AN ECO-PRAGMATIC APPROACH TO INEQUALITY AND REGULATION

At the close of the last century, Daniel Farber articulated a powerful case in favor of what he called “eco-pragmatism.”¹ In Farber’s view, environmental protection is plagued by a stark and seemingly irreconcilable divide between “tree huggers” and “bean counters.”² The former camp believes that environmental law and policy should be determined by “willingness to vote,” on the assumption that the public tends to value environmental conservation and robust and equitable human health and safety protection. In contrast, bean counters favor “willingness to pay,” on the assumption that law and policy should be governed by neoclassical economic analysis rather than inarticulate and potentially irrational public views.³ Neither camp seems to admit to any legitimacy in the other’s position. As a result, the two “[c]ontesting [d]ogmas”⁴ work to prevent coherent, balanced environmental policy from emerging, leaving the United States instead with ad hoc compromises between extremes or, perhaps worse, wild polar swings as one side or another fleetingly occupies power. Reflecting on what has happened politically in the United States since his book was published, one can imagine Farber today allowing himself a vigorous scholarly attaboy. Nailed it, he did.

In addition to his prescient diagnosis, Farber offered a practical, ecumenical framework as cure, one that eschews any attempt to find the one right way to analyze environmental law and policy matters. Whereas bean counters and tree huggers seem to share “a belief that environmental policy can be based on a single overriding value, whether that value is economic or environmental,”⁵ eco-pragmatism instead acknowledges the plurality of values, perspectives, and knowledges that might be brought to bear on contested social issues. Accordingly, eco-pragmatism seeks to create decision-making processes that take advantage of all relevant and useful knowledge while treating respectfully the diversity of perspectives that humans embrace to evaluate such knowledge. As Farber put it, “in reality, both market and political mechanisms have flaws as expression of the public interest. The real question is not whether to follow one while ignoring the other, but how to make the best use of both to guide public policy.”⁶ Importantly, this inclusive approach is to be tempered by a healthy dose of humility and a practical commitment to the task at hand. After all, at the end of the day, decision-makers must decide. Thus, in Farber’s words, a chief aim of eco-pragmatism is “to keep us firmly aware of the complexity of our values, but prevent that complexity from entangling us to the point of inaction.”⁷

Farber’s article, Inequality and Regulation: Designing Rules to Address Race, Poverty, and Environmental Justice, offers a valuable application of his eco-pragmatist approach to the contemporary and urgent problems of racial and economic inequality in the United States. In particular, Farber takes up the question of whether and how inequality should factor into the rulemaking processes that regulators use to craft new measures to protect human health, safety, and the environment. Farber’s express goal is to find “ways to make regulations more responsive to the needs of the poor and people of color.”⁸ Farber’s central recommendation, however, “[s]urprisingly” involves “mapping risk and exposure [to] shape regulatory solutions without the need for explicit consideration of inequality in regulatory design.”⁹ Much like the Biden administration’s adoption of an environmental justice screening tool that did not explicitly consider race,¹⁰ Farber’s recommendation relies on criteria such as risk exposure and vulnerability that strongly correlate with race and income without directly targeting those factors. In both cases, the adoption of neutral regulatory techniques is being driven by concern that more direct approaches would be vulnerable to challenge in the current legal milieu. Farber’s approach also can be seen as nicely consistent with the ethos he conveyed years earlier in Eco-Pragmatism: “Given that polarization is such a major problem in environmental law, one particularly important avenue for progress is to defuse the conflicts by finding implementation methods that accommodate competing concerns.”¹¹

Farber should be commended for elucidating ways to promote equality and environmental justice within the regulatory process that are practically implementable, politically feasible, and—most important for the current moment—legally defensible. To chart a promising path forward on such salient, vital, and contentious issues is the very essence of eco-pragmatism. Still, readers should not miss the fact that Farber’s proposals contain within them seeds of a fairly dramatic reconceptualization of the modern and seemingly well-entrenched practice of regulatory cost–benefit analysis in the United States. One needs to look very carefully to spot it, but apparently over the last couple of decades Farber’s sensible Midwestern eco-pragmatism has picked up a radical Berkeley streak.

Although often seen as a technical field defined by abstract concepts like risk and efficiency, the law of environmental, health, and safety protection is intertwined at all levels with matters of justice and equality. At the local level, even putting aside the voluminous evidence documenting the disproportionate environmental burdens facing residents of poor and minority communities,¹² consider the fact that our very understanding of what and where nonhuman biodiversity exists can be powerfully shaped by our own racist past.¹³ At the global level, consider the fact that researchers estimate that greenhouse gas emissions from the five highest-emitting countries have imposed approximately six trillion dollars of lost economic productivity on other nations since the year 1990.¹⁴ In short, from neighborhood birdwatching clubs to the halls of the United Nations, questions of fairness and responsibility cannot be disentangled from questions of environmental, health, and safety regulation.

But how to accommodate the former within the latter? As Farber points out, inequality typically plays only a minor role in the design and implementation of protective regulations in the United States. This paucity of attention is driven in part by the influence of regulatory cost–benefit analysis, a decision-making framework that takes the status quo distribution of wealth, resources, and power in society as given and seeks only to maximize welfare holding that distribution constant. To the extent that equity—as opposed to efficiency—is thought to be a matter of social concern, an influential view holds that distributive efforts should be pursued through the tax-and-transfer system rather than through alteration of otherwise welfare-maximizing regulations.¹⁵

The limited role of inequality in agency rulemaking is also driven by the fact that many statutes do not command agencies to center inequality as a basis for rulemaking, a limitation that is likely of even greater significance following the Supreme Court’s expansive view of the major questions doctrine in West Virginia v. EPA.¹⁶ With emboldened state attorneys general ready to sue at every agency mouse click, regulators may be reluctant to pursue rules that could be characterized as taking on social challenges outside a narrow understanding of their authorizing statutes. Because of this reality, coupled with the threat of the Congressional Review Act amidst the oscillating balance of power in U.S. national politics, agencies need to craft regulations quickly and with a view toward lasting significance. Understandably, these dynamics might counsel an agency to embrace the tenets of eco-pragmatism.

When one turns specifically to racial inequality, an agency’s task of redressing past and present injustice is complicated by the additional challenge of potential constitutional barriers to race-conscious decision-making. Farber’s analysis of the likely legal challenges facing environmental, health, and safety regulations premised explicitly on race is sober, informed, and to be ignored only at an agency’s peril. In this regard, it bears noting how much the field of environmental law has benefited over the years from Farber’s expertise in constitutional law, a relative rarity in a field filled with scholars of property, tort, and administrative law. Of particular note in Inequality and Regulation is Farber’s careful parsing of the way agencies might constitutionally deploy race-neutral means even if an express purpose of doing so is to improve conditions for communities of color.¹⁷ Significant also is his astute distinction between the aggregative or collective focus of environmental, health, and safety regulations and the individualized hiring or admissions determinations that are made pursuant to affirmative action programs—a distinction that might render the former less constitutionally vulnerable than the latter.¹⁸

Still, notwithstanding these potentially promising arguments, Farber’s overall conclusion is that concerns over inequality must generally be addressed within environmental, health, and safety regulatory rulemaking only through indirect channels. Happily, he sees practical and impactful ways to do so. First, agencies can resist the bean counters’ “plea for disaggregation”¹⁹ and instead continue to measure the benefits of avoided loss of life according to a uniform value of a statistical life (VSL). Analysts who promote disaggregation instead believe that agencies should try to identify the populations who would be benefited by a protective rule and value the benefits at the price the affected individuals themselves would be willing to pay to obtain them.²⁰ Practical difficulties would confound such an exercise, but Farber also sees conceptual failings in it. By embracing instead a uniform value of life irrespective of the wealth, age, race, gender, or other characteristics of the benefited individual, agencies can espouse what Farber calls “harm egalitarianism,” a view that “equivalent harms should be treated the same by regulators.”²¹ A benefit of harm egalitarianism in Farber’s view is that it channels more public resources toward protection of poor people than would be the case if their lives were valued according to disaggregated willingness-to-pay measures.

As a second eco-pragmatic way to promote equality and environmental justice, Farber emphasizes a focus on “differences in exposure and vulnerability”²² when agencies undertake risk assessment. Although environmental, health, and safety agencies typically are not empowered to redress structural racism or historical discrimination directly, those concerns might be addressed “in an indirect way” since “geography presents a potential mediating framework in which the life circumstances of poor communities and people of color can enter into regulatory decisions.”²³ Thus, the impact of disparate siting of hazardous facilities in poor and minority communities is likely to show up in an agency’s estimate of pollutant exposure levels in those communities, even without directly targeting factors like wealth, race, or historical discrimination. Likewise, the impact of structural racism is likely to be picked up through an agency’s estimate of a community’s vulnerability to pollution exposure, given that the measure will encompass factors connected to structural racism, such as access to health care and transportation, prevalence of comorbidities, and so on. In both cases, environmental justice might be pursued without directly inviting political backlash and legal challenge.

As noted above,²⁴ the Biden administration adopted a similarly indirect approach when constructing its Climate and Economic Justice Screening Tool (CEJST).²⁵ Although the CEJST attracted criticism from environmental justice advocates for not directly including race and ethnicity among its many variables, analysis shows that communities with majority racial and ethnic minority populations are disproportionately likely to be identified as disadvantaged by the CEJST.²⁶ For the communities who may be immediately benefited by the billions of dollars flowing from the Inflation Reduction Act and the Justice40 initiative,²⁷ sacrificing direct engagement with racism and inequality in exchange for legal defensibility in the crafting of regulations and government support may be a compromise worth making.

Still, it is also worth asking what might be lost when such fundamental moral and political matters are addressed only indirectly, through technical lenses like the VSL, risk assessment, or the CEJST. To put the question sharply, at what point does the price of eco-pragmatism’s pragmatism become too great? Before grappling with that dilemma, it is important to recognize and appreciate the subtle, yet dramatic, conceptual implications of Inequality and Regulation. Notwithstanding its well-tempered, eco-pragmatic framing, Farber’s latest contribution poses a significant challenge to the welfare economic theory that has undergirded regulatory analysis in the United States for the past four decades.

To see the radical implications of Farber’s contribution, it is helpful to imagine how his recommendations would inform a concrete case. During the George W. Bush administration, the Environmental Protection Agency (EPA) sought to assess its regulation of mercury emissions from power plants. One of the most well-characterized health hazards of mercury emissions is mental impairment of infants from neonatal exposure in mothers who eat mercury-contaminated fish. Accordingly, a key issue raised by environmental justice advocates during the EPA’s rulemaking concerned the higher levels of contaminated fish that are consumed by members of Pacific and Great Lakes Native American tribes who are subsistence fishers.²⁸ Not surprisingly, exposure estimates revealed these individuals and their children face much greater health risks from mercury than predicted by the EPA’s general population models.

For a bean counter committed to disaggregation of the VSL, the response to this disproportionate exposure level would be clear: the EPA should inquire how much Native American subsistence fishers themselves are willing to pay to avoid the dangers of consuming mercury-contaminated fish. In that manner, the EPA could determine what level of mercury reduction maximizes overall social welfare, where welfare is defined by individual willingness to pay based on the preexisting distribution of wealth, resources, and power in society.

Such an exercise might be consistent with dominant strands of welfare economic theory, but it also works to compound the historical discrimination and structural racism that affect how much Native American subsistence fishers are able to pay today, not just willing. Is the greater fish consumption level of Indigenous populations really to be seen as a mere consumer preference like any other, or is it better understood as a constitutive element of those populations’ very identity and—by extension—something the public might be willing to preserve even at greater cost than the benefited populations themselves could pay? The bean counter has no answer to this question other than to awkwardly offer an “identity premium” that might artificially boost for regulatory accounting the willingness to pay of Indigenous people to continue their traditional dietary practices but that would not otherwise upset the individual preference maximization exercise with its staunch denial of publicly expressed values.²⁹

Farber’s approach, in contrast, takes the uniform VSL and applies it even in the context of a benefited population whose ability to pay might not support the standard VSL. As noted above, this approach has the laudable effect of directing more public resources toward the poor and marginalized than they might be willing or able to spend on their own for protection. In contrast to Farber, Cass Sunstein argues that this effect is not laudable at all and that, in his view, “a uniform value [of life] is obtuse.”³⁰ Sunstein’s argument rests on the notion that regulators who apply a uniform VSL are forcing poor people to purchase more safety than those people themselves “want.” In his comment on Inequality and Regulation, David Weisbach likewise argues that “using equal VSLs means we may often require low-income households to pay more for safety than they wish to pay.”³¹ Thus, according to Weisbach, before Farber can claim to have helped disadvantaged populations through his approach, he must identify “the incidence of the costs and benefits of [a] regulation”³² to assess whether targeted beneficiaries really are made better off on net by the regulation.

As Farber notes, however, the obtuseness here seems not to lie with the uniform VSL but rather with the bean counters’ reduction of law from an expression of public values and commitments to a contrived surrogate for individual market transactions.³³ Farber’s principle of “devoting equal resources to prevent equal harms” reflects a public moral commitment to treat all lives as equally valuable and worthy of protection. Farber expressly seeks to “elevate the interests of the poor by deviating from the theory of cost–benefit analysis and treating the value of life as constant regardless of wealth.”³⁴ Elsewhere, as a defense of the use of a uniform VSL, Farber affirms, and indeed celebrates, the fact that “equality norms are already embedded in the government’s version of cost–benefit analysis.”³⁵

Here we start to recognize that although you can’t take Illinois out of the boy, you can apparently add a healthy dose of California. The underlying normative justification for Farber’s argument that regulation should be wealth-blind in assessing harms³⁶ does not just push back on the bean counter’s plea for disaggregation. It actually cuts much deeper into the heart of modern regulatory cost–benefit analysis: it rejects individual preference and willingness to pay as the normative foundation of welfare maximization and instead seems to embrace something like an objective list approach in which human health and safety are treated as lexically prior to other sources of welfare. Likewise, Farber’s focus on exposure and vulnerability in risk assessment seems to be driven by the same underlying embrace of health rather than willingness to pay as the relevant value criterion for measuring well-being. This embrace explains why the bean counters’ argument that a uniform VSL “often makes low-income households worse off”³⁷ misses its mark. Farber is not measuring whether people are better or worse off according to individual willingness to pay as bean counters are wont to do. He is asking whether they will have less mercury in their wombs.³⁸

There is important practical, as well as philosophical, wisdom in this approach. To begin with, Farber’s approach is more consistent with the statutory framework of modern environmental, health, and safety law. Much of this law was ushered into existence by “an orgy of consensus” in Congress,³⁹ and the consensus view more often than not embraced uniform levels of protection. Whether based on protective health standards or best available technologies, the statutory approach typically rejects the idea that people should receive only the level of protection they are individually willing to pay to acquire. With these directions from Congress, why should agencies nevertheless evaluate the costs and benefits of a proposed rule using disaggregated VSLs? If the regulatory standards themselves will generally need to remain uniform, why should agencies disaggregate for purposes of the cost–benefit analysis? It would be interesting to know how disaggregated versus uniform VSLs would typically impact measured benefits in the environmental, health, and safety context. Given the disproportionate burdens imposed on poor and minority communities, one suspects that the effect of disaggregated VSLs in practice would be to lower the “regulatory budget” available to agencies in their rulemakings. If that lowering explains the underlying practical motivation for the bean counters’ insistence on disaggregation, then agencies have good reason to reject it.⁴⁰

Relatedly, as eco-pragmatism reminds us, decision-makers in the real world do not have the luxury of academic theorists, who can wait for certitude before committing to a view or a course of action. Decision-makers must decide. Nothing requires them to share the bean counters’ insistence that we must achieve economy-wide understanding of a rule’s repercussions before it can be adopted. Put differently, while Weisbach may be correct as a matter of welfare economic theory that “we need much more work before concluding that Farber’s suggestion is correct,”⁴¹ that is not an argument for rejecting Farber’s suggestion as a matter of the practical business of governing. Indeed, the bean counters’ facility with conjuring up hypothetical scenarios in which regulations fail to achieve their goals sometimes seems to be simply another version of the familiar effort to thwart any regulation through “paralysis by analysis.”⁴² If the goal is to understand a rule’s implications for welfare in the real world, then why is the presumption of bean counters so often against adopting a rule in the real world, where its implications could most reliably be ascertained?

In Eco-Pragmatism, Farber observed that “the debate over cost–benefit analysis has now begun to focus more on its institutional implementation, a topic that lends itself to more reasoned and constructive debate than the earlier battles over the morality of the technique.”⁴³ From one perspective, the arguments that Farber makes in Inequality and Regulation appear to be consistent with this focus on eco-pragmatic institutional implementation of cost–benefit analysis. Yet, the arguments also can be seen to revive fundamental moral battles over cost–benefit analysis. The narrow version of cost–benefit analysis promoted by bean counters imperiously defines society’s value criterion according to individual willingness to pay. That choice, in turn, dictates how costs and benefits are valued and whether a proposed regulation will be deemed “efficient” in the sense that it raises overall welfare. All other social concerns are relegated to the dustbin of “equity.” The critical analytical move lies in selecting the value criterion, because that move determines what ends are given the favored designation of “efficiency,” as opposed to being labeled “equity” and shunted off to the tax-and-transfer system.⁴⁴

Farber’s defense of a uniform VSL is practical and principled. It is also radical, at least in comparison to this orthodox form of cost–benefit analysis. Through his approach of “devoting equal resources to prevent equal harms,” Farber is not saying agencies should promote equity to the derogation of efficiency. He is saying that the perceived tradeoff between equity and efficiency can be lessened when we remember the plural ways in which value, welfare, and efficiency can be defined.

When the Bush administration EPA conducted an environmental justice analysis of its proposed mercury rule, the agency somewhat astonishingly reported that the emissions limits it chose were not so stringent that subsistence-fishing Native Americans would be “disproportionately benefited” by the rule.⁴⁵ This passing moment in the rulemaking was revealing: only a bean counter who sees disembodied welfare impacts to the exclusion of the lives and communities that are visited by those impacts would have identified potential unfair “benefits” to Native Americans as the primary environmental justice concern at issue for mercury regulation. As Catherine O’Neill observed at the time, the “approach redefines the relevant baseline: it ignores the current maldistribution of environmental benefits and burdens and erases the long history of efforts to colonize and assimilate Native peoples. If pursued seriously, such an inquiry would always disqualify efforts to make progress toward environmental justice by ameliorating disproportionate burdens.”⁴⁶

Farber’s principle of “devoting equal resources to prevent equal harms” instead would have offered the salutary benefit of counseling the EPA to channel more resources to populations that are more exposed to the harmful effects of mercury and other pollutants. To be sure, Farber’s approach would have done so without directly addressing environmental justice, at least not in the way that environmental justice advocates typically understand their cause. Environmental justice advocates seek to address more than just the unequal distribution of environmental burdens and benefits. They also seek to address racism and colonialism. They seek to remedy and repair the continuing impacts of actively harmful relations that cannot be morally laundered out of history or present existence through cost–benefit analysis. Even a form of cost–benefit analysis as thoughtfully—and pragmatically—framed as Farber’s is ill-equipped to address these issues in the manner they deserve to be addressed.

Still, Farber is right that agencies don’t have free range to combat the odious legacies of hate and abuse of power that help drive today’s racial and economic injustice. Their statutory mandates are framed by congressional delegations of power that also must be interpreted through the increasingly narrow interpretive frames of a conservative Supreme Court. To address environmental justice in the manner truly demanded by the ideals of justice will require more than eco-pragmatic implementation of old statutes. It will require electing a Congress that takes seriously the hard task of lawmaking in the public interest. It will require replacing over time a federal judiciary that too often treats with hostility efforts to regulate in the public interest. It will require, in short, politics of the sort we have not seen since the old statutes were passed.