Before bureaucracy: Environmental spillovers

Excerpt

William E. Simon, the “energy czar” during the oil crisis of the early 1970s, later wrote of his experience: “There is nothing like becoming an economic planner oneself to learn what is desperately, stupidly wrong with such a system.” I had a similar reaction a few years ago, after serving as an expert witness in United States v. ASARCO, one of the largest court cases to grow out of enforcement of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), better known as Superfund.

My experience led me to the same conclusion that a growing number of analysts have reached about the shortcomings of command-and-control measures, enforced by central government bureaucracies such as the U.S. Environmental Protection Agency (EPA), in seeking to prevent or mitigate the damage caused by environmental spillovers from economic undertakings such as agriculture, mining, manufacturing, or electrical-power generation. Professor Richard L. Stroup has described CERCLA as “one of the most expensive and ineffective environmental programs of the past few decades.”

For several reasons, bureaucratically enforced command-and-control approaches to environmental protection have been slow, costly, and often ineffective in achieving their …