University of Illinois Law Review

In the United States, the traditional approach to environmental regulation has been for the Environmental Protection Agency to design pollution control standards for a category of industrial sources and then to mandate that all facilities within the category comply with the standard. Although this "command-and-control" system has been easy to administer, it may not be the most cost-effective way to regulate. Indeed, at a time when global competition requires American businesses to cut costs, the command-and-control approach may pose a major obstacle to continued environmental improvement.

To address this concern, the Clinton administration has developed a new program--Project XL--that allows industry leaders, the EPA, and the public to work together to come up with more cost-effective, and more protective, pollution control strategies for specific facilities. To date, over fifty-two companies have submitted proposals to participate in Project XL.

The main hurdle presently facing Project XL is a legal one. An essential component of the program is the EPA's promise that, where participating companies have developed innovative control strategies that will protect the environment better than existing command-and-control requirements would, the Agency will substitute the new approach for the existing one. Serious questions have been raised about the EPA's legal authority to lift valid and binding regulatory and statutory requirements in order to make way for Project XL. These legal questions about Project XL may jeopardize its future.

In this article, Professor Hirsch examines the legal foundations of Project XL. He first analyzes the four legal mechanisms that the EPA has stated it will use to grant regulatory flexibility to XL participants. After finding each of these four mechanisms to be flawed, Professor Hirsch argues that the Agency should consider using a fifth mechanism: implied waiver authority. This little-recognized power allows administrative agencies to grant exceptions from existing requirements where certain conditions are met. Professor Hirsch demonstrates that Project XL satisfies these criteria. He argues that the EPA could use its implied waiver authority to lift existing command-and-control requirements and to substitute in their place innovative strategies that protect the environment better and at less cost to society.

* Visiting Associate Professor, Notre Dame Law School. J.D. 1991, Yale Law School.