Keep focus on efficiency

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Try self-regulating with data triggers

By John Bartlit

Two newspaper essays I wrote this spring broached the idea of working on the regulatory process to boost its efficiency. The early responses are in.
Support is unanimous in all sectors and comes in three colors – white, red and black.  
White-colored support says the idea is “right on target.” Red support says, “I can tell real horror stories about inefficient regulation.”
The black support says, “the worst of (business, government) will wreck the good idea from the start.”
No one thinks the process is as efficient as is.
Frequent readers know my thoughts: as business systems get more efficient, the efficiency of regulating must keep pace, but it has not. Regulation can speed up in the same way efficiency keeps climbing in commerce and industry through constant invention.
One hot July day I gave my pitch for invention to an audience of semi-retired scientists and engineers, former business professors, active businessmen and others of a practical bent. Support for the idea was wholehearted in the usual colors.  
Two businessmen proposed that self-regulation is the most efficient. At first light, any idea is vague until we gather possible meanings and size up the pros and cons of each.
The meanings of “self-regulation” range from old to innovative. The oldest meaning translates to “anything goes.” Only a few hop onto this one.
Ideas soon turn up that are more concrete.
Serious self-regulation can be created from the right parts. A vital feature required, and the lifeblood of all regulation, is the steady disclosure of up-to-date information that people need.
Decent information is worth a lot of regulation. More to the heart of the issue, it costs a lot of regulation to extract decent information.
Dependable data is the currency of all business transactions. What is an acre of grassland with water rights?
What is a barrel of Texas Light Sweet Crude? How do the numbers stack up on three motor vehicles for sale?
The universal need for clear information spawns business laws of all sorts. Laws standardize the meanings of weights and measures.
Laws require clear labeling of products and descriptions of lending terms. Business seeks contract laws.
Clear reliable information is the same giant in the environment that it is in business and for the same reason. The keystone of doing business is trust in the deal.  
The biggest chunk of pollution rules aims at extracting information of known accuracy, as spelled out in copious definitions, measures and tests. These rules bulge with the successes and failures to obtain the needed data.
A thoughtful Santa Fe businessman asked whether I had considered Consumer Reports as a regulatory model. The idea was a worthy lead.    
Consumer Reports does indeed have elements of regulating companies through measuring and selling trusted independent information about products.
Finding a comparable source of, say, pollution data begins the road to self-regulation. Three kinds of key data are:   
(1) data on emitting facilities, their normal and off-normal emissions;
(2) data on pollution controls;
(3) data on ambient effects.
Who will supply these data and how? Who pays for the work? The suggestion box is open.  
The next task is enforcing self-regulation. Oddly, the intense dislike of rules may do the job.
“Contingent self-regulation,” to coin a name, uses “triggers” that spur actions. The August debt deal in Congress has triggers pre-set so a poor outcome will bring a pre-set remedy at a set time.
In pollution debates, the risks from an activity are generally known in rough form. Typically one side argues no harm can accrue and others argue harm can and will spread. As years pass, new rules may eventually lower the risks.  
How would contingent self-regulation work instead? “Contingent” means that rules are pre-set to kick in if and when the harm happens.
The instant threat of rules may do more to curb harm than the most exacting rules.  
If, as argued, no harm comes, no rules get triggered and everyone is happy.    
Self-regulation, built on key information and triggers, is a gleam just ahead on the wayside.  

John Bartlit
New Mexico Citizens
for Clean Air & Water