Applying Yandel's "Bootleggers and Baptists" Theory of Regulation to Energy Establishment and "Environmentalists"
I have been trying for several years to explain why I believe that our current nuclear regulatory environment has been influenced by a “strange bedfellows” marriage of interests that joins frightened “environmentalists” with rent-seeking fossil fuel interests who want to slow down or even eliminate competition from nuclear energy suppliers. I have documented evidence of this alignment of interests through the “smoking gun” series of posts here on Atomic Insights and engaged in numerous discussions with both nuclear supporters and anti-nuclear activists. Normally, my theory is met with a strong dose of skepticism and disbelief.
Today, while enjoying a visit to the Seeker Blog I noticed a link to an article titled Bootleggers, Baptists, and Global Warming that attracted my attention. My Dad was raised as a Southern Baptist but he left that denomination as soon as he could. His sister married a Southern Baptist preacher, who turned into one of my least favorite uncles. I was intrigued by a title that linked Baptists and Bootleggers; my preacher uncle had once stormed out of our house when my parents served wine with dinner.
That article led me to search for the original theorist, who apparently first published a piece titled “Bootleggers and Baptists: The Education of a Regulatory Economist” in the journal Regulation in 1983. I have not yet discovered the original, but I did find an article titled Bootleggers and Baptists in Retrospect that Bruce Yandle, the original author, wrote for a 1999 issue of Regulation. It makes for extremely interesting reading. Here is a quote from that article:
Here is the essence of the theory: Durable social regulation evolves when it is demanded by both of two distinctly different groups. “Baptists” point to the moral high ground and give vital and vocal endorsement of laudable public benefits promised by a desired regulation. Baptists flourish when their moral message forms a visible foundation for political action. “Bootleggers” are much less visible but no less vital. Bootleggers, who expect to profit from the very regulatory restrictions desired by Baptists, grease the political machinery with some of their expected proceeds. They are simply in it for the money.
The theory’s name draws on the colorful tales of states’ efforts to regulate alcoholic beverages by banning Sunday sales at legal outlets. Baptists fervently endorsed such actions on moral grounds. Bootleggers tolerated the actions gleefully because their effect was to limit competition.
In the case of nuclear energy regulation, the role of the “Baptists” was played by luminaries like Ralph Nader and Helen Caldicott who preached about the evils of using nuclear energy, especially because of its material relationship with nuclear weapons. The “bootlegger” role in this instance is played by a very large group of energy suppliers who often compete against each other for market share, but who have a common interest in keeping nuclear energy off of the list of options.
Nuclear energy is like Shaquille O’Neal on a playground basketball court. No one who is already playing the Great Game as an energy supplier can win if they let atomic energy compete without heavy restrictions. The most effective way for established energy interests to keep control of the energy game is to tie nuclear down. That effort works best if there is a group of vocal moralists that paint nuclear materials as inherently evil, when the real answer is to avoid using nuclear materials for evil purposes.
Here is another poignant quote from Yandle’s 1999 article that helps to explain why the “strange bedfellows” alliance of “environmentalists” and fossil energy producers has been joined by “nuclear” energy producers to slow down the often discussed, but yet to be realized Nuclear Renaissance:
The “devil is in the details” aspect of B&B theory is seen vividly in the federal environmental regulations that replaced common law with command and control enforcement of technology or specification standards, rather than call for performance standards or use emissions taxes and other economic incentives to reduce environmental harm. Specification standards generally set stricter limits for new and expanding plants than for existing ones, giving a cartel-like advantage to existing producers. Bootleggers who already use a particular technology – or better yet, hold a patent on it – are not likely to support performance standards, which are advantageous to diligent, innovative, and competitive firms seeking the most profitable (lowest cost) route to environmental control. As for emissions taxes and similar economic incentives, can anyone think of a firm or individual that has lobbied for more taxes? Only economists do that and they do it only if someone else will pay the taxes.
Think about that quote as you go and read the Wall Street Journal’s summary of Exelon’s most recent quarterly earnings call titled Exelon 4Q Net Falls On Weak Demand, Unfavorable Weather. Here is a quote from that article:
As the nation’s largest nuclear generator, Exelon is expected to benefit from new climate change regulations because of the emissions profile of reactors. But analysts from Goldman Sachs Group, Oppenheimer & Co and Macquarie Group in recent weeks have downgraded Exelon shares as global climate talks last month produced no binding agreement and U.S. legislation remains stalled in the Senate.
Rowe acknowledged that the Senate climate bill is in serious trouble, but he still expects limits to eventually be put on carbon dioxide emissions. In the meantime, increasingly stringent regulation of traditional power plant pollutants such as sulfur dioxide, mercury, and coal ash will be a major challenge for Exelon’s peers that operate coal-fired power plants, he added.
See any resemblance in the two photos below?
So, Baptists, bootleggers – and barkeepers?
A very plausible theory, and an important one for the nuclear question. Not only does it show how a synergy can develop between the antinuclear movement and the fossil-fuel industry, but shows that it need not necessarily require any direct collusion between the two.
That’s cool. I always did like old Snidely.
Yep – I am really one of those foes of democracy. That could be why I have spent most of the past 32 years in uniform and sworn to defend the Constitution and the nation that it defines.
In my opinion, and it is certainly only my opinion, the resemblance is in action. Both are rent seeking oligarchs – the only real difference is that Rowe seeks his rents from the inhabitants of a vast area of the mid west, while Potter sought his from a bunch of hard working small town inhabitants.
I fully recognize that the guy on the right is a fictional character, but I think the writers of that drama did a pretty good job of portraying the difference between living a life of service and gathering a huge following of friends and supporters along the way with living a life devoted to making money. America needs more leaders who recognize the value of the first kind of living and needs to stop celebrating the second kind. If we do not do that, we are doomed.
And with that, touch
“The current regulatory process is working fine.”
You mean the process that holds nuclear to standards that are at least 1000 times as strict, in terms of expenditure required per unit public risk avoided, than fossil fuels (mainly coal)? I think I speak for most here when I say that the current regulatory playing field is not fine, even if it were true that there is nothing behind global warming.
My understanding is that you believe that neither LNT (for nuclear), and the LNT-like effects, and epidemiologic studies, that support health effects (25,000 annual deaths) from coal, are true. Well, if that were the case, substantial tightening of fossil plant pollution requirements (as well as CO2 emissions reductions) would not be justified, but by the same token, containment domes, all those safety systems, and ridiculous nuclear QA requirements (NQA-1) would also be unjustified.
The fossil fuel industry is currently enjoying a hopelessly unlevel, double-standard playing field, were nuclear faces impeccible (and ridiculous) requirements and fossil plants do not. If CO2 limits, as well as much stricter pollution contols were instituted, the playing field would be at least somewhat more level, with fossil plants getting at least a small taste of what nuclear has to deal with. Of course, you know very well that removing the nuclear requirements (above) is politically impossible. Thus, the only hope for a fair playing field is to tighten up the requirements for fossil plants.
And if you say that it’s unfair to treat fossil plants “unfairly” just because nuclear plants are (and always will be), I say, if we allow nuclear, and renewables, to compete by holding fossil fuels to higher standards, we may just (heaven forbid) save some of our finite endowment of fossil fuels for future generations.
Hear, hear. The problem is that everyone is trying to tie nuclear down, because they’re scared of it. Big Deregulated Utility CEO is scared of what practically unlimited power (and capital investment to achieve that practically unlimited power) does to his carefully cultivated perception of shareholder value creation! Big Oil is scared of what unlimited energy does to their sweetheart deal with the oil sheiks of the Arabian Peninsula, along with the Jef
The high ground is fear rather than morality for Nuclear Power. But surely a different sort of fear must appear in a world where China and India can deploy nuclear power for 1/4 of the cost of America, and where the American economy is planning to try to compete without cheap energy. The possibility of another Republican landslide must be staring the Green-Left in the face. Likewise here in Australia I plan to vote for the Right for the first time in 40 years of voting, because the Green-Left is building policy on fantasy.
The unholy alliance that bothers me most is the environmentalists who apparently don’t believe global warming is a problem. A bunch of them hiked to Montpelier to encourage shutting down Vermont Yankee. It didn’t bother them that the New England grid system would make up Yankee’s power with fossil fuels. I’m not sure they believe the power plants on the grid actually exist. They believe power comes from some kind of alternative source, somewhere. Sorry to be crabby, but life gets crabby, here in Vermont.
No doubt you are enjoying the same weather in Vermont as I am in Southern Quebec this time of year. Every since I stopped skiing, Winter’s charms fade rapidly after the holidays.
“They believe power comes from some kind of alternative source, somewhere”
You’re giving them too much credit Meredith – most of them think electricity comes from the plugs in the wall.
I would like you to think about the recent power-upgrades in our nuclear power plants(NPPs) which added around 20,000 MWe which is almost equivalent to 20 good size of NPPs. Even though the abve reality, I kind of agree with your hypothesis which is not a theory yet, thank God, otherwise we would be looking for Oligarchs everywhere. I agree because, we would have added at least 50 more Nuclear Power Plants(NPPs) by now in addition to the 103 in operation in the country since the TMI incident of 1979, which would have cut the coal and petro-dollars in half and kill most of the developments in the research of renewable’s. As we know that if we continue to have almost free petroleum and coal there would highly be an interest in the renewables as the economy dictates.
Rod,
Southern Baptists are notorious for their legalism (strict adherence to The Law) or Galatianism (mixing of Law and Grace). Either way, I can understand your revulsion of your uncle – insufferable, joyless blowhards that deny anyone having any fun, anytime or anywhere.
Sure glad I am a different denomination… Baptists are getting a hard row here. 🙂
I know that the NRC has said that it will take 42 months to license a new reactor. It does seem to me that that is NOT a good regulatory environment, far too long and costly. The comment about regulating to specifications rather than outcomes is right on. It is a normal human tendency to make things harder for the person who follows. It is very very rare for restrictions to be lessened. In this case, the regulations need to be re-focused on actual safety rather than on “comparative safety” in relation to former designs. The idea that both “fundamentalist” environmentalists and “bootleggers” are contributing to this strict safety environment is very interesting. My understanding of a “fundamentalist” is a person who cannot understand the concept of greater or lesser importance. So, for a radical environmentalist there are no degrees of harm …. only harm. (how many parts per billion, or how many curies…) There is no comparison of impact on actual human health, only “bad” impacts and “good” impacts. So, yes, I can see this B&B interaction as a realist interpretation of impact of regulations on Nuclear energy.
Jim Hopf, you got the theory right but your facts wrong. Not one member of the public is being harmed by the generation of electricity in the US. You can repeat statements like ‘25,000 annual deaths’ all you wantbut it does not make it a fact.
When the level of harm is down to insignificant level, be my guest an debate that one level of insignificant is at ‘least 1000 times as strict’ as another level of insignificant. Zero is zero buddy and if I have to chance you around the room to slap some sense into with my slide rule fine. I do remember a time time before calculators when engineers understood the significance of a number instead of just punch numbers and write down all the numbers that would show up on a screen.
It is easier to get a permit for power up rate, extend the life, or build a new nuke through the NRC than is to deal with the EPA for the same things with coal.
Good piece Rod. Since around 2007, when I encountered Bruce Yandle’s formulation, I’ve been testing the “Bootleggers and Baptists” thesis against any issue I see that involves either regulation or subsidies. The examples that demonstrate the thesis seem to dominate the cases — here are three recent ones:
(1) Corn ethanol, where we find farmers in the same slot as the coal generation interests. And influential venture capitalists like Vinod Khosla wearing both hats: flogging the Baptists “green” rationale, while benefitting along with the rest of the bootleggers.
(2) Cap-and-Trade, H.R. 2454: American Clean Energy and Security Act of 2009, aka Waxman, Markey. The bootleggers include the lawmakers who will gain lifetime sinecures from all the lobbying and campaign contributions involved in optimizing the complexities to favor their industry, their company. The utilities who already have a dominant nuclear position may be bootleggers too, as they gain grandfathering advantage over new entries into the generation business. The Baptists are the same “green” coalition. There is an alternative energy policy that will overnight make nuclear electricity the only rational choice for new plants, a revenue-neutral carbon tax. Back in 2008 I examined why that is the superior option, but why the politicians hate it.
“The average politician loves cap and trade because if he can get the legislation passed the politician is much better off than before it was passed