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:

Charging for water in Mandate Palestine

The American Journal of Legal History recently published my article, "Horizontal and vertical influences in colonial legal transplantation: water by-laws in British Palestine". Due to space constraints of the publisher, I was not able to include in the article some sources that I think are interesting from an environmental-legal perspective. Here are two of them, both penned by engineers serving as head of the water department of the of the Jerusalem Municipality in support of the city's policy of requiring water metering (while most Palestine local authorities also allowed charging flat rates). I think they call to mind current debates about water pricing in various places around the world, explicitly raising issues of efficiency, equity, conservation, and public health:

A. In 1927 Jerusalem's Water Engineer, Andrew (Andor) Koch, was hired by the Tel Aviv Municipality to consult on its system of water supply. In his report to the Tel Aviv Municipal Council (Report on the Tel Aviv Municipal Water Supply, 25th Dec. 1927, Tel Aviv Municipal Archives file 835/04-1029B), Koch explained why he supported metering over flat charges:

I wish to mention that throughout the whole world, now the metered system, as the only correct means for charging Consumers is gaining ground.- There used to be a conception before that water is not a saleable good, but a public property, obtained from nature and therefore the selling of same per volume as any other merchandise, is not justified.- A more close study and moreover the practical results of such an assumption have clearly shown however that earlier or later the free use of water is leading to unnecessary, even expensive (especially concerning the disposal of waste water) waste on the one hand, and inevitably, to the undue exhaustion of the  available sources of supply on the other hand.

Water tower in Tel Aviv, built 1924

Trends in commons scholarship

More on (transatlantic) commons scholarship: The editors of the International Journal of the Commons (Frank van Laerhoven, Michael Schoon, Sergio Villamayor-Tomas) just published an interesting quantitative review of commons scholarship over the last five decades, "Celebrating the 30th Anniversary of Ostrom’s Governing the Commons: Traditions and Trends in the Study of the Commons, Revisited". There are interesting statistics and tables on journals, citations, disciplines, and more. (For a different take on the history of the field, see The Tragedy of the Commons at 50.) Some highlights:

The start of commons scholarship can be understood as growing out of a rejection of Hardin’s prediction of natural resource degradation unless managed by governments or through private property rights (Poteete et al. 2010). Over time, however the approach appears to have been evolving.

*****

Arguably, commons studies grew out of concerns associated with the tragedy of the commons. Accordingly, typical studies of the commons have been associated with local contexts, particularly with common pool resources such as forests, fisheries and irrigation, and an interest in the opportunities and challenges of common property rights and rules....

Hardin (1968) asked us to “picture a pasture, open to all.” Pastures, together with fisheries, forests, irrigation systems, and water management belong to what the authors of the 2007 study referred to as the “Big Five” in the study of the commons. Through 2007 these topics drew most of the combined attention of commons scholars. Overall, we find that this trend continues [unabated]. Over time, we see a relative increase in interest in water and fisheries since 2007.

*****

Where Hardin claimed that only the state or the market could prevent a tragedy of the commons, Ostrom dedicated most of her career to showing how there is a lot of room on the spectrum that ranges between these two extremes (e.g. Ostrom, 1994). Figure 18 presents a crude way to gauge our field’s attention to the market, the state, and self-governance over time.

Trends and approaches to the commons in historiography

Next to last in our series on "The Tragedy of the Commons at 50" (the previous post, on Carol Rose's article, is here) is Giacomo Bonan's piece, "Confronting Hardin: Trends and Approaches to the Commons in Historiography". The abstract:

This Article analyses both the role of historiography in Hardin’s The Tragedy of the Commons (1968) and his paper’s impact on historiographical debates of the last five decades. Concerning the role of historiography in Hardin’s argument, the ‘tragedy of the commons’ itself derived from a pamphlet written by a nineteenth century supporter of English enclosures, who proposed a variant of Malthus’ theory. If Hardin inevitably dealt with previous historical interpretations of the commons, the reverberations aroused by his paper have strongly influenced subsequent historical research on this subject. It is possible to group the historiographical production of the last decades concerning the commons into three main lines of research. The first line has developed in the field of economic history and has been influenced by Elinor Ostrom’s principles for long-enduring institutions that efficaciously manage commons. The second line has focused on the conflicts caused by exogenous interferences in the management of common land, such as state or market intervention, and their social and environmental consequences. The third line has devoted attention to the role of common lands in the internal dynamics of the local communities and the conflicts over their use at the local level. The conclusion of this Article focuses on the role of Hardin’s legacy in the current debate on the global environmental crisis.

Thomas Malthus

Law and environmental-technological change

Construction crane at Norris Dam (TVA) (Currents of Change)

Yesterday's New York Times had a piece by Naomi Oreskes and Erik Conway on the need for government help in making the technological transformations necessary to avert disastrous climate change - in particular, phasing out fossil fuels by the year 2050. They write:

None of the major technological transformations of the 19th and 20th centuries were the product of the private sector acting alone and responding only to the market. Railroads, radio, telegraph, telephone, electricity and the internet were all the result of public-private partnerships. None was delivered by the “invisible hand” of the marketplace. All involved significant interventions by the visible hand of government.

What does this mean for us? Right now, government is widely seen as inefficient and ineffective, and our needs are thought to be best addressed by the private sector, through entrepreneurship, venture capital and Silicon Valley-style “disruption.” But unless we acknowledge the need for a substantial government role, we are going to be stuck, because change driven solely by the marketplace is unlikely to suffice.

Some might object that our current challenge is vastly different from those met by past technological changes, because we’re not just talking about a thing, like a radio or cellphone, but about changing our entire energy system. But these earlier transformations involved systems, too. Just as energy technology isn’t one thing, neither were the railroads, radio, electricity or the internet. Those systems all involved many parts, including federal, state and local policies to support them (the land grants that made the railroads possible, for instance, or role of the Federal Trade Commission in licensing radio and television stations). 

Cronon and commodification

Andy Seal at US Intellectual History Blog posted an interesting piece on William Cronon's extremely influential Nature's Metropolis (1991) earlier this week. It's a rich piece, covering a lot of topics, but it's his discussion of Cronon and commodification that I thought particularly relevant for those of us interested in the intersection of environment, law, and history. Some excerpts:

[Jeffrey] Sklansky argued that one of the reasons why commodification has become such an important frame for new histories of capitalism is because—unlike proletarianization—it seems to have no necessary boundaries.

This boundlessness is quite different from the implicit premises of a narrative focused on proletarianization. Labor history and business history—as they were written up through, say, the 1990s—thrived on drawing distinctions, on identifying stages of development and differentia specifica. The most important distinction, perhaps, was between the human and the nonhuman: proletarianization is, after all, a human process.

Commodification, on the other hand, tends to overwhelm distinctions, starting with the human-nonhuman: while only humans can be proletarianized, everything can be “priced”—placed in a relationship with other things that can be expressed in terms of a number. Even more, while the process of proletarianization seems never to engulf the whole of a person (see my argument in this post), commodification assimilates both individual humans and their internal qualities to a system of commensurable valuations: your cheerfulness as well as your blood pressure, your knowledge of Latin as well as your attention can all be denominated in dollars, no different from a television or a ticket to a concert.

In this way, the story of commodification flattens distinctions between humans and the (rest of the) natural world, demolishing proletarianization’s marked anthropocentrism. Putting a price on human lives or health or knowledge or creativity and putting a price on a chair or a car is one single continuous process; as much as labor could be abstracted as just one more input or one more production cost, the story of making humans into proletarians was always distinct from—if parallel to—the story of extracting value from the natural world.

There are various ways to account for this shift in historical narration away from proletarianization’s anthropocentrism. Certainly, the influence of environmentalism has something to do with it. While very much leftist critique descending from Marx is (still) only fitfully cognizant of ecological critiques of capitalism, some of the ontological premises of an ecological worldview have seeped into culture so generally that an older stark separation of the human and the nonhuman is no longer tenable.

Another possible explanation comes from the small explosion since the 1990s of works in the subfield of what Lorraine Daston has dubbed “historical epistemology,” which as Sklansky defines it is the study of “the invention of new kinds of fact such as employment figures and credit ratings along with the modern metrics and matrices that produced them” (Sklansky, “Elusive Sovereign,” 242). Offspring of the history of science, studies in this vein emphasize the ways that quantification and abstraction have profoundly reshaped the image of “the human,” creating what Dan Bouk has called the “statistical individual.” Incarnated in numbers, this creature can float freely as part of a universe of endlessly adaptable equations: where the human worker needs to occupy a certain place in the production process, the statistical individual can be plugged in far more flexibly at many points in a firm’s calculations and predictions.

*****

The other week on Twitter, Eli Cook pointed out one possible source of inspiration for a generation of historians, one reason why folks who entered graduate school from at least the mid-90s through the present might have had commodities on their minds. That source is a single chapter in a single monograph: the grain chapter of William Cronon’s Nature’s Metropolis (1991), Chapter 3. 

Cold-War commons

Next in the series of posts on "The Tragedy at 50" (the last one is here), we have Monica Eppinger's "Cold-War Commons: Tragedy, Critique, and the Future of the Illiberal Problem Space". The abstract:

Major twentieth-century social theories like socialism and liberalism depended on property as an explanatory principle, prefiguring a geopolitical rivalry grounded in differing property regimes. This article examines the Cold War as an under-analyzed context for the idea of “the tragedy of the commons.” In Soviet practice, collectivization was meant to provide the material basis for cultivating particular forms of sociability and an antidote to the ills of private property. Outsiders came to conceptualize it as tragic in both economic and political dimensions. Understanding the commons as a site of tragedy informed Western “answers” to the “problem” of Soviet collective ownership when the Cold War ended. Privatization became a mechanism for defusing old tragedies, central to a post-Cold War project of advancing “market democracy.” Meanwhile, the notion of an “illiberal commons” stands ready for redeployment in future situations conceived as tragically problematic.

Just price

Thomas Aquinas
(detail from Valle Romita Polyptych by Gentile da Fabriano (c. 1400))

William Boyd recently posted  "Just Price, Public Utility, and the Long History of Economic Regulation in America". The abstract:

This Essay investigates the history of “just price” and its influence on the concept and practice of public utility regulation in the United States. It begins with a discussion of the Scholastic understanding of just price and its relationship to commutative justice, with particular attention to the problem of coercion in economic exchange. The Essay then discusses the centrality of just price to broader ideas of moral economy and to economic thought and regulation in colonial America and the early United States. The heart of the Essay shows how the idea of just price influenced public utility regulation as it took shape during the late nineteenth and early twentieth centuries. As the Essay demonstrates, received understandings of just price were fundamental to the public utility idea and were at the heart of battles over the proper approach to utility valuation and rate regulation during the first half of the twentieth century. The Essay concludes with a discussion of efforts to restructure formerly regulated industries during the last quarter of the twentieth century, with particular attention to the challenges faced by the Federal Energy Regulatory Commission as it seeks to ensure that prices in restructured natural gas and electricity markets are just and reasonable. Although much of the Essay’s purpose is descriptive, several larger points emerge from this study. First, the history of just price reveals that relations of reciprocity and fairness in exchange are at the very core of the public utility idea. When seen from this perspective, public utility represents an important experiment in translating abstract principles of economic justice and fair pricing into working rules for governing key systems of provisioning in a modern industrial society. Second, the history of just price reminds us that prices are more than signals; that they are also relationships and that price relationships can be coercive. At root, the economics of just price is an economics of coercion and, as such, an economics that resonates quite strongly with efforts by Progressive lawyers, legal realists, and institutional economists to develop an approach to law and economics (and economic regulation) that would put coercion at its center. Third, the history of just price shows that competitive markets, when functioning properly, can be powerful instruments for protecting consumers and facilitating fairness in exchange. But it also underscores the importance of taking individual markets on their own terms and recognizing that some markets, and the mechanisms of price formation at their center, are more vulnerable to disruption and manipulation than standard economic models suggest. Finally, at the most general level, the history of just price reminds us that for a very long time—far longer than the lifespan of classical and neoclassical economics—ethical and social concerns have been intimately bound up with conceptions of economy, economic life, and the provision of necessities.

Compensatory mitigation and neoliberalism

Restored perennial and season marsh and riparian forest
at Wildlands Mitigation Bank, Placer County, California (EPA)

The always interesting Dave Owen recently posted "The Conservative Turn Against Compensatory Mitigation", whose primary subject is the recent turn described in the article's title (compensatory mitigation is a policy that require parties receiving permits for environmentally harmful activities to compensate for them by improving environmental conditions elsewhere). Owen also has something to say about the origins of the practice, rejecting the arguments of critics who have portrayed compensatory mitigation as part of a neoliberal, capitalist resurgence:

The proponents of compensatory mitigation reform hardly ever identified their efforts as measures to boost the capitalist system. As one retired departmental employee explained to me, even during the Reagan Administration, debates about compensatory mitigation were driven more by conflicts over regulatory intensity and states’ rights rather than by Milton Friedman-style market ideals. And later reformers’ key goal was to strike a compromise between political mandates to accommodate economic development and legal mandates to protect the environment, and to make permitting decisions in an expedited fashion. Compensatory mitigation policy, in other words, evolved to fulfill agency goals, not to advance a free-market agenda, even though the policies did sometimes bring regulated industries the benefits of expedited and more flexible permitting.

I have to say that I don't find this very convincing, though it is true that compensation mechanisms can serve as a way of balancing interests, as Calabresi and Melamed taught us. First of all, I doubt whether one can get a full and reliable account of agency motivations by interviewing agency sources. Second, as Laleh Khalili points out in a recent interview at Viewpoint, officials and managers often work to advance capitalism without being conscious of it. Finally (and relatedly), I would posit that regulators " driven... by conflicts over regulatory intensity and states’ rights" were in fact often responding to "Milton Friedman-style market ideals" (whether they realized it or not). "States' rights" and "regulatory reform" are ideas the popularity of which in the last few decades owe a lot to business interests, politicians, and intellectuals pushing a neoliberal, capitalist agenda. It is no surprise that "agency goals" meshed with the neoliberal agenda (or that the recent conservative about-face on compensatory mitigation exposes the essential bad faith behind much of "regulatory reform").

Historical analysis in environmental law VI: What is at stake

In the last couple of posts in this series I suggested several directions of inquiry for uncovering the history of environmental law. In this final post in the series, I would like to tentatively offer some thoughts on why the historical exploration of environmental law matters.

First of all, history can help us better understand current environmental law. For instance, David Driesen has recently advanced a positive theory of environmental law, attempting to explain its salient features, such as reliance on certain types of standards. Notably missing from his account are historical explanations for these aspects of environmental law, explanations which might be provided by works such as those of Morag-Levine.  Or take the argument of 'free market environmentalists' that private law would do a better job of protecting the environment than modern regulation; this type of argument could be checked against the historical experience of legal systems that have relied on private law for this purpose.

AC Pigou

Second, the history of environmental law is a topic that offers an opportunity to bridge the material and the abstract, or to take up environmental historian Linda Nash's challenge 'to show how what is presumed to be social or cultural is thoroughly intertwined with the natural.' Such an endeavour would be beneficial to both environmental history and legal history, as legal doctrines, institutions, and ideologies—social and cultural artifacts—developed with regard to the natural, may circulate beyond the narrow confines of environmental law to other legal contexts. One thinks, for instance, of Pigouvian taxes, cost-benefit analyses, and feasibility standards, all developed 'intertwined with the natural' but spreading their branches far afield.

Environmentalists often portray themselves as acting in the name of an apolitical public interest.

Water rights IV: Property in water: Empirical and historical evidence

(Continuing the series on water rights:)

The empirical work of Ostrom (1990; Ostrom and Gardner, 1993) and others on institutions for governing commons resources has shown that, in practice, common property can be highly successful in managing water resources, depending on the structure and functioning of the institutions involved. She and her collaborators summed up their conclusions (Ostrom et al., 2010):

Elinor Ostrom

Researchers usually distinguish four basic types of governance systems, defined in terms of who controls access to resources: private property, government property, common property, and open access (i.e., no one's property). Research has consistently shown the inefficient outcomes of open access since open access almost always leads to destruction of any resource that is in great demand. This is the problem identified in Hardin's famous essay, although he called open access "commons," which led to substantial subsequent confusion. The other three systems, however, have mixed records in terms of sustaining water resources, including both great successes and massive failures. Thus, the ability of a type of ownership to enhance sustainable resource management depends on a number of other factors…

Many legal and environmental historians have focused on historical transitions between property regimes in water, particularly two major developments in the Anglo-American legal world: the development of the "reasonable use" riparian regime in the early to mid-nineteenth century, and the rejection of riparian rights in favor of the system known as "prior appropriation" in the western United States in the second half of the same century.

Some historians' accounts, beginning with Walter Prescott Webb's "Great Plains Thesis" (Webb, 1931), have supported the economic view associating with aridity with private rights in water (Robert G. Dunbar (1985) 'The Adaptability of Water Law to the Aridity of the West', Journal of the West 24: 57; Percy, 2005). Yet aridity has also been associated with strict state control, as in Karl Wittfogel's (1957) hypothesis associating "hydraulic civilizations" with "oriental despotism", applied to the western American context by Donald Worster (1985).

Love Canal, CERCLA, and deregulation

This past summer H-Environment published a Roundtable Review of Richard Newman's Love Canal: A Toxic History from Colonial Times to the Present (OUP, 2016). An excerpt from Stephanie Malin's contribution:

While the Superfund Act [CERCLA] resulted from national awareness of Love Canal, and though Newman focuses on the success that legislation represents, we conclude with a troubling denouement. Love Canal is now Black Village Creek, filling up with a new round of working-class residents enticed by homes priced 10 – 20% below market value. Though former residents including Gibbs fought the relocation, they lost this battle. Developers won. The results have been tragic; as Newman recounts, health problems and toxic exposures have reemerged in this ‘remediated’ community, despite the extensive, state-of-­the-­art environmental engineering schemes used to filter leachate and otherwise remediate the site.

Newman’s Love Canal succeeds in highlighting for readers an exceptionally timely notion: before the institutionalization of the U.S. Environmental Protection Agency’s Superfund Program, the American landscape was riddled with unregulated, unmonitored, and often unknown chemical and industrial dumps from America’s dizzying participation in the Industrial Revolution. Communities like Love Canal that dealt with these historical mistakes, Newman shows, contended with rampant pollution, contested and rare health outcomes, and instances of deep disempowerment. Newman showcases for his readers the immense risks and voluminous unintended consequences that emerge when environmental regulations are absent and when the precautionary principle is eschewed in favor of industrial economic development, in one era after another. His historical details, and his careful examination of the numerous barriers faced by Love Canal activists, display that regulatory programs that protect public and environmental health are relatively new, have been hard won, and are constantly vulnerable to eradication. Indeed, these are the very programs that have most swiftly come under attack under the Trump Administration – which makes Newmans’s message so relevant and timely. 

Environmentalism of the Rich

Public Books recently ran a review by Max Holleran of  Peter Dauvergne's Environmentalism of the Rich (MIT Press, 2016). Holleran writes that the book

traces the shifting tactics of mainstream environmentalism from the radicalism of the 1970s to the corporate partnerships of the 1990s, in which companies accomplished incremental changes through in-house consultations with groups like the Sierra Club. It details how many green groups began as firebrand protectors of the earth, deeply inspired by indigenous movements that opposed the sale and commodification of nature, but have since morphed into something akin to compliance departments for large companies.

*****

Green movements of the Global North and the Global South are markedly different; within that divide, unique national experiences have produced a variety of environmentalisms, some of which do not even use the name and prefer to align with indigenous rights or class-based movements. The 1970s environmental movement came of age during a time of decolonization, and many pioneers of the movement were allies of nations in the Global South seeking both political independence and more autonomy within the global economy. Dauvergne shows that most resource extraction has imperial roots, when European powers saw the wider world as a zone for the collection, and often pillage, of raw materials. The “green” decolonization movement was fundamentally anti-capitalist; it suffered when many Global North environmentalists chose to advocate for a green economy, rather than a new economy based on rethinking global trade.

Holleran writes that the book argues that increased environmental awareness has not necessarily translated into increased regulation. Rather,

Oil, competition, and Martians

The Public Domain Review recently posted (courtesy of archive.org) a fascinating and entertaining animated short from 1956 by the American Petroleum Institute, entitled "Destination Earth". As the Review explains:

Produced at the height of the Cold War, and made at the behest of the American Petroleum Institute (still the biggest lobby for the U.S. oil and gas industry), this great little promotional film from John Sutherland Studios champions not only the wonders of oil as might be expected, but also free-market capitalism. The surprisingly humorous cartoon tells the story of how the suspiciously Stalin-like leader of Mars, named Ogg, sends a rather calamity-prone citizen to Earth to find a better power source for his poorly-running “state limousine”. The exploring Martian, of course, lands in the United States and soon discovers the many and myriad delights of petroleum, and that, in contrast to his home planet, competition between companies is rife. His take-home lesson (and one drilled into the viewer on numerous occasions) is that “competing for the customer’s dollar” is key to the success of the oil industry and, of course, the thriving country as a whole. Delivering the news to Ogg back on Mars, the leader replies defiantly that “competition is downright un-Martian”, but the ordinary Martians are not to be deterred and soon rise up to overthrow Ogg and set up a thriving oil industry (and capitalist culture) of their own — the short ending with the slogan “destination unlimited” writ proudly across the screen.

California, Chile, and water law

Ralco dam & hydroelectric plant, Veoverde

Carl Bauer and Luis Catalán recently posted “Water, law, and development in Chile/California cooperation, 1960s-1970s”. First, the abstract:

During 1963-1978 the governments and the top universities of Chile and California undertook three programs of binational development assistance and cooperation. The programs built on a long historical relationship between the two regions, marked by their striking similarities in physical geography and natural resources, despite being 1000s of miles apart on opposite sides of the Equator. The first program was for technical development assistance to Chile in the framework of the Alliance for Progress, and involved the three governments of Chile, California, and the United States. Water resources and river basin development planning were a primary emphasis, and led to building Chile’s largest dual-purpose reservoir (Colbún). The second program was for graduate-level academic exchange and involved the two leading public university systems, the University of Chile and the University of California. This comprehensive program was funded for more than a decade by the Ford Foundation, with agriculture, natural sciences, and engineering the dominant fields. The third program was a separate effort to reform Chilean legal education, led by Stanford Law School and funded by the Ford Foundation. This Chile Law Program was a leading international example of the “law and development” movement in the 1960s, which overlapped closely with the early years of the “law and society” movement in the U.S. Both university and law school programs ended after the Chilean military coup in 1973. What were the impacts of these programs on water, law, and society in both Chile and California? What lessons can we learn today from those historical experiences? We answer these questions with an historical overview and synthesis of diverse documents and evidence. In focusing on water, law, and society, we aim to contribute to the interdisciplinary synthesis of different fields of development studies.

And from the conclusion:

In terms of water, California’s influence has been noticeable in dams and technology, but not in law and policy....

A pollution market in history

I recently came across a 2014 dissertation by Krystal Tribbett, "RECLAIMing Air, Redefining Democracy: A History of the Regional Clean Air Incentives Market, Environmental Justice, and Risk, 1960 -- present". The abstract:

Depending on whom you ask, the Regional Clean Air Incentive Market (RECLAIM), the nation's first regional smog market, is either a revolutionary approach to cleaning the air of the South Coast Air Basin, the most polluted region in the country, or a failed social experiment that put the interests of business and the marketplace above public health. In its original iteration, RECLAIM rules were intended to produce emissions reductions consistent with the command-and-control approach to compliance embodied in an Air Quality Management Plan, but with greater efficiency, effectiveness, and flexibility—a goal RECLAIM in large part met. In an ideal application of emissions trading, public welfare and economic growth should have been jointly protected, and previous studies of RECLAIM have focused on the normative implications of the program, condemning suspected environmental injustices or praising economic efficiency without exploring the significant historical roots of market-based solutions. A closer look at these historical roots reveals the ways in which RECLAIM actually succeeded in improving air quality through difficult compromises and negotiations by regulators, environmental activists, politicians, and businesses.

This dissertation recounts this fuller history. It is about the history of market-based mechanisms to control air pollution in Southern California, and, in a broader sense, the history of neoliberalism and the process of neoliberalising nature. It traces the history of American air pollution laws from the 1960s to the present and finds a symbiotic relationship between federal and state governing bodies that led to the establishment of RECLAIM. The history told here shows that the development of RECLAIM was not wholly neoliberal, imposed intentionally by policymakers, venture capitalists, or academics with a neoliberal agenda. What emerged out of the archives and newspapers was a story of the organic evolution of markets to address air pollution that was shaped both by political processes and academic/theoretical arguments intended to find a compromise between public demands for clean air, political concern about economic growth, and industry pushback against regulation. This dissertation thus argues that in the United States neoliberal policies to govern nature are outcomes of struggles to balance societal values (like clean air) with political, economic, and scientific realities.

Origins of emissions trading

I don't know why Daniel Cole's "Origins of Emissions Trading in Theory and Early Practice" has gotten so few downloads--maybe it's the one-line abstract. So here are some highlights from the article:

In 1968, the late Canadian economic historian John Dales elaborated the theory of cap-and-trade in his prescient book, Pollution, Property, and Prices [University of Toronto Press, 1968]. [note: Dales was not the first economist to recommend tradable permitting. Two years earlier, Thomas D. Crocker of the University of Wisconsin – Milwaukee suggested the idea. Dales, however, was the first to actually describe how such an approach might be structured.] Dales envisioned a ‘market’ in ‘pollution rights’ created by the government. First, the government would impose a quota limit on allowable emissions, as it regularly does in ordinary regulation. This quota limit, often referred to as a ‘cap,’ must be set administratively in order to render available emissions units scarce; otherwise, no market for them would develop. With the cap in place, the government would then issue pollution rights (usually referred to as ‘allowances’ or ‘credits’) equal in number to the cap. Each pollution right would be equal to one unit (usually, a ton) of pollution.

*****

In practice, emissions trading evolved, almost entirely, in the context of air pollution control under the 1970 Clean Air Act and its amendments. That statute did not make any provision for the kind of transferable pollution rights system Dales envisioned. As early as 1974, however, the Environmental Protection Agency was experimenting with transferable pollution rights programs. By 1980 the agency had approved four distinct emissions trading schemes 

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.

Standard Oil and environmental law

The October 2014 issue of Environmental History has a lot of law in it. We'll start with Jonathan Wlasiuk's "A Company Town on Common Waters: Standard Oil in the Calumet". Wlasiuk writes:

Although the twentieth-century American environmental movement was punctuated by the voices of critics within the modernist state, from Aldo Leopold to Ed Abbey, the predominant narrative focuses on calls for federal management of ecosystems that had been controlled by corporations and local governments since the advent of the industrial era. Environmental historians have engaged the debate over whether private or public forces bear responsibility for environmental decline by examining what Christine Meisner Rosen calls “industrial ecology” in search of the business roots of environmental degradation or, less often, rehabilitation. The federal regulatory framework of the EPA and the raft of antipollution legislation that emerged in the 1960s and 1970s was the culmination, not the beginning, of both federal investigations of public health concerns related to industry dating back to the New Deal era and the failure of a cluster of state oversight, local control, and free market solutions. Betsy Mendelsohn has argued that these regulatory precursors are important because they “established the legal setting for the modern environmental law movement that culminated in NEPA in 1969.” A significant chapter in this transition occurred on the Great Lakes in the twentieth century. The industrial ecology of Lake Michigan reveals the failure of market solutions and local control over the environment: corporations found little incentive to protect the quality of common waters and Lake Michigan collected the ecological consequences from polities severed by state boundaries.

This article examines the growth of federal regulatory power by analyzing a turning point in the ecology of the Calumet region on the Illinois-Indiana border and Lake Michigan. In 1889 Standard Oil transferred the heart of its domestic manufacturing empire from Cleveland, Ohio, to Whiting, Indiana, where it constructed the largest oil refinery in the world. Along the lakeshore of northwest Indiana, Standard Oil began an experiment to reorganize its petroleum empire on the principles of scientific management. For nearly eighty years, the company lived the libertarian dream of freedom from government regulation and extended the logic of scientific efficiency to the control of labor and the environment. In private interviews Rockefeller revealed the guiding ethos of his empire: “I shall hail the day when our watchword shall be efficiency, as applied to labor, to people in all positions.” As industry flocked to the Calumet region and reached a critical mass in the early twentieth century, the consequences of industrial efficiency washed down the Calumet River and into the ecology of Lake Michigan.

Chicago Park District employee Philip Saeli sprays
deodorant on dead alewives at Montrose harbor in July 1967.
Bob Langer, photographer. Courtesy of Sun-Times Media.

When water pollution drifted over state boundaries, a growing awareness of the inability of local and even state governments to control industry developed into calls for wholesale reform by midcentury. As Hugh Gorman has argued, postwar federal government mandates redefined corporate efficiency “from a guiding ethic rooted solely in the efficient use of resources to one that recognizes the need to comply with regulations based on environmental objectives.” The corporate ecology of Standard Oil on Lake Michigan reveals how a commitment to technological control and efficiency produced an environmental collapse that transformed Lake Michigan and threatened the public health of millions of Americans. Although the federal government intervened by the late 1960s, their caution in deferring to local, state, and interstate solutions challenges [James] Scott’s characterization of an aggressive “administrative ordering of nature and society.” In the Calumet region, this description better fits the actions of industrial corporations. 

Among other interesting points, here is Wlasiuk putting a renowned court decision on the public trust in context:

Rural conservation in China

More contemporary history, this time from China. The Journal of Peasant Studies last year published Emily Yeh's "The politics of conservation in contemporary rural China". The abstract:

Placing conservation within a broad framework of agrarian and environmental politics, this review article argues that natural resource governance is fundamental to rural politics in China. Much of the environmental literature adopts a technocratic approach, ignoring the political nature of the redistribution of access to and control over natural resources, and of knowledge vis-à-vis degradation. Reading the managerial literature with and against the grain of political ecological studies, the essay reviews contemporary environmental issues including Payments for Ecosystem Services and other market-based approaches, the establishment of national parks and resettlement schemes justified through ecological rationales. The first section following the introduction focuses on two of the largest forest rehabilitation schemes in the world. Next, the paper reviews work on China's rapidly growing number of nature reserves, examining their role as enclosures and their entanglement with tourism income generation. This is followed by a discussion of research on the politics of rangeland degradation and property rights. The inclusion of pastoralism within the scope of rural politics is sometimes obscured by the fact that China's extensive rangelands coincide almost completely with its minority populations. The misrecognition of rural politics over resources and the environment as ethnic politics is addressed in the concluding section.

Three Parallel Rivers of Yunnan Protected Areas (CCTV.com)