Environmental Legislation

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Many economists consider the public ownership of resources (land, water, air) and free access to the environment as the main causes of environmental pollution; therefore, the only remedy for the abuse is through environmental regulations, pollution taxes, and fines. Regulations are usually mandated by Congress and implemented by the government. Depending on their political affiliation, different people see the government’s role differently (a).

The regulative systems of most governments involve complicated and lengthy processes that leave doors open to abuse, political maneuvering, and industry influence. In the United States, after a particular problem is identified, Congress acts to pass a bill that requires the government to study the problem and take necessary actions. The task of risk assessment and safety regulations is delegated to the EPA who may then study the problem in-house or hire consultants. During this process, the EPA seeks input from the industry, the public, and environmental groups. The agency then drafts a regulation which it refers to the state governments for enforcement. It is taken for granted that no matter how insignificant the ruling is, numerous lawsuits by various interest groups will stall the process. Many of the dirtiest industries such as petroleum, chemical, and manufacturing firms have huge financial and technical resources that they spend on advertising, promotion of the election of friendly candidates, and utilization of a large lobbying staff and legal firms that can represent them in every step of the way. Even the EPA’s top managers are influenced by high-ranking government officials who may hold the key to their promotions and job security and by industries who may, at some point in the future, hire them with very generous benefit packages.

The best solution to reduce conflicts-of-interest is to eliminate or at least greatly reduce the role of money in legislative and regulatory processes. This may require banning or limiting political advertising, restricting or limiting contributions of industry lobbying groups to political campaigns, eliminating tax deductible benefits to lobbying expenses, and disallowing government officials to accept employment at firms whom may have benefited from rulings during the tenure of those officials for a certain number of years (let’s say 3-5 years after they leave their government posts). The same can be said about top-level industry managers who may be appointed to sensitive government posts.

Finally, to implement political reform we must assure that the principles of democratic government are taking hold. The collapse of the Soviet Union demonstrated that the centrally planned economy in socialist countries was even less effective in preventing environmental disaster than market-based economies. The point is that democracy is a necessary ingredient to assure the free flow of information and to empower citizens and institutions to challenge the policies of the government when it is practicing erroneous environmental initiatives.

There is no single approach to reduce the harmful effects of environmental pollution. Three approaches -- command-and-control regulations, incentive-based regulations, and process-based regulations (or a combination of them) -- are often used to address a variety of environmental problems.



(1) Toossi Reza, "Energy and the Environment:Sources, technologies, and impacts", Verve Publishers, 2005

Additional Comments

(a) Depending on their political affiliation, different people see the government’s role differently. Conservatives want to limit the government’s role as much as possible, accusing the government of being run by politicians and “special interests.” The environmental pollution, they insist, will be resolved only when industries agree to reduce emissions voluntarily. The public as a whole will decide what steps to take to force polluters to cut their emissions by boycotting, suing, or switching to more environmentally friendly competitors. Progressives see the “good” government as necessary to serve the interest of the public by providing health care and assuring their welfare. They object, however, to the role of the big businesses that – through their vast financial and intellectual assets – can influence the government and rally the public to support only those environmental measures that benefit them directly no matter what the short- and long-term costs to consumers.

Further Reading

Chapman, D., Environmental Economics: Theory, Application, and Policy,” Addison-Wiley, 2000.

Goodstein, E. S., Economics and the Environment, 4th Ed., John Wiley & Sons, 2002.

Siebert, H., Economics of the Environment: Theory and Policy, Springer Verlog, 2004.

Dauvergne, P., Handbook of Global Environmental Politics, Edward Elgar Publishing, 2005.

Journal of Environmental Economics and Management (JEEM), the journal of Association of Environmental and Resource Economics.

Ecological Economics – Direct Science Elsevier Publishing Company, the journal of the International Society for Ecological Economics (ISEE).

Environmental Economics and Policy Studies – Published by Springer-Verlog, New York is the official journal of the Society for Environmental Economics and Policy Studies.

External Links

US Agency for International Development (http://www.usaid.gov/)

National Center for Environmental Economics (http://yosemite.epa.gov/ee/epa/eed.nsf/pages/homepage).

United Nations Development Program (http://www.undp.org).

United Nations Environment Programme (http://www.unep.org).

Intergovernmental Panel on Climate Change (http://www.ipcc.ch).

World Resource Institute (http://www.wri.org)

Union of Concerned Scientists (http://www.ucsusa.org).