Kirsten H. Engel, Harnessing the Benefits of Dynamic Federalism in Environmental Law

• Citation: Vol. 56 No. 1
• Publication year: 2006

HARNESSING THE BENEFITS OF DYNAMIC FEDERALISM IN ENVIRONMENTAL LAW

Kirsten H. Engel^*

INTRODUCTION

Despite exhortations to the contrary,¹the federal government continues to address issues of purely local effect while the states continue to address issues of national-and even international-effect.²To take a well-publicized example, when Congress enacted the No Child Left Behind Act of 2001,³it imposed detailed requirements relating to teacher qualification, student performance, and reporting upon states in primary and secondary education, what might be considered the quintessential object of state and local control.⁴

Examples of federal and state overreach also abound in the environmental area, the subject matter of this Article. Objects of federal regulation include municipal solid waste landfills, drinking water, and underground storage tanks, even though leaking municipal dumps, contaminated tap water and polluted aquifers beneath neighborhood gasoline stations affect only the local population and seldom affect persons or businesses out of state.⁵What others have termed the "jurisdictional mismatch"⁶is true in the opposite direction as well. For example, it is the states and local governments-not the federal government-that are taking the lead in addressing climate change in the United States.⁷Yet because climate change is the result, at least in part, of human-induced greenhouse gas emissions from around the globe, climate change is widely regarded as the textbook example of an environmental issue best addressed at the national and international levels.⁸

The states' failure to restrict their regulatory authority to issues impacting only their own jurisdictions, and the federal government's failure to regulate only when the states' ability to address an issue effectively is hobbled by collective action problems, are inconsistent with the policy implications of the scholarly debate over environmental federalism, in which scholars have supported a particular allocation of at least primary regulatory authority between the states and the federal government.⁹The purpose of this Article is not to reengage in the long-running debate over whether, and when, the federal or the state governments are the more appropriate environmental regulators.¹⁰

Rather, the purpose is to question the fundamental assumption underlying the debate: that regulatory authority to address environmental ills should be allocated to one or the other level of government with minimal overlap. This Article argues first that a static allocation of authority between the state and federal government is inconsistent with the process of policymaking in our federal system, in which multiple levels of government interact in the regulatory process. Absent constitutional changes that would lock in a specific allocation of authority, broad, overlapping authority between levels of government may be essential to prompting regulatory activity at the preferred level of government. This Article further argues that a static allocation of authority deprives citizens of the benefits of overlapping jurisdiction, such as a built-in check upon interest group capture, greater opportunities for regulatory innovation and refinement, and relief for the courts from the often futile and confusing task of jurisdictional line-drawing. Part I.A of this Article critiques the scholarly adherence to a generally rigid separation between state and federal jurisdiction, which I argue is rooted in the dominance of economic models in the environmental federalism debates. In Part I.B, I contrast the scholarly preoccupation with the separation of federal and state power with environmental federalism in practice, which is marked by a large degree of jurisdictional overlap and interaction between the states and the federal government. Part II of this Article sets forth an alternative vision of environmental federalism, drawing upon recent scholarship that conceives the states and the federal government as alternative-not mutually exclusive- sources of regulatory authority. Such a conception views the interaction between the two levels of government as a means of improving the quality and responsiveness of regulation.

Instead of attempting to define, distinguish, and cabin federal and state authority, Part II argues that policymakers, courts, and scholars should seek ways to harness and channel the political motivations that lead to jurisdictional overlap to minimize its downsides (e.g., redundancy, lack of finality and accountability) and enhance its upsides. For policymakers, this means seeking federal legislative solutions that allow states to innovate within the bounds of federal ground rules while providing a flexible framework for interaction between the federal and state players. For instance, where national uniformity is desired, Congress might allow for the development of a single standard by the states themselves, as opposed to the imposition of a standard by the federal government. Congress did something similar to this with the Clean Air Act, which allows California-a state that has repeatedly demonstrated its commitment to environmental policy-to establish vehicle air pollution emission standards; all other states are given the opportunity to adopt California's standards or to remain subject to the federal standards developed by the Environmental Protection Agency.

The courts are important players in any federalism construct, and thus, a reconceived theory of environmental federalism must be clear on the role the courts will play in policing the inevitable conflicts that will arise between federal and state regulatory actors. In such conflicts, the federal government holds the upper hand by virtue of the constitutionally granted powers to preempt state law under the Supremacy Clause¹¹and to invalidate state laws under the dormant Commerce Clause.¹²Because the benefits of dynamic federalism that Part II envisions flow from the existence of states as alternative regulators and from the advantages of a regulatory dialogue between the two levels of government, it is paramount that states are given relatively free reign to develop policy solutions. This means that federal courts should employ their power to invalidate state laws under the Supremacy Clause and the dormant Commerce Clause sparingly. This prescription is particularly important because in completely eliminating the lawmaking powers of a level of government, judicially sanctioned preemption destroys states' ability to present alternative regulatory solutions and to "check" the interest group capture of policymakers at the federal level. Preemption, then, is the real boogeyman of public interest lawmaking because it prevents the political process from policing itself. A conception of federalism, such as the one I advance in Part II, that limits the degree to which preemption destroys the advantages of a dual system of government is not only good government, but is more true to the process of policymaking that our constitutional structure contemplates.

I. ENVIRONMENTAL FEDERALISM THEORY VS. PRACTICE

A. The Static Assumptions Underlying the Scholarly Debates

The debate over environmental federalism theory is dominated by references to static economic models used to justify a preferred allocation of regulatory authority between the states and the federal government.¹³Though scholars recognize state-to-state interactions-specifically the prospect for interstate competition for mobile industry-little attention has been devoted to the prospect for, and implications of, interaction between the states and the federal government. The end result of this scholarly approach is to omit a large fraction of the actual practice of environmental federalism from the debate. Values other than economic efficiency that may be achieved through a dynamic approach to the allocation of state and federal authority are also left out of the academic discussion.

Much of the modern scholarly debate over environmental federalism seeks to determine the proper allocation of regulatory authority between the states and the federal government with respect to specific environmental problems. As such, it proceeds according to an assumption that regulatory authority should reside more or less exclusively in one level of government with respect to particular types of environmental issues, though levels of government may split the tasks of setting standards, on the one hand, and implementing and enforcing those standards on the other.¹⁴The debate over the proper allocation of environmental regulatory authority is largely traceable to an influential 1977 article by Professor Richard Stewart that advanced the argument that federal regulation was economically superior to state regulation with respect to certain environmental issues.¹⁵Among other justifications for federal, as opposed to state environmental regulation, Stewart argued that federal regulation would prevent a welfare-reducing race to the bottom in state environmental programs as states compete with each other to attract or maintain mobile industry, save environmental groups the expense of lobbying fifty separate legislatures, exploit environmentalists' allegedly greater influence at the national level, and stymie interstate pollution spillovers.¹⁶According to the latter theory, in the absence of federal regulation, states will generate an excessive amount of pollution because they are able to externalize the costs of pollution while retaining the economic benefits (e.g., jobs, tax revenues) of the activities that produce the pollution.¹⁷

Stewart's economic argument proved enormously influential, setting the stage for subsequent debates over federalism in environmental regulation. In a series of articles, Professor Richard Revesz critiqued several of Stewart's arguments, contending that they did not support a preference for federal over state environmental regulation.¹⁸For example, using a...