Environmental Protection Legislation and Regulation

National and international environmental laws and regulations are relatively new phenomena. For centuries, conflicts over land and water use were resolved at local levels, either informally or in courts of law. But since the Industrial Revolution, increasing numbers of humans, new technologies, and rising levels of consumption have seriously degraded natural resources, have created costly and negative consequences for many, and are even likely to have altered the earth's climate. Acid rain, Love Canal, the wreck of the Exxon Valdez, and Bhopal provide well-known examples of business activities that have imposed involuntary costs on others. Degradation of natural resources (depleting fisheries and forests, desertification, ozone depletion, aquifer and wetland losses) is not a new phenomenon, but the pace of consumption, population growth, and new technology has led to many new or contemplated legal restrictions on economic activity.

During the 20th century, economic activity has been particularly intense in the industrialized democracies. [Page 752]William Rees and others have calculated the “ecological footprint” of various societies that depend on natural capital from beyond their own borders. The European Union (EU) has calculated that its 25 member states represent a declining portion of the world's population, but a rise in per person consumption means that, through global trade, they use an increasing portion of the world's natural resources. Home to 7% of the world's population, the EU nations generate 17% of humanity's ecological footprint. North America (Mexico, the United States, and Canada) generates even larger footprints. A perceived conflict between economic development and environmental protection emerges: If India, China, and other developing nations follow the same upward trend in consumption and generate ever larger demands on natural capital, strains on natural capital are likely.

Severe strains on natural capital can lead to collapse, as Jared Diamond has pointed out in his 2005 book, Collapse: How Societies Choose to Fail or Succeed. Because ecological disasters can bring an end to economic activity in that location, it may seem sensible to impose legal limits on the kinds or amounts of consumption or to encourage different technologies or activities. Effective or not, legal attempts to preserve old-growth timber, limit fish catches, or phase out ozone-depleting chemicals exemplify laws intended to avoid ecological degradation and thereby maintain natural capital for current and future generations. But each of these may inhibit profit making in the present. “The market,” without governmental interference, is not inclined to place limits on the kinds or amounts of goods that are freely bought and sold; yet setting rational restraints on production, consumption, and inappropriate technologies has proven difficult without market-based rules and incentives.

Enough is known about the nature of corporations, unconstrained markets, and human behavior to conclude that some governance from the public sphere must be in place to protect the environment. Otherwise, chlorofluorocarbons would be freely bought and sold, no one could sue for damages from pollution, and preservation of wilderness would be unthinkable. The more trenchant issue is what kinds of rules and regulations will best serve society and its various constituencies. But we must first consider the meaning of society and its various constituencies.

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