Sotomayor's "Green" DecisionBoth 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...
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