“We think we can cut regulations by 75%. Maybe more.”
Hyperbole? Maybe. But it is encouraging that President Trump kicked off the first Monday of his presidency with that bold pledge to industrial leaders gathered at the White House. He clearly realizes he can’t deliver on his campaign promise to grow America’s manufacturing base and bring jobs home without shrinking the government-regulatory complex that drives them away.
There could be no better place to start the pruning than with the webs of federal “green” regulations — layers of redundant, unjustified, draconian, or counterproductive environmental mandates and restrictions that harm the economy often without actually helping the environment.
Most Americans think of environmental law as benign regulation that secures clean water and air and safeguards threatened species. Presumably, laws like the Clean Water Act, Clean Air Act, and Endangered Species Act were passed for those purposes. But the sad reality is that, as a result of environmentalist litigation and agency misinterpretation, these statutes often are enforced not for the public’s benefit but to stop productive activity that activists or bureaucrats dislike.
Such misuse needlessly increases costly regulatory burdens, creating a crippling drag on the economy.
A 2014 study from the National Association of Manufacturers estimated the total cost of federal regulation at over $2 trillion. Another study, from the American Action Forum, estimated that the total cost of selected 2016 regulatory measures would exceed $164 billion and cost over 10,000 jobs. More broadly, the Mercatus Center at George Mason University reports that doubling regulation in a given industry results in a 9% decrease in new startups and a 5% decrease in new hires.
Environmental regulation — what has been termed “green tape” — is a major component of this administrative morass. For example, a 2012 University of Chicago study determined that federal emissions regulation for manufacturing plants results in annual productivity losses of $11 billion and annual lost output of over $20 billion.
Indeed, according to the Environmental Protection Agency’s own numbers, the agency’s 2012 power plant emissions rule, issued under the Clean Air Act, would impose nearly $10 billion per year in costs on power plants (and, scandalously, would provide only about $5 million in benefits).
Other marquee environmental laws also carry punishing price tags.
The Clean Water Act — source of “immense expansion of federal regulation of land use,” as the late Justice Antonin Scalia observed — imposes nearly $100 billion in economic burdens annually, according to the Mercatus Center. The Endangered Species Act’s ledger book of costs includes up to $500 million as a result of “critical habitat” mandates for the red-legged frog, and over $1 billion for gnatcatcher habitat in California.
In a series of articles for IBD, my colleagues at Pacific Legal Foundation will highlight various abuses in how our environmental laws are interpreted and applied, as well as sensible remedies and productive alternatives. For now, here are a few general prescriptions for a return to sanity in federal environmental regulation.
First, require federal agencies to show that their proposed environmental regulations will produce more benefits than costs. One would think that this already should be required for any government agency. Yet, as recently as 2015, the Environmental Protection Agency was arguing in the Supreme Court that it was required to issue its economically destructive power plant emissions rule, even though Congress had nowhere forbidden the consideration of costs in that type of emissions regulation.
Second, allow for fairer judicial review of environmental decision-making. Over the last several decades, federal courts have developed a variety of “deference” doctrines that result in federal agencies getting their way in litigation, even when a preponderance of the evidence fails to support their actions. Directing federal courts to conduct “de novo” review of such decision-making will help curb regulatory abuse abetted by junk science.
Third, make agencies “pay to play.” Among the protections of the Bill of Rights is the prohibition on the government’s taking of one’s property without providing just compensation. To make that key right effective, federal agencies should be required to provide compensation when their environmental regulations substantially reduce the value of one’s property. Mandating such compensation not only would ease the economic impacts of environmental regulation, it also would force the government to internalize the costs of regulation, thereby resulting in more efficient rule-making.
If the Trump administration means to make the environment for job creation great again, retrenchment and reform in environmental regulation is the place to begin.
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- Damien Schiff is a principal attorney at Pacific Legal Foundation.