Briefing Report: Is California'€™s Anachronistic Environmental Law Ripe for Creative Destruction?

Wednesday, May 8, 2013

“The right has a predilection to ‘conserve’ that which is proven, while the left has a predilection for ‘progression’ and change.  Neither need be inherently wrong.  But, quite perversely, never has a ‘progressive’ movement ever been so backward looking.  Its idea of ‘progression’ rests on a key premise: the demand to return to a ‘quaint’ pre-industrial way of life; an existence that meant high infant mortality, sickness, disease, poverty and, oh yes, early death.”
- Peter C. Glover

Green Bricks in the Road to Serfdom

Part of the legislative findings and declarations to the California Environmental Quality Act (CEQA), state the following priorities --

“The maintenance of a quality environment for the people of this state now and in the future is a matter of statewide concern. It is necessary to provide a high-quality environment that at all times is healthful and pleasing to the senses and intellect of man. There is a need to understand the relationship between the maintenance of high-quality ecological systems and the general welfare of the people of the state, including their enjoyment of the natural resources of the state.”

Command and control environmental policy has been a staple of the state’s legislative and regulatory landscape for so long that even the modest proposal to re-evaluate decades-old laws and its progressively centralized methodology receives impulsive skepticism.  With an increasingly pessimistic view about the state and health of California’s environmental statutes, it is fair to ask if these laws are sufficient to protect the health and safety of current and future citizens, as well as precious environmental resources, or are they simply antiquated vestiges of a hyper-ecological movement of yesteryear which inadvertently do damage to the state and her people because of its codified intransigence and bureaucratic bellicosity?  For a system that came into its own in the 1970s and metastasized in the 1980s -- with ratcheting constriction in the intervening decades -- any suggestion that reform is needed is seen as an affront to those environmental visionaries and enlightened bureaucrats who subscribe to the mantra that government-knows-best and anything is possible with only enough resources and regulations. 

If we believe that our state’s laws are in disrepair or irredeemably damaged in a way that they cannot adequately provide for an environmentally friendly California -- one that is healthy, safe and sustainable -- then it could be argued that our well-worn, centralized, top-down, bureaucratic and mandated approach may need to be reassessed and revamped.  Indeed, we need better stewardship over a process of negative externalities generated by a wasteland of statutes and regulations which stifle our economy and divert precious resources of human ingenuity and innovation to other places where they are increasingly recruited and welcomed warmly.

Those on the center right, which make up the Senate Republican Caucus, include a range of opinions, but usually are in favor of more personal freedom and corresponding responsibility; respect private property; innovation; mutually beneficial trade; simplicity in law and regulation; and justice in a court of law.  Recognizing that there are many legitimate and well-intended visions of good public policy, and in a year where environmental law is poised to be a center of legislative debate, a careful practitioner and legislator may want to consider the following principles in crafting environmental policy, whether it leads to just enough change or fundamental reform.

Humans Are People, Too

We would do well to recognize that humans are the prime and dominant feature of the environment.  To borrow a phrase, the Earth was made for man and not man for the Earth.  All other considerations and resources are subject to our judgment and stewardship.  Indeed, mankind is very capable of adapting to its environment and climate on its own volition.  In that vein, we must be mindful that we are only temporary keepers of this state; whatever seeds we plant now will hopefully flourish and develop fruit worthy of our posterity.  And while humans may be a primary consideration in many environmentally-based decisions, it does not mean that we are the only driver of change or degradation in our environment.  There are many other natural phenomena that impact the environment and are impacted by humans.  Humility in stewardship of our resource is always a wise course of action.

Property rights  are guaranteed by the constitution and cannot be infringed without the due process of law or just compensation. In the case of land use and environmental reporting regimes, a property owner needs to have some level of assurance that their property and their legal and legitimate uses of and investment in the property will be protected in and through any legislative or regulatory process.

Those who seek statutory privilege through environmental law, whether it be competitors, environmental justice advocates, neighborhood associations (often NIMBYs: Not-In-My-Back-Yard), anti-development activists (BANANAs: Build-Absolutely-Nothing-Anytime-Near-Anything), labor groups, social justice advocates and environmentalists, will always be with us.  However, the environment should not be held hostage to other non-related negotiations or used as leverage in labor disputes of for competitive advantage.

There Ought To Be A Law

It is commonly acknowledged that a certain threshold of laws and regulations may be necessary to provide for the general welfare, protect property rights and ensure the health and safety of the people.  These laws and regulations must not be arbitrary and capricious, duplicative of other efforts or built up for their own sake.  Law and regulation must serve a legitimate function, derived from constitutional principles.  Space and boundaries keep us civil -- good walls make good neighbors.  Yet, if we only build walls for wall’s sake, we are unlikely to craft effectual policy.  There may be situations where it is unreasonable to have any regulations at all.

In determining whether we should proceed with a certain standard, do our environmental policies actually provide for a better environment?  And if they do, for whom or what?  Are the costs Californians will be asked to bear commensurate with the benefits and consequences?  It would be good to know as much about potential costs and benefits of any promulgated rules or if unintended consequences were injurious to the original objective enough to reconsider the policy altogether.  If we find that a policy prescription has failed or could be vastly improved, are we willing to address it through common-sense deliberations and legislative changes or do we continue to relegate such decision-making to a regulatory or quasi-judicial body hoping for the best judgment of administrators who have their own fiefdom to protect?

The mantra of the physician, “First, do no harm,” should be the duty of a policymaker.  We cannot eliminate the consequences to all stupid decisions and accidents, as supposed by the disciples of the precautionary principle.  The government needs to be properly limited and restrained so that it does not unnecessarily inflict pain or restrict liberty or abridge other citizens’ rights.  It must also recognize that there is no such thing as a solution, that only alternatives exist, and for every action of the state, there is an equal and opposite reaction that will likely impact another constituency.  As succinctly stated by H.L. Mencken, "There is always a well-known solution to every human problem -- neat, plausible, and wrong."

Who Reads Those Papers, Anyway?

Federalism has a place in the environmental realm.  Other states or municipalities may provide guidance and best practices for a myriad of policy proposals or show us where they have failed so that we do not replicate the same mistakes.  There may be questions as to how a differentiation in geography, geology, climate or culture necessitates a distinct policy approach from other states with similar characteristics.  An astute decision-maker might also ask if  a particular law or regulation will actually lead to a cleaner environment or continue a failed legacy.  California needs to shed the idea that she is first and best at everything and focus on those things which actually improve quality of life for her residents.  Indeed, if so many of the state’s policies are the best among its peers, why is the law riddled with so many exemptions? 

In addressing major issues of concern that impact the whole state -- such as air and water quality -- some are better served through a regional or statewide program.  However, where problems are localized, accountability best happens where people are closest to the decision-makers, consistent with the principle subsidiarity.  There are many government-led environmental programs that do very little of substance, except for calm people’s conscience with the false assurance that someone is doing something.  Yet, there is not enough time, money and wisdom in the government to fix everything.  In fact, private parties are often willing to do things faster and cheaper -- though maybe not comprehensively -- to get things done.  When a non-governmental entity has a suggested course of action that may not be comprehensive, do we want to make the perfect the enemy of the good?

This is a Noticed and Open Meeting

California is an increasingly administrative and bureaucratic state where the Legislature has largely abdicated a swath of its authority in regulating environmental policy to the executive branch.  And what the Legislature did not consign to the executive, it relegates to the judicial branch, often dictating law from the bench, only to be ratified by the Legislature, as is often the case with the California Environmental Quality Act.

Counter-intuitively, in making the administrative state more open to the public, it has become reflexively cumbersome and subject to the whim of the executive rather than balancing the issues of a deliberative legislature, which is ultimately responsive to the electorate.  Increased centralization encourages hefty bureaucratic overhead and a sterile process that often exaggerates the benefits and underestimates the costs of its decisions.   Good public policy is lost in hours of insipid, and often, irrelevant robotic meetings accompanied by complex decision-making protocols and volumes of commentary, minutes and errata.  Not all businesses are equipped with advocates in Sacramento who can closely follow and influence the drafting of laws and regulations. Further, few businesses are nimble enough to quickly change practices to be compliant with our ever morphing menagerie of laws  and regulations.  In the end, these “transparent” and “public engagement forums” are designed to lull concerned citizens into a false sense of transparency, ironically muting their reasonable concerns without an effective means of representation, translation and accountability.

Conservatives or Preservatives?

There is value in conserving the environment and enjoying its diverse systems so that they may be “healthful and pleasing to the senses and intellect of man,” rather than preserving it in some perpetually imagined idyllic condition that may or may not reflect reality or allow for an evolving ecosystem.  It seems that those most caught up in preserving the condition of a certain environment are often the last people to move into the neighborhood, enjoying the bounties of such a place while denying it to others.  Perfect equilibrium does not exist in nature; it only takes one alteration to throw any system out of balance.

When crafting environmental law, it may be important to consider the following:

  • Pristine environments -- If maintaining a primitive ecology is the only goal, and humans are unnecessarily handicapped in their ability to develop or adapt their natural resources, then pristine environments are not desirable for humans and cannot be maintained, as such, for long.  Indeed, homeostasis may override any human impact and continue to allow for an environment hospitable to life for many millennia despite our best efforts at controlling certain environmental functions.
  • Goodhart's Law -- Once you measure something, it changes.  This may be true as we deal with greenhouse gas emissions or toxicological elements per the Green Chemistry implementation.
  • Rebound Effect -- As things become more efficient, we use more of it, oftentimes, obviating any efficiencies that we were to gain originally.
  • Peltzman Effect -- Arises when people adjust their behavior to a regulation in ways that counteract the intended effect of the regulation and can inadvertently result in redistributing risk to innocent third-parties who behave in a risk-averse manner regardless of the regulation.
  • Moral Hazard -- Occurs when a party insulated from risk may behave differently than it would behave if it were fully exposed to the risk. Economists use the term to describe inefficiencies that can occur when risks are displaced, rather than on the ethics or morals of the involved parties.
  • Regulatory Capture Theory -- Suggests that regulatory agencies and policies often end up benefiting most those who are being regulated and may be used to put other, smaller or less influential firms, at a competitive disadvantage.  This can lead to corruption, graft or monopoly.
  • Pournelle's Iron Law of Bureaucracy -- In every bureaucracy there are two types of people, those dedicated to the goals of the agency and those dedicated to the bureaucracy itself. The second kind inevitably gains control of the bureaucracy. Always.

We Are Free to Choose

Milton Friedman noted, “One of the great mistakes is to judge policies and programs by their intentions rather than their results.”  Environmental policy succeeds when it reacts to a real problem, is simple, predictable and provides for a framework of workable alternatives without endangering the livelihood of millions of citizens who engage in untold numbers of transactions every day.  Perhaps it is time to substantively revisit our basic environmental framework established decades before much of our technology and innovation made it inapt or obsolete.  Perhaps it is time to encourage some creative destruction so that we may better prioritize our scarce resources on more pressing and urgent issues, such as feeding the poor and inoculating against deadly diseases, then to divert billions of dollars into things like carbon trading schemes that have yet to work anywhere else and will only pad the portfolios of the wealthy.  Perhaps the government should spend more time thinking about adapting to the changes that continue to devastate our economy in a real, tangible and immediate way, and act accordingly, rather than pursue more state-sponsored mandates on the environment, for which it has very little control.

In the end, a wealthier state is a healthier state.  Indeed, if we as a people want to thrive, rather than subsist, economic prosperity is essential when considering the Gordian Knot of California environmental policy.  It is time for policy practitioners to make a choice for an environment hospitable to Californians before they are consumed in an increasingly invasive environmental law.

For more information on this report or other Environmental Quality issues, contact Lance Christensen, Senate Republican Office of Policy at 916/651-1501.