Can EPA and Other Feds Lead by Getting Out of the Way?

Jim Huffman has a thoughtful article in the most recent issue of the PERC Reports titled Designing Institutions for the Anthropocene, Getting the Incentives Right.  The thesis of Huffman’s proposal is that government institutions need to adopt a better approach to resource management based largely on the fact that nature itself is dynamic and always changing.  Huffman begins,

Writing in 1990, Daniel Botkin observed that since the beginning of the modern environmental movement in the 1960s, environmental policymakers have had one core mission: restore the balance of nature. The laws and regulations intended to achieve this objective are designed to halt further human disruptions of nature or reverse the consequences of past disruptions. Recently, Emma Marris explained that this balance-of-nature paradigm leads virtually every scientific study of environmental change to use or assume a baseline. The baseline environmental scientists usually choose is the condition of nature before it was exposed to human influences.

This understanding of environmental problems easily translates into policy prescriptions for “healing a wounded or sick nature” and to ethical claims that “[w]e broke it; therefore we must fix it,” writes Marris. Thus, baselines “typically don’t just act as a scientific before to compare with an after. They become the good, the goal, the one correct state.”

Both Botkin and Marris reject the balance-of-nature paradigm and its reliance on baselines. In their view, the natural environment is always changing, and humans have been an integral part of nature’s story for millennia. There is no balance to be restored, just an uncertain future. Humans may be able to influence that future, but they and all other living things must adapt to it, or perish.

Yet a quarter century after Botkin labeled his theory the “new ecology,” public policies trail behind. Policymakers are generally discouraged from adapting to new understandings of the world by those with vested interests in existing policies. And bureaucracies face constituencies more interested in stability and the benefits derived from existing regulations than in policy changes that respond to new knowledge.

But if Botkin and Marris are correct that nature is constantly changing and that humans are an integral part of nature, policy changes are needed. If nature is always changing, restoring it to some previous state—if that is even possible—makes no sense. In reality, what has been described as the balance of nature turns out to be only the state of nature preferred by those claiming it to be in balance.

Without a baseline of nature in balance, environmental policies, like all political decisions, ultimately come down to competing preferences. And if there is no single correct policy objective, centralized policymaking is unlikely to be the best approach. Given shifting human preferences, a steadily changing and highly variable natural environment, and a wide array of human actions that affect nature, decentralized institutions allow for locally appropriate and timely decisions. We should, therefore, seek institutions that allow environmental policies to evolve along with changes in the environment and in response to shifting human preferences.

Local Problems, Local Solutions

Beginning in the 1980s, some economists began to argue that a greater reliance on private property rights, contracts, and markets would create ground-level incentives for people to make environmentally sensitive decisions. Free market environmentalists, as they became known, claimed that even if restoring the balance of nature made sense, it was a mistake for policies to treat all resources across a vast continent as if they were the same. Local property owners and resource users have knowledge that centralized regulators could never have. And unlike bureaucrats, private resource owners have strong incentives to make timely and informed adjustments when conditions change.

This justification for decentralized decision making was, of course, not entirely new. Europeans have relied upon the principle of subsidiarity as a guide for designing institutions that govern large regions. The idea behind subsidiarity is that problems should be addressed at the most decentralized level that is appropriate to their solution. Problems tend to be less complex on the local level, where knowledge about those problems also tends to be deeper. When local problems have regional, national, or global effects or causes, then there may be justification for governance at a more centralized level. Subsidiarity allows for diversity and adaptability in both policy priorities and the means to achieve those priorities.  Continue reading 

Our current system of cooperative federalism is compatible with Huffman’s idea of subsidiarity, if and only if our federal agencies are willing to allow states greater flexibility to experiment with new approaches – approaches such as adaptive management, which Jonathan Adler covers in an article titled Accounting for Dynamic Nature.

I’m a strong proponent in what Huffman proposes – think and act locally – but I’m also a realist that centralized government must continue to play an active role in overseeing subsidiarity and intercede when political will and private markets at the local level fail to chart a sustainable course.  One of the better examples of subsidiarity is EPA’s brownfields program where the agency gave states more flexibility to cleanup contaminated properties.  Although, history is replete with examples of the race to the bottom.

Subsidiarity cannot work without strong federal oversight and engaged federal agencies willing to risk failure in order to achieve success.  Just as a federal judge under a binding and enforceable consent decree steps back and allows the parties to implement those things which the agreement sets forth – intervening only when the terms of the agreement are violated – so should EPA strike a similar chord with the states.

 

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