Sunday, September 13, 2009

cumulative impacts in a finite world

SEHN | The Overarching Structure Of U.S. Environmental Decision-Making

Our current property and environmental law, including both federal statutes and the common law, harbors the presumption that economic activity generally provides a net benefit to society despite any accompanying damage it may cause. Grounded almost invisibly in this starting presumption, most of our property and environmental laws permit interference with economic activity only where that starting presumption is proved false, that is, where a particular activity can be demonstrated to fail to provide a net benefit to society.

These laws for the most part do not forbid damage to human health or the environment. Rather, even when fully enforced they permit protection of human health or the environment only where the benefits of doing so can be proved to outweigh the costs. The theory is that this structure ensures that the legal system will not intervene in the economy unless the intervention will increase net social welfare. So it is that cost-benefit analysis has become the legal system’s primary tool for deciding when economic activity may be regulated in the interest of protecting human health and the environment.

The allocation of the burden of proof to government and plaintiffs has an enormous impact on environmental decision-making. Because of this allocation, the law permits damage to the environment not just when it appears cost-benefit justified but also whenever regulators and plaintiffs cannot carry their cost-benefit burden of proof. In cases of doubt or missing information, the law defaults to its starting presumption: it allows the damaging activity to continue. This allocation of the burden of proof transforms doubt and missing information into a barrier to legal protection of human health and the environment. This explains why industrial interests are rationally motivated under our legal system to invest in the manufacture and spread of doubt and confusion.

A simple diagram can represent the law’s prevailing structure for resolving conflicts between economic and environmental interests, as well as the economy this legal structure promotes. Figure 1 illustrates ever-growing social benefits produced by an exponentially growing economy (upper line). It also illustrates the growth in the accompanying cumulative environmental damage that the law permits by imposing on government and plaintiffs a cost-benefit burden of proof (lower line). This lower line might be thought of as depicting the growth in society’s ecological footprint.

Figure 1.

What is missing from this environmental decision-making structure is any recognition that the Earth has a finite and limited ability to sustain ecological damage, and that exceeding this limit will inevitably degrade the Earth’s ecological integrity. The reasons for these limits are plain. The Earth has a finite physical size, so that environmental damage becomes concentrated as it accumulates. The deep interconnection between the various constituents of the biosphere causes our various impacts to interact, each compounding the effects of the others. Moreover, species and ecosystems can be replenished only very slowly if at all, so that their losses accumulate with the passage of time.

A simple diagram can depict this ecological limit, too. Figure 2 includes a horizontal line that represents the finite limits of the Earth’s ability to sustain ecological damage. This is a limit that our current legal system is utterly blind to.

Figure 2.

Thus we see the fatal flaw inherent in our system of environmental decision-making. Routinely allowing all environmental impacts except those proved to fail a cost-benefit test, it permits those impacts to grow without limit even when their cumulative effect results in ecological overshoot. Many of these impacts occur not because they actually satisfy the law’s cost-benefit test but because whenever we do not know enough, the law’s default structure permits them to continue.

Even when cost-benefit analysis can effectively evaluate impacts when we are far below ecological limits, it cannot do so once we exceed those limits. Each incremental impact, if taken alone in an empty world, might have caused cost-benefit justifiable harm or even, in many cases (such as carbon emissions), no harm at all. But under conditions of ecological overshoot each incremental impact contributes to a total loss that is immeasurable. Indeed, the permanent loss of the ecological integrity of the Earth, since we need it to survive and prosper, might fairly be considered an infinite loss.