1. The Legal Environment of Business
A Critical Thinking Approach
5th Edition
Nancy K. Kubasek
Bartley A. Brennan
M. Neil Browne

2. THE LEGAL ENVIRONMENT OF BUSINESS
CHAPTER 21
Environmental Law

3. Environmental Protection
Pollution as “negative externality”
A detrimental by-product of an industrial economy
A national problem, requiring national solutions

4. Alternatives to Regulation
Tort Law Actions
Nuisance
Negligence
Tort Law Problems
Causation

5. Other Alternatives to Regulation
Pay subsidies to polluters
Charge pollution fee
Sell permits to pollute: “marketable discharge permit”

6. Direct Regulation to Protect the Environment
General approach: Set and enforce standards
Technology-forcing
Technology-driven

7. The EPA The largest federal agency Created in 1972 by executive order
Mission: Protect environment from all forms of pollution
Methods:
sets standards,
monitors compliance,
enforces regulations—including criminal sanctions

8. National Environmental Policy Act of 1970
Created the process of requiring Environmental Impact Statements (EIS)
for major federal legislation or agency
Significant impact on the quality of the human environment

9. EIS Process Preliminary decision: determination of non-significance
When EIS is required, it includes
Impact of proposed action
Unavoidable adverse effects
Alternatives
Short-term v. long-term analysis
Irreversible commitments of resources
Mention state analog to NEPA: SEPA. Covers state and local government actions.

10. Federal Water Pollution Control Act
Direct regulation of water quality
GOALS
“Fishable” and “swimmable” waters
Total elimination of pollutant discharges
METHODS
Point source effluent limitations
NPDES discharge permits

11. Safe Drinking Water Act
Regulates public water supply systems
Application: 15 service connections/25 persons
Primary and secondary standards
Sets unenforceable goals for contaminants

12. Air Quality Clean Air Act of 1970
National Ambient Air Quality Standards (NAAQS)
State Implementation Plan (SIP)
1990 amendments: focus on cars; hazardous air pollutants

13. Air Quality New Source Review (NSR) 1977:
regulates criteria pollutants
Installation of new pollution control technology
Removes millions of tons of pollutants each year.

14. Acid Rain 1990 Clean Air Act Amendments Emissions trading program
Sulfur dioxide allowances auctioned
One ton per allowance
Effectiveness of process under continuing study

15. Climate Change
Definition: Earth’s climate is changing in response to greenhouse gases and other pollutants.
As the Earth’s temperature rises,
Polar ice caps & glaciers melt
Arctic sea ice decreases
Raise ocean levels
Flooding of coastal areas
More storms
Animals in danger of extinction
Note: Some scientists are skeptical.

16. Regulating Hazardous Waste and Toxic substances
Resource Conservation and Recovery Act of 1976 (RCRA)
Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA)
Toxic Substance Control Act of 1979 (TSCA)
Federal Insecticide, Fungicide, and Rodenticide Act of 1972 (FIFRA)

17. Resource Conservation and Recovery Act of 1976 (RCRA):
Goal: Control hazardous waste
Method: Manifest program creates certification and recordkeeping for entire life cycle of designated hazardous wastes

18. Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA):
Example: "Superfund"
Goal: To remediate land polluted prior to RCRA regulation
Method: Use government Superfund money to clean up toxic sites, then recover costs from those responsible.

19. CERCLA “Superfund” Issues: Liability
“Potentially responsible parties” – controversial extension of liability to
Present owners or operators
Previous owners or operators
Hazardous waste generators
Hazardous waste transporter

20. CERCLA “Superfund” Issues: Funding
Goal: Self-supporting program
1986 Amendments increased funding to $8.5 billion. Funding comes from taxes on major polluters:
petroleum
chemical feedstock
environmental taxes on corporations
Note: The future of the Superfund is unclear

21. Toxic Substances Control Act of 1979 (TSCA)
Goal: Fills gap between RCRA and CERCLA
Method: Requires PMN to EPA
Note: Toxics broadly defined

22. Federal Insecticide, Fungicide, and Rodenticide Act of 1972 (FIFRA)
Goal: Regulation of all pesticides
Method: Registration system
Certifies: composition of compound; labeling; performance
Registration determines scope of use: general or restricted

23. Federal Food, Drug, and Cosmetic Act (FFDCA)
Goal: Establishes standards for pesticide residue in food
Method: Issues ‘tolerances’ for pesticide used as determined by EPA
Applicant must demonstrate compliance
1996 Food Quality Protection Act declares ‘safe residue level’ as ‘reasonable certainty of no harm’

24. Pollution Prevention Act 1990
Numerous regulatory efforts have been effective
Pollution has been significantly reduced
However, elimination of remaining pollution is increasingly costly to achieve
Goal: Pollution Prevention Act is to encourage further progress
Method: Provide information and incentive grants to spur innovation

25. Global Dimensions Pollution is transnational
The ‘Global Commons’ concept
Goal: International cooperation and harmonization of laws
Methods: Share research; promote conferences; create treaties; provide economic aid to accomplish goals

26. Selected Treaties and Protocols
Stockholm 1972 sustainable development
Montreal Protocol 1987 and 1996 ozone depletion
RIO Earth Summit - Rio de Janeiro 1992 biodiversity
NAFTA side agreement on the environment

27. U.S. Government Policies
U.S. did not sign Kyoto Protocol
U.S. does provide foreign aid to assist selected countries
Certain trade agreements contain environmental protection: NAFTA

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