Category: Environmental Law

Just What the Oil Industry Needs: More Trade Secrecy

I have tried to give the Obama Administration the benefit of the doubt during the Gulf/BP oil disaster. There was a “grand ole party” at Interior for at least eight years. Many Republicans in Congress would have tried to block nominees for Interior who were committed to a major overhaul of the department’s environmental priorities. But the more I read about the controversy, the harder it gets to excuse current players for their actions. Consider just one issue: the use of dispersants in response to the spill.

As Tom Dickinson’s excellent Rolling Stone article describes the issue,

On May 14th, two days after the first video of the gusher was released, the government allowed BP to apply a toxic dispersant that is banned in England at the source of the leak – an unprecedented practice in the deep ocean. “The effort should be in recovering the oil, not making it more difficult to recover by dispersing it,” says Sylvia Earle, a famed oceanographer and former NOAA chief scientist who helped the agency confront the world’s worst-ever oil spill in the Persian Gulf after the first Iraq War. The chemical assault appeared geared, she says, “to improving the appearance of the problem rather than solving the problem.”

Now we are learning that the some of the dispersants had “no toxicity studies” done to support their use, and we cannot even find out what is in them:
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Oil Addiction?

Responding to the ever-deepening crisis of the BP spill, Andrew Sullivan writes the following:

[Y]ou have to be emotionally and spiritually dead not to watch this and not feel some deep qualms about what our civilization is doing to its environment and to itself. The addiction metaphor – even used by George W. Bush by the end of his term – is the only apposite one. We’re like junkies trying to find a new vein. It keeps us alive and growing, but that simply brings into sharper focus the moral and spiritual costs of exploitation of the earth rather than prudent stewardship.

To sharpen the point, I’d say the impending loss of the gulf is a bit reminiscent of the closing scenes in the film “Requiem for a Dream,” where an addict’s arm is at stake. But another conservative, Jeff Jacoby, takes the following position:

[In 1974,] psychiatrist Thomas Szasz wrote in The New York Times that “oil addiction is equivalent to drug addiction.’’ But it’s not. . . . Americans consume oil not because they are “addicted’’ to it, but because it enriches their lives, making possible prosperity, comfort, and mobility that would have been all but unimaginable just a few generations ago. . . . The United States consumes more than 300 billion gallons of oil per year, nearly two-thirds of it imported. . . . What we have isn’t an addiction, but a blessing.

What I find curious about the professed “conservatism” of Jacoby’s position is that it rests on an attitude of entitlement and self-indulgence that conservatives seem to find repugnant in so many other contexts. As usual, Andrew Bacevich lays out the broader context precisely:

[Mainstream] Democrats agree with Republicans on the “concrete interests” of Americans: preserving what Bacevich calls our “empire of consumption.” ([Bacevich] borrowed the term from Harvard historian Charles Maier.) After WWII, the US was an “empire of production” – “we made the stuff that everybody else wanted.” So the country did not go into debt. “But we have increasingly become a culture that emphasizes consumption – limitless consumption . . . while others, notably China and Japan, have become the source of the goods we consume. There’s something fundamentally out of whack here. This disparity between what we produce and what we consume is simply not sustainable.”

To quantify matters: “Between 1995 and 2005, U.S. consumption grew from 17.7 million barrels a day to 20.7 million barrels a day, a 3 million barrel a day increase. China, by comparison, increased consumption from 3.4 million barrels a day to 7 million barrels a day, an increase of 3.6 million barrels a day, in the same time frame.” In other words, with less than a third of the population of China, the U.S. increased its oil consumption over a decade-long period by nearly the same amount as the entire nation of China began with! We continued building bigger cars, and bigger houses, ever further apart, assuring an ever-deeper environmental footprint.

Given the fungibility of food and fuel, we are effectively starving people to feed cars. The type of lifestyle that Jacoby celebrates may not have been a self-harming addiction as long as the structural violence it fueled was kept far away. Now it’s at the gulf coast. Perhaps Jacoby will “get it” if the loop current feeds tarballs up to the Cape.

Photo Credit: EtienneCoutu.


Book Review: Posner and Weisbach’s Climate Change Justice

Climate Change Justice. By Eric A. Posner and David Weisbach. Princeton, NJ: Princeton University Press.  2010.  Pp. viii, 220.  $27.95.

Everything’s easier with money.  That would have been a good subtitle for this new book by two University of Chicago law professors.  In Climate Change Justice, Posner and Weisbach argue that we have yet to negotiate the “optimal” climate change treaty, that there is still time to do so, that it is imperative that we do so, and that it will remain impossible to do so unless and until we stop commingling what ought to be done about climate change with what ought to be done about past injustices done to other cultures or Nations and/or how much the haves of the world ought to give the have-nots.  In this review, I sketch their expertly developed argument, several of the points they make which I think are quite frankly undeniable, and then finally a few quibbles I have with their underlying assumptions.  All in all, this book is a potent attack on an argument that is growing rapidly in popularity yet declining in clarity and focus.

Posner & Weisbach start from an undeniable proposition: moral arguments that make sense for individual people do not always make sense for nation-states.  Poor nations and, particularly, poor nations in the future are likely to suffer the most from climate change.  Who are these nations and why are they poor?  The answers to those questions are bound up with some of the most intractable moral, causal, and historical disagreements we know today—or are likely to know in the future.  What better way to take a cooperation failure and make it impossibly hard than to combine it with these intractable disputes?  Treating a nation as a unitary entity will lead to pronounced distortions if one does so out of a deontological commitment to persons.  Poor nations are often dominated by rich and powerful people just as rich nations often have many, many millions of poor people.  Posner & Weisbach implore us not to fall victim to the fallacies of composition or division here.  Climate change is already hard enough all by itself.

Chapter 1 provides what must be one of the most comprehensive, comprehensible, and yet still succinct accounts of the science of anthropogenic climate change currently in print.  Part of what nurtures climate change denialism/delayism, in my view, is how often the public gets a mere “arial glimpse” of what we know about climate change and how we know it.  These pathetically oversimplified glimpses are then subject to casual pot shots from all directions, including from the downright deceptive.  The resulting “dialogue” is mired in what looks like ambiguity, debate, and doubt.  People naturally discount the risks under discussion and move on to something more “pressing” in their daily lives.  The result is a systemic failure that is shaping up to be one of millenial proportions.

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Book Review: Burns and Osofsky, Adjudicating Climate Change

Adjudicating Climate Change: State, National, and International Approaches, edited by William C.G. Burns & Hari M. Osofsky. Cambridge: Cambridge University Press, 2009. pp. 399.

“As climate change litigation proliferates around the world, an assessment of what its role is and should be in transnational regulatory governance becomes important.  This volume provides such an assessment by exploring representative examples at subnational, national, and supranational levels.”   So opens a broad collection of papers in this book edited by Burns and Osofsky.  In this short review, I describe those papers and assess the claims Burns and Osofsky advance about the role of “climate change adjudication,” at least indirectly, in their selection and editing choices.  In a nutshell, this volume should be of special interest to the growing ranks of public officials (and public intellectuals) venturing into what is quite simply the biggest, hardest “environmental” problem we have ever faced: globally catastrophic climate change.

The single most effective cost-externalizing technology humanity has ever devised is fossil fuel.  Fossil fuels literally exemplify the microeconomic theory of market failure because they allow users to reap often tremendous rewards while spreading the most potent costs planetarily.  This is much of what makes limiting fossil fuel use so hard.  The collectives of people with real authority and power to do so have lopsided incentives against doing so, especially given the fact that their own self-discipline is guaranteed no absolute efficacy—unless and until others commit as well.

As so obviously tilted as all this is, a great deal of reasonable disagreement still remains surrounding who ought to move first, by what normative means, according to what timetables, at what costs, and pursuant to which authorities.  The norms have yet to be authored that establish which uses of fossil fuels are unduly risky, which uses are justifiable, or for whom.  That is what makes “adjudicating climate change” so unique: it is quite literally a matter of applying norms that do not yet exist.  Burns & Osofsky divide the papers of the volume up into “subnational,” “national,” and “supranational” cases, seemingly in an effort to keep things in jurisdictional perspective.

The first few papers—a paper by Stern on Minnesota’s “externality” reporting law, a paper by McAllister on Australia’s cases involving the recent permitting of new coal mines, a particularly suggestive paper by Trisolini & Zasloff on local land use planning, and a paper by Wood on extending the public trust doctrine to protect the atmosphere—provide vivid and repeated testimony to the nestedness of our jurisdictional systems.  Law in the English-speaking world is innately jurisdictional and jurisdictions are, empirically speaking, highly variable.  Trisolini and Zasloff’s paper rightly points out, for example, that local land use law and policy has perhaps the most powerful influence on our energy consumption patterns but that just understanding what motivates cities and other local government to action/inaction is still maddeningly beyond our capacities.

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Do Initial Allocations of Property Rights Matter?

If the last two years of American economic life have demonstrated anything, it is that property rights are not static.  Sometimes things that were once private property become public property (see, e.g., Motors, General).  Sometimes things that were once public property become private property, then become public property again, before they presumably become private property again (see, e.g., Mae, Fannie).  And sometimes things that were once considered inherently communal and thus inamenable to private property rights at all, become divided and privatized (see,e.g., the air).

Tradeable carbon emissions allowances are an example of the latter.  There’s a lot to like in the cap-and-trade programs proposed under the Waxman-Markey and Kerry-Boxer bills.  I hope some robust version of them passes and becomes law.  But one sticky issue that needs to be resolved is how initial allowances to fill airspace with carbon gases should be allocated.  Options include auctioning off all of the allowances, giving the allowances to existing carbon producers, and, most politically palatable, something  in between — some mixed proportion of free allocations and auctions.


Economist Robert Stavins, in the Coasean tradtion, has insightfully argued that  (with some caveats, including that transaction costs in this cap-and-trade program are similar to the transaction costs in others) the initial allocation of allowances doesn’t matter in most significant ways:  it will have no effect on the distribution of allowances after trading, and will have no effect on the total magnitude of emissions and their attendant social costs.

But there is another factor economists have not addressed, that could effect the total magnitude of emissions and their attendant social costs, and that may well depend in part on the method of initial allocations: compliance.

Law Professor Christine Parker and political scientist Peter May, among others, have demonstrated that compliance with business regulation is highest when the regulated businesses believe that the regulatory regime is fair.  Lower levels of compliance reduce the effectiveness of the regulation in producing the desired outcome, and increase the costs of achieving it.  In the world of carbon emissions, this would mean a higher total magnitude of emissions and a reduced benefit to the public through the higher costs required to achieve them.


My research into Icelandic fisheries suggests that in moving natural resources from communal to private property through cap and trade programs, initial allocations of rights do have an important effect on the perceived fairness of the regulatory regime, and thus on the willingness of the regulated to comply with it.

In Iceland, the government decided to protect fish stocks by freely allocating tradeable fishing rights and implementing catch quotas.  Permits were issued to fishing vessel owners based on their average catches during a three-year test period.  New entrants to the industry must now buy their way in by purchasing or leasing rights from others through the Icelandic Quota Exchange.  Although the system has been successful in reducing the overall catch, the perception that it is unfair has led to open defiance.  In an extraordinary case before the Icelandic Supreme Court, one fishing company did openly what many apparently do quietly — defied the system on the grounds that it was unfair.  

Transactions costs, of course, are inevitable, but it is not transaction costs that have produced resistance to the Icelandic system.  Rather, resistance is itself is a type of transaction cost, broadly construed, produced by the perceived unfairness of the initial allocation of rights.  In other words, the initial allocation of rights does indeed effect the overall effectiveness of a private property system. 

There has been considerable uproar over the potential free allocation rights to current carbon emissions producers.  Whether or not, as a matter of classical economic theory, the initial allocation of rights should effect the overall effectiveness of the program, the perception of fairness or unfairness will probably effect compliance with the system, and that in turn will effect its overall effectiveness.  It is important, therefore, for policy makers to bear in mind that the perceived fairness of initial allocations of property rights does indeed matter.


Asteroidgate: The Rocket, Not the Asteroid, Packs the Punch

global_warmingEric Posner muses about Asteroidgate:

Suppose that astronomers around the world alerted us that a large asteroid is headed in our direction, and might collide with the earth in the year 2012.  The astronomers cannot give us a precise probability of collision because of many imponderables . . .  To build a defense system—say, rockets that would intercept the asteroid and knock it off course—would cost hundreds of billions of dollars . . . As is always the case, there are a few dissenters . . .   A scandal erupts when emails at the West Anglia Space Research Unit are released, and shows that some scientists tried to arrange a boycott of a journal that published a few articles of the skeptics.  At the same time, thousands of astronomers not connected with the West Anglia Unit continue to insist that the risk of a collision is very high . . . A few questions.  In this scenario, would there emerge an industry of non-credentialed “astronomy skeptics” in the press and public comparable to the current batch of “climate skeptics”?  My instinct is that the world would quickly get to work building the rocket system, and disregard the views of the skeptics.  Is this right or wrong?  If it is right, is there some reason to think that climate science and astronomy are different, justifying the skepticism about climate science that does not (yet) exist about astronomy?

This is a clever scenario, and its gives me a launching pad to talk about why climate-change skeptics and believers have reacted so differently to the same set of information: namely the stolen East-Anglia emails.

The Cultural Cognition Project has a perspective on this problem which may be helpful.  Dan Kahan, Don Braman, Paul Slovic, John Gastil, and Geoffrey Cohen wrote a paper called The Second National Risk and Culture Study: Making Sense of – and Making Progress In – The American Culture War of Fact. Using a large random and nationally representative study sample, the paper confirms that Americans are deeply divided over basic questions about the climate, such as “how much risk does global warming pose for people in our society?” Those divisions track the cultural identities that the project has often explored — and which relate back to pioneering work by anthropologist Mary Douglas. That is, group-grid theory.

Of particular interest, Kahan et al. tested the hypothesis that individuals’ perceptions about the same set of facts about the severity of the problem turned on what policy solutions were recommended to deal with it.  When the policy solution was nuclear power, hierarchical and individualist Americans were far less likely to discredit global warming facts than when the solution was an expanded set of anti-pollution measures.  Such individuals find expanded anti-pollution policy threatening to their identities: it suggests restriction of market activities (upsetting to individualists) and it implicitly challenges the legitimacy of the ruling order (upsetting to hierarchs).  Confronted with such a threat, individuals are less likely to credit information about increased risks of warming.  Conversely, egalitarians and communitarians were more likely to see global warming as a severe threat when the solution was anti-pollution control.

What does such research teach us?  Well, for one, it makes reactions to “climate-gate” easier to understand.  We know that people are looking at the benefit/risk calculus in highly polarized ways.  The East Anglia emails, which go to the weight of the evidence about warming, is yet more fodder in that filtered debate.  This  polarization is (notably) neither partisan nor conscious.

More importantly, the research suggest a very concrete strategy for those who worry about climate change and who want to see their position persuade unbelievers: you should be more attentive to finding politically congenial solutions, and spend less energy trying to use data to convince those you disagree with.  Thus, former VP Gore’s approach, which focused on staking out a data-driven position on the scope of the problem, has at best produced a fragile coalition in support of change, which will be undermined quickly when individuals are presented with alternative data, information about imperfect scientists, or threatening policy solutions.

Rounding back to Eric’s post,  the reason that asteroidgate seems like a clear example where an organized opposition would not emerge is that neither the underlying disaster nor the policy solution poses a threat to the identities of large and discrete groups of Americans. Expensive rockets simply aren’t the bogeymen that private-property-destroying pollution controls are.  The case would be different if the solution to our asteroid problem were to unequally burden a minority group.  In that scenario, egalitarians and communitarians would be much less likely to credit the risks of a massive asteroid than would hiearchs and egalitarians.


Braking Away

One of the benefits of being at GW is that I get to talk to Dan Solove in person. When I saw him on Wednesday, he reminded me that blogging doesn’t always have to be about my past books or future projects. Thanks, Dan!Traffic Sign

Depending on where you live, today or tomorrow is “Bike to Work” Day.  Bicycles have been around the US since at least 1866, when Pierre Lallement received patent no. 59,915 for a velocipede.  I’ve been an avid year-round bike commuter for 8 years now (aside from my 2 years in Kinshasa, Congo, when I couldn’t walk around the block without an escort), and, like most zealots, I like to proselytize. Now that I’ve converted to a bike commuter, I extol the economic and environmental benefits of riding:  bicycles don’t use any fossil fuels to get you from one place to another; an 8-mile bicycle trip keeps out about 15 pounds of pollutants from the air we are breathing; and somewhere between 6-20 bikes can be parked in one car parking space (mine is parked as a piece of art in my office).  Just as importantly, however, bike commuting is really fun. It is fast: even at my pace on the bike of 10-15 mph, I breeze right past people in cars. And it’s wonderful for my mental health. One of my friends interviewed me for a story she wrote for Good Housekeeping magazine (!) about how people find serenity. I told her I find serenity through writing articles and blog posts, but she wasn’t convinced; not until I told her about my bike commuting did she put pen to paper. So, as one corporate sports giant might say, Just do it!


Environmentalism by Breach of Contract

Tim DeChristopher, a Utah-based environmental activist, has discovered a new tactic in the war on global warming: intentional breach of contract. The Washington Post reports:

Instead of joining his protester friends on the snowy sidewalk outside the Bureau of Land Management office in Salt Lake City, Tim DeChristopher took a seat inside. In a room milling with oil and gas men who knew one another by sight, he was the unknown in a red parka, registering as a bidder in an auction for the rights to drill on 149,000 acres of federal land. DeChristopher was handed a red paddle bearing the number 70.

Half an hour later, he was raising it.

“I leaned forward to one of my colleagues and said, ‘This guy behind us is just running up the prices,’ ” said David Terry, a Salt Lake City oil-land man who routinely attends the BLM auctions. “And my friend said, ‘Yeah, he’s going to get stuck with a tract.’ ”

The University of Utah economics student got stuck with 13. Promising the federal government $1.8 million he does not have, DeChristopher emerged holding leases on 22,000 acres in the scenic southeast corner of Utah.

DeChristopher, of course, is judgment proof. Unlike the strategy of say the Nature Conservancy, which seeks to preserve wilderness through purchase or other contractual arrangements, DeChristopher’s goal seems to have been disruption and the running up of oil lease prices. He’s also apparently under investigation by federal agents. Not being a government contracts geek, I don’t know what federal statutes he may have broken by participating in the auction on a bad-faith basis. As an ordinary matter of contract law, however, his case creates some interesting issues.

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Philadelphia Inquirer Series on Bush’s EPA

Someone should be calling the Pulitzer Committee to nominate the Philadelphia Inquirer’s fantastic series of articles on the Bush administration’s environmental policy, titled “Smoke and Mirrors: The Subversion of the EPA.” Here’s just one part of one story that sets the tone for the series:

In January 2005, residents near the chlorine plant here discovered that it was the biggest mercury emitter in the state. Environmentalists warned them against eating fish from their beloved Hiwassee River. They appealed to the plant’s owners, Olin Corp., to do what 100 other chlorine producers had done: abandon a 19th-century process that emits tons of the dangerous neurotoxin. Olin refused.

In fall 2005, the Environmental Protection Agency weighed in – but not to take up the cause of residents. Instead, EPA called Olin with an offer. Would the Charleston plant like to be enrolled in Performance Track, an elite green club of the nation’s most environmentally progressive companies?

In return, Olin could expect regulatory breaks, such as fewer inspections and loosened requirements on hazardous waste disposal, not to mention positive publicity. Sherry Neidich, who has lived half her life a mile downriver from Olin’s plant, was stunned. “The EPA is a toothless dog,” she said. “What right does someone have to ruin my river? To poison our playground?” . . .

[The Inquirer has found that] the EPA has recruited companies with mixed – even dismal – environmental records to become Performance Track members. Despite offering members regulatory breaks and promoting the program as one that improves environmental performance, the EPA fails to independently verify that Performance Track companies actually reach their goals.

According to the series, there is widespread exasperation in the courts (even among very conservative Republican nominees) about Bush-era extremism. As James R. May, (a Widener University lawprof and chair of the American Bar Association’s annual Environment and Energy Resources conference) puts it, “All across the spectrum, judges are finding that virtually every environmental initiative of the Bush administration is illegal.”

Midnight Regulations

There was a good discussion of end-of-term regulations we can expect from the last days of the Bush Administration on the Diane Rehm show. Now the Washington Post has foreshadowed the lasting environmental impact the Bush agencies are planning:

Many of the rules that could be issued over the next few weeks would ease environmental regulations, according to sources familiar with administration deliberations. A rule put forward by the National Marine Fisheries Service and now under final review by the OMB would lift a requirement that environmental impact statements be prepared for certain fisheries-management decisions and would give review authority to regional councils dominated by commercial and recreational fishing interests.

Two other rules nearing completion would ease limits on pollution from power plants, a major energy industry goal for the past eight years that is strenuously opposed by Democratic lawmakers and environmental groups. One rule, being pursued over some opposition within the Environmental Protection Agency, would allow current emissions at a power plant to match the highest levels produced by that plant, overturning a rule that more strictly limits such emission increases. According to the EPA’s estimate, it would allow millions of tons of additional carbon dioxide into the atmosphere annually, worsening global warming. A related regulation would ease limits on emissions from coal-fired power plants near national parks. A third rule would allow increased emissions from oil refineries, chemical factories and other industrial plants with complex manufacturing operations.

Though these moves may be reversed under the terms of the Congressional Review Act, it has not proven to be very effective in the past. Senate holds may permit just one senator to keep in place a particularly retrograde rule–and the notice and comment needed to reverse it within the executive branch may take a long time. If the hold practice remains robust, Sens. Inhofe or Coburn of Oklahoma may simply block Congressional reversal of any of these moves.