Pay Now or Pay Later

September 2015
By Mark Funkhouser  |  Former Publisher
Former publisher of Governing and former mayor of Kansas City

One way or another, somebody is going to pay. The questions are simply who, how much and in what way. That’s my main takeaway from “Losing Ground,” Chris Kardish’s cover feature this month about the destruction of the wetlands along the Louisiana coast. The issue comes down to an understanding of costs.

Costs are the consequences of actions, and once an action has been taken, the cost eventually must be paid in one form or another. This seems to me to be almost a law of nature, similar to a principle of physics. One of those, the first law of thermodynamics, holds that energy can neither be created nor destroyed. But it can transform from one form to another, such as when chemical energy is converted to kinetic energy in the explosion of a stick of dynamite. Similarly, monetary costs averted today can transform into an erosion of trust, a degradation of community conditions or even the loss of human life.

Seen from this perspective, it can be argued that public policy is almost entirely about managing costs -- today’s and tomorrow’s. This is particularly apparent in the area of environmental regulation. Consider, for example, the Buffalo Creek disaster in West Virginia in 1972, when 14 little towns were wiped out by a flood resulting from the failure of a dam built by a coal company out of mine waste. One hundred twenty-five people were killed and more than 4,000 were left homeless. A year earlier, the company had been cited for more than 5,000 mine violations nationally, with $1.3 million levied in fines. The company challenged each violation and wound up paying a total of $275.

In Louisiana, as Kardish’s story details, about 1,880 square miles of coastal land have been lost over the last 80 years as a result of the activities of oil and gas companies. With the disappearance of the land has also gone a natural barrier against the destructive force of hurricanes. Now a state agency and several local governments are suing the oil and gas companies to get them to pay billions of dollars in damages that would go toward funding coastal restoration. Still, as Kardish writes, “it’s impossible to read the lawsuits and the mountains of work on Louisiana coastal erosion without asking one simple question: Where were the state regulators?”

In the end, regardless of the outcome of the lawsuits, the costs created by the oil and gas companies will be paid, either for coastal restoration or in damage, destruction and loss of life from the next big hurricane.