The Networker  [Printer-friendly version]
March 13, 2006


Reprinted from The Networker, the newsletter of the Science &
Environmental Health Network.

[Rachel's introduction: In this important strategy paper, Joe Guth
lays out a plan for bringing the courts into the 21st century. At
present the courts tend to accept environmental devastation as an
inevitable (and tolerable) by-product of economic growth. But the
world has changed and we can no longer afford unlimited growth
because human survival requires that the natural world remain intact
and functioning.]

By Joseph H. Guth, JD, PhD**

This is an outline of arguments intended to transform American law,
beginning with the common law, so that it will promote preservation of
the earth rather than accept environmental destruction as a byproduct
of economic growth. These arguments call on the law to bridge the gap
between biologists, who see us outgrowing our habitat, and mainstream
economists, who foresee a future of unlimited economic growth.

A. How Common Law is Created

The "common law" is the body of law created by judges, as
distinguished from law created by other authorities, such as
constitutions and statutes. While judges must accept and interpret
constitutions and statutes as they find them, judges must develop
common law on their own. There was a time when judges believed they
developed the common law by "discovering" law or by logically and
inevitably deriving it from "first principles." However, since late in
the nineteenth century, judges have been understood to resolve common
law cases by reference not just to precedents and to logic, but also
to the current social environment. This makes the common law a
"battleground of social theory" in which judges have the power, indeed
the responsibility, to adapt the law to changing circumstances.

B. The Current Common Law

The common law has long been called on to balance economic activity
with damage to human health and the environment. Its modern structure
was developed during the nineteenth century, as the Industrial
Revolution arose as a dominating social force. Historically, the
common law had contained two approaches to imposing liability on
enterprises. One made defendants strictly liable for the damage they
caused regardless of whether they were guilty of any wrongdoing, and
the other let the damage lie unless defendants were somehow at fault,
that is, in the wrong. But as early nineteenth century judges
struggled with these doctrines, it became clear that strict liability
threatened the viability of the huge new industrial enterprises that
were arising.

In his famous 1881 treatise, The Common Law, Oliver Wendell Holmes
considered the long history and various justifications for the
competing principles of strict liability and fault, and then explained
why the law should not hold a "man" strictly liable for all the
consequences of his acts:

"A man need not, it is true, do this or that act, -- the term act
implies a choice, -- but he must act somehow. Furthermore, the public
generally profits by individual activity. As action cannot be avoided,
and tends to the public good, there is obviously no policy in throwing
the hazard of what is at once desirable and inevitable upon the

Note how concisely Holmes articulates two crucial propositions, one of
economics and one of legal theory. Holmes's economic proposition, that
human activity generally provides a net benefit to society, was widely
accepted, as exuberantly expressed in 1873 by the New York State
Supreme Court:

"The general rules that I may have the exclusive and undisturbed use
and possession of my real estate, and that I must so use my real
estate as not to injure my neighbor, are much modified by the
exigencies of the social state. We must have factories, machinery,
dams, canals, and railroads. They are demanded by the manifold wants
of mankind, and lay at the basis of all our civilization. [The victim]
receives his compensation... by the general good, in which he shares,
and the right which he has to place the same things upon his

Holmes's proposition of legal theory is that because human activity is
generally desirable, the law should encourage it by shielding it from
liability for damage it "inevitably" causes. Well before the end of
the nineteenth century, common law judges had accepted this legal
theory and implemented it by crafting rules of law that would allow
the Industrial Revolution to proceed.

Judges created the legal theory of "negligence" and made it the common
law's principal tool for resolving civil claims, including claims
grounded in environmental damage. Presuming that economic activity was
desirable, they shielded defendants from liability except for any
conduct that a plaintiff could prove did not provide a net social
benefit. They invented a requirement that, to receive compensation for
damage caused by a defendant, a plaintiff must first prove that the
defendant could have prevented the damage by taking steps that were
reasonable according to a utilitarian calculus. Thus, judges
implemented a presumption that damage should lie where it falls and
placed a burden on plaintiffs to prove that a defendant's conduct was
"negligent," i.e., that the conduct resulted in "unreasonable" risk.
[iii] "Unreasonable" risk "is usually determined upon a risk-benefit
form of analysis: by balancing the risk, in the light of the social
value of the interest threatened, and the probability and extent of
the harm, against the value of the interest which the actor is seeking
to protect, and the expedience of the course pursued."[iv] To meet
this burden of proof, plaintiffs usually must identify a cost-
effective alternative measure that the defendant should have adopted,
such as installing a guardrail or scrubbing a waste stream. Moreover,
because plaintiffs must prove that particular conduct by particular
defendants caused their particular harm, the common law examines the
"reasonableness" of each particular damage-causing conduct
independently, one case at a time.

Common law judges also developed the modern structure of the legal
theories of private nuisance (protecting a person's interests in
private use and enjoyment of land) and public nuisance (protecting
rights common to the general public). As reflected in the 1873 New
York State opinion quoted above, judges saw the need to shield
enterprises from liability in nuisance rather than follow some of the
older cases that were intolerant of industrial invasions of lands and
other interests. They came to require plaintiffs to prove, as in
negligence, that the damaging conduct was "unreasonable" according to
utilitarian principles.

Strict liability has become disfavored in modern common law, though it
has not been eliminated. It is now is generally confined to a few
forms of conduct, including narrowly defined "abnormally dangerous"
activities (such as blasting), sale of defective products, and some
forms of trespass to land. Thus, according to the core structure of
its predominant doctrines, negligence and nuisance, the common law
intentionally presumes that damage to the environment should lie where
it falls, without compensation even if the defendant can afford to
pay, unless a plaintiff can prove that the defendant's conduct was to
society's net detriment (i.e., that the damage was avoidable by cost-
effective measures). It is this core structure that presents the
greatest barrier to protection of the environment by the common law.
This core structure must be changed.

C. The Environmental Statutes Contain the Same Core Structure as Does
the Common Law

Some historians argue that the law shifted during the nineteenth
century from an earlier grounding in strict liability as one element
of a many-faceted transformation in the legal system sought by
powerful interests in order to shift wealth and power from weaker
elements of society to commercial and entrepreneurial groups.[v]
Indeed, the common law did come to contain many impediments, besides
the core structure of its predominant doctrines, to the ability of
plaintiffs to obtain compensation for damage caused even by
"unreasonable" conduct. These include refusing liability unless
defendants are deemed to bear a legal "duty" to plaintiffs, limiting
liability for damages to harm deemed to be both "proximately caused"
by and "foreseeable" from the defendant's conduct, requiring that
damage be "substantial" to be compensable, and many others. More
recent impediments include judicial demands for "sound science,"
secret settlements, and financial influence in science and the

Reacting to the obvious limitations in the ability of the common law
to protect the environment, the federal government enacted numerous
environmental statutes beginning in the late 1960s. These statutes
overcame some of the impediments of the common law and have enabled a
measure of environmental protection that the common law could not.
But, with few exceptions, the environmental statutes embody the same
economic and legal propositions that lie at the core of the common
law. Most of these statutes provide the administrative agencies not
with plenary authority to protect public health and the environment
but with only the authority to take "reasonable" or "cost-justified"
protective actions (exceptions include the "fishable" and "swimmable"
water quality goals of the Clean Water Act; the health-based standards
for specific "criteria" pollutants under the Clean Air Act; and the
"reasonable certainty of no harm" standard for pesticide food
tolerances under the Food Quality Protection Act.). Executive Order
12866 (Clinton, 1993), rigorously enforced by the White House's Office
of Management and Budget, requires all regulations promulgated by
executive agencies to cost less than the value of the avoided damage,
unless a particular statute requires otherwise. Thus, like the common
law, the federal environmental statutes generally permit environmental
damage unless the government can prove that the damage is avoidable by
cost-effective measures.

D. Environmental Protection Now Turns On Cost-Benefit Calculations

Environmentalists, biologists, and public health advocates can
demonstrate many forms of substantial industrial damage to human
health and the environment, but this alone does not meet the burdens
of proof imposed by the law. Today's legal battles to protect the
environment are fought almost entirely on the circumscribed
battleground of whether protective steps can be justified by
utilitarian cost-benefit calculations. In each calculation, an
increment of damage to the environment is monetized and then traded
off against other monetized costs and benefits, with no limit on the
total amount of damage that can be justified. Environmentalists and
industry are in bitter conflict over the value-laden assumptions that
underlie these calculations. Industry resists even "cost-effective"
regulations because industry bears the direct costs of environmental
protection while the benefits accrue to society. Society has little
confidence in the regulatory decisions resulting from this system but
is so locked into Holmes's two propositions that the case for applying
cost-benefit analysis to environmental risks can seem compelling: Why
shouldn't we pursue activities that create net benefits, even if they
cause some environmental risks or even damage? Why shouldn't we
require that regulations be "reasonable"? Why should we worry more
about environmental damage than about other types of risk? Wouldn't
that cause us to forgo many activities that would have a net social
benefit? Overall, isn't it sensible to let economic development
proceed while we develop the best possible cost-benefit calculations?

E. Unleashing the Industrial Revolution Onto An Empty World

The core structure of the common law was adopted when the world was
viewed as an "empty world," in which the human impact on the
environment was small compared to the assimilative capacity of the
earth as a whole. Since then, Holmes's propositions have become
embedded in our entire political economy. This can be seen in our
obsessive commitment to permanent growth in the Gross National Product
(GNP), which is grounded in the belief that GNP measures human
welfare. Reflecting an abiding faith in the net social benefit of
economic activity, GNP measures only the total dollar value of all
goods and services produced each year and makes no effort to deduct
the accompanying environmental costs. GNP incorporates no deduction
for depletion of natural resources or damage to human health, the
environment, or many other components of any true vision of human
welfare. It counts liquidation of resource stocks such as oil,
forests, and fisheries solely as positive contributions to GNP. Even
defensive expenditures such as environmental remediation and medical
costs for industrially caused disease are recorded as positive
contributions to GNP, with no debit for the underlying damage. By
failing to include these losses in our GNP accounting, our commitment
to growth in GNP deludes us into accepting losses not just when they
appear justified, as they did to Holmes, but also as they continue to
mount, no matter how serious they become.

The free market, the engine of GNP growth, is structured in the same
way. If a resource carries a price, the free market can reduce use of
that resource once it becomes scarce by causing the price to rise, but
the market contains no mechanism for preventing its scarcity. Today's
neoclassical economists tell us not to worry about this because they
believe, as an article of faith, that we will always be able to
overcome resource scarcity by deploying technology and accumulated
capital to find substitutes. Perhaps more important, the free market
comprises no markets or prices for the clean air, water, or other
vital resources of the commons that industry now uses as pollution
sinks. Industry pollutes the commons for free, externalizing onto
society this cost of industrial production. Because industrial damage
to the commons is not reflected in the price of goods and services,
the market can only encourage environmental damage and cannot
discourage or prevent it. With the law intentionally shielding
industry from most liability for this damage, the market drives us
without restraint to exhaust the pollution sinks and the resources our
economy feeds upon.

This political economy has unleashed astonishing growth in GNP over
the first two centuries of the Industrial Revolution. While global
population has grown 6-fold since 1800, global GNP has grown even
faster, rising 50-fold in the last 180 years.[vii] But this is only
the beginning. In the neoclassical economics that dominates public
policy today, no theoretical limit exists to the potential size of
GNP, and massive further growth is the only accepted solution to
global poverty. The world population, most of which is poor, will grow
to 8-10 billion by 2050. Economists expect GNP, even in rich countries
with stable populations, to continue to grow at about 3% per year
(doubling every 25 years). The World Bank projects that world GNP will
quadruple by 2050.[viii] Can we expand U.S. and world GNP by 50-fold
again (5 to 6 more doublings) in the next 180 years? Our current
political economy, driven by an insatiable consumer culture, the
desperate needs of the world's poor, and resistance to significant
redistribution between rich and poor, is giving us no other option but
to try.

F. Our New Circumstances: The Finite Size of the Earth

Today we can see that we no longer live in an empty world. The
biosphere appears now as a shockingly thin film on the surface of the
earth, and it is the only habitable place we know in a forbidding
universe. It contains only so much air, so much fresh water, so much
arable land, so much room for us to share with all the rest of life.
The earth and its interdependent ecosystems can assimilate only so
much pollution per year, and we see that the various forms of
environmental damage we visit upon the earth do not occur in isolation
but form a networked web of assaults, each compounding the effects of
the others. Because it is finite, the biosphere can withstand only so
much sustained environmental damage before becoming biotically
impoverished, with decreased ability to sustain life, including us.

As our GNP grows forever, the accompanying cost-benefit-justified
damage to the environment, which also grows forever, will inevitably
reach and surpass the rate of environmental damage that the earth can
sustainably assimilate. Environmental damage at a rate beyond the
earth's assimilative capacity will inexorably diminish and eventually
devastate the earth's biosphere. Along this path, we can foresee that
the earth's decreasing assimilative capacity, in a vicious feedback
loop, will accelerate the biosphere's decline. Many of the losses,
such as diminished biodiversity will be unrecoverable in any timeframe
relevant to us. Some perceived long ago that we would surpass this
assimilative limit. Others, sequestered in privileged refuges, will
refuse to see it until the last tree is felled. But the key to
protecting the environment from the juggernaut of GNP growth is to
accept that a physical, inescapable limit exists to the earth's
assimilative capacity for environmental damage, and that this limit is
upon us.

The consequences are profound for our economic and legal systems.
Beyond the earth's sustainable assimilative limit, each increment of
sustained environmental damage will have an adverse effect on the
environment and on human welfare that is far greater than the effect
it would have in an empty world. Eventually, further GNP growth
accompanied by environmental damage that might have been justifiable
on an empty- world, cost-benefit basis, must actually become "anti-
economic," decreasing rather than increasing human welfare.

To prevent both the impoverishment of the earth and anti-economic GNP
growth, we must limit our total cumulative scale of environmental
damage. This constraint in scale, as explained by former World Bank
economist Herman E. Daly, must be imposed from outside the market
system because it is determined by the size and nature of the earth
itself.[ix] If we accept this constraint, we should still be able to
increase economic productivity, though not while mindlessly also
increasing the scale of environmental damage. Instead, we would seek
perpetually to reduce environmental damage per unit of productivity.
We may even be able to increase true human welfare indefinitely, as
long as we are inventive enough. Cost-benefit analysis might help us
choose among alternatives as we develop a less damaging economy. But
we could no longer justify environmental damage by monetizing it and
trading it off on an equal footing with other monetized costs and
benefits, for this dooms us to limitless environmental destruction in
the quest for limitless benefits. Environmental damage must be
preferentially avoided because it alone must be capped.

This shift in focus is happening. Progressive economists are beginning
to create measures of human welfare that include the value of resource
stocks, human health, the state of the environment, and other factors,
and some have concluded that growth in GNP has already become anti-
economic.[x] We are fitfully developing systems for imposing caps on
emissions of some pollutants, such as sulfur dioxide and carbon
dioxide, and for maintaining stocks of resources such as wetlands and
fisheries. The precautionary principle is emerging as a tool for
focusing environmental decisions on avoiding unnecessary damage.
Alternative, greener technologies are struggling for a place in the

G. The New Structure of the Law

Containing the damage to the earth is the most important task facing
humanity. The rules of law spawned by Holmes's two propositions must
be overturned to the extent they govern liability for environmental
damage. The law must be transformed so that the earth's limited
assimilative capacity will operate as a real constraint on our
economy. This transformation in the law can begin with common law
judges, who are called on now, as they have been for centuries, to
adjust the law to changing circumstances.

Now that the limits to the earth's assimilative capacity for
environmental damage are upon us and we can foresee anti-economic
growth in GNP, judges cannot mindlessly continue to ground our law in
a presumption favoring all economic activity. Judges must now presume
that we must limit the scale of our environmental destruction by
acting to avoid it wherever possible. To accept this new presumption,
judges need not first measure precisely the assimilative capacity of
the earth or determine exactly when GNP growth becomes anti-economic.
Nineteenth century judges needed no mathematical proof that economic
growth was desirable before implementing their sweeping rules of law.
Today's judges need only comprehend the reality of the limits we face
and perceive that the preservation of the earth has become an ethical,
moral, and economic imperative. One can imagine such judges, in
crafting new rules of law, decrying environmental destruction with the
same profound sense of urgency that the New York Supreme Court
expressed in embracing economic development in 1873.

To act on this new presumption, it is plain that the law must turn its
shield from protecting actors from liability to protecting the
environment from destruction. First, judges must now presume that
defendants, not plaintiffs, should bear the burden of environmentally
damaging conduct. Second, this burden must be sufficient to deter
environmental destruction and promote development of less damaging
forms of production. Judges have many tools available in crafting such
rules of law, and the touchstone for calibrating their proper strength
must be whether they are sufficient to protect the earth. Judges can
make defendants strictly liable for environmental destruction. They
can ensure that the measure of damages is sufficient to drive vigorous
development of safer alternatives. They can impose liability if a
defendant has failed to employ a less damaging alternative. They can
develop legal preferences to further disfavor economic activities that
do not materially improve human welfare. While such rules may seem
burdensome to defendants, they will build the shield for the
environment that we now must have, and they are not unlike the burdens
judges placed on plaintiffs long ago when they thought the world was

Environmental laws governed by other authorities, such as statutes and
constitutions, must be rewritten as well. Meanwhile, judges should,
where reasonable, interpret existing laws in ways that further the new
overriding imperative of protecting the earth.

These transformations in the law would cause our market economy to
conform to the real, inescapable constraints imposed by the finite
capacities of the earth, deter environmental destruction, and motivate
a relentless drive to develop less damaging forms of economic
production. Under such a political economy, perhaps we could indeed
continually increase human welfare and still preserve the earth and
all its benefits.

[i] Holmes, O.W., The Common Law, Lecture III, p. 95 (Dover
Publications 1991) (originally published in 1881).

[ii] Losee v. Buchanan, 51 N.Y. 476, 484 (1873).

[iii] Restatement (Second) of Torts § 291.

[iv] Keeton et al., Prosser and Keeton on Torts, § 30 (pp. 164-65), §
31 (p. 173), 5th Edition (West 1984).

[v] See Horowitz, M.J., The Transformation of American Law
1780-1860, pp. 63-108 (Harvard University Press, 1978).

[vi] See Raffensperger, C. and N. Myers, Detox for Torts: How to
Bring Justice Back to the Tort System (SEHN White Paper, 2003)

[vii] Angus Maddison, The World Economy: a Millennial Perspective;
p. 261, Table B-18 (OECD 2001).

[viii] Responsible Growth for the New Millennium at pp. 1-3 (World
Bank, 2004).

[ix] See Daly, H. E., Beyond Growth (Beacon Press, 1996).

[x] See "Sustainability Indicators," Redefining Progress Daly, H.E.
and Farley, J. Ecological Economics 233-44 (Island Press, 2004).

** Joe Guth is the legal director of the Science & Environmental
Health Network.