The shadow of the rational polluter: Rethinking the role of rational actor models in environmental law

The modern American environmental regulatory system is founded on the assumption that business firms are rational polluters: that the rational pursuit of their self interest guides both their compliance decisions and their participation in the political process. This traditional view of firms implies that environmental regulators must deter pollution through the imposition of fines and penalties, and must deter capture and subversion of the regulatory process through the use of prescriptive and proscriptive rules. Critics of this traditional view claim that the regulatory system is unnecessarily complex, making compliance difficult, and unnecessarily punitive, since most firms try to comply and most noncompliance is unintentional. This article examines this debate between proponents of the traditional view and proponents of the complexity critique, a debate that lies at the root of ongoing controversies over civil enforcement, citizen suit standing, mens pea standards in environmental criminal prosecutions, environmental auditing policy, and EPA's experiments with collaborative regulation. While there is evidence to support both, it seems clear from a review of the evidence that, for heavily regulated firms, the complexity critique is right much of the tune. That is, the compliance task is often unreasonably difficult, and much noncompliance results from misunderstanding of or ambiguity surrounding environmental rules. The latter part of this article reviews the implications of that finding for the ongoing policy and doctrinal disputes listed above and discusses host, failure to recognize those implications could threaten the long-term legitimacy and effectiveness of the regulatory system as a whole.