Looking Forward: The Effects of Climate Change on Bureau Efficiency

This week we discussed how it is possible make comparisons across government agencies in regards to the legislature's demand for bureau output. Some agencies have marginal political benefits that are relatively elastic, while others are relatively inelastic; the more inelastic these marginal political benefits are, the more important the agency is, and the less efficient they can be. This is due in part to the take-it-or-leave-it nature of bureau proposals and the fact that bureaus are essentially monopolistic suppliers of their output. The elasticity of demand for agency output can also change over time. As Alex Tabarrok's seminar showed, a prime example was the relatively inelastic demand for CDC output during the pandemic which allowed for increased inefficiency. 

With this in mind, let's turn our attention to climate change and its impact on bureaus such as the Environmental Protection Agency. As we have all likely seen, the effects of climate change have become more prominent in recent years and are predicted to worsen unless significant changes are made. Thus, the marginal political benefits of environmental regulation will likely become more inelastic in the coming years. However, with a more inelastic demand comes the increased capability to shirk responsibility. So, as we near the point of irreversible damage to our climate and are in desperate need of the EPA's output, will we see a decrease in agency efficiency? Only time will tell.