I wouldn't have posted this one unless "efficiency," that most precious of words (to an economist), was used incorrectly:
There are fewer people protecting the state’s waters than there were a month ago.
Last week, the Department of Environment and Natural Resources eliminated 13 percent of the staff positions in the Division of Water Resources. The cuts were only the latest step in years of winnowing the state agency. Legislators have erased jobs there every year since the recession in 2008.
The juxtaposition of regulators losing their jobs so soon after the environmental disaster at Dan River that spilled coal ash into the state’s waterways is jarring. But the cuts were planned last summer as part of the agency’s reorganization and are just a piece of a much more far-reaching scenario that has escalated since Republicans took control in 2011. Since then the state has imposed heavier budget cuts, reduced restrictions on private industry and required DENR’s staff to justify the agency’s regulations in an extensive review process that is just beginning.
Lawmakers say they are making government more efficient without endangering the environment or public health and emphasize that their changes have nothing to do with the Dan River spill. But environmentalists say the politicians are gambling with the state’s future, which inevitably will harm North Carolinians.
There are two types of efficiency. Allocative efficiency is when resources flow to their most highly valued used. Technological efficiency is when the cost per unit of output is minimized. Technological efficiency is a necessary, but not sufficient, condition for allocative efficiency.
The NC legislature is arguing that reductions in monitoring and enforcement will not reduce environmental quality. There is little (if any) empirical evidence to support this argument. Gray and Shimshack (2011) put in this way in their REEP abstract:
The consistent findings from this literature review are as follows: (1) environmental monitoring and enforcement activities generate substantial specific deterrence, reducing future violations at the targeted firm; (2) environmental monitoring and enforcement activities generate substantial general deterrence, reducing future violations at facilities other than the targeted one; and (3) environmental monitoring and enforcement activities generate not only reductions in violations but also significant reductions in emissions.
The empirical evidence shows that when environmental quality monitoring and enforcement staff is cut a less than effective job of environmental monitoring and enforcement is made even less effective. In terms of technological efficiency, the state of NC is cutting costs while also cutting units of environmental quality produced. We need more evidence to support the legislature's technological efficiency assertion.
On the other hand, cutting monitoring and enforcement staff might be allocatively efficient. The most recent statewide election that turned the NC legislature Republican signaled that NC voters prefer lower environmental quality than they have been getting. A benefit-cost analysis would provide more explicit evidence.
But less charitably, since the shrinking of DENR has come before the benefit-cost analysis ("extensive review process that is just beginning"), I don't think that the NC legislature has either type of economicy efficiency in mind when they are cutting environmental quality enforcement staff. It seems that they are simply trying to reduce the size of government, cut income taxes and increase private sector profitability.
