The Risks and the Advantages of Agency Discretion: Evidence from Epa's Project Xl
Posted: 7 Sep 2000
Criticism of the administrative state seems to have increased exponentially over the past two decades, particularly with regard to environmental regulation. Many commentators assert that the "command and control" approach to enforcement is now anachronistic. Further, it has been characterized as "ossified", likely to discourage innovation, a disincentive to continuous environmental improvement, economically inefficient, a violation of free market principles, and undemocratic. Many commentators urge some form of "regulatory reinvention" or reform. Their unanimity ends, however, when it comes to which adaptions to adopt.
Since 1995, the U.S. Environmental Protection Agency has struggled to implement its own reforms, including Project XL. Through Project XL, (which stands for "Excellence in Leadership"), EPA is exploring more flexible approaches to encourage collaborative, problem-solving, outcome-oriented compliance with federal and state standards. In doing so, EPA has experimented with regulatory models that are based on "adaptive management" theory. As it turns out, this theory is very much at odds with the enforcement philosophy upon which EPA was founded. See Lee, Kai N. Compass and Gyroscope: Integrating Science and Politics for the Environment. Washington, D.C.: Island Press, 1993; Sparrow, Malcolm K. Imposing Duties: Government's Changing Approach to Compliance. Westport, Connecticut: Praeger Publishers, 1994.
The constraints of formal discretion, as typically set out in various government enforcement policy guidances, are well known. However, EPA's innovative technology/compliance initiatives are, essentially, discrete adaptive management experiments. As such, they represent Agency attempts to encourage innovative schemes that stretch or even contradict established Agency "dicta". These initiatives require bureaucrats to reanalyze regulatory intent in ways they have never before considered. Thus, the question: how do agencies behave when making judgments on projects for which no internal guidance yet exist?
The article examines the role that "informal discretion" has played in programs like Project XL and the Common Sense Initiative, and the degree to which the concept has been stretched in attempting to negotiate these projects with the private sector. The article also suggests that a more aggressively flexible approach to administrative discretion may be vital to EPA's attempts to garner further innovative proposals from the regulated community. Finally, the article discusses the degree to which "informal discretion" might invite regulators to re-conceive established regulatory safeguards that now, in their view, make the implementation of innovative compliance technologies and regulatory schemes practically impossible.
Part I reviews some of the strategic considerations behind EPA's creation, as well as its institutional structure and operation, concluding that EPA's history and structure make it a problematic setting in which to apply adaptive management techniques. The clash of philosophies between adaptive management and command and control generates significant tension within EPA. Part II discusses the doctrine of administrative discretion and its importance to the design of Project XL. Through interviews with Agency staff and the regulated community, the article analyzes the varied reactions of environmental advocacy groups, state agencies, regulators and the public to the XL philosophy. The conflict that XL generated within EPA's own philosophically-divided staff is also discussed. Part III outlines several earlier attempts to move EPA towards more collaborative (in this case, "performance-based") approaches to achieving compliance under the Bush and Clinton administrations.) It was these initiatives that culminated in the creation of Project XL in 1995. Part IV analyzes stakeholders? political reactions to XL. Intra-agency disagreements over the appropriate exercise of discretion in the context of numerous XL projects are also examined. Part V suggests strategies that might enable the Agency and the regulated community to move towards the use of adaptive and collaborative approaches to environmental management; strategies that encompass the legitimate needs of the Agency, and the strong reactions that various stakeholder groups have already expressed concerning Project XL.
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