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The problem with environmental impact statements

Summary:
Back in the 1970s, the federal government began requiring environmental impact statements for certain types of projects. In retrospect, this was probably a mistake. The Tejon Ranch development provides a good example of what can go wrong. Here’s an article from 2008: “How heartening it is, the sound of environmentalists and developers harmoniously agreeing on new construction. That’s what first came to mind when the Tejon Ranch Co. and such environmental heavyweights as the Sierra Club and the Natural Resources Defense Council jointly announced plans to both build on and preserve swaths of the 270,000-acre ranch that straddles Los Angeles and Kern counties. If all goes as intended, more than 200,000 acres would be preserved, with some as a state park and most under

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Back in the 1970s, the federal government began requiring environmental impact statements for certain types of projects. In retrospect, this was probably a mistake. The Tejon Ranch development provides a good example of what can go wrong.

Here’s an article from 2008:

“How heartening it is, the sound of environmentalists and developers harmoniously agreeing on new construction. That’s what first came to mind when the Tejon Ranch Co. and such environmental heavyweights as the Sierra Club and the Natural Resources Defense Council jointly announced plans to both build on and preserve swaths of the 270,000-acre ranch that straddles Los Angeles and Kern counties. If all goes as intended, more than 200,000 acres would be preserved, with some as a state park and most under private conservancy.”

Sounds great.  Developers and environmentalists agree on a massive new development that will provide much needed homes for California residents.  But it took another 10 years for the local government to actually approve the project. This is from 2018:

The Los Angeles County Regional Planning Commission recommended approval of the proposed Centennial development, which would build 19,000 homes on Tejon Ranch at the northern edge of the county.

“The Regional Planning Commission voted 4 to 1 to recommend that the county Board of Supervisors certify the project’s environmental impact report and approve associated land-use plans and permits, subject to some additional conditions,” reports Nina Agrawal.

The project still has to go before the county Board of Supervisors for approval.

You might think that all’s well that ends well.  Finally, we have agreement from developers, environmentalists and government officials.  Unfortunately, no project is safe from lawyers. This is from a few days ago:

Los Angeles County Superior Court Judge Mitchell Beckloff rejected the environmental impact report (EIR) for the massive Centennial project planned for northern Los Angeles County, one of the most controversial and closely watched master planning developments in Southern California in recent memory.

Louis Sahagun reports on the latest twist in the long saga of the Centennial project, a proposal approved by the county of Los Angeles to allow Tejon Ranch Co. to build 19,300 homes on 6,700 acres on the border with Kern County to the north.

Meanwhile, California has by far the nation’s largest homeless population, more than twice its share of the US population.

In an ideal world, the government would repeal the laws that allow the courts to interfere in the construction of new developments.

There’s a lot of recent talk about spending trillions of dollars on new “infrastructure”.  Much of this money is likely to be wasted, however, as regulatory hurdles make it almost impossible to build useful infrastructure in a cost effective manner.  If the Biden administration is serious about infrastructure, they will enact policy reforms to dramatically reduce the cost of building new projects.  Today, many infrastructure projects in America cost many times more than what they would cost in a truly deregulated environment.  One place to begin is by removing the need for environmental impact statements.

Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment". In May 2012, Chicago Fed President Charles L. Evans became the first sitting member of the Federal Open Market Committee (FOMC) to endorse the idea.

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