Trends in environmental regulation

(Fortnightly Magazine)

The 2016 Annual Review of  Law and Social Science had an article by Neil Gunningham and Cameron Holley, "Next-Generation Environmental Regulation: Law, Regulation, and Governance". Once you get passed the odd description of environmental law, along with design standards such as best available technology, as "conceived in the 1970s" and the odder tracing of the origins of command-and-control regulation to the creation of Yellowstone National Park in 1872, the article goes on to map the changes in environmental regulation in recent decades. The abstract:

This article analyzes more than four decades of environmental law, regulation, and governance in various Anglo-Saxon and global jurisdictions. It shows how, after the heydays of law and command and control and the swing to economic instruments, voluntarism, and light-handed initiatives, new phases evolved — their most important manifestations being pluralistic regulation, new technologies, compliance, and new governance. It shows how each of the frameworks examined proposes its own solutions and has something valuable to offer, as well as its own limitations. The article concludes by discussing a fundamental challenge confronting the field, namely, how to orchestrate the many possible approaches and relationships available on the legal, regulatory, and governance spectrum.

The authors' evaluation of the attack on traditional regulation in recent decades (citations omitted):

Broadly speaking, these state-centered approaches to law were relatively effective, achieving several gains in halting and reducing environmental degradation. Indeed, a range of findings suggest that state law approaches are the single most important driver of improved environmental performance, particularly of large industries. 

Nevertheless, by the 1980s direct law was widely criticized for being inflexible and excessively costly. At the international level, treaty congestion and fragmentation led to claims that international environmental law was unwieldy, incoherent, and ineffective in confronting increasingly serious global environmental challenges. Similar claims were raised at the domestic level, where the centralized and uniform nature of command and control was increasingly maligned as costly, cumbersome, inefficient, and insensitive to local contextualities.

A major source of these command-and-control critiques were business groups, who called for a reduction in the economic burdens that compliance with environmental law placed upon them. Adversarial enforcement by deterrence-oriented agencies, primarily in the United States, did little to allay these concerns and produced counterproductive resistance from regulated businesses and individuals.

These critiques of direct regulation can be seriously overstated and often overlooked the emergence of more flexible and cost-effective arrangements, the limited resources that prevented regulators from fulfilling their mandates, and even that some businesses supported these rules for their predictability and the level playing field they provided. But the fundamental critique—that direct regulation, whatever its effectiveness, scores poorly in terms of efficiency and flexibility—was becoming increasingly pertinent as regulators sought to expand their reach. As they did so, it became apparent that the relative strengths and weaknesses of direct law vary substantially with context. In broad terms, the more complex the environmental problem, the more obvious become the limitations (and the inefficiencies) of direct law in addressing it.

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Aligned with this new mentality was a simultaneous turn toward neoliberalism, particularly in the United States and the United Kingdom. Drawing on the normative thinking of economists like Frederick Hayek and Milton Friedman, neoliberalism sought to enroll others away from the center (such as businesses and civil society) by embedding market values and structures within economic, social, and political life. Although public opposition precluded the sort of wholesale deregulation desired by many businesses and neoliberal thinkers, environmental regulatory budgets were substantially cut in almost all jurisdictions and converted many seemingly hard-nosed legal mandates into little more than a symbolic aspirational declaration. Nevertheless, because environmental problems appeared to be increasing rather than going away, and because the public still appeared to value environment protection, the question for neoliberal politicians became, what was to replace or operate alongside direct law?

On economic tools:

Notwithstanding their theoretical attraction, in practice economic instruments were used to only a limited extent to address traditional pollution issues, in part because regulated businesses consistently opposed the introduction of taxes and charges, preferring the certainty of regulation to the uncertainty of novel approaches. However, economic instrument approaches have progressively been employed to address other, more complex environmental problems, including climate change and related forestry sinks, water rights and trading, biodiversity, and fisheries. Even so, many of these approaches have often been slow to mature, confronting various challenges, including ensuring the environmental resources are fully fungible, establishing acceptable caps, developing efficient trading regimes, and establishing new regulatory agencies to underpin the economic instrument.