Book Review: Environmental Politics: Public Costs, Private Rewards Edited by Michael S. Greve and Fred L. Smith, Jr.
Courts often impose environmental liability on parties who have caused no harm.
SEPTEMBER 01, 1993 by BRIAN DOHERTY
The old rationales for central control of the economy have suffered a crippling blow at the hands of history and economic logic. Socialism has proven neither more rational, more efficient, nor more humane than the free market. But could it be more environmentally sound?
This book is edited by Michael S. Greve, the founder and executive director of the Center for Individual Rights, a public interest law firm, and Fred L. Smith, Jr., the founder and president of the Competitive Enterprise Institute (CEI), a free market think tank. It attempts to lay the ground work for a scholarly and accessible literature that makes the case that environmental command-and-control policies, even when planned with the best of intentions, are still just a road to serfdom, only paved with green bricks, to use Smith’s apposite phrase. The book’s contributors include Jonathan H. Adler and Christopher L. Culp of CEI, Marc K. Landy and Mary Hague of Boston College, Daniel F. McInnis of Georgetown University, R. Shep Melnick of Brandeis University, and David Vogel of the University of California at Berkeley. The writers are not all sympathetic to a totally free market approach, but all of them are keen analysts of the problems associated with centralized environmental planning.
There are legal hurdles in the way of sane environmental policy as well as political ones, even though all of its authors don’t seem to grasp the most sensible and fair solution. The chapter by political scientists Marc Landy and Mary Hague examines the workings of Superfund, a program designed to clean up abandoned waste dumps. The cost was supposed to be borne by the polluter, which seems sensible and just.
Unfortunately, the Superfund “polluter pays” principle, in which liability is “strict, joint and several, and retroactive,” has led to runaway tort problems where anyone with deep pockets who has any sort of connection, however tenuous, to a site (including “prior owners, users, bankers, insurers, waste generators, and transporters”) can be held liable for the entire cleanup cost, even if the site adhered to all legal and known scientific standards at the time. So Superfund cleanup attempts are generally kept tied up in court for years as any party held liable tries to drag as many other associated parties as possible into the liability process. This leads Landy and Hague to the mistaken conclusion that “clearly, it would be fairer and more efficient to simply pay for cleanup from public funds.”
But political and legal interference with free markets is not the only problem with the current state of environmental policy. When attempting to regulate “the environment,” there are often no markets to corrupt. You can have a market only when there is property to be bought and sold, and air and water pollution involve invasive actions on individuals being performed through an “unowned” medium, a “public good.”
The book’s final chapter by Fred Smith shines an exploratory light toward an intellectual and political revolution in environmental law that would extend markets and private, voluntary arrangements to even the trickiest of pollution problems.
Smith admits the existence of problems with “tort law which . . . has been almost completely socialized,” where “courts often award compensation to parties who have suffered no demonstrable damages while imposing liability on parties who have caused no harm.” But the solution lies in the innovations that property rights and markets give incentive to create, not central governmental management. Smith points out that such innovations as fences, locks, fingerprinting, and burglar alarms only developed because of private property rights, and he hypothesizes the development of technologies that would make applying the property paradigm to currently “unowned” resources like endangered species, air, and water possible. Particularly intriguing is his notion of “chemical fingerprinting, which could identify the culprits responsible for oil spills and toxic dumping.”
Neither Smith nor the reader is able to imagine beforehand all the various mechanisms and benefits that would develop spontaneously if we were to try to extend property rights over the current “public” goods of the environment. But Environrnental Politics: Public Costs, Private Rewards makes clear that ceding all attempts at ending environmental degradation and managing environmental concerns to the government leads to private gain at public expense, and, too often, at the expense of environmental quality.
Brian Doherty is assistant editor of Regulation magazine.