Economic Analysis in the Fourth Generation of Environmental Law: What Role?

Donald J. Kochan

Chapman University, The Dale E. Fowler School of Law

November 4, 2014

21 Journal of Environmental and Sustainability Law, 2014
Chapman University, Fowler Law Research Paper No. 14-5

Written for the symposium "Environmental Law 4.0: Adaptive and Resilient" at the University of Missouri School of Law, this essay explores some of the issues of economic analysis that might arise as we approach the fourth generation of environmental law. It begins with explaining some of the ways that economic analysis can be employed to generate the best environmental rules, including measures under what this essay terms as "economics-based environmentalism."

This includes focusing on the adaptability of markets and the benefits of spontaneous order, the integration of economic principles into any polycentric toolbox of environmental law approaches, the use of property-based externalities' analysis, the use of existing property rights, the creation of property rights, the utility of greater reliance on common law principles and related compensation and liability approaches, the increased use of private contracting terms and private ordering in general to satisfy individual and societal preferences for environmental responses, and the power and responsibility of consumers to demand in the marketplace the provision of environmental goods and services and environmentally responsible behavior rather than relying on the government to instead act with coercion to satisfy such preferences. That portion of the essay concludes with a proposal that would embed in law a requirement that agencies prove the existence of market failure and the exhaustion of economic alternatives to governmental regulation before being allowed to proceed with any top-down, interventionist governmental regulation.

The last portion of the essay focuses on theories from law and economics, including those related to the self-perpetuating behavior of bureaucracies, public choice models of legislation and regulation, and capture theory as barriers to any effective reform in the emerging fourth generation of environmental law -- whether it be those reforms proposed by others or even those suggested earlier in the essay.

Number of Pages in PDF File: 60

Keywords: environmental law, natural resources law, land use, environmentalism, free market environmentalism, common law environmentalism, ecology, economics based environmentalism, law and economics, public choice, bureaucracy, property rights, resiliency, adaptive management

JEL Classification: A10, A11, A12, A13, D60, D61, D62, H10, H11, K10, K11, K32. L50, L51, O33

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Date posted: June 29, 2014 ; Last revised: January 26, 2015

Suggested Citation

Kochan, Donald J., Economic Analysis in the Fourth Generation of Environmental Law: What Role? (November 4, 2014). 21 Journal of Environmental and Sustainability Law, 2014; Chapman University, Fowler Law Research Paper No. 14-5. Available at SSRN: http://ssrn.com/abstract=2460076

Contact Information

Donald J. Kochan (Contact Author)
Chapman University, The Dale E. Fowler School of Law ( email )
One University Drive
Orange, CA 92866-1099
United States
714-628-2618 (Phone)
714-628-2576 (Fax)

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