Both Enviros and Industry May Be Reading Too Much Into Riverkeeper v. EPA
Judge Sonia Sotomayor's paper trail on the environment is slim, but one decision has drawn praise from environmentalists, and some concerns from business. In Riverkeeper v. EPA, Sotomayor wrote the opinion for the court of appeals. She found that the Clean Water Act prohibited EPA from conducting cost-benefit analysis when deciding whether to impose regulations at power plants that would protect fish, but have high costs for utility companies.
Some environmentalists have seized on the Riverkeeper opinion as proof that Sotomayor bleeds eco-green, while industry is afraid that she is insensitive to the costs imposed by green regulation. But both sides are misreading the Judge's opinion.
It simply is not the case that "pro-environment" means the same thing as "anti-cost benefit analysis." When the costs and benefits of regulation are properly and fairly tallied, many of the strict pollution controls that environmentalist favor turn out to have large net benefits. A case in point: EPA conducted a retrospective cost-benefit analysis of the Clean Air Act and found that it delivered billions of dollars more benefits than costs. Many economists favor action to regulate greenhouse gases because the catastrophic risks of climate change outweigh the economic costs of regulation. The idea that cost-benefit analysis, when properly conducted, is opposed to environmental protection is wrong.
Even worse, the fear that cost-benefit analysis is biased against regulation has turned into a self-fulfilling prophecy. For decades, industry and academics with an antiregulatory bent have used every opportunity to tilt cost-benefit analysis in their favor, while environmentalists refused to participate in the debate. The result is that, in practice, cost-benefit analysis is in fact biased against regulation. In our book Retaking Rationality, we show how the biases have resulted from industry domination of debates over cost-benefit analysis, and show what reforms are needed to take away the anti-regulation bias. With another appointee of President Obama, Cass Sunstein (who has also been mentioned as a possible new face on the Supreme Court) ready to take over as "Regulation Czar," there is hope that these reforms will finally be put in place.
Perhaps most importantly, the people who are trying to discern Sotomayor's opinions about cost-benefit analysis from Riverkeeper are looking in the wrong place. The role of a judge is to apply the law as it stands. Sometimes, Congress has explicitly forbid cost considerations when setting environmental standards. In fact, one of us wrote an amicus brief to the Supreme Court for a group of environmental organizations several years ago, arguing that certain provisions of the Clean Air Act prohibited cost considerations. The Supreme Court agreed, finding in Whitman v. American Trucking that costs could not be considered when setting national air quality standards under the Clean Air Act. Justice Scalia authored the opinion.
Justice Scalia also authored the opinion in Entergy v. EPA, the case that reversed Judge Sotomayor's opinion on the Clean Water Act. In many ways, Judge Sotomayor's opinion hewed more closely to American Trucking than Justice Scalia's opinion interpreting his own decision. But, that is the nature of our legal order: the Supreme Court enjoys broad latitude to subtly refine its decisions or even to overrule itself; the job of the court of appeals is to interpret Supreme Court precedent, not change it. So while we cannot glean from this case where Judge Sotomayor lies on the industry-environmentalist spectrum, we can tell from the decision that she is careful judge, thoughtfully applying the law to the case at hand.
Richard L. Revesz is the dean of New York University School of Law. Michael A. Livermore is the executive director of the Institute for Policy Integrity at New York University School of Law. Together, they are the authors of Retaking Rationality: How Cost-Benefit Analysis Can Better Protect the Environment and Our Health, published by Oxford University Press in May 2008.
Follow Michael A. Livermore and Richard L. Revesz on Twitter: www.twitter.com/policyintegrity