Reinventing Environmental Enforcement and the State-Federal Relationship.

Since the early 1990s, disturbing increases in significant noncompliance with federal environmental requirements have been accompanied by, and are perhaps at least partially a result, of a widespread "devolution" of responsibilities for environmental enforcement from federal to state officials along with--particularly, but not exclusively, at the state level--the replacement of formalized, deterrent enforcement with "cooperation-based" approaches to encouraging environmental compliance. In Reinventing Environmental Enforcement and the State-Federal Relationship, Clifford Rechtschaffen and David L. Markell provide deep insights into these events and trends. After perceptively describing the evolution of environmental enforcement and State-federal relationships from the mid-1980s to the present, they advance some well-supported recommendations for improving EPA's lax and inconsistent oversight of state enforcement performance. Their book, which reflects exhaustive research and careful thought, is a very important contribution to the field.

I. INTRODUCTION
II. COOPERATIVE FEDERALISM AND ITS JUSTIFICATIONS
III. COMPETING STRATEGIES FOR ACHIEVING ENVIRONMENTAL COMPLIANCE
IV. THE STATE-EPA RELATIONSHIP: PAST, PRESENT, AND POSSIBLE FUTURE
V. CONCLUSION: SOME LARGER QUESTIONS

I. INTRODUCTION

From the standpoint of compliance with pollution control requirements, the 1990s (and the first several years of the current century) have been a troubling, discouraging period. According to the best available data, major discharging facilities were in violation of the Clean Water Act no less than 58% of the time; moreover the rates of "significant non-compliance" for major polluters (as that term is defined by the Environmental Protection Agency (EPA)) stood at 20% for the Clean Water Act and 21% to 28% for the Resource Conservation and Recovery Act. (1) Similarly, more than 39% of all major facilities in five crucial industrial sectors were found to be in violation of the Clean Air Act. (2) These disturbing trends in overall environmental compliance were accompanied by--and perhaps at least partially a result of--a widespread "devolution" of responsibility for environmental enforcement from federal to state officials and the replacement, particularly at the state level, of traditional, formalized deterrent enforcement with one or more "cooperation-based" governmental approaches to encouraging environmental compliance.

In their remarkable, important new book, Reinventing Environmental Enforcement and the State/Federal Relationship (Reinventing Environmental Enforcement), (3) Clifford Rechtschaffen and David Markell provide deep insights into these events and trends. They examine the evolution of environmental enforcement policy and federal-state relationships from the mid-1980s to the present with clarity and care. In the process, they offer a set of thoughtful, balanced, and well-supported recommendations for improving EPA's oversight of state enforcement performance. These suggestions merit high praise and serious consideration.

In this review essay, I will summarize and critique the crucial features of Rechtschaffen and Markell's analysis. I will then examine some of the larger issues raised by their fine work, and I will discuss how their suggestions for intergovernmental reforms may be received by the EPA, the states, and other important environmental decisionmakers, over the short and long terms.

II. COOPERATIVE FEDERALISM AND ITS JUSTIFICATIONS

In the initial chapter of Reinventing Environmental Enforcement, Rechtschaffen and Markell provide a concise, accurate overview of the operation of the federal system in the environmental arena. They describe, in rich and careful detail, the establishment of "cooperative federalism" as the prevailing framework for allocating responsibility between EPA and the states, along with trends in the actual distribution of authority within this framework. In the same chapter, the authors identify and assay, in measured terms, the significant policy arguments that support both the centralization and decentralization of environmental decision making. Finally, they note and evaluate some major constitutional doctrines--such as the Active and Dormant Commerce Clauses, the Tenth Amendment, the Supremacy Clause, and federal preemption--that contain the potential to affect the allocation of power between federal and state authorities.

This first chapter, which most effectively sets the stage for the evaluative discussions that follow it, is thoroughly researched and briskly written. It summarizes judicial trends and scholarly debates alike with laudable precision and close attention to detail.

III. COMPETING STRATEGIES FOR ACHIEVING ENVIRONMENTAL COMPLIANCE

Chapter Two of Reinventing Environmental Enforcement shifts the book's focus to the two principal enforcement approaches taken by environmental regulators: a "deterrence-based" approach and "cooperation-based" enforcement. (4) The former is premised on the notion that regulated entities are rational economic actors, who decide to comply with environmental laws when the costs of noncompliance outweigh the benefits of noncompliance. In contrast, the latter approach primarily assumes that corporations are influenced by a mix of civic and social motives, and that they are generally inclined to comply with the law.

Not surprisingly, deterrence-based enforcement theorists emphasize the importance of likely detection of environmental violations, the swiftness and certainty and appropriateness of punitive sanctions to redress noncompliance, and an awareness of these policies and circumstances on the part of regulated entities. On the other hand, advocates of cooperation-based enforcement favor governmental persuasion rather than punishments and sanctions.

As Rechtschaffen and Markell explain in straightforward, comprehensive terms, enforcement based upon cooperation can encompass a number of different kinds of programs. These include "compliance incentives," which encourage firms to engage voluntarily in self-policing activities such as environmental auditing and environmental management systems. (5) They also include "compliance assistance" through governmental education, technical help, and (occasionally) direct financial assistance. They may also involve government persuasion and voluntary agreements to comply.

The authors' informative, well-structured discussion of prototypical enforcement approaches provides a firm foundation for a subsequent chapter of Reinventing Environmental Enforcement, Chapter 5, in which Rechtschaffen and Markell provide a compelling, critical examination of the theoretical arguments in favor of a cooperative approach. To counter the contention that market forces invariably make voluntary compliance with environmental requirements a matter of business self-interest, they observe that "many businesses remain philosophically opposed to some substantial portion of the current regime of environmental regulation and indeed consider it illegitimate." (6) They also note that not all compliance measures translate into economic gains, (7) that for many regulated entities--especially those that do not sell consumer products--there are relatively few tangible gains that accrue to firms perceived as environmental leaders, (8) and that (for several different reasons) capital markets are unreliable as a tool to promote companies' environmental compliance or improved environmental performance. (9)

In response to the argument that deterrence-oriented enforcement is counter-productive, Rechtschaffen and Markell astutely point out:

   [T]he cooperative model underemphasizes the economic pressures for
   noncompliance. Coaxing and persuasion may be very productive when
   firms are making good-faith efforts to comply and have ample
   resources to do so. It is far less likely to work when compliance
   will have significant financial consequences for a firm. (10)

Moreover, the authors sensibly and persuasively question the notion that a cooperative approach is more efficient than a deterrent enforcement effort. (11) They note that cooperation-based enforcement carries a rather high risk of inconsistent governmental treatment of similarly situated enterprises, at the same time that the approach undermines the "expressive function" (12) of environmental enforcement, i.e., the public message that environmental statutes are important, and that transgressions are matters to be taken seriously. (13)

Rechtschaffen and Markell follow this well-reasoned theoretical discussion with a thorough, well-documented summary of the empirical evidence gathered to date with respect to the relative efficacy of cooperation-oriented and deterrent enforcement strategies. The authors note that there is relatively little hard data that supports the argument that cooperation works better than deterrence to achieve compliance with environmental law. At the same time, they cite a limited but nonetheless quite compelling body of empirical evidence concluding that traditional environmental enforcement actually enhances regulatory compliance.

Based on these mixed considerations of theory and empirical data, the authors very reasonably conclude that it would be "ill-advised" to make a wholesale shift away from deterrence-based practice. "[T]he best approach," they suggest, "is one grounded in deterrence theory but that includes constructive features of a cooperative system." (14) They state:

   The best approach ... is one that is rooted in a deterrence-based
   approach--fine tuned to be more flexible and creative--that
   integrates certain constructive features of a cooperative model. In
   addition, such a scheme would be aided by a public spotlight on the
   compliance status of regulated firms, which can generate market
   pressure for improved environmental performance. (15)

IV. THE STATE-EPA RELATIONSHIP: PAST, PRESENT, AND POSSIBLE FUTURE

Another important facet of Reinventing Environmental Enforcement--one which encompasses three substantial chapters of the book, Chapters 3, 4, and 6--is its treatment of the crucial and evolving relationship between federal and state officials in the environmental arena. Rechtschaffen and Markell begin their judicious and thorough analysis of this topic with a history and overview of the "cooperative federalism" model. That paradigm provides the framework for the enforcement relationship between the state and EPA under most federal pollution control statutes. As the authors point out, this institutional arrangement--the product of a broad national political compromise--allows willing and able states a very significant role in environmental regulation and enforcement. At the same time, however, federal environmental laws generally reserve for EPA the legal power to determine, in the first instance, which states should be authorized to implement environmental requirements, as well as the authority to oversee state performance, to take enforcement action itself in appropriate circumstances, and to withdraw state authorization if needed.

Rechtschaffen and Markell further consider, in a tightly drawn summary, the specific conditions that individual states must meet in order to implement particular aspects of federal environmental laws. They examine the criteria established by EPA (beginning with its 1986 Revised Policy Framework (RPF) for State/EPA Enforcement Agreements) with respect to the Agency's oversight of state performance.

This part of their volume includes an illuminating discussion of judicial interpretations of EPA's authority to "overfile" enforcement suits against alleged environmental violators in authorized states where there is a pending (or already completed) state action regarding the same alleged violations. It also features an interesting overview of the current enforcement agreements between EPA Region 2 and New York State--agreements that illustrate, in a concrete manner, how federal and state officials may choose to divide environmental enforcement responsibilities between them.

With that background in place, the authors turn to a critical segment of their work, the "reinvented" enforcement relationship between EPA and the states that has evolved over the past seven or eight years in response to a relentless clamor, on the part of the states, for more freedom to set their own regulatory priorities (and for the institution of more cooperation-based enforcement). Rechtschaffen and Markell incisively outline the key factors that underlie this recent political push for "devolution" of greater environmental authority to the states, including the anti-federal government sentiments of the mid-1990s, the states' concern over the federal imposition of "unfunded mandates," the 1994 change from Democratic to Republican control of Congress, and a series of United States Supreme Court decisions that enhanced the overall authority of states within the federalist system.

While carefully noting the existence of significant differences among individual states, the authors document the states' emergent approach to enforcement. They detail the states' greater reliance on compliance assistance programs, their reduced emphasis on deterrence-based tools (including traditional inspections, administrative and civil enforcement actions, and penalties), and the states' increased stress on environmental audit and privilege laws.

Reinventing Environmental Enforcement also examines EPA's recent efforts to expand its compliance assistance programs, to develop compliance incentive programs (including a policy to encourage voluntary environmental auditing), and to improve its traditional enforcement efforts through targeted enforcement and other new strategies. The book considers recent changes in EPA oversight of state enforcement activities, including the institution of the National Environmental Performance Partnership System (NEPPS) in 1995, an attempt to establish a new, more flexible framework for relations between states and EPA, and EPA's opposition to state environmental audit privilege and immunity laws. Additionally, the changing nature of the performance measures used to evaluate state and federal enforcement programs is a focus of critical analysis.

In treating these important topics, the authors' approach is exhaustively researched, factually accurate, and incisive. They note, most perceptively and appropriately, the extent to which EPA--with its competing emphasis on traditional deterrent enforcement and flexible accommodation of state cooperation-based programs--has recently provided "mixed signals" to its state counterparts as to what the federal agency would truly prefer that the states do. Rechtschaffen and Markell also observe that, at least thus far, the NEPPS framework has had only a modest impact on the enforcement relationship between the states and EPA. Nonetheless, to the extent that the framework is adhered to in the future, the implementation of NEPPS may very well result in ever-greater EPA deference to state environmental approaches and objectives. Thus, Rechtschaffen and Markell conclude:

   [W]hile NEPPS in theory provides a vehicle for accommodating
   increased state autonomy and integrating more cooperative-based
   strategies, it remains to be seen whether EPA will balance this
   increased autonomy with accountability or whether NEPPS will
   primarily devolve into a vehicle for reduced state accountability.
   If so, it will significantly complicate EPA's efforts to have states
   meet its performance expectations. (16)

The last full chapter of Reinventing Environmental Enforcement, titled "Enhancing State Performance: Options for EPA," contains the authors' conclusions as to how EPA's now inconsistent and ineffectual oversight of state enforcement activities can best be reinvigorated. These recommendations are aptly summarized in one paragraph of the introductory portion of that chapter:

   First, EPA must play a stricter gatekeeping function in initially
   authorizing state programs, and more regularly re-assess and report
   the adequacy of state enforcement authorities and state capacity.
   Second, EPA must stop delivering a mixed message to the states about
   the enforcement practices it expects the states to follow. Instead,
   it must establish clear expectations for performance. Third, in
   terms of the substance of those expectations, EPA should revise its
   criteria for evaluating whether state enforcement programs work.
   Because this question is central to EPA's oversight practices, we
   discuss it at length in this chapter. Among other things, we
   recommend that EPA place greater emphasis on measures based on how
   well states are doing in actually achieving compliance by regulated
   entities, and, to the extent feasible, improved environmental
   outcomes, although we also believe that continued reliance on
   activity-based measures is appropriate. Fourth, EPA should explore
   different administrative approaches for conducting program
   evaluations. Fifth, and related, EPA should improve its data
   management programs to enhance its ability to evaluate state
   programs. Sixth, EPA should implement a "differential oversight"
   scheme that rewards in a meaningful fashion better performing
   states. Seventh, EPA should publicly report its evaluation of state
   programs, and also improve public accessibility to the underlying
   data about state performance, in order to motivate states with the
   power of an external spotlight. Eighth, EPA should make the prospect
   of program withdrawal a more credible threat and should also develop
   more graduated sanctions short of outright program withdrawal.
   Finally, EPA needs to continue to hone its capacity for strategic
   intervention--to help states to build capacity, and to take direct
   action in selected cases when needed. These options are not mutually
   exclusive; instead, they can and must be integrated in a variety of
   ways. (17)

Rechtschaffen and Markell believe that, in the first instance, EPA should insist that its existing authorization requirements are met honestly by the states. The federal agency should refuse, in their view, to authorize states that lack the legal authority to recoup the economic benefit of significant environmental violations or that are devoid of administrative penalty authority whatsoever. EPA should also not approve state programs with inherently dysfunctional enforcement processes, and it should frequently reassess whether environmental programs delegated to states are continuing to meet delegation requirements and report its findings in that regard to the public on an annual basis.

Reinventing Environmental Enforcement advocates an end to EPA's ambivalent, almost schizophrenic, oversight of state enforcement programs. The book proposes a revision of the agency's criteria for evaluating the efficacy of state enforcement and compliance programs. New criteria, it suggests, should stress continued recordkeeping with respect to enforcement "inputs" (i.e., numbers of enforcement actions taken, penalties assessed, agency expenditures, staffing levels, etc.). Moreover, the evaluative criteria should place more emphasis on the sound assessment of compliance rates among regulated industries and entities, and on the thoroughness of governmental responses to citizen complaints. There should also be more public reporting of EPA's evaluations of state individual enforcement performance. Additionally, the book calls for improvements in EPA and state enforcement data management systems, and for regular "external" reviews of state performance levels by EPA's Inspector General's Office or by special teams of experienced EPA enforcement staff and senior staff members from enforcement programs in other states.

Rechtschaffen and Markell further propose a formal system of "differential" EPA oversight of states, in which poorly performing states are given "relatively substantial oversight and less flexible funding," while better performing states receive "reduced oversight and increased flexibility in terms of use of federal funds." (18) They maintain that EPA should enhance enforcement in authorized states by giving states direct technical and fiscal assistance in order to build state enforcement capacity, by systematically increasing the number of federal enforcement "overfilings" in states that are not performing up to EPA's expectations, and by working with state personnel to divide enforcement and compliance responsibilities more clearly and effectively. Moreover, they suggest that EPA should maintain, as a credible option, the withdrawal of federal authorizations in states whose programs are particularly deficient.

Certainly readers of Reinventing Environmental Enforcement will choose for themselves whether to endorse its authors recommendations for enforcement reform (as I do) or reject them in whole or part. What seems beyond dispute, however, is the extent to which those suggestions reflect hard work, careful thought, and an objective, balanced, and scholarly approach to the knotty problems that have arisen in the field of environmental enforcement and program implementation.

Beyond being clear and specific, the ideas that Rechtschaffen and Markell advance are notable for their nonpolemical and nonpolitical character. The authors' arguments seem premised on the sound supposition that environmental enforcement is a task best approached in a dispassionate, balanced, and professional manner. While the often shifting political calculations and preferences of elected officials are certainly entitled to respectful consideration, they are poor substitutes indeed for evenhanded administration of environmental programs by a well-trained, responsible, and experienced professional staff, whether the members of that staff happen to be employed by a state or local agency or the EPA.

To their credit, the authors of Reinventing Environmental Enforcement recognize that many of the "options" they advance are likely to face political resistance (since they appear to cast EPA in the role of a traditional "overseer" of the work of state enforcement officials, as opposed to their equal "partners"). Similarly (as Rechtschaffen and Markell openly concede) some of their book's recommendations will require additional resources, at both the federal and state levels, and none of the approaches for which they advocate is likely to be a "silver bullet." Despite this, I am entirely persuaded by the authors' declaration that "[w]ithout experimenting with these new approaches ... the gap between expectation and performance is likely to widen, particularly in a political landscape heavily tilted toward devolution of authority to the states." (19)

V. CONCLUSION: SOME LARGER QUESTIONS

If Reinventing Environmental Enforcement offers a balanced and useful blueprint for enhancing environmental enforcement, promoting compliance, and narrowing the gap between EPA expectations and state performance, what are the prospects that its sensible recommendations will be adopted? The answer to that question appears to hinge upon several considerations. Rechtschaffen and Markell identify some of these factors themselves, in their brief concluding chapter.

One significant factor is whether the politically appointed leadership of EPA will have the vision, statesmanship, and courage to embrace a set of proposals that are likely to engender the opposition of at least some state environmental officials and their political allies. Professor William Rodgers has shrewdly observed that there are "psychological inhibitions" among EPA staff members who, in dealing with their state counterparts, have "a limited number of 'no's' in their repertoires." (20) As a result, Rodgers suggests, "Refusals over time to give the reins to states willing to assume them ... tend to become uncomfortable liabilities." (21) The willingness of EPA officials to accept the suggestions offered in Reinventing Environmental Enforcement should provide a good test of whether the agency's staff and leadership will have the fortitude and good sense to break free of that dysfunctional pattern, and to provide the leadership necessary for effective reform.

Another key variable will be the willingness of state officials to rethink their own stances and assumptions in enforcement and compliance matters, and to accept a working partnership with EPA that is based upon their own proven levels of performance and accomplishment, as well as the quality of EPA's efforts. While some states are probably already willing to participate in such an arrangement at this point, others almost certainly are not. Moreover, the positions of many state personnel on these questions are now undoubtedly affected (one hopes temporarily) by the paucity of resources available to nearly all state agencies and departments as a result of the present economic downturn.

Beyond EPA and state officials, decisions to be made by Congress will also play a key role in determining whether the prudent enforcement reforms that Rechtschaffen and Markell have crafted will result in genuine improvements. A number of the "options" advanced by those authors require increases in EPA's budgetary allocations. If EPA is to provide "differential" oversight of state enforcement programs, improve its recordkeeping, assist state agencies in building their own enforcement capabilities, and adopt an active stance in response to state agency failures, for example, it must have sufficient funds to carry out those measures effectively. Whether that will occur is a decision for Congress alone.

Last, and by no means least, the future success or failure of balanced enforcement reforms will depend on the extent to which environmental organizations and concerned individual citizens will choose to involve themselves in the political process as advocates for meaningful change in government environmental enforcement. As I have written previously, in the past, for a number of reasons, such organizations and individuals have displayed some reluctance to involve themselves in matters of governmental enforcement policy and intragovernmental budgetary competitions. (22) To the extent that they have the foresight, will, and determination to do so effectively and persistently, their views will have an immense effect on the shape and efficacy of the future of environmental enforcement efforts of both federal and state governments.

In sum, the prospects for adoption of the worthy notions proposed in Reinventing Environmental Enforcement remain unclear. At this writing the short-term outlook for the changes they espouse seems (at least to me) somewhat bleak. Over the longer term, however, the likelihood that much of what Rechtschaffen and Markell have recommended will be adopted by government officials may be far better.

Whatever the future holds, however, in Reinventing Environmental Enforcement, Clifford Rechtschaffen and David Markell have written a first rate study, on a vitally important topic, that is the most significant work to date on EPA's enforcement relationship with the states since the early 1990s. Their careful research, penetrating analysis, thoughtful conclusions, and practical recommendations are a superb contribution to the field of environmental law. Their pathbreaking work merits much acclaim--and a very wide audience.

(1) Sylvia Lowrance, Innovations in EPA's Compliance and Enforcement Program, Address before the EPA Office of Enforcement and Compliance Assurance, Feb. 3, 1999.

(2) JOHN COEQUYT ET AL., ENVIRONMENTAL WORKING GROUP, ABOVE THE LAW: HOW THE GOVERNMENT LETS MAJOR POLLUTERS OFF THE HOOK 9 (1999). For similar, disappointing statistical data with regard to environmental compliance, see U.S. GENERAL ACCOUNTING OFFICE, WATER POLLUTION: MANY VIOLATIONS HAVE NOT RECEIVED APPROPRIATE ENFORCEMENT ATTENTION, (GAO/RCED-96-23) 4, 7 (Mar. 20, 1996), available at http://www.gao.gov; TODD ROBBINS, U.S. PUBLIC INTEREST RESEARCH GROUP, DIRTY WATER SCOUNDRELS: STATE-BY-STATE VIOLATIONS OF THE CLEAN WATER ACT BY THE NATION'S LARGEST FACILITIES 14--15 (1997).

(3) CLIFFORD RECHTSCHAFFEN & DAVID L. MARKELL, REINVENTING ENVIRONMENTAL ENFORCEMENT & THE STATE/FEDERAL RELATIONSHIP (2003).

(4) As the authors perceptively observe, in practice most environmental enforcement systems are a combination of the two approaches. RECHTSCHAFFEN & MARKELL, supra note 3, at 81--83,

(5) Other compliance incentive measures include tax subsidies, pollution changes, government procurement preferences, relaxed regulatory requirements, emission trading, and "challenge regulation" programs.

(6) RECHTSCHAFFEN & MARKELL, supra note 3, at 217.

(7) Id. at 221.

(8) Id. at 223.

(9) Id. at 223-24.

(10) Id. at 231.

(11) Id. at 233.

(12) Id. at 235-36.

(13) Id. at 237.

(14) Id. at 267.

(15) Id. at 251-52. In a subsequent portion of their work, Reehtschaffen and Markell suggest (and defend) three ideas for "fine tuning" deterrence-based enforcement: streamlining regulatory inspections, using field citations with respect to certain types of environmental violations, and "hybrid approaches" that combine technical assistance with traditional enforcement techniques. Id at 252-67.

(16) Id. at 191.

(17) Id. at 290.

(18) Id. at 319.

(19) Id. at 342-43

(20) WILLIAM H. RODGERS, JR., ENVIRONMENTAL LAW 367 (2d ed. 1994).

(21) Id.

(22) JOEL A. MINTZ, ENFORCEMENT AT THE EPA: HIGH STAKES AND HARD CHOICES 129-30 (1995).

* [c] Joel A. Mintz, 2003. Professor of Law, Nova Southeastern University Law Center, Scholar, Center for Progressive Regulation; B.A., Columbia University; J.D., N.Y.U. School of Law; LL.M. and J.S.D., Columbia University Law School.