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What Should Libertarians Think About the Trump Administration's NEPA Reforms?

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The Trump Administration’s rewrite of regulations governing federal agency compliance with the National Environmental Policy Act (NEPA) took effect today. Many business groups and conservative office-holders cheered this move. Multiple environmentalist groups and blue states have already rushed to court seeking to overturn the rules. What should a libertarian think?

NEPA is relatively unique among federal environmental laws in that it imposes no regulatory restrictions on private economic activity, as such. Indeed, NEPA does not impose any substantive environmental restrictions at all. Rather, NEPA requires that federal agencies conduct environmental impact statements of major agency actions that are likely to have significant environmental effects, and disclose these assessments to the general public.

The underlying idea of NEPA—that federal agencies should consider the full range of likely consequences of major actions—is akin to basis for requiring cost-beneift analyses. In both cases, the idea is that requiring agencies to consider the likely positive and negative effects of their actions will improve agency decision-making, and that disclosing the outcomes of such analyses will help hold agencies accountable for bad decisions.

NEPA further embodies the idea that it is particularly appropriate to hold the federal government to stringent environmental standards. This is a common sense idea. After all, it does not make sense for the federal government to spend tax dollars creating or exacerbating environmental problems that it will then have to spend more tax dollars (or regulate private conduct) in order to clean up. Adopting a general principle that the federal government should “first, do no harm” to the environment (at least whenever this is possible) requires that government agencies consider the likely environmental consequences of their actions before they act. It is also appropriate to impose this particular burden on government agencies because governmental entities are not subject to the same competitive and other pressures that (at least sometimes) serve to constrain environmentally destructive behavior by private firms.

The above are reasons why even those who are generally skeptical of federal regulation might support fairly stringent NEPA requirements. But there’s more to the story.

NEPA’s requirements apply to a wide range of federal activities that implicate (and in some cases control) private economic activity, including federal infrastructure projects and permitting programs. This means that NEPA sometimes serves to increase the time and costs of private economic activity that requires governmental permission or cooperation. Given the breadth of federal permitting requirements and federal funding of major economic projects, this means NEPA’s effects are not limited to government actions.

So what to make of the Trump reforms? I have not studied the reforms in sufficient detail to have reached a firm conclusion, but I have sense of how I feel about the trade-offs involved. Insofar as the regulatory reforms seek to streamline or accelerate the NEPA review process, this seems like a good idea. But insofar as these reforms will enable federal agencies to escape detailing and disclosing the likely environmental effects of their actions, that seems like a step backwards. Insofar as NEPA unduly constraints private economic activity, it seems to me that the focus should be upon lessening the federal government’s stranglehold on such activity, rather than on short-circuiting environmental reviews. This is another way of saying that (at its worst) NEPA exacerbates the negative consequences of over-extending federal influence and control over what should be local resource and land-use decisions. Solve that problem, such as by decentralizing more of such decision-making, and even a stringent NEPA would not seem so bad.


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