Federal regulations: environmentalism's Achilles heel.

• Author: DiLorenzo, Thomas J.

THE U.S. Conference of Mayors, National Association of Counties, National League of Cities, and International City Management Association declared Oct. 27, 1993, National Unfunded Mandates Day to protest the increasingly costly burden imposed on local governments by Federal regulation, especially environmental mandates. Sounding like conservative think-tank economists, local public officials across the country decried the excessive costs--"guestimated" by the Environmental Protection Agency (EPA) as $32,000,000 by the year 2000--and the lack of identifiable benefits of numerous forms of environmental regulation.

Many local public officials fear for their jobs since they are being forced to increase taxes and fees sharply, to the great dissatisfaction of local taxpayers, in order to pay for the Federal directives. Consider a few examples of how Federal regulation is hitting the taxpayers where it hurts--in the pocketbook--while providing few clear ecological benefits in return.

In 1991, Congress ruled that all sewage treatment plants must remove at least 30% of the organic waste from incoming sewage. For Anchorage, Alaska, this is nearly impossible to achieve because the city has little organic matter to remove. Anchorage's sewage inflow often is cleaner than what the city's plant is allowed to emit.

The EPA was not flexible, telling Anchorage that it must meet the 30% standard. The city could have spent $135,000,000 on a new sewage treatment plant to meet the standard, but discovered a much cheaper option. It invited two local fish-processing plants to dump 5,000 pounds of fish viscera into the sewer system. The fish waste was easy to remove and Anchorage thus met the 30% rule. "The EPA wasn't exactly thrilled" with the city's method for meeting the requirement, according to Paula Easley, the city's director of governmental affairs.

In another part of Alaska, a group of Native American villages set out to construct five new outhouses using recycled materials from a cannery. A vacationing backpacker from New Jersey witnessed the project and alerted the EPA of what he believed to be a wetlands violation. (Since less than one-half of one percent of the land in Alaska is privately owned, almost any type of digging is susceptible to violating some kind of government regulation.) The EPA temporarily shut down the job and entered into long negotiations over how--if at all--the outhouses were to be built.

In order to comply with new rules the EPA apparently has written with regard to outhouse construction, the Native Americans eventually were forced to spend about $29,500 on each of them. The EPA promised to forget about $750,000 in fines that had accumulated if the builders did not mention publicly the agency's involvement in the incident.

In order to comply with the Safe Drinking Water Act, Columbus, Ohio, spends $24,000 each year to test for 43 pesticides it knows it won't find in the drinking water, including one used only on pineapples in Hawaii. Whether there are any pineapples growing there or not, Columbus--and all other cities--needlessly must spend tens of thousands of dollars annually testing for nonexistent pesticides. This money would be spent better on new textbooks for city schools, more police and fire protection, and myriad other needs.

These three incidents are examples of a nationwide trend that may become the Achilles heel of Federal environmental regulation. Those costs are explicit, where-as the benefits are becoming more and more nebulous.

Many critics--primarily economists--share with most Americans the goal of a cleaner environment. They maintain, though, that such regulation all too often imposes enormous costs on society for very little benefit. That is why Robert Crandall of the Brookings Institution has described Federal regulation as "absurdly inefficient," noting that the inefficiencies are not the mere opinions of industry spokespersons, but "are well-known as the result of decades of research." Despite this research, these policies are getting worse, not better.

Such policies may persist for various reasons, including the possibility, according to Crandall, that "this inefficiency is deliberate. It may be that environmental policy is not the result of our collective perception of threats to human safety [but] from some desire to purge ourselves of guilt for succeeding too well ... in generating economic well-being."

Public choice theory offers another explanation: The costs of environmental regulation tend to be hidden and widely dispersed, whereas the alleged benefits are trumpeted loudly by government regulators and organized environmental interest groups. A "rationally ignorant" general public has no idea how much unemployment and higher prices may have been caused by the implicit "tax" of environmental regulation, nor is it very well-informed of the likely benefits, as opposed to the alleged ones.

The general public is beginning to catch on, however. Dozens of new environmental regulations have been enacted in the past several years that...