html xmlns="" xml:lang="en" lang="en"> From the archives: Bob V starts with an easy pitch:

Thursday, February 01, 2007

Bob V starts with an easy pitch:

But those regulations are all intended toward one end, the ‘What happens on your farm can’t hurt anyone else’ end.

Then why not make *that* the regulation? Why not regulate the consequences you are trying to avoid rather than the means that at this particular moment in time bureaucrats think will probably lead to those consequences? If you regulate the consequences, it leaves open the opportunity for innovation in the future that avoids them using a method that happens to use means we currently think are bad.
Fine. We can work this from the angle of “no negative externalities from farming – you, the grower, make it happen.” Some portion of growers would instantly react, asking if we’d lost our minds. “Put the burden of figuring out all the complicated ways our farms influence their surroundings on the grower?! Make us figure out what can go in our tail and tilewater, what pesticides are safe in what applications, what emissions our farm motors should have, what endangered species are in the area? Oh hell no. You figure it out, tell me what to do, and I’ll concentrate on growing my crop and getting the best price for it.” So you would have one crowd that would rather have a process-based than outcome-based regulatory system.

But maybe they aren’t the majority. Maybe most growers would rather have an ends-based, Do No Harm bottom line. I would still say that they cannot work internally to meet that end. For starters, complying is expensive for them. It would be asking them to seek out the problems they are causing and make difficult corrections. Very few people can bring themselves to do that, even with some threat hanging over them. But second, the problems are hard. There are pesticides for cotton that are normally fine, but damage downwind olive orchards. How long would it take an individual farmer to make that connection? When drainwater carrying naturally occurring selenium from the soils ran off westside farms, it took biologists a while to trace that effect back to the farms. They knew to look for something because there were drastic, visible deformations in local birds. What if the effect were way more subtle, like drops in plankton that birds feed on, so they starve without anyone seeing? I could list these forever, and I promise you, no individual grower can address them all. Linking their diesel engines to asthma a town over? They can’t. You know who you need to do that? You need the ag diesel engine bureaucrat. That’s who has the time and knowledge to figure that out.

Finally, in an ends-based, Do No Harm system, what would be your penalties? We all want it to be a simple system, so… what? A fine when they trace a pesticide drift back to your farm? A big fine? A little fine? Well, maybe the fine should fit the harm. Maybe there should be a big fine if we catch someone emptying surplus pesticides into a stream, and little fine if they spray without checking to see if there’ll be a strong wind that day. There will probably be in between situations, so you might want gradations for your penalties... and look. You have just backed yourself into a process-based regulations system.


Anonymous Anonymous said...

Also, they have no incentives to reduce negative externalities themselves, which means that somebody has to monitor and sanction, a task that often involves creating a checklist of forbidden actions.

3:49 PM  
Anonymous Anonymous said...

One way to think of it is that regulations are way of establishing property rights, a la Coase. So, you own the right, as a factory owner, to emit X tons of sulpher into the air, but not X+1 tons. If you emit X+1 tons, the regulations tell you that you have taken away some of the air cleanness owned by the public. If you just say 'do no harm', do that mean no pollutants at all? That would shut down industry right quick. If you say 'don't do too much harm', but don't define 'too much', you have the worst of both worlds, and very, very expensive legal bills. If you say 'don't do too much harm, and this is how much is too much', that's a regulation.


6:35 PM  
Anonymous Anonymous said...

In law school we called this the "rules vs. standards" argument. Rules are easier to enforce and to comply with, but tend to be over- and under-exclusive. Standards are more expensive and difficult to enforce, but tend to take a more nuanced view. (Think 55 mph speed limit [rule] vs. drive at a reasonable speed under the conditions [standard].)

In most cases, businesses seem to prefer rules to standards, since it both reduces their risk of a lawsuit and keeps the competitive playing field more-or-less level. A law that said that businesses can be held liable for unreasonable harms to the environment with no supporting regulations would be fought tooth and nail by businesses, since they would never know how to comply and how to protect themselves. They would insist on a regulatory structure that would set rules so they would know when they were safe.

"Administrative law" is the set of rules and (essentially) traditions that govern the government's ability to set these rules. What worries me about the Bush proposal is that it tries to override all the processes that come before. Megan, you've described these processes beautifully.

Businesses want rules in place. They just want rules that suit them.

--- PJB

7:09 PM  
Anonymous Anonymous said...

"Outcomes-based regulation", which is what Bob appeared to be talking about, has been all the rage for over a decade now. But it's, ummm, hard to do. Mainly because as Megan points out it's very hard to fully measure outcomes, not to mention figure out who should be held responsible for them.

Some prominent examples of outcomes based regulation you may have heard about recently. Market-based methods for reducing CO-2 emissions (which in theory makes the emitter pay a price for each ton of carbon emitted, then leaves it up to him how and even whether to reduce emissions). School testing (e.g. No Child Left Behind), which holds schools responsible for improving test scores without mandating exactly how they do this. There are many more. Like all regulatory systems, they all have their, ummm, issues.


1:41 PM  

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