Daniel Farber on CPRBlog {Bio}
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Law Schools Doing Good

How Law Schools Serve the Public

Most people probably think of law schools, when they think of them at all, as places that train future lawyers.  That’s true, and it’s important, but law schools do a lot more.  Faculty scholarship makes a difference –law review articles laid the foundation for many of the ideas now guiding judges (both on the Right and the Left).  But I’d like to focus here on another, more recent activity by law schools — the environmental law clinics and research centers that have sprung up in recent years. There are too many of these across the country to describe here.  Instead, I’ll stick to the University of California law schools. Even so, space allows a discussion of only a fraction of their activities.

One key activity is a joint project of Berkeley and UCLA, although it’s housed here.  The announced goal of the Climate Change and Business Initiative helping businesses prosper in an era of climate change.  In a series of projects, the Initiative has worked with stakeholders to find legal barriers that stand in the way of renewable energy, energy conservation, and other sustainability practices.  Working actively with California state government, the Initiative has issued a series of white papers advising how these barriers can be removed.  The Bank of America Foundation funds this project. Berkeley is also actively engaged in water-related issues, particularly groundwater.  One major effort resulted in a white paper on fracking and groundwater that helped shape California law on the subject. We are also undertaking several projects to address issues raised by the on-going California drought.  By the way, none of our efforts are funded by state money or student tuition.

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Addressing Externalities: A Modest Proposal

How to make health and safety a personal priority for industry officials.

According to economists, firms have little reason to take into account the cost of externalities — that is to say, the harms their activities may impose on others.  The traditional solutions are damage remedies or taxes to transfer the financial cost to the industry, or regulation to force  industries to limit their harmful activities.  Why not try a more direct solution?  Why not require owners and managers to expose themselves to the same risks?

For instance, we could require managers of nuclear plants, utility officials, and officials of reactor manufacturers to live within a mile of the plant, along with their families.  That would enhance the incentive to think of safety.   Similarly, we might require oil company executives and their families to live within a mile of a refinery, so they would experience the same risks and the same exposure to air pollution as the surrounding community.  Along the same lines, chemical company executives could also be required to live near their own facilities and drink the local water, as would operators of hazardous waste disposal sites.  We could even imagine that coal company executives would be required to have their offices inside working coal mines.

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Guess Who Benefits from Regulating Power Plants

The answer will surprise you.

What parts of the country benefit most from the series of new EPA rules addressing pollution from coal-fired power plants?  The answer is not what you think.

EPA does a thorough cost-benefit analysis of its regulations but the costs and benefits are aggregated at the national level. In a new paper, David Spence and David Adelman from the University of Texas break down these figures on a regional basis.  What they found may surprise you.  In fact, the areas benefitting the most are the very ones that rely most on coal.  The reason is simple.  Much of the benefit from reducing the use of coal comes in the form of health improvements — fewer heart attacks and deaths from respiratory disease, fewer asthma attacks.  These health improvements are mostly in the vicinity of the power plants.  So the same places that will have to pay the costs of reducing their coal use are the very ones who will reap many of the benefits. As is the case nationally, the benefits are much greater than the costs on a regional basis.

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Clean Air versus States Rights

A sleeper decision by the D.C. Circuit upholds federal air pollution authority.

The D.C. Circuit’s decision last week in Mississippi Commission on Environmental Quality v. EPA didn’t get a lot of attention, despite having a very significant constitutional ruling.  Since the constitutional discussion doesn’t start until about page seventy, after many pages of scintillating discussion of matters like the reliability of private air pollution monitors and the meaning of the word “nearby”, I guess it shouldn’t be a surprise that the case has gone beneath the radar.  But the constitutional issue is an important one relating to funding cutoffs. The issue has been in play ever since the Supreme Court held that it was unconstitutionally coercive for Obamacare to cut off funding for Medicaid to states that refused to expand their Medicaid programs.  In this case, the cutoff is to federal highway funding if a state’s air pollution plan is invalid.  Texas argued that the Obamacare ruling was directly on point.

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The Case Against Sulking

States will only lose out if they refuse to cooperate with the Clean Power Plan.

Mitch McConnell has urged states to refuse to submit plans if the Clean Power Plan is upheld by the Court.  He has been accused of inciting lawless behavior on the part of state governments.  Let me come to his defense on this.  (How often do I get to do that??) The states are under no legal obligation to submit plans.  The Clean Air Act does not require them to do so.  Coercing states to administer a federal regulatory program would violate the Constitution, at least as the current Court sees things.  So there’s nothing illegitimate about McConnell exercising his American right of free speech and advising them what to do.  The fact that he’s doing so presumably reflects his own inability as the leader of the Senate to do anything about it.

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Econ101, Ideological Blinders, and the New Head of CBO

There are troubling indications that Keith Hall lets ideology blind him to basic economics.

Last week, in a post about the employment effect of regulations, I mentioned briefly that the new Director of the Congressional Budget Office, Keith Hall, had endorsed some questionable views on the subject.  A reader pointed me toward an additional writing that has done a lot to escalate my concerns.  There are disturbing signs about both Hall’s ideological bias and even his grasp of basic economics.

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Accounting for Job Loss -- The consequences of doing so may not be what you'd expect

The Republicans’ choice for head of the CBO, Keith Hall, spent some time at a libertarian think tank reportedly funded by the Koch brothers, where he wrote about the effect of regulation on employment. Hall argued that regulations cause unemployment (include indirect effects because of price changes), and that the costs of unemployment should be included in regulatory cost-benefit analysis.

In principle, it seems right to include the special harms associated with job loss in cost-benefit analysis (not just for regulations but everything else too).  There’s all kinds of evidence that being fired or laid off is very damaging to people, and that’s a genuine cost — assuming that we can reliably quantify the effect.  As Hall has said:

“The immediate impact of job loss includes lost wages, job search costs, and retraining costs. Further, research shows that even after reemployment it can take as long as 20 years for workers to catch up on lost earnings, largely due to skill mismatches between the jobs lost and the new jobs created in the economy. These losses occur at different lengths of job tenure, in all major industries, and with workers of any age.”

As I said, this seems right in principle. But there are some important caveats.

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Killer Coal

Black lung has been the underlying or contributing cause of death for more than 75,000 coal miners since 1968, according to NIOSH, the federal agency responsible for conducting research on work-related diseases and injuries. Since 1970, the Department of Labor has paid over $44 billion in benefits to miners totally disabled by respiratory diseases (or their survivors). The annual death rate from mining accidents is 20-25 per 100,000, about six times the average industry. If you do the math, that means comes out to about six deaths per thousand workers over the course of a thirty-year career as a miner. This is actually an underestimate because the government figures include office workers employed in the industry.

Miners aren’t the only victims. There’s also air pollution. Even with the pollution controls in place in developed countries, coal remains deadly. According to a 2011 report of the American lung association, particulate pollution from coal-fired power plants causes about thirteen thousand deaths per year. Indeed, according to the report: “Coal-fired power plants that sell electricity to the grid produce more hazardous air pollution in the U.S. than any other industrial pollution sources.”

Of course, things would be much worse if it weren’t for EPA. Just look at China, which has done very little to control pollution from power plants. According to a recent study:

Air pollution causes people in northern China to live an average of 5.5 years shorter than their southern counterparts. . . .

High levels of air pollution in northern China – much of it caused by an over-reliance on burning coal for heat – will cause 500 million people to lose an aggregate 2.5 billion years from their lives, the authors predict in the study, published in the journal the Proceedings of the National Academy of Sciences.

To put it in as few words as possible: coal kills.

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The Death of Deference?

Yesterday, the Supreme Court granted cert. in several cases to hear the following question:

“Whether the Environmental Protection Agency unreasonably refused to consider costs in determining whether it is appropriate to regulate hazardous air pollutants emitted by electric utilities.”

The fundamental issue is whether it was unreasonable for EPA to interpret section 112 to preclude consideration of cost at this particular stage of the regulatory process — not only different from what the Court thinks is the best interpretation, but a position that no reasonable person could take.  The Supreme Court and lower courts have rarely found agency interpretations unreasonable in cases where the statute was ambiguous.  This is called the Chevron Step 2 analysis, while deciding whether the statute is ambiguous is called Chevron Step 1.  The rationales for the Chevron doctrine are that Congress meant agencies to work out statutory ambiguities and that it is better for politically accountable members of the executive branch to do that, as opposed to federal judges with lifetime appointments.


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Lessons From an Epidemic

Ebola’s natural reservoirs are animals, if only because human hosts die to too quickly. Outbreaks tend to occur in locations where changes in landscapes have brought animals and humans into closer contact.  Thus, there is considerable speculation about whether ecological factors might be related to the current outbreak. (See here).  At this point, at least, we don’t really know.  Still, it’s clear that outbreaks of diseases like ebola strengthen the case for forest conservation.  Which is also, obviously good for the environment.  But that’s not what I want to focus on here.

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