Highlights
- Who gets away with being the nation’s top polluter and helps others remain above the law? The federal government serves as the “largest single source of demand” for toxic substances, and immunizes itself—and government contractors—from liability.
- Who decides what happens in your backyard? There is little reason to believe that the “experts” can assess risk better than individuals acting alone or through markets.
- Government agencies are culpable for Love Canal: The EPA trumpeted the fears from Love Canal to garner support for its own bureaucratic expansion through passage of Superfund, which could cost the nation $1 trillion, with no measurable reductions in toxic hazards. And, any culpability for Love Canal rests squarely with government agencies that confiscated the land and refused to comply with environmentally-sound practices.
- The worst asbestos offender: In the face of numerous personal injury lawsuits, 16 asbestos companies have declared bankruptcy. But, “the most proximate cause of the most severe asbestos-related health problems was the U. S. Government,” which remains unaccountable.
- Can one be “too careful”? The likely health benefits from EPA regulations setting exposure limits some 374,000 times less than a dose shown to cause harm in animals range from insignificant to nonexistent.
- Environmental quality: Clean air, water, and land are best produced by competitive markets with well- specified, tradeable, and accountable property rights.
Synopsis
The comprehensive new book, CUTTING GREEN TAPE, critically examines the problems of environmental hazards and quality, and the impact of government regulations and litigation. As Kip Viscusi of Harvard Law School explains in his foreword, and as economist Bruce Yandle of Clemson University also discusses, the Superfund program is fundamentally flawed. The Superfund program:
- Directs massive sums of money to remedy supposed environmental hazards that fail to meet the most basic standards of scientific evidence.
- Focuses inordinate attention on insignificant risks while diverting resources from truly substantial hazards.
- Initiates hazardous waste cleanup efforts that might prevent one case of cancer—but at a cost of $10 billion.
- Could save many more lives if it focused resources on lower-profile endeavors, like improving highway safety.
Superfund is not the only government program that exploits an apparent crisis to generate benefits for political and bureaucratic special interests. While such programs may sound noble, if taken seriously they would bankrupt the nation with little or no environmental value produced.
Protecting Air, Water and LandIn CUTTING GREEN TAPE, Montana State University economist Richard Stroup analyzes the Clean Air Act and related air toxics legislation, finding that:
- The Clean Air Act requires a reduction in the lifetime risk of death due to air toxics emissions to less than one-quarter the unlikely risk of being struck by a falling airplane.
- Complying with Superfund alone could cost the nation more than one trillion dollars.
Economist David Fractor examines the role and importance of groundwater, how and when groundwater may be threatened, and what can be done to protect or to rehabilitate this resource. Fractor notes that when property rights in groundwater quality are fully specified and protected, damages and damage risks can be properly managed to minimize the sum of all costs. Setting up such a system is costly and complex, but Fractor believes that new technologies and better science are reducing the costs so that the benefits of the information and incentives produced by a system of property rights and market trades will become attainable.
University of Texas economist Roger Meiners and attorney Jo-Christy Brown survey the legal history and operation of the common law rules of nuisance, trespass, and strict liability for abnormally dangerous products as they have operated in the United States. Under the common law, liability follows a demonstration of harm. Superfund and other environmental statutes routinely fail to make that logical linkage because Congress did not base the statutes on risks and benefits or scientific evidence of existing or likely harm.
The relationship between environmental issues and the common law is explored by law professors Donald Dewees, David Haddock and Daniel Polsby. Dewees examines the law and economics of the various common law rules. Haddock and Polsby simulate the operations of the different common law rules and arrive at some novel conclusions. Strict liability is unlikely to function well as an insurance system and when plaintiff actions are important causes of accidents and difficult to observe, negligence rules have superior deterrence properties to any variant of strict liability. It follows that negligence rules, which have become less common in the U.S. legal system over the past several decades, may often be superior to rules emphasizing strict liability.
In “Rent Seeking on the Legal Frontier,” Florida State University economist and Independent Institute Senior Fellow Bruce Benson outlines the sharp changes in tort law which have occurred over the past three decades. Legal instability has created enormous social costs. When property rights to revenues become insecure, trial lawyers and others pursue these insecure rights by filing lawsuits. The resulting litigation has overwhelmed the courts, causing delays, high costs, and numerous injustices.
Bureaucracy’s Polluted and Wasteful LegacyIn a separate chapter on federal and state impacts on the environment, research by Professor Benson reveals:
- Government agencies may be the largest single source of demand for potentially toxic substances. They use large quantities of allegedly toxic products in ways that put people at risk, often without warning the people or owners of property at risk or even acknowledging the risk.
- Despite evidence of substantial knowledge by government officials of potential health hazards of Agent Orange, the government denied virtually all liability.
- The Department of Defense knew of potential risks associated with experimental drugs and vaccines before the Gulf War, but administered them to troops anyway, with no warning of side effects and no monitoring afterwards.
- The vast majority of asbestos victims worked in government shipyards, but the U.S. Government continues to reject any moral or legal obligations to the victims.
Legal policy expert Peter Huber, University of Pennsylvania bioengineering professor Kenneth Foster, and George Mason University law professor David Bernstein discuss scientific testimony in the courtroom and how it can be made more reliable and reflective of real science. The authors point out that although the number of eyewitnesses to an accident may be limited, a lawyer can almost always find an “expert with a pleasing courtroom manner who will testify in support of the attorney’s theory of the case.” As a result, the courtrooms are often filled with frivolous theories rejected by mainstream science. Letting the jury “hear the evidence” and sort out the truth is equivalent to arguing that a jury is capable of evaluating rival scientific theories, a job difficult enough for scientists!
At the federal level, the Daubert and Joiner decisions required judges to rule unscientific evidence inadmissible and provided guidelines to determine what is unscientific. Unfortunately, most state courts have not yet adopted Daubert, much less Joiner, leaving plenty of opportunities for the admission of scientifically invalid testimony into legal proceedings. Within a few months after Joiner was decided, state courts in Massachusetts and in Oregon admitted highly questionable evidence that breast implants cause disease. The authors encourage state courts to adopt clear standards for scientific evidence, similar to those in Daubert and Joiner. They further suggest that judges appoint expert witnesses to advise them on scientific matters beyond their knowledge, a practice becoming more common in many courts.
Although many people have claimed that individuals do not estimate risk well and typically conclude that government regulation is therefore warranted, Clemson University economist Daniel Benjamin disputes both parts of such claims. Previous studies on risk assessment have asked individuals to estimate the probability someone in the U. S. is killed by X (e.g., lung cancer, heart disease, airplane crash, etc.) Surprisingly, they have not been asked the more relevant question: “What is the probability that you will be killed by X.” After reevaluating the evidence, Benjamin finds that:
- When asked about risks pertinent to them, individuals are much better at assessing risks than previously thought.
- When the rewards of being right are high, people become better at assessing risk.?
The late Aaron Wildawsky’s contribution to CUTTING GREEN TAPE questions the use of animal tests as a scientific foundation for government regulation of carcinogens:
- Scientists are not agreed on the correct statistical model to evaluate data from animal experiments. Statistical models that depend on different assumptions predict harms that vary by a factor of 200 for DDT, 800 for dioxin, and 40,000 for aflatoxin, a naturally occurring toxic substance found in various foods such as peanut butter.
- Without a plausible biological reason for preferring one model over another, the results of these tests are no better than guesswork.
CUTTING GREEN TAPE provides the essential framework to understand and resolve many of the most difficult environmental health and safety problems through innovative, practical, and ecologically sound common law and market-based alternatives to bureaucratic failure.
About the Editors
Richard L. Stroup is Professor of Economics at Montana State University and a Research Fellow at The Independent Institute
Roger E. Meiners is Professor of Economics at the University of Texas, Arlington, and a Research Fellow at The Independent Institute
