http://www.precaution.org/lib/09/prn_cume_risk.090219.htm

Rachel's Democracy & Health News, February 19, 2009

Cumulative Impacts: Death Knell For Cost-benefit Analysis

[Rachel's introduction: The impacts of our various economic
activities are now adding up to a damaged world -- a world in which
Earth's natural capacity for self-renewal has been exceeded and
permanent degradation is evident. Our legal and regulatory systems
were never intended to limit the accumulation of small impacts.
Instead, U.S. law relies on cost-benefit analysis to justify
individual impacts -- a practice that is now obsolete because it is
destroying the planet as a place suitable for human habitation.]

By Peter Montague

In the beginning, planet Earth seemed limitless. Yes, humans could
see that they were making big changes locally -- hunting the wooly
mammoth to extinction, for example, or permanently altering forest
ecosystems with fire. However, for eons there was never a hint that
humans could become a force of geologic proportions, capable of
diminishing the entire planet's capacity to sustain human life. Then
in 1864 George Perkins Marsh published Man and Nature, subtitled
"Physical Geography as Modified by Human Action," the first
scientific study of accumulating harm.

In the U.S., "environment and health" only became a public issue in
the 1950s, starting with cancer-causing food additives and
radioactive fallout from A-bomb tests. In 1962, Rachel Carson's book
Silent Spring described widespread effects from pesticides, offering
evidence that humankind was damaging whole ecosystems.

Congress passed the Water Quality Act in 1965 because people knew
something was wrong when they saw rivers covered with mounds of foam
(from detergents). Even more people started paying attention when the
Cuyahoga River caught fire in Cleveland in 1969.

In 1970, M.I.T. Press published Man's Impact on the Global
Environment, which estimated that the total human "load" on the
natural environment was increasing 5 to 6% each year -- thus doubling
every 12 to 14 years. (By this measure, since 1970 the total human
impact on the global ecosystem has increased somewhere between 7-fold
and 10-fold. At these growth-rates, by 2050 (just 41 years from now),
if nothing changes, the total human impact will have grown another 7-
fold to 10-fold beyond where it is today. Can you image such a world?)

Public concern, validated by scientific information, forced Congress
to pass more than a dozen new national laws in the 1970s, intended to
limit specific harms to the environment. But those laws were not
designed (or intended) to control the cumulative effects of many
small environmental impacts.

As time passed, harm to the natural world grew more ominous and a few
scientists and legal scholars began to nibble around the edges of
this "cumulative impacts" problem. However, only in the past 2 years
have we seen a real breakthrough in analysis -- thanks chiefly to the
work of Joseph H. Guth, a biochemist and lawyer, and his colleagues
at the Science and Environmental Health Network, where Guth serves as
Legal Director.

Acknowledging the problem

In his 1980 book, Overshoot, William Catton, Jr., wrote,
"Infinitesimal actions, if they are numerous and cumulative, can
become enormously consequential." [pg. 177] And he noted that, by
1973, "The world was becoming a place wherein actions that used to be
quite harmless to others became harmful to all of us." [pg. 59]

This is the essence of the "cumulative impacts" problem. Actions that
are tolerable or even harmless at the individual level can degrade
the planet if thousands or millions of people do them. One person
fertilizing a lawn near the Chesapeake Bay makes no real difference
-- but when thousands do it, the Bay is degraded and the storied blue
crab begins to disappear.

People routinely cut down forests and woods, displacing habitat for
wildlife to make space for crops and domestic animals. One small farm
makes no difference, but in 1986 Peter M. Vitousek and others
estimated that the world's human population (then 4.9 billion) was
appropriating for its own use 40% of net primary productivity from
Earth's total available land. Net primary productivity on land is the
mass of plant material produced each year by photosynthesis using
energy from sunlight; it is the total food resource for land-based
life. (There is also net primary productivity in the oceans; if you
include this, then humans in 1986 were appropriating 25% of total
global net primary productivity, Vitousek estimated.)

Vitousek did not extrapolate into the future, but his finding meant
that humans would appropriate 100% of net primary productivity from
land when their numbers grew just 2.5-fold, which will occur around
the year 2050 at the current rate of population growth (1.3% per
year) if nothing changes.

In 1991, two researchers at Oak Ridge National Laboratory in
Tennessee examined 11 industrial chemicals [5 Mbyte PDF] that have
contaminated the entire globe (PCBs, benzene, mercury, etc.). Using
cancer risk estimates provided by U.S. Environmental Protection
Agency (EPA), they calculated that the worldwide lifetime risk of
cancer from just these 11 chemicals was one-in-a-thousand. They
commented, "Current regulatory approaches for environmental pollution
do not incorporate ways of dealing with global pollution. Instead the
major focus has been on protecting the maximally exposed individual."

This is an important point. U.S. risk assessments (used in conducting
"cost-benefit" analyses) evaluate the danger of a single risk to a
hypothetical most-endangered ("maximally exposed") individual. If the
threat to that individual is found to fall within "acceptable"
limits, then no regulation occurs and "acceptable" amounts of
contamination can be released forever after. Then another risk
assessment and cost- benefit analysis gives a green light to another
"acceptable" release of contaminants. Then another and another. No
one ever asks, "What is the total impact of all these 'acceptable'
risks?" That is the "cumulative impact" problem in a nutshell.

Now Joe Guth has analyzed this problem and offered solutions in three
scholarly papers,[1,2,3] one of which has already been published (in
the Vermont Journal of Environmental Law), and two of which are "in
press" -- soon to appear in the Barry Law Review[2] and the journal
Transnational Law and Contemporary Problems.[3]

To me, the centerpiece of this triad is the paper, "Cumulative
Impacts: Death-Knell for Cost-Benefit Analysis in Environmental
Decisions," though all three papers are essential reading.

In "Cumulative Impacts," Guth lays out the problem in the opening paragraph:

1. We have always assumed that we could tolerate unlimited small
increments of harm as byproducts of economic growth.

2. But now things have changed because numerous studies are telling
us that the cumulative impacts of our economic activities are
degrading the Earth's capacity to support humans.

3. Therefore, humans will have to abandon the use of cost-benefit
analysis to justify individual environmental impacts and, instead,
focus on limiting our cumulative impact to a sustainable size.

As evidence of cumulative harm, Guth cites the authoritative United
Nations-sponsored Millennium Ecosystem Assessment (MEA)[4] -- a
five-year study of the condition of the Earth's ecosystems, involving
1360 scientists from all across the globe.

When the Board of Directors of the MEA issued the first volume of the
study, they said, "At the heart of this assessment is a stark
warning. Human activity is putting such strain on the natural
functions of Earth that the ability of the planet's ecosystems to
sustain future generations can no longer be taken for granted."[5]

Guth also cites the United Nations-sponsored Global Environment
Outlook (known as GEO-4), published in 2007. The GEO-4 report
concluded (among other things) that human activities now require 54
acres (22 hectares) per person globally, but Earth can provide only
39 acres (16 hectares) per person without suffering permanent
degradation. We are living well beyond Earth's means.

(For additional corroboration, see Mathis Wackernagel and others,
"Tracking the ecological overshoot of the human economy," Proceedings
of the National Academy of Sciences (Vol. 99, No. 14, July 9, 2002),
pgs. 9266-9271 and see the web site of the Global Footprint Network.)

How did we get into this shape?

How did this happen? Joe Guth finds the answer in our laws, which are
the rules by which society generallly operates. If we want society to
operate differently, we've got to change the rules, change the law.

Guth examines legislative law (laws passed by legislatures, such as
the federal Clean Air Act and the Clean Water Act) and the common law
(the body of law created by judges, such as negligence and nuisance).
Guth finds that both bodies of law share similar goals and
assumptions, and both assign the "burden of proof" in similar ways,
which I'll explain.

Guth writes, "Our current property and environmental law,[6]
including both federal statutes and the common law, is intentionally
designed to promote unending growth in economic activity. It harbors
the presumption that economic activity generally provides a net
benefit to society despite any accompanying damage it may cause.
Grounded almost invisibly in this starting presumption, most of our
property and environmental laws permit interference with economic
activity only where that starting presumption is proved false, that
is, where a particular activity can be demonstrated to fail to
provide a net benefit to society. These laws for the most part do not
forbid damage to human health or the environment. Rather, even when
fully enforced they permit protection of human health or the
environment only where the benefits of doing so can be proved to
outweigh the costs.... So it is that cost-benefit analysis has become
the legal system's primary tool for deciding when economic activity
may be regulated in the interest of protecting human health and the
environment."

But there's more. As Guth has said, the law does not allow economic
activity to be curtailed just because it is harming someone. The law
will only allow an economic activity to be curtailed if a
cost-benefit analysis shows that the activity is creating more harm
than good. And the law puts the burden of proof on the harmed party,
or on the government, to prove that costs are exceeding benefits
before an economic activity can be curtailed or regulated. If the
harmed party (or the government) cannot meet that burden of proof,
the law defaults to its starting presumption: it allows the damaging
activity to continue.

"This allocation of the burden of proof transforms doubt and missing
information into a barrier to legal protection of human health and
the environment," Guth writes. "This explains why industrial
interests are rationally motivated under our legal system to invest
in the manufacture and spread of doubt and confusion." [See David
Michaels' book, Doubt is their Product, describing an industry
devoted to manufacturing doubt.]

So, if information is missing, or there exists scientific doubt, then
the law presumes that an economic activity should continue -- even
when the law acknowledges that harm is occurring. The default
presumption is that the benefits of economic activity always outweigh
the costs unless a specific cost-benefit analysis can show otherwise.

This explains why the environmental movement -- which has made truly
heroic efforts since 1970 -- has been unable to stem the degradation
of human health and the environment.

Another unspoken presumption of the law is that damage to human
health and the environment can continue to grow forever. Guth shows
this in in Figure 1. The upper curved line in Figure 1 represents
endlessly growing benefits from economic activity. The lower curved
line shows smaller (but also endlessly growing) legally-permitted
harms from economic activity. The space between the upper line and
the lower line is "net benefit" or "net social benefit" or "net
social utility" -- it is the residue of good that remains after costs
have been subtracted from benefits.

The world is new: on our finite planet, ecological limits exist

What's been slowly dawning on people in the last 2 decades is that
there really are limits on how much harm the Earth can tolerate.
There are limits to the total costs the Earth can sustain before it
is permanently damaged. The lower curved line in Figure 1 (which you
can think of as the growing human footprint), by growing without
limit as the law assumes it should, will eventually make the planet
unsuitable for human habitation. And since this planet is the only
place that anyone has ever found in the universe that supports human
life, the law is now allowing -- even promoting -- the destruction of
humankind's only home.

Guth's Figure 2 includes a horizontal line that represents the
ecological limits of the Earth -- the point at which the planet
starts to be permanently degraded, the point at which human damage
has exceeded the Earth's natural capacity for self-renewal. As Guth
says, "This is a limit that our current legal system is utterly blind
to." Our legal system does not acknowledge that such a limit exists.

Joe Guth continues, "Thus we see the fatal flaw inherent in our
system of environmental decision-making. Routinely allowing all
environmental impacts except those proved to fail a cost-benefit
test, it permits those impacts to grow without limit even when their
cumulative effect results in ecological overshoot. Many of these
impacts occur not because they actually satisfy the law's
cost-benefit test but because whenever we do not know enough, the
law's default structure permits them to continue."

Importantly, Guth points out a fundamental flaw in trying to use
cost- benefit analysis after we reach ecological limits: "Even
[though] cost-benefit analysis can effectively evaluate impacts when
we are far below ecological limits, it cannot do so once we exceed
those limits. Each incremental impact, if taken alone in an empty
world, might have caused cost-benefit-justifiable harm or even, in
many cases (such as carbon emissions), no harm at all. But under
conditions of ecological overshoot each incremental impact
contributes to a total loss that is immeasurable. Indeed, the
permanent loss of the ecological integrity of the Earth, since we
need it to survive and prosper, might fairly be considered an
infinite loss."

If you are going to suffer an infinite total loss, your cost-benefit
analysis of each increment of damage ceases to have any meaning.
Under conditions of ecological overshoot, cost-benefit analysis is a
meaningless exercise and a diversion from what's really important --
shrinking the human footprint back down to a size that Earth's
ecosystem can tolerate, learning to live well below the horizontal
line in Figure 2.

Guth concludes, "To maintain the ecological integrity of the Earth,
we need a new decision-making structure designed not to promote
endless growth in net benefits, but to accommodate the ecological
limits of the biosphere, the horizontal line of Figure 2." [Emphasis
added.]

Summary: U.S. law is dominated by cost-benefit analysis

To summarize, then, Joe Guth has described how, in general, the law
works (both statutory law and common law):

** Its goal is perpetual economic growth, even if some damage occurs
as a byproduct

** It presumes that the benefits of economic growth outweigh any
costs (or harms) until someone can prove otherwise

** It places the burden of proof on anyone who wishes to curtail or
regulate any economic activity, even a harmful activity, requiring
them to prove that the harms outweigh the benefits. If such a showing
cannot be made because of missing information, or scientific
confusion or uncertainty or doubt, then the law presumes that the
economic activity should continue.

** Seeking endless growth in net benefit, the law assumes that both
benefits and costs can grow without limit. The law has no way to
acknowledge that there exist ecological limits that sooner or later
must be exceeded by the endless growth of cumulative costs (because
the planet has a finite size), and which we exceed at the peril of
making our only home uninhabitable for our species.

Federal laws contain a few limited exceptions (which I'll describe
below) but, as Guth says, "Taken as a whole... the federal
environmental statutes are not directed toward an overarching goal
such as preservation of ecological integrity. Instead, with some
exceptions, they are deeply committed to a highly fragmented, cost-
benefit-driven evaluation of each individual action proposed by the
government to protect human health and the environment."

The way our laws are written, government regulators are not allowed
to take into consideration, or try to control, cumulative impacts.

Joe Guth continues: "These laws do not permit regulators broadly to
take account of what is happening to the world around them. They
embed regulators in a decision-making structure that may seem
scientific but in fact is profoundly unscientific because it prevents
them from responding to the ever more detailed findings by the world
scientific community that we are overshooting the Earth's ecological
capacities. Rooted in the assumption that ecological overshoot does
not occur, our current statutes are incapable of containing the
cumulative scale of ecological damage. Their approach to
environmental protection is firmly based in the conception of the
world as an empty one rather than as the full one that is in fact
arising all around us. It is an approach that has become outdated
because it is based on assumptions that are no longer valid."

Guth then discusses the common law, showing that modern liability
doctrines -- both negligence and nuisance -- do not prohibit all
harmful impacts, but require the same kind of cost-benefit balancing
that is pervasive in the federal statutes:

"Negligence and nuisance apply broadly to many different
circumstances, including cases arising from damage to human health
and the environment. These doctrines do not seek to prevent or impose
liability for all harm to human health and the environment.
Negligence, for example, places the burden of proof on damaged
plaintiffs to demonstrate that defendants created an "unreasonable"
risk of harm in order to make them liable for the damage they cause.
"Unreasonable" is defined not as a moral principle, but in cost-
benefit terms that compare the social utility of the particular
challenged act to the risks of resulting harm....

"Similarly, nuisance, the quintessential environmental tort, now
places the burden of proof on plaintiffs to prove that the
defendant's intentional acts are "unreasonable." As in negligence,
"unreasonable" is defined explicitly by a cost-benefit test...."

By placing the burden of proof on those who are harmed, the common
law "resolves cases of doubt and missing information in favor of
economic actors, allowing their damaging activities to continue and
rewarding confusion and ignorance," Guth writes.

All is not lost: a new decision structure is possible

With a new decision-making structure, we can learn to enjoy the
fruits of modern technologies while living within the Earth's
ecological limits.

This is where the precautionary principle fits in. Because we can
never be certain exactly where the ecological limits lie, once we
understand that we are approaching or exceeding those limits, there
is only one way to avoid ecological overshoot: eliminate or reduce
every environmental impact that we can. This means applying the
precautionary principle to all activities, large and small, that
cause an environmental impact:

(a) shifting the burden of proof by assuming that every action that
causes an impact on the Earth may be harmful unless proven otherwise;

(b) always seeking, then choosing, the least-harmful alternative; and

(c) paying attention to consequences after decisions have been made,
monitoring, looking for evidence of environmental harm, and being
prepared to reverse course if necessary.

(d) This last requirement means we should favor decisions and courses
of action that are reversible, avoiding irretrievable commitments
(such as the current coal-industry proposal to curb CO2 emissions by
pumping liquid carbon dioxide deep below ground, hoping it will stay
there forever).

Hints of a new decision structure in some existing U.S. laws

In Section II of his "Cumulative Impacts" paper, Joe Guth argues that
"Our legal system already harbors examples of decision-making
structures that establish a principle or standard of environmental
quality or human health and do not rely on cost-benefit balancing.
These examples... show that such legal principles or standards can
enable the legal system to contain the growth of cumulative impacts."
[Emphasis added.]

However, to succeed, Guth argues, we must apply these legal
approaches broadly to our entire economy: "We must subject all our
actions to a new decision-making structure designed to defend and
maintain the ecological integrity of the Earth."

One of these approaches is to establish "environmental rights," as
several states have done by amending their constitutions to give
citizens an explicit right to clean air and water, for example. But
Guth argues that judges typically balance "environmental rights"
against other kinds of rights when they conflict, so environmental
rights (like other rights) cannot be enforced to their full extent.
"Establishing these kinds of [environmental] rights is a critical and
valuable step, one that requires care if the rights are to be
effective."

Meanwhile, as work to establish environmental rights "can and must
continue," Guth argues, "both the common law and legislation are
quite capable of defining and enforcing standards of environmental
integrity and human health."

He then shows how U.S. common law in the 18th and 19th centuries
(before the modern doctrines of negligence and nuisance were
developed) was capable of controlling cumulative impacts. The older
liability rule was expressed (in Latin) as "sic utere tuo ut alienum
non laedas" ("use your own so as not to injure another"). If your
economic activities harmed your neighbor, you were liable for the
harm regardless of what benefits your economic activity might provide
to society.

"The principle of sic utere tuo was built around the presumption that
material damage to property was socially undesirable, and it imposed
a rule of strict liability without regard to the social utility of
the interfering activity," Guth writes. In other words, there was no
cost-benefit balancing in the older doctrine -- you could not harm
your neighbor and get away with it by arguing that your actions
created net social benefits. (In his published paper, "Law for the
Ecological Age[1], Guth traces legal history, showing how the common
law changed profoundly in the 19th century, from "sic utere tuo" to
cost-benefit balancing.) Under "sic utere tuo" every economic actor
who contributed to a demonstrable harm could be held liable for the
cumulative results to which his or her actions contributed.

"Under rules of law that were focused on protecting defined interests
[usable water in a river, for example], rather than on whether a
defendant's acts provided a net benefit to society, the law was able
to protect those interests from the cumulative impact of individually
harmless acts," Guth says. He cites older cases in which businesses
contributing small amount of toxicants to a river were held liable
for the end result, which was a totally-polluted river. They were
forced to stop contributing even small increments to the problem.
Then, as industrialization increased, cost-benefit balancing was
introduced and economic actors were presumed to create "net benefits"
and were allowed to continue polluting unless their pollution could
be shown to fail the cost-benefit test.

Besides showing that profoundly different legal structures are
possible, this history of U.S. property law reveals an important and
encouraging fact: in the past, we have changed our law dramatically
to suit the goals and circumstances of the times, so we can change it
again.

Guth then offers some examples indicating that, in small ways at
least, some federal environmental laws are beginning to address
cumulative impacts of individual pollutants. He points to particular
provisions in the federal Clean Air Act and Clean Water Act requiring
the government to take into consideration total emissions of
particular pollutants into air and water and then allocate those
emissions among economic actors, holding the total emissions of each
particular pollutant within fixed limits. He points to the "cap" part
of the "cap and trade" system created to limit sulfur emissions in
the U.S. Acid Rain program. This "cap" puts a limit on cumulative
emissions from large industrial facilities emitting sulfur.

Similarly, once a species is designated as "threatened" or
"endangered" under the Endangered Species Act, government must
prevent all actions that contribute to the demise of that species.

These are examples of federal statutes and early common laws that are
able to control cumulative impacts, but they have been applied only
to a few pollutants or impacts on species or common-law-protected
interests, each controlled one at a time. They do not broadly seek to
prevent ecological degradation as a whole.

A broad legal principle of preservation of ecological integrity

Ultimately, Guth argues, the law will need to expand this conceptual
approach to define a broad legal principle of preservation of
ecological integrity: "For in ecology we can discover how to evaluate
ecological systems, what impacts the Earth can tolerate and what we
need to maintain and protect from degradation," he says,
acknowledging that it will not be simple or easy.

Some progress in this direction has already been made, he points out.
The Swedish government has set 16 environmental quality goals that
should be met and maintained for the foreseeable future, with many
measurable benchmarks. The Natural Step organization has defined four
principles of sustainability that aim to allow economic activity to
occur within ecological limits. Various ecological studies and
organizations have defined what constitutes "degradation" of an
ecosystem. Much more work is needed, but we're not starting from
scratch.

Joe Guth offers some new ideas of his own for how to restructure the
law around a principle of preservation of ecological integrity. In
his paper, "Law for the Ecological Age," Guth has proposed creating a
new "ecological tort," a "legal rule of the common law that would
presumptively impose liability for impacts on the environment that
may contribute to ecological degradation."

He has also proposed a "Model State Environmental Quality Act" that
"defines a threshold level of environmental impacts that would
trigger placing the burden of proof on defendants, a definition of
who should have standing to assert this rule of law, and a temporary
affirmative defense for those engaged in a meaningful search for less
damaging alternatives."

This does not exhaust the list of suggestions and proposals that Joe
Guth briefly describes in his "Cumulative Impacts" paper. The more
important point is that Guth's three papers have clearly outlined the
specific ways the law will have to change if we are to reverse the
slide (driven by cumulative impacts) toward ecological degradation
and irreversible destruction of humankind's only home, planet Earth.

He has also excavated our legal history to show that, in the past, we
in the U.S. have signficantly changed our law in response to new
social objectives and realities, and therefore we can do it again.

Joe Guth concludes,

"The American government and legal system bear a duty to respond to
the rise of cumulative impacts. The growing human ecological
footprint has made untenable the assumptions on which our current
environmental decision-making structure is based. The central goal of
property and environmental law must shift from promoting endless
growth in costs and benefits to maintaining the ecological systems we
need to survive and prosper.

"By adopting such a new goal, the law would transform the shape of
the economy. If the law contains the permissible scale of cumulative
environmental impacts, the economy would become one that continues to
develop but accommodates rather than undermines the ecological
systems our welfare ultimately depends on. Cost-benefit analysis
might remain useful as we seek less damaging alternatives in a quest
to reduce the scale of cumulative impacts, but it could no longer be
used to justify limitless increments of ecological degradation."

Now it's up to all of us to decide how best to change the law, and
then to get those changes made. The world is new -- because for the
first time in human history the regenerative capacity of the Earth is
being palpably damaged by the human economy. In this new world, many
of our old assumptions, attitudes, and goals are obsolete and getting
in the way. But we can fix all that, so let's get to it. Survival is
not negotiable.

==============

[1] Joseph H. Guth, "Law for the Ecological Age," Vermont Journal of
Environmental Law, Vol. 431 (2008), pgs. 431-512. Available at
http://www.vjel.org/journal/pdf/VJEL10068.pdf

[2] Joseph H. Guth, "Cumulative Impacts: Death-Knell for Cost-Benefit
Analysis in Environmental Decisions," Barry Law Review, 2009. In
press. http://www.barry.edu/law/studentLife/lawreview.htm

[3] Joseph H. Guth, "Resolving the Paradoxes of Discounting in
Environmental Decisions," Transnational Law & Contemporary Problems
Vol. 18 (Winter, 2009). http://www.uiowa.edu/~tlcp/html/view_iss
ues.html

[4] Millennium Ecosystem Assessment -- a series of reports issued by
the United Nations starting in late 2005, assessing the status of
ecosystems worldwide, including (but by no means limited to) effects
on human health. The work began in 2001 and involved 1360 scientists
http://www.millenniumassessment.org/en/Global.aspx

[5] Millennium Ecosystem Assment Board of Directors, Living Beyond
Our Means: Natural Assets and Human Well Being (2005).
http://www.millenniumassessment.org/en/BoardStatement.aspx

[6] By "property and environmental law," Guth is referring to "all
our laws that control the impacts people may have on the environment,
both by altering their own lands and by externalizing impacts onto
the lands of others, or of the commons."