The Federalist Society hosted a colloquium on environmental regulatory
reform at Georgetown University's Leavey Center on Thursday, July
18, 1996. The colloquium, jointly sponsored by the Federalist Society
and Beveridge & Diamond, was designed to provide an informal
forum for open discourse and cross-fertilization of ideas on environmental
regulatory reform issues. As moderator Alan Raul of Beveridge &
Diamond explained, the conference did not aspire to harmonize or
converge the many prevailing views on reform but sought to brainstorm
and to identify themes, principles and strategies.
The panel of sixteen environmental law and policy experts was drawn
from public interest, private practice, government and policy think
tanks. The panel established a rough consensus on the need for reform
and a recognition that a favorable climate was emerging that offered
unprecedented opportunity for experimentation and cooperation between
regulator and regulated.
Several principal themes were identified. The panel generally endorsed
devolution (empowerment of state and local stakeholders), evolutionary
rather than revolutionary reform, innovation and flexibility, and
an increased recognition of the role of property rights and private
stewardship. Also identified as reform priorities were streamlined
information gathering and dissemination, sharpened accuracy in risk
assessment, and an effort to effectively communicate the reform
message to the voting public. The Sierra Club, however, indicated
that environmental reform was not part of their agenda, considering
reform efforts to be misplaced priorities that benefit industry,
not the environment. All participants joined Raul in calling for
media efforts to better educate the public on all environmental
Only a few issues engendered division amongst the panel. Serious
disagreement arose over whether legislative change was necessary
to effectuate reform. Despite consensus on the need for change,
legislative movement may not be possible at all given the prevailing
partisan divisiveness on Capitol Hill. The panelists recognized
that significant tensions must be reconciled, particularly in the
area of federal control over state programs and in balancing flexible
regulatory programs with enforcement and performance standards.
The panel also acknowledged that future environmental improvements
will demand greater impacts on lifestyle patterns and on small business.
The four-hour colloquium provided an enlightening and informative
exchange of the most current ideas on environmental reform from
many of the experts closest to the subject. The atmosphere was overwhelmingly
collegial and congenial.
Jonathan Adler - Competitive Enterprise Institute.
Jay Benforado - EPA Regulatory Reinvention Team.
F. Scott Bush - National Environmental Policy Institute.
Don Clay - Don Clay Associates.
Henry Diamond - Beveridge & Diamond.
Becky Norton Dunlop - Secretary of Natural Resources, Commonwealth
C. Boyden Gray - Wilmer, Cutler & Pickering.
Larry Hart - United States Congress, Energy & Environment Subcommittee,
House Committee on Science.
Dana Joel - Citizens for a Sound Economy.
Dorothy Ann Kellogg - Chemical Manufacturers Association.
Debra Knopman - Progressive Foundation and Center for Innovation
and the Environment.
Michael McCloskey - Sierra Club.
Andrew Otis - Center for Strategic & International Studies
and Enterprise for the Environment.
Alan Raul - Beveridge & Diamond.
Lynn Scarlett - Reason Foundation.
Robert Sussman - Latham & Watkins.
Jonathan Adler of the Competitive Enterprise Institute ("CEI")
offered the first of four semi-formal presentations. Adler's diagnosis
of current regulatory policy identified a general dissatisfaction
with the onerous character of regulation and the frequency with
which inappropriate parties, such as small landowners, bear a disproportionate
share of the regulatory burden. Adler noted that the complexity
of current regulatory schemes often results in one regulation undermining
the effectiveness of another program. As an example, Adler pointed
to EPA's Green Lights Program which has been thwarted by EPA's simultaneous
regulation of compact florescent light bulbs as hazardous waste.
Drawing a parallel to the late Soviet Union's corpulent centralized
bureaucracy, Adler warned that adding additional layers to the regulatory
framework was not an effective solution and that more than minor
tinkering was required. Adler and CEI advocate reworking the current
system with a focus on expanded market mechanisms and economic growth.
Adler outlined a CEI initiative which recognizes market forces,
private stewardship, state and local control over programs, property
rights and increased accountability of federal agencies.
Debra Knopman, of the Progressive Foundation and the Center for
Innovation and the Environment ("CIE"), an arm of the
Democratic Leadership Council, also recognized growing discontent
in both parties over the course of environmental programs. Knopman
noted that voters have historically considered the environment a
"core value" and have rarely divided along party lines
over environmental issues. She observed that the climate attached
to the 104th Congress has made promoting environmental reform on
the Democratic side of the aisle a lonely venture. Knopman credited
the Clinton administration with some marginal improvements but explained
that the face of environmental issue-making has changed dramatically
now that environmental regulation has been fully implemented at
the industry level. She explained that a range of less-well-defined
but more difficult issues, such as global warming and non-point-source
pollution, have been added to the table. Knopman agreed with Adler
that new principles should govern the next wave of reform. Chief
among these, Knopman identified the need to set goals for the ten
major environmental statutes that have no statements of purpose.
She also advocates efforts to harness market forces and to promote
devolution. Knopman also stressed promoting flexibility through
incentive and reward programs and recognized a need for better measurement
of environmental results. CIE offers an initiative which advocates
vision, flexibility and reconciliation of opposing viewpoints. Knopman
noted that the "tragedy of the commons" scenario results
from lack of regulation rather than over-regulation; accordingly,
environmental regulatory policies are not inherently inconsistent
with property rights. The biggest challenge for reform, in Knopman's
view, was to package a reform policy for the Democratic side of
the aisle that would comport with the reality of tight budgets and
draw from the Democrats' reputation as protectors of the status
Andrew Otis, from the Center for Strategic and International Studies,
spoke on behalf of the Enterprise for the Environment, a joint project
of 75 stakeholders, including former members of Congress, regulators
and public interest groups. While acknowledging the polarized climate
on the Hill, Otis pointed to recent reports by the President's Council
for Sustainable Development as an indicator of bi-partisan, multi-lateral
consensus regarding the need for environmental reform. Otis articulated
another theme of the day, which was the need for evolutionary, rather
than revolutionary change, but emphasized that, in the past, small
gains have been purchased at the price of a cost-ineffective and
rigid system. Enterprise for the Environment's initiative identifies
many of the same concerns shared by the preceding groups. They also
support the development of international standards and internal
drivers to corporate behavior. Enterprise for the Environment is
currently developing a legislative recommendation for 1997.
Lynn Scarlett spoke on behalf of the Reason Foundation, a think-tank
based in Los Angeles. Scarlett reminded the panel of the importance
of vision and poetry and the need for new regulatory paradigms,
such as problem-solving instead of punishment and performance rather
than prescription. Scarlett echoed what were becoming the dominant
themes of the session: devolution, evolution, creation of incentives,
and recognition of private stewardship values. Scarlett pointed
to several innovative strategies that were already established in
some regions, such as Massachusetts' self-compliance permit program
and EPA's XL project. Finally, Scarlett noted that many proposed
reforms create new unknowns, such as whether market systems are
equipped to allocate common resources and whether accurate measurement
and documentation of compliance is possible. Scarlett considers
the task of balancing competing choices - certainty versus flexibility,
diversity versus uniformity and complexity versus simplicity - the
most daunting of the obstacles facing environmental policy-makers.
The panel having set out what seemed to be a loose consensus on
the problems facing environmental regulation, and having suggested
some principles and strategies to tackle the problems, moderator
Raul opened the floor to discourse. He invited Jay Benforado, from
EPA's Regulatory Reinvention Team, to initiate an open roundtable
discussion by commenting on EPA's recent activities. He encouraged
response from the panelists and audience.
Benforado related that EPA was striving to incorporate many of
the suggestions on the table. He agreed that evolution rather than
revolution was the proper approach, characterizing EPA's strategy
as a "nuts and bolts tuning" rather than remodeling. Benforado
cited a number of successful EPA programs including Project XL,
plain language compliance assistance centers, paperwork reduction,
and compliance rewards. EPA is also considering rewards for participation
in the ISO 14000 program and seeks to make advances in information
access, he noted. Raul then interjected with the only question of
the night that seemed to sharply divide the panel - whether legislation
was necessary to accomplish regulatory reform or whether EPA policy
and discretionary authority was sufficient. Benforado replied that
regulators were not as adamant as were lawyers that legislation
was indispensable to achieving reform. He explained that EPA was
committed to conducting as many bold experiments as possible within
their existing authority and was not concentrating on legislative
Becky Norton Dunlop, Secretary of Natural Resources for the Commonwealth
of Virginia, confirmed that an attitudinal change at EPA was obvious,
but complained that the States still struggle under stifling federal
command and control structures. She observed that federal agencies
often exhibit a lack of respect for state agency competence and
fail to fully share valuable information. She argued that Virginia
vigorously has been seeking devolution of authority but that EPA
has resisted. Moreover, she noted, EPA has criticized innovative
state initiatives such as voluntary compliance audits. Addressing
a point made by Lynn Scarlett, Dunlop admitted that Virginia has
been troubled by the difficulty in "packaging" environmental
reform programs to gain support from voters who tend to view open
market strategies skeptically.
Henry Diamond, of Beveridge & Diamond, doubted whether most
environmental public interest groups were actually opposed to reform.
He observed that the Christmas 1995 stall in regulatory reform efforts
was attributable more to resistance from local bankers and business
than from environmental groups. Diamond noted that political posturing
has resulted in overly- cautious margins of safety in industrial
end-of-pipe regulation despite enormous reductions in emissions
over recent decades. This phenomenon has created a culture that
readily accepts parts per quadrillion as a meaningful industrial
emissions standard while ignoring non-industrial pollution sources,
such as land runoff and mobile source emissions, which contribute
the lion's share of current environmental stress. Reform of land
use practices should form the core of environmental concerns today,
Diamond cautioned, yet land use issues are routinely displaced by
the more politically approachable subject of industrial regulation.
Diamond noted that private stewardship is the traditional basis
of land use in this country and urged that its potential be tapped.
Dorothy Ann Kellogg, of the Chemical Manufacturers Association
("CMA"), remarked on the degree of commonality that had
emerged among the commentators. She stressed the need to increase
the level of trust between regulated and regulator in a historically
adversarial system. She confirmed that the CMA was excited about
Project XL's potential and called for continued development of "soft-landings"
- opportunities to craft solutions while allowing each side to save
Scarlett responded to Kellogg by re-emphasizing the need to recognize
and surmount inherently different approaches to environmentalism.
Difficult questions, such as whether markets serve as a tool or
an end, whether enforcement should punish violations or actual harm,
and whether reforms should be substitutes for or additions to existing
regulatory structures, have a potential to cause deep rifts in the
reform movement if left unaddressed.
Adler returned to the question, posed by Raul, whether legislative
measures are a necessary ingredient to reform. Adler opined that
legislative certainty was desirable in light of the ephemeral nature
of politics, but lamented that a seemingly clear, bi-partisan consensus
on regulatory reform has in fact been derailed by squabbles between
the political leadership. Alder doubted Benforado's optimism regarding
EPA's flexibility and noted that existing statutory schemes posed
real, legal barriers to agency flexibility that could not be overcome
by mere internal policy changes. In his view, statutory reform is
C. Boyden Gray of Wilmer, Cutler & Pickering, challenged Benforado
to justify EPA's resistance to reform in the acid rain program and
its refusal to adopt definitive performance standards. Benforado
responded that flexibility could co-exist with enforcement.
Robert Sussman, of Latham & Watkins, took the floor to identify
a number of areas of real disagreement between the various groups
which, he observed, were occasionally masked by the politeness of
the discourse. Sussman said that he supported reform but felt reform
advocates needed to make the case for why we really need improvement.
Because the current scheme has achieved clear environmental gains,
a new system must be capable of providing the same or higher levels
of protection at lower cost. Sussman cautioned that reform could
require an increased devotion of political and financial resources
which might be severely constrained at the state and local level.
Raul then posed a question to Don Clay, of Don Clay Associates,
asking how reform advocates could send an effective message and
build political consensus. Clay reminded the panel that innovation
and flexibility necessarily involve risk and asked whether reformers
are willing to accept the chance that projects might fail and efforts
might be wasted. Clay noted the paradox of a person who says that
they like gambling, but really means that they like to win. Clay
recommended that programs concentrate on involving the public. He
also noted that statistics on "safety" are more instructive
than those on "risk." Clay criticized our litigious culture
and its potential to impede progress. Unlike the United States,
he commented, the European Union calls top industry leaders to the
table in order to resolve problems in a fraternal manner. Clay also
pointed out that a multiplicity of programs often frustrates enforcement
ability. He observed that, conversely, a large measure of flexibility
that does exist within the present statutory schemes, especially
within RCRA, goes untapped - chilled by relentless criminal enforcement.
Clay acknowledged some recent regulatory successes, such as RCRA's
reworked mixture rule and a variety of EPA pilot programs. Clay
urged Congress to continue to fund pilot projects rather than asking
EPA to impose untested mandates on states.
F. Scott Bush joined the discussion stating that the National Environmental
Policy Institute ("NEPI") is thinking along the same lines.
Bush outlined a platform that emphasized consensus, vision, devolution,
and improved information gathering. Bush chastised EPA for second-guessing
state initiatives while purporting to encourage state participation.
He called for performance-based, cross-media standards with risk
assessment and benefit analysis to measure effectiveness. NEPI also
supports facility-wide permitting that draws on engineer participation
Larry Hart, a staffer with the Energy and Environment Subcommittee
of the House Committee on Science, revisited the question whether
legislation is needed to effect environmental reform. He noted that
failure to communicate, not real differences, have created the schism
on Capitol Hill. Hart opined that the "action and reaction"
phase is now over and a new climate has arrived in which members
are again talking. He cautioned, however, that with so few days
remaining in this session, serious reform dialogue will have to
await a new Congress. Hart's final assessment was that, despite
the many positive sentiments, it will be hard to achieve reform
without legislation. Cleanup required strong laws and reform will
require the same, he counseled.
Michael McCloskey spoke for the Sierra Club, confessing that his
group was not prepared to join the reform effort. Sierra Club, he
explained, is not concerned with relieving burdens on regulated
entities. Rather, Sierra Club is committed to attaining fishable
and swimmable waters. McCloskey admitted to feeling like "an
interloper in the proceedings," because he considers the strategies
being discussed as relief rather than reform. Although he recognized
that progressive and small companies were entitled to be treated
differently, McCloskey doubted the reform movement's commitment
to "cleaner" as well as "more flexible." He
admitted that the current system was not perfect, but reminded the
panel that it was a far cry better than the conditions that pre-dated
the environmental movement. The system was never designed to be
perfectly efficient, he added. He expressed a deep concern that
relaxation under the guise of "leveling the playing field"
would precipitate a free-fall to the bottom and predicted that the
American public would see reform as an attempt to "get away
with" more pollution.
Raul then opened the panel to questions from the audience. Becky
Norton Dunlop fielded questions about whether devolution is feasible,
and responded with vigorous optimism. States are excited about participating
and assuming control, she argued, despite resistance from a few
bad-apple industries and challenges from public interest groups.
Virginia is committed to "re-involving" its citizens in
the environment, seeks to re-connect people with natural resources,
and will support educational programs that promote those goals.
Knopman asked McCloskey to expand on Sierra Club's objections to
the reform effort. McCloskey responded that more pressing issues,
such as researching the effects of hormone disruptors and setting
target dates for unaddressed media, were priorities that deserved
greater attention than reform of industry regulation policies. He
also cautioned the panel to distinguish between bona fide environmental
benefits and economic social benefits (such as new bridges or buildings)
that are the most visible and alluring incidents of reform.
That comment kindled a lively discussion on America's willingness
to accept lifestyle changes as the price of environmental improvement.
Raul commented that the lifestyle question had the capacity to change
the face of the entire dialogue. Hart agreed that current environmental
issues are carefully designed to avoid the lifestyle debate. McCloskey
warned that a "holy war" over lifestyle could derail the
environmental process. Dana Joel, of the group Citizens for a Sound
Economy, noted that it is incumbent on policy groups to disseminate
information and to persuade the public, rather than seek legislative
mandates. Adler built on that comment by pointing out that the 103rd
Congress was stymied in the environmental field, despite a Democratic
president and congress, because local constituents vocally resisted
a perceived intrusion on lifestyle and unacceptable impacts on small
Don Clay concluded the forum discussion by noting that securing
constituent support is often complicated by skewed popular perceptions
of risk. He pointed to radon testing as an illustration of an inexpensive
and non-intrusive response to a serious and proximate risk that
nonetheless has failed to garner public support while, at the same
time, the comparatively remote risks posed by Superfund sites engender
enormous public outcry.
At the conclusion of the dialogue, Raul asked each panelist to
add a parting thought. Hart reiterated that legislation was needed
to secure reform efforts that are now on the right track. McCloskey
offered Sierra Club's willingness to continue to participate in
the reform discourse, but reaffirmed that reform is not Sierra Club's
agenda. Sussman pointed out that some convergence of the reform
and activist agendas was critical. He pointed to the recent Safe
Drinking Water Act amendments as proof that convergence is possible.
Diamond suggested that the lifestyle issue may serve as a healthy
referendum of public commitment to the environment and cautioned
the panel not to underestimate the public's willingness to participate
and even to voluntarily modify societal behavior. Dunlop called
on government to cease the common hypocrisy wherein legislators
mandate change but are unwilling themselves to purchase alternative
fuel vehicles or offer true recycling programs. Adler noted that
reform can be pro-environment and asserted that it enjoys a 70%
public approval. He added that the Wise Use and Environmental Justice
movements, though lying at extremes of the political spectrum, both
support devolution and community involvement. Kellogg stressed the
importance of having examples of successful reform to act as templates.
She called for development of solutions though experimentation.
Bush warned that EPA presently lacks the tools or authorization
to achieve many of the goals being discussed. Therefore, he advised,
Congress must empower the agency through specific legislation. Clay
agreed that change is possible.
Raul summed up the discussion by noting that nothing discussed
that day could be described as revolutionary measures. Establishing
clear minimum standards and allowing for flexibility is not radical,
he pointed out. Raul called for a fusion between the environment-only
and reform agendas and an increased level of public commitment.
He also called for efforts to encourage the press and media to communicate
these issues to the public and suggested that the reform movement
enlist an effective spokesperson to spark public involvement.
* This colloquium was the first program planned and sponsored by
the Environmental Law and Property Rights Practice Group.