Breaking the Vicious Circle: Toward Effective Risk Regulation.

• Author: Flatt, Victor B.

1. INTRODUCTION

   With continuing international economic integration and declining United States competitiveness, people continue to be insecure in their jobs, targeting regulation in general, and health and safety (including environmental) regulation in particular, as the cause of their problems. Regulation is seen as the gaping hole through which our society's valuable resources are drained. This criticism of regulation has now jumped from the pages of the academic journals to popular literature. Several new books, most notably Justice Stephen Breyer's book, Breaking the Vicious Circle: Toward Effective Risk Regulation,(1) have attempted to respond to this criticism with a proposed overhaul of the way our nation deals with risk assessment, presumably providing us with better risk regulation at lower cost. According to Justice Breyer, the patchwork of risk regulation requires inconsistent expenditures of enormous amounts of money to save lives in certain cases while doing very little to prevent harm in other cases. Justice Breyer claims that this is because the public, and through it, Congress, are focused on certain risks, such as toxic waste dumps, without regard to the true harm of these risks. Justice Breyer advocates reform to break this irrational "vicious circle" formed by the synergism created from public perceptions of risk, congressional actions, and current regulatory methods.(2)

   In easily understood language, Justice Breyer examines the various facets of our country's response to risk and puts forward a facially convincing argument that something is wrong with our risk regulatory system. He sees a vicious circle of illogical regulation at work because we are willing to spend hundreds of millions of dollars to protect one life from one type of risk, but will not spend more than $100,000 to protect other lives from different risks.(3) In order to overcome this vicious circle, Justice Breyer proposes breaking it at its weakest link: regulatory response.(4) He recommends vesting one agency with the power of overarching risk examination and regulation authority, including the power to create uniform regulatory responses to specific types of risks (such as cancer) and to provide uniform methods of dealing with particular risk issues (such as scientific uncertainty).(5) Justice Breyer also supposes that such an agency, with improved prestige, could make suggestions to Congress and the public about how to more wisely balance the expenditures made for certain kinds of risks by being the one part of government that will simultaneously examine our various responses to risk in differing contexts.(6)

   Unfortunately, in his hurry to remedy the irrationality of risk regulation as it exists today, Breyer fails to examine why the current regulatory choices exist. The scope of his analysis is too restricted. The regulatory reformists blame the sweeping environmental movement for distorting our perceptions of true environmental risks. Likewise, regulatory reform sweeps along its followers, including Justice Breyer, without looking at what is left behind.

   Specifically, I believe: 1) the "problems" cited by Justice Breyer in Breaking the Vicious Circle are not as bad as he supposes and do not represent the crisis that he suggests; 2) what Justice Breyer identifies as major "problems" are not "problems" at all, but the implementation of policies that reflect other values; 3) in the case of actual risk uncertainties, the public might be correct; and 4) institutional flaws limit the effectiveness of Justice Breyer's solution even if the problems were as he assumes.

   I do not claim that Justice Breyer is absolutely wrong in some of his thoughts nor do I mean to embrace a particular point of view in this review. Instead, I intend to show that Justice Breyer's analysis is too limited and has many weaknesses when considering this issue. Justice Breyer's book missed the mark in its perception of and suggested remedy for our current risk regulatory environment. Far from being a vicious circle, the current combination of public perceptions, congressional actions, and regulatory methods may provide the best regulatory response given our society's needs and wants, posing the question "should the circle be unbroken?"

2. IS THE REGULATORY CRISIS REALLY THAT BAD?

   One major problem Justice Breyer identifies to illustrate the regulatory "crisis" in our country is the "last 10% problem," representing the disproportionate expenditures needed to reduce the last ten percent of a particular risk.(7) Justice Breyer believes that the high marginal cost of eliminating the last vestiges of a particular risk could be better spent for greater primary risk reduction in another area. He posits that when asked to eliminate danger from a certain risk, our regulatory agencies focus narrowly on that risk to the exclusion of more effective risk regulation.

   Justice Breyer illustrates this problem of overregulation of one risk to the detriment of overall cost-effective risk regulation with an example from his court:

   The first [example] comes from a case in my own court, ... arising out of a ten year effort to force cleanup of a toxic waste dump in southern New Hampshire. The site was mostly cleaned up. All but one of the private parties had settled. The remaining private party litigated the cost of cleaning up the last little bit, a cost of $9.3 million to remove a small amount of highly diluted PCBs and "volatile organic compounds" (benzene and gasoline components) by incinerating the dirt. How much extra safety did this $9.3 million buy? The forty-thousand-page record of this ten-year effort indicated (and all the parties seemed to agree) that, without the extra expenditure, the waste dump was clean enough for children playing on the site to eat small amounts of dirt daily for 70 days each year without significant harm. Burning the soil would have made it clean enough for the children to eat small amounts daily for 245 days per year without significant harm. But there were no dirt-eating children playing in the area, for it was a swamp. Nor were dirt eating children likely to appear there, for future building seemed unlikely.... To spend $9.3 million to protect non-existent dirt-eating children is what I mean by the problem of "the last 10 percent."(8)

   The example is so visual and seemingly absurd that it could easily convince a reader that something is terribly wrong with our risk regulatory system. As presented by Justice Breyer, few would disagree with his statement that the "dirt-eating children' example offers a powerful argument ... for a serious effort to prioritize, and perhaps to reallocate, our regulatory resources."(9) However, such superficial anecdotal absurdity should not substitute for a more detailed analysis of the regulatory response to the risk involved, and a closer look reveals a regulatory response to risk that may not be as absurd as Justice Breyer depicts. Though Justice Breyer may know more about the clean-up area because he presided over the case's appeal, I do not think the safety level of 245 "dirt-eating children days" is a blatant example of overregulation.

   Much of the apparent absurdity comes in the terms used. Most of us would not characterize our children as "dirt-eating," but all persons do ingest certain quantities of soil on a daily basis directly from food and as contamination from our hands to food. Children, who tend to be less hygienic about washing hands and more likely to play in the dirt, are much more apt to ingest dirt with which they come into contact.(10) It is not beyond the pale for children to actually eat dirt directly as "mud pies." Moreover, though the location specified in the litigation is presently undisturbed by playing children, southern New Hampshire is relatively densely populated, and children do play in swampy areas. Indeed, depending on its nature, a swampy area may be particularly attractive to children.

   As for the days involved, how often are children likely to play in a given area? Children often play repeatedly in the same spots, both during free days and after school, and it is logical to assume that they might play in one location as often as the weather allowed. In New England, that would be much closer to 245 days per year than 70 days per year.

   Seen in this light, the clean-up of the soil to allow children to ingest some of it safely 245 days per year, while perhaps not economically desirable for this particular site, is neither wholly illogical nor egregious overregulation. Assuming that any dirt will be eaten, to stop at seventy "dirt-eating children days" provides no logical break in terms of risk regulation. While Justice Breyer asserts, without saying why, that no children would play on this site, clearly someone thought that this was a possibility or this type of illustrative risk model would not have been used. I do not claim that such regulation is logical; indeed it may be ridiculous. But Justice Breyer asserts that the model is not logical without making a case for his position. If overregulation is really a problem then Justice Breyer should support this assertion in his examples. If this example of dirt-eating children, used repeatedly but not explained, is the most egregious or "telling" example of structural "overregulation," then the reader is left to wonder if the problem is as bad as Justice Breyer states.

   In addition to overstating the absurdity of the "last ten percent problem," Justice Breyer fails to distinguish between isolated examples of regulatory problems and wide-ranging structural deficiencies. For example, Justice Breyer points to another "more important" instance of risk regulation gone awry--the regulation of asbestos.(11) Breyer refers to several studies that show the risk of breathing encapsulated asbestos in public buildings is no greater than breathing asbestos out on the "prairie" and that asbestos is far more dangerous during removal...