AN INTRODUCTION TO ENVIRONMENTAL LAW AND POLICY

THE NEED FOR REGULATION

• Some believed that we did not need to enact environmental

protection laws because tort law would protect the
environment.
• In fact, for a while, tort law was the way we feebly controlled
pollution, and it was in a tort class where protection of the
environment was, if at in law school.
• But the dying streams and polluted skies made evident that
tort law was not working, thus, the adoption of environmental
regulation was seen as necessary.
 TRAGEDY OF THE COMMONS

• People often seek to justify environmental regulation by using

a story told by Garret Hardin entitled “the Tragedy of the
Commons”. The tragedy develops this: Picture a huge, lust
pasture open in everyone.
• Many people survive by raising cattle, they take their came to
the common pasture to graze.
• Each herds man keeps as many cattle as possible. For while,
disease, famine, and tribal wars keep the number of cattle
down to a reasonable level.
• Eventually, however, the keep the number of cattle down to a
reasonable level.
• Eventually, however, the day of reckoning comes.
• There are enough land to support all the cattle.
• Just as with the tragedy of the commons, as long as there
were few polluters relative to the size of the water and air, the
absorptive capacities of these resources were not taxed and
there were no problems.
• As pollution and industry increased, environmental tragedy
emerged.
• Rivers became polluted as did the air and the land.
• Nature’s absorptive capacities were exceeded in many areas.
 FREE RIDER PROBLEM
(A free rider, refers to someone who benefits from resources,
goods, or services without paying for the cost of the benefit.)

• The Tragedy of the Commons, some people justify the need

for environmtal laws by pointing out that clean air and clean
water are public goods.
• Public goods are goods that are nonrival and no excludable –
that is once they are produced, others’ consumption of the
goods does not affect another’s consumption of the good and
others cannot be excluded from using the good.
• Thus, when someone pays to the produce the public good,
not only the payer but also everyone else gets to use it.
• Those who do not pay become free riders. They get benefits
paid for by others.
• Pollution as an Externality: One common justification for any
government intervention on the market is to eliminate
negative externalities.
• In the market, buyers and sellers interact to determine prices
for goods and services. Buyers through demand,
communicate that certain resources should be allocated to
the production of certain goods.
• Price is supposed to reflect the interest in allocation of
resources to the production of those goods.
• However, sometimes third parties have an interest in a goods
or service, but the market listens only to buyers and sellers.
• Third parties have no impact on market prices; either
government gives their interests a voice in production
decisions or they have no voice. Thus, some argue that the
government needs to step in to impose the costs of pollution
on polluting firm, so that it will have to increase the price of
the product to reflect the true costs of producing the product.
• Citizens who would have otherwise been adversely affected
by the improper waste disposal will not have to pay by
incurring losses to their health.
• The important point here is that the marketplace by itself has
no mechanism for providing public goods, such as clean water
and accounting for the cost of externalities, such as the cost
to third parties associated with improper waste disposal.
 Environmental Ethic

• Proponents of an environmentalist perspective believe that

too often important decisions affecting the environment are
made while taking into account only short term impacts and
economic factors, with little concern for the ongoing
maintenance and enhancement of the viability of ecosystems.
• Environmentalists are heavily influenced by ecology, the study
of the relationships of living organisms to their environments.
• In ecology, land is viewed as a biotic pyramid.
• Some environmentalists point out that as the dominant species
in the ecosystem, (An ecosystem is a community of living
organisms (plants, animals and microbes) with all our
knowledge and power, we have a duty or responsibility to care
for that ecosystem and to preserve it for future generations.
• We have an ethical obligation to past and future generations to
be careful stewards of the legacy we have inherited.
• Some also make a sort of environmental noblesse oblige
argument. Because our species has gone beyond the mere
acquisition of food, clothing and shelter and we can understand
the way ecosystems work, we have special responsibilities to
consider the long term impact of our behavior.
• As you read environmental cases, note that although the
courts attempt to focus purely on the law, there are times
when they go beyond a strict interpretation of the law.
• There are occasions when you will see the influence of the
ecological perspective on a judge’s decision making.
 ALTERNATIVE WAYS TO CONTROL POLLUTION

• Tort Law: Tort law was the first way the United States
attempted to control pollution, and it still provides a limited
means of control.
• However, a number of limitations make tort law unavailable in
many cases and unsatisfactory as an overall means of
pollution control.
• Under tort law, the typical action brought to control pollution
is a nuisance case. A nuisance is an unreasonable
interference with the use and enjoyment of another’s land.
• So when someone interferes with a person’s use of his or her
land, the one interfering can be sued for nuisance.
• Traditionally, the person suing received an injunction requiring
that the nuisance be stopped.
• Because pollution of air and water is clearly an interference
with others’ use and enjoyment of their land, nuisance would
seem an ideal solution.
• The person who has been harmed by pollution could bring an
action seeking an injunction, the court order prohibiting the
polluting behavior and/or providing money damages for the
harm caused.
 Boomer Vs. Atlantic Cement Company

• The nuisance case of Boomer v. Atlantic cement Company

reflects some of the problems of using tort law. In Boomer,
defendants operated a large cement plant near Albany, New
York.
• They were sued by neighboring landowners who alleged
injury to property from dirt, smoke and vibrations emanating
from the plant.
• The plaintiffs sought permanent injunctions and damages.
• After trial, a nuisance was found and temporary damages
were granted the injunction unless the defendants paid
permanent damages of $ 185,000 to compensate for the
plaintiff's economic loss.
• Given the relatively small amount of the monetary damages
award, the injunction was essentially denied.
• Because pollution control is expensive, after Boomer,
nuisance became an in effective way to stop pollution. At
best, tort law could be used to get damages to clean up some
of the pollutions’s harm.
 PROBLEMS WITH USING WITH TORT LAW

• The major problem reflected in Boomer is the court’s

reluctance to grant injunctions, the only remedy that really
controls pollution because what is sought is an end to the
pollution. However, courts will balance the economic harm
caused by the nuisance against the costs that would result
from the injunction.
• If the harm from the injunction would be greater, then the
courts will simply award permanent damages.
• Most pollution is a public nuisance. Public official, who are
generally elected may be reluctant to bring a nuisance against
a major corporation for several reasons.
• For one, the polluting company supplies jobs, and public
officials do not want to be accused of driving jobs out of town.
• Also, they do not want to anger a powerful constituent who
may be responsible for sizable campaign contributions.
SUBSIDIES, EMISSIONS CHARGES AND MARKETABLE EMISSIONS
PERMITS

• Three alternative means of protecting the environment are

subsidies, emissions charges and marketable emissions
permits.
• As we shift towards pollution prevention, we shall see the
increasing use of these tools.
• Subsidies exist when the government pays, either directly by
grants or indirectly by tax credit, to encourage pollution
control.
• Traditionally, subsidies have not fully covered the costs of
reducing pollution, so businesses were not likely to use the
subsidies because they did not wish to pay for pollution
control when their competitors did not.
• Subsidies can also be offered to consumers to encourage
them to make environmentally sound purchasing decisions.
• For example, consumers who insulation, doors and roofs and
heating equipment for existing homes between January 1,
2009 and December 31, 2010 were eligible for a tax credit of
30 % upto $ 1,500.
• Another alternative is to require emissions charges.
• In essence, we are saying that the air and water belonging to
the community, so if you want to use them, you must pay the
owners that is the community.
• Emission charges, however, are not without their problems.
• It is very difficult to monitor emissions. It is also difficult to
know how to set the fee.
• If fees are too low, firms will simply pay the fee and continue
to pollute.
• If there are few firms in the industry, they may even tacitly
agree simple to pass on fees to consumers.
• If fees are too high and alternative technology to reduce
emissions is extremely expensive or not available, only a few
firms may be able to survive, thereby creating a monopoly.
• In such an event, emissions charges can be a stimulus to
concentrated economic power.
• A related alternative is for the government not only to sell
permits but also to let the polluters trade those permits
among themselves, an approach referred to as emissions
trading, marketable emissions permits, or cap and trade.
• Governments set overall emissions using low-cost methods,
so they can sell their permits.
• The total amount of pollution can be reduced by gradually
reducing the number of permits issued.
 Green Taxes

• One way to help control pollution that has not been

attempted to any great extent in the United States is the use
of green taxes, sometimes called environmental taxes.
• A green tax is a tax on polluting behaviors, the revenues from
which may be funneled into environmental programs.
• Supporters argue that these taxes correct the market’s failure
to value environmental services.
• They also seem to be somewhat effective in discouraging
polluting behavior if they are set high.
• The member states of the European Union have been
somewhat successful in implementing Green Taxes.
• Eight member states have waste disposal taxes and an equal
number of states use carbon taxes.
• In 2003, environmental or green taxes accounted for 6.5 per
cent of total tax revenue.
• Three fourths of the EU’s green taxes are levied on energy
sources.
 DIRECT REGULATION

• The primary means of protecting the environment is direct

or command-and-control regulation.
• By direct regulation, we mean the setting of standards and
mandating compliance through threat of fines for violations.
• Standards may be set in terms of levels of technology that
must be used or total emissions set in terms of levels of
technology that must be used or total emissions allowed.
• The focus of the remaining chapters is primarily on direct
regulation.
• These regulations are often referred to as end-of-pipe
regulations because they tend to concentrate on controlling
pollutants towards the end of the manufacturing process.
• These direct regulations have been the focus of most
environmental legislation.
• As the final section in this chapter reveals, however, we are
beginning to shift away from the end-of-pipe regulations and
towards ways of making it economically beneficial for firms
to evaluate their entire production process in search of
avenues whereby fewer pollutants would be created in the
first place.
 EVOLUTION OF OUR ENVIRONMENTAL POLICY

• The Origins of our Environmental Policy:

• Our federal system of government allocates power and
responsibility among many levels of government.
• Consequently, we do not have national policies on many
issues: our policy, if you can call it a policy, with respect to
most issues has been laissez-faire (the policy of
non-interference)
• Minimal government intervention, especially in business
affairs, traditionally has been seen as desirable by those in
power in this country.
• We are, for example, the only industrialized nation that does
not have a coherent industrial policy.
• However, if there is any area in which our country has seemed
to have adopted a National Policy, it is with respect to the
Environment.
• In 1970, President Nixon signed the National Environment
Policy of America, which began the federalization of
Environmental Policy.
• As noted earlier, before 1970, the United States did not have
any sort of environmental policy.
• To a large extent, this absence of environmental regulation, as
well as subsequent increases in regulation, reflected the state
of scientific knowledge.
• We were not even aware of many environmental problems.
• Furthermore, we did not have the ability to detect and
measure low levels of chemical contaminants.
• For example, the ability to measure levels of many
contaminants has gone from parts per thousand to parts per
million.
• We also did not have the computer technology available to do
the types of modeling that today allow us to project the long-
term impacts of certain levels of contaminants on the human
environment.
• Even in some cases, when we determined that a given level of
pollution was harmful, we did not have the technology to
reduce emissions levels immediately.
• Once the technology was developed, it was sometimes more
costly than expected.
• Frequently, the cleaner the environment became, the more
costly the technology for small and smaller reductions of
emissions.
• Finally, our environmental policy is influenced by our values –
the long ingrained values of our culture, as well as more
temporary values that seem to change over time in response
to economic conditions.
• Our independence has always encouraged a hands-off policy
towards business, which would explain our lack of an earlier
environmental policy.
• However, as our economy became stronger, other values,
especially those reflecting a desire for an improved quality of
life, became more dominant and encouraged the adoption of
policies more favorable to the environment.
• TO BE CONTINUED