Forum for Applied Research and Public Policy, Dec 22, 1998
Why interpollutant and interrisk trading are good ideas and how we get there from here. Two major... more Why interpollutant and interrisk trading are good ideas and how we get there from here. Two major, integrally related trends define U.S. environmental law at the millennium. The first trend is to bring presently unregulated risks under the control of the regulatory system.(1) The second trend, which is the focus of this article, is toward bigger bubbles - toward broader and broader trading among pollutants and even among various types of risk reduction, such as allowing a company to fund a preventive healthcare program in place of reducing its air pollution. To illustrate a regulatory bubble, imagine a huge bell jar - a bubble - placed over an entire industrial facility, such as a refinery or chemical plant. Rather than setting regulatory pollution limits for each individual smokestack or other discharge point, the regulator sets a single plant-wide limit for the pollution occurring throughout the bell jar. This approach allows the regulated party to control emissions less stringently from some emission points within the bell jar, as long as it makes up the shortfall by controlling others more stringently. The total emissions from the plant must be no greater than they would have been if each of the smokestacks or discharge points had been regulated separately. Bubbling gives the regulated community the flexibility to make tradeoffs among various sources of pollution under the figurative bubble. And the larger the bubble, the greater the flexibility. The concept of the bubble finds its roots in the U.S. Environmental Protection Agency's 1981 definition of a "stationary source," which was upheld by the Supreme Court in Chevron v. NRDC.(2) EPA's definition - which expanded the concept of a source, as used in the Clean Air Act, to an entire plant rather than limiting it to a single smokestack - is the prototype, but the logic of bubbles can extend far beyond this initial example. The logic of bubbling, in fact, is a useful central organizing concept to understand the policy behind many environmental law reforms that are currently proposed under different names, such as "cap and trade" systems, public health approaches, risk trading markets, and alternative compliance systems.(3) Why Bubble? There are two major advantages to bubbling from the standpoint of the regulated community. First, bubbling delegates power and increases flexibility for the regulated community. Second, bubbling may also increase the economic efficiency of regulation.(4) The primary policy case for bubbles to date has been based on the claim that they will achieve equivalent environmental protection at a fraction of the cost of conventional "command-and-control" systems.(5) A National Academy of Public Administration committee found that many businesses choose to control pollution more stringently than required if they can use their own strategies to achieve pollution reduction targets.(6) These advantages of bubbles are relatively well-understood.(7) It is not generally as well understood that bubbling - at least when it works properly - also radically decreases the administrative burdens of regulating. It is much more efficient for the government to set up a market and police its operation than to plan and administer each individual exchange. Thus, as the government gains experience with regulating in an area, it may make sense to rely on bubbles to economize on the government's own regulatory costs.(8) Although U.S. environmental law is already arguably the most complex system of law the world has ever known,(9) it is also radically under inclusive - "an inch wide and a mile deep."(10) A great many possible environmental hazards are currently outside the regulatory system, in part because we lack sufficient information to regulate them,(11) but also in some cases, because they are not easily amenable to our current regulatory techniques. It is virtually unthinkable that the U. …
The authors argue that the goal for the next stage of U.S. environmental law should be to interna... more The authors argue that the goal for the next stage of U.S. environmental law should be to internalize environmental externalities (principally harms to health from releases to the environment) to the maximum extent feasible. Where it is not possible to eliminate harms entirely, as a second best solution the authors propose financial compensation to compensate victims to the fullest extent possible plus disclosure of the basis for a polluter's conclusion that their releases will not harm others. The authors argue this goal - rather than benefit-cost analysis or economic efficiency - should be the guiding principle for the environmental law of the future, based on the natural law and philosophical principle that members of a community have an ethical obligation not to harm one another.
Separation of powers jurisprudence in the United States is in an abysmal state. That conclusion e... more Separation of powers jurisprudence in the United States is in an abysmal state. That conclusion emerges clearly from virtually every article in this symposium. The kindest thing that anyone seems to be able to say about re-cent separation of powers decisions is that in certain cases the ...
The paper begins with a brief history of civil discovery and argues that the development of the X... more The paper begins with a brief history of civil discovery and argues that the development of the Xerox machine in 1959 led to the problem of overuse (or abuse) of discovery. Next it criticizes the Supreme court decision in Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340 (1978), for not providing specific guidance for when judges should allocate costs of complying with discovery requests to requesters rather than producers. It then reviews six significant contributions to the law and economics of civil discovery by Elliott, Setear and Easterbrook, Cooter and Rubinfeld, Redish and McNamara, and Robert Bone. The paper argues that the rules for civil discovery should create incentives to produce a socially efficient level of discovery, such that the parties have enough discovery to reach a just result in settlement or at trial but without so much discovery that its costs become an impediment to reaching a just result in settlement or at trial. It furthers suggests that the costs of disco...
Historians have often portrayed social movements as using lawsuits to develop public support, wit... more Historians have often portrayed social movements as using lawsuits to develop public support, with setbacks and wins along the way, but gradually carrying the day by winning over the public mind . This vision that cases and statutes are not the end but one means by which we transform public values is commonplace in accounts of the civil rights movement, for example .2 Similarly, the on-going transformation of the law relating to same sex marriage was accomplished not in a moment, but by a gradual process of many legal and social acts that changed public attitudes . Lawyers can be important contributors to this on-going process of social change . The gradualist school of social movements and legal reform, of which Purdy is a part, sees law and public values as influencing one another, back and forth, in what cultural anthropologists and evolutionary theorists call “co-evolution .”3 While this vision of values shaping law,
Forum for Applied Research and Public Policy, Dec 22, 1998
Why interpollutant and interrisk trading are good ideas and how we get there from here. Two major... more Why interpollutant and interrisk trading are good ideas and how we get there from here. Two major, integrally related trends define U.S. environmental law at the millennium. The first trend is to bring presently unregulated risks under the control of the regulatory system.(1) The second trend, which is the focus of this article, is toward bigger bubbles - toward broader and broader trading among pollutants and even among various types of risk reduction, such as allowing a company to fund a preventive healthcare program in place of reducing its air pollution. To illustrate a regulatory bubble, imagine a huge bell jar - a bubble - placed over an entire industrial facility, such as a refinery or chemical plant. Rather than setting regulatory pollution limits for each individual smokestack or other discharge point, the regulator sets a single plant-wide limit for the pollution occurring throughout the bell jar. This approach allows the regulated party to control emissions less stringently from some emission points within the bell jar, as long as it makes up the shortfall by controlling others more stringently. The total emissions from the plant must be no greater than they would have been if each of the smokestacks or discharge points had been regulated separately. Bubbling gives the regulated community the flexibility to make tradeoffs among various sources of pollution under the figurative bubble. And the larger the bubble, the greater the flexibility. The concept of the bubble finds its roots in the U.S. Environmental Protection Agency's 1981 definition of a "stationary source," which was upheld by the Supreme Court in Chevron v. NRDC.(2) EPA's definition - which expanded the concept of a source, as used in the Clean Air Act, to an entire plant rather than limiting it to a single smokestack - is the prototype, but the logic of bubbles can extend far beyond this initial example. The logic of bubbling, in fact, is a useful central organizing concept to understand the policy behind many environmental law reforms that are currently proposed under different names, such as "cap and trade" systems, public health approaches, risk trading markets, and alternative compliance systems.(3) Why Bubble? There are two major advantages to bubbling from the standpoint of the regulated community. First, bubbling delegates power and increases flexibility for the regulated community. Second, bubbling may also increase the economic efficiency of regulation.(4) The primary policy case for bubbles to date has been based on the claim that they will achieve equivalent environmental protection at a fraction of the cost of conventional "command-and-control" systems.(5) A National Academy of Public Administration committee found that many businesses choose to control pollution more stringently than required if they can use their own strategies to achieve pollution reduction targets.(6) These advantages of bubbles are relatively well-understood.(7) It is not generally as well understood that bubbling - at least when it works properly - also radically decreases the administrative burdens of regulating. It is much more efficient for the government to set up a market and police its operation than to plan and administer each individual exchange. Thus, as the government gains experience with regulating in an area, it may make sense to rely on bubbles to economize on the government's own regulatory costs.(8) Although U.S. environmental law is already arguably the most complex system of law the world has ever known,(9) it is also radically under inclusive - "an inch wide and a mile deep."(10) A great many possible environmental hazards are currently outside the regulatory system, in part because we lack sufficient information to regulate them,(11) but also in some cases, because they are not easily amenable to our current regulatory techniques. It is virtually unthinkable that the U. …
The authors argue that the goal for the next stage of U.S. environmental law should be to interna... more The authors argue that the goal for the next stage of U.S. environmental law should be to internalize environmental externalities (principally harms to health from releases to the environment) to the maximum extent feasible. Where it is not possible to eliminate harms entirely, as a second best solution the authors propose financial compensation to compensate victims to the fullest extent possible plus disclosure of the basis for a polluter's conclusion that their releases will not harm others. The authors argue this goal - rather than benefit-cost analysis or economic efficiency - should be the guiding principle for the environmental law of the future, based on the natural law and philosophical principle that members of a community have an ethical obligation not to harm one another.
Separation of powers jurisprudence in the United States is in an abysmal state. That conclusion e... more Separation of powers jurisprudence in the United States is in an abysmal state. That conclusion emerges clearly from virtually every article in this symposium. The kindest thing that anyone seems to be able to say about re-cent separation of powers decisions is that in certain cases the ...
The paper begins with a brief history of civil discovery and argues that the development of the X... more The paper begins with a brief history of civil discovery and argues that the development of the Xerox machine in 1959 led to the problem of overuse (or abuse) of discovery. Next it criticizes the Supreme court decision in Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340 (1978), for not providing specific guidance for when judges should allocate costs of complying with discovery requests to requesters rather than producers. It then reviews six significant contributions to the law and economics of civil discovery by Elliott, Setear and Easterbrook, Cooter and Rubinfeld, Redish and McNamara, and Robert Bone. The paper argues that the rules for civil discovery should create incentives to produce a socially efficient level of discovery, such that the parties have enough discovery to reach a just result in settlement or at trial but without so much discovery that its costs become an impediment to reaching a just result in settlement or at trial. It furthers suggests that the costs of disco...
Historians have often portrayed social movements as using lawsuits to develop public support, wit... more Historians have often portrayed social movements as using lawsuits to develop public support, with setbacks and wins along the way, but gradually carrying the day by winning over the public mind . This vision that cases and statutes are not the end but one means by which we transform public values is commonplace in accounts of the civil rights movement, for example .2 Similarly, the on-going transformation of the law relating to same sex marriage was accomplished not in a moment, but by a gradual process of many legal and social acts that changed public attitudes . Lawyers can be important contributors to this on-going process of social change . The gradualist school of social movements and legal reform, of which Purdy is a part, sees law and public values as influencing one another, back and forth, in what cultural anthropologists and evolutionary theorists call “co-evolution .”3 While this vision of values shaping law,
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