An Environmental House of Cards

An Environmental House of Cards

Smith Op-Ed in The Environmental Forum
December 11, 1991


AFTER REPEATEDLY HEARING "read my lips, no new taxes," it is appropriate to ask whether President Bush's promise to be green was simply protective coloration.

If being the environmerital president means empowering environmental bureaucrats to micro-manage every aspect of the economy and paying lip-service to every cause heralded by the environmental establishment, then Bush is well on his way to earning the title. Since Bush became president, the EPA's spending and personnel have increased by 31 and 23 percent, respectively. In addition, the United States now spends over 2 percent of GNP-$115 billion—on environmental regulation. Both of these figures are greater than the environmental expenditures of any other industrialized nation.

However, if being the environmental president actually means ericouraging the efficient use of resources, promoting rational land management, and empowering individual landowners arid voluntary associations to protect environmental quality without crippling the economy, George Bush has been a dismal failure.

Bush has discovered what all politicians know deep down: it is impossible to satisfy every special interest group. However, by trying to be all things to all people, George Bush has succeeded in disappoiriting almost everyone.

Take as an example the Clean Air Act Amendments of 1990. Most businesspeople and economists feel that it went too far. Most of the erivironmental establishment feels that it did not go far enough. All told, this is the single most comprehensive, expensive, and criticized piece of erivironmental legislation in history. It is estimated that it will impose over 525 billion in annual costs to the economy if, in fact, it is ever fully implemented.

This multi-billion-dollar monstrosity will directly and indirectly affect millions of economic decisions each year, from the fuels used by utilities and automobiles to the activities of bakeries and dry cleaners. Because these regulatory costs will be translated into the prices of goods and services, the United States will become less competitive in world markets as domestic manufacturing processes become comparatively more expensive.

Perhaps these costs would be justified if the act could produce tremendous environmental benefits. But alas, this will not be the case. In exchange for the billions of dollars it will cost, the Clean Air Act will yield only pennies in benefits. George Bush should not act so surprised to discover the economy is in a "free fall."

In another program touted by the administration as an environmental success, Bush pledged to adopt a strategy of "no net loss" of wetlands. As with the Clean Air Act, the general outlines of this proposal held broad appeal. The specifics, however, have caused many to question whether the administration respects the property rights of citizens as much as it respects the prerogatives of the bureaucracy.

When parcels of arid scrub land, wet perhaps a few times in a decade, are bitterly fought over as "wetlands," it should be obvious that the jurisdictional definition is too broad. Yet Bush has backed himself into a rhetorical coma, promising to protect private property while his EPA administrator, William Reilly, demands strict adherence to "no net loss."

After careful examination of Bush's environmental record, it is clear that George Bush has no environmental policy. He endorses "market-based" solutions, yet has no concept of what a true market is. He will praise market efficiency, even while promoting government mandates for almost every production practice in the country.

The acid rain provisions of the Clean Air Act were heralded as a truly innovative market-based solution to the acidification problem in northern lakes. While debate focused on the potential of sulfur emission credits, little atterition was paid to whether billions of dollars should be spent eliminating industrial emissions. The National Acid Precipitation Assessment Program asked this question, and proposed a less expensive cleanup alterriative, yet was riever grarited a full hearing in Congress. What too many fail to realize is that market-based means are useless if the ends are still controlled by the political process.

Our ends in environmental policy need to be made clear. When building a house, once the walls are in place and the roof is on, the job is basically finished. This is not the case in environmental policy, where there are few, if any, objective stanndards. There is no point at which the "construction" of environmental policy should logically stop. Is a one per-million cancer risk small enough? Or must it be one-per-trillion? Is no net loss of wetlands sufficient? Or must there also be no net loss of woodlands and prairies as well? Perhaps the house will not be complete until all human impacts upon the environment are eliminated.

Unfortunately, Bush has no need to be concerned about the owner of this environmental house coming by to inspect the builder's handiwork, or to look over the invoices. The taxpayer is never allowed such scrutiny, and is often deceived about the results. When public officials are allowed to ignore, or even deny, the scientific evidence and still keep their jobs, the public has little hope of hearing the truth.

From dioxin to asbestos, from radon to ozone, everything is open to perpetual debate precisely because it has been politicized. In a political setting, decisions are made based upon who can wield the most influence. However, a true market solution would eliminate most of the political component of environmental decisionmakingg. In a market system, decisions are made by those who will bear the costs, or reap the benefits, of the actions. Free markets, combined with a strong defense of property rights, secure the landowners' ability to protect their land, while benefiting the environment through greater efficiency in resource use.

This scenario contrasts sharply with the political system, which rewards failure with a bigger annual budget and the stern warning: "Do it right this time, or we'll increase your budget again and again!" This sleight of hand on environmental policy has given the professional environmental lobby five aces. Bush's environmental house of cards is collapsing. And we need a new deal.