After a quarter century of environmental regulation in this country, s
ignificant environmental threats remain. Why has the regulatory system
failed to fully address our environmental problems? The goal of this
paper is to suggest that the roots of environmental problems, and the
failure of environmental regulation, are deeply embedded in the proces
ses that generate economic growth. The logic of the argument to be pre
sented will take the following form: long-run economic growth relies o
n the creation of new industries and new forms of economic activity; t
hese new forms of economic activity create new kinds of environmental
problems; these new forms of economic activity constitute vested polit
ical interests that oppose environmental regulation. Each of the three
main sections of the paper will provide theoretical and empirical jus
tification for each component part of the basic argument.