Environmental Compliance Costs Where the Rubber Meets the Road

This paper reports the results of an evaluation of the direct and indirect information on the compliance costs state Departments of Transportation (DOT) experience in responding to environmental regulations. After reviewing the statutory requirements and a series of Environmental Impact Statements, four data sets were assembled to consider the extent of these compliance costs. The first is based on a survey of the designated environmental officials at state DOT's. Limited responses and incomplete records require that the available information from this source be treated cautiously. Based on the responding states, compliance costs range from nearly 8 to 10 percent of construction and repair expenditures for Federal Aid highway projects. The second data set compares construction expenditures for the Federal Aid Highway Program with construction expenditures for state roads from 1990 to 1994. Statistical analyses suggest that these expenditures for Federal Aid construction were impacted by measures of the resources or regulatory activity likely to be associated with environmental mandates.