Cornell Law Review Volume 99 Article 3 Issue 1 November 2013 Private Environmental Governance Michael P. Vandenbergh Follow this and additional works at: http://scholarship.law.cornell.edu/clr Part of the Law Commons Recommended Citation Michael P. Vandenbergh, Private Environmental Governance, 99 Cornell L. Rev. 129 (2013) Available at: http://scholarship.law.cornell.edu/clr/vol99/iss1/3 This Article is brought to you for free and open access by the Journals at Scholarship@Cornell Law: A Digital Repository. It has been accepted for inclusion in Cornell Law Review by an authorized administrator of Scholarship@Cornell Law: A Digital Repository. For more information, please contact [email protected]. \\jciprod01\productn\C\CRN\99-1\CRN103.txt unknown Seq: 1 12-NOV-13 14:03 PRIVATE ENVIRONMENTAL GOVERNANCE Michael P. Vandenbergh† Environmental law has quietly transformed from a positive law field deeply rooted in administrative law to one that is also heavily rooted in pri- vate law and private governance. After two decades (1970–1990) of re- markable activity, more than two decades have now passed without a major federal environmental statute (1991–2012). Whether the appropriate next step is expansion or contraction, reforms to the federal statutory framework have stalled. Federal regulatory activity and state and local measures have filled some of the gap, but private governance efforts—the pursuit of public ends through private standards, monitoring, enforcement, and dispute reso- lution—now play an important role. Corporations report that their toxics use is regulated more by private supply chain contract requirements than the federal toxics statute. The fate of fourteen percent of the temperate forests and seven percent of the fisheries around the world is in the hands of private certification systems. More money is spent on private environmental inspec- tions than on the entire federal Environmental Protection Agency enforce- ment office. The emergence of private governance is hiding in plain view because the conceptual model by which environmental law is viewed and the metrics by which legal activity is measured do not square easily with private governance. Environmental preferences are expressed in private market deci- sions, not through voting or lobbying. Standard-setting, enforcement, and dispute resolution occur through private actions and institutions, not legisla- tures, agencies, or courts. This Article demonstrates the value of conceptual- izing seemingly disparate private activities as a discrete new model of environmental governance. Viewing private environmental governance in this way provides new insights about collective action problems, reframes the standards used for environmental instrument choice, and suggests new ac- tors and actions to address environmental problems. INTRODUCTION ................................................. 130 R I. THE GROWTH OF PRIVATE ENVIRONMENTAL GOVERNANCE . 140 R A. What Is Private Environmental Governance? ........ 141 R B. Examples of Private Environmental Governance .... 147 R † Professor of Law, Director, Climate Change Research Network, and Co-Director, Energy, Environment and Land Use Program, Vanderbilt University Law School. The au- thor thanks the participants at the National Research Council’s Sustainable Procurement workshop, the Environmental Law Institute’s Corporate Environmental Management in the Era of Private Governance roundtable, and the Wake Forest Law School faculty work- shop. Linda Breggin, Lisa Bressman, Jon Cannon, Caroline Cecot, Mark Cohen, Paul Edelman, Dan Farber, Richard Lazarus, Kai Lee, Will Martin, Andy Mims, William Peder- sen, Tracey Roberts, Ed Rubin, J.B. Ruhl, Jeffrey Smith, Andrew Smith, Kevin Stack, and Yesha Yadav provided helpful comments. Emma Doineau, David Goldman, Katherine Huey, Consuela Mejer, and Amanda Nguyen provided valuable research support. 129 \\jciprod01\productn\C\CRN\99-1\CRN103.txt unknown Seq: 2 12-NOV-13 14:03 130 CORNELL LAW REVIEW [Vol. 99:129 1. Collective Standard-Setting......................... 148 R 2. Bilateral Standard-Setting ......................... 156 R C. Summary ........................................... 161 R II. TOWARD A THEORY OF PRIVATE ENVIRONMENTAL GOVERNANCE ............................................ 162 R A. The Private Environmental Governance Model ..... 163 R 1. Small-Scale Private Ordering ....................... 164 R 2. Large-Scale Private Ordering ....................... 165 R B. Private Environmental Governance and New Governance ........................................ 170 R III. OBJECTIONS ............................................. 175 R A. Is Private Environmental Governance a Coherent Concept? ........................................... 175 R B. Has Market Failure Occurred? ...................... 181 R C. Is Private Environmental Governance of Concern to Lawyers? ............................................ 182 R D. Does Private Environmental Governance Matter? . 184 R 1. Standards ....................................... 185 R 2. Effects on Environmental Behavior ................. 188 R 3. Effects on Environmental Quality .................. 192 R E. Why Is the Scope of Private Governance Hard to See? ................................................ 195 R F. Will Private Environmental Governance Lead to New Instruments? .................................. 197 R CONCLUSION ................................................... 198 R INTRODUCTION Environmental law is not what it once was. It is no longer just a subfield of positive law, namely administrative law, starting with man- dates in the form of statutes, translated into regulations and enforced by agencies, and reviewed by trial and appellate courts, generating oc- casional iconic Supreme Court decisions such as Vermont Yankee,1 Chev- ron,2 and Massachusetts v. EPA.3 It is understandable if this is your view of environmental law. If you took an introductory environmental law class at almost any law school, read almost any environmental law casebook or undergraduate policy textbook, read the 300 or more en- vironmental law articles published every year, or followed environ- mental policy debates in the mass media, you would be fully justified in believing that this positive, public governance model is environ- 1 Vt. Yankee Nuclear Power Corp. v. Natural Res. Def. Council, Inc., 435 U.S. 519 (1978). 2 Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984). 3 549 U.S. 497 (2007). \\jciprod01\productn\C\CRN\99-1\CRN103.txt unknown Seq: 3 12-NOV-13 14:03 2013] PRIVATE ENVIRONMENTAL GOVERNANCE 131 mental law.4 This is also the model that fits many of the metrics used to monitor environmental law: the number of major statutes and regu- lations, the costs and benefits of major regulations, the number of pages devoted to environmental issues in the Federal Register, the size of agency budgets and staff, and the number of enforcement actions and reported decisions.5 The standard model of environmental law still describes impor- tant aspects of what many environmental lawyers do and still has im- portant effects on environmental behavior and environmental quality. Government officials at the federal and state levels are still engaged in developing, implementing, and enforcing important public environ- mental regulations. Industry and environmental groups lobby and lit- igate to affect the scope and implementation of public environmental laws and regulations. Corporations change behavior in response to regulations and enforcement actions affecting the handling of hazard- ous materials and discharges to the air and water. Household emis- sions are affected by new motor vehicle tailpipe standards, appliance efficiency standards, and pesticide regulations. In some regions, states have adopted new statutes and local governments have adopted new ordinances to address climate change, toxics, and other issues.6 Yet no major federal environmental statute has been enacted since the Clean Air Act Amendments of 1990. The period of statutory inaction (1991–2012) now exceeds the period of statutory growth (1970–1990).7 Despite substantial scholarship and advocacy directed toward the development of new public governance schemes, no major federal statute on climate change is likely in the near term,8 even though climate issues are arguably a more fundamental threat to the domestic and global environment than the problems addressed by the framework erected between 1970 and 1990.9 Reasonable arguments 4 See Michael P. Vandenbergh, The Private Life of Public Law, 105 COLUM. L. REV. 2029, 2030–32 (2005); Dan Tarlock, Is a Substantive, Non-Positivist United States Environmental Law Possible?, 1 MICH. J. ENVTL. & ADMIN. L. 159, 162 n.9 (2012); Linda K. Breggin, Jacob P. Byl, Lynsey R. Gaudioso, Seamus T. Kelly & Michael P. Vandenbergh, Comment, Trends in Envi- ronmental Law Scholarship 2008–2012, 43 ENVTL. L. REP. 10643, 10644–45 (2013). 5 See infra notes 274–76 and accompanying text. R 6 See Katherine A. Trisolini, All Hands on Deck: Local Governments and the Potential for Bidirectional Climate Change Regulation, 62 STAN. L. REV. 669, 669 (2010). 7 See infra notes 44–47 and accompanying text. Many environmental analyses discuss R the turbulent policy process of the last two decades but often overlook the absence of major new statutes. An exception is Richard J. Lazarus, Congressional Descent: The Demise of Deliberative Democracy in Environmental Law, 94 GEO. L.J. 619, 628–29 (2006). 8 See Elinor Ostrom, Polycentric Systems for