Red lights to green lights: from 20th century environmental regulation to 21st century sustainability.

Author:Esty, Daniel C.

Twentieth century environmental protection delivered significant improvements in America's air and water quality and led companies to manage their waste, use of toxic substances, and other environmental impacts with much greater care. But the pace of environmental progress has slowed as the limits of the command-and-control regulatory model have been reached. This Article calls for a new 21st century sustainability strategy that overcomes the ideological, structural, and operational issues that have led to political gridlock and blocked environmental policy reform. It makes the case for a transformed legal framework that prioritizes innovation, requires payment of "harm charges" and an "end to externalities," and shifts toward market-based regulatory strategies that expand business and individual choices rather than government mandates. It further proposes a systems approach to policy that acknowledges tradeoffs across competing aims, integrates economic and energy goals with environmental aspirations, and emphasizes on-the-ground pollution control and natural resource management results. This new approach would go beyond the "red lights" and stop signs of the existing framework of environmental law that centers on telling people what they cannot do, to a broader structure of incentives and "green lights" that would engage the public and the business world in environmental problem solving. Building on the changed circumstances of the 21st century, including the extensive breakthroughs in information and communications technologies, the transformation envisioned would permit a shift in the "environmental possibility frontier" and a lighter and stronger structure of pollution control and resource management that could appeal to Americans from all parts of the political spectrum, making real reform possible after decades of deadlock.

  1. INTRODUCTION 3 II. WHAT DERAILED THE 20TH CENTURY APPROACH TO ENVIRONMENTAL PROTECTION? 6 A. Political Rupture 7 B. Structural Failure 9 C. Operational Shortcomings 16 III. CORE PRINCIPLES FOR 21ST CENTURY SUSTAlNABlLITY 24 A. The End of Extemalities 24 B. Choice 27 C. Interdependence and Integration: Systems Thinking 29 D. Innovation and Green Lights 31 IV. GOVERNANCE FOR A 21ST CENTURY SUSTAlNABlLITY STRATEGy 34 A. Going Beyond Govemment-Centered Environmental Protection 34 B. Integration: Toward a Systems Approach to Environmental Issues 37 C. Reinvigorated Environmental Federalism 40 V. RESETTING THE 21ST CENTURY ENVIRONMENTAL POSSIBILITY FRONTIER 43 A. Advances in Information and Communications Technologies 43 1. Big Data 44 2. Intemet and Communications Breakthroughs 51 3. Transparency 54 B. Science and Knowledge 58 C. Changed Role of Government 58 D. Business Leadership 64 E Changed Roles of Individuals 66 F. Nongovemmental Organizations and other Partnerships 69 G. Focus on FYnance 71 H Economic Transition and Slower Growth 76 I Planetary Boundaries 77 VI. CONCLUSION 79 I. INTRODUCTION

    Environmental protection has gone from a realm of broad political consensus in the 1970s to a domain of bitter partisan battles today. As a result, virtually no substantial environmental legislation has moved through Congress in a generation. This gridlock in Washington has stalled efforts to recast our pollution control programs to meet evolving challenges such as climate change, restructure our regulatory toolbox to take advantage of 21st century policy opportunities (notably the advances in information technologies), reframe the country's energy strategy, and advance new approaches to land conservation.

    This Article begins with two related questions: Why has environmental progress in America come to a dead stop? What will it take to get political consensus on how to go forward? In answering these two questions, I highlight the need to move from our existing 20th century model of environmental regulation to a new 21st century sustainability strategy (1) that builds on the successes of the past five decades, but acknowledges both that our current circumstances and looming challenges have changed. I argue that the federal-government-led structure of command-and-control mandates worked reasonably well in the 1970s as America launched efforts to address critical concerns about air pollution, water quality, chemical exposure, and land use. But what worked in those early days is no longer our best path forward. Going beyond the usual academic critique of environmental law and policy theory, I highlight the political obstacles that have made systematic reforms of our environmental protection regime impossible to advance. I argue that progress depends on a transformed agenda that addresses both the revealed weaknesses of the current legal framework and the need for a reframed political consensus about energy and the environment.

    We've come a long way since Earth Day 1970, which might be seen as the launch of the modern era of environmental law and policy. We've learned a great deal about the spectrum of harms we face; the fate and transport of pollutants; the epidemiological and ecological impacts of emissions; and the environmental effects of choices made in other domains including energy, agriculture, trade, transportation, and the economy. We've come down a long learning curve and now have much more data and analysis about these problems, their causes, the interactions among pollutants, aggregate impacts across various scales and over time, and what policy interventions work best in response.

    Like a fast-growing teenager bursting out of children's clothes, our society plainly needs an updated approach to environmental protection for the 21st century. Instead, we are stuck with an outdated regulatory model that no longer fits our current requirements and circumstances. Despite the widespread dissatisfaction with the status quo--from both the Left and the Right--and even some agreement on better ways of doing environmental protection, we have not seen major policy refinements or progress.

    Change is never easy, especially within a fraught political context, but it is essential. Indeed, one of the most significant findings in social science of recent decades is the importance of innovation to healthy organizations. (2) Businesses have come to learn that they must constantly remake themselves to stay competitive and profitable. (3) Other institutions must similarly transform themselves to stay relevant and vibrant. Some parts of our administrate state have been remade for the 21st century. Recast telecommunications regulations helped to usher in the smartphone era. (4) Regulatory reform also transformed the airline industry, railroads, and other sectors of society. (5) The environmental arena and related energy systems have remained, however, curiously unchanged for decades. (6) And, even when the broader political climate seems poised to support new policy directions, the structure of American democracy--which positions an engaged minority to obstruct majority action--makes meaningful change difficult unless a bipartisan transformation agenda can be forged.

    I make the case in this Article for a reconfigured legal framework that can deliver real transformation because it takes up the opportunities to create a 21st century approach to energy and environmental challenges, and takes seriously the political necessity of a degree of consensus on the path forward. In laying out a possible new sustainability strategy, this Article proceeds in five parts. Part II provides a high-level analysis of the sources of gridlock in America's environmental policy, highlighting the ideological, structural, and operational issues that have led to political breakdown and declining effectiveness of the 20th century environmental regulation model. It ends with a call for a new political theory of environmental protection around which Democrats and Republicans might find common ground--making\ reform possible.

    Part III spells out the core elements of a refined political theory of environmental protection to undergird a recast sustainabiuty strategy building on: 1) a commitment to the "end of externalities" in keeping with the common law property rights, meaning that polluters (7) must either stop their polluting activities or pay "harm charges" for their emissions; 2) an emphasis on choice rather than government mandates so as to provide both businesses and individuals greater flexibility in where to draw the line between stopping their harm-causing activities and paying for them; 3) an integrated or systems approach to environmental protection that recognizes interconnections across issues and the reality of tradeoffs among them; 4) a priority on innovation and the capacity to bring new technologies, information, and learning to bear in support of environmental protection and a transition to clean energy; and 5) a focus on "on-the-ground results," policy implementation, and improved outcomes over time.

    Part IV translates these principles into a revised environmental governance structure. It calls for an environmental strategy that is broader than the 20th century government-centered (largely federal) regulatory model. I argue, in particular, for a sustainability strategy that goes beyond "red lights" that tell polluters what they cannot do, and creates an expanded structure of "green lights"--incentives to spur fresh thinking and creative responses to persistent pollution challenges. More fundamentally, I suggest that government is not the only actor able to deliver environmental progress--and in many circumstances not even the best-positioned driver of improved outcomes.

    This vision requires a shift from a command-and-control regulatory strategy to one centrally focused on price signals that fully internalize externalities and offer marketplace rewards for those delivering breakthroughs. Change at the scale and speed required to deliver a sustainable future can be realized only by engaging the private...

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