What Should Libertarians Think About the Trump Administration's NEPA Reforms?

What is wrong with requiring government agencies to consider and disclose the likely environmental consequences of their actions?

The Trump Administration's rewrite of regulations governing federal agency compliance with the National Environmental Policy Act (NEPA) took effect today. Many business groups and conservative office-holders cheered this move. Multiple environmentalist groups and blue states have already rushed to court seeking to overturn the rules. What should a libertarian think?

NEPA is relatively unique among federal environmental laws in that it imposes no regulatory restrictions on private economic activity, as such. Indeed, NEPA does not impose any substantive environmental restrictions at all. Rather, NEPA requires that federal agencies conduct environmental impact statements of major agency actions that are likely to have significant environmental effects, and disclose these assessments to the general public.

The underlying idea of NEPA - that federal agencies should consider the full range of likely consequences of major actions - is akin to basis for requiring cost-beneift analyses. In both cases, the idea is that requiring agencies to consider the likely positive and negative effects of their actions will improve agency decision-making, and that disclosing the outcomes of such analyses will help hold agencies accountable for bad decisions.

NEPA further embodies the idea that it is particularly appropriate to hold the federal government to stringent environmental standards. This is a common sense idea. After all, it does not make sense for the federal government to spend tax dollars creating or exacerbating environmental problems that it will then have to spend more tax dollars (or regulate private conduct) in order to clean up. Adopting a general principle that the federal government should "first, do no harm" to the environment (at least whenever this is possible) requires that government agencies consider the likely environmental consequences of their actions before they act. It is also appropriate to impose this particular burden on government agencies because governmental entities are not subject to the same competitive and other pressures that (at least sometimes) serve to constrain environmentally destructive behavior by private firms.

The above are reasons why even those who are generally skeptical of federal regulation might support fairly stringent NEPA requirements. But there's more to the story.

NEPA's requirements apply to a wide range of federal activities that implicate (and in some cases control) private economic activity, including federal infrastructure projects and permitting programs. This means that NEPA sometimes serves to increase the time and costs of private economic activity that requires governmental permission or cooperation. Given the breadth of federal permitting requirements and federal funding of major economic projects, this means NEPA's effects are not limited to government actions.

So what to make of the Trump reforms? I have not studied the reforms in sufficient detail to have reached a firm conclusion, but I have sense of how I feel about the trade-offs involved. Insofar as the regulatory reforms seek to streamline or accelerate the NEPA review process, this seems like a good idea. But insofar as these reforms will enable federal agencies to escape detailing and disclosing the likely environmental effects of their actions, that seems like a step backwards. Insofar as NEPA unduly constraints private economic activity, it seems to me that the focus should be upon lessening the federal government's stranglehold on such activity, rather than on short-circuiting environmental reviews. This is another way of saying that (at its worst) NEPA exacerbates the negative consequences of over-extending federal influence and control over what should be local resource and land-use decisions. Solve that problem, such as by decentralizing more of such decision-making, and even a stringent NEPA would not seem so bad.

Comments

[Flatulus]

"What Should Libertarians Think About the Trump Administration's NEPA Reforms?"

I don't know, maybe you should ask some?

Back before the Glibbening, there was an aphorism tossed around here, "Don't let the perfect be the enemy of the good." Getting pissy about positive regulatory change because it doesn't do something it never claimed to do may be indicative of chronic TDS.

[Stephen Lathrop]

What Should Libertarians Think About the Trump Administration’s NEPA Reforms?

Which kind of libertarians? You have two kinds. Principled libertarians (rare, but Somin, for instance), who follow libertarian reasoning wherever it leads. And movement conservative libertarians, who measure every policy against but one criterion—how can we maximally hamper whatever government outcomes entail collective action? Those are opposed not because they might fail, but because they might succeed, and make government popular.

[M L]

There are two types of libertarians. Extremist ideologues (like Somin, for instance) who ignore the real world and favor naive globalist utopian fantasies. And then there is the use of terms like "libertarian" to describe views merely in terms of their general direction relative to the status quo.

[y81]

There's a third category, academic libertarians, which encompasses most of the Conspirators. Distinguishing features are that (i) although in theory they would support lower taxes and less regulation, their true libertarian passion is reserved for issues involving sex and drugs (and latterly, purported police abuses, although they never volunteer to defund their own university police forces) and (ii) all political questions are addressed within the obligatory Orange Man Bad framework, because if you don't have that, the dean will cut your funding and no one will speak to you in the faculty lounge.

[Lee Moore]

Many business groups and conservative office-holders cheered this move.

Does this not answer the question ?

Any regulation (or deregulation) involves trade offs between various desirable things. If you privilege the environment in the world of regulations (by insisting that it, in particular, be considered and thus allowing judges to insist that the government has failed to consider it enough) you will deprivilege the other desirable things, which do not get their own hook to delight a friendly judge.

Imagine if NEPA stood for National Economic Progress Act and it contained a bevy of strictures requiring the government's regulatory organs to take into account, say, levels of employment, income and profitability in the regulated activity; effects on prices to consumers, effects on government revenues, and economic growth. With such a new-NEPA, the playing field would have been tilted in favor of economic activity and against the environment.

As for libertarians, the effect of enhanced clout for environmental regulation is likely to be more restriction of liberty. Environmental protectors seldom advance their preferences with the cry "deregulate now !"

Whereas the effect of enhanced clout for economic activity is likely to be a little more nuanced in its effect on liberty. Certainly as Adam Smith noted, people of the same trade are always forming conspiracies against the public to fix prices and to keep competitors out, and it would be a sad day for K Street if they were to stop. On the other hand, there are also plenty of folk who appreciate that free markets produce more goods and services, of better quality and with lower inputs than would otherwise obtain. So biasing economic activity with a new-NEPA is not such a clearcut anti-liberty stick as biasing the environment.

Perhaps for the libertarian, the sort of bias in regulatory law that would be best is an anti-ratchet. ie a requirement to consider all sorts of things for years and years before introducing a new regulatory infringement of liberty. But no requirements for considering anything at all for repealing one.

[M L]

"Imagine if NEPA stood for National Economic Progress Act . . ."

I like this. If this were applied to immigration policy, it would certainly shine a brighter light on the constant spurious rhetoric and dissembling regarding the economic effects of the interventionist policy of mass immigration.

[jb]

"Imagine if NEPA stood for National Economic Progress Act and it contained a bevy of strictures requiring the government’s regulatory organs to take into account, say, levels of employment, income and profitability in the regulated activity"

You mean what if there was a requirement to do an economic cost benefit analysis for federal regulations? (Hint: that's already required.)

[Lambchop]

In theory, NEPA makes a lot of sense. Who could be against considering and disclosing environmental effects before taking action? In practice, it's pretty easy to find some defect in thousands of pages of EIS materials, and the need to consider some level of cumulative or indirect effects creates a lot of ambiguity. Either of which can be made to look like a big deal by a skilled advocate, especially to a court that may not understand the actual environmental issues at stake. Because the NEPA process is a veto point for controversial projects, there is a structural incentive for interested parties to find any issue with the EIS as a pretext to challenge projects they oppose for other reasons, and the whole system is drowning in wasteful gamesmanship. It no longer serves, if it ever did, to require consideration and disclosure of material environmental issues. It's gotcha games all the way down at this point, IMO. This is especially true since section 404 of the Clean Water Act has often been administered a a crypto national land use law, so there is no way to avoid the federal action hook.

[Rossami]

This is the perfect answer to the article's question. The problem is not with the idea of NEPA. The problem is with how it's implemented and abused.

[TW]

I think you just hit the nail on the head. I took Environmental Law as an evening class at law school and our professor was a litigator who represented environmental groups and admitted that NEPA was pretty much just about trying to delay projects by constantly finding “defects” in the analysis (because there was always something they could argue that should have been included) and to the extent it stopped projects, it was because the delays made it cost-prohibitive to continue.

[bernard11]

free markets produce more goods and services, of better quality and with lower inputs than would otherwise obtain.

Properly functioning markets should take the cost of environmental degradation and its consequences into account. If they don't then the outcome is not the paradise you describe.

The point of environmental regulation of various types is to at least bring those things into the picture, thereby making markets more, not less, efficient.

That's hard, no doubt, and I don't know the details of NEPA in particular, (though I have zero faith that the Trump Administration is making a well thought out decision) but that hardly means we should ignore the issue.

[Lee Moore]

Properly functioning markets should take the cost of environmental degradation and its consequences into account.

Not really. Although laissez faire often produces better environmental outcomes than government intervention, there are obviously cases where it doesn't (for some values of government intervention.) So the tragedy of the commons can often be reduced by eliminating the commons and substituting private ownership, and this sort of thing can also work by co-operation by private owners over a common resource; but reality does not always align convenienty to permit laissez faire to price and enforce every kind of externality.

Which is why government regulation - aka force - is sometimes substituted for the market in the management of externalities. Government regulation is not a market mechanism.

That doesn't mean that the substitution is always unnecessary, it simply means that a libertarian is always, and rightly, going to be viewing government environmental regulation with considerable suspicion. And why those who like to impose their own preferences on others like to don an environmental cloak when doing so.

[bernard11]

So the tragedy of the commons can often be reduced by eliminating the commons and substituting private ownership, and this sort of thing can also work by co-operation by private owners over a common resource;

I'd say "sometimes," rather than "often." And I don't actually understand how you can sensibly privatize air and, broadly, water. Nor does privatization, even where feasible, guarantee optimal social outcomes, since only private benefits will be taken into account.

a libertarian is always, and rightly, going to be viewing government environmental regulation with considerable suspicion. And why those who like to impose their own preferences on others like to don an environmental cloak when doing so.

Well, economics is about preferences. I'd say that those who value nominal growth or, more often, their own or their contributors' profits, over environmental concerns are also imposing their preferences, and like to don cloaks of their own - "jobs," growth," - etc. when doing so.

[CommentMonkey]

The potential costs of the NEPA requirement that jump out to me are (1) the actual monetary cost of compliance; (2) the delay associated with completing review; and (3) the potential for political manipulation by agency actors and outside groups. The potential benefits are better information for the decision-makers about the costs/benefits of the contemplated agency action and better information for the rest of us in holding those decision-makers accountable.

The first two costs can be measured. The third cost is trickier and I think ought to give libertarians pause. It seems likely that NEPA reports would be subject to manipulation depending on agency preferences. It also seems likely that outside groups (developers with something to gain from the project in question, industry groups, environmental groups, etc.) would be in a position to influence and pressure the review process. Any time you add a layer of complexity to government action you are going to increase the risk of political interference. With respect to agency actions involving partnership with private firms, this will have a tendency to price out smaller firms and advantage larger firms that can afford to unleash a team of lobbyists and environmental consultants to help make the environmental case for the proposed action.

As for the benefits, I think libertarians should be skeptical. We already have reporting and environmental impact requirements elsewhere in the law, as well as FOIA provisions and the like. There are several well-heeled environmental groups with quick trigger fingers when it comes to litigation to protect against potential environmental abuses. Is the marginal benefit of NEPA significant against this backdrop? More and better information about a proposed government action is of course a good thing, but private stakeholders with access to the raw data might be better able to make the case for and against the proposed action than the administrative apparatus of the federal government.

I think the default libertarian position ought to be that if the data doesn't strongly suggest benefits outweighing costs, efforts to cut NEPA back should be welcomed.

[Stephen Lathrop]

Any time you add a layer of complexity to government action you are going to increase the risk of political interference.

Increasing opportunities for what you call, "political interference," was the intent of the NEPA. Because there is zero mandatory remediation prescribed, potential political intervention is the only benefit the NEPA affords. It is supposed to work that way.

[CommentMonkey]

That's not what I meant by political interference. I agree that what you're describing is a benefit - the disclosure of environmental impact leads to public opposition to the agency action that might never have materialized if the costs weren't disclosed. That seems to me an example of NEPA leading to better information which in turn leads to a more informed debate over the agency action.

What I mean by political interference, and maybe it was a bad choice of words, is where the review itself is compromised or manipulated by third parties. For example, private parties standing to gain from the agency action lobby or pressure for a more positive assessment or groups opposed to the action lobby or pressure for a more negative one, or try to cause delay for its own sake by fighting over whether the review was adequate. If such jockeying over the review itself is or becomes standard practice, it seems to me the advantage goes to deep-pocketed interests that can afford a protracted battle. An earlier post on this topic cites the Council on Environmental Quality reporting that the average review takes over four years. It's hard to imagine a net benefit from a four-year administrative review before the agency can even start taking action.

[M L]

NEPA sounds like just another Environmental Consultant Full Employment Act. I'm sure the federal government contractors love it.

Really though, I support looking at the environmental impact of federal agency actions, as long as they are focusing on real impacts. Leave the CO2 out of it.

[bernard11]

Maybe you could get Michael Caputo put in charge.

He seems to be sufficiently anti-science to satisfy even you.

[MachineGunBodine]

Libertarians for More Governmental Regulations! Or to put it more succinctly, Orange Man Bad.

[DiKatz313]

Having studied NEPA for a while now, this is what I think of the new implementation rules: https://www.heritage.org/sites/default/files/2020-08/BG3524.pdf