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Gaming the Past: The Theory and Practice of Historic Baselines in the Administrative State

Posted by on Sunday, January 30, 2011 in Articles, Volume 64, Number 1, Volumes.

Goals based on absolute targets, risk, technology, or cost are found throughout the administrative state. “Historic baselines,” points in the past used to ground a policy goal, are just as commonplace, yet remain unexamined. Whether in budgeting or tax, criminal sentencing or environmental protection, historic baselines direct a wide range of agency activities. Their ubiquity raises some important questions. What makes baselines more attractive than other approaches for implementing regulatory goals? Conversely, when are other standard-setting methods such as absolute targets or risk-based, technology-based, or cost-based standards more useful to policymakers than historic baselines? Unless one believes that policymakers choose between the alternative approaches randomly, or that it simply does not matter which they choose, each approach requires a clear theoretical understanding in order to make better choices and predict the comparative potential for success and failure. This Article is the first to examine historic baselines.

Using examples from environmental and land use regulation, this Article examines the attributes, design issues, and strategic uses and abuses of historic baselines. Part I unpacks the structure and design of historic baselines, identifying four core attributes and examining the design issues particular to each to demonstrate the different forms historic baselines can take. Part II explores the attractiveness of historic baselines to policymakers and the conditions under which they may be preferable to using absolute standards or risk-based, technology-based, or cost-based standards. Part III explores the opportunities for rent-seeking in more detail, delving into the gaming possibilities created by historic baselines. Part IV then provides a practical context by examining the role of historic baselines in climate change policy. The demand for action will require policymakers to consider a wide array of regulatory goals for controlling greenhouse gas emissions, sequestering carbon from the atmosphere, and adapting to climate change impacts that cannot be avoided. The analysis in Parts I, II, and III speaks directly to this issue, explaining why historic baselines will prove effective in certain applications but decidedly problematic in others.