DISTRIBUTING THE COSTS OF ENVIRONMENTAL, HEALTH, AND SAFETY PROTECTION: THE FEASIBILITY PRINCIPLE, COST-BENEFIT ANALYSIS, AND REGULATORY REFORM

Boston College Environmental Affairs Law Review, 2005 by Driesen, David M

Abstract:

This Article offers a normative theory justifying the feasibility principle animating many environmental statutes. The feasibility principle avoids widespread plant shutdowns while maximizing the stringency of regulation that does not close plants. This principle offers a reasonable, democratically chosen response to distributional concerns and provides meaningful guidance regarding both maximum and minimum stringency. Pollution's tendency to concentrate severe harms upon randomly selected victims justifies this approach's stringency. Normally, widely distributed costs cannot justify failing to protect people from death, illness, and ecological destruction. But the principle's constraints apply in the one situation where some initial restraint might be justified, when regulation threatens to produce widespread shutdowns that concentrate significant harms on individuals. The feasibility principle offers a rational alternative to CBA. Indeed, a comparison between CBA shows that the feasibility principle offers a more sensible way of taking cost into consideration than CBA does.

INTRODUCTION

Proponents of cost-benefit analysis (CBA) often portray the choice involved in deciding whether to create a "cost-benefit state" as simply a choice between cost sensitive decisionmaking and cost blind decisionmaking.1 But consideration of cost pervades the regulatory system and always has, even before the current push toward CBA.2 In particular, numerous statutory provisions establishing technology-based criteria for setting standards require agencies to consider cost.3 But they do not require agencies to weigh those costs against the value of avoided harms (usually referred to as benefits).4 Instead, they often require application of the feasibility principle, a principle requiring maximum feasible emission reductions.5 The Supreme Court addressed this principle last term in Alaska Department of Environmental Conservation v. EPA (Cominco).6 This Article examines that principle and compares it to CBA.

The feasibility principle reflects a key democratic decision about the distribution of costs, namely a preference for avoiding widespread plant shutdowns. This preference for avoiding plant closures provides a sensible approach to distributional issues and addresses many other concerns that influence CBA advocates. Furthermore, by demanding stringent regulation where such regulation does not threaten widespread shutdowns, this approach maximizes the protection of health, which is fundamental to welfare, in situations where doing so does not threaten welfare in a significant way.7 This approach allows Congress, rather than administrative agencies, to make fundamental policy decisions about how to evaluate the distribution of costs.8 This congressional role fits both democratic theory and the claims of cost-benefit proponents better than a mandate that agencies consider CBA.9 Implementation of the feasibility principle has an additional advantage; it requires a limited kind of analysis, a feasibility analysis, that avoids many of the difficulties that plague CBA.10

The comparison between CBA and the feasibility principle matters a great deal. Technology-based standard-setting provisions dominate the United States Code.11 But they have existed, since the mid-1970s, alongside a minority of statutes that have been based on a cost-benefit approach.12 Moreover, first by executive order, and more recently by statute, elected officials have required CBA of most major regulations, including many technology-based regulations.13 If the status quo continues, the debate about the value of CBA will influence regulatory outcomes that now reflect a requirement for CBA and different, albeit cost-sensitive, statutory criteria.

Moreover, industry, with significant support from the think tanks it funds, some judges, and scholars who have adopted the conservative think tanks' view of existing regulation, seek to supplant existing law with cost-benefit standards.14 Environmentalists and many academic environmental law experts claim that such a change would greatly weaken environmental law.15 Advocates for corporations and some academics argue that CBA would improve government regulation.16 All agree that the issue is critical.17

While past discussion of CBA has focused on the concept of economic efficiency, leading scholars on both sides of the regulatory reform debate agree that distribution of costs matters to environmental protection.18 This Article therefore moves beyond the debate about the merits of economic efficiency to address the broader arguments made about CBA. Those who have supported CBA while saying that distribution matters have said very little about how current statutes or CBA address distributional concerns.19 A comparison of the feasibility principle and CBA allows one to test the arguments of prominent CBA proponents, such as Cass Sunstein, Matthew Adler, and Eric Posner, who support it, despite expressing skepticism about neoclassical economies' devotion to economic efficiency.20 I focus on these scholars for a number of reasons. First, they include many of the most active, prominent, and influential writers on the subject of government regulation and its reform. Second, their arguments have not received nearly as widespread critical attention as the efficiency idea has in the academic literature.21 And finally, the question of why scholars who claim to reject the principal economic rationale for CBA nevertheless embrace the technique provides an interesting puzzle.22