Center for Progressive Regulation
 CPR >> Environmental Enforcement

Environmental Enforcement


The Issue
What is the most effective way to make sure industry and other regulated entities comply with our nation’s environmental laws?

Effective enforcement is key to ensuring that the ambitious goals of our environmental statutes are realized. Enforcement refers to the set of actions that the government can take to promote compliance with environmental law. . Currently, rates of noncompliance with environmental laws remain disturbingly high; experts believe that as many as twenty to forty percent of firms regulated by federal environmental statutes regularly violate the law. Tens of millions of citizens live in areas out of compliance with the health based standards of the Clean Air Act, and close to half of the water bodies in the country fail to meet water quality standards set by the Clean Water Act. In communities burdened by multiple sources of pollution, noncompliance has particularly serious health consequences for affected residents.

As in virtually every other area of government regulation, environmental enforcement traditionally has been based on the theory of deterrence. This theory assumes that persons and businesses act rationally to maximize profits, and will comply with the law where the costs of noncompliance outweigh the benefits of noncompliance. The job of enforcement agencies is to make both penalties and the probability of detection high enough that it becomes irrational– unprofitable-- for regulated firms to violate the law.

EPA’s enforcement policies traditionally have reflected these principles. EPA has emphasized the importance of regular inspections and monitoring activity to detect noncompliance, and has responded to violations with swift and appropriate sanctions. EPA’s policies also mandate that the agency recover the economic benefit firms realize through noncompliance, since if a firm is able to profit from illegal activity, it has little incentive to comply in the first place.

State environmental agencies actually carry out the majority of enforcement activity in this country because most states have received authority from EPA to administer federal environmental laws under EPA oversight (see CPR Perspective on Devolution) States also administer and enforce their own state laws. As in other areas of environmental regulation, the quality of state enforcement programs vary considerably. Some states carefully follow EPA mandates and vigorously enforce environmental requirements. In other states, enforcement is relatively lax, and agencies rarely respond to violations with penalties.

Citizen enforcement also is a feature of most federal environmental statutes. The statutes allow citizens to sue companies for violations when the government fails to do so and various, often strict, procedural conditions are met. Traditionally, Congress has viewed citizen enforcement as an important supplement to agency enforcement and an important prod to agency regulators.

What People are Fighting About

In recent years there has been a sharp debate over the future direction of environmental enforcement. Many states and regulated entities advocate a more business-friendly, conciliatory enforcement strategy, one that does not emphasize enforcement actions and penalties as the keys to securing compliance. In their view, businesses are likely to comply without resort to sanctions because of adherence to social and political norms, market forces, and other factors.

What’s At Stake?
-Whether the protections of our environmental laws will be implemented effectively
-Whether environmental quality will improve

Thus, many states have reduced funding for inspections. enforcement cases and similar activities, and shifted resources toward compliance assistance programs. Some have created “customer service centers” for regulated entities. Many states do not follow EPA guidance for responding to violations with “timely and appropriate” enforcement actions. Many impose only limited penalties on violators, penalties that typically are far lower than those assessed by EPA in similar circumstances. Many states fail to recover economic benefit when assessing penalties--a core element of deterrence theory. In the past decade, almost one-half of the states have enacted environmental audit privilege or immunity laws that preclude penalties for violations voluntarily disclosed and corrected by regulated entities as a result of environmental audits. These laws also keep materials contained in environmental audits secret and exempt from public disclosure.

At the same time, EPA has to some degree deemphasized traditional enforcement and used its limited resources to provide more compliance assistance to small businesses and other regulated sectors. It has also searched for positive incentives for companies that carry out self-policing efforts. Until very recently, however, EPA has continued to demand that the states impose sanctions, conduct inspections, and bring enforcement actions as the main tools for deterring firms from violating the law. EPA also resisted the most far-reaching efforts of states to weaken enforcement of environmental laws. Funding shortfalls and emerging policy changes in such areas as whether new sources must obtain new permits have taken their toll and EPA’s commitment to deterrence-based enforcement appears to be weakening.

In reaction to these changes, environmental groups, contend that government enforcement is too lax, that too often fines for violating environmental requirements have become no more than a routine cost of doing business for regulated entities, and that the government lacks the resources to pursue most violations. They would like to more vigorously enforce environmental violations. During the past decade or so, however, the Supreme Court has erected a series of hurdles to citizen enforcement of environmental laws. The Court has imposed restrictions on who has standing to bring suit, what type of illegal conduct can be challenged, when a decision is “ripe” for suit, when government agencies can be sued, and when attorneys fees can be awarded to successful plaintiffs’ attorneys. These court-imposed obstacles have significantly undermined the role envisioned by Congress for citizen enforcers.

CPR's Perspective

Both experience and a host of empirical research demonstrates that deterrence-based approaches promote compliance and reduce pollution. Inspections, the threat of inspections, timely and appropriate enforcement responses, or other enforcement actions tend to increase the rate of industry compliance. Conversely, the absence of deterrence-based enforcement, that is, the absence of a threat of meaningful sanctions, often translates into noncompliance.

Decisions on the Table
-Whether the federal government will continue with strong environmental enforcement efforts
- Whether EPA will permit states to pursue business-friendly enforcement programs without demonstrating improvements in compliance or environmental conditions
- Whether citizens will continue to have access to the federal courts to remedy violations of environmental laws

The effectiveness of the enforcement strategies favored by many states has yet to be proven. Few states have been able to demonstrate improvements in compliance or improved environmental conditions from their conciliatory strategies, or, have even been willing to devote the resources necessary to document such results. Conciliatory enforcement by states thus could lead to higher rates of noncompliance by firms and increased public exposure to harmful pollutants. It also could undermine the national uniformity Congress intended in enacting the federal environmental laws.

A number of elements are critical to to effective environmental enforcement:

  • As agencies expand compliance assistance and incentive programs, they must maintain a strong, credible threat of enforcement. Strong enforcement motivates many regulated parties to strengthen their internal regulatory systems and promotes voluntary compliance by ensuring firms that voluntarily comply that other firms cannot gain a competitive advantage by not complying with applicable laws and regulations.

  • To encourage regulated entities to develop voluntary compliance programs, firms that conduct audits or carry out other self-policing efforts should be rewarded with benefits like less frequent inspections or lower fines. But these self-policing systems should supplement, not replace, traditional enforcement activities. Audit privilege and immunity laws are unnecessary and undesirable. They are unnecessary because there are many existing incentives for firms to conduct audits even without such laws, including lower insurance premiums, reduced waste, reduced liability, and others. Such measures are undesirable because they complicate and increase the costs of enforcement, and shield important environmental information from the public.

  • Information disclosure has proven to be a potent force in motivating firms to improve environmental performance (see CPR Perspective on Right to Know). EPA and state agencies should publicly spotlight the compliance and performance status of regulated entities to generate important public pressure for compliance and improved performance.

  • EPA should implement a “differential oversight” scheme that rewards states that have effective and successful enforcement programs with reduced oversight and greater flexibility, and publicly report its evaluation of state enforcement programs in order to motivate states environmental performance with the power of an external spotlight (See CPR Perspective on Devolution.)

  • Citizen enforcement plays a valuable role in promoting environmental compliance, spurring agency enforcement efforts and providing an important deterrent to noncompliance when government agencies fail to act either because of lack of resources or political will. Federal environmental and civil rights statutes should be amended to ensure citizens access to the courts to enforce environmental violations.