Unintended Consequences and Environmental Policy

Last summer, Los Angeles experienced a rash of water main breaks that at the time baffled  city officials responsible for the 7000 plus miles of underground pipes.  In a new report,  a panel of experts concluded that the city’s 2009 water conservation program, which limited lawn watering to Mondays and Thursdays during the summer, increased the number of “dramatic pipeline failures known as blowouts.”  These blowouts occured, the experts surmise, because of large drops in water pressure on watering only days that were accompanied by unusual increases in water flow.  Where aging pipes were already fatigued, the drop in pressure led to blowouts.

Environmental policies not infrequently produce unintended consequences, some of them deleterious.  L.A.’s water conservation policy is a case in point.  The program has been quite successful in accomplishing its primary goal — 2009’s water usage declined to 1979 levels, when the city had a population that was a million people smaller.  But surely the designers of the Monday-Thursday watering program never anticipated that the limits would lead to catastrophic water main breaks.   Similarly, the Clean Air Act’s requirement that states meet ambient air quality standards may have provided states with incentives to allow polluters to install tall smoke stacks on those facilities located near downwind state borders in order to blow pollution across state borders.  And current incentives to increase the amount of solar energy we produce may have deleterious consequences to workers who produce solar panels, as Tim detailed earlier this week.  The good news is that each of these negative unintended consequences has a fix:  in the case of water conservation policies it may be as simple as having all odd numbered addresses water on two days and all even numbered addresses water on a different two days.

But environmental policies can also bring ancillary – and often unintended — benefits.  My favorite is that the reduction in carbon monoxide emissions from cars as a result of federal clean air standards led to a corresponding decline in suicides by carbon monoxide poisoning.  California energy policies enacted in the 1970s to encourage energy efficiency have made the state one of the lowest per capita emitters of carbon dioxide in the country, surely not a benefit the state’s policymakers were thinking about during Jerry Brown’s governorship.  Unfortunately, as Samuel Rascoff and Richard Revesz argued in an article several years ago, these ancillary benefits –even when recognized in advance — often are not taken into account in cost-benefit analysis. As a result, they argue, “conclusions about the desirability of regulation … are consistently distorted.”

I’m interested in other examples of unintended consequences of environemental policy (not consequences that are understood at the time of enactment, like ancillary air pollution benefits from greenhouse gas emisisons reductions).  Ideas?

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