Posted on June 10, 2013 by Seth Jaffe
I believe in governmental environmental regulation. We have a complicated world and it is not surprising that many activities, including those generating greenhouse gases, cause negative externalities. At the same time, however, I have spent more than 25 years representing regulated entities in negotiations with government regulators and it is impossible to do such work without obtaining an appreciation for the very significant costs that bureaucracies impose.
With all due respect – cue the upcoming diss – to my many friends in government, the absence of market discipline or the ability to fire nonpolitical bureaucrats often leads to street level bureaucrats operating under a law of their own devising. Moreover, if a complex economy causes externalities requiring regulation, that same complexity should cause regulators to pause before imposing or revising complicated regulatory regimes. Unintended consequences abound.
The genesis of these musings was the confluence of a number of otherwise unrelated recent regulatory developments. The most significant was headline in the Daily Environment Report earlier this week noting that “EPA Still Unable to Provide Time Frame For Revising Definition of Solid Waste Rule.” RCRA is the perfect example. No one can really quarrel with the need for hazardous waste regulation, in order to prevent the creation of more Superfund sites. However, if we’re still fighting over the definition of something as basic as solid waste more than 30 years after the inception of the program and EPA’s most recent efforts to update the definition remain fruitless after about five years of effort, then we have to acknowledge some serious implementation problems where the rubber is trying to hit the road.
I’ll also provide two recent examples from my home state of Massachusetts. MassDEP has been engaged in a serious regulatory reform effort, which has earned deserved praise. However, as NAIOP has recently noted in comments on the draft proposal to revise the Massachusetts Contingency Plan, MassDEP’s proposed Active Existing Pathway Elimination Measure Permit is “so cumbersome that it is not clear that a PRP or redeveloper would want to seek such a permit.” This calls to mind MassDEP’s reclaimed water regulations, which were intended to encourage water reuse, but are so cumbersome that no one is applying for the permits.
Thus, the final caution. The MassDEP example is extremely common – and extremely troubling. Regulator gets great idea for innovative program. Prior to implementation, concerns are raised about what happens if…. More effort is put into avoiding the perceived downsides than in actually making the program work. Program ends up being worse than nothing.
I believe in environmental regulation, but…