Administrative Discretion and Environmental Regulation: Agency Substantive Rules and Court Decisions in U.S. Air and Water Quality Policies

The main challenge of the scholarship with administrative discretion is how to reach the appropriate balance between a commitment to legislative preferences and flexibility in regulating diverse targets in constantly changing environments. This article focuses on how regulators and courts interact in influencing the potential for administrative discretion in U.S. environmental policy. It creates an analytical framework highlighting the construction of substantive rules by an agency, the interpretation of agency rulings by courts, capacity of an agency for implementation, and legislative responsiveness to agency rulings. It analyzes several cases of the introduction of incentive‐based economic instruments administered by the Environmental Protection Agency in air and water policies. The cases reveal the intensified and expanded production of substantive regulations by the agency and the trajectory of a struggle in the judiciary to advance both the legislative intent and the substantive goal of protecting the environment in a more cost‐effective and less burdensome way.