The Disclosure Debates Recap: Environmental Laws & Disclosure Requirements Panel

This post, written by Vermont Law Review Articles Editor Caitlin Stanton, first appeared on Vermont Law School’s Environmental Health blog

PosterThe Vermont LawReview hosted its 13th Annual Symposium, the Disclosure Debates: The Regulatory Power of an Informed Public. The event addressed disclosure in the context of environmental laws, financial regulation, food and product labeling, and campaign finance.

Professor Pat Parenteau moderated the first panel, Environmental Laws & Disclosure Requirements. The panel included Shakeb Afsah fromPerformeks LLC and the CO2 Scorecard, Mark Cohen from Vanderbilt Law School and Resources for the FutureKatrina Kuh from Hofstra University, Matthew McFeeley from the Natural Resources Defense Council, and Shailesh Sahay from Arnold & Porter LLP, and focused on the conflicts inherent in information disclosure.

Professor Kuh provided a unique perspective, focusing on the issue of disclosure on the individual, both as the audience and as the subject. When considering individuals as the audience, the question becomes how to inform them. When individuals are overexposed to information, the risk is that they will become confused or frustrated and will underestimate or disregard risk. When considering individuals as the subject, the question becomes how to involve them. Quoting Richard Lazarus, who identified that “the increased cognitive severance for consumers between environmental cause and effect exacerbates the potential environmental impact of such increased consumption,” Professor Kuh referenced current initiatives to provide information about an individual’s habits and their impact on the environment. While initiatives like smart meters that monitor individual energy use raise concerns, such as privacy, compelled speech, scientific restraints, and administrative questions, they also generate data and information that can be used as benchmarks or as an impetus for community-wide changes.

Matt McFeeley also touched on this issue within the context of hydraulic fracturing. Matt suggested that to be successful, disclosure laws must capture enough information to reveal a pattern or consequence of behavior. For example, only four states have disclosure requirements before a company begins a fracking project, but without baseline data, it is impossible to determine the effect a project ultimately has on groundwater or air quality. Disclosure requirements must also generate enough of the necessary information to create actual knowledge. For example, a disclosure law requiring identification of chemicals in fracking fluid may ignore chemicals used in other aspects of gas harvesting. Disclosure laws must also exempt certain information without undermining the underlying purpose of the policy. If a state exempts disclosure of chemicals in fracking fluids, it may present an incomplete picture of the exposure and risk associated with a given project.

consumer_shopping.jpgTouching on what would become a recurring issue, Professor Cohen discussed the interplay between consumer demand for information and the ability of manufacturers to make information available without affecting the incentive for innovation. As an economist, Professor Cohen focused on this symbiotic relationship, suggesting that companies will voluntarily disclose information if it results in changes in consumer behavior, and that consumer demand for transparency will drive manufacturers to comply with disclosure requirements.

Shailesh Sahay offered a less cynical perspective, suggesting that businesses do not want to provide products or services that are harmful to health or the environment, and that these voluntary programs provide an opportunity to evaluate their products and to inform the public about them.There is a limit to the benefits of disclosure, however, when disclosure laws require businesses to reveal trade secrets, which in turn stifles innovation. Benefits of disclosure also become limited when information overwhelms a consumer or creates a barrier to knowledge. Greenwashing, or the overuse of certifications and labeling, can make information meaningless, and raw data can be difficult or impossible for consumers to interpret and can lead to misunderstandings about risks or exposure.

Professor Parenteau, as moderator, touched on a theme that ran through the entire event: the value of disclosure, posing the question, what makes disclosure “good?” In response, Shakeb articulated one of the most compelling thoughts of the day, that “it is easy to create the perception of disclosure, but there is a difference between authentic disclosure and the perception of disclosure.” The panelists agreed that true disclosure requires a standard that enables the public to establish the type of information necessary and the format that will enable analysis, interpretation, and dissemination. While “authentic disclosure” may lead to greenwashing and issues of credibility, which in turn creates indifference from consumers or even mistrust, and while raw data may be difficult tointerpret, information establishes a baseline understanding about what chemicals to monitor and regulate, and can be used to promote consumer awareness. The true value of disclosure lies in discovering the zone of public interest, where industry and public interest overlap.

For more information about specific projects or resources discussed by the panelists, visit the following websites:

Toxic Release Inventory

Global Reporting Initiative

Carbon Disclosure Project

EPA Design for the Environment Program

FracFocus.org

Greenwashing Index

Sins of Greenwashing


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