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We Need to Work Together: Understanding Federal Agency Collaboration

The federal government manages tens of millions of acres of land across the United States. That land includes some of the most iconic landscapes in the country – such as Yosemite, Yellowstone, and Everglades National Parks. It also is land that provides habitat for endangered species, ecosystems that support communities and wildlife, resources such as timber and minerals for economic development, and more. Forests on federal lands have been at the center of the wildfire crisis enveloping California and the Western United States. Given these overlapping demands and their importance, these lands are a fertile source for conflict, and much litigation and political rancor.

Yet there are other ways to resolve that conflict – engagement between various interests (“stakeholders”), and federal, state, local, and tribal governments about how to manage the lands and achieve these conflicting goals. This kind of stakeholder collaboration has received relatively little treatment in the legal literature – and Karen Bradshaw’s article is a vital contribution simply because of its efforts to cover that gap. Supported by the Administrative Conference of the United States, Professor Bradshaw undertook an impressive assessment of how a wide range of federal agencies – focusing on, but not limited to, the public lands – use collaboration among different stakeholders to help manage conflicts over public resources.

One reason stakeholder collaboration has received so little attention historically is that it does not lend itself easily to research, especially research based on statutes, regulations, and caselaw. While Professor Bradshaw identifies many statutes that mandate or authorize collaboration, they often each have their own unique processes. Many collaborations are not embodied in statutory or regulatory provisions. Understanding them is time-consuming, requiring reviewing copious agency files and attending many meetings. And understanding how they work – how they really work – requires getting the trust of participants to explain why they are part of the collaborations, what they hope to accomplish, and how they see the process working. To gain even a basic understanding of this process required all of Professor Bradshaw’s hard work on this article and the broader research project – and again, that alone warrants recognition.

The article is mostly descriptive – Professor Bradshaw attempts to create a clear and consistent definition of stakeholder collaboration, to articulate how it differs from other processes by which a federal government agency engages with other entities, and to tentatively assess its strengths and weaknesses. Again, given the wide range of possible forms and the difficulty of collecting data, these achievements alone are noteworthy.

Professor Bradshaw’s assessments of the strengths and weaknesses of the tool are also very helpful. She notes that collaborations can be beneficial in terms of helping agencies gather information they might not otherwise receive, and of building political support for difficult decisions that agencies might make. She also notes real issues around equity: Because participants are not paid by the federal government for their participation, only a limited number of people have the ability and inclination to spend hours during a weekday on a regular basis talking in a conference room. Thus, many participants are necessarily representatives of larger organizations, with their participation part of their employment responsibilities. As Bradshaw notes, this will generally mean that lower socio-economic status communities and diffuse interests will be underrepresented in these processes. And even where there are established groups that could afford to participate, many will not because of suspicions of how the process will unfold – emphasizing the importance of trust in making these collaborations function.

Another issue that Professor Bradshaw notes is the uneasy fit of these collaborations with existing law and regulations. Many are specifically structured to avoid the requirements of the Federal Advisory Committee Act (FACA). Professor Bradshaw quotes a government official stating that the collaboration requires bending agency regulations and policies, but that the official supports doing so.

Professor Bradshaw concludes with a thoughtful framework to help agencies assess when they might want to take advantage of stakeholder collaborations – drawing on her rich expertise from her research.

Public land management agencies are a key user of stakeholder collaboration, but as Professor Bradshaw notes, they are not the only ones who use them, and they are far from the only agencies faced with difficult, localized conflicts over government decisions. As the United States’ political system has polarized politically, these tools may be important to help manage that polarization. As Professor Bradshaw notes, they can provide important forums for stakeholders to listen to each other, and to help bridge deep disagreements. Her research can provide an important foundation for policymakers and academics to explore whether and how to draw more on the tool in a wide range of fields.

But Professor Bradshaw’s work also highlights a key limitation of the tool, and one that Congress might well want to consider if it continues to rely so heavily on it. The differential ability of stakeholders to participate in collaborations may interact in problematic ways with the willingness of agencies to bend laws and regulations to facilitate collaborations – the result may be agencies bending the law to benefit those who have more ability to participate. In some ways, this pattern may replicate age-old concerns about the capture of agencies by key interest groups. If collaborations simply replicate that outcome, then their promise will have been lost.

There is much to consider in Professor Bradshaw’s work – and much more to build from. She has already developed a companion piece on the topic, and I look forward to more writing from her on this important topic.

Cite as: Eric Biber, We Need to Work Together: Understanding Federal Agency Collaboration, JOTWELL (February 9, 2021) (reviewing Karen Bradshaw, Agency Engagement with Stakeholder Collaborations, in Wildfire Policy and Beyond, 51 Arizona St. L.J. 437 (2019)), https://lex.jotwell.com/we-need-to-work-together-understanding-federal-agency-collaboration/.

Is Resilience Resilient?

Robert L. Fischman, Letting Go of Stability: Resilience and Environmental Law, 94 Ind. L.J. 689 (2019).

All it took was a frequently lethal, highly infectious, globally distributed virus. In anxious self-protection, Homo sapiens drastically curtailed the planet-altering behaviors we call “economic activity.” The non-human parts of our ecosystems responded. Above cities, toxic and murky air cleared. Fossil fuel extraction sputtered; greenhouse gas emissions slowed. Wild animals returned to places from which they had long been exiled. Birds singing for mates vied more with each other and less with the drone of humanity. Even Earth’s own seismic rumbling sounded more distinctly against a diminished background of people’s percussive pounding.

The pandemic pause accomplished, however briefly, results that have eluded all the world’s environmental policy makers. These results reminded us just how tight the correlation is between the human economy and human environmental impact–and, by negative implication, exploded the myth that “sustainability” can be a pragmatic and achievable goal of environmental law. The Earth has shown that to sustain normal levels of human population and economic growth, ecosystems must absorb massive, deeply disruptive, perturbations. In Letting Go of Stability, Professor Robert Fischman rejects the sustainability shibboleth and thoughtfully explores the potential of resilience, rather than sustainability, to provide a conceptual anchor for environmental law in the decades ahead.

Fischman, as he acknowledges, is not the first to question the merit of sustainability or to highlight the potential of resilience as a guiding principle of environmental law. Letting Go of Stability stands firmly on the shoulders of at least two scholarly traditions in the scientific, social-scientific, legal, and environmental planning literature: the development of adaptive management techniques for natural resources and the consideration of system resilience for legal regulatory design in many policy contexts. Using an admirable mix of theory and case description, Fischman argues that the scientific study of resilience in ecosystems offers specific lessons that will help society to address the persistent “fundamental questions of environmental law.”

Why resilience? Fischman observes that environmental law, like much of law, implicitly has endorsed the goal of stability, seeking, for example, predictable and consistent production of ecosystem services. But to expect stability is unrealistic. Ecosystems, and their interactions with people that form numbingly complex “social-ecological systems,” are intrinsically and unpredictably dynamic. Hence, Fischman contends, instead of trying to maintain social-ecological systems in some desired equilibrium state, it makes more sense for law to aim to protect systems’ ability to restore a desired equilibrium in response to stress. That is, to keep systems resilient.

Fischman would, accordingly, have environmental law focus more on process and less on results. But as a goal, resilience is atypical and slippery. Resilience, after all, is a property that inheres in a system rather than an output that results from a system. And human beings (especially adherents of a certain school of legal and economic theory) just love designing systems to maximize output.

Fischman appreciates that for the most part, we value ecosystems not for what they are, but for what we get from them–whether nesting birds or irrigation water. Nevertheless, he argues, the goal of resilience should not and would not be indifferent to outputs. Process for process’s sake, Fischman emphasizes, is not nearly sufficient as a policy goal. Achieving resilience may not maximize or stabilize the production of a particular system output, but it can enhance human and environmental welfare by narrowing variability and reducing the probability of significant disruption. “The greatest challenge for resilience as an environmental law objective,” Fischman writes, “is that it will not fulfill the expectation of sustaining what we like.” (P. 718.) The solace is that “[r]esilience will promise less but deliver more of what it promises.” (P. 709, emphasis in original.)

Moreover, Fischman astutely observes that there are some types of promises that environmental law based on resilience could fulfill more easily than is possible in a legal regime focused on stable outputs. Using the example of a degraded stream in Indianapolis, Fischman describes how resilience could be used not just to achieve narrowly-conceived environmental quality objectives but to reimagine and reconfigure the entire social-ecological system of the stream and its surrounding community. Resilience need not always buttress an existing equilibrium; sometimes a resilience frame moves policy toward a change large enough to push a system into a new and better equilibrium.

Can the attribute of resilience also push environmental law itself to a new and better equilibrium? In addition to being an overarching policy objective, should resilience be a design element of environmental law as well? The final section of Letting Go of Stability ponders these “meta” questions.

Of course, our legal system as a whole is built for resilience: by Constitutional design, common-law tradition, and institutional reality, it resists change, even to a fault. So how would design for resilience inform and improve environmental law particularly? Fischman argues that the features that make real-world systems resilient are uniquely applicable to environmental law because of environmental law’s heavy emphasis on process and the polycentric nature of environmental policy puzzles. As he notes, the existing body of environmental law already incorporates some features of resilient systems, such as statutes that allow relatively large amounts of regulatory discretion and that require agencies periodically to reassess their prior decisions. Optimistically, he envisions that designing resilience into environmental law will entail “inviting new voices to the table,” thereby enhancing environmental justice and “substantially increas[ing] the constituency of Americans who recognize how they benefit from environmental law.” (P. 722.)

This article does not focus on particular policy prescriptions. But Fischman’s vision is not purely theoretical. He is clear that the shift to a resilience theory of environmental law, if properly executed, would have significant substantive implications. For example, he writes, “[b]urdens of proof in common law and administrative settings need root-to-branch reassessment in light of the resilience framework.” (P. 725.) He is certainly right about the need; let us hope that an enlightened generation of legislators, judges, and administrators seize the opportunity.

Letting Go of Stability grew out of Fischman’s inaugural lecture as the George P. Smith, II Distinguished Professor at the Indiana University Maurer School of Law. This thought-provoking article demonstrates that the appointment was wisely made.

Cite as: Steve Gold, Is Resilience Resilient?, JOTWELL (September 30, 2020) (reviewing Robert L. Fischman, Letting Go of Stability: Resilience and Environmental Law, 94 Ind. L.J. 689 (2019)), https://lex.jotwell.com/is-resilience-resilient/.

The High Cost of Exclusionary Zoning

Robert C Ellickson, Zoning and the Cost of Housing: Evidence from Silicon Valley, Greater New Haven, and Greater Austin, available at SSRN.

An article about the cost of housing may seem a surprising choice as one of the year’s best environmental law articles. But there are good reasons for it: Housing costs in major coastal metro areas in the United States are soaring. Strong evidence suggests that the stringent of land-use regulations is a major contributor to those price increases Some commentators also consider state-level environmental review laws, such as the California Environmental Quality Act, among those stringent land-use regulations – thus implicating environmental law as a cause of the housing crisis. At the same time, transportation is one of the primary contributors to greenhouse gas emissions in the United States, and is the largest single sector now in California. Addressing emissions from transportation requires a reduction in vehicle miles travelled by Americans, which in turn requires densification of the built landscape to facilitate walking, biking and public transit use. But densification may be difficult or impossible in the face of soaring metro housing costs and stringent land-use regulations that obstruct redevelopment.

Ellickson’s piece provides a timely contribution to both of these debates, because it provides something that has been sorely lacking in the debates over how land-use law shapes housing policy and the built form: Data on how the land-use regulatory system actually operates in practice. Up to now, most of the literature (whether economic, planning, or law) that has tackled how land-use regulation operates on the ground has been either speculative, or it has relied on surveys of developers and planners. This is in part because the local nature of land-use regulation in the United States, combined with its sometimes extreme complexity in local jurisdictions, makes data collection expensive and difficult. Surveys attempt to elide this issue by asking for perceptions or knowledge of land-use regulation by actors (planners and developers) who should know much about the topic, but they may not always accurately reflect the realities of land-use regulation on the ground. But if we want to solve the problems of housing cost and greenhouse gas emissions from transportation, we need to have good data on the true nature of land-use regulation is in the United States.

Ellickson’s work is a great first step in this direction.

Ellickson painstakingly collects data on the zoning regulations for a few dozen jurisdictions in three major metro areas: Silicon Valley/San Jose, CA; Austin, TX; and New Haven, CT. Ellickson documents how all of these jurisdictions have significant limits on how much housing can be produced – in large part through the use of single-family zoning (requiring all development in a particular zone to be single-family houses) and minimum lot sizes (the minimum size of land that can be developed for a single-family house). Ellickson shows how some cities in these metro areas lock up almost all of their land through large-lot, single-family zoning, excluding multi-family housing and even relatively affordable single-family houses. These kinds of zoning regulations are antithetical to producing either affordable housing or walkable neighborhoods – they are the epitome of what is called exclusionary zoning. He uses simple summary statistics to emphasize how dramatically exclusionary much of the zoning is.

Ellickson also helpfully provides three additional elements to his data collection. First, he gives deep historical context for how each metro area has developed over time, including changes to the zoning system that he believes have been most impactful. Second, he does some nice comparisons across his metro areas, showing how the Austin, TX area does have relatively more development-friendly zoning, and how the most exclusionary metro area of all is New Haven, CT. Third, Ellickson develops some very basic measures of how stringent zoning might be – the incidence of large-lot zoning and small-lot zoning, and the amount of land available for multifamily housing. This metric is quite useful in that it allows for rapid and high-level assessments of zoning stringency across a range of suburban jurisdictions, although the metrics would be less useful for assessing central-cities, which usually have a much more complicated zoning system.

If I were to have a critique of Ellickson’s excellent piece, it is that he could engage more with the environmental law implications of his work. Ellickson is primarily descriptive rather than normative in the article, but at times he makes observations on the feasibility of development in areas such as hillsides, wetlands, or water supply districts that might be seen as understating the environmental and societal benefits of protecting those lands. For instance, Ellickson notes that large areas of the foothills of Silicon Valley have been protected as open space, though similarly hilly and steep areas have been developed in the East Bay – the Oakland and Berkeley hills. But those areas were subject to a tragic firestorm in 1991, killing 25 people and destroying thousands of homes – a major discussion today in California is whether those kinds of areas should be developed at all, given their vulnerability to increased fire risk in a world subject to climate change.

A more important connection with environmental law, however, is the implications of Ellickson’s work for efforts to densify American cities and metro areas as a response to climate change. Ellickson doesn’t touch on this, but his work highlights the deep challenges that cities and states around the country will face if they seek to decrease automobile use and reduce greenhouse gas emissions from transportation. That is a real contribution of his piece (albeit unstated), and I hope he continues to do more work in this vein (the footnotes promise a follow-on piece with a more historical bent) and considers building connections to environmental law in general, and climate change in particular. And I really hope that others follow Ellickson’s lead in collecting data on land-use regulation on the ground (some of which I have been doing with collaborators). We need a lot more data in this area, given its central importance for housing, environmental law, climate change, and more.

Cite as: Eric Biber, The High Cost of Exclusionary Zoning, JOTWELL (February 26, 2020) (reviewing Robert C Ellickson, Zoning and the Cost of Housing: Evidence from Silicon Valley, Greater New Haven, and Greater Austin, available at SSRN), https://lex.jotwell.com/the-high-cost-of-exclusionary-zoning/.

Two Chapters in the GIGO Mess Epic

There are two problems with cost-benefit models for environmental policymaking: the model inputs and the model outputs. This is not exactly news. Researchers and reporters have documented honest overestimates of regulatory costs, honest undercounts of regulatory benefits, and dishonest attempts to cook the cost-benefit books.1 The authors of the articles reviewed here avoid such easy targets. Instead, they strike at the heart of the welfarist policymaking preference that promotes and privileges cost-benefit analysis.

Richard Revesz challenges the orthodoxy that distributional effects should not motivate regulatory choices. Bernard Harcourt assails the myth that cost-benefit analysis offers an objective motivation for regulatory choices.

Revesz has long argued that proponents of environmental regulation must learn to love, or at least to live with, cost-benefit analysis. He readily concedes that “all other things being equal,” regulations should be designed to maximize net benefits, that is, to be economically efficient. (Revesz, P. 1490.) But in Regulation and Distribution, Revesz reminds us that inequity prevents all other things from being equal—and that profoundly unequal distributive effects demand corrective action.

Regulation and Distribution does not bother with the simplistic claim that inequity can be ignored because welfare maximization trumps all other social goals. Instead, Revesz grapples with the more nuanced argument of Louis Kaplow and Steven Shavell: that redress for distributional effects of regulatory action should occur only through the tax code rather than through regulatory decisions themselves.2

Revesz replies that using the tax code, however attractive in theory, is impossible in practice. Redistribution through provisions of tax law requires legislative action, but such legislation seems exceedingly unlikely in today’s extended period of hyper-partisan legislative gridlock.

Even if redistributive legislation were possible, a system of taxation and money transfers is ill-suited to address many types of environmental injustice. In one of the most persuasive parts of Regulation and Distribution, Revesz analyzes the deficiencies of using a tax-and-transfer approach to respond to the unequal distribution of exposure to toxic pollutants. With higher exposures come a people who confront a greater risk of becoming sick, more eventual cases of disease, and more premature deaths. Revesz shows that any attempt to respond to this inequity through the income tax system will inevitably result in undercompensation. Some aspects of the harm are too difficult to attribute to individual taxpayers. Others are too difficult to quantify and monetize. Therefore, Revesz concludes, regulatory agencies, and not the Internal Revenue Service, should figure out and adopt measures to counter the harmful distributive effects of their regulations.

How should they do this? Revesz’s proposed solutions are interesting and thought-provoking, though they also raise questions.

Before presenting his recommendations, Revesz is careful to argue that only “unusuallylarge inequities” justify intervention, lest the welfare benefits of cost-benefit analysis be overwhelmed by the routine distributional effects of regulation. (Revesz, P. 1571.) Individual regulatory agencies cannot be trusted to make the call, Revesz seems to imply, so he suggests that the Office of Information and Regulatory Affairs (OIRA) define the trigger in a guidance document. Those who are already skeptical of OIRA’s outsized power might question this idea, although Revesz would doubtless answer that OIRA’s central role in regulation is simply a fact of life. Unfortunately, Regulation and Distribution offers no advice about how large an inequity is unusually large, or even about how to begin to make that decision. This would be a nice follow-up project.

Next, Revesz proposes creation of a standing interagency working group that would craft an appropriate redistributive response to any regulation satisfying OIRA’s triggering criterion. Revesz considers two types of possible responses: directly making the rule more equitable, or indirectly mitigating the rule’s inequitable effects.

Of the two, Revesz pays much more attention to the indirect mitigation option. Having argued that the tax code cannot be used for this purpose because of legislative gridlock, Revesz advocates executive branch action under existing statutory authorities. Citing efforts by the Obama Administration to help dislocated coal industry workers, he argues that Presidents have a host of options for ameliorating the focused economic harm that sometimes results from regulations that benefit society as a whole. Many of these options involve the targeted award of federal grants or the redeployment of contingency funds such as those set aside for national emergencies. The breadth of the possibilities supports Revesz’s proposal for an interagency working group.

Revesz’s mitigation goal is laudable. As he acknowledges, however, achieving it would require concerted action centrally controlled from the White House. Revesz argues that Presidential administration is, like OIRA, a fact of life; it may as well be deployed in support of beneficial environmental regulation. On the other hand, if a President may use emergency funds to help coal miners weather the effect of greenhouse gas emission limitations, what is to stop a President from using emergency funds to build a border wall? At this moment in history, the scope of Presidential authority inherent in Revesz’s proposal is arresting.

Mitigation approaches, notwithstanding the Presidential power they invoke, still amount to money transfers. Effectively, they use tax revenues (or federal borrowing) to achieve distributive goals, without requiring amendment of the tax code. Therefore, Revesz notes, these approaches are not the best way to address non-monetary harms, such as the environmental injustice of disproportionate exposures to toxic pollutants. To address inequitable non-monetary consequences of proposed rules, Revesz recommends that the interagency working group should consider directly changing the rule.

Regulation and Distribution discusses this option only briefly, leaving some interesting questions unaddressed. For example, could an agency ever justifiably reject a rule that maximizes net benefits in favor of a rule that is less efficient but more equitable? Might we be willing to accept a slightly smaller pie in exchange for keeping more people alive and healthy enough to enjoy partaking? Revesz very nearly implies an affirmative answer, but never quite says so. The follow-up question, “under what circumstances should an agency do this,” would surely lead to a very interesting conversation.

Bernard Harcourt, it seems, would eagerly join such a conversation. For if Regulation and Distribution challenges one pillar of cost-benefit orthodoxy without quite trying to bring down the whole edifice, Harcourt’s The Systems Fallacy has no such compunctions.

The Systems Fallacy argues persuasively that the claim that cost-benefit analysis provides policymakers with neutral, scientific, or objective guidance, is false. Harcourt contends that any cost-benefit analysis necessarily embodies normative political values and then, by guiding policymaking, in turn reshapes normative political values.

Harcourt traces the origins of cost-benefit analysis not to welfare economics but to military operations research and systems analysis. Systems analysis approaches worked well enough, he says, for military or engineering problems addressing the performance of tangible objects. But social policy problems do not define themselves. Before even confronting the problem of determining the values and functions to use in a policy analysis, Harcourt explains, an analyst must make a series of decisions about the scope of the analysis.

Harcourt identifies and illustrates five critical choice-of-scope decisions: conceptualizing the metaphorical social system to be analyzed, defining the system’s boundaries, determining the system’s objectives, selecting policy alternatives to be analyzed within the system, and choosing criteria to evaluate system performance under the various policy alternatives. With hypotheticals and real-world examples, Harcourt shows that each of these decisions “entail[s] normative choices about political values.” (Harcourt, P. 421.)

Although Harcourt concedes that systems analysis and cost-benefit analysis are not identical, it is easy to see – and Harcourt demonstrates—that cost-benefit analysis requires the same set of value-laden choice-of-scope decisions. Moreover, he contends, once those decisions produce a policy outcome, a feedback loop engages: cost-benefit analysis determines policies; the policies dictate allocations of social resources; the allocations of social resources affect people’s lived reality, altering the society’s balance of political values. This is what Harcourt finds most offensive about allowing cost-benefit analysis to set social policy: a supposedly objective analytical tool, often entrusted to technocrats, “silently impose[s] political values on society.” (Harcourt, P. 422.)

Harcourt acknowledges that smart welfare economists, again exemplified by Kaplow and Shavell, among others, have a response. If welfare is defined broadly enough to include people’s desires to implement political values such as fairness, then cost-benefit analysis can maximize welfare while including society’s political preferences, rather than privileging only some political values through choice-of-scope decisions. But Harcourt responds, devastatingly, that this catholic vision of welfare and welfare maximization exists only in theory. A real cost-benefit analysis inevitably addresses a particular, selected social problem. Therefore, a real cost-benefit analysis inevitably makes the normative choice-of-scope calls Harcourt describes. And, Harcourt notes, maximizing net benefits within the arbitrarily-defined metaphorical system being analyzed may not actually maximize overall social welfare, broadly defined to include political values.

The Systems Fallacy is not an article about environmental law. Harcourt’s arguments are general; his illustrations concern policies aimed at crime reduction. But any environmental lawyer will recognize at once that Harcourt’s argument applies strongly to environmental policy. Pollution control regulations, which so often promise benefits that are broadly dispersed and hard to quantify in exchange for costs that are concentrated and monetary, seem to face particularly stringent cost-benefit scrutiny from all three branches of government. And the problem Harcourt identifies goes beyond pollution regulation to pervade all environmental policy. The choice-of-scope decisions Harcourt describes, for example, are awfully familiar to anyone who has ever been involved with an environmental impact statement under the National Environmental Policy Act.

If there is a weak spot in The Systems Fallacy, it is the discussion of what to do about the problem the article identifies. Harcourt quite properly insists that he is not opposed to analytical rigor or to quantifying what can be quantified. But, he asserts, policy analysis should be limited to a single dimension, thereby evading the systems fallacy by avoiding the normative choices embedded in the construction of metaphorical systems to analyze. That solution seems unconvincing and unrealistic. Choosing the dimension for analysis would also be fraught with political value judgments, and the functional relationships between variables usually would turn a unidimensional metric into a multidimensional system.

Alternatively, Harcourt argues, the solution is to politicize cost-benefit analysis and policymaking, wresting back normative power from the technocrats. It is hard to argue with Harcourt’s objective; assuring political accountability for inherently political judgments is a good idea. But at this moment in history, when alternative facts are spun to serve political agendas, overbearing technocrats may not be society’s biggest problem.

Late in 2018, law professor and former OIRA administrator Cass Sunstein, in a keynote address at a conference of Revesz’s Institute for Policy Integrity, said: “We often think that the issues that divide us are issues of values. But the fundamental divisions involve issues of fact, not values.”3 No doubt that is true, sometimes. Not always, though. Sometimes, different people really do hold different values. Sometimes, even agreed-upon facts produce different policy positions in different people. Sometimes, different values even drive different perceptions of facts.

In distinct ways, both Regulation and Distribution and The Systems Fallacy teach us to be vigilant for those possibilities. Richard Revesz and Bernard Harcourt offer new reasons to be skeptical of cost-benefit policy prescriptions. They show us that cost-benefit analysis has limits that cannot be overcome by attacking the “garbage in” problem, by collecting more data, by refining functional models. Their work should inspire us to think outside the cost-benefit box. If we pay heed, we may be able to use cost-benefit analysis more wisely and to avoid the problem of policy “garbage out.”

Cite as: Steve Gold, Two Chapters in the GIGO Mess Epic, JOTWELL (July 9, 2019) (reviewing Bernard E. Harcourt, The Systems Fallacy: A Genealogy and Critique of Public Policy and Cost-Benefit Analysis, 47 J. Legal Stud. 419 (2018); Richard L. Revesz, Regulation and Distribution, 93 N.Y.U. L. Rev. 1489 (2018)), https://lex.jotwell.com/?p=904.

Should We Use the Market to Address Climate Change?

Alice Kaswan, Energy, Governance, and Market Mechanisms, 72 U. Miami L. Rev. 476 (2018).

The recent report from the Intergovernmental Panel on Climate Change this fall has made clear the urgent need to address climate change. What should be the primary policy tool that we use to address the problem? Economists have vociferously advocated for the use of carbon taxes or cap-and-trade permit systems, on the grounds that they provide the most efficient way to decarbonize global economies. Yet carbon taxes have had little success in the political arena. Many of the existing policies that countries and states have used to address carbon emissions have been regulations or subsidies, not market-based approaches. Is this a fundamental misstep on the part of policymakers?

In her recent article, Energy, Governance, and Market Mechanisms, Alice Kaswan argues that this is not a misstep, and that in fact there are good reasons—political, democratic, even economic—to prefer non-market-based instruments to advance decarbonization. Her article is ambitious in its scope but effective in raising important questions about what approach is best.

Kaswan raises a couple of key points about why non-market-based mechanisms may be superior to address the transition to a decarbonized economy. First, she argues that government coordination of climate policies can allow the achievement of multiple goals in addition to reducing carbon emissions at the least cost (which is what market-based tools excel at). For instance, we might be concerned about the distributional impacts of a transition to a decarbonized economy and adding on social equity measures to market-based tools may not be as effective as a fully integrated approach. Similarly, there are a lot of additional issues we are concerned about in energy production than simply carbon emissions (e.g., bird mortality from wind turbines, or long-term waste disposal from nuclear power), and a price on carbon alone cannot help us resolve those tradeoffs.

Second, Kaswan argues that long-term planning is an essential component of a transition to a carbon-free energy system, given the interconnectedness of a wide range of elements of our energy systems and the long timeframes for many investments in those systems. According to Kaswan, market-based tools may not be the most effective in managing these kinds of planned transitions—particularly if carbon prices are low, and so far we have only observed relatively low carbon prices in practice.

Third, Kaswan argues that public participation would be more robust for non-market-based regulatory measures, and that this public participation will result in a more equitable and more accountable approach to carbon reductions. And finally, Kaswan argues that non-market-based mechanisms appear to be more politically realistic than stringent market-based tools—something that has been quite apparent this fall as the French protest against a new gas tax and Washington state voters turned down a carbon tax proposal.

One law review article will not be able to conclusively answer any of these difficult questions about the role of market-based mechanisms in climate policy—the challenge spans the entirety of the modern economy, across countries with very different political and cultural settings, and an incredible range of technical problems. But Kaswan’s piece is a vital starting point for the now-vibrant debate about which policy approaches will be more successful, and an important counterpoint to a policy discourse that has mostly been dominated by advocates of carbon pricing. Even if you don’t agree with her arguments, Kaswan’s analysis should give you important points to consider.

Cite as: Eric Biber, Should We Use the Market to Address Climate Change?, JOTWELL (February 14, 2019) (reviewing Alice Kaswan, Energy, Governance, and Market Mechanisms, 72 U. Miami L. Rev. 476 (2018)), https://lex.jotwell.com/should-we-use-the-market-to-address-climate-change/.