14:33, April 30 112 0 theguardian.com

2020-04-30 14:33:04
Environmental investigations  Claims of 445% rise in Australian green tape based on 'lazy' and 'flawed' analysis

Claims that environmental regulations have risen “by 445%” are based on a flawed word-counting methodology developed at a US conservative thinktank and should not be relied upon, legal experts have told Guardian Australia.

Last week the Melbourne-based libertarian thinktank the Institute of Public Affairs claimed its analysis showed that since 2000 regulations under the Environment Protection and Biodiversity Conservation Act had increased by 10% a year.

The methodology used for the IPA’s analysis was developed at the US-based thinktank the Mercatus Center, linked to the powerful billionaire industrialist and Republican donor Charles Koch.

But experts who spoke to Guardian Australia have dismissed the methodology – known as RegData – as fundamentally flawed and ideologically motivated.

Prof Jodi Short, of the University of California’s Hastings law school, is a critic of “regulation counting” efforts. She told Guardian Australia: “RegData is a political project that seeks to reduce regulation, period.

“It is not an effort to improve the quality of regulation or maximise the net benefits of regulation, it is an effort to stop regulators in their tracks, regardless of the costs to the economy, the environment, and to human health and safety.”

RegData counts key words and phrases in legislation – “shall”, “must”, “may not”, “prohibited” and “required” – as a supposed measure of the levels of regulation.

The IPA released its analysis last week amid reports that the environment minister, Sussan Ley, was planning to cut “green tape” and could make changes to Australia’s centrepiece environmental law before a review, due to be completed in October.

The IPA analysis, which has received uncritical coverage in some media outlets, has been submitted to the review of the EPBC Act.

Brendan Sydes, an environmental lawyer and the chief executive of Environmental Justice Australia, told Guardian Australia: “I think it is clear that this is an attempt to import to Australia a spurious methodology developed by rightwing thinktanks in the United States.

“They are ideologically opposed to consumer protection and environmental protections laws, and that is their starting point for this analysis.”

Sydes said Prof Graeme Samuel, the former Australian Competition and Consumer Commission chair who is chairing the review of the EPBC Act, should reject the IPA’s analysis.

“We should be focused on environmental outcomes that the act is meant to achieve. Just counting types of words tells us little about the legislation and if it’s efficient.”

He said Australia’s environmental laws were “failing to protect Australia’s unique places and wildlife”.

“The EPBC Act needs to focus on this, rather on those that seek to strip away environmental laws.”

In a 2018 critique of RegData, Short wrote: “Regulation counts do not account for the weight of the things counted. This is a fundamental flaw if regulation counts are meant to measure regulatory costs, burdens, or constraints on regulated entities.

“The burden of carrying 1,000 feathers is very different from the burden of carrying 1,000 anvils, yet regulation counts make no attempt to differentiate between regulatory feathers and anvils.”

Short told Guardian Australia that RegData “creates a powerful political narrative about the volume of regulation crushing the populace, undermining political support for regulation”.

She said RegData forced regulators into examining “the mundane but extraordinarily time consuming task of regulation accounting” instead of “developing quality regulations that protect public health, safety, economic wellbeing, and the environment”.

“For people who purport to shun red tape, Mercatus has been highly adept at tying regulators’ hands with it,” she said.

Mercatus and the IPA say cutting regulations will be good for the economy, but Short said: “There is no credible empirical evidence that they are causally related (or even correlated with) the economic outcomes that Mercatus claims.”

She added: “I am, frankly, shocked that Mercatus and its political allies continue to forge ahead with their agenda to hobble effective regulation.”

Chris McGrath, a barrister and environmental law expert, told Guardian Australia: “The whole idea of just counting key words to track a rise in environmental regulation, as RegData does, then saying, ‘That’s bad and it should go back to the starting level,’ is a fallacy.

“In reviewing any law, you need to look at the effectiveness, efficiency and equity of the law in the context of the nature of the complex problems they are trying to address. That’s a hard task and one that the RegData approach avoids doing. The RegData analysis is fundamentally lazy.”

Prof Jason Potts, of Melbourne’s RMIT University, worked to develop the Australian version of RegData that was used by the IPA.

“Disputes between academics are normal,” he said. “There is a vibrant academic debate related to the measurement of regulation, and we have contributed to that in top peer-reviewed journals developing an innovative empirical methodology.”

He said the RegData methodology had been published in “top US academic journals”, adding: “We are certainly proud to be working with top US university researchers.”

He said one way economists studied the effects of law was to have a “quantitative measure of regulation at a point in time and for a jurisdiction”.

Patrick McLaughlin, a senior fellow at Mercatus Center who devised RegData, said it “was a way to measure, like a scale” and that it provided a “useful number”. He said “hundreds of third-party academics” had used it.

It was “utter nonsense” to claim it was a “political project”, he said: “RegData is a significant improvement in the science of regulation. You would only make this argument if you don’t think science can lead to improvement.”

An IPA spokesman also rejected the claim that RegData was ideologically driven.

The thinktank’s director of research, Daniel Wild, said RegData was a “revolutionary approach to measuring and cutting red tape” and could be “used to measure the red tape burden, track government progress in reducing red tape, compare the regulatory burden across industries and across states and identify areas of prioritisation for governments”.

The Mercatus Center is based at George Mason University’s Arlington campus. It says it “advances knowledge about how markets work to improve people’s lives”.

According to its website, it is a not-for-profit organisation “supported by foundations (58%), individuals (40%), and businesses (2%) from around the country”.

Charles Koch, with his late brother David, donated many millions to a network of libertarian and conservative thinkthanks, including those that have challenged the science and risks of human-caused climate change.

One counting of financial disclosures shows that the Charles Koch Foundation donated more than $9m to the Mercatus Center between 2002 and 2012. Koch is an emeritus board member at Mercatus, and was listed as a director in financial disclosures for 2018, the most recent year available.

The Mercatus Center was founded by Richard Fink, a former executive at Koch Industries.

Koch’s contributions to Mercatus, and to George Mason University, as well as many other universities, have sparked protests and campaigns around the US.

Samantha Parsons, director of campaigns at UnKoch My Campus, told Guardian Australia: “The only difference between the Mercatus Center and another industry-funded think-tank is the fact that GMU allows the Center to use its name and office space to brand itself as an academic program, and that’s exactly what UnKoch is fighting.”

Another environmental law expert, adjunct Prof Rob Fowler, of the University of South Australia, said RegData Australia’s “use of simplistic counting measures based on certain key words to measure the volume or extent of regulation does not provide any useful evidence as to the effectiveness or, alternatively, the dis-benefits of particular regulatory measures”.

He added: “I believe it is simply catering to a neoliberal, anti-regulatory ideology and audience by providing numerical data to present an attempted quantitative assessment of an inherently qualitative subject.”

The methodology’s ties to the Kochs “speaks powerfully to the real, political motives behind its development”, he said.

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