The New “Contractarian” Paradigm in Environmental Regulation

Abstract

In response to criticism of the traditional command-and-control approach to environmental regulation, state and federal regulators have created a “contractarian” approach. More specifically, contractarian environmental regulation consists of an arrangement in which regulators agree not to enforce various laws applicable to regulated entities in exchange for the entities’ agreements to fulfill additional obligations not required by existing law. In this article, Professor Dana argues that the contractarian approach stems from two factors: political disagreements that make the amendment of existing environmental laws difficult and the complexity of environmental problems, which makes a decentralized approach to regulation desirable. He then discusses four recent regulatory reform initiatives that both illustrate how contractarian regulation works and explicate the difference between it and command-and-control regulation. Professor Dana argues that the contractarian approach, as compared to its command-and-control counterpart, has potential costs as well: decreased participation in the regulatory process by environmental advocacy groups and stasis in the overall regulatory system. Finally, Professor Dana contends that Congress must address any shortcomings of the contractarian approach and strike a balance between the approach’s enhancement of localized environmental regulation, on the one hand, and its potential to cause regulatory entrenchment and decreased public participation, on the other.