Complete Report Card
This mid-term report card was developed by PERC--the Center for Free Market Environmentalism to evaluate actions affecting natural resources and the environment taken by the George W. Bush administration during its first two years. The report card assesses actions in the light of free market environmentalism (FME). Consideration was given to how the executive branch played the hand passed along by the Clinton administration and how the new team began to play its own cards.
Free market environmentalism is a way of looking at environmental problems that recognizes the role of incentives and the importance of private property rights in encouraging stewardship. In viewing public sector activity, free market environmentalism identifies specific ways to improve public management by changing managers' incentives and opening up opportunities for voluntary action. These include: 1) decentralizing regulation where possible; 2) encouraging merit-based waivers of command-and-control where possible; 3) adopting only regulation that is, on net, beneficial and cost-effective; and 4) tying public sector managers' budget to their performance.
We recognize that, even at best, this report card is an incomplete and imperfect assessment. As students and professors well know, this is the way it is with all report cards, but even more so in this case. In assessing an administration's environmental policy actions, there is no sure way to know how hard the leaders may have pushed to alter policy one way or another. Struggling to avoid the passage of laws that might violate FME principles may be as heroic as working to pass FME-based laws. However, like all report cards, this one does not assess effort as much as outcomes.
In developing their assessments, the graders were asked to consider the following.
Did the president and his administration meet the following standards?
- 1. The administration defined and protected private property rights in the ownership and use of environmental assets.
For example, were property rights in grazing and timber cutting rights extended to allow more market participation and trading? Were incentives changed to induce more species protection and cleanup of hazardous waste by protecting the land rights held by private parties?
2. The administration made a deliberate attempt to draw on market forces, as opposed to command-and-control, in determining and enforcing standards.
Were the states allowed to set water quality standards employing watershed and river basin associations, for example? Are states allowed to use common law or permit trading to achieve quality goals? Are designated Superfund sites to be sold to the highest bidder, with performance standards set and joint and several liability rules forgiven?
3. The administration provided federal agencies with the ability to charge market-based fees for services and to keep the revenues collected at the point of the services being provided.
Did the administration take the initiative to set market-based visitor fees to federal parks and lands managed by the U.S. Park Service, Bureau of Land Management, and Department of Agriculture? Were the managing agencies allowed to keep the revenues collected within the facility or agency for use in improving the facilities?
4. The administration decentralized regulation by devolving regulation to the state and local level.
Was Superfund, in effect, devolved to states that demonstrate ability to manage the process? Were mandates for state vehicle inspection and maintenance programs exchanged for programs that focused on reducing auto emissions from vehicles that offend the environment?
5. The administration avoided new legislation or executive action that generates harmful environmental costs that are not assessed and accounted for in the action.
What role did the administration take in the farm bill expansion of commodity programs that produce surpluses and increase uses of nitrate fertilizers that invade rivers and streams; protection of the steel industry that perpetuates life of older, more polluting steel makers; delays in use of genetically engineered foods, perpetuating use of insecticides in production of older products?
6. The administration limited the ability of regulatory agencies to circumvent congressional and executive branch responsibilities and override recognition of the opportunity cost of environmental actions.
Was the regulatory review process strengthened to limit the likelihood that the Environmental Protection Agency would embrace the Kyoto Agreement, which has not be ratified by Congress? Did the administration raise the standard for applying benefit-cost analysis to newly proposed regulations, focusing where possible on reductions of income and health that regulation can cause?
7. The administration encouraged private action and public/private sector cooperation in achieving environmental goals, thereby avoiding expansion of federal involvement and supporting common law contracting, innovation and experimentation.
Did the federal government adopt the trust concept as a way to manage the numerous national monuments designated by the Clinton administration? Did it sponsor community-based pilot projects to improve our forests and clean up our waters?
This report undoubtedly raises an age-old problem experienced in schools and universities?how to interpret grades. Is a C in one professor's physics class comparable to a C in another professor's economics course? We do not guarantee that, for example, a B on agricultural chemicals policy from Delworth Gardner is the same as the B on White House regulatory review policy assigned by Brian Mannix. No effort was exerted by the editors to force the grading system into a mold of comparability. But each grader, who worked independently, offers a detailed explanation for the elements considered as well as for the grading logic applied.
Each report card lists the areas covered and gives a letter grade for each, along with the grader's name. In most cases, grades are also provided for components of the larger topic. For example, Del Gardner gave an overall grade of B for agricultural chemicals policy. Within the category are individual grades for environmental polices associated with the new farm bill (D), genetically engineered crops (A), and organic crops (A). Each grader determined the overall grade for his or her category.
To the extent that generalizations can be drawn, a grade of C seems to be given when the Bush administration maintains the status quo with respect to free market environmentalism principles. If policy moves toward FME, the grade rises; if policy moves away, it falls. When the grades were considered together, the result was a C-.
The final grade of C- implies that the Bush administration's actions have drifted away from the FME position during these first two years. An overall grade of C- is not quite as good as a C. But these are mid-term grades and the reports contain recommendations for improving the final assessment.
The graders have shown considerable care in making their assessments, determining grades, and communicating the logic they applied. Even so, we know that there could well be major areas of importance we missed and work by the Bush administration that we may have inadequately assessed. This said, we do what all fair-minded scholars do. We invite criticism, and we hope that the criticism we receive will help us to improve our final report card.
We at PERC believe that inspiring debate is more important than the grade itself. We welcome discussion about the relative merits of free market environmentalism and the prospects for improving how we go about protecting and enhancing environmental assets. Fortunately, we continue to see environmental progress being made on most fronts, even with the decades-old command-and-control policies that are generally used. It is our belief that when FME is more fully applied, even more progress will emerge.