67 Pages Posted: 9 May 2014 Last revised: 28 Apr 2015
Date Written: March 10, 2015
Over the past forty years, environmental trading systems have emerged as one of the primary innovations of American environmental law. In fields ranging from climate change mitigation to wetlands protection, regulated entities now may proceed with otherwise proscribed activities in return for providing extra protection at some other place or time. At their best, these trades achieve environmental goals while increasing flexibility and lowering the economic costs of regulation. In practice, that promise has not always been achieved, and the emergence of environmental trading systems has at times been quite controversial. But they have become increasingly pervasive.
This Article considers environmental trading in a new context. The United States contains tens of thousands of dams, and these dams have drastically altered river systems. While many of these dams also provide important societal benefits, a major reconfiguration of America’s dams would greatly improve those dams’ collective balance between benefits and harms. To date, that kind of major reconfiguration has not taken place. But a restoration project on Maine’s Penobscot River illustrates how trading might create such change. By exchanging reduced environmental regulatory constraints and increased energy generation in some locations for dam removals and other environmental improvements elsewhere, the project will create major environmental improvements without any loss of hydropower.
Using that project as a model, this Article analyzes how trading systems might facilitate better reconciliation of the positive benefits and negative impacts of dams. Our conclusions are qualified; while we argue that trading systems hold promise, applying them to dams will not be easy. Nevertheless, the concept is worth pursuing, and we offer a series of legal reforms to that end. More broadly, the analysis illustrates both the promise and the challenges that face environmental trading systems as they continue their expansion through the field of environmental law.
Keywords: dams, dam removal, hydropower, environmental trading system, mitigation, Penobscot
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