Current Issues in U.S. Environmental Policy

By A. Myrick Freeman; Paul R. Portney | Go to book overview

CHAPTER 5
Environmental Policy and the Distribution of Benefits and Costs

HENRY M. PESKIN

IT IS HARD to conceive of any federal environmental policy--or, indeed, any federal policy--that does not affect various people differently. If a policy were designed in such a way that all affected parties were made better off and none worse off, then the fact that some gained more than others would probably not be of great concern to the designers of policy. At least, this is what one might surmise from the policy designer's frequent emphasis on total benefits and costs. The fact that policies with benefitcost ratios greater than unity have the potential of making everyone better off has apparently eased the conscience of many a policy maker. In the real world, however, such potential outcomes are rarely realized. Regardless of the total of benefits and costs, the usual state of affairs is that some parties gain while others lose.

Federal environmental policy is not exceptional in this respect. What may be exceptional about it is that there seems to be widespread political acceptance for the environmental policies we have adopted even though there is evidence that the number of losers may exceed the number of gainers. In this chapter we will first discuss why this disparity between gainers and losers is an expected consequence of the design of the policy. Then, using data from a study of the distributional consequences of the Clean Air Amendments of 1970, we provide evidence that substantiates these expectations. Finally, we speculate on the political implications of

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