Article by Richard J. Pierce, Jr.
When society first began to recognize the growing problem of environmental damage caused by otherwise socially desirable activities, it looked initially to traditional common law remedies, primarily the tort law doctrine of nuisance for solutions. Tort law was not equal to the task. The interrelationships from which environmental problems emerge are too complicated to address through application of the simple correlative property rights notions upon which the law of nuisance is based. Tort law had to be relegated at best to a secondary role.
Society next adopted the two public law remedies that are traditionally relied upon when common law remedies prove inadequate—large infusions of government capital and regulation. Infusions of capital took the form of public works spending targeted primarily at municipal governments—a major source of liquid and solid waste. In this important area, public expenditures proved beneficial, but government capital projects were not economically appropriate or politically feasible responses to the many environmental harms that originated in activities undertaken by private participants in the market place. In this sphere, government regulation was perceived to be the only adequate remedy.
Throughout the 1960's and 1970's, increasingly complicated regulatory schemes were enacted and implemented to address a wide range of environmental problems. Toward the end of the 1970's and extending into the 1980's, however, public and scholarly criticism of the regulatory response to environmental problems grew. Environmental regulation has endemic flaws that limit its efficacy. The literature on the limits and adverse effects of the regulatory response to environmental problems is vast, but a brief summary of the major problems identified to date is sufficient to show the need for a search for alternatives.
Environmental regulation can be imposed through one or both of two approaches—setting of general standards and individualized screening of conduct. Standard setting has unavoidable problems. Among these are the setting of standards based more on politics and bargaining than on analysis; the great delay in establishing and changing standards to reflect the dynamics of technology and economics; the inadequacy or inaccuracy of information on which to base standards; the inability to enforce standards; the danger that standards will raise entry barriers and stifle competition; and the application of standards in ways that are inappropriate to important specific situations. The list of problems inherent in individualized screening is similar: gathering and analyzing the information necessary for decision is an expensive and time-consuming task that inevitably requires highly subjective judgments because of inadequate information; information concerning the benefits of proposed conduct often is more difficult to obtain than information concerning the environmental costs of that conduct (or vice versa); the cost and delay inherent in screening proposed new conduct distort the market by insulating preexisting market participants from the threat of new competition; and the procedures required to implement an individualized screening approach are expensive, time-consuming, and distorted by the adversary process.
Some serious scholars have gone so far as to conclude that environmental regulation provides no benefits while it imposes large costs. Most scholars reach the more modest conclusion that regulation cannot be the sole societal response to environmental problems. The need to identify alternatives or supplements to regulation is apparent.
About the Author
Richard J. Pierce, Jr. W.R. Irby Professor of Law, Tulane University. B.S. 1965 Lehigh University; J.D. 1972, University of Virginia.
The author was a member of a team commissioned by the Honorable David C. Treen, Governor of Louisiana, to draft a tax statute responsive to the environmental problems of Louisiana's coastal wetlands. In writing this article, the author has borrowed liberally from the thoughts and analyses of other members of the team. That team consisted of Cyrus Greco, Walter Hellerstein, Vernon Palmer, Robert Pugh, Thomas Schoenbaum, and Paul Verkuil. The author is particularly grateful to Walter Hellerstein, whose extensive scholarship on state taxation of natural resources formed the foundation for most of the analysis in this article.
Citation
58 Tul. L. Rev. 169 (1983)