Valuing the Air: The Politics of Environmental Regulation from the Clean Air Act to Carbon Trading
Fifty years ago, the environmental movement convinced Americans that strong regulations were needed to protect human health and the natural world against the compounding detritus of industrial society. Meanwhile, environmental economists offered a different solution: let markets value the environment by pricing the social effects of degradation. Congress went with the environmentalists, passing legislation in the early 1970’s to protect the public health from noxious emissions and effluents, regardless of the costs involved. But as the new Environmental Protection Agency (EPA) quickly discovered, defending major regulatory interventions against an onslaught of criticism from regulated industries required environmental advocates to convincingly establish the economic benefits of environmental protection. Over the 1970’s, EPA officials invested millions of dollars in staffing economists at the agency and funding critical new research on the pecuniary benefits of regulatory protection at universities across the country. In the late 1970’s, the agency began experimenting with emission trading and other market and economic incentive programs, putting EPA at the forefront of the larger regulatory reform movement. By leaning on cost/benefit analyses to justify regulations and turning to market trading to lower the costs of enforcement, the EPA contributed to the ascendance of economics in policy-making. Yet by simultaneously rejecting economists’ calls to let markets price the environment, the EPA preserved into the present the political salience of the moral and romantic values of 1970’s environmentalism.