New Bottom Line Volume 3.16 – "Takings" Liberties: None Dare Call It Reason

August 23, 1994

In an unprecedented display of unity, 15 major US environmental organizations have undertaken a joint campaign to turn back what they describe as “an all-out effort to weaken our most important environmental laws.”

That effort, mounted by unnamed “special interest groups who profit from pollution and from exploiting public lands” constitutes a fundamental attack on the legal basis for decades of environmental law.

As the environmental coalition’s letter notes, “The opponents of strong environmental laws have been effective because they have reduced their arguments to three simple but misleading anti-environment messages:

  • ” ‘Takings’ — Industry claims that environmental laws take private property unfairly.
  • ” ‘Cost-Benefit and Comparative Risk Analysis’ — Polluters want to force the government to justify the benefits of environmental safeguards in monetary terms.
  • ” ‘Unfunded Federal Mandates’ — many cities and states want environmental laws to be voluntary unless the federal government pays for all local compliance costs.”

These points may sound reasonable on the surface, but they unravel dangerously on closer inspection. Let’s look at one of the arguments–the “Takings” provision. (We’ll consider the others in coming weeks.)

The “takings” argument is rooted in the Fifth Amendment of the US Constitution, which provides that private property may not “be taken for public use without compensation.” When government uses eminent domain to take property for a highway, it must compensate the landowners; that principle is familiar, and clear. And, as the environmental coalition’s letter notes, the government must “pay compensation when a regulation places a severe, unfair economic burden” on a property owner.

And there’s the rub. The environmentalists hold that regulation “is not a taking every time property value is lowered, but _can_ be considered a taking if property value is reduced so much that no viable economic use remains. This determination should be made on a case-by-case basis.” (Most existing case law agrees.)

The radical right position is that _any_ government action, from environmental regulations to zoning policies, that reduces property values requires compensation–arguing, in effect, that property holders have a natural right to pollute (even beyond the boundaries of their property), and that any attempt by society to restrict that pollution must be bought from the property owner. This turns the world on its head–perversely treating industrial pollution rather than pristine environment as the natural state, and elevating the right to pollute over the right to breathe.

The reasonable-sounding libertarian position thus becomes a well-crafted argument for large scale extortion; it masks the much more dangerous “taking” that we all live with every day–the pollution of water, air, land, and our bodies that constitutes a taking of both private and community value. The late Robert van den Bosch, professor of entomology at University of California, Berkeley, used to speak of the right to “biochemical privacy;” if you park your company’s pollutants in my body, you have to get my permission–and pay me rent. Otherwise, you’re trespassing.

An honest “free market” position would support Dr. van den Bosch’s perspective, and the Polluter Pays Principle. The producer of any substance–be it a product or the “non-product output” that we generally call waste–would be held responsible for the consequences of that production; if a company profits from the production of product or waste, it’s only fair that it pay the full expenses–external expenses as well as internal expenses–involved in that production. This “full cost accounting” would provide, at least in theory, a simple market incentive for the zero emissions companies that will be emerging in the not-too-distant future.

The lack of ideological or even philosophical consistency is amazing, though not surprising. Why is it that the anti-government, pro-free-market forces pushing the “takings” argument, and other restrictions on government’s role in protect health and safety, are happy to lease mineral rights from the Federal government at 19th century prices, or to accept cost-plus contracts from the Pentagon (the world’s leading example of a centrally planned economy)?

Some would say that the environmental groups are just trying to protect their political turf by protecting environmental laws–laws strongly favored by most Americans. But the same charge of self-interest could be levied at the attackers–who are trying to protect considerable financial turf as well.

(c) 1994 Gil Friend. All rights reserved.

New Bottom Line is published periodically by Natural Logic, offering decision support software and strategic consulting that help companies and communities prosper by embedding the laws of nature at the heart of enterprise.

Gil Friend, systems ecologist and business strategist, is President and CEO of Natural Logic, Inc.

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