A Holistic Look at Agency Enforcement

BY David L. Markell & Robert L. Glicksman

Click here for PDF*

David L. Markell** & Robert L. Glicksman***

The law review literature has long recognized that effective enforcement is an essential component of effective regulation. Yet much of the literature focuses on one aspect of the enforcement challenge or another. For example, the underlying theory about optimal levels of enforcement has received considerable attention, as have topics such as the relative merits of using deterrence-based versus cooperation-based approaches and the use of citizen suits. The purpose of this Article is to consider agencies’ enforcement and compliance promotion function holistically.

This Article proposes a three-layered conceptual framework for considering options for structuring the administrative agency enforcement and compliance promotion function. The first layer consists of five components of effective enforcement and compliance: norm clarity, norm achievability, verifiability, an appropriate mix of sanctions and rewards, and indicia of legitimacy. The second involves the interrelated character of these components and highlights the importance of fitting each into a particular enforcement and compliance regime so that agencies may gain synergistic benefits and consider the need to make difficult trade-offs. Third, and finally, our conceptual framework includes four contextual design issues that create additional challenges in determining the appropriate content of each of the five key components of effective enforcement and compliance: the hybrid character of contemporary governance efforts; the importance of “reality-checking” enforcement options through close attention to past performance as well as future challenges and opportunities; the dynamic character of environmental governance challenges; and the salience of possible design changes and the need to prioritize design improvements. This Article suggests that it is important to consider all three layers in developing an effective enforcement and compliance promotion regime.

This Article tests our conceptual framework by including a case study of an ongoing Environmental Protection Agency (“EPA”) effort to transform its enforcement and compliance promotion program and by applying our framework to EPA’s initiative. This case study illustrates the value of our framework in evaluating regulatory design options for the enforcement and compliance promotion function.

Introduction

The law review literature has long recognized that effective enforcement is an essential component of effective regulation. [1] Yet much of the literature focuses on one aspect of the enforcement challenge or another. For example, the underlying theory about optimal levels of enforcement has received considerable attention,[2] as have topics such as the relative merits of using deterrence-based versus cooperation-based approaches and the use of citizen suits. [3] The purpose of this Article is to consider agencies’ enforcement and compliance promotion function holistically. This Article approaches the challenge from an “inside-out” perspective, [4] a perspective that administrative law scholars have found to be lacking in the academic literature. [5]

This Article begins by proposing a three-layered conceptual framework for considering options for structuring the administrative agency enforcement and compliance promotion function. First, it identifies five components of effective regulation both generally and in the specific context of regulatory enforcement and compliance: norm clarity, norm achievability, compliance verifiability, an appropriate mix of sanctions and rewards, and indicia of legitimacy. [6] Beyond examining the importance of these components in establishing and implementing enforcement and compliance promotion policies, we consider some of the complexities involved in fitting each component into particular regimes so that agencies may take advantage of opportunities to gain synergistic benefits and consider the need to make difficult trade-offs. This assessment of how each component relates to the others is the second layer in the framework we propose. [7]

The third layer of our framework for evaluating enforcement and compliance promotion functions relates to what we term “contextual design challenges.” [8] One contextual design issue relates to the hybrid character of contemporary governance efforts. As the “new governance” and other literatures reflect, [9] governance is no longer the exclusive province of the government, if it ever was, and those seeking to design effective regulation should consider the multiplicity of actors. [10] The capacity of each actor to affect compliance is relevant to the desirability of alternative options for the structuring of enforcement and compliance programs. [11] A second challenge is the importance of confronting past performance as well as future challenges and opportunities. Past failures to consider performance of wide swaths of the regulated community, for example, counsel in favor of considering changes to enforcement regimes to account for at least the more significant outliers. [12] A third design issue stems from the dynamic character of governance challenges. As the regulatory treatment of the environmental issues posed by climate change reflects, normative objectives are likely to be dynamic in some cases. [13] The nature of the tools available to government and other key stakeholders also may shift because of factors such as technological advances and changes in resource availability. A sharp reduction in government enforcement resources, for example, might suggest the need to facilitate private enforcement. It is essential to consider these dynamic aspects of the regulatory landscape in structuring enforcement and compliance efforts. Finally, a fourth critical contextual design challenge relates to the salience of possible design changes, and the need to prioritize design improvements. Resource limitations, for example, limit government enforcement and compliance promotion capacity, thus requiring policymakers to decide which efforts are the most critical. [14]

This Article also tests our conceptual framework by including a case study of an ongoing Environmental Protection Agency effort to reform its enforcement and compliance promotion program and by applying our framework to EPA’s initiative.[15] This case study illustrates the potential value of our framework in evaluating regulatory design options for the enforcement and compliance promotion functions.

Part I of the Article lays out our conceptual framework. It first identifies and examines why each of the five components of effective regulation we have identified is important in establishing and implementing enforcement and compliance promotion policies. [16] Next, Part I explains why it is important to consider these five components holistically in the structure and content of an enforcement and compliance program; it is, in our view, of foundational importance to consider how the structure and operation of each component influences the others. Next, this Part introduces the final layer of our multi-layered conceptual framework, which is comprised of four contextual design challenges that we believe may significantly influence how one should approach design and implementation of an effective enforcement and compliance promotion regime.

Part II contextualizes how an agency might begin to consider the design of its enforcement and compliance regime by focusing on EPA’s track record. This Part examines two especially important features of past performance—the adequacy of agency resources and the nature of the regulated community—and the implications of changes in each feature for the future operation of enforcement and compliance programs. This Part helps to ground the Article by offering our perspective on EPA’s past enforcement performance and some significant challenges and opportunities the agency faces.

Part III is an attempt to give our framework a test run. It provides an overview of an ongoing EPA initiative to transform its promotion of compliance with the Clean Water Act’s (“CWA”) regulatory requirements. In this Part, we consider EPA’s ongoing transformation effort in light of the conceptual framework introduced in Part I and EPA’s track record and anticipated challenges and opportunities discussed in Part II. In doing so, we explain how the application of our framework would enrich EPA’s analysis of available options for restructuring its CWA compliance promotion program. In addition to providing insights on EPA’s program, we hope our work stimulates analysis of the design and implementation of other regulatory programs and, relatedly, demonstrates how the context in which a particular program operates is likely to affect the manner in which the regulatory components we have identified can contribute to (or detract from) effective regulation. [17]

I. Effective Regulation: Key Components and Contextual Design Challenges

In designing a regulatory program, policymakers strive, among other things, to create mechanisms that are effective in achieving, or at least advancing, the program’s goals. {{18}][[18]] Agency “pathologies” and other factors obviously have the potential to affect policymakers’ motivations. See Engstrom, supra note 3, at 674, 680, 684 (discussing “bureaucratic behavioral pathologies,” such as agency capture, agency self-aggrandizement, agencies’ predilections for overly cautious behavior, and the influence of careerist incentives of agency personnel, in framing choices among different agency gatekeeping options). Although there is debate about the effectiveness of our nation’s environmental initiatives, it is well accepted both that there have been some successes and that much more remains to be done. See, e.g., Robert W. Adler, Resilience, Restoration, and Sustainability: Revisiting the Fundamental Principles of the Clean Water Act, 32 Wash. U. J.L. & Pol’y 139, 172 (2010) (noting that “the [CWA] has resulted in significant progress in improving the quality of the Nation’s waters”). [[18]] The relative attractiveness of options available to an agency like EPA in structuring and implementing its enforcement and compliance promotion function may depend on the nature of the regulatory program. Numerous models of regulation exist. For example, in the environmental field, many commentators characterize traditional regulation as “command-and-control.” [19] According to Professors Cole and Grossman, “ ‘[c]ommand-and-control’ is in essence a regulatory approach whereby the government ‘commands’ pollution reductions (e.g., by setting emissions standards) and ‘controls’ how these reductions are achieved (e.g., through the installation of specific pollution-control technologies).”[20] Other variations include market-based approaches to regulation, [21] “new governance” approaches, [22] and adaptive regulation. [23] Each type of regulation has different features and different approaches that may be required for each feature to be effective. [24] Agencies like EPA may use different types of regulation for different challenges, and they may mix and match different approaches to address concerns as well. [25]

For many types of regulation, enforcement (and compliance with regulatory norms more generally) is often characterized as essential to effective regulation, [26] although it is not sufficient to achieve desired environmental protection policy objectives. [27] Moreover, the selection of measures to determine the extent of regulatory compliance is contestable. The possibilities include inputs (e.g., the extent of agency resources invested in bringing enforcement cases), outputs (e.g., the number of enforcement actions brought), outcomes (e.g., the amount of pollution reductions achieved through enforcement actions), and environmental results (e.g., changes in the quality of the ambient air or water because of enforcement activity). [28] Some consider compliance levels to be the Holy Grail of enforcement measures, [29] but such measures have proven extremely difficult to use in practice. [30]

While recognizing that the particular regulatory approach may affect the choice of enforcement and compliance promotion strategies, at a macro level we suggest that it is possible to identify at least five critical components of an effective regulatory enforcement and compliance function. Section A below introduces and reviews these components. Section B considers some of the complexities involved in fitting each of these components into particular regimes, including the synergies they provide and the need to make difficult trade-offs when they threaten to work at cross-purposes. Section C then introduces four challenges that further contextualize the task of designing the appropriate structure and content of an agency’s enforcement and compliance promotion function.

A. Five Key Components of Effective Regulation

Although it is possible to describe the components of effective regulation in many ways, [31] we think at least five features are relevant to the design of a successful regulatory enforcement and compliance program: norm clarity, norm achievability, compliance verifiability, an appropriate mix of sanctions and rewards, and indicia of legitimacy, as we illustrate in Table 1.

 

Table 1: Components of Effective Regulation

Norm Clarity
Norm Achievability
Verifiability
The Mix of Rewards and Sanctions
Indicia of Legitimacy

 

  1. Clarity

It is axiomatic that it is important to consider the clarity of regulatory norms in designing effective regulations. [32] There are good reasons for regulators to strive to create clear expectations for acceptable (and unacceptable) conduct. It is difficult for a regulated entity to comply with its regulatory responsibilities, or for others to assess whether it has done so, without understanding what those responsibilities are. Participants across the spectrum of interested stakeholders recognize the value of establishing clear standards for regulated parties to meet. Complaints about indeterminacy are heard from regulated parties as well as members of the public. [33]The government has internalized this message as well, with the head of EPA’s enforcement office recently acknowledging that “we should focus on greater simplicity and clarity [in our regulations]. One of the principles we have learned over years of hard experience is that compliance is better when the rules are simple and clear.” [34] This message is most obviously salient for the development of regulations, [35] but it is also important in the development of guidance and the exercise of enforcement discretion. [36]

Achieving clarity requires attention during multiple stages of the regulatory process. An obvious starting point is the regulatory norms themselves. A second important aspect of clarity, however, involves education, especially education of the regulated community. Studies have shown that extra effort to educate regulated parties about their legal obligations can pay significant dividends in terms of improved compliance. [37] A recent Colorado compliance initiative involving hazardous waste rules, for example, found that an innovative state effort to increase understanding of regulatory requirements led to significant improvements in compliance, thereby dramatically reducing the need for enforcement.[38]

Clarity, however, may also come at a cost. Statutory and regulatory schemes often cover a large number of actors, and not all are similarly situated. Thus, environmental policymakers often need to make choices about whether to use one-size-fits-all approaches or, alternatively, to tailor treatment of different sub-groups within the regulated community. In some situations it is possible to use fairly bright lines for such tailoring. The Resource Conservation and Recovery Act’s (“RCRA”) use of thresholds to distinguish between standard generators and de minimis generators is an example. [39] Sometimes, however, efforts to regulate “fairly” require much more ad hoc judgments about whether particular members of the regulated community qualify for special treatment. Especially in the latter situations, where there are no bright-line rules or tests, there is a clear tension between clarity and “fair” treatment. [40]

Regardless of the precise weight policymakers and others attach to clarity as a component of effective regulation in a particular context, it seems relatively uncontested that clarity of norms and expectations is a factor that at a minimum deserves attention in regulatory design. [41]

A second key component of effective regulation is its capacity to achieve (including the agency’s ability to effectively implement) regulatory requirements. Using EPA’s terminology, achievability involves the extent to which strategies “will work in the real world—rules with compliance built in.” [42] A recent example of EPA’s emphasis on achievability in developing a particular regulatory regime relates to the agency’s proposal of emission control regulations for oil and gas producers under the Clean Air Act (“CAA”). EPA adopted the strategy of allowing producers simply to inform EPA that they are using air pollution control equipment that EPA has certified rather than testing the equipment themselves. EPA explained that its purpose in using this approach was to “make compliance easier and less costly, while improving results . . . .” [43]

Achievability has not always trumped other values in policy design. Congress has insisted that regulatory standards be set with little if any attention given to achievability because of the weight it attached to other values, such as attaining a particular level of health or environmental protection. In the environmental laws, for example, Congress in some cases has directed EPA not to consider costs in developing regulatory standards.[44] In other regulatory schemes, Congress did not prohibit consideration of cost, but nevertheless made it clear that it was permissible for EPA to attach relatively little weight to it, and apply a relatively loose definition of achievability. [45] At least in some contexts, technology-forcing regulatory approaches have been used successfully to substantially improve normatively desired outcomes notwithstanding questions at the outset about the achievability of such approaches. [46]

Independent of any particular regime, scholars have debated the value of including hortatory language in environmental statutes because of the gap between objectives and likely results. Some suggest that setting the bar high has had a positive influence on performance. [47] Others have been more skeptical. [48] Regardless of the weight that should be attached to achievability in the design of any particular regulatory regime, the larger, conceptual point is that, when developing regulatory approaches, it is important to consider the extent to which regulated parties are likely to achieve regulatory standards.

  1. Verifiability

A third key component of effective regulation and of strategies to induce compliance involves what we term “verifiability.” We define verifiability as the capacity to monitor compliance with regulatory requirements. [49] There is little question that the ability to monitor compliance with legal requirements is a critical component of effective regulation. [50]

The major federal environmental regulatory statutes generally provide broad monitoring authority that includes, at a minimum, authority for the government to inspect an operation’s compliance with regulatory requirements, as well as an obligation for the regulated party to monitor its own performance. [51] Yet, monitoring schemes come in various shapes and sizes. [52] For example, New York implemented a statewide strategy that sought to enhance verifiability by requiring facilities with especially significant compliance concerns to hire independent third-party monitors whose role was to complement both government inspection efforts and the facility’s own compliance efforts. [53]

As a practical matter, the nature and extent of monitoring that occurs is likely to depend on a variety of features of the particular regulatory regime involved, including the availability of government resources; the complexity associated with monitoring compliance and the training required to monitor credibly; the availability, cost, and reliability of monitoring equipment; the trustworthiness of regulated parties and their commitment to self-monitoring; and the capacity of non-governmental interests to participate in monitoring.

Some commentators have highlighted the importance of broader transparency to the public as an aspect of verifiability. [54] Transparency can be enhanced in a variety of ways. For example, the CWA requires permittees to submit discharge monitoring reports (“DMRs”) that demonstrate compliance or noncompliance with legal requirements and, in addition, requires that these DMRs be easily accessible to interested citizens.[55] The transparency of the CWA in revealing noncompliance is a principal reason why most of the citizen suit activity against alleged violators of major environmental laws has occurred under that statute. [56] Other reporting requirements, such as those for hazardous substance releases above a reportable quantity, [57] or pursuant to EPA’s toxics release inventory (“TRI”) program, [58] are useful for monitoring and verifying compliance with legal requirements while also serving other purposes. [59]

Considerable evidence shows that in many circumstances inadequate verification contributes to lower-than-desired levels of compliance with environmental requirements. To offer an example from international environmental law, the Kyoto Protocol’s Clean Development Mechanism (“CDM”) has suffered from weak verifiability, which has undermined the Mechanism’s effectiveness. [60] The Canadian Auditor General similarly found that monitoring shortcomings weakened the enforcement and compliance performance of a Canadian environmental program. [61] On the other hand, enhanced reporting has led to dramatically improved compliance in some cases. In a recent article, EPA’s Assistant Administrator for Enforcement highlighted a 2008 study in Massachusetts that found that requiring drinking water systems to mail compliance information to customers reduced both environmental regulatory violations and severe health violations significantly. [62] She noted that “EPA’s efforts to make our data more available are only starting to scratch the surface of the ways transparency can improve results.” [63]

In short, while the optimal parameters for incorporating a verification component into a particular regulatory regime will depend on a wide variety of factors, the literature demonstrates that verification is a foundational element of an effective regulatory scheme.

  1. The Mix of Rewards and Sanctions

A fourth component of an effective regulatory scheme is its capacity to incentivize regulated parties to comply with regulatory obligations through the use of both carrots and sticks. Conceptually, an optimal level of compliance maximizes net social benefits. [64] Strategies that embody a mix of rewards and sanctions have the potential to contribute to achieving desired compliance levels.

EPA, on its own and in tandem with environmental or community non-governmental organizations (“NGOs”) and regulated parties, has a rich array of options for promoting compliance. [65] These include litigation options such as criminal prosecutions under many of the environmental statutes, civil judicial actions, and administrative enforcement actions, some of which may, like their judicial counterparts, seek penalties and other relief. [66] Beyond these types of formal enforcement litigation, EPA uses strategies that employ “carrots,” or a mix of “carrots and sticks,” to promote compliance. [67] An active debate continues about the relative effectiveness of various enforcement strategies in different contexts. [68]

At the ground level, EPA has developed a library full of enforcement response and penalty policies that seek to prioritize violations that warrant different levels of enforcement attention. [69] The agency has generally attempted to focus on “significant violations” and “high priority” violations, while giving less or different types of attention to minor instances of noncompliance. [70] It has also developed a substantial set of compliance promotion and incentive policies that reflect a mix of strategies. [71] In short, effective compliance promotion is most likely to derive from the use of a combination of traditional enforcement activity, facilitated by robust monitoring and reporting regimes, and efforts to induce regulated entities to comply through financial and other positive and negative incentives. Determinations of how best to combine those elements will inevitably be context specific.

  1. Legitimacy

Finally, we suggest that an important component of effective regulation is its capacity to promote legitimacy, which we define to include enhancing confidence of the public and others. [72] We believe that, in designing and implementing regulatory enforcement and compliance mechanisms, it is appropriate for policymakers to ask whether a particular regulatory design will enhance or diminish public confidence in the government’s ability and willingness to promote compliance with it. A regulatory scheme that leads to a public perception that government is corrupt, overbearing, or selective in its enforcement of the law may lead to a loss of confidence and trust that undermines effective regulation in many ways, including by exacerbating budget pressures if public support for necessary funding diminishes. [73] As one of us has noted elsewhere, “[t]he legitimacy of a regulatory system also [may] turn[] on the degree to which it protects against deviation from legislative goals due to capture of regulators by special interests,” and on whether decisionmakers are perceived as honest, unbiased, or competent. [74] Polling results showing the American public’s loss of confidence in the federal government highlights the salience of perception by different audiences and constituencies in designing the enforcement aspects of regulatory programs. [75]

A. Interrelatedness of the Five Components of Effective Regulation

The preceding section introduces what we believe to be five important components of effective regulation. [76] Considering each of these components on its own merits is, we submit, a starting point in designing and implementing an effective enforcement and compliance promotion regime. A second layer of analysis involves assessing how the relationships among the components affect the manner in which, and the degree to which, policymakers should pursue each individual component of effective regulation. This section focuses on the fundamentally interrelated character of different components of the regulatory process in order to reinforce the importance of considering regulatory design holistically rather than atomistically.

The five components of effective enforcement and compliance that we discuss above are interrelated in a virtually unlimited number of ways. We offer a few illustrations in this section. Our first example relates to concerns that arose in 2007 about compliance rates among small quantity generators (“SQGs”) of hazardous waste under Colorado’s hazardous waste program. [77] As backdrop, state regulators believed that SQGs in the state might collectively pose a greater risk to human health and the environment than other, larger generators.[78] This was because in the aggregate SQGs generated a considerable amount of waste; they did so at many more locations than large quantity generators; and the SQGs had less control over the waste and lower levels of compliance. [79] Because of resource constraints, agency staff members were only able to inspect each SQG once every eight years. In the agency’s view, “[t]hat [was] simply not enough to improve compliance”—“[t]he 12 percent inspection coverage we were attaining each year did not create enough accountability and deterrence to improve compliance rates.” [80]

Colorado decided it needed to address the SQG sector in a different way. [81] It adopted a regulation that sought to improve compliance by changing the “verifiability” component and enhancing the clarity of the regulatory requirements. In particular, the State required that each SQG complete and return a “self-certification checklist” to the agency. [82] Failure to do so subjected a SQG to an enforcement action and the possibility of penalties. [83] Colorado reports that the return rate for the checklists was more than ninety-five percent. [84]

Beyond tweaking the verifiability component of its regulatory scheme, Colorado also invested considerable effort in improving the scheme’s clarity. The state prepared a comprehensive compliance checklist that identified all of the regulatory requirements, and it developed an instruction booklet that provided guidance on how to complete each question on the checklist. [85] The state sent the checklist and instruction booklet to all members of the regulated community. [86]

The changes to verifiability, sanctions, and clarity led to significant increases in compliance. As the report on the initiative reflects, “compliance rates across the SQG sector have dramatically improved. . . In 2008, only 32 percent of the SQGs were in compliance with 100 percent of the regulatory requirements. . . . By 2011, the compliance rate had increased to 84 percent.” [87] This example reflects the value of thinking about key components of a compliance promotion scheme in an integrated way and appears to be an example of a significant redesign that yielded impressive improvements in performance.

A second example of the value of approaching the different components of regulation in an integrated fashion is not as grounded in a real-world effort to improve environmental compliance. In a recent article, Professor David Freeman Engstrom focuses on one aspect of enforcement—enforcement litigation, and, in particular private and public enforcement litigation—in an effort to improve regulatory design. [88] Engstrom considers whether agency “gatekeeping” of private enforcement, which involves an agency’s exercise of statutory authority to block or otherwise influence private enforcement actions, would help to rationalize enforcement litigation; he further considers the possible options for designing such a gatekeeping function. [89]

For example, Engstrom suggests that a strong agency gatekeeping role to limit or direct private enforcement might be appropriate when there is a significant risk that private enforcement will yield legislative drift “as private enforcers drive law enforcement efforts in new and democratically unaccountable directions.” [90] It seems reasonable to conclude that the clearer the substantive rules that govern the conduct of regulated entities, the lower the risk that courts, responding to suits by NGOs, will accept novel applications of legal mandates that amount to such legislative drift. Under these circumstances, all other things being equal, the need for agencies to exercise veto authority over private enforcement efforts should recede. On the other hand, in some cases, clear requirements may contribute to dramatic reductions in noncompliance and hence in the need for enforcement, private or public. The value of private enforcement may decline in such circumstances, which might affect analysis of the desired mix of rewards and sanctions and, in particular, the appropriateness of incorporating a private enforcement feature in a compliance program.

The ability of regulated entities to comply with regulatory norms (the achievability component) is also salient in considering the desirability and structure of Engstrom’s gatekeeping apparatus as part of a regulatory scheme’s sanctions function. If compliance is particularly difficult, public enforcers might choose to exercise prosecutorial discretion and defer prosecution of known violations, or reduce the penalties assessed for such violations, perhaps in return for commitments by regulated entities to sink resources into developing a fix for the implementation problem. [91] A gatekeeper regime that empowered NGOs to initiate private enforcement actions might interfere with commitments that regulated entities might otherwise make to public enforcers. [92] In circumstances in which achievability is a concern, the arguments in favor of a strong public gatekeeping role for private enforcement actions may be relatively appealing. [93] On the other hand, problems with achievability may create more, and more significant, noncompliance problems that may overwhelm public enforcement capacity. The incorporation of private enforcement litigation as a component of an enforcement regime would seem to hold special value in such cases. [94]

Consideration of Professor Engstrom’s gatekeeping scenario also shows that verifiability is not only a critical feature of regulation in its own right but is also important because of its effect on other components of regulatory compliance design. Easy and cheap access by private enforcers to information revealing compliance status creates a risk of over-deterrence, at least if one regards what Professor Engstrom refers to as the “zealousness critique” of private enforcement [95] as a significant concern. If access to information concerning compliance status is available at little or no cost, private enforcers may pursue actions in which their expected return on investment in litigation will exceed their costs, even if public enforcers would choose not to sue because the expected social cost exceeds the expected social gain. Thus, low verification costs may increase the risk that public and private assessments of the relative costs and value of enforcement diverge, resulting in over-expenditure of social resources and over-deterrence. [96]

The likelihood of overzealousness remains in dispute, however, and gatekeeping regimes may be structured to minimize it (if, indeed, they are needed at all). [97] For example, the absence of a damage remedy for successful private enforcers under the citizen suit provisions of the federal environmental statutes should minimize this risk. Likewise, these provisions all require that penalties be paid to the United States Treasury, not to private enforcers. [98] Further, some scholars, such as Professor Barton Thompson, have suggested that “the benefits of citizen suits have far outstripped the benefits that Congress originally identified,” [99] even assuming that some over-deterrence occurs. These suits create the potential for private enforcers to create enforcement innovations that may be attractive to public enforcers, promote democratic values that direct citizen participation in law enforcement yields, and serve an educational function. [100] The larger point still stands, however: the design of the verifiability component of effective regulation affects how other aspects of environmental regulation should be structured, including the appropriate mix of rewards and sanctions.

A final reflection on the integrated character of different components of effective environmental regulation involves the relationship between the mix of sanctions and rewards with legitimacy and is again illustrated in connection with the desirability of a gatekeeping mechanism. A regulatory design that gives a government agency extremely powerful gatekeeping authority might undermine legitimacy if the public’s perception is that an agency is choking off much-needed private enforcement. [101] Such a loss of legitimacy is most likely to be the case if an agency is widely perceived as corrupt or captured; extensive opportunities for supplemental private enforcement may help to restore a sense of legitimacy to the regulatory program, and in particular its enforcement component. Less obviously, Professor Engstrom discusses “bubble periods,” during which ambiguous regulatory mandates remain unsettled. [102] He posits that vigorous private enforcement may be troublesome during these transitional periods because judicial responses to private enforcement actions may be difficult to override legislatively and enforcement targets may suffer costly adverse judgments notwithstanding subsequent overrides. [103] In such cases, allowing private enforcement might undermine legitimacy, at least in the eyes of the regulated community. This effect would support a strong gatekeeping regime. [104] But if an agency’s delay in filling statutory gaps is due not to the costs of regulation but instead to agency disaffection with the statutory regime, private enforcement may help to maintain public confidence in the rule of law. This scenario would seem to favor a weak or nonexistent gatekeeping regime. The gatekeeping and other examples discussed in this section therefore highlight the need for policymakers to consider how the components of effective regulation interact in designing enforcement and compliance programs.

B. Contextual Design Challenges

The preceding discussion identified five key components of effective regulation. In addition, it demonstrated that effective design must consider each component as it relates to the others, rather than solely as a distinct and isolated regulatory feature. This section discusses four contextual issues facing policymakers responsible for regulatory design, which may enrich, and complicate, analysis of how to craft a program that settles on the best mix of the five components of effective regulation addressed above. [105] These four contextual design issues are (1) the hybrid character of much of contemporary governance; (2) the need to confront actual performance; (3) the dynamic nature of governance challenges and opportunities; and (4) salience, the need to prioritize in making design and implementation decisions. [106] We list these elements in Table 2.

 

Table 2: Key Design Elements

Hybrid Character of Governance
Reality Checking to Assess Past Performance andPrepare for Future Challenges and Opportunities
Dynamic Character
Salience—the Need to Prioritize

 

Figure 1 below depicts how the five components of effective regulation described in Section A interact with these four contextual design challenges.

 

In short, as Figure 1 shows, each of the contextual design challenges has the potential to affect one or more components of effective enforcement and compliance promotion. [107] As a result, it is the interaction of the contextual design challenges and the components of effective regulation that should shape the design of each component of an enforcement and compliance program such as gatekeeping mechanisms. [108] The remainder of this section elaborates on these interactions.

  1. Hybrid Governance

One contextual reality of contemporary governance in the United States is its hybrid character. At its most abstract level, we view hybrid governance to mean governance composed of heterogeneous elements. [109] Several manifestations of the hybrid character of governance are well known and we mention them only briefly. In terms of horizontal hybrid governance issues, both the U.S. Constitution and the foundational statute for the administrative state, the Administrative Procedure Act, [110] reserve specific roles for the three branches of our federal government. [111] The ongoing debate about the appropriate role for the Office of Management and Budget’s (“OMB”) Office of Information and Regulatory Affairs (“OIRA”) highlights the tension concerning the distribution of power between and among Congress, the President, and federal agencies. [112] The lack of judicial review of much of what OIRA does raises issues concerning the appropriate role of the judicial branch in presidential review of agency activities as well.[113]

More generally, increasing recognition that multiple federal agencies need to be engaged in addressing many of the most significant public policy issues we face today reflects that horizontal coordination challenges exist within, between, and among agencies. These challenges pose a significant barrier to effective governance. [114]

The cooperative federalism structure Congress adopted in enacting the major federal pollution control statutes contributes to the hybrid character of contemporary enforcement and compliance work by giving states a major role in administrative governance. An enormous body of scholarship addresses the vertical governance challenges that the cooperative federalism structure poses, including in the enforcement and compliance realm. [115]

Over the past few years, EPA has acknowledged these challenges and announced renewed efforts to grapple with them more effectively. [116] The states’ central role in the enforcement and compliance promotion function has heavily influenced the design of EPA’s programs; state enforcement actions will no doubt continue to affect the design and operation of federal enforcement programs for the indefinite future.

Governance is much more than simply the actions of government actors, however, and the quality of governance often benefits (or suffers) from the actions of these multiple stakeholders. [117] The value in assessing alternative regulatory design options, not only to acknowledge the reality of hybrid governance, but also to assess its promise and perils, is difficult to overstate. In part this is because of the recognition that government cannot “solve” problems on its own and that a well-designed “pluralistic regulatory landscape” improves chances for success.[118] As Professor Magali Delmas noted, “[T]he inadequacy of governments to resolve some environmental issues has generated the search for alternative governance mechanisms.” [119]

Considerable work engaging the appropriate shape of this pluralistic regulatory landscape has been done, such as contributions to the “new governance” literature. [120] But as Professor Delmas points out, a great deal of additional work is needed: “[T]he research on environmental governance without government, or between government and other actors, is only just emerging.” [121] Contextualized treatment of this pluralistic landscape is in our view likely to be of especial importance and practical value. [122] To illustrate its value, we offer such contextualized treatment of one example of hybrid governance: the use of agency gatekeeping to rationalize public and private enforcement litigation, a topic considered recently by Professor Engstrom.

EPA already has significant gatekeeping authority, as Professor Engstrom notes. [123] We consider here how EPA’s exercise of this authority might influence the capacities of public and private enforcers and affect environmental regulatory enforcement and compliance. All other things being equal, EPA would seemingly want to exercise its gatekeeping power lightly in order to encourage private enforcement litigation in circumstances in which other strategies for inducing compliance, such as reliance on positive incentives, do not yield desired results. Indeed, in addition to exercising its gatekeeping responsibilities with a light touch, EPA might want to engage private enforcers affirmatively to encourage invigorated private enforcement efforts. Similarly, an agency posture of weak gatekeeping might be desirable where obstacles (such as limited government enforcement resources) exist to traditional government deterrence-based enforcement. [124] In other words, an agency may opt for relatively weak gatekeeping when limited government capacity exists.

Conversely, EPA may want to exercise its gatekeeping authority aggressively if it is concerned that expansive private enforcement will undermine national consistency in approaching compliance challenges. [125] For example, private enforcement efforts that focus on securing particular types of relief with which an agency has concerns, in lieu of the types of relief it favors, may influence the desirability of a significant private enforcement presence [126] because of both “legislative fidelity” and “coordination” issues, to use Professor Engstrom’s terms. [127]

The cooperative federalism structure of the environmental laws, and the central role of the states in enforcement, is an important part of the discussion in attempting to rationalize public and private enforcement of those laws. [128] Thus, state capacity (in terms of resources and will) in bringing enforcement actions is an important issue in assessing the need for and desirability of EPA’s exercise of its gatekeeping authority.

We also think it is important in rationalizing enforcement litigation to be aware that a state, like EPA, can prevent the filing of a citizen suit by commencing and “diligently prosecuting” its own enforcement action after being notified by a prospective citizen suit plaintiff that it intends to file suit against an alleged violator. [129] Both scholars and public interest advocates have complained over the years that some states have reacted to citizen suit notices by commencing an enforcement action against the putative civil suit defendant and then settling the action on terms favorable to the regulated entity because that entity was important to the state’s economy or had valuable political connections. [130] EPA has the authority, and responsibility, to exercise a different type of gatekeeping authority when it learns of state action that may undermine effective enforcement—here, the federal gatekeeping authority involves EPA’s authority to withdraw a state’s authorization. [131] Effective enforcement to address significant violations under the environmental laws is a three-legged stool, with each leg (federal, state, and private enforcement) having multiple pieces. [132] EPA actually has at least two types of gatekeeping authority available to rationalize the use of enforcement tools given the multiple actors involved.

As the previous discussion of agency gatekeeping of private enforcement litigation illustrates, it is important to consider the hybrid character of enforcement and compliance contextually. The range of actors involved in this aspect of environmental regulation, however, obviously extends far beyond agency and private enforcers. Similarly, the opportunities for hybrid governance to promote effective compliance and enforcement extend far beyond the realm of ex post enforcement litigation. [133] A critical observation about this central feature of contemporary governance is that efforts to enhance compliance should take into account how best to engage all stakeholders throughout the entire regulatory process. [134]

  1. “Reality Checks” As a Contextual Design Issue

A second type of contextual issue relevant to the design of regulatory enforcement structures is what we term the “reality-check” feature. In assessing or revisiting regulatory design, it is critical to assess the agency’s (here EPA’s) actual performance in conducting enforcement, the challenges the agency has faced, and opportunities to improve performance by altering regulatory features or practices in ways suggested by past experience. As we discuss in more detail in Parts II and III below, EPA has experienced and acknowledged significant shortcomings in its enforcement and compliance program. There are opportunities to improve on this track record with respect to each of the five components of effective regulation identified above, [135] as well as significant challenges in doing so. EPA’s efforts to reform its CWA enforcement programs, which are discussed in Part III below, respond to its perceptions of past enforcement successes and shortcomings.

  1. Dynamism

The degree of dynamism is a third contextual issue relevant to regulatory design. This feature does not receive much attention in some of the regulatory design literature, [136] but we believe it deserves emphasis. Effective regulatory design requires an understanding of the extent to which key features of regulation are likely to be static or dynamic over time. This feature differs from the reality-check feature in that it focuses not on whether existing regulatory practices have worked as anticipated, but on whether the regulatory environment itself has shifted in ways that affect regulatory goals.

Concerns that climate change is causing transformative shifts in the environment are becoming increasingly widespread. Scholars and others are beginning to consider the impacts of such changes on not only the content of regulation, but also on regulatory structure. For example, Professors Robin Craig and J.B. Ruhl recently suggested that the impacts of climate change warrant a fundamental reappraisal of the structure of agency procedures. [137] In particular, they urged more attention be given to adaptive approaches to governance rather than what they consider to be unavoidably limited ex ante approaches:

The idea of adaptive management is that agencies should be free to make more decisions, but that the timing of those decisions is spread out into a continuous process that makes differentiating between the “front end” and the “back end” of decisionmaking much less relevant. Rather than make one grand decision and move on, agencies employing adaptive management engage in a program of iterative decisionmaking following a structured, multistep protocol: (1) definition of the problem, (2) determination of goals and objectives for management, (3) determination of the baseline, (4) development of conceptual models, (5) selection of future actions, (6) implementation and management actions, (7) monitoring, and (8) evaluation and return to step (1). [138]

In addition, changes in agency staffing levels and financial resources, improvements in monitoring technology, and the capacity of regulated parties and NGOs to participate in regulatory implementation are among a litany of factors that affect EPA’s capacity for effective governance, especially as it pertains to enforcement and compliance. [139] EPA should consider these changes in formulating and implementing approaches to achieving desired levels of enforcement and compliance more generally. EPA is already taking steps to do so. For example, to address compliance challenges EPA is increasingly relying heavily on new monitoring tools and data management capabilities. [140] These include infrared cameras that can detect pollution emissions otherwise invisible to the naked eye and electronic reporting such as EPA’s Greenhouse Gas Reporting Tool that are intended to save time and money, increase transparency, and ultimately yield improved compliance. [141]

Thus, the contextual reality of dynamism suggests that an indispensable component of regulatory design is awareness of the likelihood that normative objectives may change over time. It is also important to consider the shifting capabilities and interests of different key actors throughout the entire regulatory enterprise and the extent to which these developments should influence design of regulatory structures. [142]

  1. Salience

A final part of the regulatory design puzzle is the importance of salience. In a world of limited resources, policymakers interested in regulatory design to improve compliance should prioritize changing certain aspects of the regulatory process more than others. [143] Informed deliberation about possible redesign of agency governance strategies requires attention to the nature and priority of the challenges an agency faces. It also requires consideration of all of the opportunities available to improve performance.

To return to Professor Engstrom’s effort to rationalize integration of private enforcers into the public compliance promotion effort, the possibility of and parameters for agency gatekeeping are likely to be salient issues in many contexts (environmental and otherwise) in the effort to improve regulatory compliance. It seems indisputable, however, that an agency’s first step when confronting an enforcement challenge should not be to automatically focus on any single component of the regulatory scheme, such as the appropriate structure of an agency gatekeeping regime. [144] This is a well-understood concept: while hammers work well for nails, other tools are better for other circumstances. Before moving forward to address a particular enforcement or compliance challenge, an agency should be sure it considers the five key components of environmental enforcement and compliance outlined in Part I.A and the contextual design issues addressed in this section to assess which mix of viable options is likely to prove most effective.

In the Colorado hazardous waste initiative we discuss above, for example, a state agency prioritized promoting compliance in a particular sector of the regulated community because of features of that community (e.g., high levels of noncompliance, significant aggregate volumes of waste generated). [145] The agency was then able to make significant improvements in its regulatory approach by refining a few of our key components of effective regulation, notably clarity, verifiability, and the mix of sanctions for noncompliance. There was little need to consider rationalization of public and private enforcement litigation as part of this redesign. The Colorado example obviously does not mean that the particular strategies used there to improve clarity and verification and, ultimately, compliance should be used across the board. Other noncompliance challenges will require different responses to yield desired results. Ultimately, agencies would be well advised to engage in priority setting on multiple levels when addressing enforcement and compliance concerns. A first level involves identifying the challenges that most need attention. The second involves identifying the mix of tools that is most likely to be effective. We suggest that both the components of regulation and contextual design issues discussed in this Part offer a starting point for taking this second step in a systematic and thoughtful way. [146]

II. Contextualizing the Conceptual Framework for Effective Regulatory Compliance Design: An Overview of EPA’s Compliance Track Record and Challenges

As Part I indicates, informed regulatory design requires an understanding of the entire regulatory process and of the actors who play critical roles throughout that process, whether the goal is the design of a regulatory scheme writ large or of a particular piece of that scheme such as the enforcement and compliance promotion function. To illustrate the importance of context in regulatory design we now turn to a brief review of some of the real-world compliance-related challenges and opportunities EPA faces. In doing so, we focus on the second and third design challenges introduced in Part I.C—the need to consider an agency’s experience based on past performance of the regulatory structures being assessed for possible revision and the ways in which the dynamic nature of the regulatory environment bears on regulatory design, particularly on effective enforcement and compliance structures.

Evaluating effectiveness in inducing compliance is an extraordinarily difficult task. [147] It is worth being mindful of the old adage about optimists seeing the glass half full and pessimists seeing the same glass as half empty in considering EPA’s performance and appraisals of its enforcement efforts. Nevertheless, a wide variety of observers, inside and outside government, have identified significant concerns over EPA efforts to promote compliance. [148] EPA faces substantial barriers in overcoming these challenges, including resource constraints (its own and those of the states), and a changing (in some cases expanding) regulated community. There are, however, some promising signs on the regulatory design horizon as well.

The principal point about the contextual overview we provide in this Part is that extant and upcoming challenges, as well as emerging opportunities, demonstrate that efforts to improve regulatory design should proceed with an understanding of the nature of the challenges an agency has faced and will face and the tools available to meet those challenges. For example, concerns that a regulatory design that enables private enforcement suits will lead to problems with private enforcement such as overzealousness, coordination challenges, or infidelity to legislative objectives are likely to be fairly minor in a context in which there is rampant noncompliance, violations are causing significant environmental degradation and harm to public health, and responsible agencies have proved incapable or unwilling to enforce against substantial numbers of significant violators. On the other hand, such concerns are likely to be much more relevant when compliance challenges are complex and require sophisticated, integrated strategies, and a responsible agency’s efforts to address these challenges efficiently and effectively are likely to be undermined by the presence of a host of other erstwhile enforcers.

A. Agency Enforcement Records

The Government Accountability Office (“GAO”), EPA’s Office of Inspector General (“OIG”), EPA’s Administrator, and EPA’s own enforcement office have all offered highly critical assessments of EPA’s performance in promoting compliance with environmental regulatory requirements. [149] In a December 2012 report, for example, the GAO noted that “[i]n recent years, EPA has reported that it is not achieving all of the environmental and public health benefits it expected in regulating certain entities because of substantial rates of noncompliance in some programs.” [150] Compounding the challenge in inducing compliance at desired levels is the enforcers’ ignorance of the scope of the problem they are addressing. As the GAO also noted, “[B]ecause of incomplete or unreliable data on compliance in some programs, such as the [National Pollutant Discharge Elimination System (“NPDES”) permit program under the CWA], EPA cannot determine the full extent of entities’ compliance.” [151] Scholars have also noted EPA’s failure to require regulated entities to submit the kinds of information needed for accurate agency assessment of compliance status. [152]

Concerns about government enforcement extend beyond EPA’s performance. An essential feature of many of the key environmental regulatory statutes is their reliance on a cooperative federalism structure. [153] Congress has enacted pollution control laws such as the CAA and CWA, charging EPA with ultimate responsibility for implementing these laws and achieving their goals (through actions that include standard setting, review of state-issued permits, and concurrent enforcement authority). [154] It has also empowered qualified and interested states, however, to play a significant role in implementation, through planning, permitting, and enforcement, under laws states adopt for that purpose. [155] Congress has done so, among other reasons, out of respect for state sovereignty, especially in areas of traditional state concern, [156] to take advantage of state expertise about local conditions, to support the legitimacy of environmental regulation, and to enhance the total resources available to tackle environmental problems. [157] Over the years, EPA has authorized increasing numbers of states to take primary responsibility for implementation of the major environmental laws, and the states are regarded as the primary enforcers under the major federal environmental regulatory statutes. [158] As a result, much of the compliance promotion work is now performed by the states with oversight from EPA. According to one account, states “conduct about ninety percent of all environmental regulatory inspections and file eighty to ninety percent of environmental enforcement actions.” [159] Moreover, the number of state enforcement actions may dwarf the level of private enforcement, even under a statute such as the CWA in which citizen enforcement historically has been high. [160] Thus, assessments of the efficacy of state performance are (or to be plausible must be) at the heart of efforts to evaluate government enforcement performance more generally. [161]

The GAO and EPA’s OIG, among others, have documented significant deficiencies in states’ performance. [162] Both entities have reported inconsistencies in state environmental enforcement, and the OIG characterized state enforcement programs as “underperforming,” notwithstanding EPA’s efforts to improve state performance and oversight consistency. [163]

EPA’s enforcement office also has acknowledged serious deficiencies in state performance. In an August 2013 draft strategy to improve oversight of state enforcement, EPA noted that its reviews of state performance identified four “unresolved and recurring” significant issues concerning state enforcement (or the integration of federal and state enforcement programs) that require focused attention:

 

  • Widespread and persistent data inaccuracy and incompleteness in national data systems, which make it hard to identify when serious problems exist or to track state actions;

 

  • Routine failure of states to identify and report significant noncompliance;

 

  • Routine failure of states to take timely or appropriate enforcement actions to return violating facilities to compliance, potentially allowing pollution to continue unabated; and

 

  • Failure of states to take appropriate penalty actions, which results in ineffective deterrence for noncompliance and an unlevel playing field for companies that do comply. [164]

 

The upshot is that, as EPA’s OIG has found, “state enforcement programs frequently do not meet national enforcement goals.” [165] The OIG found that during fiscal years 2003 to 2009, which was before some of the most significant funding declines described below occurred, “performance was low across the board,” with some states performing far below average. [166] For example, EPA established a national goal that states inspect 100% of major CAA emitters every two years, but the Inspector General found that only eight states met that goal. [167] As of 2009, EPA set a national goal that states inspect 100% of CWA major permit holders every two years, but in 2010, only two states met that goal, the national average was only 61%, and thirteen states inspected fewer than 50% of major facilities. [168] Similarly, only two states met EPA’s target for inspections of hazardous waste generators under RCRA, and states averaged inspections at only 62% of the targeted number of facilities. [169] The OIG concluded that EPA had failed to hold its regional offices “accountable for ensuring that states adequately enforce environmental laws,” and that EPA regions did not consistently intervene to correct state deficiencies. [170]

As the GAO has noted, “Given these challenges, as well as growing federal and state budget pressures, EPA stated that it has become increasingly difficult to rely primarily on its traditional approach of inspecting individual entities to increase compliance with the nation’s environmental laws and regulations.” [171] Consistent with this assessment, EPA recently announced a new initiative—Next Generation Compliance—to improve performance by capitalizing on advances in emissions monitoring and information technology. [172] As Part III below indicates, the agency has also initiated a program under the CWA to address deficiencies with exclusive reliance on traditional enforcement, and that program illustrates the value of the holistic approach to enforcement that we recommend here.

B. Declining Resources

The adequacy of government resources to promote compliance has been a long-standing concern that seems unlikely to be addressed in the near term. [173] Most of EPA’s annual funding comes from discretionary appropriations. The agency’s funds increased sharply in the late 1970s as EPA began implementing many of the foundational environmental laws adopted earlier that decade. [174] Funding dipped in the early 1980s and then leveled off until late in that decade, after which it increased fairly regularly until fiscal year 2005. [175] The enacted budget for the agency fell slightly for fiscal years 2006 through 2009, bringing appropriations approximately back to the amounts provided by Congress during the late 1990s. [176] Adjusted for inflation, EPA’s funding in fiscal year 2009 was slightly lower than it was in fiscal year 1978, according to the Congressional Research Service (“CRS”). [177] After reaching a peak of $10.3 billion in fiscal year 2010, the agency’s budget declined to about $8.5 billion in fiscal years 2011 and 2012, and to a little less in fiscal year 2013. [178]

Further cuts, perhaps significant ones, seem almost inevitable, at least in the near term. [179] Environmental group spokespersons have characterized EPA budget cuts as an indirect way to weaken environmental regulations, likening the situation to “death by a thousand cuts.” [180] These cuts are likely to affect the agency’s capacity to fulfill its responsibilities, including its enforcement function. EPA announced in early 2014, for example, that increasing budget pressure and resulting uncertainty had prompted it to reduce its workforce through employee buyouts. [181] EPA’s workforce had already declined between 2004 and 2012 during a period when the overall number of federal employees grew by fourteen percent. [182] Among other things, according to a spokesperson for a government employees’ union, the buyouts will result in a reduction in the number of enforcement officials available to do inspections. [183]

The impact of a drop in real funding over the years has been magnified by the increase in EPA’s regulatory responsibilities resulting from the enactment of new statutory programs (such as the Comprehensive Environmental Response, Compensation, and Liability Act in 1980 [184] and the Emergency Planning and Community Right-to-Know Act in 1986 [185] and the expansion of regulatory programs—often in ways that drew many new sources within the scope of those programs—through amendments to RCRA in 1984, [186] the CWA in 1987, [187] and the CAA in 1990. [188]

The combination of EPA’s declining resource pool and increased responsibilities has presented the agency with difficult choices, some of which may impair EPA’s enforcement capacity. [189] In late 2013, EPA issued a Draft Strategic Plan for fiscal years 2014 to 2018. [190][[190]] See Draft FY 2014–2018 EPA Strategic Plan; Availability, 78 Fed. Reg. 69,412 (Nov. 19, 2013) (notice of availability); Envtl. Prot. Agency, Draft FY 2014–2018 EPA Strategic Plan (2013) [hereinafter EPA, Draft Strategic Plan], available at http://progressivereform.org/articles/EPA_Draft_Strategic_Plan112013.pdf [190]] In the portion of the Plan devoted to the goal of protecting health and the environment by enforcing laws and assuring compliance, EPA trumpeted its commitment to a “new [enforcement] paradigm” under its Next Generation Compliance Initiative. [191] EPA predicted that this Initiative would enhance enforcement and compliance by relying on innovative enforcement approaches that use new monitoring and reporting technologies. [192] News reports, however, focused on the portions of the Plan indicating that EPA would cut federal inspections by one-third and reduce the number of civil cases filed each year by twenty-three percent. [193] EPA insisted that its decision to focus on the biggest violators and to implement real-time monitoring of emissions to prevent violations would enhance compliance. [194] The shift in enforcement strategy appeared to have been induced at least in part, however, by budgetary pressures, as reflected in the concession by a top EPA enforcement official that “[o]bviously, necessarily with budget cuts, we have to make tough choices.” [195]

The decline in resources available to the federal government for environmental protection programs generally, and for enforcement functions specifically, is likely to have ripple effects on the robustness of state programs. [196] The federal government has long provided financial assistance in the form of grants and loans to assist the states in performing their roles under the federal environmental statutes. [197] Between fiscal years 2004 and 2012, annual appropriations for EPA categorical grants to assist states in implementing air, water, pesticide, and hazardous substance programs shrank by about eighty-five million dollars. [198] The Environmental Council of the States (“ECOS”) has expressed concern about reductions in federal funding for state environmental programs. [199] Some within the federal government apparently share these concerns. [200]

The reductions in federal financial support for the states were especially problematic given that many states were cutting funds for their own agencies and enforcement programs at the same time. ECOS concluded in 2009 and 2010 that reductions in state budgets for environmental enforcement threatened the viability of state enforcement programs. [201] Between fiscal years 2011 and 2012, twenty-four states reduced funding for their environmental agencies, [202] reflecting “[a]n overall trend of decreasing budgets” for funding for state environmental agencies and, according to ECOS, “jeopardiz[ing] states’ ability to implement federally delegated programs and policies.” [203] The CRS expressed concern about a mismatch between federal support provided and state needs, noting that “[t]he adequacy of federal funds to assist states with these responsibilities has become a more contentious issue over time, as state revenues and spending generally have declined under recent economic conditions.” [204] The GAO similarly noted that “the importance of federal grants has increased, as some states have reduced their funding for certain environmental programs to address decreased state revenues and significant deficits in funding.” [205]

Some states responded to reduced funding for environmental programs by reducing staff levels and cutting outreach and technical assistance programs that can facilitate compliance. [206] State environmental officials have reported to the GAO that resource constraints have required them to institute hiring freezes and reduce staff through attrition and layoffs. [207] In addition, these officials reported that funding freezes or declines have affected their capacity to conduct activities such as permitting, inspections, and monitoring, all of which are critical to effective enforcement. [208]

All of this is to say that implementation of environmental enforcement programs does not occur in a static world. Rather, both the responsibilities and capacities of regulators shift over time. Particularly when growing responsibilities, such as those described in the next section, accompany shrinking resources, policymakers engaged in regulatory design should be cognizant of and account for those realities.

C. Changes in the Regulated Community and Regulator Responsibilities and Capacities: The Dynamic Character of Regulation

At the same time that resources available to agencies to enforce environmental laws have diminished, challenges facing enforcement officials have shifted. Among the factors that have made effective enforcement more daunting for some agencies and programs are an increase in the number of regulated entities; increases in regulatory responsibilities and mandates for agencies and regulated entities alike; implementation of programs that depend on making difficult causal connections between regulated activities and environmental harms; a movement in some contexts away from uniform regulatory treatment toward differentiated responsibility, which may arise under market-based approaches to regulation or other deviations from traditional regulatory tools; and a commitment to target significant violations by smaller sources that have not traditionally been the focus of enforcement attention and activity. [209]

For various reasons, contemporary government enforcement officials would face significant challenges in achieving effective enforcement of environmental laws even if the financial resources available for enforcement were not declining. In some instances, the size of the regulated community has grown. [210] EPA has referred to the “breadth and expanding scope of the [National Pollutant Discharge Elimination System (“NPDES”)] regulated universe” as one of the challenges it faces in improving its enforcement performance. [211] The number of point sources subject to CWA permitting requirements doubled over a recent ten-year period. [212] A recent appellate court decision established, for example, that pesticide applications that allow chemical residues to enter surface water bodies may trigger regulation under that statute. [213] Stormwater permitting has also increased the size of the regulated community. [214]

The resulting increase in regulated entities may present difficulties for federal and state regulators. [215] In New York, for example, regulated point sources increased by sixty-three percent between 1999 and 2012. [216] In some contexts, it may be possible to reduce the burdens of addressing newly expanded categories of regulated sources through the creation of general permits, such as the ones available under the CWA’s dredge and fill [217] and NPDES [218] permit programs. Indeed, EPA has developed a general permit for pesticide and herbicide applications over surface waters. [219] General permits undoubtedly reduce the resource commitment a state must make at the permit approval stage, but agencies continue to have ongoing responsibility for monitoring, oversight of reporting, and inspections. [220] If agencies seek to reduce their administrative burdens by not only switching from source specific to general permitting, but also by minimizing oversight of sources covered by general permits through reduced inspections or sporadic review of regulated entities’ reports, one trade-off will be a decline in verifiability and accountability. [221]

Changes in the nature of regulatory approaches also may complicate agency performance of enforcement and compliance-related functions. For example, EPA has recently shifted its focus in implementing the CWA from enforcement of technology-based effluent limitations applicable to point sources to achieving state water quality standards through the implementation of ambient quality-based effluent limitations. [222] Water quality standards are often expressed in terms of maximum ambient concentrations of pollutants in a surface water body, but are sometimes couched in narrative terms. [223][[223]] For a discussion of the use of numeric and narrative water quality standards under the CWA, see Craig N. Johnston, Don’t Go Near the Water: The Ninth Circuit Undermines Water Quality Enforcement, 24 Envtl. L. 1289, 1300 (1994). Cf. Am. Paper Inst. v. EPA, 996 F.2d 346, 355–56 (D.C. Cir. 1993) (upholding EPA regulations that directed states to convert narrative water quality criteria in state water quality standards, through the TMDL allocation process, into numerical effluent limitations for individual point sources); Fla. Wildlife Fed’n v. Jackson, 853 F. Supp. 2d 1138, 1176 (N.D. Fla. 2012) (upholding EPA mandate that Florida convert water quality standard for nutrients from narrative to numeric form), appeal dismissed, 737 F.3d 689, 692 (11th Cir. 2013) (per curiam). [[223] Implementation of such a standard requires a state environmental agency to establish a total maximum daily load (“TMDL”), which is an aggregate amount of pollution that may be discharged into a surface water body without resulting in concentrations of regulated pollutants in excess of those allowed by a state water quality standard. [224] Tasks such as establishing enforceable limits, monitoring whether allowed loadings (clearly enforceable or less so) are producing desired environmental results, and adapting to the findings are all resource-intensive enterprises. [225] The burdens are perhaps particularly great if the target is a vague narrative standard rather than a numerical limit. [226] Determining whether a point source violated technology-based effluent limits, which are expressed as caps on end-of-pipe discharges, is a relatively simple matter by comparison. Agency efforts to improve water quality by restoring and maintaining ecologically functioning ecosystems will likely create similar ripple effects on enforcement strategies. [227] Expansion of the CWA permit program to cover stormwater permitting may make regulators’ enforcement tasks more difficult because regulation of stormwater discharges often takes the form of best management practices rather than end-of-pipe discharge limits. [228] It may be harder to track compliance status with mandates that take the form of ongoing operating practices than it is for numerical discharge limits that can be monitored. [229] As regulatory challenges change, so do enforcement challenges, affecting the implications of available regulatory design options.

Shifting from traditional regulatory techniques such as technology-based limits that apply to classes of regulated sources to market-based strategies that allow individual regulated entities to alter their responsibilities through inter-source transactions is another change in regulatory approach that is likely to create new enforcement challenges. [230] Such a shift may make it more difficult to ascertain the nature and extent of enforceable duties of individual regulated entities. [231] Some emissions trading markets have been exploited through the sale of credits for environmental improvements that would have occurred even without regulation, credits for which sellers have already been fully paid either in the same or another market or credits for environmental improvements that did not occur at all except on paper. [232] Colorado noted that the burden on agencies to improve compliance may increase when requirements are tailored rather than consistent across an industry, not only because it will be more difficult for government inspectors to determine compliance, but also because “it may be more difficult to implement a self-certification program where individualized permits determine unique facility-specific compliance requirements.” [233]

A final development that may increase the difficulty of enforcement is the effort to address significant environmental threats, even from sources that have not traditionally been the focus of agency enforcement attention, and to address sources that are emitting or discharging relatively small amounts but whose violations may be cumulatively significant. [234] If enforcement initiatives target smaller sources, enforcers may have to initiate more actions and commit more resources to enforcement just to achieve the same level of environmental improvement through enhanced compliance. [235] In addition, data relevant to compliance status may not be available to the same extent for small as for larger sources, making it more difficult to enforce against those sources, or at least more expensive as agencies must amass a database that does not exist or is incomplete. [236]

Not all changes in regulatory challenges make government officials’ jobs more difficult. There are also opportunities to promote compliance that may facilitate better performance. As Part III indicates, these include improvements in monitoring capacity and enhancements in the capacity to manage and disseminate data and other information. Improved understanding of the mix of incentives that promote compliance also holds promise for improving the effectiveness of enforcement efforts. [237]

D. A Brief Conclusion Concerning the Importance of Context to Regulatory Design

Part I seeks to demonstrate that policymakers designing or redesigning programs dealing with regulatory enforcement and compliance promotion should be aware that the programs operate in a multi-faceted context in which each part of the regulatory process may affect the degree to which other parts are capable of achieving the goal of effective regulation. Further, it highlights several contextual issues (such as the hybrid character of contemporary governance) that deserve close attention. This Part has focused on two contextual issues as they apply to EPA in particular. The first is the agency’s enforcement performance record and the impact on it of the resource challenges it has faced and continues to face. The second is the dynamic nature of regulation. Even if one were to take a snapshot of the regulatory process and fully assimilate the interactions among the different phases of the regulatory process and actors participating in it, that understanding is of time-limited value. Past experience with a regulatory program can and should provide lessons that shape policymakers’ redesign efforts. Just as important, however, is recognition that the regulatory landscape and the role of its participants change, sometimes in ways that significantly disrupt settled patterns. If policymakers assume a certain level of state and private enforcement in structuring EPA’s own enforcement activities, they may find that the aggregate level of enforcement is not what they anticipated or desired if, for example, state funding of enforcement drops significantly. The same might be true if the Supreme Court were to issue a decision sharply restricting standing for environmental NGOs in citizen suits. [238] The overarching point is that regulatory design needs to be undertaken and then revisited over time, with a sophisticated understanding of the nature of both the regulatory landscape that exists in a particular regulatory setting and of the changes in this landscape that are likely to occur over time.

III. A Review of EPA’s Initiative to “Transform” Compliance and Enforcement Under the Clean Water Act[239]

In this Part we provide a case study of an ongoing EPA regulatory redesign effort that EPA has recently undertaken to bolster compliance promotion strategies under the CWA. We examine EPA’s approach in the context of the holistic, contextual depiction of the enforcement and compliance promotion function outlined above. In doing so, we are mindful of the view some scholars have taken, which we have considered throughout the Article, that rationalizing public and private enforcement is a central challenge in the modern regulatory state. [240] The absence of this consideration from EPA’s reinvention effort, despite EPA’s possession of agency gatekeeping authority and the significant level of private enforcer activity, raises important questions for conceptualizing and implementing strategies for enhancing enforcement and compliance promotion. [241]

Over the past few years, EPA has acknowledged that its strategies for promoting compliance with the CWA need improvement. [242] In a July 2009 Memorandum, EPA Administrator Lisa Jackson told the head of EPA’s enforcement program, Cynthia Giles, that “[w]e are . . . falling short . . . [in] the effectiveness of our clean water enforcement programs,” [243] and “the level of significant non-compliance with permitting requirements is unacceptably high . . . .” [244] Jackson accordingly directed Giles to develop an action plan to improve enforcement performance. [245]

In October 2009, EPA’s Office of Enforcement and Compliance Assurance (“OECA”) issued the Agency’s Clean Water Action Plan (“CWAP”). [246] Echoing the Administrator’s concerns, OECA noted that “[v]iolations are . . . too widespread, and enforcement too uneven.” [247] OECA also emphasized the challenge presented by a substantially increased universe of regulated parties: “The sheer magnitude of the expanding universe of the NPDES program itself, from roughly 100,000 . . . sources to nearly a million sources . . . presents challenges in how we regulate and enforce the laws . . . .” [248] EPA noted that the types of sources known to raise concerns have evolved as well: When EPA developed its enforcement policies, it focused primarily on the largest (or major) facilities with individual permits that are in significant noncompliance. But EPA had found a rate of serious noncompliance at about forty-five percent of smaller facilities. [249] EPA had further concluded that “[i]t is likely that these smaller but more numerous sources are of critical concern, especially where there are clusters of permitted facilities around impaired waters.” [250] OECA stated that EPA needed to “revamp” enforcement to meet these challenges. [251]

Based on its own assessment, and considerable outreach, [252] OECA identified “three major themes for action” to improve compliance, noting that its outreach efforts engendered a “surprising . . . coalescence” around these themes. [253] The three themes, discussed below, are the need to focus on the most significant threats to water quality and public health, to strengthen EPA-state partnerships and improve the performance of each partner, and to improve accountability and transparency.

A. The Need to Focus Enforcement on the Most Significant Threats

The first theme for action identified in the CWAP is the need to focus enforcement on the “biggest threats to water quality and public health.” [254] This strategy, or approach to regulatory design, might seem obvious. But as EPA pointed out, an unintended consequence of EPA’s traditional focus on the biggest facilities (known in EPA parlance as “majors”) was that EPA paid little attention to the “full range of the NPDES regulated universe,” [255] including “non-major” sources whose discharges caused significant environmental problems. Thus, EPA’s first theme seeks to prioritize enforcement-related efforts by ensuring that these efforts focus on the most problematic sources regardless of size, which previously it had not done.

EPA identified a range of “new approaches and new tools” to address its proposed shift in strategy. [256] For example, it noted the need to improve data management to facilitate understanding of the relationship between compliance problems and their impacts on water quality. [257] Data about water quality, permit limits, and permit violations “reside in different systems and have not been routinely used together to help target serious problems.” [258] EPA also highlighted the importance of improving tools across the spectrum of regulation, indicating that while responses might include enforcement actions, addressing water quality concerns also might require fixing problematic regulations and improving operating permits. [259] Last, the agency focused on integrating its state partners better in its discussion about options for addressing the “biggest threats.” [260]

In short, EPA’s strategy in addressing the first significant deficiency it identified in extant compliance promotion efforts involved all four of the contextual design issues we identified above. EPA’s goal of better integrating states into its enforcement initiatives reflects the hybrid nature of the regulatory process—our first conceptual design challenge. The agency’s decision to refocus its efforts stemmed from the “reality check” provided by past experience —our second contextual design challenge—which showed that historically EPA had paid insufficient attention to significant violators by focusing on a small subset of the regulated party universe. EPA’s commitment to take advantage of improved technology to make easily accessible and understandable information available to the public about compliance status, actions EPA and states are taking to address problems, and the effects of those actions on water quality [261] relates to our third contextual design challenge—dynamism. Finally, EPA’s decision to shift its priorities reflects an agency effort to grapple with our fourth design issue—salience. Further, by focusing on resolving data deficiencies (verifiability) and tools besides formal enforcement (the available mix of rewards and sanctions), EPA considered some of the key components of an effective enforcement and compliance program identified in Part I.A. The Agency also recognized the interrelated character of these components, noting, for example, that improved verifiability and better use of sanctions are related.

B. Strengthening the EPA-State Partnership

The second “major theme for action” that EPA identified in its CWAP, not entirely distinct from the first, is the need to strengthen state performance. In most parts of the country, states are the first line of CWA permitting and enforcement. [262] The Plan noted that reviews of state performance identified widespread deficiencies, and EPA noted the importance of federal oversight to motivate improvements in such performance:

[The many reviews of state permitting and enforcement performance] have identified a lack of consistency in performance across states and highlighted common issues such as permit backlogs, failure to identify significant noncompliance, or to take timely and appropriate enforcement. EPA must consistently respond to these issues and press states and ourselves to make the appropriate improvements in order to achieve equitable protection to the public, a level playing field for competing businesses, and fairness across states in how our environmental laws are enforced. [263]

EPA’s goal of better integration of federal and state enforcement involves the first of our contextual design challenges—the idea that design efforts should take into account the role of different stakeholders in a hybrid regulatory process. Particularly in the cooperative federalism context built into the environmental statutes, it is unsurprising that EPA would make rationalization of its relationship with the states a top priority. [264] EPA enforcement leaders over the past couple of decades have highlighted the importance of the state-federal partnership in effective enforcement and compliance promotion. [265]

EPA’s focus in the CWAP on rationalizing federal and state enforcement efforts reflects more than just our point about the importance of hybrid governance considerations to regulatory design. EPA’s concerns extend to several of the key elements of effective enforcement and compliance promotion we discuss above, including verifiability and the appropriate mix of rewards and sanctions. The fact that EPA decided to directly and publicly level its criticisms of state performance implicates legitimacy concerns, another important element of effective regulation. EPA’s decision to pursue improved enforcement in light of unacceptable past performance reflects the importance of the “contextual design” issue of structuring future efforts in light of assessments of past performance. The agency’s apparent decision to regard rationalization of federal and state enforcement as a higher priority than the rationalization of public and private enforcement implicates another of our contextual design issues (salience). [266] Thus, EPA’s goal of strengthening state performance bears on several elements of our conceptual framework for improving regulatory design.

C. Improving Accountability and Transparency

The third theme around which EPA and its stakeholders coalesced in the CWAP is the need to improve accountability and transparency. [267] As it did in identifying the Plan’s first two themes, EPA acknowledged that it “lacks nationally consistent and complete information on the facilities, permits, pollutant discharges and compliance status of most NPDES-regulated facilities.” [268] Data problems exist across the board, including “data quality, accuracy, and completeness.” [269] Inevitably, the infrastructure problem these data gaps represent “affects the ability of EPA and states to identify violations, . . . connect violations to water quality impacts, and to share information with the public.” [270] The Plan notes that the “breadth and expanding scope of the NPDES regulated universe” heightens the challenge of responding to the long-standing data problems. [271] The CWAP indicates that, because of the size of the challenge and the costs involved (it would cost over $100 million per year to generate the data EPA would like to have), [272] EPA will explore new ways to fill these data gaps, including using technological advances. [273]

Innovative information-gathering technologies may facilitate the ability of regulators and potential private enforcers to identify regulatory violations. Geographic information systems, global positioning satellite technologies, and remote sensing devices already support the investigation and enforcement of environmental laws in ways that were not previously possible. [274] Some of this technology is available to the public at little or no cost from federal or state agencies. [275] These technologies produce data that are more finely grained and that can be more helpful in identifying environmental conditions, violations, and violators than cruder, previously available data. The new data can strengthen the deterrent impact of regulations and foster higher compliance levels if regulated entities recognize that ease of access to information may make it easier for enforcers to prove violations.[276]

Invoking the experience with the TRI program, the CWAP also touts the promise of transparency as a tool to improve compliance. [277] EPA suggests that both public pressure and greater regulated party self-awareness can motivate better performance. For our purposes, the key point is that, in identifying strategies to improve compliance, EPA is looking well beyond ex post enforcement and considering a range of tools throughout the regulatory process. In doing so, it is by no means dismissing the value of traditional enforcement; it is simply calling for use of additional tools to address compliance challenges, a position we have taken in previous work [278] and which academic literature supports. [279] According to EPA, “[t]ransparency is not a replacement for regulatory enforcement, but can be an effective driver for improved performance and accountability.”[280] As others have noted, changes in information technology can affect phases of the regulatory process other than ex post enforcement. Better information, for example, can contribute to the adoption of more effective regulation, planning, and permitting, which in turn can affect the extent of compliance and the need for enforcement. [281]

The CWAP’s third theme illustrates how considerations relating to hybrid governance and the dynamic nature of the regulatory environment can affect regulatory design choices, and that these aspects of regulatory design may affect key characteristics of effective regulation, including verifiability, the creation of appropriate compliance incentives, and regulatory legitimacy. The range and relative attractiveness of regulatory design options, both for regulation as a whole and for enforcement aspects of it, will shift over time as technology advances, government capacity evolves in other ways, and more is learned about what works and what does not in achieving desired environmental results. Regulatory design decisions should take full account of these contextual aspects of regulation.

D. Enhancing Reinvention Through Holistic Regulatory Evaluation

While EPA’s effort to improve enforcement and compliance efforts under the CWAP reflect many of the aspects of our multi-layered approach to regulatory design, the application of our framework to the initiative raises questions about several features of the CWAP. In this section, we provide a few examples of how a more complete accounting of all of the layers of our model for the design of regulatory enforcement and compliance programs might enrich EPA’s analysis of each element of its CWAP. [282]

The first theme of EPA’s CWAP centers on expanding the range of enforcement efforts to cover regulated sources previously ignored or deemphasized. [283] EPA reasons that the discharges of small sources, particularly in the aggregate, have the potential to create significant adverse public health and environmental effects. [284] Implicit in EPA’s decision to sweep these sources into the agency’s enforcement program is that doing so should increase the prospects of achieving desired levels of water quality. EPA may well prove to be correct, and as a normative matter we hope so.

Conceptually, we encourage systematic consideration of the role our five key components of effective enforcement and compliance might play a part of this new initiative. For example, are there strategies that would improve the regulated community’s understanding of its regulatory obligations and how to meet them, as Colorado did with hazardous waste small quantity generators (our clarity component)? [285] Smaller facilities are less likely than larger counterparts to have access to sophisticated technical and legal advice. [286] EPA has undertaken such outreach in other settings. {{287}] [[287]] EPA’s website on Compliance Assistance provides access to many such outreach initiatives. See Compliance Assistance, EPA.gov, http://www.epa.gov/ compliance/assistance/ (last updated June 20, 2012). [[287]] Similarly, what are the implications of achievability for EPA’s enforcement strategies for smaller facilities? Are there steps EPA can and should take in light of any achievability issues that are likely to materialize with respect to smaller facilities in particular? Verifiability is a third component that deserves careful consideration in determining how best to regulate a large universe of smaller facilities. Are there additional steps EPA should consider to facilitate effective self-monitoring? Or actions that could facilitate more effective government (EPA or state) monitoring and reporting? NGO capacity to participate in the verifiability component is worth attention as well.

Our fourth and fifth components—the mix of rewards and sanctions, and legitimacy—should influence when EPA brings cases against large and small facilities, and the relief the agency should seek. Perceptions of legitimacy may increase, for example, if EPA’s enforcement program targets all suspected significant violators, regardless of size, particularly if small sources create adverse effects analogous to those resulting from discharges by larger facilities. On the other hand, coercive enforcement against small entities may seem unfair and overbearing to those sources if they lack adequate resources to comply, or if they lack the technical capacity to identify and quickly resolve problems. EPA policies account for disparities in the regulated community in terms of ability to pay; [288] applying these fourth and fifth commitments, it would be appropriate for the agency to consider proactively whether other special accommodations are appropriate in deciding which suits to initiate and what relief to seek.

Our framework also suggests the value of deepening, or perhaps extending, the analysis of EPA’s commitment in the second element of its plan to achieving a better integration of federal and state enforcement efforts. EPA’s Plan does not address the role of citizen suits (an important aspect of hybrid governance in the enforcement and compliance promotion arena) in addressing the shortcomings it identified. The availability of citizen suits complicates the challenges of rationalizing or integrating federal and state compliance inducement efforts because such suits make it possible for three enforcers with different interests and capacities to take steps to address particular alleged violations. The challenges, and opportunities, are significant because of the significant number of actions citizen enforcers bring each year. [289] Public enforcers have considerable discretionary authority over the fate of private enforcement; to use Professor Engstrom’s phrase, the major federal pollution control statutes empower EPA and the states to serve as “gatekeepers” with respect to citizen suits. [290]

Nevertheless, there are significant limits on EPA’s ability to influence citizen suit enforcers. A fully integrated analysis of the role of public enforcement by federal and state authorities should include an assessment of strategies that would “rationalize” the use of citizen suits so that, in combination, the three sets of enforcers have the best chance of halting significant violations and inducing desired levels of compliance. [291] For example, weak gatekeeping is likely to create uncertainty for regulated entities (regarding the likelihood of suit, the types of relief to be sought, etc.). But strong gatekeeping that significantly disables private enforcement may detract from the legitimacy of the regulatory program if it is perceived as an effort by captured regulators to block public participation in efforts to halt violations with significant public health or environmental implications. While, therefore, we respectfully suggest that Professor Engstrom’s prescriptions for rationalizing public and private enforcement would benefit from consideration of state enforcement, EPA’s CWAP is similarly incomplete because it ignores the role of private enforcement. A comprehensive effort to design an enforcement and compliance regime that is up to the challenges of hybrid governance needs to take account, at a minimum, of the roles of all three enforcers, of how regulated entities are likely to react to the enforcement strategies of each, and of how each enforcer’s effectiveness will be affected by the actions of the other two enforcers.

The CWAP’s failure to consider the role of private enforcers in the CWA’s hybrid enforcement program similarly may prevent the third aspect of EPA’s CWAP—reliance on new information technology to enhance accountability and transparency—from completely fulfilling its potential. The dynamic nature of changes in information technology means that the economics, feasibility, and chances for success of enforcement will not remain static. Better monitoring and the information it generates, for example, may motivate regulated parties not to violate the law in the first place, thereby influencing the universe of cases that deserve formal enforcement. Better monitoring and information might heighten the willingness of private enforcers to pursue violators as information gathering costs decrease and the costs of success rise. These developments may spur citizen suits that would not otherwise have been brought, adding to the chances that regulatory policy will be set in the context of private litigation in ways which the government deems unwise. [292]

When Congress enacted the major federal environmental regulatory statutes, it chose to forego a uniform enforcement regime in which expert federal agencies have the sole power to decide which enforcement actions will promote legislative goals. Instead, Congress created a regime in which EPA shares its enforcement authority with states, in part for reasons rooted in a desire to promote federalism values. In addition, as Professor Engstrom has noted, when Congress created citizen suit provisions, it took into account and implicitly endorsed enforcement actions by private litigants that public enforcers might choose not to pursue, thereby “conferring democratic legitimacy, though at a higher level of generality,” on such enforcement pursuits. [293] In other words, Congress intended that EPA and the states share authority with private enforcers, whose inclusion in the enforcement equation arguably promotes legitimacy in addition to reflecting Congress’s intent to align enforcement capacity with levels of noncompliance warranting enforcement action in light of government resource constraints. These considerations are all relevant to policymakers as they consider the likely impacts of improved information technology on the preferred structure of enforcement and compliance programs.

Conclusion

Enforcement is generally thought to be an indispensable feature of effective governance. The importance of using a holistic and systematic approach to consider reforms to agencies’ enforcement and compliance functions is difficult to overstate because of the interconnectedness of the different components of an effective regulatory regime. Yet much of the discussion of options to improve enforcement fails to account for the entirety of the administrative state’s tools to conduct its work.

This Article offers a comprehensive conceptual framework for considering how best to structure an enforcement and compliance promotion regime. The framework includes three levels. The first identifies five key components of effective regulation: clarity, achievability, verifiability, the mix of rewards and sanctions, and legitimacy. The second deals with interactions among the five components, which in some instances may produce synergistic benefits, but in others may require policymakers to make tradeoffs and difficult choices. The third level is comprised of four contextual design challenges facing regulatory programs, including enforcement regimes: hybrid governance, past performance, dynamism, and salience. Agencies should confront each of these challenges in designing and administering enforcement and compliance promotion efforts. The “test run” we gave to the framework by applying it to a case study of an ongoing EPA effort to transform its enforcement strategies under the Clean Water Act illustrates the importance of efforts of this sort to use a wide lens in considering regulatory design and implementation opportunities.

                     *   © 2014 David L. Markell & Robert L. Glicksman.

                  **   Stephen M. Goldstein Professor of Law, Florida State University College of Law.

               ***   J. B. & Maurice C. Shapiro Professor of Environmental Law, George Washington University Law School. The authors thank William Andreen, Robin Craig, David Freeman Engstrom, Emily Hammond, Shi-Ling Hsu, Joel Mintz, J.B. Ruhl, Sidney Shapiro, Hannah Wiseman, and Sam Wiseman for helpful comments on drafts of this Article. Thanks also to Katrina Miller, Research Librarian, Florida State University College of Law, and to Sarah Haston, Florida State University College of Law (‘15) for terrific assistance, and to William Yon, George Washington University Law School (‘16) for his assistance on graphic design. In addition, thanks to the Florida State University College of Law and the George Washington University Law School for support.

   

 

DOWNLOAD PDF | 93 N.C. L. Rev.1 (2014)