George Mason economist Tyler Cowen has written recently about the “speed premium” in reacting to the current pandemic:

I’ve blogged a few times in the past about the importance of speed, and speed as an input into productivity and innovation. What many people do not realize is that “the speed premium” is vastly higher when a deadly virus is doubling in reach every five to seven days.

An economic or epidemiological plan from a week ago might be worthless or even misleading today…. If you are seeking to start a business, to deal with the third party vendors that Amazon is (temporarily) abandoning, you cannot just wait a month or two. You have to start now.

The Chinese system has its flaws from an anti-pandemic point of view, most of all low transparency. But their typical rapid speed of response has been astonishing — setting up that hospital in six days — and it is a big reason why they are on a (partial) rebound.

Over the course of the last month or two, we’ve seen a significant number of regulations suspended or repealed to allow more flexibility and speed in the response to the novel coronavirus outbreak. In some cases, regulation has turned out to be less a necessity than a luxury good.

Now consider another area: NEPA reform. First passed in the 1970s, the National Environmental Policy Act had the laudable goal of minimizing environmental harm from governmental infrastructure and permitting by, among other things, requiring environmental impact analyses to be done as part of the approval process. Over the subsequent decades, however, the time an effort required to complete this process has slowly grown. Originally, NEPA impact statements were expected to take no more than a year to complete and to be no more than 150 pages in length. Today the average time to prepare an impact statement is around five years, and the average length is over 600 pages.

NEPA could pose a significant obstacle to recovery efforts, particularly if the “speed premium” continues to operate. Fortunately, the movement for NEPA reform has been building steam. In January, the Trump Administration announced a notice of proposed rulemaking to reform NEPA, reduce unnecessary delays and promote better decision-making. While some details remain to be ironed out, we should continue to advance NEPA reform now, so it does not become a roadblock to the recovery later.

Image credit:  Andrii Vodolazhskyi

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