What We Know About Opportunities for Intergovernmental Institutional Innovation: Policy Issues for an Industrializing Animal Agriculture Sector

Abstract

Textbook wisdom would suggest that the Congress and the U.S. Environmental Protection Agency (EPA) are taking an appropriate approach to policies regarding environmental risks associated with animal agriculture in the United States. Relevant federal environmental regulations are based on performance standards, which are preferred on economic efficiency grounds over technology-based regulation (Baumol and Oates). Furthermore, the states are given the opportunity to implement these standards-based federal regulations, a feature that allows for policy customization in accordance with unique environmental attributes of each state. Pressure from environmental regulation, in combination with the increased mobility of large vertically integrated livestock production units (Abdalla, Lanyon, and Hallberg) should, in theory, act to optimally allocate concentrated animal feeding operations (CAFOs) in areas of the country that have low environmental vulnerability to the byproducts of animal agriculture, and, thus, have lower costs of compliance. Smaller and land-extensive livestock operations that are not so readily mobile would remain in locations where, because of lower and different environmental risk