The Republican takeover of Congress has triggered—and promises to continue triggering—a proliferation of suggestions from all political sectors for reforming our environmental regulatory system. So far, media attention has focused almost exclusively on generic proposals to require agencies to support new regulations with cost-benefit analysis and more "realistic" risk evaluation. Meanwhile, a completely different and equally broad-based approach has largely escaped notice.

Our current environmental protection system works largely by imposing detailed regulatory commands on "major sources" of air, water, and waste releases. Quite frequently, 5 to 10 different federal and state laws, and scores of separate, uncoordinated regulatory requirements, will apply to a large factory. A new approach has been proposed to replace this system. Under it, a major pollution source could enter into a legally enforceable contract with its local community promising both to cap its environmental releases and to reduce releases gradually over time. That contract would replace most of the regulatory commands in our current federal laws.¹