Environmental Choices: Policy Responses to Green Demands

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Lawrence S. Rothenberg

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    Dedication

    In memory of Jeffrey S. Banks (1958–2000), extraordinary scholar and dear friend

    Tables and Figures

    Tables
    • 1-1 Attitudes toward the Environment 9
    • 1-2 Willingness to Pay for Environmental Quality 11
    • 3-1 Schematic History of Environmentalism 39
    • 4-1 Groups and Government Organizations Concerned with National Environmental Policy 66
    • 4-2 Government and EPA Support of Organizations, 1996–1997 72
    • 4-3 Environmental PAC Contributions to Federal Candidates, 1997–1998 75
    • 4-4 House Votes Used by the League of Conservation Voters to Rank Members of Congress in 1999 76
    • 4-5 Congressional Committees and Subcommittees Dealing with the EPA 82
    • 4-6 Estimate of Savings from Cutting Nine Congressionally Championed Programs that Have Possible Negative Environmental Effects 84
    • 5-1 EPA Inspection Activities, Fiscal Year 1997 112
    • 5-2 Dollar Value of EPA Enforcement Actions by Statute, Fiscal Year 1997 116
    • 6-1 Variance in State Environmental Expenditures, Fiscal Year 1996 137
    • 6-2 Average Household Costs for Proposed Rules by Size of Affected System 144
    • 7-1 National Government Ownership by States, 1997 152
    • 7-2 Condition of Riparian Areas 162
    • 7-3 Diversity of National Park Service Holdings, by Type and Acreage, as of December 31, 1999 166
    • 8-1 Summaries of Environmental Laws Administered by the EPA 181
    • 9-1 Nation's Surface Water Quality, 1988–1998 212
    Figures
    • 1-1 State Income and Pollution Subsidies 13
    • 3-1 Growth in Federal Employment, 1871–2001 45
    • 3-2 Timber Harvests from National Forests, 1940–1997 50
    • 3-3 Visitors to National Park System, 1940–1998 51
    • 3-4 EPA Budget and Employment, 1970–1999 59
    • 4-1 Foundation Support for Environmental Organizations, 1974–1998 71
    • 4-2 Agency Zone of Discretion: An Illustration 97
    • 5-1 EPA Administrative Actions by Statute, 1974–1997 113
    • 5-2 State Administrative Actions, 1987–1997 114
    • 5-3 EPA and State Judicial Referrals 115
    • 7-1 Real Grazing Fees, 1946–1999 163
    • 7-2 Authorized Grazing AUMS, 1961–1968 (Section 3 Lands) 164
    • 8-1 Major Regulatory Rules, October 1, 1996–September 30, 1999 182
    • 8-2 Superfund Expenditures, 1987–1998 196
    • 9-1 Estimates of Environmental and Risk Protection Costs, 1977–2000 209
    • 9-2 Air Pollution Emissions, 1970–1998 210
    • 9-3 Violations of Federal Ozone Standard in the Los Angeles Basin, 1976–1998 211
    • 9-4 Toxic Releases—Core Chemicals and Industries, 1988, 1995–1998 213
    • 9-5 Number of National Priority List (NPL) Sites, 1982–1998 214
    • 9-6 Pesticide Use for Selected U.S. Crops, 1964–1995 215
    • 9-7 Threatened and Endangered Species, 1980–1999 216

    List of Acronyms

    ANILCAAlaska National Interest Lands Conservation Act of 1980
    AUMAnimal unit month
    BLMBureau of Land Management
    CAAClean Air Act
    CAFECorporate average fuel economy
    CBOCongressional Budget Office
    CCCCivilian Conservation Corps
    CEQCouncil on Environmental Quality
    CERCLAComprehensive Environmental Response, Compensation, and Liability Act of 1980 (Superfund)
    CFCChlorofluorocarbon
    CPSCConsumer Product Safety Commission
    CWAClean Water Act
    DDTDichlorodiphenyl-trichloroethane
    DODDepartment of Defense
    DOIDepartment of Interior
    EPAEnvironmental Protection Agency
    EPCRAEmergency Planning and Community Right-to-Know Act of 1986
    ESAEndangered Species Act
    FDAFood and Drug Administration
    FIFRAFederal Insecticide, Fungicide, and Rodenticide Act
    FLPMAFederal Land Policy and Management Act of 1976
    FQPAFood Quality Protection Act
    FWSFish and Wildlife Service
    GAOGeneral Accounting Office
    GNPGross national product
    LCVLeague of Conservation Voters
    NAAQSNational Ambient Air Quality Standards
    NEPANational Environmental Policy Act
    NIMBYNot in My Backyard
    NPDESNational Pollutant Discharge Elimination System
    NPLNational Priority List
    NPSNational Park Service
    OMBOffice of Management and Budget
    OSHAOccupational Safety and Health Administration
    PRIAPublic Rangelands Improvement Act of 1978
    PRPPotentially responsible parties
    RCRAResource Conservation and Recovery Act
    SARASuperfund Amendments and Reauthorization Act of 1986
    SDWASafe Drinking Water Act
    TMDLTotal maximum daily load
    TRIToxic Release Inventories
    TSCAToxic Substance Control Act
    TVATennessee Valley Authority
    USDAU.S. Department of Agriculture
    USFSUnited States Forest Service

    Preface

    Environmental policies in the United States often appear to be a perplexing morass—fragmented, contradictory, inconsistent, and rule-bound. Although it is fairly easy to describe the policy system, it is far more difficult to gain a deeper understanding of what determines policy and the costs and efficacy of policy initiatives.

    Despite the obvious importance of the environment and the policies that govern it, contemporary books that provide a unifying analytic approach are in short supply. Environmental Choices: Policy Responses to Green Demands fills this gap. It furnishes an important overview and perspective on research and issues while providing analytic tools that challenge students' intuitive understanding of environmental policy and public policy. Students using the book will be prepared to apply the knowledge gained from it to make sense of the world they observe. As well as being employed as a principal text, this book may be used in conjunction with a standard core text as a means of questioning conventional wisdom, shedding light on hard-to-understand policy features, and making connections more generally between environmental policy and public policy.

    Although the book incorporates sophisticated ideas, it is written to be comprehensible. It offers and consistently applies a coherent framework that focuses both on the economic determinants of demand for environmental quality and on the nature of political supply in responding to such demands. In doing so, it provides a distinctive approach that shows how the U.S. political system produces higher environmental quality than would occur without government intervention but at a seemingly high cost.

    More generally, Environmental Choices has two goals. The first is to provide a framework for understanding environmental policy that is derived from a general perspective on public policy. Environmental policy is a manifestation of more general processes that affect policy and is best understood that way. Drawing heavily on existing social science about public policy—and about how individuals, firms, organizations, and institutions make relevant choices—the various chapters accessibly introduce key ideas in economics and political science so that readers can easily understand where demand for environmental policy comes from and how political institutions supply it.

    The second goal is to survey government's environmental policies in a way that closely ties in to the analytical framework. Consequently, rather than being presented with the history of environmental policy choices and their influences as a laundry list of accomplishments and failures, students are given a perspective from which to make sense of the political intervention observed, the policy instruments and agencies chosen, and the level of government and means of enforcement selected.

    In communicating complicated and nuanced ideas, Environmental Choices employs a variety of helpful pedagogic tools. Key terms appear in bold face and are listed at the end of each chapter. Key data are presented in easy-to-digest tables and figures. And extensive references are provided to direct readers who are interested in exploring further.

    Environmental Choices begins by laying out the general framework by which policies, among them environmental policy, are seen as a product of demand for goods and the nature of government supply. Chapter 1 explores how that demand for environmental quality has grown with economic prosperity and how the capacity of the United States to meet that demand has increased in a manner heavily influenced by a constitutional structure that produces fragmentation. This interaction—of rising demand with an expanding but fragmented political system—is a crucial element in the understanding of environmental policy. Chapter 2 lays out both the economic and noneconomic rationales for government intervention, and Chapter 3 applies the conceptual framework to the history of environmental policy in the United States. Chapter 4 investigates the impact of national political influences—voters and groups on the one hand and political institutions on the other—and shows how such demand- and supply-side forces interact. Chapter 5 surveys the implementation and enforcement of environmental policy and demonstrates that, although policy enforcement does seem to increase compliance, it also reflects the fragmented political process. Chapter 6 discusses federalism, providing an overview of the reasons for and against either localizing or nationalizing policies, and shows how the working of federalism in practice is profoundly related to the nature of supply and demand for environmental quality. Chapter 7 applies the conceptual framework to government policies with respect to the government's role as landlord, looking at the four principal land management agencies—the Forest Service, the Bureau of Land Management, the National Park Service, and the Fish and Wildlife Service. Chapter 8 applies the framework to government regulatory policies, focusing on the Environmental Protection Agency. Chapter 9, after demonstrating how the conceptual framework reconciles an often seemingly misguided political system with improvement in at least some elements of environmental quality, speculates on the many challenges that the future holds.

    Acknowledgments

    This book has been a decade in the making, and I have incurred many debts along the way. Thanks principally go to my former students, graduate and undergraduate. My initial commitment to developing expertise in environmental affairs stemmed from a feeling of responsibility toward my graduate students, and special appreciation goes to Lucy Drotning, Todd Kunioka, and Marc Shapiro, among others. Thanks also to Randy Calvert for encouraging me to develop an undergraduate seminar in environmental politics and to the students who sat through the class as I educated myself.

    Through the years, the University of Rochester's Department of Political Science and the Wallis Institute of Political Economy have been stimulating and congenial places to get my work done. Thanks to my colleagues and to the associated staffs. Thanks also to the administration at the University of Rochester for giving me a semester off as a Bridging Fellow to learn more about environmental concerns; Larry Lundgren of the Earth and Environmental Sciences Department proved a most gracious sponsor for that semester.

    Several colleagues deserve special recognition. David Weimer, now of the University of Wisconsin, alerted CQ Press to the existence of my then-scattered manuscript and was a source of encouragement. Nathan Dietz of American University was willing to be co-opted into learning about grazing policy. Seth Goldstein provided able research assistance. Special thanks to Bill Lowry of Washington University for his support, his calming of my worries of being an intellectual interloper, and his valuable comments on the manuscript. Other very helpful comments were provided by Matthew Cahn (California State University, North-ridge), Donald Haider-Markel (University of Kansas), Sheldon Kamieniecki (University of Southern California), Geoffrey Wandesforde-Smith (University of California, Davis), and Patrick Wilson (University of Iowa). After all this valuable feedback, I'm not even sure I recognize the finished manuscript any more.

    Thanks also to the folks at CQ Press. Special thanks to Charisse Kiino for taking a flier on a manuscript that is admittedly a bit different from the press's norm, to Amy Briggs and Joanne S. Ainsworth for their patience with the author and their helpful editing of the manuscript, and to Gwenda Larsen for seeing the manuscript through production.

    Finally, thanks to my family, particularly to my children, Daniel and Sarah, who are used to daddy carrying his laptop to art, swimming, and karate classes, on vacation, and to sundry other locations. Your love and affection make life something extraordinary.

    This manuscript is dedicated to the memory of my dear friend and former colleague, Jeffrey Banks (1958–2000), whose extraordinary scholarship was, for those who had the privilege to call him a friend, overshadowed by his warmth and humanity. I count myself among those who are better for having known him.

  • Notes

    1. Environmental Policy in Context

    1. For example, political scientist Ronald Inglehart (for example, 1995) emphasizes the importance of individuals being inculcated with so-called post-materialist values—values reflecting the desire for goods beyond those satisfying basic human needs such as housing and shelter that have allegedly become more important as economic security has become less problematic—as an additional determinant of demand beyond ability to pay. Nevertheless, as will be discussed in more depth, whatever the validity of such assertions (the utility of the post-materialist framework has been widely contested, see Duch and Taylor 1993), the evidence that a significant and positive relationship exists between economic growth and government and between the demand for environmental quality and the ability to pay for it is strong and unambiguous (for example, Grossman and Krueger 1995, Holsey and Borcherding 1997, Rothenberg 2000).

    2. Statements that more environmental quality is demanded with growth and prosperity should not be construed as endorsing the more extreme proposition, which some on the political right espouse, that economic activity is the best policy for a clean environment. (For a particularly controversial example of such environmental optimism see Easterbrook 1995; for critiques, see Arrow et al. 1995; Oppenheimer, Wilcove, and Bean 1995.) For present purposes, noting that demand for environmental quality seems to rise with prosperity and that this demand collides with political, economic, and technical realities to produce environmental policy and quality is sufficient.

    3. Kahn (1998) discusses this process and reactions to cleaning up air pollution in the Los Angeles basin, while Chay and Greenstone (1998) analyze the relationship between air pollution and housing prices. Such behavior designed to avoid pollution's negative effects is partially responsible for concerns that environmental ills fall disproportionately on the poor and the disenfranchised. For instance, as will be discussed further, many activists, scholars, and political figures decry what they consider to be a system of environmental injustice and racism by which the poor inhabit high pollution areas (see Bullard 1993, 1994; Hamilton 1995b; Hamilton and Viscusi 1999). Analogously, many find that those who are better situated politically, and typically better-off financially, are more adept than those with little political clout at preventing activities that cause or dispose of pollution and, therefore, might improve quality of life generally but impose costs on those located nearby (this is the NIMBY, or Not in My Backyard, syndrome; for a discussion, see Rabe 1994). Indeed, environmental justice concerns were politically sanctioned by Bill Clinton in February 1994 when he signed Executive Order 12898, “Federal Actions to Ensure Environmental Justice in Minority and Low Income Communities,” which ordered seventeen federal agencies to develop strategic plans to address environmental justice (for an analysis of environmental justice issues, see Foreman 1998).

    4. Residentially, radon is most commonly found in the air at high levels in structures providing little ventilation, such as in many energy-efficient buildings constructed during the last several decades, that are built on granite, shale, or phosphate-bearing geological formations. Occupational exposure is most associated with uranium mining. Although inexpensive detection kits identify radon dangers fairly cheaply, remediation costs, such as those of substantially improving ventilation, can run into thousands of dollars (Cole 1993, Reitze and Carof 1998).

    5. Establishing secure and well-defined property rights is deemed essential for generating productive economic activity, as the creation of value is commonly thought to be diminished if property rights are undefined, unclear, or unenforced (North and Thomas 1973, Eggertsson 1996).

    6. Indeed, the 1996 passage of the Food Quality Protection Act (FQPA), which established a variety of standards for pesticide residues on food, formally recognized this fact (Schierow 1996; for a critical discussion see Byrd 1997). Previously, under the 1958 Delaney Clause, pesticide traces were not allowed in processed foods (Vogt 1995), leading to the paradox that acceptable amounts of pesticides on raw foods were unacceptable after processing.

    7. It would be unsurprising to discover that people in poorer countries consider the environment to be problematic, especially because quality is objectively worse in such nations on many dimensions, even if they are unwilling or unable to pay the same amount per capita for environmental attributes. (On comparing opinions of those in poor and rich nations on the environment, see Dunlap, Gallup, and Gallup 1993; Dunlap and Mertig 1995.) Also, particularly for a good with costs and benefits spilling over to so many others, asking people hypothetical questions often raises validity issues (are responses actually measuring what they seem to?); indeed, a huge literature considers how to measure willingness to pay for public goods such as the environment (for example, Mitchell and Carson 1989). In this book, therefore, most opinion data are viewed as suggestive, and measures of actual behavior are considered stronger indications of how to classify environmental quality as a good.

    8. Although green parties are important forces in certain western European countries, America's version is a pale imitation (for example, Green Party presidential candidate Ralph Nader received 685,000 votes, or 0.71 percent of the popular vote, in 1996 and 2,878,000 votes or 2.73 percent in 2000). The discrepancy in green party success is almost certainly a function of the advanced democracies of Europe being parliamentary systems, which typically encourage multiple parties, and America being a presidential system biased toward two principal parties (for the classic work, see Duverger 1954).

    9. For instance, only 17.3 percent of General Social Survey respondents answer that they have a great deal of confidence in the people running the executive branch of the federal government (51 percent say that have “only some” confidence, 27.3 percent have “hardly any” confidence, and 2.8 percent simply “don't know” if they have confidence). Perhaps more ironically, by producing pressures to make government even more inert and inflexible (for example, Kagan 1995), this tension between the mistrust of government and the demands on it may exacerbate pathologies associated with American public policy.

    10. Kahn and Matsusaka actually make the stronger claim that preferences are unimportant determinants of behavior once income is controlled; however, their measures of preferences (voter registration and vote for president) are incomplete, and their measures of production costs (for example, agricultural production in a county) may tap some of the effects of preferences, particularly if mobility is important (that is, similar types of people may deliberately congregate together). Additionally, Kahn and Matsusaka do discover that income has a declining effect for some referenda, which they attribute, probably reasonably, to “crowding” behavior by which wealthy individuals purchase private goods, such as an isolated house in the midst of pristine surroundings, rather than contribute to public provision, such as parks open to all, thereby displacing the production of public goods with that of private goods.

    11. Consistent with this discussion (although other factors are relevant), while the United States virtually eliminated its emissions fairly quickly once international efforts to reduce CFCs gained momentum (industrial nation production declined by roughly 90 percent from 1989 to 1995), a variety of developing nations continue to use them and have actually increased production,

    12. In a related vein, whether unifying authority in a single party across both chambers of the U.S. Congress and the office of the president makes for more effective or decisive government is vigorously debated (Mayhew 1991, Fiorina 1996, Epstein and O'Halloran 1999, Laver 1999).

    13. In this framework, second-tier explanations focus on fundamental differences with separation of powers or parliamentary systems related to regime or government type, and third-tier explanations include a plethora of other considerations not directly tied to legislative-executive relations.

    14. Also, interestingly, there was a recent movement in judicial circles to revive the so-called nondelegation doctrine, which had been presumed dead since the 1930s, with specific application to environmental issues (on nondelegation, see Lowi 1979). Under this doctrine, delegating broad discretion to agencies like the Environmental Protection Agency (EPA) is deemed unconstitutional; notably, in American Trucking Associations v. Environmental Protection Agency, the District of Columbia Court of Appeals ruled that regulatory efforts to promulgate new ozone and particulate standards violated Article I of the Constitution vesting legislative powers in Congress. However, in Whitman v. American Trucking Associations, the Supreme Court put a stop to this potential assault on agency delegation (see also Chapter 6).

    15. Another form of commitment that government may find more difficult to solve and which will be covered in Chapter 5, involves implementing sanctions to punish those not behaving in a prescribed manner. Although durability may solve commitment problems related to expectations about a policy's longevity, it will not solve those stemming from expectations about whether government will have the nerve to punish transgressors (for example, manufacturers not meeting prescribed standards) even at the risk of, for example, throwing employees out of work.

    2. Environmental Action, Environmental Caution

    1. Another typical justification for intervention, notably for economic regulation by which government decides issues such as firm entry, exit, and pricing, is imperfect competition stemming from market concentration, that is, government steps in when a monopoly or an oligopoly gives economic actors market power. However, concentration is not especially relevant for social regulation of consumption and production choices generally or for environmental policy specifically. Although imperfect competition can have environmental repercussions justifying intervention in selected instances, such as with respect to public utilities where economies of scale may make competition difficult and harm the environment, other market failures weigh far more heavily. (Economies of scale involve the reduction of the average cost of a product when it is made by a single producer.) As such, monopoly and oligopoly will be largely ignored.

    2. One argument heard for discounting smokers' utility is that those with high chemical sensitivities, such as asthmatics, suffer through no fault of their own, whereas smoking is more or less voluntary. Also, along the lines that smokers should be harshly penalized, another possible justification for discounting smokers' utility is that symbolic gestures such as bans or the condemnation of other forms of environmentally damaging behavior might change attitudes in the population more generally and result in a more favorable state of affairs through a process of stigmatization; in other words, ostracizing smokers can be good (on stigma, which has been principally analyzed with application to means-based programs such as welfare, see Besley and Coate 1992).

    3. Although not obviously what Sandel has in mind, as implied, an instrumental perspective on moral stigma could suggest that it helps reduce policy enforcement costs by internalizing beliefs that harming the environment is wrong (similar arguments are found, for example, in Glazer and Rothenberg 2001). However, moral stigma likely works far more on individuals than on larger economic decision makers, such as corporations, who are the primary focus of many environmental market mechanisms. Additionally, the positive effects of moral stigma would have to be quite large to justify eschewing markets on instrumental grounds.

    4. For instance, Keohane, Revesz, and Stavins (1999) suggest a wide variety of reasons for hesitancy in adopting market instruments: legislators may find command-and-control more comfortable, familiar, better for hiding costs, more symbolically attractive, and better for distributing benefits; firms may be wary of market instruments if they push more costs onto their industry or undo established rights, undo barriers for new entrants into the industry, or eliminate a cost advantage relative to other firms in complying with regulations; besides philosophical objections, environmental organizations may be suspicious of market instruments if they threaten their ability to attract members, if they are more difficult to alter than command-and-control policy (which, frankly, would not seem to be the case), or because group leaders believe market mechanisms will be less effective in practice than theory.

    5. In the spirit of the earlier discussion, the Coasian solution can only be realized with clearly defined and easily transferable property rights. The ability to make effective bargains is undermined if rights or their exchange are in question—for example, proper choices will not be made if those involved are worried that government will step in and appropriate rights by fiat.

    3. A Brief History of U.S. Environmental Policy

    1. The definition of multiple use cited here is from the Federal Land and Policy Management Act of 1976.

    2. Passage of the 1960 Multiple Use and Sustained Yield Act codified the linkage between multiple use and sustained yield.

    3. These groups were the Environmental Defense Fund, the Environmental Policy Institute, the Friends of the Earth, the Izaak Walton League of America, the Natural Resources Defense Council, the National Audubon Society, the National Parks and Conservation Association, the National Wildlife Federation, the Sierra Club, and the Wilderness Society.

    4. Illustrative of the increasing attention to brownfields was the Clinton administration's 1997 announcement of a Brownfields National Partnership (Bartsch 1997) and, despite some complaints that it is statutorily inappropriate, the EPA's decision to employ some Superfund monies to help clean up selected brownfield sites ($91.3 million in fiscal year 2000; see, for example, General Accounting Office [GAO] 1998c, Reisch 2000a).

    Climate change issues principally concern worries that increasing emissions of atmospheric greenhouse gases, such as of carbon dioxide, cause global warming. They are highlighted by the 1997 Kyoto, Japan, multinational agreement—although meaningful implementation of this accord has proven difficult. As mentioned earlier, ozone depletion involves worries about how gases, such as CFCs, might deplete stratospheric ozone, potentially resulting in changes such as increases in skin cancer. Besides prompting domestic efforts, worries about climate seemingly precipitated nations to sign the Montreal Protocol in 1987 (Benedick 1998). Although not completely alleviating broader concerns, as other chemicals threaten the ozone layer and developing nations increase their CFC production and consumption, this accord greatly reduced CFC production and usage, particularly in the industrial countries.

    5. The United States had developed significant pollution problems by the end of the nineteenth century, such as waterborne diseases, particularly in urban areas, caused by a lack of sewers and water treatment (Melosi 1980, Andrews 1999), and urban air pollution produced by America's industrial engine (Hays 1959).

    6. Perhaps even more surprising, unlike the soon-to-be-discussed General Revision Act, Congress has never revoked this authority. An obvious reason is that presidents have exercised caution in using these powers in ways that would alienate Congress. However, there are exceptions. For instance, in 1996 Bill Clinton created the Grand Staircase Escalante National Monument in Utah in a transparent election-time gesture to skeptical environmentalists. Lacking much local support—for example, both Utah senators opposed it—this action provoked unsuccessful cries for repealing the act. Predictably, the president then abstained from using the act in such incendiary ways until near his administrations end, when, because his worries about legislative retribution were marginal, he produced a torrent of lame-duck initiatives.

    7. Separating agencies that are, intuitively, best served by coordination between different executive departments with contrasting orientations reflects and reinforces institutional and policy fragmentation. Although such differences should not be exaggerated, those favoring preservationist goals have historically found the DOI more receptive than the USDA.

    8. Providing ranchers with grazing rights over specific lands eliminated the commons, but moral hazard remains problematic to the extent that ranchers worry that their rights may be adjusted or taken away after their leases expire. More generally, as will be discussed in Chapter 7, the guardianship of the Grazing Service and the BLM, although producing lands that are better than previously, comes under considerable attack from all sides.

    9. As Kaufman's seminal analysis illustrates, the USFS had a reputation for developing mechanisms to keep producer interests at arm's length. It became known for its highly professional employees, decentralized decision making, and mission orientation. For many years the USFS was claimed to be one of the best managed American organizations—public or private (see Clarke and McCool 1996). However, although perhaps not as reviled as the BLM, the USFS would ultimately be subject to claims of special interest capture (for example, Hodges 1996).

    10. Specifically, Nixon's executive order transferred two DOI bureaus—the Federal Water Quality Administration and the Office of Research on Effects of Pesticides on Wildlife and Fish—five Health, Education and Welfare agencies (Bureau of Water Hygiene, Bureau of Solid Waste Management, National Air Pollution Control Administration, Bureau of Radiological Health, and the Office of Pesticides Research), the Pesticides Regulation Division from the USDA, the Division of Radiation Standards from the Atomic Energy Commission, and the Interagency Federal Radiation Council.

    11. Delegating authority locally over various environmental issues may be sensible. However, one can also convincingly argue that tasks that were locally delegated—and the nature of the defined intergovernmental relationship—do not correspond to those suggested by a rationalized treatment of environmental policy (see Chapter 6).

    4. National Political Influences on Environmental Policy

    1. Public interest groups and business-commercial organizations may overlap financially. A variety of grassroots organizations, for example, many wise use groups, are substantially bankrolled by the corporate sector; similarly, more conservative interests frequently complain about government support for environmental organizations (to be discussed in more detail later).

    2. Reiterating an earlier point, business and corporate interests have, at times, pushed for more efficient policy (for example, adopting market instruments) to meet goals more cheaply. But such preferences are often overwhelmed by incentives of specific corporations or business sectors to pursue their narrow self-interest.

    3. Assertions that structural choice is exclusively the province of organized interests should be made cautiously because voters care about environmental conditions and their financial well-being. By this logic, elected officials will be penalized if mistakes in agency design cause poor environmental quality or high costs. A balance must be struck between narrow, concentrated interests and inefficiency (Becker 1983; Grossman and Helpman 1994; and Keohane, Revesz, and Stavins 1999 provide arguments consistent with this assertion).

    4. In contrast, scholars such as Berry (1999) emphasize the influence of liberal environmental interest groups on congressional policy choices.

    5. Somewhat counter to claims of legislative venality, others maintain that congressional impact is limited because large numbers of members deter effective organization for pursuing collective goals because of high transaction costs, leaving more nimble political actors such as the president with a strategic advantage (Moe and Howell 1999). However, the repeated nature of congressional activity and the coordination mechanisms, such as political parties, that legislators have created should substantially mitigate such obstacles. (The increasing complexity of institutions such as the presidency may also produce problems in getting subordinates to march in lockstep.) Thus, for example, legislators representing various concerns have little problem organizing around mutual concerns; in illustration, those interested in protecting auto producers effectively mobilize when air pollution standards threaten, as do western Republicans combating attempts to raise grazing fees.

    6. The most notable recent threat occurred in 1993, when the House and Senate passed contrasting royalty payment schemes. The two chambers failed to reconcile their differences, and the legislation died in a House/Senate conference committee charged with forging a compromise. Currently, legislators, environmentalists, and mining interests are fighting over how much of a given parcel can be used as a mill site, with smaller sites reducing environmental damage and mining profitability.

    7. These processes are frequently nuanced, with political actors anticipating each other's actions. Executive orders may be circumvented by strategic legislators passing statutes; vetoes may be rendered unnecessary by strategically amended bills; and presidential nominations of candidates mutually acceptable to all sides may defuse hostile conferral battles.

    8. Although the following discussion focuses on federal courts (since the EPA's formation for the most part), state courts have jurisdiction over intrastate pollution issues and concerns of state regulatory agencies and the like.

    9. Justices may also invite statutory reversal when they believe that the law ties their hands. Perhaps the best known example is the Supreme Court's ruling in TVA v. Hill (437 U.S. 153 [1978]) in which the ESA unambiguously required that a dam threatening the existence of a species of snail darter not be built regardless of the desirability of an exception.

    10. The next section shows how this confluence of preferences could have given agencies such as the EPA a zone of discretion; essentially, these agencies could change the status quo, and statutory reversion would be difficult as these agencies had presidential support.

    11. Workload is an additional capacity issue. Interestingly, while the lower federal courts are overwhelmed by growing caseloads—a situation exacerbated after 1994, when squabbling between Republican senators and a Democratic president left both sides willing to leave judgeships unfilled at the expense of increasing delay and transaction costs (for example, in April 1997, twenty-three positions had been vacant for at least eighteen months)—the Supreme Court has not found restrictions in the number of cases that it can handle annually constraining in the sense of not being able to hear cases for reasons of workload as its present composition has made it more passive than in the past.

    Also, a caveat is that the District of Columbia Court of Appeals handles more environmental cases than other courts (for example, the EPA litigates about two-thirds of its cases in the court) and thus its justices have become somewhat more familiar with environmental issues (Wald 1992). However, administrative cases are still a small absolute percentage of the court's workload, and judicial expertise regarding the environment remains modest (Banks 1999).

    5. Developing and Enforcing Environmental Policy

    1. For those interested in the importance of program areas, for the EPA in fiscal 1997 there were 89 air cases, 111 water cases, 154 CERCLA cases, 49 RCRA cases, and 23 toxics/ pesticide cases. For the states, the numbers were 151 water, 164 air, and 64 RCRA.

    2. A similar movement concerns environmental management systems and involves efforts to survey and improve firms' environmentally relevant activities.

    3. This does not mean that CAFE standards are good public policy. Indeed, from an economist's perspective they are far from ideal and could be improved by simpler taxes; for example CAFE is estimated to be seven to ten times more expensive than a petroleum tax and is claimed to have possibly reduced average fuel efficiency in the 1980s by shifting automobile sales toward low fuel efficiency cars (Kleit 1990, Crandall 1992, Thorpe 1997).

    6. National or Local Control

    1. Although a stable federal system helps check the abrogation of property rights—which is essential if markets are to function and, for that matter, if policies requiring investment are to succeed—establishing the processes preventing national government usurpation of authority is complex (for example, Weingast 1993, 1995; Qian and Weingast 1997; see also, Riker 1987). Put differently, since national political actors need to devise mechanisms for credibly committing to preserving federalism, they can be viewed as party to any bargain allowing local control.

    2. Specifically, Tiebout's model suggests that, if different bundles of public goods are offered in different geographic polities, those with homogenous preferences will separate themselves through residential choice by “voting with their feet.”

    3. Another complicating factor in stopping a bidding war is that the national government may find itself having to reserve vast arrays of policies as local leaders, faced with having to maintain a single national standard, may respond by manipulating others. For example, local leaders wishing to reduce business costs may respond to a national rule setting a strict environmental standard by relaxing local worker safety rules.

    4. For instance, in the spirit of the analysis emphasizing the relationship between ability to pay and demand for environmental quality, Henry Butler and Jonathan Macey (1996b, 20), scholars of law and economics, argue that income effects may produce more environmental quality in high-income states: “In fact, competition between jurisdictions may lead to greater increases in environmental quality. It is often argued that environmental quality is a luxury good, in that individuals develop a greater concern for environmental issues as their incomes rise. If this is true, the key to increases in environmental quality may be found in higher incomes. This point has implications for the desirability of jurisdictional competition.” In reality, although they might be more proactive if the devolution of authority were less constraining, states only exceed current national environmental standards with modest frequency.

    5. Politically, there may also be an imbalance in regard to costs if they are disproportionately borne by those outside the district; for example, midwestern automakers do not vote in California, providing the latter with an incentive to pass legislation that makes the former pay for cleaner air in their state (Elliott, Ackerman, and Millian 1985).

    6. This inference is conditioned on assuming that national policies would be identical in centralized and federated systems. Intuitively, national standards might be stricter if local leaders could not exceed them when demand warrants, although prominent economist Wallace Oates (1997) speculates that national regulators tend toward excessively stringent standards.

    7. The commissions domain includes areas of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, parts of Virginia, and the District of Columbia (one criticism is that this area is not comprehensive for covering all externalities) and involves representatives from each states environmental quality bureaucracy and the three relevant EPA regions. The commission may recommend initiatives, by majority vote, that the EPA may or may not approve. To date, the commission has passed two initiatives successfully, one regarding the use of low-emission vehicles and the other concerning the production of nitrogen oxide from power plants and large boilers (for a discussion of the commission, see Trinkle 1995).

    8. One exception, already discussed, is setting designs and standards for automobile tailpipe emissions, given large economies of scale. Here, the national government almost certainly plays a positive coordinating role.

    7. Land Use Agencies

    1. Although these environmental policies substantially affect land quality and value (for example, areas covered with toxics are diminished and devalued), this chapter concentrates on how land is directly managed, whereas Chapter 8 provides additional insight into the effect on lands of EPA regulatory policies.

    2. Illustrative of the reasoning of skeptics is the policy advice furnished by the conservative, market-oriented Cato Institute in its manual designed for members of Congress: “[L]ands that have recreational or historical value should be sold or given to private conservation groups such as the Nature Conservancy or the Audubon Society. Such groups would surely do a better job of preserving those lands than has the federal government. Lands that have commercial value—such as timber and grazing lands—should be sold to the private business concerns that currently lease them from the federal government or to environmentalists who wish to buy them for conservation purposes.” (Stansel 2001, 176)

    3. The Army Corps of Engineers and the Bureau of Reclamation could also fall into this group and would reinforce many analytic themes. They are excluded only for the sake of brevity. These agencies, long associated with water projects such as dam construction, control about 21 million acres of land (almost 9 million by the bureau and over 12 million by the corps). Traditionally identified with economically inefficient, pork barrel projects, environmental pressures have recently made them more environmentally sensitive (for example, Clarke and McCool 1996). Also, the Department of Defense (DOD) is excluded, as its goals are geared neither toward conservation nor toward preservation. Nonetheless, the DOD owns about one percent of the total land in the United States, takes actions with significant environmental consequences, and spends billions of dollars annually on environmental programs.

    4. This battle engulfed three of the four principal land management agencies, the courts, Congress, and several presidents (for a detailed description covering the period until 1993, see Yaffee 1994). It was highlighted by a summit called by Bill Clinton that ultimately led to a compromise—putting substantial environmental safeguards in place and transferring more than $ 1 billion to the region to ease the economic pain—that left both sides dissatisfied and appears to have contributed to the substantial decline of logging in the Northwest.

    5. Bidder collusion over timber rights may also reduce prices received by the USFS (Brannman 1996; Baldwin, Marshall, and Richard 1997). Such collusion is facilitated by relying on oral auctions (where behavior is observable) rather than on sealed bids.

    6. Claims of below market pricing are sometimes challenged on the grounds that (1) public land quality is poor, and (2) grazing rights have a capital value for which ranchers not originally receiving rights have to pay, that is, after the initial allocation of who could purchase grazing rights was decided, the windfall for ranchers subsequently controlling these rights was not as great as might appear, since they had to be purchased from the original grantees.

    7. The National Marine Fisheries Service (part of the Department of Commerce's National Oceanic and Atmospheric Administration) also has some responsibility for implementing the ESA.

    8. The EPA

    1. DDT became commercially important after World War II because it was cheap, killed mosquitoes and lice carrying malaria and typhus, and had other desirable properties. But the slow rate at which it metabolizes means that it builds up in those consuming it directly or indirectly. Consequently, widespread DDT application threatened the ability of birds such as the American bald eagle and the peregrine falcon to reproduce successfully because it deformed embryos, thinned eggshells, and lowered hatching rates. The EPA banned DDT in 1973 (Dunlap 1981).

    2. Also, although Superfund is heavily centralized, for those cleanups that require program monies because PRPs are not picking up the tab, states may influence which sites get cleaned up and how vigorously because, among other requirements, they must pay 10 percent of the costs.

    3. Harking back to the discussion in Chapter 2 of indoor air pollution and justifications for intervention, it is not intuitively clear that radon involves a market failure. As no obvious public goods or externality problems exist, it must be argued that the market is incapable of furnishing information.

    4. This discussion is related in spirit to that of divided government (where the presidency and control of Congress are split between the two major parties). Divided government may accentuate preference divergences between presidents and Congress and, therefore, give all involved an incentive to write a detailed contract, everything else being equal. However, as indicated by the fact that much key environmental legislation in the 1970s was written under divided government (notably with the Republican Richard Nixon in the White House and a Democratic Congress), the obstacle is obviously not divided government per se but preference divergence (see Krehbiel 1998).

    9. The Costs of Environmental Progress

    1. Solow (2000) makes clear that there are more restrictive definitions of sustainability. However, his view is intuitive, sensible, and consistent with this analysis.

    2. Not only are democracies likely to be more receptive to the production of environmental quality than other forms of government but the correlation between democracy and sociodemographic factors, such as wealth, that produce demand for environmental quality may further widen the gap between high- and low-demand countries.

    3. Ironically, there are only small returns to populations burning rainforests, as the land's agricultural value is exhausted quickly (inducing still more burning), making a Coasian type contract by which payments are made to maintain the rainforest an obvious solution if enforceable.

    4. Others now discuss this movement under the rubric of sustainability (for example, Kraft and Mazmanian 1999), but in this chapter the word sustainability is used in accordance with the precise definition offered earlier.

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