This from last November's edition of the Yale Law Journal: Environmental Economics: A Market Failure Approach to the Commerce Clause,
by Mollie Lee. I bring this up in my blog only because the conclusions here dispute the conclusions reached in my recent article on the Unconstitutionality of the Safe Drinking Water Act (SDWA).
(Warning: the following is a bit technical and is probably only meant for those with interest in Commerce Clause jurisprudence.
In my article, I argue that environmental and health statutes could be found to be Constitutional only if they are passed as part of a valid regulatory scheme of economic activity under the Commerce Clause. In addition to concluding that the SDWA is Unconstitutional, I also examined and rejected the arguments that the Endangered Species Act (ESA) was a permissible use of the Commerce Clause power. Mollie Lee agrees with my arguments, and the purpose of her piece is to find an alternative rationale by which to uphold the ESA. According to Ms. Lee, the ESA can be considered an economic statute (and therefore is permissible under the Commerce Clause) if one is to take a narrow market failure approach. That is, where market failures occur (at least as far as activities that are involved in interstate commerce), then the regulation can be seen in a sense as a market correction, even if the subject of the regulation is not specifically economic. (This is my own off the cuff summary, so please excuse any looseness of language.)
I disagree with this approach for the following reasons:
1st- Ms. Lee mentions my biggest concern, and that is the fact that a broad use of the market failure approach would permit nearly any activity to be considered economic. She contends that this can be resolved by taking a narrow approach, but I'm unsure how focusing only on activities that impact on interstate markets differ from traditional commerce clause analysis.
2nd- Market failure itself is a troubling term, particularly when it comes to commerce clause analysis. For one thing, as I just mentioned above, the term can very elastic. And one person's market failure is another person's functional market. For all the different examples of market failure discussed by Ms. Lee, I think most come down to the tragedy of the commons. That is, air pollution, water pollution, and other similar issues are issues precisely because the air and the water is owned in common and not by any one individual or party. (We'll ignore the inconvenient fact that this is not really an example of market failure at all, but an example of the problem of public as opposed to private ownership.) And remember, when it comes to the ESA, we're talking about what people do with their own privately own land, not any publicly owned land.
The problem with considering the ESA a response to a market failure is that it is unclear why the loss of an endangered species on private land is any more of a market failure than any other sort of environmental impact on private land. The only real counter argument would involve the economic value of endangered species in the aggregate, but this is precisely the sort of logic I've rejected in my article and which Ms. Lee had previously rejected herself. Perhaps an argument can be made for species which have economic value, but many endangered species have no such value outside of a nebulous concept of biodiversity and the interconnectedness of life- and this is precisely the sort of argument I rejected in my article because with such an argument it is impossible to distinguish an endangered species from any other aspect of the environment.
3rd- Ms. Lee ignores the possibility of an as-applied challenge. In Raich, with marijuana, and even in Wickard, with wheat, the decisions rested on the fact that you could not separate the local intrastate activity (homegrown marijuana and homegrown wheat) from the larger regulation. In both cases the regulations in question regulated all aspects of the identified commodity. In the case of the ESA (similar to the SDWA) Congress has identified specifically what is to be regulated and local intrastate species can be distinguished from species which travel interstate. For instance, take the sand-loving fly or the cave insect species brought to light in past ESA challenges. One would have to show that these species were essential to the ESA as a whole in order to find them permissible subjects of regulation- and it's just hard to buy that the ESA would be useless if these intrastate species weren't included. One would have to make the argument that any single species extinction is harmful, which is exactly the proposition that the ESA does not stand for and not to mention is patently absurd on it's face- after all, new species evolve and old species go extinct and this is a cycle that has been going on since the beginning of time.
Finally, I'd just like to note that even if this market failure approach could prove applicable to the ESA, it would be difficult to apply it to the SDWA. A failure of a non-economic entity to ensure the safety of it's drinking water is no different than the failure of a non-economic entity to ensure the safety of it's buildings or anything else located on the premises. Following through such logic would permit the federal government to regulate building codes, zoning, and everything else which has traditionally been the realm of local government.
Some people may wonder why I dwell on the Commerce Clause- for me, the Commerce Clause is a powerful symbol of the lack of concern Congress shows for Constitutional constraints. If the Constitution is to have any real meaning, any real force, we can't pick and chose which provisions we like and which provisions we don't like. Those who think the regulatory reach of the federal government should extend beyond economic and commercial matter should pursue this goal the Constitutional way- through the amendment process. Stretching language and engaging in legal trickery does a disservice to the Constitution and the people of this country.