefit, statistical methods like sensitivity analysis may be
applied to determine cost-benefit balance. Worst-case scenarios may be
explored as well to help mitigate uncertainty. In any case, while cost-benefit
analysis is very valuable and as I have argued before should be the default approach
in most situations, it does have a high margin of error in a sense in that
uncertainty levels often remain high for many variables.
Environmental Justice
The third
framework is environmental justice. Environmental justice considers which
groups of people bear the burdens of environmental harm, but also of
environmental regulation, Usually, we see it related to harm, and rarely, if
ever, encounter it in terms of the burden of regulations. Certain socio-economic
classes, or disenfranchised groups like African Americans, often live in
certain areas and if those areas are chosen for economic development or other
activities that produce local pollution, then that is a huge concern to those
communities. Economically disparaged communities may have poorer health in
general and so be more susceptible to the harms of pollution.
Ideally, such
burdens should be distributed equally among all populations but for many
reasons that is not often the case. In extreme cases one might term
environmental justice issues as environmental racism, but I believe such cases
are rare these days, although they may have occurred more often in the past. Most
environmental justice issues are issues from the past or legacy environmental
justice issues. President Clinton was the first to require that environmental
justice be incorporated into decision-making. It should also be noted that even
though there may be multiple reasons why environmentally dangerous facilities
are located near minority and poor communities, there is little disagreement
that they are located in these communities. Again, the vast majority of this
siting happened far into the past before such ideas as environmental justice
began to be considered. The co-location of housing developments and industrial facilities
in the past has led to many disproportionate effects on these communities.
Consideration
of these distributional impacts is now also required by federal law. I believe
it was Obama who made that requirement, which Trump did not change, and which
Biden emphasized in many areas.
Some examples of
less-considered environmental justice issues include emissions trading where one
company is allowed to pollute by trading their emissions allowances to another company
that reduces their emissions instead could lead to pollution remaining in the disenfranchised
community. Other examples are the disproportionate effects of regulations that
might result in higher costs for minority and poor communities. Another example
is that of renewable energy subsidies being far more available and advantageous
to wealthy communities. In that case, the benefits are often limited to the
wealthy and exclude the minority and poor communities.
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