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Rent-Seeking Behind the Green Curtain

"Rent-Seeking Behind the Green Curtain"

Journal article

By: Jonathan H. Adler

Date: 1996

Source: Adler, Jonathan H. "Rent-Seeking Behind the Green Curtain." Regulation: The CATO Review of Business and Government 19, 4 (1996).

About the Author: Jonathan H. Adler is an associate professor teaching free-market environmental law and Associate Director of the Center for Business Law and Regulation at the Case Western Reserve University School of Law. Formerly a director of environmental studies at the Competitive Enterprise Institute, Adler is a contributing editor to the National Review and hosts his own free-market-oriented Web site.

INTRODUCTION

In the years since the first Earth Day was held in 1970, environmentalism and environmental activism have rapidly become big businesses. Environmental activist groups such as Earth First and Greenpeace raise millions of dollars each year to support environmental causes, and many of these dollars have funded legislative initiatives at both the state and federal levels. Environmentally friendly politicians have passed numerous acts intended to clean up environmental mistakes of the past and prevent their recurrence in the future. These acts, including the Wilderness Act, the Clean Air Act, the Clean Water Act, and the Superfund Act, have cost taxpayers billions of dollars and have had an enormous impact on the lives and livelihoods of Americans.

The Superfund, for example, currently costs about $1.5 billion per year to run, and is expected to consume a total of more than $16 billion by 2009. While this total amount appears reasonable, given the difficulty involved in cleaning up toxic waste sites, estimates place the administrative and support expenses of Superfund efforts at 18-25 percent of the project's total costs, raising questions about how efficiently the resources are being used.

Environmental activist groups have generally portrayed themselves as morally superior to lawmakers who pander to political contributors and seek political gain. Many environmental debates have been framed as pitting the small, idealistic forces of environmentalism against the money-hungry, heartless polluters of industry. While this portrayal of underfunded environmentalists might have been true in the past, today's environmental movement is a politically connected, well-funded machine.

In this article, the author explores two questions. First, he asks whether environmentalists have become just another political constituency jockeying for power and influence in Washington. Second, he suggests that in many cases, the center stage pieces of legislation passed by the movement have not only failed to accomplish their stated goals, but may have actually worsened the situations they were intended to repair.

PRIMARY SOURCE

RENT-SEEKING BEHIND THE GREEN CURTAIN

On August 4, 1992, vice-presidential candidate Senator Al Gore appeared in Orange County, California, to attack the incumbent President's regulatory record. In a speech at an Evergreen Company used-oil treatment facility, Gore attacked President George Bush for making it "impossible [for] companies like this one to survive." Because of the Bush administration's inaction, Gore charged that "A lot of jobs were lost."

Senator Gore was not calling for "reinventing" regulation or reducing the paperwork burden. He was not attacking President Bush for presiding over too much regulation, but too little. Gore's complaint was that the Bush administration hurt companies that rely on federal regulations to turn profit by failing to promulgate more regulatory standards.

In particular, Gore attacked the administration's failure to define used motor oil as a hazardous waste under the Resource Conservation and Recovery Act (RCRA). Such regulation would have increased the cost of oil changes for consumers and discouraged the recovery and recycling of used oil; however, it would have guaranteed additional business for the Evergreen Company and for members of the Hazardous Waste Treatment Council (HWTC). This policy proposal had as much to do with promoting narrow economic interests as with protecting environmental concerns.

Green Politics is Still Politics Most Americans recognize that politics has a lot to do with the pursuit of power, privilege, and special interests; however, there is a generel presumption that environmental polotics is somehow different. We take for granted that environmental laws are what they seem; that the legislators who enact those laws and the bureaucrats who implement them are earnestly struggling to protect public interests; and, that these laws wil be enforced in a fair and sensible manner. All too often, however, environmental regulations are designed to serve narrow political and economic interests, not the public interest.

The details of environmental policies have major economic consequences. America spends well over 2 percent of the gross domestic product on pollution control, and the figure is rising. As the cost of environmental regulation increases, so does the value of potential potential comparative advantages in the marketplace. Seeking regulatory policies that will carve out niche markets or obstruct competition becomes an increasingly profitable investment. One should not be surprised that economic interests lobby, litigate, and make alliances with "public interest" organizations to ensure favorable treatment for their own interests and to utilize environmental regulations to transfer wealth.

Attempts "to gain a competitive advantage through manipulation of the regulatory process [are] occurring with increasing frequency," notes former Environmental Protection Agency Deputy Administrator A. James Barnes. Examples are everywhere:

  • The Business Council for a Sustainable Energy Future, a coalition of gas, wind, solar, and geo-thermal power producers and related firms, is lobbying for deep cuts in greenhouse gas emissions.
  • The Environmental Technology Council, a successor to the Hazardous Waste Treatment Council (HWTC), wants to ensure that various wastes, such as fluorescent bulbs, are covered by hazardous-waste regulations.
  • The Alliance for Responsible Thermal Treatment (ARTT), an HWTC spinoff of incinerator operators, wants to prevent the burning of hazardous waste in cement kilns, and thereby eliminate its members' toughest competitors.
  • Major utilities recently lobbied to require the sale of electric vehicles in California and the northeastern United States and have sought policies that would subsidize the purchase of electric cars at the ratepayers' expense.
  • Ethanol producers attempted to secure a portion of the lucrative oxygenate market for federally mandated reformulated gasoline.
  • A primary purpose of the Conservation Reserve Program is to increase farm commodity prices by taking acreage out of production, though the program does little to control agricultural runoff.

The list can go on and on, for painting special interest policies green makes them easier to enact, irrespective of whether they further environmental protection. In this sense, environmental politics is as polluted as the rest.

SIGNIFICANCE

Like most other political causes, the environmental movement brings together a complex mixture of personalities, motivations, and intentions. While indicting the entire movement for the mistakes of some members would be senseless, Adler's work makes an important point, especially given that environmental expenditures now consume more than 2 percent of the nation's Gross National Product. For this reason alone, serious attention should be paid to how funds are being spent, and whether they are producing the desired benefits.

FURTHER RESOURCES

Books

Barnett, Harold. Toxic Debts and the Superfund Dilemma. Chapel Hill, N.C.: University of North Carolina Press, 1994.

Kubasek, Nancy K. and Gary Silverman. Environmental Law, 5th ed. Upper Saddle River, N.J.: Prentice-Hall, 2000.

Novello, David P. and Robert Martineau, eds. The Clean Air Act Handbook, 2nd ed. New York: American Bar Association, 2005.

Periodicals

Olson, Dan. "Waste is a Terrible Thing to Waste." Minnesota Environment 5, 3 (2005): 1-4.

Ribaudo, Marc. "New Clean Water Act Regulations Create Imperative for Livestock Producers." Amber Waves 1, 1 (February 2003): 30-37.

Web sites

Ichniowski, Tom. "Study Pegs Superfund's Cost at $14-16 Billion Through 2009." Engineering News-Record, July 12, 2001. 〈http://www.construction.com/NewsCenter/Headlines/ENR/20010712d.asp〉 (accessed February 28, 2006).

Killam, Gayle, Paul Koberstein, and Gabriella Stocks. "Understanding the Clean Water Act Online Course." River Network. 〈http://www.cleanwateract.org〉 (accessed February 28, 2006).

U.S. Environmental Protection Agency. "The Plain English Guide to the Clean Air Act." U.S. Environmental Protection Agency Web site, April 1993. 〈http://www.epa.gov/oar/oaqps/peg_caa/pegcaain.html〉 (accessed February 28, 2006).

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