Valuing the Air: The Politics of Environmental Governance from the Clean Air Act to Carbon Trading
Creators: Halvorson, George Charles
Publisher: name: Columbia University
Year: 2017
Subjects: History
Emissions trading
Air quality management
Environmental policy

description: In 1970, the United States Congress and President Richard Nixon created a federal regulatory regime to meet public demands for improved environmental quality. As it happened, the formation of the Environmental Protection Agency (EPA) and the enactment of the first national environmental standards coincided with the disruption of the postwar prosperity that had helped fuel the environmental movement. Valuing the Air provides the first sustained historical study of policy making at EPA during the formative period between 1970 and 1990, when the embattled agency preserved its original mission to protect Americans’ right to clean air. To justify strong regulations in an era of rising inflation and unemployment, EPA officials turned to the new field of environmental economics, funding pioneering research that concluded that the benefits of environmental protection outweighed the costs. Such pecuniary evidence allowed EPA to shield its regulatory interventions from business lobbying and to rebut rhetorical campaigns in which corporate executives threatened communities across the country with the loss of industrial jobs if they supported strong environmental health regulations. While this dollars and cents valuation proved persuasive to policy makers, it ran contrary to environmentalist notions of priceless nature and environmental advocates fought doggedly to prevent EPA from fully adopting a cost/benefit approach to policymaking. As environmentalists recognized, EPA’s embrace of economic measurement elevated the stature of economists at the agency, raising the possibility that recently established natural rights to clean air and water might be undercut by a dehumanized pricing of externalities. Regulatory reforms enacted by the Carter administration, such as emissions trading and the bubble policy, signaled a new willingness among liberals to use economic incentives and markets approaches in place of direct regulations – a development that environmentalists regarded warily. In 1981, the Reagan administration upset a bipartisan consensus for market based reforms with the announcement of drastic budget and staffing cuts at EPA. Reagan’s attack on EPA marked the ascent of a new conservative ideology that held unrestrained free enterprise to be the greatest social good, irrespective of the actual economics of regulatory interventions. Finding environmental economics to be a powerful, if imperfect, ally against such assaults, many environmental organizations softened their critiques of economic valuation and began to borrow the language and logic of economics to make their case. With this growing support from environmental organizations, EPA ushered in the commodification of pollution rights in the era of cap and trade. The inflection of contemporary environmental advocacy with economic measurement and value demonstrates the political utility of economics while also underscoring the foreclosure of an earlier environmentalism’s more radical questioning of the desirability of an unbounded market economy. At the same time, EPA continues to resist economists’ efforts to derive public preferences from market exchange, insisting that fundamental choices about underlying environmental value be made through the democratic process.