Running Head: ENVIRONMENTAL REGULATIONS/COST BENEFIT ANALYSIS
Environmental Regulations My View
Environmental Studies, PHS 100
Professor David Terrell, PH. D.
November 30, 2010
Would it not be comforting to know that each time an environmental regulation passed through the legislative process it received a 100% approval rate when implemented? Sure it is easy to think that all of society wants to breathe clean air, drink pure water, and look out over an unspoiled landscape—anyone who did not might earn a label from those who do…capitalist, greedy, non-enlightened, or maybe just deadbeat. And then again, those people (the deadbeats) might reverse label their counterparts as…tree huggers, environmental whackos, nature freaks, or maybe just hippies.
Rest assured, a newly implemented environmental regulation that was intended to bring about a positive benefit to the majority would surely be met with opposition from the minority. Some will feel threatened; some will cry out that the government wants more and more control over the environment—and in turn the individual; some will voice their concern over economic loss; while others will say that environmentalists are ‘taking over.’
A 100% approval rate is not likely, given the diversity of interests that rage throughout our society. Even though there are (seemingly) winners and losers in most environmental regulation scenarios there is (fortunately) a system in place that allows the government to analyze the financial implication and ‘weigh’ the costs of federal regulations against the economic benefits resulting from the regulations. Withgott, Scott (2008)
Coupled with historical data studies, practical application studies that show control results, and sufficient ‘real world’ implementation and procedural studies, I believe that I could make a valued judgment on any newly implemented environmental regulation.
Environmental Regulations My View
Corporate America is not a quick study. Again and again, companies
have responded to proposed environmental rules by threatening bankruptcy,
huge layoffs, foreign inroads into American markets, even an end
to the car-based American way of life — and it has never worked. Finally,
though, companies are acknowledging that the sky did not fall every time
they were forced to clean up their act and their air. (Deutsch 1997)
Good policy decisions require accurate benefit and cost estimates. Put another way,
economic efficiency and a balancing of competing social objectives require careful analysis of
the costs and benefits of environmental regulations. (Hodges)
The key point of Hodges’ statement is “good policy decisions.” Decisions based on suppositions and ‘feel good’ hypothesis need to be subjected to the scrutiny of cost comparison analysis. During the early days of environmental regulatory design (from the 70s through the 90s) companies first thought that complying with the new regulations would be “over the top” expensive—what was found after time was the reality that compliance almost always never cost as much as originally estimated. The terminology for measuring the differences in cost estimates of compliance is ex-ante vs. ex-post [cost estimates].
The ability to weigh the costs vs. the benefits of new environmental regulations is an important first step to implementing the regulation. As important are ‘studies of practicality.’ Can the new regulation be implemented without turning the world upside down? Will compliance be met with willing acceptance? These are just two questions that come to mind—there are more for sure. My aim is to keep an open mind when a new regulation hits the books.
I have the duty and responsibility, as a member of a small town planning commission (in the Columbia River Gorge) to review and enforce a number of new environmental regulations—many concerning water—believe me some you scratch your head over, while others make a lot of sense. One in particular is the Shoreline Act. This Act provides legislation for the establishment of firm setbacks from waterways…to the point where any development is prohibited within fifty feet of the shoreline. The exceptions are few and the permitting process expensive, but, more salmon are now running in the river as a result—to me (and many) the benefit of the Shoreline Act far outweighs the inconvenience and the cost.
The downside to all regulations, especially in light of the fact that governments are becoming increasing more powerful—with departments and agencies vying for power within the “top dog” structure of government—is the “takings” by government fiat. More and more of our land use rights are being restrained to the point where it is virtually impossible to contain the power government wields in the name of the ‘environment, or the ‘common good’ of the people.
Can we find a balance—at this time I would say no because those in power have the upper hand.
Withgott, J., & Brennan, S. (2008). Environment, the science behind the stories. In J. Withgott, & S. Brennan, Environment, the science behind the stories (pp. 3-13). San Francisci: Pearson Benjamin Cummings.
http://www.epi.org/page/-/old/briefingpapers/bp69.pdf Retrieved 11/30/2010 FALLING PRICES:
Cost of Complying With Environmental Regulations Almost Always Less Than Advertised
by Hart Hodges