Monday 27 June 2022

Why America Can't Build

An awful lot of this piece over at Palladium also applies to New Zealand. 

Once upon a time, it was possible to build infrastructure at scale and on time.

And then environmental management legislation was passed requiring a lot of proof that environmental effects would be mitigated.

And then activists weaponised that legislation to prevent any development that didn't address whatever concern they had.

And then nobody was able to build anything on time or on budget any more. 

Sound like New Zealand?

Sepulveda’s numerous lawsuits and stakeholder conflicts are an example of a phenomenon that can be traced back to the passage of the National Environmental Policy Act (NEPA) in 1969. NEPA mandates developers to provide environmental impact statements before they can obtain the permits necessary for construction on huge swathes of infrastructure. 

Shortly following the passage of NEPA, California’s then-governor Ronald Reagan signed the California Environmental Quality Act (CEQA) into law, which required additional environmental impact analysis. Unlike NEPA, it requires adopting all feasible measures to mitigate these impacts. Interest groups wield CEQA and NEPA like weapons. One study found that 85 percent of CEQA lawsuits were filed by groups with no history of environmental advocacy. The NIMBY attitude of these groups has crippled the ability of California to build anything. As California Governor Gavin Newsom succinctly put it, “NIMBYism is destroying the state.”

It is also destroying the U.S.’s ability to build nationally. The economist Eli Dourado reported in The New York Times that “per-mile spending on the Interstate System of Highways tripled between the 1960’s and 1980’s.” This directly correlates with the passage of NEPA. If anything, the problem has gotten worse over time. Projects receiving funding through the $837 billion stimulus plan passed by Congress in the aftermath of the financial crises were subject to over 192,000 NEPA reviews.

The NEPA/CEQA process incentivizes the public agencies to seek what is often termed a “bulletproof” environmental compliance document to head off future legal challenges. This takes time, with the average EIS taking 4.5 years to complete. Some have taken longer than a decade. A cottage industry of consultants is devoted to completing these documents, earning themselves millions in fees.

The NEPA consultants are just one of the numerous types of consultants that benefit from the way we build. Most infrastructure in the U.S. is built through a huge number of state and local agencies: for example, there are 51,000 community water systems alone in the U.S. This decentralized structure makes it much more difficult to develop the depth of expertise needed to manage the complexities posed by megaprojects. Often, the multiple public agencies that are involved with projects also have overlapping authorities, creating bureaucratic delays and slowing decision making. 

The expertise problem is compounded by the fact that agencies are often staffed with a workforce of people either just at the beginning of their careers or near the end of them. Those at the beginning tend to leave if they are ambitious, which leaves senior positions in the hands of agency lifers. Because of this dynamic, and the fact that it is not economically feasible to have the wide range of expertise needed in-house, public agencies employ engineering consulting firms. These firms fill a valuable niche. If you are building a complex project—say, a long-span bridge or a desalination plant—you want advice from someone who has designed and built dozens of them. The problem arises when you become too dependent on such advice. 

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