Efficiency and equality in US environmental regulation

Kunal Parker recently reviewed Elizabeth Popp Berman, Thinking Like an Economist: How Efficiency Replaced Equality in U.S. Public Policy (Princeton UP, 2022). There's a lot here that's relevant to the history of environmental regulation. First, Parker's summary of Popp Berman's argument, with obvious implications for understanding historically some mainstays of environmental policy, such as cost-benefit-analysis and market tools for regulation:

The book explores the rise to prominence of an economic “style of reasoning” in U.S. policymaking in the post-World War II decades. Between 1950 and 1980, Popp Berman shows, this style pervaded realm after realm of policymaking, from social welfare programs to the regulation of markets to the management of the environment.

The chief institutionalizers of the economic style of reasoning were not neoliberals or libertarians (these would become truly prominent in government only after the election of Ronald Reagan in 1980). Instead, they were Democrat-appointed economists and the bureaucrats they worked with and influenced. Albeit not ideologically opposed either to social programs or to market intervention, these economists and bureaucrats insisted that social goals be met as efficiently as possible and that market solutions were generally preferable to interventionist ones. Wherever possible, they pushed cost-benefit analyses and reviews within administrative agencies, urged the dismantling of early-twentieth-century market controls, and sought to achieve ends by creating markets for entitlements rather than by imposing standards by fiat. In all this, they shared much with those further to their right.

By the time Ronald Reagan was elected president, the economic style introduced during the Kennedy and Johnson years had become thoroughly entrenched. Indeed, it had become the hegemonic approach to solving all manner of public problems, its ubiquity and self-evidence continually reinforcing each other. Reagan Republicans would employ the economic style, but the ground had been laid for them decades earlier by Democrats. Indeed, Popp Berman argues, Democrats proved far less strategic in using the economic style than Reaganites. Democrats privileged it as a method in context after context and allowed it to subsume their substantive ends. By contrast, Reaganites were more selective and often successfully subordinated it to their substantive ends.

Parker, though, queries whether equality was actually the guiding principle in the pre-efficiency era:

The Cigarette: A Political History

The Cigarette: A Political History (Harvard UP, 2019) by Sarah Milov, co-founder of this blog, was recently reviewed by Reuel Schiller for Jotwell. Schiller writes that Milov's "narrative weaves together legal, political, and economic history in a manner that calls for a revaluation of the dimensions of twentieth-century liberalism and the nature of its decline. The book is a compelling exercise in historical synecdoche: its subject is the political history of the cigarette, but its story is that of the twentieth-century American state." Further excerpts:

Frankly, one could teach a course on twentieth-century legal history using this book as a textbook. It speaks to a broad range of subjects central to the interests of legal historians: the role of law in constituting capitalism; the interaction of law, gender, and race in the construction of social movements; the simultaneously emancipatory and constraining potential of framing policy preferences as rights; the profound role of the administrative state in structuring politics and policy; the rise of public interest litigation; the importance of understanding the legal history of agriculture, a field sorely neglected by legal historians. While different readers will find different analytic points particularly compelling, two stand out for me.

First, Milov’s narrative suggests the need to reevaluate the postwar state’s legal and political contours. For readers familiar with early New Deal policies such as the National Industrial Recovery Act and its industry-written “codes of fair competition,” American tobacco policy is familiar. It was “associationalism” — an interweaving of public and private power that obscured the extent to which private institutions acted as vehicles for public policy. In the traditional narrative of the New Deal, associationalism ended with the political and legal demise of the National Recovery Administration in 1935. Joining scholars such as Brian Balogh, Milov shows how, in fact, associationalism outlasted the NRA and became an integral component of postwar state. Far from being replaced by the light touch of Keynesian fiscal policy, Milov shows how producer-oriented associationalism melded with consumer-oriented Keynsianism to give an alliance of corporate and state interests an active role in structuring the post-war economy as it simultaneously created an illusion of statelessness.

Postwar America's greatest environmentalist

More on working-class environmentalism and the law (see, most recently, here): Jacobin recently ran a piece by Connor Kilpatrick claiming that "Postwar America’s greatest environmentalist was a labor leader". There's a lot here also about politics, religion, climate skepticism and more. Some excerpts:

Today, the AFL-CIO lobbies Congress to pass the Keystone XL pipeline while noted NASA climate scientist James Hansen, one of the first to link global warming to fossil fuels, is repeatedly arrested for protesting such projects. And while in 2017, the idea that the interests between wonky environmentalists and jobs-focused trade unionists would diverge seems like common sense, it’s only because the bad guys won.

But it wasn’t a preordained victory. For nearly a decade in the 1960s and ’70s, environmentalism seemed to be on the cusp of a popular reckoning against the powers of capital. And it found an ally in the labor movement which, for a few years, looked like it might be able to not only cling to life but find a way back into the heart of American society.

[Tony] Mazzocchi and his union, the Oil, Chemical and Atomic Workers International (OCAW), were the primary muscle behind the 1970 Occupational Safety and Health Act (OSHA), signed into law by Richard Nixon. Looking back on that victory, which mobilized both labor and the burgeoning environmental movement, Mazzocchi said: “We have demonstrated that an unpopular idea can be generated into a powerful political program that’ll reignite the consciousness of the American people.”

Environmental originalism

Over at Legal Planet Dan Farber recently blogged on "The Truth About Environmental Originalism". Farber writes:

Scott Pruitt has taken to talking about environmental originalism – going back to the original intent of our environmental laws. But he’s got the original intent completely backwards. The statutes weren’t intended to protect jobs or grow the economy. They were intended to protect the environment, with cost at best a secondary consideration.

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In fact, some of the key provisions of our environmental laws preclude consideration of cost or even technological feasibility. For instance, the Clean Air Act requires EPA to set national air quality standards based entirely on possible risks to public health – and “with an adequate margin of safety.” As Justice Scalia himself was forced to admit in Whitman v. American Trucking Ass’n, the statute “unambiguously bars cost considerations.” In fact, he said in a footnote, EPA would be reversed in court there was proof that it secretly did take cost into account. (Pruitt might want to take note of this, given the number of leaks from the government these days.) As Scalia also recognized, these cost-oblivious air quality standards are the linchpin of the Clean Air Act. 

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This is not the only statutory provision that ignores costs. The Endangered Species Act prohibits agencies from jeopardizing the survival of species in absolute terms, with only a rarely used exception for extraordinary cases, requiring approval by a special cabinet-level committee. OSHA requires that standards for toxic chemicals in the workplace be set to eliminate any significant risk to workers, unless doing so would bankrupt the industry.

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It’s important to recognize that the federal environmental laws were passed in a time of remarkable public ferment over the environment. Don’t forget this was the era of the first Earth Day, of Rachel Carson’s Silent Spring, and of a public shocked by a fire on the Cuyahoga River and the Love Canal toxic dump. As I discuss in a recent paper, even arch-conservatives like Barry Goldwater and William F. Buckley were calling for much stricter pollution control. The public today remains broadly supportive of environmental regulation but the issue is no longer a top priority for most people. But it was an urgent priority in the 1970s when these laws were passed. The original intent was about as far away from current Republican views as humanly possible. If they could see that Scott Pruitt had become head of the EPA, the framers of these laws would have been appalled.

Environmental preferences and economics

A little while back Resources for the Future posted a paper by H. Spencer Banzhaf on the history of an economic idea with major implications for the way environmental law plays out (particularly when cost-benefit analysis is involved), "The Environmental Turn in Natural Resource Economics: John Krutilla and 'Conservation Reconsidered'". The abstract:

John Krutilla

Environmentalism in the United States historically has been divided into its utilitarian and preservationist impulses, represented by Gifford Pinchot and John Muir, respectively. Pinchot advocated conservation of natural resources to be used for human purposes; Muir advocated protection from humans, for nature’s own sake. In the first half of the twentieth century, natural resource economics was firmly on Pinchot's side of that schism. That position began to change as the postwar environmental movement gained momentum. In particular, John Krutilla, an economist at Resources for the Future, pushed economics to the point where it could embrace Muir’s vision as well as Pinchot’s. Krutilla argued that if humans preferred a preserved state to a developed one, then such preferences were every bit as "economic"—either way, opportunity costs exist and economic choices must be made.

Environmental views on the US Supreme Court

A year ago we noted Jed Purdy's review of Jonathan Cannon's Environment in the Balance: The Green Movement and the Supreme Court (Harvard UP, 2014). Now we have Anthony Penna's review of the same in Environmental History. An excerpt:

Jonathan Z. Cannon’s Environment in the Balance argues that the majority of the Supreme Court’s decisions regarding environmental legislation reflected a struggle between competing and conflicting beliefs and values. Environmental laws embraced “an ecological model of the world” (p. 1) that posits interconnections among humans and the natural world and seeks to protect it from potentially harmful human activities across place and time. In contrast, the Supreme Court’s conservative majority during the last forty years (highlighted by the appointment of Associate Justice Scalia in 1986) represented a different set of values and beliefs, stressing individualism, property rights, economic growth, and limited government.

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It is difficult to imagine a more complete analysis of the Supreme Court’s conservative direction when interpreting environmental legislation. Chapter 2, “Environmental Law, the Court, and Interpretation,” provides the background for thirty selected cases from a group of 150 significant environmental cases decided between 1970 and 2014 and an interpretive guide for categorizing majority and minority positions. Chapter 3, “Environmental Urgency and Law,” reinforces the author’s thesis that the deep-seated beliefs and values of justices inform their decisions when interpreting environmental laws.

Chapter 4, “Law for the Environmental Other,” explores the Court’s findings when the rights of the other conflicts with human use and benefit. In cases in which species protected by the Endangered Species Act, 1964 and the Marine Mammal Protection Act, 1972 were litigated, the Court rejected arguments that reflected Aldo Leopold’s ecocentric perspective.

In Chapter 5, “Efficiency,” Cannon notes that from 1972 to 2007 the Court resisted using cost-benefit-analysis in environmental and worker safety statutes. 

Conservative anti-environmentalism

Conservative anti-environmentalism is an intriguing historical topic with great relevance for the development of law. I wrote about it last year, and also noted a book review of Brian Allen Drake's Loving Nature, Fearing the State: Environmentalism and Antigovernment Politics before Reagan. Now Linda Bui has a review in Enterprise and Society of Judith Layzer's Open for Business: Conservatives’ Opposition to Environmental Regulation (MIT Press, 2012). Bui writes (among other things):

Layzer argues that contemporary conservative ideas have had an important and mitigating effect on environmental policy—one that is easily underestimated. In part, this can be explained by the conservative movement’s effectiveness at shaping both how and what policy questions come to the table, and not just how they affect policies once they are in place. The author concludes that the consequences of both the direct and indirect (“low profile”) attacks against environmental regulation by conservatives have led to significant delays in the adoption of regulatory measures, the rollback of existing regulations, and a discrediting of the environmental narrative.

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The evolution of the tools used by conservatives to try to attack the environmental movement is strongly correlated to changes in the understanding of the economics of regulation and the theory of externalities.... What Layzer... point[s] out... is how cleverly the conservative movement was at playing the academic card. When the economics matched the conservatives’ own needs, they adopted them as their own, and when they did not, they pushed the story line of the minority intellectual elite trying to bully the silent majority. For example, the conservative argument that free markets can solve the problems of the environment if governments are not allowed to intervene simply does not hold water when externalities are present. However, that is not the story that the conservative movement spins. The conservatives’ story begins and ends with the efficiency of the free market. On the other hand, demanding cost–benefit analysis when adopting a new environmental rule is a brilliant strategy when one can attack all the uncertainty associated with both the cost and benefit estimates, guaranteeing a slowdown in rule adoption. 

Cost-benefit analysis in recent history

Michael Livermore and Richard Revesz recently posted "Interest Groups and Environmental Policy: Inconsistent Positions and Missed Opportunities". In it they argue that over the last few decades the positions of polluters and environmentalists on two of the central questions of environmental law and policy have flipped. The abstract:

This Essay examines and explains the positions of the principal interest groups over the past four decades with respect to the two central questions of environmental policy: the appropriate policy goal and the instrument that should be used to carry out the policy. With respect to the first question, the Essay observes that, at the beginning of the contemporary period of environmental law, industry groups strongly supported setting the stringency of environmental standards by reference to cost-benefit analysis. At the same time, environmental advocacy organizations strongly opposed the use of cost-benefit analysis. As environmental regulators gained greater proficiency in the quantification and monetization of environmental benefits, industry groups came to see that, when properly conducted, cost-benefit analysis could justify stringent environmental protection. Consequently, they have abandoned their original enthusiasm for the technique. Similarly, over the same period of time, environmental groups came to see the promise of cost-benefit analysis, for similar reasons.

An example of an industry attack on marketable permits

With respect to instrument choice, industry groups were originally attracted to marketable permit schemes as a lower-cost means of achieving pollution reduction, while environmental groups were skeptical of the these approaches. First with the Clean Air Act Amendments of 1990, and then when faced with the daunting challenge of climate change, environmental groups acknowledged that market mechanisms are more economically and politically viable than command-and-control regimes because they impose far lower aggregate costs on society. And, industry groups realized that by attacking marketable permit schemes they might defeat greenhouse gas regulation altogether. 

While environmental groups and industry have largely switched positions on the two central questions of environmental policy, the points at which their positions overlapped were fleeting, and opportunities to make substantial progress in rationalizing the system of environmental regulation have largely been unrealized.

Postmodernism and environmental policy

Shi-Ling Hsu has posted "The Accidental Postmodernists: A New Era of Skepticism in Environmental Policy". Though the article focuses on the present, it provokes thoughts about changes in environmental lawmaking over time. The abstract:

René Magritte, La trahision des images (1928-29)

Environmental law and policy conflicts seem to have entered a new phase. The emergence of complex problems such as climate change and of complex technologies such as hydraulic fracturing and genetic modification have created new political and legal schisms that no longer break down predictably along "pro-environment" versus "pro-business" lines. Rather, a new era of skepticism seems to be taking hold in which antagonists spar over the epistemic legitimacy of certain claims made in support of a policy position. Environmental law and policy conflicts thus divide antagonists into two camps: self-styled positivists – scientists (physical, chemical, biological, and social) and environmental postmodernists, who seek to undermine the legitimacy of the positivists.

Environmental postmodernists urge us to take a skeptical look at the claims of self-styled positivists, because they suspect their epistemic claims are part of an attempt to gerrymander environmental law. Some environmental postmodernists challenge the use of cost-benefit analysis, and others are climate skeptics, who contest the prevailing concern over global climate change. These new schisms produce strange bedfellows, but environmental postmodernists share a common objective of creating doubt and skepticism.

I argue that environmental postmodernism can make a contribution: it can highlight dangerous policy situations in which a concentration of esoteric information can generate a power imbalance, and it can highlight the usefulness of transparency measures aimed only making information more publicly accessible and otherwise broadening process inputs. If this is the upshot of environmental postmodernism, it will have articulated a policy means of power diffusion, and therefore gone beyond the failures of Twentieth-century, post-structuralist postmodernism.

The Cold-War origins of the "Value of Statistical Life"

One of the most contentious issues in recent academic debates over environmental law and policy is the monetizing by policy tools such as cost-benefit analysis of values--such as the value of life--that many argue cannot be monetized. H. Spencer Banzhaf's recently posted "The Cold-War Origins of the Value of Statistical Life (VSL)" has a historical take on the origins of the methodology. The abstract:

from Mother Jones

This paper traces the history of the "Value of Statistical Life" (VSL), which today is used routinely in benefit-cost analysis of life-saving investments. Schelling (1968) made the crucial move of thinking in terms of risk rather than individual lives, with the hope to dodge the moral thicket of valuing "life." But as recent policy debates have illustrated, his move only thickened it. Tellingly, interest in the subject can be traced back another twenty years before Schelling's essay, to a controversy at the RAND Corporation following its earliest application of operation research to defense planning. RAND wanted to avoid valuing pilot's lives, but the Air Force insisted they confront the issue. Thus, the VSL is not only well acquainted with political controversy; it was born from it.

RIP Ronald Coase

Nobel Prize-winning economist and law school professor Ronald Coase passed away earlier this month at the age of 102.

Coase's 1960 article, "The Problem of Social Cost", the most-cited law review article of all time, had an immense effect on both the study of environmental law and its design, providing intellectual backing for two prominent trends in environmental law of the last few decades: market-based policies and cost-benefit analysis. As Cass Sunstein explains:

His target was the great British economist Arthur Cecil Pigou, who contended that if a polluter is emitting smoke, and thus causing injury, the best response is to make the factory owner pay for the injury or to impose a corrective tax.

Coase said Pigou failed to see “the reciprocal nature of the problem.” Suppose that a very noisy factory is causing legal injury to a doctor operating next door. Under Pigou’s approach, the factory should be required to pay damages to the doctor. But Coase pointed out that we could also make the doctor bear the cost. His central insight was that if people can bargain with one another, and if it isn’t costly for them to do so, it just doesn’t matter who is required to pay: People will negotiate their way to the efficient solution. This is the Coase theorem in a nutshell.

Jewish law and the environment

We recently posted on John Nagle's discussion of Lynn White's influential "The Historical Roots of Our Ecologic Crisis", which blamed Christianity for modern environmental problems, and the critiques that have been leveled against it.

Jonathan Zasloff's recent post at Legal Planet, "A New/Old Jewish Environmental Ethic: Don’t Go About Like a Merchant", examines religion and the environment from a new and surprising angle, the relation of Jewish law's prohibition not to "go about like a merchant" (לא תלך רכיל) to environmental issues. Zasloff writes:

To the extent that the לא תלך רכיל injunction is about merchants, it opens up huge vistas to think about environmental ethics.  It most assuredly is not saying that being a merchant is bad; there are literally hundreds of laws, decisions, and ethical commands on the proper conduct of private business.  But instead, what it suggests is that one should not “walk around” or “go out” as a merchant; in other words, one should not apply the rules of private business to spheres where it does not apply.

It’s not hard to see where this is going.  Interpreting the injunction in this way would yield an approach to environmental policymaking that is cautious and conservative in allowing purely economic considerations to dominate the preference for rules.  It’s not bad to act like a merchant, but you shouldn’t walk around doing it.  There are a host of other ways to think about problems: justice, fairness, tradition, equality (not to mention humanity’s relationship with God).  Jamming everything into economic models or cost-benefit calculations violates the injunction.  Note, by the way, how much better the “merchant” interpretation goes with the immediate context: you don’t go about as a merchant because then you consider everyone as things to be added into a calculation, in other words, you would stand idly by the blood of your neighbor.

The history of environmental law through the history of a law review

Gerald S. Dickinson and Sheila Foster have posted "Stasis and Change in Environmental Law: The Past, Present and Future of the Fordham Environmental Law Review" on SSRN. The abstract: