Industry threats in the face of environmental regulation: Crying wolf, or worth heeding?

A few preliminary thoughts on the most recent discussion related to the Portland River Plan (sources cited below):

T. Alan Sprott wrote an OpEd on March 26. He's the vice president of Vigor Industrial LLC in Portland and chair of the Working Waterfront Coalition. Reflecting on a lack of consensus with the Portland River Plan, he argues that

Businesses offered a straightforward alternative: A fee, in lieu of going through the city's regulatory process, collected from multiple projects would be pooled and the money spent on meaningful restoration projects at city-identified sites in the harbor. It makes no sense to spend significant additional time and effort on city paperwork at already-developed facilities when we could instead be investing in real improvement on the river.

He asserts that the present regulatory structure at the city, state, and federal levels contributes to a lack of predictability upon which business can base its strategic plans. His alternative above would enable businesses to avoid going through the regulatory process within the confines of already-developed waterfront areas and, instead, contribute to a habitat restoration fund. Speaking on behalf of the Working Waterfront Coalition, he predicts that the proposed river plan

will result in reduced private investment in the harbor by creating additional cost and uncertainty in the permitting process. This loss of private investment means less revenue generated from mitigation fees and less revenue for environmental improvement.

I don't have the time right now to do sufficient research to determine how accurate Sprott may be when he contends that business investment will decline with adoption of the River Plan as currently formulated. However, I can observe a consistent pattern with similar arguments in the past. Representatives of industry have for at least a century raised the specter of financial loss when faced with environmental regulations. The pulp & paper industry used this argument to resist taking pollution abatement measures within the Willamette watershed at least as early as the 1930s. The industry even threatened the state's residents in the early 1950s that mills would relocate if the State Sanitary Authority went forward with it's requirement that industry establish substantive abatement plans within a 2.5-year deadline. Reacting to this threat, the Sanitary Authority did give the mills an extra six months -- and the mills then implemented a variety of measures to conform with state water pollution laws as administered by the Sanitary Authority.

In other words, these mills did not relocate.

I need to do more research on other examples of how industry attempts to hold communities hostage by threatening financial loss or relocation. Sports franchises do this often, for example (recall how the new owners of the team-formerly-known-as-the-Seattle-SuperSonics attempted to pressure Seattle residents and government into investing many millions of dollars into Key Arena).

Strengthening environmental regulations will indeed have an economic impact on businesses, because these firms won't be able to continue business-as-usual. However, "business-as-usual" includes subsidies in the form of externalized costs, of which variants of environmental degradation are one type. To require of businesses that they modify their behavior in light of new evidence and shifting cultural values seems a perfectly reasonable expectation. After all, membership in the community comes with rights and responsibilities.

Being members of a community does also mean negotiation and dialogue.

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T. Alan Sprott, "What the Portland River Plan lacks for consensus," Oregonian March 26, 2010.

Daniel Rohlf, "Critics of the Portland River Plan are all wet," Oregonian March 2, 2010.

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