Temporal Spillovers

Abstract

A great deal of environmental law, encompassing a wide variety of regulatory approaches, addresses physical or spatial spillovers. But spillovers can cross temporal boundaries as well as physical ones. The paper explores uses of land that deliver present benefits but entail residual risks after the cessation of the beneficial use. Paradigmatic cases include sites associated with natural resource extraction such as mining or oil and gas drilling, as well as landfills or other waste sites. The environmental harms that arise on such sites can be thought of as temporal spillovers to the extent that the actor reaping the benefits of some productive activity does not also bear the costs of remediation. Unlike physical or spatial spillovers, temporal spillovers have not received a great deal of attention from law-and-economics scholars, yet they present a serious challenge for policy makers because they are difficult to internalize. This difficulty can itself induce actors to employ temporal spillovers to shed costs. And unlike contemporaneous spillovers, temporal spillovers pose a challenge of political economy because harms may not materialize within a timeframe relevant to political elections. The paper surveys existing and proposed approaches for addressing certain forms of temporal spillover.