Regulation Can Be Bad for the Environment

One of the left’s most pointed critiques of conservatives is that they too often prescribe deregulation as means to address environmental issues. Deregulation, according to the left, is fundamentally at odds with environmental protection and allows big businesses to prioritize profits over planet. To them, deregulation is universally bad for the environment and only through heavy-handed government intervention will we tackle climate change.


These views could not be further from the truth. What those on the left fail to acknowledge is that command-and-control style regulation often produces bad environmental outcomes. In many cases, as opposed to protecting the environment, overregulation limits the market’s ability to drive the innovation and technology that have made our world a better and greener place.


The left often likens deregulation to a license to pollute, but in many situations, it is arcane regulations that are acting as the key roadblocks to environmental progress. For instance, a decades-old provision in the federal tax code provides investors in fossil fuel-based projects – not clean energy ones – with access to a significant tax advantage. The Financing Our Energy Future Act would address this imbalance and create a level playing field, which would go a long way in making clean energy alternatives more competitive relative to fossil fuels.  


By expanding the administrative state’s role in environmental policy, technologies that the left claims to champion, such as solar and wind energy, are being held back. How will we accomplish the left’s lofty goal of transitioning to 100 percent renewable energy when a maze of cumbersome regulations stand in the way? If serious about going fully renewable, the left would support opening up markets and leveling the energy playing field as opposed to a socialist-style takeover of the economy.


In addition to distorting energy markets, onerous regulations hinder conservation efforts. A prime example of this is the Endangered Species Act, a law that enjoys support from 83 percent of the public almost exclusively because of its pleasant sounding name. A quick glance at ESA’s track record, however, reveals that it has produced very limited results: less than 2 percent of species added have later been delisted.


The Endangered Species Act’s failures can be attributed to its woefully misguided incentive structures. Given that roughly 90 percent of listed species reside on private lands, an effective law would encourage private landowners to conserve the protected species and reward them if their efforts produced positive results. The Endangered Species Act does the opposite. Rather than incentivizing conservation, this law makes ridding their properties of endangered species – shooting, shoveling, and shutting them up – the most attractive option for landowners.


While many regulations like those in the Endangered Species Act fail to accomplish their intended goals, not all of them do more harm than good. Some level of government intervention is necessary to ensure optimal market function, but this does not mean the solution to every environmental issue is to regulate, which is what the left mistakenly suggests. After all, what good does a regulation do if it produces an incremental environmental benefit, but a massive economic cost?


Regulation, when necessary, must balance environmental and economic interests to be effective. Individuals, small businesses, and large corporations cannot act as stewards when they are overburdened by time and money to comply with useless regulations. Let’s stop implementing regulations that create a false choice between environmental and economic success simply for the sake of feeling good about ourselves.  


Ineffective regulations will continue to dominate environmental policymaking until the left, and much of the public at large, recognize that command and control policies are not the only way forward. In many cases, strong markets and property rights, by creating a level playing field and incentivizing innovation, do a much better job of accomplishing the left’s idealistic environmental goals. By taking this alternative route, we do not have to turn to the government to address every environmental issue and our planet can be protected without crippling the economy.  

Ronnie ThompsonComment