A Commonsense Policy To Protect The Environment

By Robert K. Best
August 1997 — Issue Number MS-4
Monograph Series

Twenty-five years ago our nation experienced a paradigm shift of historic proportions. “Environmentalism” was embraced as a national ethic. While some segments of society have been slower than others to recognize the importance of protecting the environment, no credible person today argues for the “right” to dump dangerous carcinogens into a drinking water supply or for a return to the polluting automobiles of the first half of this century. But debate still rages about the proper boundaries of government action to protect and preserve the environment. How clean is clean enough? What is the best mechanism for establishing the standard of cleanness that society wants? Who should pay for open space, habitat, and other “quality of life” factors?

Too often the debate has been reactionary. When legislative bodies set nebulous goals for a clean environment, regulatory agencies react with a “command and control” hammer. Clean is defined as clean as can possibly be. Regulators adopt draconian standards and harsh penalties, which force industry to adapt or die. Industry naturally reacts venomously against what it perceives to be regulatory overkill. This adversarial approach dictates extreme positions to rally supporters and to stake out the strongest apparent position. Finally, the public reacts with confusion and concern as regulators, lawmakers, and the regulated wage a holy war across the battlefields of the courts, press, agencies, and legislatures with armies of lawyers, PR flacks, bureaucrats, and lobbyists.

Somewhere between a state of total regulation-free, laissez-faire anarchy and a micromanaged, command and control, bureaucratic tyranny there is a better way. An appropriate blend of reasonable regulations and free market incentives combined with most people’s natural inclination toward protecting the environment can achieve a commonsense policy for environmental protection without generating the deep resentment against government abuse that results from the current coercive regulatory approach.

Recognizing Costs is Essential to Rational Regulatory Policy

Certain controversy is generated by regulations that disregard costs. When a wetlands regulation turns once valuable, developable land into worthless (to the owner) open space of some dubious ecological value, the owner will naturally become indignant if not compensated for the loss. When acres of farmland must lie fallow because of the presence of an endangered animal, the owner has every reason to protest. While such regulations may appear to be cost free to the government, they certainly are not cost free to society. Too often the costs are forced on the hapless landowner whose property has been turned into a de facto nature preserve.

This state of affairs has inexorably led to the growth of the “takings” controversy that haunts the regulatory state today. As former U.S. Supreme Court Justice Brennan once observed, “From the property owner’s point of view, it may matter little whether his land is condemned or flooded, or whether it is restricted by regulation to use in its natural state, if the effect in both cases is to deprive him of all beneficial use of it.”

The takings controversy that has been building before the courts, statehouses, and Congress for several years has exposed the unappreciated costs of regulations. Instead of individual landowners bearing all the costs alone, the agencies are now paying some of the costs due to successful takings litigation. Legislators are also eyeing the political costs associated with the mounting public pressure to reform the nation’s environmental laws and with constituents’ demands for some kind of “takings legislation.” The days of arguing that regulation is cost free are over. It is time to examine a better way to protect the environment and share the costs among the many, rather than imposing costs on the few without regard to the proportion of genuine culpability for legitimate environmental problems.

Environmental regulations must be based on a rigorous analysis, subject to independent peer review, public notice, and comment to identify the costs imposed and to explain alternative approaches that will reduce costs or promote a fairer cost distribution. The final decision should be based not only on how “clean” the regulation will make things, but also on whether the costs are reasonable in amount and fair in distribution. In other words, the final regulatory decision should be based substantially on common sense.

Successful Environmental Regulation Follows Priorities and Accepts Cost Limits

If the goal is to have a clean environment, then the first step must be to define “clean.” Anything can be made a little bit cleaner. With testing equipment measuring ever more minute amounts, there is always going to be another unclean molecule to remove. There has to be some limit. Do we want the land in inner city industrial sites clean enough for children to play on every day for several decades, or do we want it clean enough to protect the groundwater once a new factory is built on top of the site? Are children in a community better off if their parents have jobs in a factory or if the factory site remains an empty, junk-filled lot?

In defining “clean” it is essential that economic and human costs not be ignored. Value judgments must be made. Is a single Delhi Sands fly worth $450,000 and the human misery associated with delaying a needed medical facility for several years? Is it appropriate to put a residential lot owner in jail because he or she put sand on a dry area of his land that technically met the standards for a wetland? If we decide the need for a “clean” environment justifies the cost, who must pay the bill?

If environmental protection efforts are to sustain their credibility, we must first admit that human lives do matter—more than most things. Thus, unless we are to adopt the notion that human beings are of no greater worth than weeds, weevils, and warthogs, we must accept that there are cost limits on environmental regulation. Society’s embrace of an environmental ethic was not an embrace of the deep-ecology vision of a people-free countryside. A million dollars spent saving a dozen lives per decade with better traffic signals is money better spent than putting that same amount in regulation designed to save one life per century from a hypothetical cancer risk or even saving one acre’s worth of endangered field mice from a housing development.

It should go without saying that no environmental policy is worthy of public support if the regulations and their justifications are not based on sound science affirmed by independent review. Too many regulatory actions have been based on the “Chicken Little” approach. The general public has grown insensitive to legitimate environmental concerns because of years of regulatory actions that soon proved to be infeasible.

Positive Incentives and Fairness are the Key to Accepting the Environmental Paradigm

No amount of improvement of the regulatory process will help in the end if the perversion of rational incentives continues to twist the environmental paradigm into an environmental paradox. Today, landowners across the country are cutting down trees well before maturity solely to avoid seeing them reach “old growth” and thus become regulated habitat. Who wants to provide an old growth hotel for spotted owls, marbled murrelets, and red cockaded woodpeckers now that the law ensures the cutting of such old growth can land the owner in a federal hotel, complete with bars on the windows? Unfortunately, to some it is better to “shoot, shovel, and shut up” than it is to turn one’s property over to the federal government without so much as a “thank you” in exchange. It is a perverse logic to argue that the environment is best protected by punishing property owners who have provided habitat for plants, animals, and other living things.

Effective environmental laws must acknowledge and encourage the accomplishments property owners can achieve in maintaining a healthy environment and providing suitable habitat for rare plants or animal species while responsibly managing their properties.

The emissions trading program set up under the Clean Air Act is a small first step in the right direction. While imperfectly executed, it provides an example of how pollution abatement goals can be better and more economically met through market mechanisms. The Clean Air Act establishes and permits the transfer of sulphur dioxide “allowances” between the owner of regulated sources. The allowances are set in accordance with a source’s nature and history. With the creation of a fungible economic right in a unit of pollution, a free market can arise in pollution reduction. Operators who can more easily and cheaply reduce pollution will sell allowances to those operators for whom it is more difficult and expensive to reduce emissions. The net effect will be to direct pollution reduction dollars to those plants that can accomplish the most pollution reduction with the finite amount of dollars available in the economy. If properly implemented, this plan works toward maximizing the reduction in pollution while minimizing the cost to the economy. The concept behind this system can be employed in other areas where environmental protection obligations can be quantified, such as water pollution, wetlands impact, or endangered species habitats.

Market incentives can contribute substantially to pollution reduction, habitat protection, and other environmental goals by turning current opponents or reluctant participants into supporters of the effort. If the method of reducing pollution or protecting habitat is all costs and burdens, then only the minimum required under threat of penalty will be done. On the other hand, marketable opportunities will generate active participation to accomplish as much as the market will reward.

The principle of individual rights in the ownership of property is a fundamental concept underlying both our Constitution and our free-market economic system. It is a mistake to stake the protection of our ecosystem on a regulatory approach that creates strong and irresolvable tension between actions necessary to protect the environment and this basic premise of our free society. Too frequently these days we hear the argument that recognition by the courts or by Congress of the concept of a “regulatory takings” is a severe threat to the protection of the environment. If we accept the proposition that property rights and a clean environment are caught in some sort of a zero sum game, then both will be lost. The meaning of individual rights in property will be diminished and the quality of the environment will suffer.

Regardless of the various theories relating to property in our modern regulatory state, there are clearly limits to the amount of loss that individuals are willing to suffer from the perceived infraction of their personal rights in the name of the public good. The United States is not a collectivist society. We honor the rights of the individual over those of the group. We cannot assume that people will accept that their rights in property are “second class” rights to be generously waived for the public benefit. Environmental protection will be most effective when it promotes and rewards individual rights, but at the very least, it must not deprecate them.

Property owners would not fear wetlands and the presence of endangered species if they were rewarded rather than punished for maintaining and even enhancing natural values on their property. If the most valuable wetlands and wildlife habitats were properly identified, then property owners who have decided to forego destructive development should be rewarded by providing tax incentives, stewardship grants, or other benefits. Otherwise the property should be purchased. Why do we now implicitly threaten any property owner who has preserved a natural area with the probability that the land will be frozen in a no-use status and government agents will start monitoring their conduct? How can a free society justify requiring the property owner to bear the entire cost of such a public benefit?

To be sure, it may make sense to prohibit or restrict a project in a wetland that will cause flooding of neighboring or downstream properties, but the average person finds it more than a little difficult to understand a sweeping ban on use because a certain bird has been known to fly over the area. The current prohibitions and restrictions against using vernal pools because they are wetlands and home to four varieties of fairy shrimp impose a huge burden on private property owners. Vernal pools, by definition, have no, or minimal, connection to other bodies of water. There is, therefore, an imperceptible effect on other persons as compared to the debilitating effect on the individual owner. In circumstances like this, it is the public rather than the individual property owner who should bear the costs.

Elements of a Commonsense Policy

The first and crucial element of a commonsense policy to enhance the environment is the setting of rational priorities. Environmental protection efforts, like any other public endeavor, must be carried out with a realistic, commonsense attitude that we can never do all we want to do. There exists neither time nor resources to make everything perfect. Priorities must be set. All species cannot be preserved forever. Every piece of ground that technically can be classified as a wetland is not of equal importance with every other wetland. Every pollutant in the air or in the water is not the same concern as every other pollutant. Some things we should protect (or eliminate) even at significant costs to other values. Some things we should do an okay job with. Other things we should just let go.

We cannot maintain public support for the substantial costs of protecting a fly, a weed, or a rat to the same degree as an eagle, a grizzly, or a bison. Government is a farce when one day it is poisoning trash fish and paying bounties on animals and the next day imposing substantial costs on a few individuals to preserve these same species. People will always wince when they learn that millions of their tax dollars go to treating waste water to a “cleaner” level than the ocean to which the water is discharged. Without clear priorities, environmental protection efforts are seen to lack the common sense that rules our daily lives.

The next essential element is cost recognition. Because there are no limitless resources, there is no commonsense program that does not recognize costs and factor costs into the decisions being made. We do the best we can with the resources we have. Most importantly, costs count even when someone else bears the burden. There is no free lunch, even if it is a picnic in the woods. Commonsense decisions include consideration of how much of our society’s resources should we expend to clean up this site and how much can society afford to protect this species?

The third element of commonsense policy is clear objectives. We have to put our attention and our resources on the environmental objectives themselves. It is absurd to spend more money on lawyers and process than on work to clean up polluted sites. Too much time, attention, and resources go to establishing control and authority, finding and punishing “bad guys,” and protecting and enhancing this or that favored economic interest.

The first person to go to jail for violating Section 404 of the Clean Water Act was a small property owner in Florida named Ocie Mills who dumped some sand on an apparently dry area of a lot on which he intended to build a home. Did this precedent-setting enforcement action, which drew adverse national attention to this important environmental program, really serve the objectives of protecting the waters of the United States? Too often regulatory actions are focused on assuring that the parties involved “pay up” and “don’t get away with anything.” Why not use all that effort to address the best way to achieve the environmental objectives?

Finally, there must be a strong element of fairness. We cannot forget that the premise of our society is that government rests on the consent of the governed. That consent must be earned and re-earned continually. If we force hardship on individuals in the name of the common good, that action had better be perceived as fair. Incentives by their nature are fairer than coercive regulation. There is a desperate need to develop mechanisms to make people want to assist in the cause, or to make it economically advantageous for them to do so. Just because environmental regulations allow a government agency to destroy the retirement dreams of an elderly couple or to bankrupt a young couple trying to make a go of it on a family farm or to put a homeowner in jail for two years does not mean that it makes good sense to do so.

Conclusion

As the horror stories mount, a backlash is growing against the abuses of regulatory power. While the advocates of more and more regulation may counter that some of the horror stories have been overplayed, the fact remains that there is enough truth behind the fear and outrage to warrant serious review of the environmental regulatory status quo.

The growing public resentment against bureaucratic abuse is real. Congress and state legislatures are now debating what was unthinkable only a few years ago. From proposals to rewrite a number of environmental laws, to “takings” provisions that would transfer the cost of some of the more draconian laws onto the taxpayer, change is in the air. Regardless of whether this course of events is viewed as overdue, reasonable regulatory reform, or unthinking backlash, there is an underlying undeniable fact: The established regulatory approach has not worked well in too many situations. Too many people have suffered or have seen too many dumb or dumber actions.

On the bottom line, with a strong dose of common sense we can make substantial gains in our effort to enhance the environment without embroiling a positive endeavor in conflict and controversy. We do not need a change in direction as much as we need a change in approach and a change in attitude. Clarify the objectives and sort out the priorities. Give meaningful consideration to costs, expand the use of market incentives, and ensure the fair treatment of affected individuals. In the end, we will do a better job at a smaller overall cost to society, and most importantly, turn antagonists into converts to regain the consensus of public support necessary for a program that affects us, each and every one.

If you want your financial gifts to help make common sense out of protecting our environment just note on your tax-deductible contribution to PLF your desire to support the “Environmental Law Project.” For more information about this Project and how you can help support its goals, please contact PLF at (916) 362-2833, fax (916) 362-2932, E-mail plf@pacificlegal.org, or write: Pacific Legal Foundation, 10360 Old Placerville Road, Suite 100, Sacramento, California 95827.

Robert K. Best is President and CEO of Pacific Legal Foundation headquartered in Sacramento, California.

This monograph essay is one in a series published for PLF’s “Guardian Members.” To receive this publication by mail, click on “Charitable Donations.”

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