Congress constructed the edifice of federal environmental regulation atop a pile of misconceptions and mistaken assumptions. Once erected, it has withstood meaningful efforts at reform, and atrophied. However much some existing laws helped address twentieth-century environmental problems, they are increasingly obsolete and ill-suited to today’s environmental challenges.
Steven Hayward is absolutely correct that “it is long past time for something new,” and properly identifies many of the key attributes upon which a “new environmentalism” could be built. The case for greater utilization of property rights and supplementing market incentives for environmental purposes, such as through prizes, is quite strong. Substantial challenges remain, however. The environmental policy establishment shows little sign of altering course, and, at present, right-of-center political leaders show little interest in a serious or substantive approach to environmental policy.
The birth of the modern environmental movement coincided with an explosion of federal environmental legislation. In less than a decade, Congress enacted a raft of statutes seeking to counteract the environmental consequences of industrialization and centralize control of environmental policy in Washington, DC. Yet, as Hayward suggests, the specific contours of the new regulatory regime were premised upon mistaken, and in some contexts quite harmful, assumptions. For many in the nascent political movement, an environmental crisis required a reconsideration of basic liberal ideals, such as the importance of individual liberty and a belief in progress. In reality, it would have been more productive to commit more fully to applying classical liberal principles to ecological concerns—but that was not the road taken.
The statutes enacted in the wake of the first Earth Day sought to limit and control those economic activities identified as the source of environmental harms, often through the imposition of various permitting requirements. The idea behind this approach was that existing market institutions, however efficient they may be as a general matter, fail to account adequately for the “external” consequences of economic activity. The failure to account for such “externalities” thus required governmental intervention, in the form of regulation or other measures, to correct for this “market failure.” The problem is that such “externalities” are everywhere, so this rationale for government intervention can justify control of just about all economic activity.
Under the rationale of controlling “externalities,” regulatory mandates proliferated to the point where, as the late Richard Stewart observed, “it amounts to nothing less than a massive effort at Soviet-style central planning of the economy to achieve environmental goals.” And much like Soviet-style central planning, this approach initially produced some gains, but ultimately began to falter underneath the weight of its own ambitions. Since then, little has changed. Regulations continue to proliferate, and there has been minimal effort to enact reforms. Indeed, most of the major federal environmental statutes have not been reauthorized or meaningfully revised in the twenty-first century.
This could have been avoided. In his influential 1968 essay, “The Tragedy of the Commons,” Garrett Hardin explained how most environmental problems could be understood as the natural and avoidable consequence of treating ecological resources as open-access commons. In such situations, there is no incentive to conserve or protect the underlying resource, as any benefits from such forbearance are dispersed among all users. On the other hand, each individual can capture the benefits of exploiting the resource for themselves. And as each individual responds to the incentives created by the underlying arrangement, “ruin is the destination toward which all men rush.”
Hardin noted that one way to prevent this tragedy is through “mutual coercion, mutually agreed upon,” and that is the lesson most drew from his essay (in addition to a myopic and somewhat misanthropic fear of population growth). Too often overlooked was Hardin’s other prescription: property rights. The tragedy of the commons can be “averted by private property, or something formally like it,” Hardin noted, but few heeded this advice. Instead of seeking innovative ways to apply property principles to threatened resources, policymakers sought to bring ever more private activity under government control, and the environment was not much better for it.
Hardin’s lesson has been learned in some areas, even if there is a reluctance to expand on the lesson. Fisheries conservation, in particular, has benefitted from the proliferation of “catch shares” and other property-based reforms, coinciding with increased aquaculture production outside of the marine commons altogether. Western water rights have further shown that the recognition and protection of marketable rights in natural resources can foster conservation and encourage sustainable use, allowing users to fulfill economic demands while accommodating and accounting for ecological concerns. Taking a broader view, it is generally those resources most incorporated into market institutions through property rights and market exchange, protected by the rule of law, that are managed most sustainably.
A more principled approach would get the government out of the practice of picking winners and losers altogether, providing for a stable and predictable legal environment.
Beyond conservation in the commons, the economic incentives created by property, prices, and the pursuit of profit have yielded what is simultaneously the most important and least remarked environmental trend of the twenty-first century: dematerialization. In advanced market economies, resource consumption has been decoupled from economic growth, such that material consumption is actually declining as countries continue to grow. This development has been driven not by regulatory mandates or restraints, so much as it is the product of market dynamics, entrepreneurial responses to economic constraints, and permissionless innovation. In the simplest of terms, where markets are most robust, Malthusian prognostications have been most often dispelled.
The architects of federal environmental law also erred in assuming that centralized leadership and direction of environmental policy in Washington, DC, was necessary, or even desirable. When the first federal environmental regulatory statutes were adopted, it was assumed that state and local governments could not be trusted to address local or regional environmental concerns. The prevailing narrative, that the failure of state and local governments and private efforts to prioritize environmental protection was leading to ever-worsening environmental conditions, was but a fable. The same groundswell of environmental concern that led to the enactment of federal environmental laws had already been working at the state and local level, and many key environmental indicators were already pointed in the right direction. Progress continued after the enactment of federal environmental laws, to be sure, but it is far from clear that federal intervention was the cause.
Particularly with the benefit of hindsight, the outlines of an alternative environmental agenda should be visible, one that recognizes property rights as the foundation of effective conservation, embraces the importance of local community input, and encourages technological innovation and market-driven efficiency improvements. Such an alternative is in line with classical liberal principles and would align with constitutional values far more than the sprawling regulatory edifice we currently have in place.
The problem is that few political leaders have been willing to embrace such an alternative vision of environmental progress. As Hayward recounts, the initial wave of environmental lawmaking was a bipartisan enterprise. Over time, Republican lawmakers grew disenchanted with the growth of centralized environmental regulation and the environmentalist movement’s near-unending appetite for further government constraints on productive economic activity. Yet few were willing to consider, let alone embrace, an alternative policy vision.
For most of the past thirty years, conservative political figures have had an easier time deciding what to oppose and what to support. Criticizing regulatory overreach and opposing the enactment of additional controls is relatively easy. Identifying alternative paths toward continued environmental progress has been far more difficult. Thus, the conventional Republican response to Democratic proposals has been to offer a similar agenda at a discount or to deny the need for reform altogether. Neither is particularly satisfying on policy or political grounds. There are real environmental problems and ample reasons to want change from the status quo. Denying the existence of environmental problems is mere avoidance, and it is neither inspiring nor effective to try and solve existing problems on the cheap.
In recent years, the political dynamic may have gotten even worse as tribal loyalties have subsumed policy development. To many, it has become enough to oppose whatever the other side wants, without regard for the merits. So if Democrats like renewable energy projects, Republicans must oppose them. Subsidies and regulatory barriers must thus be adjusted accordingly to align with each tribe’s preferred energy sources and industries.
A more principled approach would get the government out of the practice of picking winners and losers altogether, providing for a stable and predictable legal environment in which firms could invest in promising energy projects of whatever sort without having to navigate mountains of paperwork and rivers of red tape.
Despite the tremendous environmental progress of the past century, serious environmental challenges remain. Meeting such challenges in an effective and efficient way, without sacrificing other societal needs, will require turning away from the environmental paradigms of the past and embracing the sort of new environmental vision Hayward recommends. The real question is whether there are any political leaders willing to embrace such an environmental agenda and push for reform. Looking at Washington, DC these days, the forecast is cloudy.