Managing Green Mandates: Local Rigors of U.S. Environmental Regulation

Foreword

vii Foreword T his volume is one in a series commissioned by the AEIBrookings Joint Center for Regulatory Studies to contribute to the continuing debate over regulatory reform. The series will address several fundamental issues in regulation , including the design of effective reforms, the impact of proposed reforms on the public, and the political and institutional forces that affect reform. Many forms of regulation have grown dramatically in recent decades—especially in the areas of environment, health, and safety. Moreover, expenditures in those areas are likely to continue to grow faster than the rate of government spending. Yet, the economic impact of regulation receives much less scrutiny than direct, budgeted government spending. We believe that policymakers need to rectify that imbalance. The federal government has made substantial progress in reforming economic regulation—principally by deregulating prices and reducing entry barriers in specific industries. For example, over the past two decades consumers have realized major gains from the deregulation of transportation services. Still, policymakers can achieve significant additional gains from fully deregulating other industries, such as telecommunications and electricity. While deregulating specific industries has led to substantial economywide gains, the steady rise in social regulation— frontmat.p65 6/28/01, 11:05 AM 7 which includes not only environmental, health, and safety standards but many other government-imposed rights and benefits —has had mixed results. Entrepreneurs increasingly face an assortment of employer mandates and legal liabilities that dictate decisions about products, payrolls, and personnel practices . Several scholars have questioned the wisdom of that expansion in social regulation. Some regulations, such as the phaseout of lead in gasoline, have been quite successful, while others, such as the requirement for safety caps on aspirin bottles, have led to increased risks. As those regulatory activities grow, so does the need to consider their implications more carefully. We do not take the view that all regulation is bad or that all proposed reforms are good. We should judge regulations by their individual benefits and costs, which in the past have varied widely. Similarly, we should judge reform proposals on the basis of their likely benefits and costs. The important point is that, in an era when regulation appears to impose very substantial costs in the form of higher consumer prices and lower economic output, carefully weighing the likely benefits and costs of rules and reform proposals is essential for defining an appropriate scope for regulatory activity. The debates over regulatory policy have often been highly partisan and ill informed. We hope that this series will help illuminate many of the complex issues involved in designing and implementing regulation and regulatory reforms at all levels of government. ROBERT W. HAHN ROBERT E. LITAN AEI-Brookings Joint Center for Regulatory Studies viii FOREWORD frontmat.p65 6/28/01, 11:05 AM 8 ...