Regulatory Reform Needs More Carrots And Fewer Sticks

AT what point do government regulations -- laudable as their goals might be -- become so burdensome that they cause political overload? It looks like we're about to find out.

Washington is aflurry with efforts to reduce the cost of federal rules, particularly those designed to protect the environment.

As part of his ''reinventing government'' program, President Clinton has announced steps to simplify regulations from the Environmental Protection Agency. EPA reporting and record-keeping requirements are to be reduced 25 percent. Small businesses will get a grace period to correct violations. More companies will be able to ''trade'' emissions in order to meet pollution standards.

All of this follows Interior Secretary Bruce Babbitt's recent announcement of steps to make the Endangered Species Act less onerous for small landowners.

Republicans in Congress say this isn't nearly enough. They're pushing through moratoriums on new regulations and attempting to modify existing laws on health, safety, and the environment. The GOP wants to impose tough ''risk-assessment'' and ''cost-benefit'' standards on any law that has economic impact.

The image is of a regulatory purge on Capitol Hill and a scramble to catch up at the White House. But while the headlines tend to highlight political battle lines, the need for regulatory reform is widely accepted in this country.

Most would agree with Senate majority leader Bob Dole (R) of Kansas, who recently asserted that ''at an estimated cost of $500 billion per year, the regulatory state is too intrusive, too inflexible, and too burdensome.''

Jonathan Lash and David Buzzelli, who co-chair the President's Council on Sustainable Development, figure air-quality rules alone add 380 pages a month to the Federal Register. Mr. Lash is president of the World Resources Institute and Mr. Buzzelli is vice president of Dow Chemical Co.

While leaning more toward the Clinton approach than that of congressional Republicans, Environmental Defense Fund executive director Fred Krupp acknowledges ''an enormous opportunity to get more environmental protection with less expense, less delay, less bureaucracy, and less wasted motion.''

It is not just Democrats but also Republicans who worry about undermining environmental safeguards in the rush to deregulate.

''America did not abolish slavery after a cost-benefit analysis nor prohibit child labor after a risk assessment,'' observes Robert Stafford (R), a retired United States senator from Vermont.

''It is irresponsible to ignore the high cost to jobs, profits, and development of aggressive protection of the environment,'' former congressman Mickey Edwards (R) of Oklahoma wrote in the Chicago Tribune last week. ''But it is equally irresponsible to ignore the high cost to health, safety, and beauty of an aggressive protection of profit.''

Sen. John Chafee (R) of Rhode Island, who chairs the Senate Environment and Public Works Committee, has called applying risk-assessment standards to all environmental regulations ''a prescription for gridlock.''

The answer to gridlock over regulatory reform is cooperation, innovation, and a certain amount of trust.

Lash and Buzzelli of the president's council suggest a 10-year voluntary pilot program in which companies would set ''ambitious performance goals that exceed current environmental standards.''

In return, they wrote recently in the Journal of Commerce, companies (rather than regulators) would decide how best to reach those goals. Something like this has been happening since 1991 when 1,200 companies agreed to voluntarily reduce emission of 17 chemicals by half before 1996.

''Progress so far has been excellent,'' Lash and Buzzelli say of this program begun by the EPA.

More incentives, fewer penalties. More carrots, fewer sticks. That's the way to regulatory reform.