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

Managing Green Mandates

1 Managing Green Mandates G overnment policies to protect the environment in the United States have been largely successful. Twenty-five years ago, only a third of the lakes and rivers in the country were safe for swimming and fishing; today two-thirds are. Almost every toxic waste site was hazardous a quarter century ago; today one-third have been cleaned up. Scores of urban air sheds that were deteriorating in 1970 now are much improved: smog has declined by a third, even as the number of miles driven in motor vehicles has more than doubled; carbon monoxide levels have fallen by almost two-thirds; acid rain has diminished by 40 percent; soot particles are down by more than one-quarter since 1988; and poisonous airborne lead has all but disappeared. The nation’s forested acreage is expanding, and the threat to wildlife has diminished in many areas. Americans even are consuming less water than they did fifteen years ago, despite a growing population.1 That success has come at a price. A conservative estimate of the costs of complying with the nation’s stringent environmental laws in 1990 was that they absorbed approximately 2 percent The authors are grateful for the comments of Christopher Foreman, Robert Hahn, Mary Graham, Donald Kettl, Robert Litan, Shelly Metzenbaum, and Barry Rabe on earlier drafts of this work. The authors remain solely responsible for its content , which does not necessarily reflect the views of the AEI-Brookings Joint Center for Regulatory Studies. nivola-shields.p65 6/28/01, 11:05 AM 1 2 MANAGING GREEN MANDATES of gross national product, but some studies suggest a considerably greater “environmental drag.”2 The toll in the form of lagging growth in productivity, and hence in workers’ wages, has been especially heavy for a number of major industries. Those negative effects notwithstanding, there is little doubt that over time society has netted a gain from most environmental protection programs. Americans are better off with them than they would have been without them. That’s good news. Even better news, however, would be to learn that the hundreds of billions of dollars spent each year on pollution abatement are delivering the biggest bang for the buck. Here, the story gets murky. Many U.S. antipollution rules confer net benefits but do not maximize them. The cost of the rules often is needlessly high; alternative means could secure approximately the same gains with considerably less pain. Cost overruns have resulted from four distinctive features of U.S. environmental regulation. First, the regulatory regime still subjects communities to controls that often do not befit local circumstances. Rules that might make sense for Miami may be wasteful for Minneapolis. Second, a number of standards seek, in essence, a risk-free environment, and frequently they run up costs exponentially. A few million dollars may be enough to convert some contaminated, abandoned industrial acreage into a reasonably harmless site for an alternative land use. But if the goal is to create a place so pristine that children playing there can safely eat the dirt, the bill for decontamination skyrockets.3 Third, the enforcement of environmental laws in the United States remains largely a legalistic and antagonistic process, not a notably flexible and consensual one. Intense mutual distrust between parties, commonly degenerating into pitched legal battles, results in virtually every significant administrative decision being put through lengthy formal proceedings . Sometimes these ordeals seem more filled with billable hours than pragmatism. Fourth, federal policymakers continue nivola-shields.p65 6/28/01, 11:05 AM 2 MANAGING GREEN MANDATES 3 to dictate to local governments without compensating them adequately for the expense of complying with the dictates. When strapped for revenues, local communities are left to grapple inefficiently with the fiscal burden of the federal government’s unfunded mandates. This monograph explores each of these four difficulties, first by describing them and their origins more fully. Later we review recent innovations in environmental management, concluding that these developments, however welcome, are insufficient. A final section summarizes our main observations and also suggests some general directions for further reform. Environmental programs, we contend, would be more rewarding if they were less distracted by costly assaults on minor risks and if the hyperactive U.S. legal system did not encourage such distractions. The payoff might also increase if local authorities were granted the latitude and wherewithal to tailor their own solutions to local pollution problems...