* Professor, Syracuse University College of Law; J.D. Yale Law School, 1989. I would like to thank Dean Hannah Arterian for suggesting the conference at Syracuse University College of Law that generated the papers for this symposium issue, Zygmunt Plater for arranging publication with the Boston College Environmental Affairs Law Review, Chris Ramsdell and Theresa Coulter for their work in organizing the conference, and all of the participants in the conference for a lively exchange of ideas. Portions of this Essay are based on The Economic Dynamics of Environmental Law, a book written by the author and published in 2003.
1 David M. Driesen, The Economic Dynamics of Environmental Law (2003).
2 See, e.g., Stephen Breyer, Breaking the Vicious Circle: Toward Effective Risk Regulation (1993) (claiming that environmental law suffers from poor priority-setting); Thomas O. McGarity, A Cost-Benefit State, 50 Admin. L. Rev. 7, 39–40 nn.155–58 (1998) (citing other regulatory reformers’ priority-setting arguments); Richard H. Pildes & Cass R. Sunstein, Reinventing the Regulatory State, 62 U. Chi. L. Rev. 1, 86–89 (1995) (advocating cost-benefit analysis to cure poor priority-setting).
3 Lisa Heinzerling, Regulatory Costs of Mythic Proportions, 107 Yale L.J. 1981, 1983, 1993–98 (1998) (describing the influence of tables denoting dollars per lives saved).
4 Id. at 1998–2042.
5 Id. at 1984.
6 See David M. Driesen, Getting Our Priorities Straight: One Strand of the Regulatory Reform Debate, [2001] 31 Envtl. L. Rep. (Envtl. L. Inst.) 10,003, 10,017 (Jan., 2001).
7 Id. at 10,017–18.
8 See generally Lisa Heinzerling, Political Science, 62 U. Chi. L. Rev. 449 (1995) (book review).
9 Cf. id. at 470 (discussing Justice Breyer’s implicit view that the proper goal of risk regulation is to save human lives).
10 For a more extended treatment of how economic efficiency might help explain regulatory reformers’ priority-setting arguments, and an extended critique of this approach, see Driesen, supra note 6.
11 See William J. Baumol & Wallace E. Oates, The Theory of Environmental Policy 23 (1975) (misallocation of resources can be fixed by charging price, or tax, equal to the social cost).
12 See David M. Driesen, The Societal Cost of Environmental Regulation: Beyond Administrative Cost-Benefit Analysis, 24 Ecology L.Q. 545, 578-79 (1997).
13 See, e.g., Jack Manno, Commoditization and its Impact on Environment and Society 223 (2000) (questioning the treatment of environmental quality as a commodity); Mark Sagoff, The Economy of the Earth 1100 (1988) (arguing that environmental protection should be based on debates about values, not summation of individual “preferences”).
14 See Unfunded Mandates Reform Act of 1995, Pub. L. No. 104-4, � 202, 109 Stat. 48 (codified at 2 U.S.C. � 1532 (1995)).
15 See Driesen, supra note 1, at 21–23.
16 See McGarity, supra note 2, at 13 (discussing problem of data gaps rendering risk assessments, the basis for benefits estimates, incomplete and uncertain); see, e.g., Thomas O. McGarity, Politics by Other Means: Law, Science, and Policy in EPA’s Implementation of the Food Quality Protection Act, 53 Admin. L. Rev. 103, 120–92 (2001) (describing in detail the data gaps and judgments needed to assess risk under the Food Quality Protection Act).
17 See Frank Ackerman & Lisa Heinzerling, Pricing the Priceless: Cost-Benefit Analysis of Environmental Protection, 150 U. Pa. L. Rev. 1553, 1553 (2002) (describing CBA as reducing benefits into dollars and cents to the extent possible).
18 See generally Frank Ackerman & Lisa Heinzerling, Priceless: On Knowing the Price of Everything and the Value of Nothing (2004) (describing many of the value assumptions employed in converting environmental and health benefits into dollars).
19 See Driesen, supra note 12, at 601–05; Donald Hornstein, Lessons from Federal Pesticide Regulation on the Paradigms and Politics of Environmental Law Reform, 10 Yale J. on Reg. 369, 422 (1993) (describing an “analytical treadmill” making progress on pesticide regulation “strenuous if not impossible”).
20 Corrosion Proof Fittings v. Envtl. Prot. Agency, 947 F.2d 1201, 1219 (5th Cir. 1991). For a critique of this decision, see Thomas O. McGarity, The Courts and the Ossification of Rulemaking: A Response to Professor Seidenfel, 75 Tex. L. Rev. 525, 541–49 (1997).
21 See Driesen, supra note 12, at 596.
22 See id. at 594 (noting that EPA lacks information on health effects of the majority of toxic chemicals to which Americans are exposed).
23 See Driesen, supra note 6, at 10,004.
24 Id.
25 See id. at 10,018. While this has rarely been explicit in regulatory reformers’ writing, it has been implicit. During the Economic Dynamics conference, at least one participant explicitly defended the idea that CBA aids ordering.
26 A participant in this conference explicitly advocated this idea.
27 See Driesen, supra note 6, at 10,018–19 (discussing these and other possible priority-setting principles).
28Cf. id. at 10,018 (discussing the problem of CBA-based priority-setting exercises consuming resources that could be devoted to protecting public health).
29 See e.g., David M. Driesen, Markets Are Not Magic, 20 Envtl. F. 19, 24 (2003) (discussing example of renewable energy’s falling cost).
30 See Bruce A. Ackerman & Richard B. Stewart, Reforming Environmental Law: The Democratic Case for Market Incentives, 13 Colum. J. Envtl. L. 171 (1988); Robert W. Hahn & Robert N. Stavins, Incentive-Based Environmental Regulation: A New Era from an Old Idea?, 18 Ecology L.Q. 1 (1991).
31 See Driesen, supra note 29, at 21.
32 See David M. Driesen, Is Emissions Trading an Economic Incentive Program?: Replacing the Command and Control/Economic Incentive Dichotomy, 55 Wash. & Lee L. Rev. 289, 291–92 (1998); see, e.g., Royal C. Gardner, Banking on Entrepreneurs: Wetlands, Mitigation Banking, and Takings, 81 Iowa L. Rev. 527 (1996) (reviewing an intertemporal trading program for wetlands conservation); Ann Powers, Reducing Nitrogen Pollution on Long Island Sound: Is There a Place for Pollutant Trading?, 23 Colum. J. Envtl. L. 137 (1998) (discussing proposal to use nitrogen trading regionally to control water pollution).
33 See, e.g., Approval and Promulgation of Air Quality Implementation Plans; New Jersey; Open Market Emissions Trading Program, 67 Fed. Reg. 64,347 (Oct. 18, 2002) (announcing EPA decision not to proceed with processing New Jersey State Implementation Plan revisions, because New Jersey had found such serious problems in its emissions trading program that it was planning to abandon it); Richard Toshiyuki Drury et al., Pollution Trading and Environmental Injustice: Los Angeles’ Failed Experiment in Air Quality Policy, 9 Duke Envtl. L. & Pol’y F. 231, 258–63 (1999) (discussing fraud in the estimation of credits that undermines environmental performance).
34 See, e.g., Drury, supra note 33, at 258–63 (discussing problems with trading volatile organic compounds).
35 Michael Common, Sustainability and Policy: Limits to Economics 139 (1995); National Science and Technology Council, Technology for a Sustainable Future 2 (1994); Michael Barrows & Jay Stowsky, Technology Policy and Economic Growth, in Investing in Innovation: Creating a Research and Innovation Policy That Works 41 (Lewis M. Branscomb & James H. Keller eds., 1998).
36 Robin Paul Malloy, Law and Market Economy: Reinterpreting the Values of Law and Economics 78–99, 137 (2000).
37 See John Bates Clark, Essentials of Economic Theory 374 (1907); John Kenneth Galbraith, American Capitalism: The Concept of Countervailing Powers 14–18 (1952); IV J.S. Mill, Principles of Political Economy, ch. VII, � 7 (3d ed., Parker & Son 1852) (1848); Joseph A. Schumpeter, Capitalism, Socialism, and Democracy 78 (2d ed. 1947).
38 Edwin Mansfield, The Economics of Technical Change 104–06 (1968).
39 Driesen, supra note 1, at 4.
40 Id. at 5.
41 See Herman E. Daly, Beyond Growth: The Economics of Sustainable Development 221 (1996); Douglas A. Kysar, Sustainability, Distribution, and the Macroeconomic Analysis of Law, 43 B.C. L. Rev. 1 (2001).
42 See Dynamics, Economic Growth, and International Trade 31 (Bjarne S. Jensen & Kar-yiu Wong eds., 1997).
43 See Malloy, supra note 36, at 85.
44 Douglass C. North, Institutions, Institutional Change and Economic Performance 81 (1990).
45 Oliver E. Williamson, Chester Barnard and the Incipient Science of Organization, in Organization Theory: From Chester Barnard to the Present and Beyond 172, 178–79 (Oliver E. Williamson ed., 1995).
46 Envtl. Law Inst., Cleaner Power: The Benefits and Costs of Moving from Coal Generation to Modern Power Technologies 4–5 (2001), http://www.elistore.org/re
ports_detail.asp?ID=519 (last visited Mar. 5, 2004).
47 See North, supra note 44, at 80.
48 Id.
49 Id. at 81.
50 Id. at 99.
51 Prevention of Significant Deterioration (PSD) and Non-Attainment New Source Review (NSR): Equipment Replacement Provision of the Routine Maintenance, Repair and Replacement Exclusion, 68 Fed. Reg. 61,248, 61,253 (Oct. 27, 2003) (codified at 40 C.F.R. �� 51.165–.166, 52.21) (indicating that advancing technology may force operators to replace old equipment with more modern equipment when the old equipment wears out).
52 See generally Jerry Mashaw, Greed, Chaos, and Governance: Using Public Choice to Improve Public Law (1997).
53 Daly, supra note 41, at 65, 194–95. See generally Nicholas Georgescu-Roegen, The Entropy Law and the Economic Process (1971).
54 See Driesen, supra note 1, at 6–12.
55 See id. at 15–31.
56 See Driesen, supra note 6, at 10,012–13, 10,017.
57 Id. at 10,013, 10,017–18.
58 See id. at 10,017 (citing Breyer, supra note 2, at 12–18).
59 See Ackerman & Heinzerling, supra note 18, at 53–55 (describing the theory of statistical murder regulatory reformers employ).
60 See, e.g., Clean Air Act, 42 U.S.C. �� 7411, 7412 (2000).
61 See Driesen, supra note 6, at 10,016.
62 See generally id. at 10,010–13.
63 See id. at 10,017.
64 See id. at 10,015–16 (citing Breyer, supra note 2, at 19, 67).
65 Driesen, supra note 1, at 12 (noting the “slow and uncertain” pace of government decisionmaking).
66 Driesen, supra note 6, at 10,019.
67 See generally Driesen, supra note 1, at 12.
68 See Driesen, supra note 6, at 10,006 (discussing exemptions of ordering decisions from litigation and precautionary approach to agency agenda setting, both of which avoid paralysis in priority setting preceding regulation).
69 Id.
70 Driesen, supra note 1, at 17 (explaining that CBA helps to determine regulations’ goals).
71 See id. at 21 (discussing the difficulty of quantifying environmental risks for CBA).
72 Thomas O. McGarity, Reinventing Rationality: The Role of Regulatory Analysis in the Federal Bureaucracy 131 (1996); Winston Harrington, et al., On the Accuracy of Regulatory Cost Estimates, 19 J. Pol’y Analysis & Mgmt. 297 (2000); Thomas O. McGarity & Ruth Ruttenberg, Counting the Cost of Health, Safety, and Environmental Regulation, 80 Tex. L. Rev. 1997 (2002).
73 McGarity, supra note 72, at 131–32.
74 Barbara White, Coase and the Courts, 72 Iowa L. Rev. 577 (1987).
75 Driesen, supra note 1, at 27.
76 Id.
77 See Hahn & Stavins, supra note 30.
78 See Driesen, supra note 1, at 75.
79 Id. at 65.
80 David M. Driesen, Does Emissions Trading Encourage Innovation?, [2003] 33 Envtl. L. Rep. (Envtl. L. Inst.) 10,094, 10,097–98 (Jan., 2003).
81 See id.; Richard G. Newell et al., The Induced Innovation Hypothesis and Energy-Saving Technological Change, 114 Q.J. Econ. 941 (1999).
82 See Driesen, supra note 80, at 10,097–98.
83 See David M. Driesen, Free Lunch or Cheap Fix?: The Emissions Trading Idea and the Climate Change Convention, 26 B.C. Envtl. Aff. L. Rev. 1, 44 (1998) (discussing this point’s implications for environmental benefit trading under the climate change regime).
84 See Driesen, supra note 1, at 83–85.
85 Driesen, supra note 80, at 10,097–98.
86 See, e.g., 42 U.S.C. � 7411 (2000) (Clean Air Act provisions regulating performance standards for new sources); 33 U.S.C. � 1316 (Clean Water Act provisions regulating performance standards for new sources).
87 Hahn & Stavins, supra note 30, at 13.
88 Id.
89 See Driesen, supra note 1, at 64.
90 See Hahn & Stavins, supra note 30, at 13.
91 David Wallace, Environmental Policy and Industrial Innovation: Strategies in Europe, the U.S. and Japan 20 (1995); David A Malueg, Emissions Credit Trading and the Incentive to Adopt New Pollution Abatement Technology, 16 J. Envtl. Econ. & Mgmt. 52 (1987).
92 Driesen, supra note 80, at 10,097–98.
93 Driesen, supra note 32, at 335.
94 See Driesen, supra note 1, at 9–10.
95 See id. at 98.
96 See id.
97 See id. at 112–19.
98 Id.
99 See id. at 139–61 (considering this question at greater length).
100 Driesen, supra note 1, at 140–41.
101 See id. at 140–45 (discussing citizen suit’s value as a source of vigor and suggesting ways to enhance that value).
102 See id. at 146; Bradley C. Karkkainen, Information as Environmental Regulation: TRI and Performance Benchmarking, Precursors to a Paradigm, 89 Geo. L.J. 257, 297 (2001).
103 T.H. Tietenberg, Using Economic Incentives to Maintain Our Environment, 33 Challenge 42 (1990).
104 Nathanael Greene & Vanessa Ward, Getting the Sticker Price Right: Incentives for Cleaner, More Efficient Vehicles, 12 Pace Envtl. L. Rev. 91, 94–95 (1994).
105 Id.
106 See Driesen, supra note 1, at 153–61 (discussing this idea in some detail).
107 Driesen, supra note 1, at 114.
108 See generally id. at 115–16 (describing some of the forces creating this situation).
109 See id. at 163–81 (reviewing a variety of possible proposals to make environmental regulation more fair and effective).
110 See id. at 167.
111 See id. at 169–70.
112 See id. at 170–76 (discussing a number of ways of equalizing participation).
113 Driesen, supra note 1, at 193.
114 See, e.g., Natural Res. Def. Council v. Envtl. Prot. Agency, No. 90–2447, 1991 WL 157261 (4th Cir. Aug. 19, 1991); United States v. Allsteel, No. 87 C 4638, 1989 WL 103405 (N.D. Ill. Aug. 30, 1989) (unpublished disposition); United States v. Alcan Foil Products, 694 F. Supp. 1280, 1281 (W.D. Ky. 1988), aff’d in part, rev’d in part, 889 F.2d 1513 (6th Cir. 1989).
115 Byron Swift, Command Without Control: Why Cap-and-Trade Should Replace Rate Standards for Regional Pollutants, [2001] 31 Envtl. L. Rep. (Envtl. L. Inst.) 10,330, 10,331 (Mar., 2001).
116 Driesen, supra note 1, at 194–95.
117 Id. at 195.
118 Id.
119 Id. at 195–96.
120 Id. at 196.
121 Id.
122 Driesen, supra note 1, at 196–97.
123 See generally Voluntary Approaches in Environmental Policy 137–50 (Carlo Cararro & Fran�ois Leveque eds., 1999).
124 Alan S. Miller, Environmental Regulation, Technological Innovation, and Technology-Forcing, 10 Nat. Resources & Env’t 64 (1995).
125 See generally Environmental Strategies for Industry (Kurt Fischer & Johan Shot eds., 1993); Nicholas Ashford & George R. Heaton, Regulation and Technological Innovation in the Chemical Industry, 46 Law & Contemp. Probs. 109 (1983).
126 Driesen, supra note 1, at 197.
127 Id.