Deregulation Good For Environment

Alexander Volokh
BG News (Bowling Green, Oh.), April 26, 1996

Can deregulation be good for the environment? As Earth Day approaches, the question is not often asked. Ever since the first Earth Day in 1970, a distinction has usually been drawn between evil industrialists on the one hand and virtuous government regulators on the other. But a recent study from the Reason Foundation, How Government Building Codes and Construction Standards Discourage Recycling, suggests that government may be in fact subtly discouraging the use of recycled materials.

The government almost never enacts a law saying, "Thou shalt not use recycled materials." But many of the regulations hindering recycling are hidden. Because the government is such a large buyer, and because government officials enforce state and local building codes, the government can profoundly affect the use of recycled materials by its choice of what to buy and what to allow us to build with.

And just as many people read Consumer Reports before buying a consumer product, so do government agencies and building code officials look to recognized national standard-setting organizations before making their decisions. Two such groups are the Philadelphia-based American Society for Testing and Materials (ASTM) and the American Association of State Highway and Transportation Officials (AASHTO). While such groups are useful in creating uniform product standards, excessive government reliance on such groups discourages the use of recycled materials.

"Plastic lumber" is a case in point. Plastic lumber is a construction material made out of recycled plastic, and it's used to make products like marine pilings, sign posts, backyard decks, park benches and the like. There is some evidence that plastic lumber is more cost-effective, and may perform better, than wood. But it's not being used for "structural" applications -- for instance, walls that hold up a house. Because the proper testing techniques haven't yet been developed, no one would risk building houses out of it just yet.

The ASTM is the organization that people expect to establish these testing standards, but negotiations have been going on for over two years, and there is still no standard. Part of the ASTM's slowness comes from the newness of the plastic lumber industry. But some blame the structure of the ASTM, where competing industries sit on the standard-writing committees and can easily delay the process.

Another example is drainage pipes made of recycled high-density polyethylene (HDPE). Current ASTM standards don't actually prohibit recycled content in HDPE pipes, but they specify the characteristics of the plastic to be used in such excruciating (and, some would say, unnecessary) detail that they are akin to a [prohibition]. AASHTO goes further and flatly prohibits the use of recycled HDPE in its standards.

Until recently, the relevant ASTM committee had been in a seven-year deadlock over HDPE pipe standards. According to observers of the process, all competing manufacturers -- makers of concrete, steel, PVC, and pressure-grade pipes -- obstructed the process, perhaps fearing that their own market shares would drop if recycled HDPE pipes got a standard. Recently the ASTM has promulgated provisional standards for recycled HDPE pipes, but these only apply to certain limited categories of pipe.

Not that we don't need standards. As Jose Ortega y Gasset put it, "Barbarism is the absence of standards to which appeal can be made." But not all standards are rational, and not all standard-setting methods or organizations are ideal.

The problem isn't that organizations like the ASTM or AASHTO exist; they are useful groups. However, when governments rely on their standards, so that the standards become mandatory, innovation is deterred. Innovations like using plastic lumber, recycled HDPE drainage pipe, or other products with recycled content, have been perceived to involve risk; when given the choice, many governments choose the path of least risk by falling back on established norms like the ones from the ASTM.

In the meantime, waiting for Earth Day, recycling advocates should ponder this dilemma. Given wisdom has it that the way to encourage recycling is through recycling mandates, recycled-content requirements, price preferences for recycled materials, and other government programs. Perhaps, though, the answer is the opposite. Today, recycling is a growing industry. And like any other industry, recycling is being discouraged by excessive regulation and bureaucracy. Encouraging governments to state the performance requirements of what they need and let the market find the best producer, instead of mandating someone else's preferred materials and methods, is one way in which deregulation is good for the environment.

Alexander Volokh is an assistant policy analyst at the Reason Foundation, a public policy think tank in Los Angeles.

(also appeared in Daily Journal (Devils Lake, N.D.), April 22, 1996; The Independent (Gallup, N.M.), April 25, 1996; Martinez (Ca.) News-Gazette, August 8, 1996)