ECONOMIC

improving the environment. The fundamental premise of economic policyis that the Nation's total resources must be allocated as efficiently as possible.This concept includes careful allocation of our scarce environmental resources,but it does not follow that environmental policy should be insulatedfrom other problems and policies.In enacting laws to protect environmental quality, Congress was respondingto the strong public demand that environmental resources—clean air,water, and land—should be enjoyed as amenities rather than used asreceptacles to absorb residual wastes of production and consumption. Thenew legislation set environmental standards that would be costly to achieve,but it did so with the presumption that the goals were worth the costs. However,the standards also assumed certain basic cost relationships among theadditional resources devoted to meeting the standards; the energy crisis hasdisrupted these relationships by sharply raising the cost of fuels.As the price of energy increases, environmental policy provisions that callfor significant consumption of energy become more expensive, and energyconservingprovisions become cheaper. If policy adjustments are not made,unnecessary amounts of society's scarce energy resources will be used toattain any given level of environmental quality. Adjustments to avoidsuch waste do not represent a change in the relative importance that eitherthe Government or the public places upon environmental quality. Instead,they are similar to the reduction in consumption that occurs if the price ofany commodity increases significantly while other nonprice influences on theconsumption of that commodity remain unchanged. The appropriate shorttermadjustments indicated in environmental policy because of energy priceincreases have two requirements: First, they must accurately reflect the increasedscarcity of energy expected in the near future; second, they mustnot interfere unnecessarily with appropriate adjustments to the somewhatless intense scarcity of energy likely to prevail in the more distant future.Thus, provisions of environmental policy that save energy become cheaper,and as a result comprehensive efficiency criteria indicate a greater use ofthem. For example, to achieve the air quality standards specified in the GleanAir Act, the Environmental Protection Agency (EPA) has stated that a verysubstantial reduction in the number of vehicle miles traveled (VMT) byautomobiles and lightweight trucks will be necessary in several large urbanareas. This reduced fuel consumption would be desirable both in counteringthe energy crisis and in improving the environment. Since higher energyprices reduce the costs of such VMT reductions, efficiency criteria suggestfaster implementation of this particular environmental policy. In accordancewith this view, the Administration has acted to provide on a priority basisfor substantial funding of mass transit in areas in which air quality willrequire large VMT reductions.The theory of implementation in the Clean Air Act calls for the Statesto formulate plans to achieve the act's air quality standards. The act requiresonly that the more important primary or human health standards be126