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.
Indeed, we could even multiply the risk in order to further incentivize safety. An economist once suggested that, if we really wanted to increase auto safety, we should install large sharp spikes on steering wheels — the idea is that people will drive very carefully if they are afraid of being impaled during an accident. In a similar vein, we could require oil sprinkler systems in the homes and offices of oil company executives that would be automatically triggered the moment a pipeline or oil tanker spill took place, thus drenching them and their homes in crude oil. The message would be a variant of the Golden Rule: “Don’t do unto others lest you be done two-fold unto yourself.”
Liberals are likely to find these solutions appealing. For conservatives, the tradeoff might be reductions in some existing regulations that would no longer be necessary given the greater incentive toward safety. It’s win-win. Isn’t it?
This blog is cross-posted on Legal Planet.
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Daniel Farber | October 22, 2015
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 […]
Erin Kesler | October 21, 2015
This morning, CPR Member Scholar and University of Maryland School of Law professor Rena Steinzor testified before the U.S. Senate Committee on Environment and Public Works Subcommittee on Superfund, Waste and Regulatory Oversight for a hearing focused on, “Oversight of Regulatory Impact Analysis for the U.S. Environmental Protection Agency Regulations.” In her testimony, Steinzor noted the limitations of “Regulatory Impact […]
Evan Isaacson | October 19, 2015
It’s a staple of the right-wing assault on government that “bloated” government programs, like those intended to protect the environment, are a burden to taxpayers. In my home state of Maryland, the numbers demonstrate otherwise. The percentage of taxpayer dollars spent by the Maryland Department of the Environment (MDE) is tiny and getting tinier. In […]
Evan Isaacson | October 15, 2015
Last month, the Environmental Protection Agency finalized a long overdue rule that was designed, according to EPA’s description, to move the agency “into the 21st Century.” Since many of the rules’ provisions still will not be in effect more than two decades after the turn of the century, this rulemaking plays right into the hands […]
Dave Owen | October 14, 2015
Last week, the United States Court of Appeals for the Sixth Circuit issued a nationwide stay of implementation of the new Army Corps/EPA Clean Water Rule. This sounds like a very big deal, and the state plaintiffs who won the stay will no doubt describe this as a major victory. Those proclamations will conceal, however, a few […]
Matthew Freeman | October 9, 2015
Courtesy of the New York Times, here’s a bit of reporting that is emblematic of the way the press has covered the Volkswagen emissions-cheating scandal: Volkswagen said on Tuesday that the scandal would cut deeply into this year’s profit. And the company’s shares plunged again, ending the day 35 percent below the closing price on […]
Mollie Rosenzweig | October 8, 2015
Modern-day snake oil peddlers may have found a way to keep consumers quiet about their ineffective products: non-disparagement clauses, also known as gag clauses. These clauses, slipped into the fine print of form contracts, can restrict a consumer’s ability to post negative reviews of a product online. Non-disparagement clauses, which can vary in scope, generally […]
Robin Kundis Craig | October 7, 2015
Last week, the U.S. Environmental Protection Agency (EPA) finalized new National Ambient Air Quality Standards (NAAQS) for ozone pursuant to the federal Clean Air Act. See 42 U.S.C. § 7409. The new regulation reduces both the primary and secondary NAAQS for ozone from 0.075 to 0.070 parts per million (ppm) (or from 75 to 70 […]
Sidney A. Shapiro | October 6, 2015
The resignation of House Speaker John Boehner and the VW diesel car scandal — two rather extraordinary events — might not initially appear to be related, but there is a connection. The most conservative members of the Republican caucus celebrated Representative Boehner’s resignation because they felt he did not fight hard enough to shrink the […]