Interstate Commerce, Environmental Protection, and U.S. Federal Law
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Description
This essay summarises the role of the United States Supreme Court and the Congress in dealing with the legal and institutional problems of environmental policy in a federal system with a common market. The commerce clause of the United States Constitution has been the principal source of national authority to harmonise and advance economic and social policy, including, in recent decades, environmental policy. In the absence of relevant national legislation, the Supreme Court has used the commerce clause as a source of judicial authority to strike down State measures that unjustifiedly infringe the free movement of commodities within the common market. Courts achieve partial harmonisation by the negative means of selective invalidation of State laws. Affirmative measures of harmonisation through national legislation are, however, also needed in order to ensure a progressive environmental policy in the face of competition among States for industry and the problem of interstate pollution spillovers. During the past 25 years, Congress has relied on the commerce clause to adopt sweeping national programmes of pollution and hazardous waste control and remediation. The implementation of such legislation must, however, still confront distinctive problems that arise in a federal system. One is the question of preemption: does national legislation preempt more stringent State law? The other is the problem of dealing with interstate conflicts created by pollution spillovers that are not adequately addressed by national law. The raison d’etre f a federal polity is to reap benefits from co-operation and scale economies without full centralization. Decentralised decision making by independent States often fails to secure citizens’ welfare because of various kinds of interstate externalities or spillovers. Because of these externalities, a system of independent States may “fail” for reasons similar to why markets composed of independent economic actors sometimes “fail”. In both situations, collective action may reduce the costs associated with these spillovers and prove mutually beneficial. On the other hand, rivalry among individuals or States for economic advantage may prevent or undermine such co-operation. Yet excessive centralization through national regulation or control has its own perils. In the context of environmental policy, the problems of State conflict and co-operation are quite different as regards regulation of products and wastes on the one hand, and regulation of industrial processes on the other. Different State regulations of products or wastes pose a clear threat to the internal market and the associated economic integration that are basic objectives of a federal political system. Accordingly, harmonisation of such measures must be a central objective of federal systems. The threat to the internal market stems from the strong strategic position of States importing products manufactured in other States. By contrast, a State that is downwind of an air pollution source in another State cannot block the pollution. Nor can it block lax environmental process regulation in another State that gives industry in the other State a competitive edge in world markets. In these situations, collective action is needed to deal with such problems. In the case of products self-help is readily available. A State may simply prohibit the import from other States of products that it judges deficient from the viewpoint of environment, health, or safety. This form of self-help, however, can and has been used from protectionist purposes. Further, self-help threatens to create a tangle of conflicting or cumulatively burdensome requirements in different States, preventing full realisation of scale economies in manufacture, distribution, and marketing. Similar problems arise in the context of State regulation of waste, which can be viewed as a negative product. State restrictions on imports of wastes can prevent realisation of scale economies in waste treatment and disposal, and also prevent disposal of waste at locations that are most appropriate from an environmental perspective. The federal courts have addressed these problems by invalidating certain State regulatory measures under the commerce clause. In some cases, Congress has legislated national product regulatory standards. Process regulation present problems for a federal or supranational political system that are fundamentally different from the problems created by product regulation. Pollution spillovers occur when pollutants generated by industry or agriculture cross State boundaries. The polluter State has little or no incentive to take the interests of the receiving State into account in deciding on the extent of environmentally protective measures. As a result, excessive pollution will be generated. Competitive spillovers are created by the effects of State environmental regulatory decisions on competition and industrial location. A State will be reluctant to impose strict controls on its industry for fear that its industry will suffer a competitive disadvantage relative to industry in other States. The mobility of capital and other production factors within the common market may encourage States to adopt lax environmental controls in order to attract industrial development. These pressures will be intensified by uncertainty regarding the strategic responses of other States. As a result, all States may suffer from greater pollution than would occur if there were no economic spillovers. States adversely affected by the pollution and competitive spillovers associate with processes and their regulation cannot protect themselves through the self-help mechanisms available in the product regulatory context. Moreover, litigation is, as a practical matter, of little assistance in the case of most pollution spillovers and affords no remedy for competitive spillovers. Selective invalidation of State laws by the Supreme Court also cannot deal effectively with these problems. They must be address through affirmative national legislation.
Source Publication
Trade & the Environment: The Search for Balance
Source Editors/Authors
James Cameron, Paul Demaret, Damien Geradin
Publication Date
1994
Volume Number
I
Recommended Citation
Stewart, Richard B., "Interstate Commerce, Environmental Protection, and U.S. Federal Law" (1994). Faculty Chapters. 1702.
https://gretchen.law.nyu.edu/fac-chapt/1702
