Of fables and federalism: a re-examination of the historical rationale for federal environmental regulation.

Author:Andresen, William L.
Position:I. Introduction through II. Air Pollution Control Efforts: 1881 to 1970, p. 627-660
  1. INTRODUCTION II. AIR POLLUTION CONTROL EFFORTS: 1881 TO 1970 A. State and Local Efforts Prior to 1963 1. The Anti-Smoke Crusade 2. The Emergence of Broader Efforts to Deal with Air Pollution B. Federal Efforts Prior to 1963 C. An Era of "Creative" Federalism: 1963-1970 III. AN EXAMINATION OF THE CLAIMS FOR STATE REGULATORY SUCCESS PRIOR TO 1970 A. The Claims B. A Closer Look at the Air Quality Data upon Which the Claims Are Based IV. A CLEARER PICTURE EMERGES A. Trends hi Air Pollution Emissions and Energy Consumption B. Sorting Out Cause and Effect V. AIR QUALITY AND EMISSIONS TRENDS SINCE THE PASSAGE OF THE CLEAN AIR ACT IN 1970 VI. CONCLUSION I. INTRODUCTION

    The decade of the 1970s witnessed a veritable explosion of environmental law. Frustrated by the nation's seeming inability to control the fouling of our water, air, and land, Congress cast aside prior, less ambitious regulatory approaches and passed a series of pollution statutes that were sweeping in their scope and uncompromising in their rigor. (1) In doing so, Congress vastly expanded the federal government's role in pollution control. (2) Programs that had relied primarily on state initiative, like both the clean air and clean water programs, were now largely federally driven, with the new U.S. Environmental Protection Agency (EPA) responsible for setting most pollution standards and the states generally responsible for implementing those requirements, (3) although the states were free, in most instances, to establish more stringent standards. (4) The political structure of environmental law had thus changed in a fundamental way. Although the states still had a significant role to play under this "cooperative" approach to federalism, the EPA was clearly the senior partner in the relationship. The states had lost their predominant position.

    This new approach to environmental protection produced tremendous progress. The air is markedly cleaner today, (5) water pollution has declined, (6) and the problem posed by hazardous waste has been reduced dramatically. (7) Controversy, however, still surrounds Congress's decision to give the federal government the leading role in environmental regulation. The critics of this approach, including some prominent legal scholars, would like to return regulatory primacy to the states, although most would accept the need for a continuing, albeit more modest, federal presence in the field.

    Many critics would concede that some federal involvement is necessary in cases involving interstate pollution, since states have little incentive to deal effectively with the spillover effect, for example, of air or water pollution generated within their own borders and discharged into an adjoining state. (8) In addition, few would question the fact that the federal government enjoys economies of scale when it comes to producing and analyzing scientific and technical data. (9) This role could, however, be detached from primary regulatory authority with the federal government returning to the informational and support role that it had played prior to the 1970s. (10) On the other hand, these economies of scale clearly extend beyond the mere generation of environmental information and would logically include the sometimes enormous task of setting standards based upon that information. It would be difficult to imagine any single state or even a group of states having either the resources or inclination to develop the kind of technology-based effluent limitations that EPA promulgated under the Clean Water Act. The same would likely be true for any number of programs under the Clean Air Act including ambient air quality standards, new source performance standards, and standards for hazardous air pollutants.

    Those who favor decentralization often contend that state primacy would better reflect the fact that certain regions in the country place a higher value on environmental quality than others and that state primacy would promote experimentation with different governmental policies. (11) The states, however, seldom utilize their power to set higher standards. (12) In a decentralized system, of course, they could set less protective standards, but that ability would run counter to the argument that all Americans are entitled to enjoy a certain level of environmental protection regardless of where they choose to live or travel in the nation. (13) A centralized system, moreover, reduces the number of political arenas in which significant policy and legal questions are addressed, thus, empowering citizens and environmental groups to compete on a more level playing field with large business and industrial interests. (14)

    The justification for federalized environmental regulation that is most commonly challenged is the belief that states in a decentralized system will be tempted to engage in a race to the bottom in order to attract and retain industry through lax environmental standards, weak implementation, and lethargic enforcement. (15) The fact that so many states have enacted statutes either forbidding or restricting the ability of state regulators to exceed federal standards (16) suggests that the fear of competitive disadvantage, so basic to the notion of a race to the bottom, remains pervasive in state capitals. (17) While one might offer occasions on which individual states have set stricter requirements in an effort to cast some doubt on the existence of this fear, (18) the infrequency with which states actually do so would appear to strengthen the race-to-the-bottom hypothesis. (19)

    Richard Revesz, however, questioned the theoretical basis of the hypothesis in 1992. (20) Using neoclassical economic models, he argued that there was no support for the belief that competition among the states for industry would result in a race that harms overall social welfare since such competition, although it would tend to create less stringent environmental standards, would produce an efficient allocation of industrial activity through industrial migration. (21) Even were there a basis to believe that a socially undesirable race would take place in the environmental arena, he argued that federal minimum standards could not effectively protect overall social welfare since states could simply lower standards in other areas. (22) Revesz ignited a flurry of debate in the legal academy. (23) Several scholars challenged his theoretical approach contending that it was based on unrealistic assumptions, (24) while Kirsten Engel demonstrated empirically that state officials commonly believe that industrial development concerns affect the quality of environmental decisionmaking in their states. (25)

    I do not intend to address these rationales for federal regulation-interstate spillover effects, economies of scale, the advantages of centralization as opposed to decentralization, or the race to the bottom--at any greater length in this Article. Rather, I want to turn my attention to a rationale that appears to have received less focused attention--the historical rationale for federal regulation.

    Until the 1970s, the primary responsibility for controlling pollution resided at the state and local level. (26) In recognition of the fact that nuisance law alone could not check unsanitary conditions, health departments were established beginning in 1866--first at the local level and later at the state level--to check unsanitary conditions, including those created by water pollution. (27) By the end of the nineteenth century, a number of cities also began to adopt smoke abatement ordinances. (28) Despite these efforts, air and water quality continued to deteriorate. (29) Following World War II, the states began to create new regulatory agencies to control water pollution, a process that continued in the 1960s with the advent of new air pollution agencies. (30) These agencies received both financial and technical support from the federal government, (31) and by the mid-1960s, Congress began to try to prod the state agencies to take stronger action by requiring them to promulgate water quality standards for interstate waters (32) and to set ambient air quality standards. (33)

    According to the conventional wisdom, these state and federal actions failed to reverse the rising tide of pollution, thus triggering the enactment of more comprehensive federal legislation in the 1970s, an approach that shifted the primary responsibility for pollution control from the states to the newly created EPA. (34) A number of legal scholars, however, dispute the accuracy of this account. (35) They do not question the fact that a perception of failure was a motivating factor in Congress's action. (36) Rather, these revisionists challenge the underlying premise that state regulatory action had not successfully reduced air or water pollution. (37) Their argument is largely based upon other commentators who claim that the states were actually making substantial environmental progress in the years before the 1970s. (38) Three of these commentators examined federal air quality monitoring data for two air pollutants, total suspended particulates and sulfur dioxide, (39) and one examined data on organic wastes and bacteria from EPA's first national water quality inventory that was published in 1974. (40) Pointing to the air pollution data, Revesz concludes that state and municipal regulatory programs were making considerable progress before the federal regulatory era. (41) And pointing to all four commentators (dealing, therefore, with both air and water pollution), Jonathan Adler asserts that once a pollution problem was identified and understood, the states and local governments had begun to act and did so well before the federal government. (42) History thus demonstrates, according to Adler, the "environmental benefits of decentralization," and provides "ample reason to question the assumption that lessening federal environmental regulatory authority necessarily results in...

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