oEPA
United States
Environmental Protection
Agency
Administration And
Resources Management
(PM-221D)
EPA/IMSD/91-006
June 1991
Selected Management
Articles
Public Policy Mechanisms:
Non-Regulatory Options
For Environmental Protection
PEOPLE
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PUBLIC POLICY MECHANISMS:
NON-REGULATORY OPTIONS
FOR ENVIRONMENTAL PROTECTION
JUNE 1991
EPA Headquarters Library
Information Management and Services Division
U.S. Environmental Protection Agency
RoomM2904 PM-211A
401 M Street, SW.
Washington, DC 20460
U S. Environmental Protection Agency
Region 5, Library (PL42J)
77 West Jackson Boulevard, IZtn noor
Chicago, IL 60604-3590
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TABLE OF CONTENTS
Introduction
I. GENERAL OVERVIEW
^ II. ECONOMIC INCENTIVES
A. MARKET-BASED 8
B. TAX-BASED 1 0
C. EMISSIONS TRADING 1 2
D. BUBBLE POLICY 26
E INTERNATIONAL 31
III. APPLICATIONS OF ECONOMIC INCENTIVES
A. ACID RAIN 37
B. AGRICULTURE 38
C. AIR POLLUTION 39
D. HAZARDOUS AND SOLID WASTE 4 0
E PUBLIC UTILITIES 44
IV. PUBLIC-PRIVATE PARTNERSHIPS 45
V. DEBT-FOR-NATURE 51
VI. POLLUTION PREVENTION 60
EPA Headquarters Library Management Collection List of
Management Bibliographies 63
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PUBLIC POLICY MECHANISMS:
NON-REGULATORY OPTIONS
FOR ENVIRONMENTAL PROTECTION
INTRODUCTION
Traditional environmental protection mechanisms favor
command-and-control legislation backed by strong enforcement.
Today, EPA is expanding its use of non-regulatory mechanisms that
encourage partnerships with governments, environmental
communities, industries and businesses. Public Poiicv
Mechanisms: Non-Regulatory Options for Environmental
Protection was developed as a tool for EPA managers to identify
and explore various options for non-regulatory environmental
protection. The bibliography focuses on techniques and applications
of non-regulatory options on national and international levels.
Each entry in Public Poiicv Mechanisms: Non-Reoulatorv
Options for Environmental Protection includes a summary of a
journal article with the source of the entry noted at the end of the
sunmmary. The information is organized into the following sections:
General Overview; Economic Incentives: Market-Based, Tax-Based,
Emissions Trading, Bubble Policy, International; Aplications of
Economic Incentives: Acid Rain/ Agriculture, Air Pollution,
Hazardous and Solid Waste, Public Utilities; Public-Private
Partnerships; Debt-for-Nature; and Pollution Prevention.
Public Poiicv Mechanisms: Non-Requlatorv Options for
Environmental Protection was compiled from the following
databases: ABI/INFORM, MANAGEMENT CONTENTS, ENVIROLINE, NTIS,
POLLUTION ABSTRACTS, and PAIS. Entries from PAIS do not have
full abstracts but include a brief descriptive summary. For copies
of articles listed in this bibliography, contact Sigrid N. Smith,
Reference Librarian, EPA Headquarters Library, (202) 382-5922 or
Email address, Library.HQ/EPA3738. M>O
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I. GENERAL OVERVIEW
Green Economics
Kay, John; Silberston, Aubrey
National Institute Economic Review (UK) n!35 PP: 50-64 Feb 1991
The principal environmental problems generally are not the
result of an inappropriate pursuit of the interests of the current
generation; they derive from a failure to perceive correctly what
the interests of that generation are or to establish mechanisms
that properly reflect them. A positive policy for the environment
begins not from broad generalization, but from specific analysis of
the environmental costs and benefits of actions and policies. The
most serious fallacy in green policies may be the assertion of
general remedies for problems whose solution is sensitively
dependent on the facts of a particular case. A careful evaluation
of costs and benefits is insufficient, however, when costs and
benefits accrue to different groups. Environmental improvements
will always entail losses for some and gains for others, and this
should be recognized. (ABI/INFORM)
Revenue-Neutral incentives for Efficiency and Environmental Quality
Koomey, Jonathan; Rosenfeld, Arthur H.
Contemporary Policy Issues v8n3 PP: 142-156 Jul 1990
Interest has grown in using monetary incentives as an efficient
way to promote energy efficiency and environmental quality. A
description is presented of issues raised in designing revenue-
neutral incentive policies to achieve these goals. Such policies
involve charging fees in proportion to undesirable characteristics
and giving rebates in proportion to desirable characteristics. The
fees pay for the rebates and for any administrative costs of the
program. Conceptual issues raised in designing such incentive plans
are analyzed to correct for externalities and to promote the
efficiency of buildings and automobiles. The nature and importance
of externalities are examined, the rationale for revenue-neutral
incentive policies is presented, and 6 revenue-neutral incentive
programs for achieving these goals are described. The criteria that
should be used in determining the size of rebates and fees are
analyzed. (ABI/INFORM)
Acceptance of Need for Choices Brightens Hopes for Solutions
Berry, John M.
Financier v!4n7 PP: 5-9 Jul 1990
Since the first Clean Air Act was passed in 1970, it has been
updated and strengthened. Recent estimates of the annual cost of
pollution control in the US are in the neighborhood of $90 billion,
or 1.7% of the gross national product. Economist Paul Portney has
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estimated that passage of Clean Air Act amendments will add between
$25 billion and $30 billion to the current total cost by the year
2005. Public awareness of the health and other damage done by
pollution has made many people willing to pay for cleanup - at
least if the cost is not too burdensome. By using low-sulfur fuel
at Southern California Edison, most customers have accepted that
the approximately 5% extra on electric bills is a reasonable
contribution to improve air quality. An incentive-based approach to
the problems of meeting standards of air emissions and selling
credits is being adopted by many utility companies and is being
accepted by environmental groups. (ABI/INFORM)
Regulating Bureaucratic Polluters
Lyon, Randolph M.
Public Finance Qtrly v!8n2 PP: 198-220 Apr 1990
The behavior of polluting public sector agencies and other
bureaucracies under environmental policies based on economic
incentives, such as transferable permits and pollution taxes, and
under direct regulations are analyzed. A theoretical model is
developed to consider the incentives for bureaucratic behavior that
can arise where the provision of pollution control services
increases the salary, prestige, and other perquisites of decision
makers. The possible existence and magnitudes of the effects
implied by the model are then respectively examined by considering
actual and simulated environmental management programs. The
evidence considered suggests that public-sector polluters may
participate in a manner somewhat different from private-sector
polluters under programs relying upon economic incentives. The
simulations imply that, even in the presence of bureaucratic
distortions, programs relying upon economic incentives are likely
to be less expensive than direct regulations.
(ABI/INFORM)
THE GREENING OP CORPORATE AMERICA
SMITH, EMILY T. ; CAHAN, VICKI; ELLIS, JAMES E. ; WEBER, JOSEPH
BUSINESS WEEK, APR 23, 90, N3156, P96(8)
WITH INCREASING PUBLIC CONCERN ABOUT THE ENVIRONMENT,
CORPORATIONS ARE GRADUALLY TAKING A PROACTIVE ROLE IN CONSERVATION
AND POLLUTION ISSUES. POLLUTION MANAGEMENT IS OFTEN IN THE BEST
INTERESTS OF THE COMPANY, AS PROFITS ARE ERODED BY CONSUMER DISMAY
AS WELL AS SHARP FINES FOR VIOLATIONS OF POLLUTION REGULATIONS.
SUCCESSFUL CORPORATE INITIATIVES HAVE TOP-LEVEL POLITICAL SUPPORT,
AND SHOP-LEVEL PARTICIPATION, OFTEN OPERATING IN CONCERT WITH
FINANCIAL INCENTIVES. (ENVIROLINE)
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Using Economic Incentives to Maintain Our Environment
Tietenberg, T. H.
Challange v33n2 pp.42-46 Mar/Apr 1990
Instead of mandating environmental policies, environmental
groups and regulators are offering economic incentives to achieve
their objectives. Using incentives can: 1. reduce the conflict
between environmental protection and economic development, 2. ease
the transition to a sustainable relationship between the
environment and the economy, and 3. encourage the development of
more environmentally benign production processes. An economic
incentive appraoch known as the "offset policy" was introduced in
the mid-1970's to lower air pollution in a number of U.S. cities.
Emission reduction credits were awarded to companies that
voluntarily lowered their emissions below regulation standards.
These credits could be sold to new firms seeking to move into the
city as long as the acquiring firm bought 1.2 emission credits for
each 1.0 units of emissions added by the new plant. With this
approach, air quality improved every time a new firm moved into the
area. (ABI/INFORM)
Earth Day: Twenty Years Later
Miller, William H.
Industry Week v239n6 PP: 86-97 Mar 19, 1990
The 20th anniversary of the first Earth Day, April 22, 1970, is
approaching. There are indications that many companies are becoming
more responsive to the environment, and environmentalists are
expressing more interest in market-based incentive solutions.
One example is the Environmental Defense Fund's close work with the
Environmental Protection Agency and the White House in developing
the emissions-trading scheme in the acid rain portion of President
Bush's 1989 clean air proposal. The president of the National
Audubon Society, Peter A. A. Berle, praises Du Pont Co. for its
decision to discontinue production of chlorofluorocarbons, but he
criticizes oil companies for their tepid support of energy
conservation. Sierra Club Executive Director Michael Fischer says
that good deeds have been centered mostly in small and medium-sized
firms. Like industry, the environmental movement is not monolithic.
Dialogue with industry has not increased on the aggressive side of
the spectrum. On the conservative side, the Nature Conservancy
refuses to join in lobbying coalitions with other environmental
groups. (ABI/INFORM)
Environmental performance will count in the 1990s
Wells, Richard P.
Marketing News v24 March 19, 1990, p22(l)
Marketing research indicates that environmental issues are
important to consumers, and firms hoping to succeed in the 1990s
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will be the ones that achieve a performance in the marketplace that
is sensitive to the environment. Firms can achieve success by using
an environmental management strategy which responds to market
incentives and uses innovative marketing approaches. It also will
be important to develop advertising which reflects a commitment to
environmental performance and is simple to comprehend. Additionally
firms will need to monitor consumer response to the market-focused
environmental techniques used in corporations. (MANAGEMENT
CONTENTS)
Breaking the circle of the Short-Term Fix: we Must Earn the Right
to operate
Mahoney, Richard J.
Executive Speeches v4n8 PP: 16-19 Mar 1990
To earn the right to operate, to regulate, and to legislate, the
cycle of the short-term environmental fix must be broken. The
current system of command and control used by government to
achieve environmental improvements in industry is the slowest,
most expensive, and most contentious way to a solution.
Moreover, voluntary environmental initiatives by industry tend to
be penalized by the system. The US must accept a more realistic
view of what is possible and achievable. Laws and regulations must
become less prescriptive, and cooperative solutions must be
encouraged, not politicized as collusion. Approaches are needed
that encourage voluntary and creative initiatives and market
incentives for industry to eliminate waste at the source rather
than at a Superfund site years later. Industry must embrace the
concept of environmental stewardship, work toward a goal of
absolute zero chemicals in the environment, and commit itself to
the idea of making no significant impact on the environment.
(ABI/INFORM)
"PROFITS ARE FOR RAPE AND PILLAGE"
MORGENSON GRETCHEN AND ; EISENSTODT GALE
FORBES, MAR 5, 90, V145, N5, P94(6)
WHILE GOVERNMENT REGULATION AND CONSOLIDATION IS GENERALLY
CRITICIZED IN MOST POLITICAL REALMS, IN THE AREA OF ENVIRONMENTAL
REGULATION IT IS AS STRONG AND PERSISTENT AS EVER. INDUSTRY LEADERS
ARGUE THAT POORLY PLANNED LEGISLATION COSTS BILLIONS OF DOLLARS IN
COMPLIANCE ANNUALLY; EXAMPLES ARE GIVEN FROM THE CLEAN AIR ACT AND
THE RESOURCE CONSERVATION AND RECOVERY ACT. PROPONENTS OF
DEREGULATION ARGUE THAT THE FREE MARKET SYSTEM, IMPLEMENTED WITH
GREATER SUCCESS IN SOME COMMUNIST COUNTRIES, WOULD DO MORE TO
ENCOURAGE ENVIRONMENTALLY SOUND INDUSTRIAL PRACTICES. OPTIONS
SUCH AS EMISSIONS CREDIT TRADING AND SELECTIVE IMPLEMENTATION ARE
PROPOSED AS ALTERNATIVES TO UNILATERAL REGULATION. (ENVIROLINE)
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BUSINESS AND THE ENVIRONMENT
SIWOLOP SANA AND ; BARRETT AMY
FINANCIAL WORLD, JAN 23, 90, V159, N2, P40(3)
GIVEN THE GLIMPSE OF FEDERAL REGULATIONS TO COME, A GROWING
NUMBER OF COMPANIES ARE WILLING TO TAKE PREEMPTIVE, UNILATERAL
ACTION EVEN IF IT MEANS SACRIFICING SANE LINES OF BUSINESS.
CORPORATE INITIATIVES ON POLLUTION CONTROL BEING TAKEN AT SUCH
COMPANIES AS MONSANTO, LOUISIANA LAND & EXPLORATION, 3M, AND H.B.
FULLER ARE EXAMINED. MONSANTO HAS VOLUNTARILY AGREED TO REDUCE ITS
TOXIC AIR POLLUTION TO ONLY 10% OF 1987 LEVELS TO KEEP FROM BEING
SEEN AS A POLLUTER. LOUISIANA LAND & EXPLORATION RECEIVED THE
CONSERVATION AWARD FOR RESPECTING THE ENVIRONMENT FROM THE USDI IN
1989. AND 3M AND H.B. FULLER HAVE TAKEN THE LEAD IN LEARNING HOW TO
MAKE POLLUTION CONTROL EQUAL COST CONTROL. DISCUSSED IS THE
PRACTICE OF FIXING BLAME FOR POLLUTION ON COMPANIES EVEN IF THAT
POLLUTION OCCURRED BEFORE THERE WERE LAWS AGAINST IT.. SUGGESTED IS
A REMEDY OF ASSESSING A SURCHARGE ON COMMERCIAL AND INDUSTRIAL
PROPERTY-CASUALTY INSURANCE PREMIUMS TO CLEAN UP THE MOST DANGEROUS
HAZARDOUS WASTE SITES. (ENVIROLINE)
THE CRITICAL DECADE. ENVIRONMENTALISM IN THE 1990S: WHERE ARE WE
HEADED?
RUSSELL DICK
E MAGAZINE, JAN-FEB 90, VI, Nl, P30(8)
MAN'S WANTON DISREGARD FOR THE EARTH SINCE THE INDUSTRIAL
REVOLUTION HAS RESULTED IN THE CONTAMINATION OF THE WORLD'S AIR,
LAND, AND WATER BY TOXIC POLLUTANTS. ENVIRONMENTALISTS BELIEVE THAT
THE 1990S WILL BE A CRITICAL DECADE AND WILL DETERMINE THE FUTURE
OF THE EARTH. MANY NATIONAL LEADERS PURPORT TO BE COMMITTED TO THE
ENVIRONMENTAL CAUSE AS CONCERN CROWNS AMONG THE CITIZENS OF
THEIR NATIONS. GLOBAL ENVIRONMENTAL IMPROVEMENTS CAN ONLY OCCUR IF
INDUSTRY MAKES THE ENVIRONMENT A PRIORITY. GOVERNMENTS COULD
ENCOURAGE CORPORATE ENVIRONMENTAL RESPONSIBILITY BY OFFERING
FINANCIAL INCENTIVES TO THOSE THAT ARE RESPONSIBLE. MANY STATE AND
LOCAL GOVERNMENTS HAVE EMERGED AS STAUNCH ADVOCATES FOR THE
ENVIRONMENT AND, JOINED BY A GROWING NUMBER OF GRASSROOTS
ORGANIZATIONS, HAVE WAGED THE BATTLE TO SAVE THE EARTH FROM
DESTRUCTION. (ENVIROLINE)
ECONOMIC INCENTIVES TO RESOLVE URBAN CRISES
HARRINGTON WINSTON
RESOURCES (RESOURCES FOR THE FUTURE), WINTER 90, N98, P13(4) THE
TRAFFIC CONGESTION, SITING OF LOCALLY UNDESIRABLE FACILITIES,
AND AIR POLLUTION ARE THREE SERIOUS URBAN ENVIRONMENTAL PROBLEMS
THAT APPEAR MORE UNMANAGABLE TODAY THAN 20 YEARS AGO. CONSTRUCTION
OF AN EXTENSIVE NETWORK OF EXPRESSWAYS AND INTERSTATE HIGHWAYS HAS
PERMITTED THE SPREAD OF LOW-DENSITY DEVELOPMENT THUS INCREASING
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CONGESTION AND TRAVEL TIME FROM HOME TO THE WORKPLACE. URBAN
SERVICE FACILITY SITINGS HAVE BECOME A DIFFICULT AND COSTLY
PROBLEM, SINCE THIRD PARTIES NOW MAY FIGHT SITING DECISIONS.
ALTHOUGH THE CLEAN AIR ACT HAS HELPED REDUCE EMISSIONS OF SOME
POLLUTANTS, THE US STILL FACES POTENTIALLY SERIOUS ACID RAIN
PROBLEMS. TO REMEDY THESE PROBLEMS, MANAGEMENT STRATEGIES THAT RELY
HEAVILY ON ECONOMIC INCENTIVES ARE BEING CONSIDERED. (ENVIROLINE)
INCENTIVES, MCDM, AND ENVIRONMENTAL PROTECTION
NAGEL STUART (UNIV OF ILLINOIS, URBANA) AND ; NAGEL ROBERT
(CONGRESSIONAL STAFF OF SEN. THOMAS HARKIN, D-IA)
J ENV SYSTEMS, 1989-90, V19, Nl, P25(8)
ENVIRONMENTAL PROTECTION CAN BE FACILITATED BY THE SUBSTANCE OF
INCENTIVES THEORY COMBINED WITH MULTI-CRITERIA DECISION-MAKING
METHODS (MCDMS). IN INCENTIVES THEORY, PUBLIC POLICY SHOULD SEEK TO
ENCOURAGE SOCIALLY DESIRABLE BEHAVIOR BY INCREASING THE BENEFITS
AND DECREASING THE COSTS OF SUCH BEHAVIOR. THE ESSENCE OF MCDM IN
A PUBLIC-POLICY CONTEXT IS THE IDEA OF SYSTEMATICALLY PROCESSING A
SET OF SOCIETAL GOALS TO BE ATTAINED, ALTERNATIVE PUBLIC POLICIES
FOR ACHIEVING THEM, AND RELATIONS BETWEEN GOALS AND ALTERNATIVE
POLICIES IN ORDER TO CHOOSE THE BEST OPTION OR PREDICTIVE DECISION
RULE. SIMPLE AND REALISTIC MODELS ARE APPLIED TO THE ANALYSIS OF
POLLUTION-CONTROL INCENTIVES FOR ILLUSTRATION. (ENVIROLINE)
Here Comes the Big New Cleanup
Main, Jeremy
Fortune Vll8nl2 PP: 102-118 Nov 21, 1988
Evidence of ecological damage and dangers to the environment are
making environmental issues national and bipartisan. The next
Administration will immediately confront major pollution problems
that include: 1. acid rain, 2. ozone at ground level and the lack
of it in the stratosphere, 3. toxic waste, and 4. water pollution.
While current environmental regulations have made progress in some
areas, they are expensive, prone to regulatory and legal problems,
tied to unrealistic goals, and locked into the wrong technologies.
Some say the US could continue the cleanup process without excess
regulation and expense by adopting a more commonsense, market-
oriented strategy. The US should harness market forces by providing
incentives for business and individuals to go beyond what
regulators can require. Specific suggestions for dealing with 16
major environmental problems include: 1. tradable credits and
permits, 2. taxes, 3. refunds, 4. swaps, and 5. deposits.
(ABI/INFORM)
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New Instruments for Environmental Policy: A Perspective
Huppes, Gj alt
International Jrnl of Social Economics (UK) v!5n3-4 PP: 42-50 1988
In the postwar years of fast economic growth, extensive
government regulations to curb growing environmental problems were
devised in most Western nations. Three main types of policy can be
distinguished: 1. physical activities undertaken by
governments, 2. institutional arrangements such as liability,
price corrections, and education that indirectly affect private
behavior, and 3. regulation of the physical aspects of private
activities such as licenses, standards, and codes. The latter type
of regulation has become dominant in both Western and communist
countries. The regulative emission tax is a financial instrument
with theoretical advantages but with practical limitations. Because
of various problems, none of the policy instruments has been
developed systematically on a practical level.-. A tax-like system
such as a security deposit system could solve a number of problems
in a very cost-effective manner. In contrast to process-oriented
policies, product-oriented policies are a domain where improvements
can be made largely on a voluntary basis. (ABI/INFORM)
Markets for Pollution Control
Gates, Wallace E.
Challenge v27n2 PP: 11-17 May/Jun 1984
AVAILABILITY: Challenge, 80 Business Park Dr., Armonk, NY 10504
Almost every economist favors use of pricing instruments to
protect the environment, but politicians and regulators have chosen
the traditional command-and-control (CAC) techniques under which
the environmental authority specifies the technology that polluters
must adopt to control or treat their waste discharges. It is
estimated that a well-designed system of pricing incentives could
cut the costs of pollution control by at least 75%. Economists have
long favored the effluent fees suggested by A. C. Pigou early in
this century. However, a system of marketable permits to pollute,
first suggested by J. H. Dales in the mid-1960s, has several
advantages over an effluent fee program. Now there is a growing
consensus among environmental economists that marketable emissions
permits represent a more promising policy alternative for pollution
control. Two recent programs of economic incentives are examined:
the Environmental Protection Agency's emissions trading experiment
with air pollution control, and Wisconsin's program for the
management of water quality using transferable discharge permits.
(ABI/INFORM)
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A Simpler Path to a Cleaner Environment
Alexander, Tom
Fortune v!03n9 PP: 234-254 May 4, 1981
While some environmental legislation has achieved gratifying
gains, the most ambitious statutes have proved to be failures, and
some have produced additional environmental ills. Legislation, now
a maze of complexity, was enacted at a time when the spirit was one
of emergency, and things appeared to need to be done in a hurry. At
the same time, US pollution control spending has risen to $48.5
billion in 1979 from $34.5 billion in 1972. Today, public opinion
is changing and beginning to focus more on economic renewal than on
pollution control. Thus, there exists a good chance that in
rewriting the Clear Air Act, Congress will simplify present.
complexity and lessen the burden of compliance on industry. The
present system of offsets and increments has proved far too
baffling for those who want to increase plant and equipment.
Incentives can be used to cut through the regulatory maze, and
Congress should support that concept when renewing the Clean Air
Act. Regulatory overkill could be eased if emissions charges were
varied to take into account costs of controlling various pollution
sources. (ABI/INFORM)
II. ECONOMIC INCENTIVES
A. MARKET-BASED
How to Fill the Holes in Ozone Policy
Shrivastava, Paul
Business & Society Review n75 PP: 59-62 Fall 1990
Depletion of stratospheric ozone is one of the most devastating
crises affecting the environment. The natural balance through which
oxygen reacts with ultraviolet light to create and destroy ozone
simultaneously has been disrupted by manufactured substances,
mostly chlorofluorocarbons (CFC). The Montreal Protocol, an
international agreement for CFC reduction, was signed by 34
countries in 1987 and provided for a 50% reduction of CFCs by 2000.
No real reductions in CFCs had been achieved by 1990. Technological
solutions are available, but for them to be applied, corporations
must acknowledge their primary role and ethical responsibility in
dealing with the problem. Economic incentives and political will
and leadership are needed to completely eliminate harmful CFCs in
the immediate future. Companies should raise this problem to the
strategic level by appointing a board of directors committee to
oversee their responses to the ozone crisis. The public can create
economic pressures for major changes. (ABI/INFORM)
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The carrot or the stick? some environmentalists are pinning their
hopes on a "market-incentive" approach to environmental protection
Engle, Claude and Hawley Truax.
Environmental Action 20 (i.e. 21):12-15 My/Je '90
Explores the concept of pollution trading—where it comes from,
how it will work, and the ramifications of its becoming a part of
the new Clean Air Act. (PAIS)
Using economic incentives to maintain our environment: regulators
can persuade developers to respect nature by making it worth their
while; environmentalists have come to realize that their former
adversary, the market, can be a powerful ally
Tietenberg, T. H.
Challenge 33:42-6 Mr/Ap '90
Calls for harnessing the power of the market with economic
incentive policies for the achievement of environmental goals.
(PAIS)
Variety of Imperfect Strategies Must Be Pursued for Control
Eads, George C.
Financier v!3n!2 PP: 30-33 Dec 1989
When air pollution was first becoming a national issue in the
mid-1960s, the use of market-like mechanisms to control pollution
was in disfavor with politicians and environmentalists alike. There
is now a growing realization that effective control of pollution
requires the use of the power of the markets because the problems
are too complex to be addressed through source-specific
regulations. Such regulations are unfeasible because there are
literally millions of different contributing emission sources.
Market-based mechanisms of pollution control can be either simple
or complex, with much depending on the characteristics of the
pollutant that one is trying to control. Economic incentives also
offer much more flexibility and provide a broader scope for
innovation. Market-based regulation does not eliminate the need for
tough political decisions relating to regulation and may even
complicate global negotiations, but there is no realistic
alternative. (ABI/INFORM)
An incentive-conscious approach to toxic chemical controls
Roe, David.
Econ Development Q 3:179-87 Ag '89
California's Proposition 65, the Safe Drinking Water and Toxic
Enforcement Act, in effect since early 1988. Market incentive
created by the requirement to label products that exceed a defined
level of exposure. (PAIS)
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Clean profits: using economic incentives to protect the environment
Stavins, Robert N.
Policy R p 58-63 Spring '89
Reviews the recommendations of Project 88, a bipartisan effort
to find innovative solutions to major environmental problems; US.
Advantages of market-based approaches to deter pollution or reduce
resource degradation. (PAIS)
Approaching Pollution Control via the Wallet
MacKerron, Conrad B.
Chemical Week Vl41nl8 PP: 41-42 Oct 28, 1987
The Environmental Defense Fund (EDF), the Foundation for
Research on Economics and the Environment, and 2 Columbia
University Law School professors have proposed a market-based
approach to environmental regulation in which part of the incentive
to clean up the environment is that participants earn money doing
it. Their program is based on marketable permits to pollute the
environment that would be auctioned off periodically by the federal
government. EDF's Frederic Krupp says the system would eliminate
the inefficiencies of the present program, which is based on laws
that reguire companies to use the best available technology to
clean up pollution and ignore the fact that cleanup costs for
plants and industries vary. By charging fees for permits to
pollute, a financial incentive would be created for those who can
clean up most cheaply to sell their permits to those whose
treatment costs are highest. The result would be a least-cost
allocation of control burdens. The Environmental Protection Agency
already is using a similar concept in its emission trading rights
in the air pollution area. (ABI/INFORM)
B. TAX-BASED
Feasibility Study of the Privatization of Public Wastewater
Treatment Works
Heilman, J. G. ; Johnson, G. W.
Auburn Univ., AL. Water Resources Research Inst.
Sponsor: Geological Survey, Reston, VA. Water Resources Div.
Jan 89 472p
NTIS:PB89-155642/XAB
The report outlines the research and the results of a national
feasibility assessment of capital-intensive privatization (CIP)
of municipal wastewater works (WTW). The initial WTW CIP
agreements, of which there were fewer than a dozen, were driven in
part by federal tax incentives created in 1981 and 1982. These
agreements involved private sector financing, design, construction,
operation, and ownership of WTW facilities. Tax reform in 1986
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removed most of the tax incentives, but the water industry remains
interested in developing the CIP option. The conclusion reached is
that the WTW CIP option offers inherent efficiencies which are
independent of tax incentives. WTW CIP is a feasible option which
merits serious consideration by municipalities or other
authorities planning to develop wastewater treatment capacity. WTW
privatization raises many issues which must be recognized and
addressed if accountability and the benefits of the efficiencies
inherent in CIP are to be realized. These issues are identified and
addressed in greater detail in order to provide information and
guidance for authorities and policymakers considering
privatization. (NTIS)
The potential for private cost-increasing technological innovation
under a tax-based, economic incentive pollution control policy
McHugh, Richard
Land Economics v61 Feb, 1985, p58(7)
It is shown that the implementation of a tax-based
economic-incentive policy makes total private compliance costs
increase (potentially) when new, less expensive pollution control
technologies are introduced despite the benefits in terms of lower
real control outlays. The conditions present when the
'cost-increasing1 innovations occur are described, and the process
is shown numerically. Ways to avoid the cost-increasing
technologies, including coupling the tax incentive with a net
revenue lid for the pollution control authorities, are discussed,
and support for private permit plans relative to tax-based
incentive plans is shown. (MANAGEMENT CONTENTS)
Financing and Taxation for Urban Control of Pollution
1964-April, 1981
(Bibliographic Citations from the NTIS Data Base)
(Kept, for 1964-Apr 81)
Apr 81 264p
NTIS:PB81-805970
The citations relate to urban and regional planners who wish to
study means of financing pollution abatement programs and of taxing
sources as a means of pollution reduction. The reports are divided
into three sections: Air pollution studies, solid waste disposal
studies, and water pollution and sewage treatment studies. (This
updated bibliography contains 255 citations, 24 of which are new
entries to the previous edition.) (NTIS)
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C. EMISSIONS TRADING
Emissions Trading and the Natural Gas industry
Palmisano, John; Friday, Janet; Brooks, Thomas
Gas Energy Review v!8n9 PP: 15-23 Sep 1990
Despite the obvious environmental advantages of using natural
gas over other fuels, there are few incentives in the existing
Clean Air Act to use natural gas for environmental purposes. A less
traditional federal air pollution program, known as air emissions
trading, can provide the gas industry with a much richer array of
opportunities for increasing the value of gas by leveraging its
environmental benefits. Emissions trading allows firms to create a
marketable asset, the emission reduction credit (EEC), by
voluntarily reducing air emissions to levels below those mandated
by their air permits. To date, industry has saved well over $1
billion by taking advantage of emissions trading opportunities. The
pending Clean Air Act Amendments will expand emissions trading
opportunities by incorporating them into a new regulatory program
focusing on acid deposition control. The new amendments will also
reduce the uncertainty regarding the permanence of emission
reduction credits. (ABI/INFORM)
Comparison of direct control and market based policies for
controlling emissions
Fox, J. A. ; Hanson, D. A. Argonne National Lab., IL.
Intersociety energy conversion engineering conference (25th) , Reno,
NV, 12-17 Aug 1990.
Sponsor: Department of Energy, Washington, DC.
Report No.: CONF-900801-5 1990 4P.; NTIS:DE90011113/XAB
Emission control can be achieved by employing direct control
policies such as performance standards and technology standards or
by employing market based policies such as emissions trading,
emissions taxes and marketable permits. This paper describes these
policies and discusses the economic, social and political
advantages and disadvantages of each type of policy. As the paper
will show the chief disadvantage of the direct control policies is
that they do not minimize the cost of obtaining the desired
level of emissions in either the short or long run. One advantage
of these policies is that they may be easier to administer then the
market based plans. The chief advantage of the market based
policies is that they are more likely to attain a desired emissions
level at least cost in both a static and dynamic sense. These
market based plans do have some shortcomings which are largely
political in nature. For example, some people perceive these plans
as '•licenses to pollute11 where wealthy firms can continue
polluting by simply paying a tax, buying a permit or trading.
(NTIS)
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Pollution: Trading Places
Anonymous
Economist (UK) v316n7662 PP: 32-33 Jul 7, 1990
Tradable permits are at the core of the new clean-air bill now
before Congress, and the group doing most to promote them is the
Environmental Defense Fund. The 20-year-old idea combines the
flexibility and cost-effectiveness of an economic instrument with
the certainty of regulatory standards. In essence, a regulator sets
a ceiling on the amount of pollution allowed for a whole industry
and issues permits to individual firms for their share in that
amount. Polluters can then buy or sell permits so that those who
can clean up cheaply do so and then make money by selling spare
permission to others. The main feature is the cap the program
imposes on emission from electricity-generating plants. Severe
penalties are a 2nd vital feature. The Bush administration wants
emissions trading incorporated into any international agreement on
climate change. An international trading system in greenhouse gases
would allow countries that could reduce emissions more cheaply to
sell gas-emitting allowances to those for which cuts were more
expensive. (ABI/INFORM)
Exposure Trading: An Approach to More Efficient Air Pollution
Control
Roumasset, James A.; Smith, Kirk R.
Jrnl of Environmental Economics & Mgmt v!8n3 PP: 276-291 May 1990
To improve the cost-effectiveness of air pollution control,
emissions trading among sources has long been recommended and
recently implemented in the US. However, the implicit conceptual
framework underlying emissions trading falls well short of the
theoretical optimum. The concept of exposure trading is introduced,
which makes the linkage between pollution sources and human health
more explicit by focusing on exposure rather than concentration.
One result of this shift is that incentives are established for
regulated sources to consider unregulated sources, including those
outdoors, and programs to induce behavioral changes in exposed
populations as part of decisions to reduce their costs of exposure
control. Exposure trading also facilitates a more comprehensive
environmental policy by providing an administrative mechanism for
including pollution sources other than the large industrial point
polluters that are the focus of traditional analysis. (ABI/INFORM)
WHERE DID ALL THE MARKETS GO? AN ANALYSIS OF EPA'S EMISSIONS
TRADING PROGRAM
HAHN ROBERT W. AND ; HESTER GORDON L. CARNEGIE MELLON UNIV, PA.
YALE J ON REGULATION, WINTER 89, V6, Nl, P109(45)
RESEARCH CONCERNING THE USE OF MARKET SYSTEMS TO REGULATE
ENVIRONMENTALLY DAMAGING ACTIVITIES IS REVIEWED, AND THE
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LEGISLATIVE AND REGULATORY FRAMEWORK OF EMISSIONS TRADING IS
SUMMARIZED. THE PERFORMANCE OF EMISSIONS TRADING IS EXAMINED, AND
FOUND TO HAVE PROVIDED ECONOMIC BENEFITS WHICH DID NOT REACH THEIR
POTENTIAL. REGULATIONS WHICH STYMIE EFFECTIVE USE OF EMISSIONS
TRADING ARE CONSIDERED, AND PROPOSALS FOR REFORM ARE SUGGESTED,
(ENVIROLINE)
Trading Emission Reduction Credits
Palmisano, John
Plant Engineering v43n!4 PP: 78-80 Sep 14, 1989
With emission trading, plant managers have the freedom to
control air pollution in the most cost-effective manner. In some
cases, a firm can substitute less expensive surplus emission
reductions at one emission point for expensive reductions at
another. Emission credits can be created in several ways,
including: 1. through alternative fuel strategies, 2. through
equipment shutdowns, and 3. through curtailments of production. The
trading process can be handled through any one of 4 avenues. These
include: 1. offsets, which enable existing firms to locate in
nonattainment areas, 2. bubbles, which allow managers of existing
facilities to increase pollution controls where the costs are low
in exchange for reducing pollution controls where the costs are
high, 3. netting, which refers to sources using emission credits to
avoid certain new source requirements, and 4. emission banking,
which is the creation, certification, and storage of emission
reduction credits for future use. (ABI/INFORM)
_L
Capital Turnover and Marketable Pollution Rights
Maloney, Michael T.; Brady, Gordon L.
Jrnl of Law & Economics vSlnl PP: 203-226 Apr 1988
The empirical question is addressed of whether restrictions on
emissions trading enhance or retard the rate of ambient air quality
improvement. Ambient air quality has improved since the 1970s,
though it is uncertain whether the improvement is due to the 1970
Clean Air Act or to other factors. Rules that limit the scope of
the pollution-permit market create an incentive to postpone
retirement of old pollution sources, which has a negative impact on
air quality. Using air pollution control regulatory expenditures as
a measure of the strictness of regulation, it was found that a
doubling in regulation results in an 8% increase in capital's age.
When the age of capital is related to actual pollution rates, it is
found that a 1% increase in age has a 1% increase in pollution. The
estimates suggest that stricter restrictions on trading permits
result in a higher rate of pollution than would have existed
without restrictions. (ABI/INFORM)
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Bureaucratic politics and regulatory reform: the EPA and emissions
trading
Cook, Brian J.
'88 xvi+165p
SERIES: Contributions in pol. science no. 196
Chronicles 15 years of congressional debate over the use
of incentive-based regulatory instruments for pollution control;
implications for administrative agencies. (PAIS)
EMISSIONS TRADING: WHY IS THIS THOROUGHBRED HOBBLED?
DUDEK DANIEL J. (ENV DEFENSE FUND, NEW YORK) AND ; PALMISANO JOHN
(AERX, WASHINGTON, DC)
COLUMBIA J ENV LAW, 1988, V13, N2, P217(40)
EMISSIONS TRADING IS AN EPA ENVIRONMENTAL PROTECTION REFORM THAT
HAS PROVEN SUCCESSFUL IN NUMEROUS WAYS: BY REDUCING TENSION BETWEEN
ECONOMIC AND AIR QUALITY GOALS, BY MEETING POLLUTION STANDARDS FOR
LESS MONEY, AND BY FOSTERING PRIVATE SECTOR POLLUTION CONTROL
EXPERTISE. THE FLEXIBILITY AND EFFECTIVENESS OF PRIVATE SECTOR AIR
POLLUTION CONTROL INITIATIVES HAVE PROVEN THAT OTHER AREAS OF
ENVIRONMENTAL CONTROL COULD PROFIT FROM MARKET-BASED SYSTEMS, WHICH
ARE A REASONABLE COMPROMISE BETWEEN OVER-REGULATION AND
DE-REGULATION. (ENVIROLINE)
Economic Implications of Emissions Trading Rules for Local and
Regional Pollutants
Atkinson, S. E.; Tietenberg, T. H.
Canadian Jrnl of Economics (Canada) v20n2 PP: 370-386 May 1987
In 1975, the US Environmental Protection Agency began a historic
process of regulatory reform, now known as the Emissions Trading
Program. For nonuniformly mixed pollutants such as sulfur dioxides,
air quality is a function not only of the level of emissions, but
also of their location and stack heights. Attention is focused on
how to protect local air quality and limit long-range pollutant
deposition caused by emission trades, while permitting as much
cost-reducing trading activity as possible. Programming simulation
models are employed to examine the implications of 2 trading rules
in 2 different airsheds. These rules are compared in terms of: 1.
compliance costs, 2. ambient degradation, 3. emission loadings, and
4. long-range deposition. It is found that the use of either
trading rule represents a great improvement over exclusive reliance
on the current allocation of control responsibility.
(ABI/INFORM)
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The Market for Bads: EPA's Experience with Emissions Trading
Hahn, Robert W.; Hester, Gordon L.
Regulation vlln3/4 PP: 48-53 1987
Recently, the Environmental Protection Agency (EPA) has allowed
some modest reforms in its rigid approach to environmental
management. For example, the emissions trading policy gives
companies the opportunity to devise less costly ways to control
their emissions. This policy includes the bubble program and 3
other programs. A review of the emissions trading policy shows that
it has resulted in substantial economic gains, in the form of
reduced compliance costs for companies, with little effect on the
environment. However, the gains have been limited as a result of a
struggle over property rights between industry groups and
environmentalists. Reforms would reduce the uncertainties involved
in trading and encourage more external trading. One change should
be to improve information about baseline emissions. Also, the use
of emissions credit banks should be encouraged. (ABI/INFORM)
"EMISSIONS TRADING" TO MEET CLEAN-AIR LAWS
WEISS MALCOLM ; PALMISANO JOHN
RESIDUALS MANAGEMENT TECHNOLOGY, FAIRMONT
NATURAL GAS APPLICATIONS FOR AIR POLLUTION CONTROL, 1987, P83(ll)
EMISSIONS TRADING COMPRISES THE OFFSET POLICY, BUBBLE POLICY,
NETTING, AND EMISSIONS BANKING. THESE CONCEPTS ALLOW FIRMS TO
SUBSTITUTE RELATIVELY CHEAP, SURPLUS EMISSIONS REDUCTIONS FOR
EXPENSIVE REDUCTIONS AT OTHER EMISSION POINTS. EPA'S POLICIES
PERTAINING TO THE FOUR COMPONENTS OF EMISSIONS TRADING ARE
DISCUSSED, AND UTILITY TRADING EXPERIENCE IS REVIEWED. SINCE ALL
EMISSIONS TRADING IS BASED ON EMISSIONS REDUCTION CREDITS,
INDIVIDUALS AND FIRMS CAN PARTICIPATE ONLY AFTER CREATING EMISSIONS
REDUCTIONS. (ENVIROLINE)
"EMISSIONS TRADING" FOR AIR POLLUTION.CONTROL: A VIEW FROM EPA
LEVIN MICHAEL H. EPA, FAIRMONT:
NATURAL GAS APPLICATIONS FOR AIR POLLUTION CONTROL, 1987
P73(10)
EMISSIONS TRADING (ET) CAN ALLOW FIRMS TO COMPLY WITH THE CLEAN
AIR ACT OF 1977 IN THE MOST COST-EFFECTIVE MANNER RATHER THAN BY
MEETING UNIFORM REQUIREMENTS. THE FOUR BASIC COMPONENTS OF ET ARE
EXPLAINED: BUBBLE POLICY, NETTING, OFFSETS, AND BANKING. THESE
ELEMENTS PROVIDE BALANCE SHEET REASONS FOR BETTER THAN REQUIRED
PERFORMANCE. OVER 200 BUBBLES WERE APPROVED IN 29 STATES BY EPA BY
1985, WITH TOTAL ESTIMATED SAVINGS OF OVER $800 MILLION. SELECT USE
BUBBLES CAN BE USED EITHER BY SWITCHING ONE SOURCE COMPLETELY TO
GAS, OR BY SWITCHING IT TO A LOWER-EMITTING MIXTURE OF COAL AND
GAS, IN ORDER TO ALLOW AN EQUIVALENT INCREASE IN EMISSIONS AT
ANOTHER SOURCE. (ENVIROLINE)
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Trade-Offs in Designing Markets with Multiple Objectives
Hahn, Robert W.
Jrnl of Environmental Economics & Mgmt v!3nl PP: 1-12 Mar 1986
According to targets-instruments literature, at least one
instrument is required to meet each target of problems that have
multiple objectives. When there are costs associated with utilizing
instruments, there are trade-offs to consider in meeting a
prescribed set of objectives. Such trade-offs are examined in the
context of using markets to control externalities. For example, the
basic goal of the Environmental Protection Agency's emissions
trading policy is to achieve better environmental quality at lower
cost, and this requires that an increase in emissions at one source
be offset by a greater reduction at another source. The states
preside over trading under this constraint, using the ''offset
ratio.'' Three basic mechanisms are used to minimize the risk of
air deterioration: 1. the requirement of detailed atmospheric
modeling to demonstrate a net air quality improvement, 2. the
specification of a region for trading without modeling, and 3. the
employment of an offset ratio greater than unity. Thin markets and
high transactions costs can be circumvented, but the solutions
typically involve trade-offs. (ABI/INFORM)
THE CONCEPTUAL FRAMEWORK
(EMISSIONS TRADING: AN EXERCISE IN REFORMING POLLUTION POLICY)
TIETENBERG T. H.
RESOURCES FOR THE FUTURE REPORT, 1985, P14(24)
THE TRADITIONAL COMMAND-AND-CONTROL APPROACH TO AIR POLLUTION
CONTROL IMPOSES A LARGE INFORMATION BURDEN ON CONTROL AUTHORITIES,
WHO HAVE IN RESPONSE PROMULGATED EMISSION STANDARDS THAT ARE NOT
COST-EFFECTIVE. COST-EFFECTIVE EMISSIONS TRADING SYSTEMS MUST BE
DESIGNED ACCORDING TO THE NATURE OF THE POLLUTANT REGULATED. A
COST-EFFECTIVE ALLOCATION OF UNIFORMLY MIXED, ASSIMILATIVE
POLLUTANTS COULD BE ACHIEVED BY AN EMISSIONS PERMIT SYSTEM. FOR
NONUNIFORMLY MIXED ASSIMILATIVE POLLUTANTS, AN AMBIENT PERMIT
SYSTEM WOULD YIELD THE COST-EFFECTIVE ALLOCATION OF CONTROL
RESPONSIBILITY. UNIFORMLY MIXED ACCUMULATIVE POLLUTANTS CAN BE
CONTROLLED USING A CUMULATIVE EMISSION PERMIT SYSTEM. (ENVIROLINE)
ENVIRONMENTAL REGULATION AND ECONOMIC EFFICIENCY
US CONGRESSIONAL BUDGET OFFICE REPORT, MAR 85 (134)
THE EFFECT OF POLLUTION CONTROL EXPENDITURES ON THE EFFICIENCY
WITH WHICH U.S. GOODS AND SERVICES ARE PRODUCED IS ANALYZED, BOTH
ABSOLUTELY AND RELATIVE TO THE EXPERIENCE OF MAJOR U.S. TRADING
PARTNERS. ENVIRONMENTAL QUALITY STANDARDS AND ATTAINMENT STRATEGIES
IN THE U.S. AND ABROAD ARE COMPARED, AS ARE ATTENDANT EXPENDITURES.
FINDINGS SUGGEST THAT ENVIRONMENTAL REGULATION HAS NOT BEEN A MAJOR
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CONTRIBUTOR TO A LOSS IN THE EFFICIENCY OF THE U.S. PRIVATE
ECONOMY. EMISSIONS TRADING AND EMISSIONS TAXES CAN BE IMPLEMENTED
TO ALLOW POLLUTERS MORE ATITUDE WHEN COMPLYING WITH REGULATION
WITHOUT RELAXING OVERALL POLLUTION ABATEMENT GOALS. (ENVIROLINE)
EMISSIONS TRADING GIVES FLEXIBILITY IN MEETING CLEAN-AIR LAWS
WEISS MALCOLM ; PALMISANO JOHN
RESIDUALS MANAGEMENT TECHNOLOGY, POWER, MAR 85, V129, N3, P55(4)
EMISSIONS TRADING REPRESENTS A REGULATORY REFORM UNDERTAKEN BY
EPA INTENDED TO IMPROVE THE ENVIRONMENTAL EFFICIENCY OF EACH DOLLAR
SPENT ON AIR POLLUTION CONTROL ACTIVITIES. THE PROGRAM GIVES PLANT
MANAGERS THE FLEXIBILITY TO TAKE ADVANTAGE OF CONTROL ALTERNATIVES
TO FIND THE MOST COST-EFFECTIVE AND EVEN PROFITABLE WAYS TO CONTROL
AIR POLLUTION. EMISSIONS TRADING IS COMPRISED OF FOUR SIMILAR
CONCEPTS: OFFSETS, BUBBLES, NETTING, AND BANKING. UTILITY TRADING
EXPERIENCE IN ATTAINING EMISSION REDUCTION CREDITS IS SURVEYED,
(ENVIROLINE)
REGULATORY REFORM IN AIR-POLLUTION CONTROL
TIETENBERG TOM
COLBY COLLEGE,
RESOURCES, WINTER 85, N79, P17(4)
THE EPA EMISSIONS TRADING PROGRAM IS AN ATTEMPT AT REGULATORY
REFORM. IT SEEKS TO RENDER THE COMMAND AND CONTROL APPROACH
MANDATED IN THE CLEAN AIR ACT OF 1970 MORE FLEXIBLE BY ALLOWING
POLLUTERS MORE OPTIONS IN MEETING THEIR ASSIGNED CONTROL
RESPONSIBILITIES. RELATED BUBBLE AND OFFSET POLICIES ARE EXPLAINED;
REVISIONS AUTHORIZED UNDER THE CLEAN AIR ACT OF 1977 ARE DISCUSSED.
THE ENDURING ROLE THAT THE EPA EMISSIONS TRADING PROGRAM IS PLAYING
IS DIRECTLY ATTRIBUTABLE TO THE FACT THAT IT WAS PRECEDED BY A VERY
COST-INEFFECTIVE REGULATORY POLICY. (ENVIROLINE)
EVALUATION AND PROPOSALS FOR FURTHER REFORM
(EMISSIONS TRADING: AN EXERCISE IN REFORMING POLLUTION POLICY)
TIETENBERG T. H.
RESOURCES FOR THE FUTURE REPORT, 1985, P188(29)
THE EPA EMISSIONS TRADING POLICIES ARE EVALUATED IN TERMS OF
COST-EFFECTIVENESS AND SPEED OF COMPLIANCE. PROPOSALS FOR
FURTHER REGULATORY REFORM ARE OUTLINED. WHILE THE TRADING POLICY
IS MORE COST-EFFECTIVE THAN COMMAND-AND-CONTROL POLICIES, IT IS NOT
FULLY COST-EFFECTIVE. RECOMMENDATIONS ARE SUMMARIZED FOR GAINING
CONTROL OVER EMISSION TIMING, REINTERPRETING NEW SOURCE PERFORMANCE
STANDARDS AND BEST AVAILABLE CONTROL TECHNOLOGIES, AND IMPROVING
THE AIR QUALITY ACCOUNTING SYSTEM. (ENVIROLINE)
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ENFORCEMENT
(EMISSIONS TRADING: AN EXERCISE IN REFORMING POLLUTION POLICY)
TIETENBERG T. H.
RESOURCES FOR THE FUTURE REPORT, 1985, P168(20)
EMISSIONS CONTROL ENFORCEMENT UNDER THE CLEAN AIR ACT OF 1977 IS
ADDRESSED. ENFORCEMENT PRACTICES UNDER THE COMMAND-AND-CONTROL
APPROACH HAVE RESULTED IN A HIGH PERCENTAGE OF NONCOMPLIANCE. THE
1977 AMENDMENTS ADDED A NEW NONCOMPLIANCE PENALTY TO THE
ENFORCEMENT ARSENAL, BASED LOOSELY ON THE ZERO NONCOMPLIANCE MODEL,
WHICH IS DESIGNED TO REDUCE THE PROCEDURAL BURDEN. THE EMISSIONS
TRADING PROGRAM CAN BE EXPECTED TO HAVE MIXED EFFECTS ON
ENFORCEMENT. BY LOWERING COMPLIANCE COSTS, IT REDUCES THE INCENTIVE
TO RELAX EMISSION STANDARDS AND TO VIEW NONCOMPLIANCE AS A LESS
EXPENSIVE ALTERNATIVE. HOWEVER, IT OPENS NEW POSSIBILITIES FOR
RELYING ON SOURCES WHICH ARE MORE DIFFICULT TO MONITOR.
(ENVIROLINE)
THE TEMPORAL DIMENSION
(EMISSIONS TRADING: AN EXERCISE IN REFORMING POLLUTION POLICY)
TIETENBERG T. H.
RESOURCES FOR THE FUTURE REPORT, 1985, P149<19)
MEETING SHORT-TERM EMISSION STANDARDS COST-EFFECTIVELY MEANS
CONTROLLING THE TIMING AS WELL AS THE QUANTITY OF EMISSIONS.
TRANSFERABLE PERMIT SYSTEMS CAN BE DEFINED TO MEET THESE STANDARDS
COST-EFFECTIVELY. PERIODIC AND EPISODIC PERMIT SYSTEMS ARE
DISCUSSED. ESTABLISHING A COMPLETE PERIODIC CONTROL PROGRAM COULD
INCREASE EMISSION LOADINGS SIGNIFICANTLY IN PERIODS OTHER THAN PEAK
PERIODS. THE ESTABLISHMENT OF A TRANSFERABLE EPISODE PERMIT SYSTEM
WOULD MAKE IT EASIER TO IDENTIFY THOSE SOURCES WHICH CAN UNDERTAKE
EMISSIONS REDUCTIONS RELATIVELY CHEAPLY ON SHORT NOTICE.
(ENVIROLINE)
MARKET POWER
(EMISSIONS TRADING: AN EXERCISE IN REFORMING POLLUTION POLICY)
TIETENBERG T. H.
RESOURCES FOR THE FUTURE REPORT, 1985, P125(24)
TWO TYPES OF MARKET POWER ARE POSSIBLE IN TRANSFERABLE EMISSION
PERMIT MARKETS. THE FIRST ARISES WHEN A PRICE-SETTING SOURCE OR A
COLLUSIVE COALITION OF SOURCES SEEKS TO MANIPULATE THE PRICE OF
PERMITS FOR THEIR OWN FINANCIAL GAIN. THE SECOND STEMS FROM THE
DESIRE OF ONE PREDATORY SOURCE OR A COALITION OF SOURCES TO USE THE
PERMIT MARKET AS A VEHICLE FOR REDUCING THE COMPETITION THEY FACE
IN PRODUCT OR FACTOR MARKETS. AUCTION, SUBSIDY, AND GRANDFATHERING
APPROACHES TO MARKET MANIPULATION ARE DISCUSSED. (ENVIROLINE)
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DISTRIBUTING THE FINANCIAL BURDEN
(EMISSIONS TRADING: AN EXERCISE IN REFORMING POLLUTION POLICY)
TIETENBERG T. H.
RESOURCES FOR THE FUTURE REPORT, 1985, P93(22)
THE COMMAND-AND-CONTROL APPROACH IMPOSES A LARGE AND UNEQUALLY
DISTRIBUTED FINANCIAL BURDEN ON COMPLYING SOURCES. BECAUSE THE
ALLOCATION OF THE BASELINE CONTROL RESPONSIBILITY CAN BE USED TO
AFFECT THE DISTRIBUTION OF COSTS WITHOUT INCREASING THE AMOUNT
SPENT ON CONTROL TECHNOLOGIES, EMISSION TRADING OFFERS THE
OPPORTUNITY TO ACHIEVE BOTH COST-EFFECTIVENESS AND FAIRNESS. THE
CONTROL AUTHORITY HAS MANY OPTIONS IN DISTRIBUTING THE FINANCIAL
BURDEN. IT CAN AUCTION OFF ALLOWABLE EMISSION OR CONCENTRATION
PERMITS OR ALLOCATE A BASELINE CONTROL RESPONSIBILITY ON THE
BASIS OF SOME INITIAL DISTRIBUTION RULE. (ENVIROLINE)
Emissions Trading and What It May Mean for Acid Deposition Control
Raufer, Roger K.; Feldman, Stephen L.
Public Utilities Fortnightly vl!4n4 PP: 17-25 Aug 16, 1984
One of the most controversial topics in the debate over acid
deposition control strategies for electric utilities has been the
potential use and benefits of emissions trading. The potential for
emissions trading by electric utilities is important for proposed
emission reductions and as a mechanism proposed to handle the
growth of new emission sources. The electric utility market has
already faced a number of impediments that have slowed the use of
emissions trading in the existing Environmental Protection Agency
program, such as: 1. regulatory constraints, 2. uncertainty, and 3.
transaction costs. Utility-specific impediments include: 1.
ratemaking, 2. construction planning times, and 3. enhanced
potential for future regulatory actions. The market impediments
have resulted in the hoarding of emission reduction credits.
Emissions trading in an acid deposition program could be minimized
by the proper emissions reduction allocation, but it may display
many of the characteristics of the existing emissions trading
program. The experiences of electric utilities in the Ohio River
Valley support this idea. (ABI/INFORM)
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Legal Issues Related to Creation, Banking and Use of Emission
Reduction Credits (ERCs).
Part I: The 'Taking1 Issue - Is Compensation Required if a Sta .e or
Local Government Confiscates or Reduces the Quantity of Banked ERCs
(Final rept.)
Tether, Ivan J.
ICF, Inc., Washington, DC.
Sponsor: Environmental Protection Agency, Washington, DC.
Report No.: EPA 230/04-82-001; NTIS:PB82-221854
(See also PB81-214249 and PB81-235046.)
May 82 23p
Emissions Trading, under the Clean Air Act, includes bubbles,
netting, emission offsets, emission reduction banking, and is the
subject of an EPA proposed Policy Statement (47 Fed. Reg. 15076,
Apr. 7, 1982). These alternatives involve the creation of surplus
reductions at certain stacks or vents and use of these reductions
to meet requirements applicable to other emission sources.
Emissions trades can provide more flexibility, and may therefore be
used to reduce control costs, encourage faster compliance and free
scarce capital for industrial revitalization. Where private parties
have banked surplus emission reductions for future use or sale,
states may determine that a portion of these reductions is required
for clean air purposes. This paper provides legal analysis of
the Constitutional issue of whether by 'taking' all or part of a
person's banked emission reduction credits a state becomes liable
to compensate that person. The paper concludes that the state would
not be liable in this circumstance, particularly if the state had
set out in advance, in its banking rule, the circumstances that
could give rise to such a taking and the way it would be done.
(NTIS)
Legal Issues Related to Creation/ Banking and Use of Emission
Reduction Credits (ERCs).
Part 2. The Public Trust Doctrine
Environmental Protection Agency, Washington, DC.
Report No.: EPA 230/02-84-004 NTIS:PB84-195460
(See also PB82-221854)
May 84 14p
This report presents an overview on which involves the creation
of surplus pollution reductions (Emission Reduction Credits) at
certain emission sources and use of these reductions to meet
requirements applicable to other emission sources. The public trust
doctrine holds that some public resources, notably land, are held
in trust by the state for the public. Insofar as an Emission
Reduction Credit (ERC) might be construed as a private right in a
public resource (air), the doctrine may be of concern to states
adopting an emissions trading program. At most, the public trust
doctrine is common law, and presumably a properly enacted state
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regulatory program (enacted under state and federal statute) would
preempt a common law doctrine. The only consistent reading of the
public trust doctrine is that the state must administer public
property in a way that ensures broad public use for all purposes.
An emissions trading program is consistent with this end,
allocating competing uses of a limited resource. An ERG program
does not conflict with the public trust doctrine, and the doctrine
should prove no obstacle to Emissions Trading. (NTIS)
On Marketable Air-Pollution Permits: The Case for a System of
Pollution Offsets
Krupnick, Alan J.; Dates, Wallace E.; Van De Verg, Eric
Jrnl of Environmental Economics & Mgmt v!0n3 PP: 233-247 Sep 1983
An examination of the properties of several alternative forms of
marketable air-pollution permit systems for the control of air
pollution leads to a proposal for a system of pollution offsets as
the most promising approach. Under this scheme, sources of
emissions are free to trade emissions permits subject to a
constraint of no violations of the predetermined air quality
standard at any given receptor point. The pollution-offset system
is shown to have the capacity to achieve the predetermined
standards of air quality at the minimum aggregate abatement cost,
but it still makes comparatively modest demands both on the
administering agency and on the pollution sources. Working through
its Emissions Trading Policy, the Environmental Protection Agency
(EPA) already has provided a framework for the introduction of such
a system. However, changes must be made in the Clean Air Act and
existing regulatory procedures before cost savings from a
market-oriented approach can be fully realized. (ABI/INFORM)
EMISSIONS TRADING IN THE UNITED STATES: AN OVERVIEW AND THE
TECHNICAL REQUIREMENTS
BRADY GORDON L.
CEQ, J ENV MANAGEMENT, JUL 83, V17, Nl, P63 (17)
EPA UNDER THE REAGAN ADMINISTRATION HAS INTRODUCED THE CONCEPT
OF THE ''EMISSIONS TRADING POLICY STATEMENT,'' WHICH ALLOWS STATES
TO ESTABLISH AN EMISSION TRADING SYSTEM BASED ON THE IDEA OF
MARKETABLE DISCHARGE PERMITS. THE STATEMENT DOES NOT FUNDAMENTALLY
ALTER THE EXISTING REGULATORY APPROACH AND DOES NOT ALLOW STATES TO
DEPART FROM THE CURRENT ADMINISTRATIVE PROCEDURES. THE
STATE-OF-THE-ART OF TECHNICAL COMPONENTS NECESSARY FOR IMPLEMENTING
THE STATEMENT IS DESCRIBED. (ENVIROLINE)
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A STEP FORWARD? AN ECONOMIC APPROACH IN AIR QUALITY MANAGEMENT
BRADY GORDON L.
CEQ, ENV POLICY & LAW, JAN 83, V10, Nl, P3 (9)
THE USE OF TRADING AND MARKET-BASED APPROACHES IN AIR QUALITY
MANAGEMENT IS CONSIDERED. TRADE RECOGNIZES THAT MUTUAL GAINS AND
PAYOFFS TO A PARTICULAR REGION MAY BE SECURED THROUGH COOPERATIVE
BEHAVIOR. TRADING CAN LEAD TO AN EQUILIBRIUM IN WHICH THE COSTS FOR
ALL ACTIVITIES IN THE AREA ARE EQUAL TO THE PRICE OF DISCHARGE
PERMITS. A FULL-SCALE MARKET IN AIR POLLUTION ENTITLEMENTS CAN SAVE
INDUSTRY UP TO 90% COMPARED WITH COMMAND AND CONTROL APPROACHES.
ASPECTS OF EPA'S EMISSION TRADING SYSTEM, ESPECIALLY ITS
COST-EFFECTIVENESS AND LONG-TERM VIABILITY, ARE DISCUSSED.
IMPLEMENTATION OF THE FOUR MAJOR PROVISIONS OF THE 1970 CLEAN AIR
ACT IS HIGHLIGHTED: NAT'L AMBIENT AIR QUALITY STANDARDS, NEW SOURCE
PERFORMANCE STANDARDS, STATE IMPLEMENTATION PLANS, AND EMISSION
STANDARDS FOR HAZARDOUS AIR POLLUTANTS. (ENVIROLINE)
Emissions Trading: An Overview of the EPA (Environmental Protection
Agency) Policy Statement
(Research rept.)
Brady, G. L. ; Morrison, R. E.
National Science Foundation, Washington, DC. Div. of Policy
Research and Analysis.
Report No.: NSF/PRA-82013; PRA/RR-82-2; NTIS:PB85-150316/XAB
26 May 82 39p
The Environmental Protection Agency's Emissions Trading
Statement is examined. The Statement consolidates the emission
reductions achieved and used through current administrative
procedures for the bubble, netting, offset, and banking programs
into a common currency: the Emission Reduction Credit (ERC). The
Statement provides guidelines for air quality management regions to
develop generic state implementation plan provisions governing
transactions in ERCs. The Statement invites firms to create
1 surplus'discharge reductions beyond current control requirements.
The incentive for participation is the opportunity to make a profit
by selling ERCs to other firms that face higher marginal emissions
control costs. The existing regulatory implementation incentive
structure for stationary source dischargers is described, and the
evolution of the Statement is traced. Issues that may limit the
cost-effectiveness of the ERC program are considered. (NTIS)
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Incentives for Technological Innovation in Air Pollution Reduction:
An ETIP Policy Research series, volume 9: internal Offsets and
Technological Innovation: Six Case Studies
Mogee, Mary Ellen
National Bureau of Standards, Washington, DC. Experimental
Technology Incentives Program.
Report No.: NBSIR-82-2475; NTIS:PB82-208372
(See also Volume 8, PB81-218273.)
Apr 82 73p
This report describes the experiences of six industrial firms
with the new Federal policy of internal offsets. Offsets are part
of a group of regulatory reforms initiated by the Environmental
Protection Agency and called by the generic title of 'emission
trading1. Offsets were introduced to allow continued economic
growth in nonattainment areas and to stimulate innovation in
pollution control and process technology by making it profitable
for firms to create more reductions than the law now requires. The
report discusses the problems of defining and measuring innovation
as well as presenting industrial firm perceptions of innovation
associated with offset cases. (NTIS)
Manual for a Prototype Emissions Banking and Trading Recordkeeping
System
(Final rept.)
Berg, Dennis
American Mangement Systems, Inc., Arlington, VA.
Sponsor: Environmental Protection Agency, Washington, DC.
Report No.: EPA230/04-82-002; NTIS:PB82-209610
Apr 82 69p
The manual describes a prototype recordkeeping system for use by
state and local agencies that adopt an emissions banking and
trading program. The manual is organized to demonstrate how the
prototype would be used to record information for various types of
emissions trades, and to produce various reports of use to program
managers, participating firms, and other interested organizations.
The documents comprising the prototype system are described and
examples are provided for tracking emission reduction credits
through: creation and deposit; sale or transfer; and withdrawal and
use. (NTIS)
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Tax Considerations Related to the Creation, Financing, Banking, Use
and Disposition of ERGS in Controlled Trading Approaches to Air
Pollution
(Final rept.)
Baker, E. P. ; Winslow, Peter H.
ICF, Inc., Washington, DC.
Sponsor: Environmental Protection Agency, Washington, DC.
Report No.: EPA 230/01-82-001; NTIS.-PB83-148361
(See also PB81-214249)
Jan 82 86p
Prepared in cooperation with Scribner, Hall,
Thornburg and Thompson, Washington, DC.
Emissions trading, under the Clean Air Act, includes bubbles,
netting, emission offsets, emission reduction banking, and is the
subject of an EPA proposed Policy Statement (47 Fed. Reg. 15076,
Apr. 7, 1982). These alternatives involve the creation of surplus
reductions at certain stacks or vents and use of these reductions
to meet requirements applicable to other emission sources.
Emissions trades can provide more flexibility, and may therefore be
used to reduce control costs, encourage faster compliance and free
scarce capital for industrial revitalization. This paper discusses
tax considerations regarding the currency of emissions trading, the
Emission Reduction Credit, or ERG. Major issues include: (1) tax
benefits available to. a firm creating an ERC, (2) financing issues,
(3) tax attributes of an ERC, and (4) ERC sales and option
transactions. Like most business and financial activity, ERC
transactions turn substantially on tax issues. The study includes
issues raised by the Economic Recovery Tax Act of 1981. (NTIS)
Emissions Trading: Technical/Scientific Requirements
Brady (Gordon L.), Washington, DC.
Sponsor: National Science Foundation, Washington, DC.
Report No.: NSF/PRA-82043; NTIS:PB83-166736
1982 197p
This study examines the institutional, scientific, and technical
issues in the Environmental Protection Agency regulatory reform
proposal for rulemaking entitled: 'Emissions Trading Policy
Statement: General Principles for the Creation, Banking, and Use of
Emission Reduction Credits. ' The existing regulatory implementation
incentive structure for stationary source dischargers is described.
Requirements for uniform technology standards are found to vary in
stringency according to whether the discharger is an existing
source or a modified source and according to the attainment status
of the region. Market-based approaches that may be used in air
quality management are considered, and the Emissions Trading Policy
Statement is presented as a logical extension of administrative
innovations already in limited use. The value of the pricing system
in air quality management is discussed. Simplification of the
Emissions Trading Policy Statement and abandonment of uniform
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technology standards are recommended. Reviewer comments and a
response from the principal investigator* are included in the
report. (NTIS)
Modified Fiscal Incentives in Environmental Policy
Blackman, Sue Anne Batey; Baumol, William J.
Land Economics v56n4 PP: 417-431 Nov 1980
Pigouvian effluent charges and markets in emissions rights, the
2 mainstays of economists' environmental proposals, have gained
little support among policy makers. The US Environmental Protection
Agency and other environmental authorities have introduced several
regulatory programs based on financial incentives which have
aroused minimal opposition. An analysis is presented of several new
programs and the degree to which they approximate measures that are
theoretically ideal. The emissions offset policy is examined
showing its close similarity to a market in pollution rights.
Despite their limitations, the policies described are a step in the
direction of increased efficiency in pollution control.
(ABI/INFORM)
D. BUBBLE POLICY
Emission Control Technologies and Emission. Factors for unpaved
Road Fugitive Emissions. (User's Guide)
Fitzpatrick, M.
JACA Corp., Fort Washington, PA.
Sponsor: Environmental Protection Agency, Cincinnati, OH. Center
for Environmental Research Information.
Report No.: EPA 625/5-87/022; NTIS:PB90-274101/XAB
Sep 87 56p
During the past decade, research has shown that particulate
emissions from open sources such as unpaved roads contribute
significantly to ambient particulate matter concentrations in many
areas. The current EPA emission trading policy, commonly called the
bubble policy, allows excessive emissions from one source to be
offset by improved control of another source within the same plant.
In implementing the bubble policy, some plants have agreed to
reduce fugitive dust emissions in lieu of tighter controls on
process emissions. The document has been prepared to assist control
agency personnel in evaluating unpaved road fugitive emissions
control plans and to assist industry personnel in the development
of effective control strategies for unpaved roads. The document
describes control techniques for reducing unpaved road emissions,
methods for quantifying or estimating emissions generation, and
provides data or estimating the efficiency of the performance of
various control technologies. Although fugitive particulate
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emissions can be reduced by reducing the extent of the source, the
document focuses on the use of 'add-on1 controls which do not
affect the size or throughput of the source. (NTIS)
An Optimization Approach to Environmental Policy Making: A Case
Study of Coal Liquefaction Process
Tayi, Giri Kumar; Rubin, Edward S.; Lincoln, David R.
Energy Systems & Policy v9n2 PP: 141-169 1985
Coal liquefaction plants are among the energy conservation
processes that may achieve environmental quality objectives in a
more cost-effective and environmentally acceptable manner via
innovative approaches to regulation permitting trade-offs among
multiple emission sources of a complex facility. "The issues implied
by this view of conservation and regulation are considered
quantitatively in the context of a ''bubble policy11 for meeting
sulfur dioxide emission limitations for a coal liquefaction
process. The analysis is carried out with a computerized simulation
model to compare the bubble concept with source-specific emission
standards. Application of the methodology to different scenarios
affirms that the bubble policy could result in lower production
costs while still meeting air quality requirements. Secondary
environmental impact to other media, such as water and land, could
also be minimized with the approach. The review of the methodology
addresses its general applicability and limitations. (ABI/INFORM)
A 'Bobbly' Win for EPA Policy
Anon
Chemical Week Vol.135, No.l, July 4, 1984, P. 14.
The United States Supreme Court upheld the Environmental
Protection Agency's bubble policy for industrial air pollution
control. The policy allows a plant to treat all air pollution
sources as if one source. This permits plants to implement fewer
controls on higher emission sources. The Natural Resources Defense
Council (NRDC) opposes the policy as a loophole against the Clean
Air Act. (MANAGEMENT CONTENTS)
A Plan that Bends the Clean-Air Rules
Anon
Business Week, No.2777, Feb. 14, 1983, P. 48H.
The Environmental Protection Agency (EPA) is introducing a new
policy it hopes will help companies reduce antipollution costs. The
so-called bubble policy would permit some plants to exceed
pollution limits if others would cut below required levels. The
savings companies would realize could then be used to acquire more
advanced antipoluution technology. (MANAGEMENT CONTENTS)
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How to Limit the Rising Costs of Stricter Regulation
Anonymous
Chemical Week v!28n3 PP: 36-40 Jan 21, 1981
Chances are slim that the Reagan Administration will eliminate
the governmental rules that cost businesses millions of dollars. In
the effort by the business community to contain these costs, the
discipline of regulation management will play an increasingly
important role for chemical companies. Under the new
Administration, forecasting regulations, monitoring compliance, and
negotiating with regulators may become even more important than in
the past. Balance sheet considerations are motivating firms to
invest in tools for managing regulation, such as hiring of experts
and implementing specialized monitoring devices. Monsanto is
installing a computer system to organize issues such as employee
health and chemical hazards, and its Environmental Policy Staff
tries to forecast what new regulations will be promulgated and
when. Cost control efforts of companies concentrate on the
Environmental Protection Agency's (EPA) ''bubble policy'', whereby
a firm can deal with total emissions of a locality rather than with
individual sources. Future innovative approaches may also be needed
to deal with regulations cost effectively. (ABI/INFORM)
Will John Barker's Bubble Burst?
Johnson, Greg
Industry Week v206n7 PP: 63-65 Sep 29, 1980
Armco, Inc., Middletown, Ohio, is trying out a simple and
logical plan that could save industry millions in the war on air
pollution. John E. Barker', corporate director of environmental
engineering, is trying to convince the Environmental Protection
Agency (EPA) that his so-called ''bubble-policy11 is as effective
but far less expensive than the traditional air pollution control
program mandated by EPA to control particulate emissions at Armco' s
Middletown steelworks in southern Ohio. If Barker is successful,
Armco will spend only $4 to $5 million, compared to spendiing an
additional $15 million if the company is forced to install EPA
controls. The bubble plan is based on a '"trade-off'' of process
emissions control for control of windblown fugitives. It is
expected that the bubble will cut particulate emissions 4,000 tons
per year, 6 times as much as traditional process controls Any
pollutant would have to exit through a single smokestack on the top
of an imaginary bubble that encompasses the entire Middletown
Works, in contrast with the individual stack and process control
stack which EPA has traditionally relied upon. (ABI/INFORM)
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Bubbles and Efficiency: Cleaner Air at Lower Cost
Maloney, M. T.; Yandle, Bruce
Regulation v4n3 PP: 49-52 May/Jun 1980
In December 1979, one year after endorsing an experimental
1'bubble11 policy, the Environmental Protection Agency (EPA)
announced 2 new options for reducing air pollution. This new cost-
effectiveness or ' 'bubble' ' approach is simple enough to understand
when applied to a single plant: if the cost of removing an
additional unit of a given pollutant is higher for some sources
than for others, the manager can reduce the plant's total cost of
achieving the desired air quality by shifting emission control from
the higher-cost to the lower-cost sources until the point is
reached when the incremental cost becomes the same at each
source.Studies have indicated that the application of the regional
bubble concept can be very cost-effective in terms of emission
control costs. Results showed that the regional bubble applied to
52 DuPont plants yielded significantly more clean air than source
standards, while generating considerable cost savings. Even though
these results appear to be positive, there are still some
unanswered questions concerning applicability, costs, and net
social benefits. (ABI/INFORM)
Steel's Bid for Softer Standards
Anonymous
Business Week n2636(Industrial Edition) PP: 1220-122P May 12, 1980
The Environmental Protection Agency (EPA) is considering
renegotiating 2 large consent agreements signed with US Steel
Corporation. Signing of the 2 landmark agreements last year was
seen as a victory for the EPA. One major agreement for
renegotiation is the extensive unemployment resulting from plant
closings which were partly due to the high cost of meeting
environmental regulations. The current agreements require the steel
companies to be in compliance with air quality standards by
December 31, 1982, the nationwide compliance deadline. The proposed
delays by the steel companies could jeopardize the 1982 deadline or
eliminate it.US Steel Corporation is considering installing a new
basic oxygen furnace and wants a delay to decide. US Steel is also
seeking credits against pollution in other plants as a result of
reducing emissions with the new furnaces. US Steel is also trying
to get changes in the Pennsylvania laws which would allow the
bubble policy of extending pollution credits over an area. The EPA
is concerned with the precedent that would be set if it made
changes in the agreement. (ABI/INFORM)
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Industry Ready to Test EPA ''Bubble1'
Anonymous
Industry Week v204n3 PP: 70,75 Feb. 4, 1980
Since the Environmental Protection Agency (EPA) announced its
1'bubble policy,'' a number of corporations have stepped-up work on
proposals to determine if the policy is a cost effective air
pollution control mechanism as its proponents claim. The concept is
based on an imaginary bubble over an industrial plant with a single
imaginary smokestack for all plant emissions. Industry has been
required in the past to control airborne emissions from individual
smokestacks scattered across a plant site. The bubble allows
engineers to concentrate on least-cost approaches so long as the
total pollution is within permissible limits.EPA predicts that
steel producers will save 5-10% on particulate control, utilities
will trim 15% from sulfur dioxide control costs, and chemical
producers could save as much as 60% on hydrocarbon control. Armco,
Inc., is implementing a bubble strategy at its Middletown, Ohio,
steelmaking facility. It plans to limit wind-blown or open-dust
emissions from roads and open lands rather than install more
expensive controls on individual steelmaking processes. Minnesota
Mining & Manufacturing Co. (3M) believes the bubble is applicable
to processes using hydrocarbons. (ABI/INFORM)
Buying and Selling for Cleaner Air?
Yandle, Bruce
Business v29n2 PP: 33-36 March/April 1979
In July, 1978, the Environmental Defense Fund (EDF) petitioned
the U.S. Environmental Protection Agency (EPA) to consider the use
of an auction system, along with various other marketing
approaches, for allocating the use of air quality in the Ohio River
Valley region of the U.S. Following the mandate of the Clean Air
Act, the EPA required each state to have an approved plan for
implementing the provisions of the Act. The EPA then developed
emission guidelines and standards for the various pollutants
defined in the national standards. The regulations were very
uniform and did not take into account the diversities of regions,
thus causing difficulties for firms and industries. In
nonattainment areas, environmentalists and industrialists learned
that something had to be traded off in order to achieve more of
something else, bringing EPA to announce its "offset policy." This
policy means that an industry can expand if the demand for its
product is sufficient to pay the cost of emission offsets.
(ABI/INFORM)
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E. INTERNATIONAL
Taxation: Uncertain Incentives
Crowe, Ian
CA Magazine (Canada) v!24n3 PP: 51-52 Mar 1991
Social policy has always had a significant influence on the
formulation of income tax law. Thus, it is surprising that, in
these environmentally sensitive times, Canada has only a few tax
incentives designed to encourage environmental protection. Two of
these are by way of accelerated capital cost allowance. Classes 24
and 27 essentially provide for a 3-year write-off of the cost of
pollution-control equipment. Class 34 also provides for a 3-year
write-off and includes equipment designed to encourage energy
conservation and use of alternative energy sources. Tax-motivated
investments and expenditures have a history of abuse, and no doubt
the government will be cautious about encouraging expenditures in
this area. Nevertheless, these incentives do work, so it is
inevitable that pressure will build for government to provide
incentives to encourage the collective effort necessary to solve
environmental problems. (ABI/INFORM)
GREEN DIPLOMACY: A COOL LOOK AT HOT AIR
ECONOMIST, JUN 16, 90, V315, N7659, P17(3)
SINCE THE MONTREAL PROTOCOL OF 1987 DICTATED CURBS ON THE USE OF
CFC'S, INTERNATIONAL DIPLOMACY HAS HAD TO ADDRESS ENVIRONMENTAL
ISSUES AT EVERY LEVEL OF INTERACTION. MOST "GREEN ISSUES" EXTEND
BEYOND NATIONAL BOUNDARIES, AND BECOME THE SUBJECT OF INTERNATIONAL
DEBATE. AN ANALYSIS OF THE MONTREAL PROTOCOL REVEALS THE EXTENT
AND ECONOMIC IMPLICATIONS OF SUCH INTERNATIONAL TREATIES.
(ENVIROLINE)
The "Greening" of Europe
Hawk, Ruth
Europe n300 PP: 6-8 Oct 1990
The European Community (EC) governments increasingly favor green
taxes as a means to harmonize their differing directives into a
system of stricter pollution control. Taxes and other economic
instruments are incentives to encourage consumers and industry to
behave in ways that do little harm to the environment. For example,
in May 1990, France became the first country to put in place taxes
to control pollution. France's decree allows substantially higher
taxes to be put on air and water pollution and on household and
industrial waste. The tax revenues will be used to fund the
development of new technologies for reducing and measuring
pollution levels. West Germany has called for a world agreement on
environmental issues, particularly carbon dioxide emission
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reductions. The agreement is to be prepared for the June 1992
Conference on Environment and Development. The European Environment
Agency, now in the formative stage, is expected to publish a code
of ethics to be met by Western companies building factories in
Eastern Europe to ensure that the less stringent environmental laws
in these countries are not exploited. (ABI/INFORM)
CAR EMISSIONS IN THE FIELD
RIJKEBOER R. C. (NETHERLANDS ORG APPLIED SCIENTIFIC RESEARCH,
DELFT) AND ; ZWALVE W. J. (NETHERLANDS MINISTRY PUB HOUSING PHYS
PLANNING & ENV PROTECTION),
SCIENCE OF THE TOTAL ENV, APR 90, V93, P159(8)
A FIVE-YEAR PROGRAM WAS LAUNCHED IN THE NETHERLANDS TO PERFORM
IN-USE COMPLIANCE TESTS ON VEHICLES CERTIFIED UNDER THE
REQUIREMENTS OF THE EEC TAX INCENTIVE SCHEME FOR CONTROLLING
EXHAUST EMISSIONS. MEASUREMENTS HAVE BEEN MADE ON ABOUT 350
VEHICLES OF 68 VEHICLE TYPES TO DATE. THE VEHICLES ARE TESTED
BEFORE AND AFTER TUNING OVER URBAN AND RURAL DRIVING CYCLES.
AVERAGE EMISSIONS OF CARBON MONOXIDE, HYDROCARBONS, AND NITROGEN
OXIDES ARE REPORTED. TUNING PROTOCOLS SIGNIFICANTLY REDUCED CO AND
HYDROCARBON EMISSIONS. WHEN TUNED, MOST VEHICLES WERE FOUND TO
COMPLY WITH THE EMISSION STANDARDS. (ENVIROLINE)
An International Tax on Pollution and Natural Resource Depletion
Sterner, Thomas
Energy Policy (UK) v!8n3 PP: 300-302 Apr 1990
During 1989, the world witnessed a surge in top-level political
concern for environmental problems, as seen in major "green"
speeches from such politicians as Thatcher, Gorbachev, and Bush
advocating the strengthening of international environmental
cooperation. However, when it comes to actual implementation,
policies adopted are comparatively weak, as illustrated by
insufficient support for the United Nations Environment Programme,
which still carries a vast responsibility and workload with a
completely undersized budget and staff. To resolve these global
problems, global institutions and policy instruments must be
introduced. An international tax based on pollution and natural
resource depletion is proposed. Such a tax would not only finance
urgent environmental work, but would also be a valuable instrument
of environmental policy. Also, a global tax on fossil energy is
proposed. (ABI/INFORM)
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A COMPARISON OP NEW ECONOMIC METHODS IN USSR ENVIRONMENTAL POLICY
WITH WESTERN APPROACHES
EBERHARDT ALFRED UNEP, NAIROBI, KENYA
ENV MANAGEMENT, MAR-APR 90, V14, N2, P151(10)
COMPARISON OF THE EXPERIENCES OF SEVERAL DECADES OF
ENVIRONMENTAL POLICY IN CENTRALLY PLANNED ECONOMIES, REPRESENTED BY
THE USSR, AND IN MARKET ECONOMIES EXEMPLIFIED BY THE US AND WEST
GERMANY, DEMONSTRATES THE SIMILARITIES BETWEEN THEM IN SPITE OF THE
DIFFERENCES IN POLITICAL AND ECONOMIC STRUCTURE. ONE OBVIOUS
SIMILARITY IS SEEN IN THE FACT THAT ENVIRONMENTAL MANAGEMENT IN
BOTH THE EAST AND WEST EMERGES AS A REGULATORY "COMMAND AND
CONTROL" APPROACH, WHICH WAS LATER SUPPLEMENTED BY ECONOMIC
INCENTIVES. THE ECONOMIC METHODS INTRODUCED IN THE 1988 USSR
RESOLUTION "ON THE RADICAL TRANSFORMATION OF THE SYSTEM OF NATURAL
CONSERVATION" INCLUDE CHARGES FOR THE USE OF NATURAL RESOURCES AND
THE EMISSION OF POLLUTANTS. EXPERIENCES WITH THIS APPROACH WILL BE
OF INTEREST TO WESTERN NATIONS, WHILE LIABILITY REGULATIONS OF THE
US CAN BE USED TO DESIGN PROVISIONS TO IMPLEMENT THE USSR
RESOLUTION. RECENT POLITICAL DEVELOPMENTS, INCLUDING A NUMBER OF
BILATERAL TREATIES, HAVE DEMONSTRATED THE RELEVANCE OF AN EAST-WEST
EXCHANGE OF EXPERIENCE IN ENVIRONMENTAL MANAGEMENT. (ENVIROLINE)
Green Taxes: Where There's Muck There's Brass
Anonymous
Economist (UK) v314n7646 PP: 46-47 Mar 17, 1990
When the Organization for Economic Cooperation & Development
(OECD) reviewed the economic measures for environmental protection
that countries had in place by mid-1987, it found that most had
been introduced to raise the money to pay for regulation. In the
past couple of years, however, governments have become more
interested in changing behavior - the encouragement of recycling,
for instance. The OECD is currently working on guidelines for green
taxation. The guidelines are to be published in summer 1990 and
given to OECD environment ministers when they meet in January 1991.
The measures being tried in Europe generally fall into one of 2
categories: 1. taxes or charges, or 2. refundable deposits. Denmark
has an elaborate set of green imposts, including a
chlorofluorocarbon tax, a refundable deposit on drink containers,
and a charge on pesticides in small containers. Germany plans to
change the basis for automobile tax from engine size to exhaust
fumes and noise. Ireland has announced a ban on the sale of soft
coal in central Dublin, and in Belgium, proposals to tax waste
water and solid waste are being considered. (ABI/INFORM)
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Economic instruments for environmental regulation
Tietenberg, T. H.
Oxford R Econ Policy 6:17-33 Spring '90
Experience with emissions trading in the US and emission charges
in Europe. (PAIS)
Britain: A Greener Budget
Anonymous
Economist (UK) v314n7639 PP: 61-63 Jan 27, 1990
The UK's Institute for Fiscal Studies has conducted a study to
see how environmental (green) taxes might work. Ways to apply green
taxes to transport include: 1. widening the gap between leaded and
lead-free gasoline, 2. using a tax on new automobiles or a vehicle
excise duty on current cars to encourage use of catalytic
converters, and 3. raising the gasoline duty to reduce fuel
consumption. A tax on carbon dioxide production could encourage a
shift to low-carbon or no-carbon fuels, but if the UK introduced a
carbon tax unilaterally, the structure of industrial production
would alter. A value-added tax on domestic gas and electricity is
another option. Green taxes may be more appropriate for encouraging
energy conservation than for preventing other kinds of pollution,
such as indirect pollution. Green taxes need to be imposed at high
levels to have much environmental effect, but they do offer
governments a new source of cash. (ABI/INFORM)
A GREENER BUDGET
ECONOMIST, JAN 27, 90, V314, N7639, P61(3)
THE INST FOR FISCAL STUDIES, UK, HAS STUDIED THE FEASIBILITY OF
TAXES ON ROAD TRANSPORT, FOSSIL FUELS, FERTILIZERS, AND DISCHARGES
OF INDUSTRIAL EFFLUENTS INTO RIVERS. THESE "GREEN TAXES" COULD BE
AN EFFICIENT WAY FOR THE UK GOVERNMENT TO RAISE REVENUE WHILE
HELPING TO CLEAN UP THE ENVIRONMENT. THE PROS AND CONS OF TAXES ON
ROAD USE, CARBON DIOXIDE EMISSIONS, AND CHEMICAL CONTAMINATION OF
SOIL AND WATER ARE DISCUSSED IN DETAIL. HOWEVER, THESE TAXES MAY
PROVE TO BE A DISAPPOINTMENT TO GOVERNMENTS ANXIOUS TO CLEAN UP THE
ENVIRONMENT. THEY OFTEN NEED TO BE IMPOSED AT HIGH LEVELS TO HAVE
MUCH EFFECT. BUT AS FAR AS REVENUES, GOVERNMENTS SHOULD BE
DELIGHTED; THEY ARE OFTEN A BETTER ALTERNATIVE TO MORE BUREAUCRACY
AND MORE PUBLIC SPENDING ON REGULATION. (ENVIROLINE)
Greening Europe: The Freedom to Be Cleaner than the Rest
Anonymous
Economist (UK) v313n7624 PP: 21-24 Oct 14, 1989
The European Community (EC) is trying to develop rules that allow
countries at different stages of economic development to pursue
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national environmental policies that do not hinder free trade. Long
before it had legal authority to do so, the EC commission had been
trying to get the EC countries to adopt common environmental
standards. As amended by the Single European Act, the EC treaties
allow one country to impose higher environmental standards than
others, but only if it does not create an open or disguised
barrier to intra-EC trade. Some of the environmental consequences
of 1992 will arise not from the removal of barriers but from the
lower prices and faster growth that will occur. The conclusion of
a study by the EC probably will be that 1992 will hurt the
environment if EC countries do not take measures to steer the new
growth into wholesome channels. (ABI/INFORM)
The economic approach to the environment: economic instruments
—charges tax differentiation or "emissions trading"
—provide incentives to reduce environmental damage
Barde, Jean-Philippe
OECD (Org Econ Coop and Development) Observer 158:13-15 Je/Jl '89
Role in environmental policy; OECD countries. (PAIS)
Hazardous waste management: a West German approach
Linnerooth, Joanne and Allen V. Kneese
Resources p 7-10 Summer '89
Approach using both economic incentives and regulatory control;
Bavaria, Germany. (PAIS)
And Now, the Greening of Europe
Maremont, Mark
Business Week n3104 (Industrial/Technology Edition) PP: 98D-L May 8,
1989
The environment, largely ignored by Europeans in the past, has
become a popular topic. Environmental group Greenpeace
International reports that its list of European members has grown
by 50% in the past 18 months. Sensing the environmental concerns,
major political parties are trying to appropriate the issue. The
UK's prime minister, Margaret Thatcher, known for opposition to
almost anything that may harm British industry, is now alluding to
a pro-environment sentiment. Industrial catostrophes and widespread
worries about the ozone layer are contributing to the new concern
among Europeans. Germany is at the forefront of environmental
concern, while the Mediterranean nations lag behind. The European
Community is assuming a higher profile on environmental affairs as
1992 approaches. In November 1988, European automobile companies
and governments agreed on a country-by-country phase-in of tougher
exhaust standards by 1993. (ABI/INFORM)
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A SYSTEMS APPROACH TO A TECHNOLOGY-BASED RESPONSE TO THE GREENHOUSE
GAS ISSUE
HAMILTON L. D. BNL, UPTON, NY,
OECD/IEA ENERGY TECHNOLOGIES FOR REDUCING EMISSIONS OF GREENHOUSE
GASES SYM, PARIS, FRANCE, APR 12-14, 89, VI, P207(32)
USING A SYSTEMS APPROACH TO A TECHNOLOGY-BASED RESPONSE: TO THE
GREENHOUSE-GAS PROBLEM, TECHNOLOGIES ARE EVALUATED WITHIN THE
CONTEXT OF THE ENERGY, ECONOMIC, AND ENVIRONMENTAL SYSTEMS OF WHICH
THEY ARE AN INGREDIENT. THE SYSTEMS APPROACH THAT HAS EVOLVED TO
ADDRESS THE ACID-RAIN PROBLEM IN EUROPE EXEMPLIFIES THIS PROCESS.
AN INTERNATIONAL EFFORT IS PROPOSED TO EXTEND OR DEVELOP NATIONAL
SYSTEMS MODELS OF ENERGY AND ENERGY-RELATED EMISSIONS OF GREENHOUSE
GASES FOR INDUSTRIAL NATIONS. GUIDELINES FOR ASSESSING EMISSIONS
TRADEOFFS AND GENERATING APPLICABLE TECHNOLOGY DATABASES ARE
PRESENTED. (ENVIROLINE)
Environmental Management and Economic Development
Schramm, G. ; Warford, J. J.
International Bank for Reconstruction and Development, Washington,
DC.
Report No. ISBN-0-8013-3904-1 c 1989 220 p; NTIS:PB89-217210/XAB
Environmental management and economic policy in developing
countries; Environmental and natural resource accounting;
Marginal opportunity cost as a planning concept in natural resource
management; The environmental basis of sustainable development;
Economic incentives for sustainable production; Deforestation in
Brazil's Amazon Region: magnitude, rate, and causes; An economic
justification for rural afforestation: the case of Ethiopia;
Managing the supply of and demand for fuelwood in Africa; Economic
aspects of afforestation and soil conservation projects;
Multilevel resource analysis and management: the case of
watersheds. (NTIS)
HOW TO PAY FOR CONSERVING BIOLOGICAL DIVERSITY
MCNEELY JEFFREY A. IUCN, SWITZERLAND
AMBIO, 1989, V18, N6, P308(6)
GOVERNMENTS ARE HAVING DIFFICULTY FINDING SUFFICIENT FINANCIAL
RESOURCES FOR ADDRESSING THE PROBLEMS OF BIODIVERSITY CONSERVATION
IN A WAY THAT IS COMMENSURATE WITH THE NEEDS OF SOCIETY. FUNDING
MECHANISMS USEFUL PRIMARILY AT THE NATIONAL AND LOCAL LEVELS ARE
IDENTIFIED. RESOURCE MANAGEMENT AGENCIES CAN CHARGE ENTRY FEES TO
NATIONAL PARKS, CHARGE FOR ECOLOGICAL SERVICES PROVIDED BY
PROTECTED AREAS AND FORESTS, AND COLLECT SPECIAL TAXES ON TIMBER
EXTRACTION, WOOD TRADING, AND TRADE IN WILDLIFE AND WILDLIFE
PROJECTS. MECHANISMS USEFUL PRIMARILY AT THE INTERNATIONAL LEVEL
INCLUDE EXPLOITATION OF INTERNATIONAL CONVENTIONS FOR PROVIDING
FINANCIAL SUPPORT, SEEKING DIRECT SUPPORT FROM INTERNATIONAL
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CONSERVATION ORGANIZATIONS, AND SWAPPING DEBT FOR NATURE
CONSERVATION. (ENVIROLINE)
Public-private partnership salvages recyclables in Sweden
Pollock, E.L.
WASTE AGE VOL. 18, NO. 1, p. 78+, Publ.Yr: 1987
One of the world's oldest refuse companies in now in the sixth
year of a successful collection and recycling partnership with a
consortium of nine municipal entities in Sweden. (POLLUTION
ABSTRACTS)
III. APPLICATIONS OF ECONOMIC INCENTIVES
A. ACID RAIN
Acid Rain Control and Public Utility Regulation
Trisko, Eugene M.; Wayland, Robert E.
Public Utilities Fortnightly vl!4n5 PP: 15-22 Aug 30, 1984
In view of the probable costs to electric utilities of
compliance with pending federal acid deposition control
legislation, state regulatory agencies with rate and other
jurisdiction over utilities would be wise to anticipate and start
planning for that contingency. Timely development of policy
positions on control cost recovery and other consequences of
federally enacted requirements would diminish many uncertainties
associated with the control effort. The current legislative
proposals would have implications for several acid rain control and
public utility regulation areas, including: 1. fuel procurement
oversight, 2. fuel supply contract practices, 3. fuel switching and
power plant performance, 4.' scrubber retrofit and plant life
extension programs, 5. emerging control technology, 6. emission
trading potential, and 7. rate level and structure. The costs and
administrative complexities of acid rain control could be reduced
by state and regional cooperation. (ABI/INFORM)
Acid Rain Reduction Credits
Tietenberg, Thomas H.
Challenge v32n2 PP: 25-29 Mar/Apr 1989
Attempts by Congress to legislate an effective policy response
to the problem of acid rain have failed. There are several
obstacles to adopting more stringent controls on older sources of
acid rain. An innovative regulatory approach to overcoming these
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obstacles is the acid rain reduction credit (ARRC) program, which
is patterned after the Environmental Protection Agency's successful
emissions trading program. This economic incentive approach offers
the possibility for achieving emission reduction targets at a lower
cost, while dealing realistically with electrical generating units
that are about to be replaced or are in a financially precarious
position. Any sources of emissions contributing to acid rain could
have excess reductions, or credits, which could be transferred to
other plants. This plan offers: l. lower costs, 2. incentives for
reduced emissions, and 3. greater flexibility. (ABI/INFORM)
B. AGRICULTURE
NATIONAL AGROENVIRONMENTAL INCENTIVE PROGRAMS: THE U.S. EXPERIENCE
REICHELDERFER KATHERINE H. USDA, WASHINGTON, DC.
AGRICULTURE & WATER QUALITY: INTERNATIONAL PERSPECTIVES (LYNNE
RIENNER PUBLISHERS), 1990, P131(15)
INCENTIVE PROGRAMS BASED ON VOLUNTARY PARTICIPATION HAVE BEEN A
HALLMARK OF US AGRICULTURAL POLICY. NEGATIVE INCENTIVE PROGRAMS TO
CONTROL POLLUTION HAVE BEEN LESS COMMON, BUT ARE GAINING
ACCEPTANCE. MAJOR AGRICULTURAL INCENTIVE PROGRAMS SINCE 1930 ARE
REVIEWED AND ANALYZED FOR FACTORS DETERMINING SUCCESS OR FAILURE.
THESE PROGRAMS INCLUDE DIRECT PAYMENT FOR APPROPRIATE PRACTICES,
DISINCENTIVES FOR ENVIRONMENTALLY INAPPROPRIATE PRACTICES, AND
TECHNICAL ASSISTANCE TO ENCOURAGE CERTAIN TYPES OF FARMING. [Book
chapter] (ENVIROLINE)
CONTROL OP AGRICULTURAL POLLUTION BY REGULATION
ANDERSON GLENN D. ENV LAW INST, WASHINGTON, DC,; DE BOSSU ANN E.;
KUCH PETER J.
AGRICULTURE & WATER QUALITY: INTERNATIONAL PERSPECTIVES (LYNNE
RIENNER PUBLISHERS), 1990, P63(39)
AGRICULTURAL POLLUTION HAS BEEN SUBJECT TO RELATIVELY LITTLE
REGULATION IN THE US EVEN THOUGH VOLUNTARY CONTROL OF
NONPOINT-SOURCE POLLUTION HAS PROVEN INADEQUATE. THE ECONOMIC BASIS
OF REGULATORY CONTROL IS ANALYZED, AND REGULATORY POLICIES ARE
COMPARED WITH INCENTIVE POLICIES. REGULATORY APPROACHES IN THE US
AND EUROPE ARE SURVEYED AND COMPARED WITH INCENTIVE PROGRAMS.
[Book Chapter] (ENVIROLINE)
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C. AIR POLLUTION
Saving the climate saves money: the threat of global warming
Flavin, Christopher and Nicholas Lenssen.
World Watch 3:26-34 N/D '90
Suggests various economic incentives for reducing air pollution.
(PAIS)
Clean Air and Natural Gas Vehicles
Tilley, C. Ronald
Public Utilities Fortnightly v!26n6 PP: 31,34 Sep 13, 1990
The US is losing the fight against air pollution. Since 2/3 of
the carbon monoxide that contaminates the air comes from motor
vehicles, cleaner burning fuels are imperative. A national market
for natural gas vehicles (NGV) would improve air quality and help
reduce dependence on foreign oil. It would be appropriate for the
federal government to set an example by making 10% of its
nonmilitary vehicles NGVs. Regulatory commissions can expedite the
sale of NGVs by removing regulatory restraints on the sale of
natural gas. To assist in environmental improvements, regulatory
programs must: 1. permit the recovery of the reasonable costs of
establishing fuel facilities for fleets and fleet vehicle
conversions or privately owned NGVs, 2. provide regulatory support
or financial incentives to private fleet owners who use NGVs, and
3. provide special, clean-fuel tax incentives. (ABI/INFORM)
Study of Economic Incentives to Control Photochemically Reactive
Organic Compound Emissions from Consumer Products
(Final rept)
Gibbs, M. J. ; Tlaiye, L. ; Letourneau, M.
ICF Consulting Associates, Inc., Universal City, CA.
Sponsor: California State Air Resources Board, Sacramento.
Report No.: ARB-R-90/447; NTIS:PB91-129346/XAB
Aug 90 231p
The study investigates and evaluates two economic incentive
systems (emissions fees and guotas) as potential control strategies
for reducing emissions of photochemically reactive organic
compounds (PROCs) found in consumer products. Hair sprays and spray
paints were examined in detail. Current emissions in California,
technical options for reducing emissions and economic incentives
needed to promote the implementation of the technical options were
identified. Options for designing and implementing the economic
incentives were discussed. The study concludes that economic
incentives can be used to reduce PROC emissions from hair spray and
spray paint products. Because cost is the principal barrier
preventing the wide-spread use of most of the PROC-reducing
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formulations and packaging systems, an incentive fee or quota is
appropriate for promoting the use of the desired formulations and
packaging systems. The effectiveness of economic incentives is
reduced when non-cost barriers, such as inadequate product
performance information, prevent the use of emissions-reducing
formulations and packaging. In these situations, consumer awareness
programs or other steps in conjunction with economic incentives
should be considered. It is also recommended that economic
incentives be implemented for a group of products, as opposed to
for a single product. (NTIS)
Empirical properties of economic incentives and command-and-control
regulations for air pollution control
(economic and non-economic approaches to controlling air pollution)
Kolstad, Charles D.
Land Economics v62 Aug, 1986, p250(19)
The application of a spatial, stochastic model of emission
regulation design to the southwestern 'Four Corners' states (Utah,
Arizona, Colorado, and New Mexico) examines the efficacy of
command-and-control regulations versus economic incentives in
minimizing air pollution. Moreover, the regional case study of air
pollution regulations and alternatives addresses the issues of: (1)
price controls versus quantity controls, within the area of
economic incentives; and (2) the spatial resolution of economic
incentives. The objective of this analysis is not to encourage air
pollution regulation reform, but to provide insight as to air
pollution regulatory alternatives. Efficiencies of various forms of
pollution control regulation are appraised according to types of
environmental damage ("linear damage," "kinked damage,"
"superlinear damage," and "slightly superlinear damage").
(MANAGEMENT CONTENTS)
D. HAZARDOUS AND SOLID WASTE
State Policies on Waste-to-Energy Facilities
Migden, Janine L.
Public Utilities Fortnightly v!26n6 PP: 26-30 Sep 13, 1990
As more attention is focused on the crisis of disposing of all
the solid waste the US produces, incinerators coupled with energy
production emerges as one of the viable alternatives. Some
environmental advantages of incineration are that air emissions are
not latent with sulfur dioxide or nitrogen oxides and that a
renewable resource is replacing a fossil fuel, a nonrenewable
resource, thus promoting conservation. Economic benefits of waste-
to-energy (WTE) include the creation of jobs, stabilization of
tipping fees for solid waste disposal, and the generation of
reliable, long-term, low-cost electricity. Many states have
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recognized the special attributes of WTE and have enacted policies
that provide additional rate incentives. However, these incentives
are not the only mechanisms used by commissions to encourage the
development of WTE. Maine and a number of other states have
implemented competitive bidding options. The most receptive state
toward cogeneration and small power production is probably
California. For WTE to reach its full potential, it is imperative
that state regulation decompartmentalize. (ABI/INFORM)
Recycling: The Newest Wrinkle in Waste Management's Bag
Bremner, Brian
Business Week n3148 (Industrial/Technology Edition) PP: 48-49 Mar
5, 1990
Waste Management Inc. (Oak Brook, Illinois) has 7 hazardous
waste landfills and 5 incinerators that handle millions of tons of
waste a year. Waste Management's Recycle America subsidiary has
become the US' largest recycler. Waste Management is not just
looking to placate the environmental groups that have criticized
the firm in the past; recycling is turning into a profitable
business. Also, it conserves precious landfill space. Underscoring
its interest in recycling, Waste Management recently signed joint
ventures with papermaker Jefferson Smurfit Corp. and Du Pont Co. to
recycle paper and plastic. The recycling push complements Waste
Management's strategy of offering curbside-to-landfill garbage
services to cities. Waste Management is not likely to make much
money in recycling anytime soon, and the company faces stiff
competition. Congress is considering a package of tax incentives
that are designed to spur use of recycled materials.
(ABI/INFORM)
What Have You Done for Me Tomorrow?
Cook, James
Forbes v!45n4 PP: 88,92 Feb 19, 1990
Safety-Kleen Corp. (Elgin, Illinois) services 180,000 service
station and automobile repair shop customers through a nationwide
network of 162 branches and 1,100 salespeople. In the mid-1980s,
Safety-Kleen began recycling fluids of all kinds, beginning with
small-quantity industrial fluids and moving up to large-quantity
truck and tank load lots. In 1989, Safety-Kleen earned an
impressive $46 million on $480 million in sales for a 20% return on
equity. While this was enough to hold the company's stock at around
30 per share, up from a low of 13 in 1982, it is well below the
1987 high of 39 1/2. Safety-Kleen would like to see service
stations charge recycling fees of 50 cents for each oil change.
However, service stations will not levy the surcharge unless they
have an economic incentive. The US Congress and the Environmental
Protection Agency are considering increasing the environmental
restrictions on the disposition of used oil, which almost certainly
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will enable Safety-Kleen to increase prices for recycling
(ABI/INFORM)
DEMAND AND MARKET INCENTIVES: A LOOK AT INDUSTRIAL POLICIES
HEMPHILL THOMAS A. NEW JERSEY DEPT OF ENV PROTECTION
WASTE AGE, JAN 90, P24(3)
FOR RECYCLING TO BE SUCCESFUL, CERTAIN ECONOMIC PREREQUISITES
MUST BE MET: SUPPLY MUST BE CONSISTENTLY GENERATED, AND CONSUMER
DEMAND MUST EXIST. THE GOVERNMENT COULD PLAY A SIGNIFICANT ROLE IN
GENERATING DEMAND-SIDE INTEREST. • TO FACILITATE RECYCLING,
GOVERNMENT POLICIES AT THE FEDERAL AS WELL AS STATE AND LOCAL
LEVELS MUST SUPPORT THIS MARKETING EQUATION, AS WELL AS MANDATING
WASTE REDUCTION GOALS. SUCH POLICIES SHOULD ADDRESS STABLE MATERIAL
RESOURCES, EXPEDITED CONSTRUCTION AND ENVIRONMENTAL PERMITTING
WITHIN THE RECYCLING INDUSTRY, CAPITAL FINANCING OR INCENTIVES, AND
LEADERSHIP IN PROCUREMENT OF RECYCLED MATERIALS. (ENVIROLINE)
Protecting the environment
Weidenbaum, Murray.
Society 27:49-56 N/D '89
Partial contents: Economic solutions to hazardous waste
problems; Economic incentives needed; A birth control approach to
pollution. (PAIS)
To clean up landfills, the leader should be municipalities using
economic incentives to settle
Bernstein, Norman W.
Environmental Law Reporter 19:10012-15 Ja '89
Urges municipalities to take initiative in developing
settlements with polluting companies; outlines New York City case.
(PAIS)
Economic Incentives and Disincentives for Recycling of Municipal
Solid Waste
Franklin Associates Ltd., Prairie Village, KS.
Sponsor: Center for Economic Policy Analysis, Chicago, IL. ; Office
of Technology Assessment, Washington, DC.
Dec 88 142p
NTIS:PB91-119099/XAB
The purpose of the study is to identify and analyze various
Federal government policies that may discourage or act as
disincentives to the recycling of matericils from municipal solid
waste. The study primarily evaluates economic policies, but also
examines tax policies and their potential effectiveness ifn
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reducing or eliminating the barriers to recycling. The report is
prepared as an internal document to be used by the Congress of the
United States, Office of Technology Assessment (OTA) in their
assessment of municipal solid waste. The report organization
follows the scope of work as defined by OTA: Chapter 1 - Federal
Subsidies for Virgin Materials; Chapter 2 - Federal Subsidies for
Recycled Materials;Chapter 3 - Federal Subsidies for Alternative
Energy Sources; and Chapter 4 - State Tax Incentives. (NTIS)
Solid Waste Management Alternatives: Review of Policy Options to
Encourage Waste Reduction
Zimmermann, E.
Illinois Dept. of Energy and Natural Resources, Springfield. Energy
and Environmental Affairs Div.
Feb 88 91p
Report No. IL/ENR/RE/PA-88/03; NTIS:PB88-188560/XAB
In order to adopt effective waste reduction policies, States
must first develop a framework for evaluating alternative policy
options. Such a framework should include a clear definition of
'waste reduction1, a set of policy evaluation criteria,
consideration of a variety of policy approaches, and targeting of
policies to appropriately distinguished sectors of waste
generators. Three general approaches are possible to encourage
waste reduction: (a) regulatory approaches; (b) financial
incentives and/or disincentives; (c) research and education. The
report outlines a wide range of policy options which encourage both
post-consumer and industrial waste reduction. The most effective
waste reduction policies will most probably include a balanced
mixture of educational programs, financial
incentives/disincentives, and regulations designed to best meet
overall waste reduction goals consistent with established
evaluation criteria. (NTIS)
Assessing the viability of marketable permit systems: an
application in hazardous waste management
Opaluch, James J.; Kashmanian, Richard M.
Land Economics v61 Aug, 1985, p263(9)
The increasing number of hazardous waste dumps discovered near
residential neighborhoods, such as the Love Canal area in New York
State, has led to increased awareness in the general population of
the dangers of hazardous wastes, which in turn has made hazardous
waste management a persistent societal problem. The use of economic
incentives for pollution control is examined from two points of
view: a strategy allowing flexible response by companies to test
for efficient benefits, and the distribution of cost savings among
kinds of companies to test the political pressure likely to result
in response to proposals for marketable permit plans.
(MANAGEMENT CONTENTS)
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E. PUBLIC UTILITIES
Regulatory aspects of emissions trading: conflicts between economic
and environmental goals
Bohi, Douglas R. and Dallas Burtraw.
Electricity J 3:47-55 D '90
Implications of proposed distribution of credits for emissions
control that can be bartered by electric utilities.
(PAIS)
Weighing environmental costs in utility regulation: the task ahead.
Gordon, Kenneth.
Electricity J 3:54-63 0 '90
Economic incentives for factoring the environment into energy
planning decisions; US. Evaluation of current approaches, and
possibilities for routine adoption of the process.
(PAIS)
EEI's New Risk-Taking President Talks About the Electric Utility
Industry
Rodgers, Lori M.
Public Utilities Fortnightly v!26n3 PP: 17-19 Aug 2, 1990
Thomas R. Kuhn, who became president of the Edison Electric
Institute (EEI) in May 1990, indicated that one topic of concern
within the electric utility industry is implementation of the Clean
Air Act. EEI has supported the clean coal technology (CCT) program,
and, regarding the emissions trading portion of the bill, Kuhn
remarked that the free marketplace ultimately should work. Kuhn
believes the industry should retain nuclear energy as an option,
although significant progress needs to be made in the nuclear waste
area. EEI favors a standardized design for nuclear plants. The
issue of efficiency and demand-side management (DSM) is also
something electric utility companies are involved in. All of EEI's
member companies have DSM programs, which, in the past decade, have
increased from around 130 programs to over 1,300. Kuhn mentioned
that the public needs to be educated on topics such as global
warming and health concerns associated with electric and magnetic
fields. EEI proposes to meet that challenge by doing additional
research. In order to ensure that the public is aware that the
industry is environmentally oriented, EEI plans on increasing
advertising and public relations efforts.
(ABI/INFORM)
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Emissions trading in the electric utility industry
Krupnick, Alan J. and others
Resources p 10-13 Summer '90
Economic incentives for reduction of sulfur dioxide emissions
under the proposed revision of the Clean Air Act. (PAIS)
Cost-Minimizing Regulation of Sulfur Emissions: Regional Gains in
Electric Power
Gollop, Frank M.; Roberts, Mark J.
Review of Economics & Statistics (Netherlands) v67nl PP: 81-90
Feb 1985
Maximum allowable rates for sulfur dioxide emissions from
electric utilities are set by environmental regulations. These
standards do not minimize the cost of reducing emissions because
they ignore firm differences in marginal abatement costs and
prevent emissions trading. Marginal abatement cost functions for 56
utilities for 1973-1979 are estimated, thus quantifying the cost
effect of sulphur dioxide emission restrictions. The data are
derived from Environmental Protection Agency, state, and Federal
Energy Regulatory Commission publications and are classified by
subperiod and geographical region. Marginal costs are found to vary
considerably across firms as a result of differences in the price
of low and high sulfur fuels and the intensity of regulation. The
potential savings from a cost-minimizing reallocation of abatement
resources are estimated for the 5 geographical regions. Results
indicate that current expenditures are 47% higher than cost
minimizing levels. (ABI/INFORM)
IV. PUBLIC-PRIVATE PARTNERSHIPS
Public private partnerships for environmental facilities: a self-
help guide for local governments
United States. Environmental Protection Agency
Admin, and Resources Mgt. My '90 iv+40p
Partial contents: Building a public-private partnership: an
action checklist; Finance, procurement, and the service agreement.
(PAIS)
Encouraging Signs
Hersch, Paul
Water Engineering & Mgmt v!37n4 PP: 18 Apr 1990
George Ames, executive director of the Council of Infrastructure
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Financing Authorities, foresees positive developments in fulfilling
the US' infrastructure needs. A particularly encouraging sign is
the Environmental Infrastructure Act of 1989. The bill would create
a separate category of tax-exempt infrastructure bonds, and it
would expedite cost recovery of wastewater facilities, improving
the economics of public-private infrastructure projects. Ames notes
that the Environmental Protection Agency, through its Office of
Resource Management, has been marketing the advantages of public-
private partnerships in building and operating new water and
wastewater facilities. In Ames1 assessment of the potential for
long-term improvement of the US' infrastructure, state
infrastructure financing agencies (SIFA) are the most encouraging
development. SIFAs provide subsidized assistance for diverse water
and wastewater projects, as well as for other projects. Ames
believes that SIFAs can become the primary public source of funding
for the environmental infrastructure. (ABI/INFORM)
Funding Environmental Programs: An Examination of the Alternatives
Shields, Evelyn
Public Budgeting & Finance vlOnl PP: 110-112 Spring 1990
Since the late 1970s, the cost of environmental protection for
state government has increased while the federal contribution has
decreased. To help meet the higher costs, almost all states are
utilizing alternative financing mechanisms (AFM) to help support
environmental programs. The primary types of AFMs are user fees and
pollution discharge fees, environmental taxes, bonds, and revolving
loan funds. Even though AFMs are an integral part of most
environmental programs today, they cannot cover the full costs of
environmental protection. A few ways that federal, state, and local
governments can reduce the cost of environmental protection are
through the emphasis of pollution prevention and the application of
public-private partnerships. (ABI/INFORM)
WASTE: HOW BIG A MARKET?
BOWEN DOUGLAS JOHN
RAILWAY AGE, JAN 90, V191, Nl, P44(2)
THE UNIVERSAL MESSAGE DELIVERED AT A RAIL MOVEMENT OF SOLID
WASTE CONFERENCE IS THAT THE SOLID WASTE ISSUE IS A POTENTIAL BOOM
TO THE RAIL INDUSTRY. IN THE NEXT DECADE, THE VOLUME OF SOLID WASTE
MOVED BY RAIL COULD INCREASE TO AS MUCH AS 25 MILLION TONS
ANNUALLY, WHICH WOULD CONTRIBUTE SIGNIFICANTLY TO BOTTOM LINE
REVENUES. FACTORS DRIVING THE MOVEMENT OF SOLID WASTE BY RAIL ARE
THE INCREASING LANDFILL CLOSURE RATE, BROADENING ENVIRONMENTAL
CONCERNS, GROWING OPPORTUNITIES FOR PUBLIC/PRIVATE PARTNERSHIPS,
AND THE ENDLESS SUPPLY OF THE COMMODITY. PRESENTLY, A CONCERN TO
MANY STATES IS THE FACT THAT ONLY FOUR LANDFILLS HAVE DIRECT ACCESS
BY RAIL, INDICATING A NEED FOR RELOAD CENTERS. IN ADDITION, PROPER
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EQUIPMENT FOR CARRYING SOLID WASTE IS CURRENTLY VERY SCARCE.
(ENVIROLINE)
Business & Government: Effecting Change - Joining Forces
Miller, Jack
World V24H3 PP: 38-39 1990
In the 1980s, governments began working with private interests
to solve public problems, a result of governments being asked to do
more with limited resources. Public-private partnerships cover a
broad spectrum that includes short-term projects in which the
private sector volunteers its services to the public sector and
ongoing contractual alliances between business and government.
Formal public-private partnerships provide for varying divisions of
responsibility, such as: 1. facility financing, 2. design, 3.
construction, 4. ownership, 5. operation, and 6. maintenance. While
US public-private partnerships are considered a phenomenon of the
1980s, the concept is as old as the US. The American colonies were
established with partnerships among the UK, merchants, and
religious groups. Recently, there has been an increase in public-
private partnerships to improve city and state infrastructure. The
environment also is the focus of many new partnerships.
(ABI/INFORM)
The development of substitutes for chlorofluorocarbons: Public-
private cooperation and environmental policy
Miller, A. Cent. Global Change, Univ. Maryland
AMBIO VOL. 19, NO. 6-7, pp. 338-340, Publ.Yr: 1990
US regulations restricting the use of chlorofluorocarbons (CFCs)
are a noteworthy example of a market-based environmental
regulation. In contrast with traditional regulation dictating
specific technologies, the rules limit total production leaving
allocation of the permitted use to market choices. In addition to
the regulations, the Environmental Protection Agency (EPA) has
continued to be actively involved in the search for acceptable
substitutes. These activities complement private-sector efforts to
develop substitutes in several important ways that will be reviewed
in this paper. A similar public/private partnership may be the most
productive approach to reducing emissions of greenhouse gases.
(POLLUTION ABSTRACTS)
Minnesota's public-private partnership
Connell, J.J.
WASTE AGE VOL. 21, NO. 10, pp. 73-76, Publ.Yr: 1990
Dakota County's Recyclables Collection Center is the result of
teamwork among local haulers, county government, and a marketer.
(POLLUTION ABSTRACTS)
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Risk allocation in a changing MRF industry
Ewel, D.; Shaw, F.C.
BIOCYCLE VOL. 31, NO. 4, pp. 64-67, Publ.Yr: 1990
Technological risks, financial risks, marketing risks, and
change in law risks have all discouraged municipalities and private
industries from investing in recycling. By entering into a
public/private partnership, both the private developer and the
municipality can reduce their respective risk exposure, and hence
increase the overall chances of a successful project.
Municipalities and private vendors have distinct skills and
resources—particularly, differing capacities to bear certain types
of risk. By allocating responsibilities and risks to the party best
able to bear them, a public/private recycling venture can turn
these skills and resources to best effect, transforming a problem—
a lack of disposal capacity—into an opportunity.
(POLLUTION ABSTRACTS)
Proceedings of the Privatization Council's third national
conference
Privatization R 4:21-35+ Fall '89
Edited versions of the six Partnership Opportunity Workshops
presented at the conference, Making Ends Meet: Public-Private
Partnerships into the 1990's, held in Washington, D.C., May 15-16,
1989. Environmental infrastructure, transportation, municipal
service contracting, health care, contracting out for assets and
services, and labor relations and public/private partnerships.
(PAIS)
Financing environmental infrastructure: a national challenge
Grizzle, Charles L.
Munic Fin J 10:231-9 Fall '89
Problems at the local level due to the expansion of
environmental programs and activities; US. Reviews the use of
public/private partnerships as an alternative financing mechanism.
(PAIS)
Public-private partnership case studies: profiles of success in
providing environmental services
United States Environmental Protection Agency.
Admin, and Resources Mgt. S '89 vi+118p
Components of successful partnerships in the areas of solid
waste management, wastewater treatment, and drinking water;
experience of 23 US communities. (PAIS)
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Strategies for EV commercialization
Mader, G.H.; Bevilacqua
O.M. Electr. Veh. Dev. Corp. Cupertino, CA 95014, USA
82. Annual Meeting of the Air & Waste Management Association
Anaheim, CA (USA) 25-30 Jun 1989 p68
Electric vehicle (EV) technology represents one of the most
promising alternatives for improving air quality. This paper
describes the utility industry's work to develop market-ready EVs,
including vehicle development and testing, market analysis, and
support system development. It proposes a partnership between the
public and private sectors to build the initial EV market, focusing
on the need to lower vehicle costs by establishing a critical
production volume. (POLLUTION ABSTRACTS)
Privatization: An Emerging Management and Financing Trend
Seader, David
Water Engineering & Mgmt vl36n3 PP: 44-49 Mar 1989
A recent Environmental Protection Agency Municipal Sector Study
concluded that the ability of local governments to raise capital is
being rapidly exceeded by mandated investments in environmental
protection. A growing number of local governments are turning to
private sector financing and the codevelopment of public
facilities. Among the many types of private participation that have
evolved in recent years, the most common is the design,
construction, and operation of public facilities by a private
sector organization for public use. A public-private partnership
may be created using a range of ownership structures, including
turnkey design-build, and can operate with public ownership of the
facility, leases, limited partnerships, or some variation of the
above. As the economic pressures faced by municipalities increase,
many will weigh the advantages of private versus public provision
of services or facilities. (ABI/INFORM)
Privatization moves to the forefront
Seader, D.
SOLID WASTE POWER VOL. 3, NO. 2, p. 59+, Publ.Yr: 1989
New federal guidelines are forcing many communities to implement
new MSW disposal technologies, but don't address how these
communities can raise the money to pay for them. The solution may
be an expansion of the public-private partnership already in place
for solid waste disposal. (POLLUTION ABSTRACTS)
49
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The partnership works in Riverside
Anon.
WASTE AGE VOL. 18, NO. 3, pp. 34-41, Publ.Yr: 1987
A large new landfill, which will be a major disposal site for
this California county, was developed by a public-private
partnership from which, participants say, all have benefited.
(POLLUTION ABSTRACTS)
Implementing the public/private nonpoint source management
partnership: A state forestry perspective
Davis, R.L.; Miller, R.L.
For. Div., Oklahoma State Dep. Agric., Oklahoma City, OK, USA
Perspectives on Nonpoint Source Pollution: Proceedings of a
National Conference Kansas City, MO May 19-22, 1985
pp. 325-329, Publ.Yr: 1985
U.S. EPA, OFFICE OF WATER REGULATIONS AND STANDARDS, WASHINGTON, DC
State forestry agencies currently recognize two principal areas
of concern in nonpoint source water quality management: to work
with the private sector to get the management job done in the face
of poor economic conditions, and to establish a more effective
framework in law and policy for doing so. The new national nonpoint
source policy promises to be an important advancement toward these
ends, particularly because of its support for a cooperative
public/private partnership approach. Opportunities exist for
improvements where economic factors are not primarily limiting,
particularly in public sector actions. As first priority, the
public sector should put its house in order by applying the
public/private partnership provisions of the national nonpoint
source policy. (POLLUTION ABSTRACTS)
Planning for energy recovery from municipal refuse in New York
State
Rhodes, M.; El-Baroudi, H.; Al-Iman, H.; et al.
General Electric Co.
Fifth annual industrial pollution conference: Proceedings. Atlanta,
Ga. Apr. 19-21, 1977
Edited by L. Delpino and A. Krigman Publ.Yr: 1977 pp. 545-564
Water and Wastewater Equipment Manufacturers Association
An investigation was made to identify the energy recovery
systems for New York urban communities (excluding New York City and
Long Island) that constitute a statewide optimum management plan.
Water wall incineration with heat recovery and co-firing in
existing coal-fired power plants are the established technologies
proposed for implementation by optimally defined urban regions. For
the developed plans, cost estimates and recommendations for
enhancing implementation by a public-private partnership were
50
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made. New York State data and information on population centers,
solid waste generation, legislation, and electric generating
stations were the bases for the development of the statewide energy
recovery management plan. It is noted, however, that the approaches
and models developed and applied in the study are applicable to a
great extent in other urban regions. (POLLUTION ABSTRACTS)
V. DEBT-FOR-NATURE
World Wildlife Fund: The Call of the Wild
Sweeney, Paul
CFO: The Magazine for Senior Financial Executives v7n3 PP: 63-64
Mar 1991
Lawrence J. Amon is vice-president for finance and
administration at World Wildlife Fund (WWF) and The Conservation
Foundation. The last 7 years have been a transition and
transformation for the organization. Before their affiliation in
1985, culminating in a legal merger in 1990, World Wildlife Fund
and The Conservation Foundation were separate entities. Each group
had skills the other coveted. The merger resulted in a nonprofit
organization with a fiscal 1991 budget of $54 million and a million
members, making it the largest private environmental group
operating worldwide. The bulk of WWF's operating budget (85%) goes
to underwriting field programs, organizing conferences, and policy
making. The rest of the operating budget is expended on
administration and fund-raising activities. Debt-for-nature swaps
have been a major tactic in WWF's conservation strategy since 1987.
To date, the organization has bought $3.8 millon worth of debt,
generating $15.1 million worth of conservation projects in Asia,
Africa, and Latin America. Many other private environmental groups
are also arranging debt-for-nature swaps, and WWF has taken the
lead in lobbying Washington to adopt the strategy on a grand scale.
(ABI/INFORM)
SWAPPING DEBT FOR DEBT IN LESS-DEVELOPED COUNTRIES: A CASE STUDY OF
A DEBT-FOR-NATURE SWAP IN ECUADOR
SUNDARAM ANANT K. AMOS TUCK SCHOOL OF BUSINESS ADMIN.
INTL ENV AFFAIRS, WINTER 90, V2, Nl, P67(13)
THE ECONOMICS BEHIND DEBT-FOR-NATURE SWAPS IN LESS
DEVELOPED COUNTRIES ARE ANALYZED. THE EXAMPLE OF A DEBT-FOR-NATURE
SWAP MADE BY THE WORLD WILDLIFE FUND TO FINANCE A NATURE
CONSERVATION PROJECT IN ECUADOR IS USED TO CALCULATE THE EXPECTED
RETURNS FROM THE PROJECT. ALSO DISCUSSED ARE RISKS TO CONSIDER IN
SUCH TRANSACTIONS, AND HOW TO ADDRESS THESE RISKS. MATHEMATIC
MODELS ARE PRESENTED. (ENVIROLINE)
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Debt-for-nature swaps: effective but not enforceable
Hrynik, Tamara J.
Case Western Reserve J Internat Law 22:141-63 Winter '90
Development and success of a swap in Bolivia. Includes
discussion of debt servicing and debt-for-nature swaps as an
alternative debt relief program. (PAIS)
Credit Where Credit's Due
McEvedy, Imogen
Management Today (UK) PP: 88-89 Jul 1990
In 1984, Thomas Lovejoy, then of the World Wildlife Fund,
proposed the idea of debt-for-nature swaps. These would allow
conservation groups to purchase a debt and then swap it with the
debtor country to pay for environmental projects. The bank gains a
proportion of its money back by selling the debt, clears the books
(claiming a large tax relief on the loss), and relends the money.
The conservation group can increase dramatically the amount of
local currency it receives from donations, and the debtor nation,
which had no hard currency with which to pay, has now wiped out the
debt using its own currency to pay for projects in its own land.
Conservationists have concentrated on areas of great biodiversity,,
such as the tropical rain forests. Swaps have taken place in such
countries as Bolivia, Ecuador, Costa Rica, and Madagascar. One
criticism of the swaps is that the sums involved are too small;
consequently, so are the areas saved. Karl Ziegler, who has just
completed a study of debt-for-nature swaps for Friends of the
Earth, is proposing a $50-billion debt swap with Brazil.
(ABI/INFORM)
DEBT-POR-NATURE SWAPS: THE TIME HAS COME
REILLY WILLIAM K. EPA, WASHINGTON, DC
INTL ENV.AFFAIRS, SPRING 90, V2, N2, P134(6)
DEBT-FOR-NATURE AGREEMENTS ARE PART OF A NEW WAVE OF THINKING
ABOUT THE LINKS BETWEEN DEVELOPMENT AND THE ENVIRONMENT AND DEBT.
ONE WAY TO BEGIN TO ESTABLISH A POSITIVE RELATIONSHIP BETWEEN DEBT
AND THE ENVIRONMENT IS TO AVOID REPEATING PAST MISTAKES; IT IS
ESSENTIAL THAT THESE AGREEMENTS BE ON SOUND FINANCIAL FOOTING BY
THINKING THROUGH THOROUGHLY THE SHORT- AND LONG-TERM ENVIRONMENTAL
EFFECTS OF THE PROJECTS. BUT THEY CAN WORK. TO DATE THESE SWAPS
HAVE REDUCED FOREIGN DEBTS BY OVER $85 MILLION, AND THEY HAVE
HELPED POOR COUNTRIES IN LATIN AMERICA, ASIA, AND AFRICA PROTECT
ONE OF THE FEW RESOURCES IN WHICH THEY ARE VERY RICH: FORESTS AND
WILDLIFE. SIX GENERAL PROPOSITIONS ARE SUGGESTED TO HELP ACHIEVE AN
ORDER-OF-MAGNITUDE INCREASE IN THE RESOURCES COMMITTED TO
CONSERVATION THROUGH DEBT-FOR-NATURE TRADES. (ENVIROLINE)
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DEBT, CONSERVATION, AND INNOVATING SUSTAINABLE REGIONAL DEVELOPMENT
JAEGER CARLO SWISS FEDERAL INST OF TECHNOLOGY
INTL ENV AFFAIRS, SPRING 90, V2, N2, P166(8)
RECENT ATTEMPTS TO LINK DEBT AND CONSERVATION HAVE INNOVATION
POTENTIAL. IN THE AREA OF DEBT-FOR-NATURE SWAPS, THE FOCUS IS NOT
ON A FIXED FINANCIAL TECHNIQUE, BUT ON AN ONGOING SERIES OF
INNOVATIVE STEPS. WAYS IN WHICH THESE SWAPS COULD BE WIDENED ARE
DISCUSSED. DEBT-FOR-NATURE SWAPS COULD BE USED TO REORIENT
INTERNATIONAL FINANCIAL FLOW ACCORDING TO THE REQUIREMENTS OF
SUSTAINABLE DEVELOPMENT. NEW FINANCIAL INSTRUMENTS COULD THEN BE
USED IN A FRAMEWORK OF ECOLOGICAL CONDITIONALITY BY VARIOUS AGENTS
RANGING FROM NONGOVERNMENTAL ORGANIZATIONS TO GOVERNMENTS, FROM
INTERNATIONAL ORGANIZATIONS TO PRIVATE FIRMS. THE POINT WOULD BE TO
INVEST THE MONEY SO AS TO FOSTER INNOVATIVE REGIONAL MILIEUS WHICH
DIRECT THEIR INVENTIVENESS TO THE DEFINITION OF SUSTAINABLE
DEVELOPMENT ON A REGIONAL SCALE. (ENVIROLINE)
DOING MORE WITH DEBT-FOR-NATURE SWAPS
WAGNER RODNEY B. MORGAN GUARANTY TRUST CO OF NEW YORK
INTL ENV AFFAIRS, SPRING 90, V2, N2, P160(6)
DEBT-FOR-NATURE SWAPS HAVE BECOME UNPOPULAR IN MANY
LESS-DEVELOPED COUNTRIES (LDC) AND HAVE BEEN LIMITED OR STOPPED
COMPLETELY,DUE OFTENTIMES TO INFLATION OR OPPOSITION TO FOREIGN
PRIVATE INVESTMENT. AN ANALYSIS OF THE LDC DEBT PROBLEM IS
PRESENTED. DEBT-FOR-NATURE PROJECTS MUST BE DEVELOPED, DISCUSSED
WITH THE HOST GOVERNMENT, DISCOUNTS ESTABLISHED, AND PAYMENT
METHODS FOR LOCAL CURRENCY PUT INTO PLACE. DONATING DEBT IN THE US
IS HINDERED BY TWO REASONS: TAX LAWS ARE RIGOROUS ABOUT WHAT KIND
OF ORGANIZATION RECEIVES DONATIONS, AND DONATING DEBT IS NOT AS
ATTRACTIVE AS SELLING DEBT FOR CASH. BUT EVEN WITHOUT A TAX-LAW
CHANGE, DEBT-FOR-NATURE SWAPS ARE AN IDEA WORTH PURSUING; THESE
SWAPS ARE NOT INFLATIONARY, AND HAVE THE POTENTIAL TO CREATE JOBS
AND GET ECONOMIES MOVING. WHILE DEBT-FOR-NATURE SWAPS WON'T SOLVE
THE LDC'S DEBT PROBLEM, THEY HAVE THE POTENTIAL TO DEMONSTRATE TO
THE WORLD THAT WE ARE DEFENSELESS IN THE FACE OF PROBLEMS THAT ARE
LARGER THAN OURSELVES. (ENVIROLINE)
DEBT-FOR-NATURE CONVERSION: WHAT LIMITS THEIR FURTHER GROWTH?
TAMMES GERRIT J. MNB BANK, AMSTERDAM, NETH.
INTL ENV AFFAIRS, SPRING 90, V2, N2, P153(7)
THE WORLD BANK HAS CALCULATED THAT BY APPLYING ALL OF THE
OTHER TYPES OF TRANSACTIONS IN WHICH BANKS ARE ACTIVE, THE
AGGREGATE EXTERNAL DEBT OF THE DEVELOPING NATIONS DIMINISHED BY $11
BILLION IN 1988 COMPARED TO THE $100 MILLION USED FOR
DEBT-FOR-NATURE CONVERSIONS. THE QUESTION ARISES OF HOW MUCH LARGER
CAN THE AMOUNTS BE MADE AVAILABLE FOR FURTHER SWAPS. DUE TO THE
FACT THAT RESTRUCTURED BANK LOANS ARE BEING TRADED IN THE SECONDARY
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MARKET, A MAJOR PART OF THE DEBTOR-COUNTRY DEBT REMAINS UNSUITABLE
FOR DEBT CONVERSION. CALCULATIONS BY THE WORD RESOUCES INST SHOW
THAT, FOR NATURE CONSERVATION PROJECTS IN DEVELOPING COUNTRIES
ALONE, $20-50 BILLION ARE REQUIRED EACH YEAR. A WAY TO OVERCOME
THIS IS TO GET PRIVATE INVESTORS TO INVEST IN COMMERCIAL PROJECTS
THROUGH DEBT-EQUITY CONVERSIONS, OR HAVE NONGOVERNMENTAL
ORGANIZATIONS AND A PRIVATE INVESTOR PROVIDE PART OF THE FOREIGN
EXCHANGE. NUMEROUS COMBINATIONS ARE POSSIBLE BETWEEN THE BANKS,
CONSERVATION ORGANIZATIONS, AND THE CREDITOR COUNTRIES
WHO ARE GIVING DEBT RELIEF TO POOR COUNTRIES. (ENVIROLINE)
BANKS, DEBT, AND DEVELOPMENT-I
QUESADA ALVARO UMANA MINISTRY OF NATURAL RESOURCES ENERGY & MINES,
COSTA RICA
INTL ENV AFFAIRS, SPRING 90, V2, N2, P140(10)
APPROPRIATE ECONOMIC INCENTIVES TO TROPICAL DEVELOPING
COUNTRIES COULD SIGNIFICANTLY REDUCE DEFORESTATION AND SUPPORT A
MASSIVE BIOMASS BUILDUP ON A GLOBAL SCALE. DEBT-FOR-NATURE SWAPS
HAVE PROVEN TO BE ONE OF THE MOST INNOVATIVE AND EFFECTIVE
ALTERNATIVES TO CREATE VALUE IN THE FORM OF LOCAL CURRENCY BONDS,
WHICH YIELD RESOURCES THAT CAN BE UTILIZED TO TRANSFORM THE DEBT
PROBLEM INTO NEW OPPORTUNITIES TO SUPPORT CONSERVATION, RESOURCE
MANAGEMENT, AND REFORESTATION. THE DEBT-FOR-NATURE SWAPS IN COSTA
RICA ARE PROFILED, BY ASSESSING THE INDIVIDUAL PROJECTS AND
THE EFFECTS ON INFLATION. ALSO DISCUSSED ARE BILATERIAL DEBT
OBLIGATIONS AND THE ROLE OF DEVELOPMENT BANKS.. EFFORTS TO NEGOTIATE
URGENT GLOBAL TREATIES RECOGNIZING AS COMMON RESOURCES OUR SHARED
ELEMENTS SHOULD BE ENCOURAGED AND EXPEDITED.
(ENVIROLINE)
BANKS, DEBT, AND DEVELOPMENT-II
SEVILLA ROQUE FUNDACION NATURA, ECUADOR
INTL ENV AFFAIRS, SPRING 90, V2, N2, P150(3)
A BRIEF ASSESSMENT OF DEBT-FOR-NATURE SWAPS IS GIVEN BY
THE PRESIDENT OF THE FUNDACION NATURA, ECUADOR. IN THE DEBT FIELD,
INDUSTRIALIZED NATIONS MUST HELP IMPROVE THE STANDARD OF LIVING AND
EDUCATION OF THOSE LESS FORTUNATE LIVING IN THE DEVELOPING NATIONS.
BANKERS MUST UNDERSTAND THAT THEY HAVE AN ETHICAL RESPONSIBILITY TO
SOLVE THESE LONG-TERM PROBLEMS, AND NOT EXPECT A QUICK RETURN ON
THEIR INVESTMENT. AND CONTRIBUTIONS MUST COME FROM ALL SIDES:
DEVELOPING NATIONS MUST BEGIN TO DEAL WITH OVERPOPULATION AND
DEFORESTATION, WHILE INDUSTRIALIZED NATIONS MUST REDUCE THEIR TOXIC
EMISSIONS. (ENVIROLINE)
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THIRD WORLD DEBT: ARE THERE OPPORTUNITIES FOR FORESTRY?
PRESTEMON, JEFFREY P. (NORTH CAROLINA STATE UNIV, RALEIGH) AND;
LAMPMAN, SCOTT E. (INTL COMPUTERS & TELECOMMUNICATIONS INC,
ARLINGTON, VA)
J FORESTRY, FEE 90, V88, N2, P12(5)
DEVELOPING COUNTRIES OWED MORE THAN $1.2 TRILLION TO OTHER
COUNTRIES BY 1988. TO REPAY THESE LOANS, DEBTOR COUNTRIES HAVE
BEGUN TO LIQUIDATE NATURAL RESOURCES, OFTEN WITH DISASTROUS
ENVIRONMENTAL CONSEQUENCES. ALTERNATIVE DEBT-EQUITY AND
DEBT-FOR-NATURE SWAPPING OPPORTUNITIES, IN WHICH FOREIGN DEBT IS
EXCHANGED FOR LOCAL COMMERCIAL OR NON-COMMERCIAL INVESTMENT,
REQUIRE THE COOPERATION OF DEBTOR COUNTRIES, THE WILLINGNESS OF A
BANK OWNING DEBT OF THAT COUNTRY TO SELL AT A DISCOUNT,
MULTINATIONAL CORPORATIONS OR PRIVATE VOLUNTEER ORGANIZATIONS THAT
PURCHASE THE DEBT, AND A FINANCIAL INTERMEDIARY. THE ADVANTAGES AND
DISADVANTAGES TO THESE PARTIES ARE OUTLINED, AND OPPORTUNITIES FOR
FORESTRY ARE DESCRIBED. (ENVIROLINE)
DEBT-FOR-NATURE SWAPS
FULLER KATHRYN S. PRESIDENT, WORLD WILDLIFE FUND
ENV SCIENCE & TECHNOLOGY, DEC 89, V23, N12, P1450(2)
THE DEBT-FOR-NATURE SWAP IS AN INNOVATIVE FINANCIAL MECHANISM
AIMED AT LEVERAGING CONSERVATION DOLLARS IN THE DEVELOPING WORLD.
THE SWAPS INVOLVE THE ACQUISITION OF A DEVELOPING NATION'S DEBT BY
CONSERVATION ORGANIZATIONS AT A DISCOUNT, ITS REDEMPTION IN LOCAL
CURRENCY, AND ITS USE FOR CONSERVATION PURPOSES. SUCCESSFUL
DEBT-FOR-NATURE SWAP EFFORTS HAVE SERVED TO PROTECT TROPICAL
FORESTS AROUND AN EXISTING RESERVE IN BOLIVIA AND TO EXPAND THE
PARK SYSTEM IN COSTA RICA. WITH THE IMPLEMENTATION OF SIX PRIVATE
DEBT SWAPS TO DATE, WORLDWIDE ACCEPTANCE FOR THESE DEALS HAS GROWN
AND THE CONCEPT IS RIPE FOR EXPANSION IN LIGHT OF THE CONTINUING
DEBT CRISIS AND INCREASING CONCERN OVER THE STATE OF THE GLOBAL
ENVIRONMENT. (ENVIROLINE)
DEBT-FOR-NATURE SWAPS: EXPERIENCE GAINED, LESSONS LEARNED
PAGE DIANA WORLD RESOURCES INST, WASHINGTON, DC
INTL ENV AFFAIRS, FALL 89, VI, N4, P275(14)
DEBT-FOR-NATURE PROGRAMS WERE FIRST INITIATED IN LATIN AMERICA
IN THE LATE 1980S. THE PROGRAM INVOLVES CANCELLING A CERTAIN AMOUNT
OF FOREIGN DEBT IN EXCHANGE FOR LOCAL CURRENCY INVESTMENTS IN
PROGRAMS THAT WILL IMPROVE NATURAL RESOURCE MANAGEMENT IN THE
DEBTOR COUNTRY. RESULTS OF THE PROGRAM ARE ASSESSED FOR BOLIVIA,
COSTA RICA, ECUADOR, AND THE PHILIPPINES. IT IS STILL TOO EARLY TO
EVALUATE WHETHER OR NOT THE PROGRAM IS WORKING. ASSESSMENTS OF THE
PROGRAM IN GENERAL INCLUDE TERMS OF THE SWAPS AND THE NATURE
PROGRAM TARGETED. WHILE NOT ALL GOVERNMENTS ARE WILLING TO DELEGATE
MAJOR RESPONSIBILITY OF AN INTERNATIONALLY FUNDED ENVIRONMENTAL
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PROGRAM, THE PROTECTION OF BIOLOGICAL DIVERSITY, REFORESTATION, AND
ENVIRONMENTAL EDUCATION ARE NOW RECEIVING MORE FUNDS THAN WOULD
HAVE BEEN POSSIBLE WITHOUT THE DEBT-FOR-NATURE SWAPS. (ENVIROLINE)
Doing It Naturally: The Greening of International Finance
Burand, Deborah
International Financial Law Review (UK) v8n9 PP: 37-39 Sep 1989
Faced with a growing need for financial resources,
conservationists working in developing countries have initiated a
new finance mechanism -debt-for-nature exchange - for turning their
dollars into local currency investments in conservation. In these
exchanges, the conservation organization acquires a debt and agrees
to extinguish it in return for the host country' s commitment of
additional local resources to conservation programs. The first
debt-for-nature exchange occurred in Bolivia in July 1987, and many
countries have followed suit. Three factors make these transactions
a viable means of supporting ecosystem conservation in less
developed countries (LDC) : 1. an increasing number of commercial
debt holders are disposing of their Third World loan portfolios, 2.
the price of Third World loans in the secondary market is dropping,
and 3. many LDC governments recognize that debt exchanges for
nonprofit purposes are of equal or greater importance than many
other profit-oriented investments. However, these exchanges
illuminate many of the difficulties confronting those involved in
the LDC conservation and debt crises. (ABI/INFORM)
Debt-for-nature swaps: debt relief and biosphere preservation?
Winthrop, Stephen VanR.
SAIS (School Advanced Internat Studies) R 9:129-49 Summer/Fall '89
Programs, similar to debt-equity swaps, designed to conserve
tropical rain forests in Central and South America., Experiences in
Bolivia, Costa Rica, and Ecuador since 1987. (PAIS)
USING RED INK TO KEEP TROPICAL FORESTS GREEN
WORK CLEMENS P. AND ; SMITH GERI
US NEWS & WORLD REPORT, MAR 6, 89, V106, N9, P48(2)
DEBT-FOR-NATURE SWAPS HELP RESCUE FRAGILE ECOSYSTEMS FROM
DEVELOPMENT WHILE REDUCING ECONOMICALLY STRESSED COUNTRIES'
ECONOMIC DEBT. NEGOTATIONS ARE CURRENTLY UNDERWAY TO SAVE THE
REMAINING FORESTS OF THE MATA ATLANTICA COASTAL FOREST OF BRAZIL.
THE ECONOMICS OF THE SWAPS CALL FOR SALE OF A COUNTRY'S DEBT AT A
DEEP DISCOUNT TO A CONSERVATION ORGANIZATION. THE COUNTRY'S CENTRAL
BANK THEN REDEEMS THE DEBT AND ISSUES LOCAL-CURRENCY BONDS WHICH
PROVIDE INTEREST TO FINANCE LOCAL ENVIRONMENTAL PROTECTION
PROJECTS. THIS ARRANGEMENT TENDS TO EXACERBATE LOCAL INFLATION,
AND OFTEN DOES NOT SIGNIFICANTLY REDUCE OVERALL DEBT. SWAPS HAVE
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BEEN SUCCESSFUL IN BOLIVIA, ECUADOR, COSTA RICA, AND THE
PHILLIPINES. (ENVIROLINE)
DEBT FOR NATURE SWAPS: OVERVIEW AND DISCUSSION OF KEY ISSUES
HANSEN STEIN ORNEVEIEN, BEKKESTUA, NORWAY,
ECOLOGICAL ECONOMICS, FEB 89, VI, Nl, P77(17)
THE PRESENT DEBT SITUATION OF MANY DEVELOPING NATIONS POSSESSING
TROPICAL FORESTS IS VIEWED AS AN OPPORTUNITY TO TRADE OFF BAD
DEBTS AGAINST HABITAT PRESERVATION. IN THE DEBT FOR NATURE SWAP
CONCEPT, A DEVELOPING NATION'S DEBT IS PURCHASED AT A DISCOUNT
VALUE IN THE SECONDARY DEBT MARKET AND CANCELLED IN RETURN FOR
ENVIRONMENT-RELATED ACTION N THE PART OF THE DEBTOR NATION. IF THE
AMOUNTS AT STAKE ARE MARGINAL RELATIVE TO A NATION'S DEBT BURDEN,
SUCH ARRANGEMENTS MAY PROVE BENEFICIAL BECAUSE THE OPPORTUNITY
COSTS OF THE FREED FUNDS ARE VERY LOW. THE MOST IMPORTANT
CONTRIBUTION OF AGGRESSIVE PROMOTION OF SUCH SWAPS WILL BE THE
REALIZATION BY POLICY MAKERS OF THE MANY CONSEQUENCES OF
ACCELERATING ENVIRONMENTAL DEGRADATION OF MANY FRAGILE TROPICAL
HABITATS ALONG WITH INCREASED AWARENESS OF THE OPPORTUNITY COST OF
DIMINISHING RENEWABLE RESOURCES. (ENVIROLINE)
HANDS ACROSS THE SEA (PLANET OF THE YEAR)
SANCTON THOMAS A.
TIME, JAN 2, 89, V133, Nl, P54(3)
MULTINATIONAL COOPERATION IS ESSENTIAL TO EFFECTIVELY
PROTECT THE EARTH'S ENVIRONMENT. RESEARCH, EDUCATION, AND CONCRETE
ACTION ARE NEEDED TO PROPEL COMPREHENSIVE ENVIRONMENTAL TREATIES.
THE LARGEST STUMBLING BLOCK TO SUCH INITIATIVES IS POVERTY AND
FOREIGN DEBT. A GREATER SHARE OF THE WORLD'S CAPITAL WILL HAVE TO
FLOW INTO DEVELOPING COUNTRIES FOR THE CORRECTION OF ENVIRONMENTAL
IMBALANCES. ONE SOLUTION SCENARIO CALLS FOR REDUCED MILITARY
SPENDING BY WORLD POWERS WHICH WOULD IN TURN FREE UP FUNDING FOR
DOMESTIC AND FOREIGN ENVIRONMENTAL PROGRAMS. ADDITIONAL AGENDA
INCLUDES RAISING GASOLINE TAXES, TIGHTER AUTO FUEL EFFICIENCY
REQUIREMENTS, INCREASED WASTE RECYCLING, PROMOTION OF NATURAL GAS
USAGE, EXPANSION OF FAMILY PLANNING PROGRAMS, RATIFICATION OF THE
1982 UN CONVENTION ON LAW OF THE SEA, ENCOURAGEMENT OF
DEBT-FOR-NATURE SWAPS, AND MAKING THE ENVIRONMENT AN INTERNATIONAL
PRIORITY. (ENVIROLINE)
DEBT-FOR-NATURE SWAPS: A NEW STRATEGY FOR PROTECTING ENVIRONMENTAL
INTERESTS IN DEVELOPING NATIONS
HAMLIN TIMOTHY B.
ECOLOGY LAW QUARTERLY, 1989, V16, N4, P1065(24)
DEBT-FOR-NATURE SWAPS ATTEMPT TO CONTROL THE EXPLOITATION OF
NATURAL RESOURCES WITHOUT IGNORING THE ECONOMIC NEEDS OF DEVELOPING
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NATIONS. THE SWAPS RESTRUCTURE OR RETIRE SOME OF A DEVELOPING
NATION'S DEBT IN RETURN FOR PROTECTION OF UNDEVELOPED AND
ENVIRONMENTALLY SENSITIVE AREAS WITHIN THE COUNTRY. THE DEBT-FOR-
NATURE SWAPS IN BOLIVIA, ECUADOR, COSTA RICA, AND THE PHILIPPINES
ARE ASSESSED. CONSERVATION INTL INITIATED THE FIRST AGREEMENT WITH
BOLIVIA IN 1987, FOLLOWED BY A SIMILAR AGREEMENT BETWEEN THE WORLD
WILDLIFE FUND AND THE THREE OTHER COUNTRIES. DEBT-FOR-NATURE SWAPS
HAVE NOT MET THEIR GOALS AS WELL AS WAS FIRST HOPED, BUT THEY
REMAIN AN APPEALING SMALL-SCALE MEANS FOR PRIVATE ORGANIZATIONS TO
PROTECT ENVIRONMENTAL INTERESTS ABROAD. IT IS NOT CLEAR THAT LARGE-
SCALE SWAPS ARE ECONOMICALLY OR POLITICALLY FEASIBLE OR DESIRABLE
AT PRESENT. AS TROPICAL FORESTS HAVE ONLY AS MUCH PROTECTION AS THE
TROPICAL STATES DESIRE, IT IS HOPED THAT THESE COLLABORATIONS WILL
CONTRIBUTE TO A CONSTRUCTIVE FRAMEWORK FOR FUTURE CONSERVATION
EFFORTS. (ENVIROLINE)
Save a tree/ donate some debt
(debt-for-nature swaps in developing countries)
Barrett, Scott
Multinational Business Wntr (end of year), 1988, p37(2)
Costa Rica, Ecuador, and Bolivia have improved their finances
and protected their rain forests by trading debt purchased by
conservation groups for promises to protect the rain forests. US
conservation groups have contributed $3.2 million to the program in
Costa Rica and $1 million in Ecuador. US tax changes have made it
more attractive for banks to donate their foreign loans to
conservation groups. Argentina, Chile, Brazil Mexico and the
Philippines are also interested in trading debts for conservation.
(MANAGEMENT CONTENTS)
Back to Nature — The Financial Way
Burton, Jonathan
Banker (UK) v!38n754 PP: 22-25 Dec 1988
Environmentalists have created debt-for-nature swap deals
designed to retire a country's debt in exchange for cooperation on
environnmental matters. For example, a debt-for-nature arrangement
could involve a conservation group's purchase of debt in the
secondary market at a steep discount. A government then can buy the
debt in local currency at a premium but below face value, and the
proceeds can be utilized by local conservationists to fund such
efforts as land preservation, forestry projects, and environmental
education. These deals apparently satisfy all parties: the bank
rids itself of a troubled asset, the government reduces some of its
debt burden, and conservationists help preserve nature. However,
these conversions have totaled only about $10 million thus far, and
they are having difficulty finding acceptance in mainstream debt
solutions. Most banks initiating the debt-for-nature swaps have not
been of the large money-center variety. (ABI/INFORM)
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Conservation Groups Help to Bail Out the Big Banks
Anonymous
Business & Society Review n65 PP: 34-38 Spring 1988
Conservation groups have found a way to protect natural
resources in developing nations while helping these countries meet
their debts. "Debt-for-nature swapping" involves the acquisition of
debt by conservation groups and its redemption in local currency to
be used for conservation purposes. In July 1987, Bolivia entered
into the first debt-for-nature swap with Conservation International
(CI) , a US organization. CI purchased $650,000 of Bolivia's
commercial debt for $100,000, and, in exchange, Bolivia agreed to
demarcate 3.7 million acres of tropical rain forest as protected
area. The World Wildlife Fund (WWF) has entered a swap with Ecuador
that converts external debt into local currency bonds to be held by
Fundacion Natura, Ecuador's leading private conservation
organization. The Treasury Department has recently adopted new
rules giving banks a better tax break if they wish to donate debt
for conservation purposes. (ABI/INFORM)
GUANACASTE: THE DAWN OF A PARK
MCLARNEY WILLIAM 0.
ANAI, COSTA RICA,
NATURE CONSERVANCY, JAN-FEB 88, V38, Nl, Pll(5)
NOT ALL TROPICAL FORESTS ARE RAIN FORESTS. RARER ARE DECIDUOUS
DRY FORESTS LIKE THAT OF GUANACASTE NATL PARK IN NORTHWEST COSTA
RICA. THROUGH A PROGRAM OF LAND ACQUISITION, THE PARK IS EXPANDING.
CREATIVE LAND MANAGEMENT IS ENCOURAGING EXPANSION OF THE FOREST
ITSELF, EVENTUALLY ENCOMPASSING 280 SQUARE MI, FROM THE PACIFIC TO
THE CORDILLERA DE GUANACASTE. MUCH OF THE SUCCESS OF THE PROGRAM SO
FAR HAS BEEN DUE TO INTERNATIONAL INTEREST AND A ""DEBT PURCHASE'1
PLAN. WHEN A DONOR PAYS OFF SOME OF COSTA RICA'S FOREIGN DEBT, THE
COSTA RICA GOVERNMENT RELEASES MATCHING FUNDS AT A FOUR TO ONE
RATIO. SINCE THE LAND BEING ACQUIRED BELONGS ON THE WHOLE TO A FEW
FAMILIES, THE PARK MEANS JOB OPPORTUNITIES FOR THE LOCAL POPULACE,
NOT DISPLACEMENT. FOR THE WILD POPULATION-AGOUTIS, WHITE-FACE
MONKEYS, SATURNIID MOTHS, BOAT-BILLED HERONS AMONG THEM-IT MEANS
THE PRESERVATION OF THEIR HABITAT. (ENVIROLINE)
DEBT-FOR-NATURE SWAPS: A NEW CONSERVATION TOOL
WORLD WILDLIFE FUND LETTER, 1988, Nl, PI(9)
DEVELOPING NATIONS, PRIMARILY THOSE IN LATIN AMERICA, OWE NEARLY
$1.2 TRILLION TO PUBLIC AND PRIVATE LENDING INSTITUTIONS. MANY
NATIONS HAVE EXPERIENCED DIFFICULTY IN MEETING THEIR OBLIGATIONS,
LEADING TO THE EVOLUTION OF DEBT EXCHANGE PROGRAMS. DEVELOPING
NATIONS MAY NOT BE WILLING OR ABLE TO PROVIDE THE US DOLLARS NEEDED
TO REPAY THEIR DEBTS, BUT THEY CAN OFFER CREDITORS SOMETHING ELSE
INSTEAD. DEBT-FOR-NATURE SWAPS HELP REDUCE ENVIRONMENTAL PROBLEMS
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SUCH AS TROPICAL DEFORESTATION WHILE RELIEVING DEBT BURDENS AND
ALLOWING CONTINUED ECONOMIC GROWTH. THE SUCCESS OF SEVERAL SUCH
SWAPS TO DATE IS NOTED, AND RECOMMENDATIONS FOR IMPROVING SUCH DEBT
EXCHANGE EFFORTS AND FOR LINKING CONSERVATION WITH DEVELOPMENT ARE
OFFERED. (ENVIROLINE)
VI. POLLUTION PREVENTION
"PLASTIC IS BAD" AND OTHER MYTHS
TOMPKINS DAVID HIMONT,
INNOVATION, SUMMER 90, V9, N2, Pll(4)
PLASTICS COMPRISE 7% BY WEIGHT OF AMERICAN SOLID WASTES
GENERATED ANNUALLY. THE SOLUTION TO SOLID WASTE REDUCTION IS REUSE
AND RECYCLING. APPROXIMATELY 200 MILLION LB OF PLASTIC SOFT DRINK
BOTTLES ARE CURRENTLY RECYCLED; THIS TOTAL MAY REACH 700 MILLION LB
BY 1993. FACED WITH REGULATIONS RESTRICTING OR BANNING PLASTIC-
BASED PRODUCTS, MANUFACTURERS AND THEIR CUSTOMERS ARE DEVISING
TRASH RECOVERY SYSTEMS AND IDENTIFYING APPLICATIONS FOR RECYCLED
PLASTIC. VERSATILE, COMPATIBLE FAMILIES OF PLASTICS SUCH AS
POLYPROPYLENE ARE BEING DESIGNED FOR USE IN VARIED APPLICATIONS AND
FOR EFFICIENT RECYCLING. INDUSTRIAL DESIGNERS NEED TO TAKE A
PRIMARY ROLE ON BEHALF OF ENVIRONMENTALLY RESPONSIBLE DESIGN.
(ENVIROLINE)
TAKING OUT AMERICA'S TRASH
EHRBAR TOMMY
PITT MAGAZINE, JUN 90, V5, N3, P30(6)
ABOUT 10% OF US TRASH IS RECYCLED, ANOTHER 10% IS INCINERATED,
AND THE REMAINING 80% IS SENT TO LANDFILLS. BETTER DUMPING, BETTER
BURNING, AND RECYCLING CAN ALL HELP MANAGE OUR SOLID WASTE PROBLEM,
BUT SOURCE MINIMIZATION IS BECOMING THE MOST SIGNIFICANT
DEVELOPMENT IN THIS FIELD. THE STATE OF OUR SOLID WASTE PROBLEM
TODAY IS ASSESSED, AND FUTURE DIRECTIONS ARE PROPOSED. UNIV OF
PITTSBURGH'S NATL ENV TECHNOLOGY APPLICATIONS CORP, A CENTER SET
UP FOR THE COMMERCIALIZATION OF ENVIRONMENTAL TECHNOLOGY, IS
PROFILED. (ENVIROLINE)
AFTER 20 YEARS: THE CRISIS OP ENVIRONMENTAL REGULATION
COMMONER BARRY
NEW SOLUTIONS, SPRING 90, VI, Nl, P22(8)
A MAJOR REORIENTATION OF THE ENVIRONMENTAL EFFORT, WHICH FOR THE
LAST 20 YEARS HAS BEEN BASED ON CONTROL ONLY AFTER POLLUTANTS HAVE
BEEN PRODUCED, IS NECESSARY; POLLUTION PREVENTION IS REQUIRED.
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POLLUTION PREVENTION MEANS ELIMINATING A POLLUTING PRODUCTION
PROCESS BY SUBSTITUTING A MORE ENVIRONMENTALLY BENIGN METHOD OF
PRODUCTION. EXAMPLES ARE PRESENTED OF HOW POLLUTION CAN BE ATTACKED
AT ITS SOURCE AND THEREBY PREVENTED. THE IDEA THAT A SPECIFIC
POLLUTANT HAS AN ACCEPTABLE HEALTH RISK IS THE INVERSE OF THE
PREVENTIVE PUBLIC HEALTH APPROACH. THE MOST SERIOUS HINDRANCE TO
THE PREVENTION STRATEGY IS IMPLEMENTATION. CURRENT METHODS OF
PRODUCTION ARE THE PRESUMABLY PROFIT-MAXIMIZING RESPONSES TO
ECONOMIC FORCES, AND THERE WILL BE MUCH RESISTANCE TO CHANGING
THEM. THIS HURDLE CAN ONLY BE SURMOUNTED BY CONCERTED GOVERNMENTAL
ACTION. (ENVIROLINE)
AMERICA'S ENERGY FUTURE: CONSERVATION AND RENEWABLES ARE THE PATH
TO TAKE
ROSS JEFFREY S.
BEYOND EARTH DAY (SCIENCE FOR THE PEOPLE), MAY 90, PI(2)
THE FUTURE OF ENERGY USE IN THE US SHOULD INVOLVE CONSERVATION
AND RENEWABLE SOURCES. THE GREATEST ENERGY CONSERVATION COULD BE
ACHIEVED BY SIMPLY ELIMINATING PURE WASTE AND UTILIZING AVAILABLE,
MORE EFFICIENT TECHNOLOGY. A 1985 NAS STUDY PREDICTED THAT US
ENERGY CONSUMPTION COULD BE CUT IN HALF BY LEAK PLUGGING ALONE,
WITH TECHNOLOGIES SUCH AS WEATHERSTRIPPING, HEAT EXCHANGERS,
GREENHOUSES, SUPERWINDOWS AND OTHER INSULATION DEVICES. RENEWABLE
ENERGY TECHNOLOGIES WORTH PURSUING INCLUDE BIOMASS, WIND POWER AND
SOLAR ENERGY. BESIDES THE OBVIOUS ECONOMIC COSTS, MANY SOCIAL AND
ENVIRONMENTAL COSTS COULD BE AVOIDED THROUGH THESE AVAILABLE ENERGY
SOURCES. AS A NATION, WE MUST DEMAND THAT CONGRESS AND THE
PRESIDENT CHANGE THE DIRECTION OF US ENERGY POLICY, SO THAT ENERGY
EFFICIENCY AND RENEWABLES CAN ACHIEVE THE PROMINENCE THEY DESERVE.
(ENVIROLINE)
SAVING AN ECOSYSTEM: FROM BUFFER ZONE TO PRIVATE INITIATIVES
LEAL DONALD
POLITICAL ECONOMY RESEARCH CENTER,
THE YELLOWSTONE PRIMER: LAND & RESOURCE MANAGEMENT IN THE GREATER
YELLOWSTONE ECOSYSTEM (PACIFIC RESEARCH), 1990, P25(21)
MANY ENVIRONMENTALISTS FEEL THAT THE BEST WAY TO SLOW ABUSE IN
THE GREATER YELLOWSTONE ECOSYSTEM IS TO CREATE A BUFFER ZONE AROUND
YELLOWSTONE AND GRAND TETON NATL PARKS, WHICH WOULD LEGALLY PROTECT
THE ECOSYSTEM FROM ACTIVITIES CONSIDERED THREATENING TO THE
ENVIRONMENT. ARGUMENTS ARE PROPOSED TO REFORM THE AREA WITHOUT
INCREASING GOVERNMENTAL INTERVENTION. RATHER THAN DEMANDING BUFFER
ZONES TO PROTECT THE PARKS, ENVIRONMENTALISTS SHOULD WORK TO REFORM
EXISTING GOVERNMENT INSTITUTIONS, SUCH AS THE USFS TIMBER PROGRAM
THAT IS RUNNING A DEFICIT IN ALL OF THE NATIONAL FORESTS
SURROUNDING YELLOWSTONE. AN END TO DEFICIT TIMBER SALES WOULD STOP
OVERSTRESSING THE ENVIRONMENT AND SAVE TAXPAYERS MONEY. GREATER
EFFICIENCY IS ULTIMATELY OBTAINED THROUGH PRIVATE STEWARDSHIP; ONLY
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THROUGH PRIVATE OWNERSHIP IS AUTHORITY ALIGNED WITH RESPONSIBILITY.
[Book chapter] (ENVIROLINE)
THE NEW RESOURCE ECONOMICS
COPELAND MICHAEL D.
MONTANA STATE UNIV, BOZEMAN
THE YELLOWSTONE PRIMER: LAND & RESOURCE MANAGEMENT IN THE GREATER
YELLOWSTONE ECOSYSTEM (PACIFIC RESEARCH), 1990, P13(ll)
NEW RESOURCE ECONOMICS (NRE) CRITICALLY EXAMINES THE PREVAILING
ENVIRONMENTAL ORTHODOXY. NRE WAS DEVELOPED AT THE POLITICAL ECONOMY
RESEARCH CENTER IN BOZEMAN, MT, FROM A CONCERN FOR THE ENVIRONMENT,
WHICH WAS BEING COMPROMISED BY THE VERY GOVERNMENT AGENCIES
ASSIGNED TO PROTECT IT. THIS PHILOSOPHY IS APPLIED TO THE
PRESERVATION AND IMPROVEMENT OF YELLOWSTONE NATL PARK. BY
ADVOCATING THE PRIVATE OWNERSHIP OF RESOURCES, NRE PROVIDES SOME
ALTERNATIVES TO THE PRESENT COMMAND-AND-CONTROL MANAGEMENT
TECHNIQUES. NRE WOULD CREATE PRIVATE INCENTIVES AND INSTITUTIONS
WHENEVER POSSIBLE, AND WOULD UTILIZE THE MARKET SYSTEM TO GENERATE
THE PRICE INFORMATION NEEDED TO MAKE GOOD DECISIONS. THUS, PRIVATE
OWNERSHIP WOULD, IN MANY CASES, REPLACE GOVERNMENT OWNERSHIP.
[Book chapter] (ENVIROLINE)
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EPA HEADQUARTERS LIBRARY MANAGEMENT COLLECTION
List of Management Bibliographies
1. EFFECTIVE CONFERENCE PLANNING
by Sigrid N. Smith, March 1991
EPA/IMSD-91-002
2. CONTRACT MANAGEMENT
by Mary Hoffman and Sigrid N. Smith, January 1991
EPA/IMSD-91-001
3. MANAGING A DIVERSE WORK FORCE
by Anne Twitchell, September 1990
EPA/IMSD-90-011
4. PROJECT MANAGEMENT
by Anne Twitchell, June 1990
EPA/IMSD-90-007
5. STRATEGIC PLANNING
by Anne Twitchell, March 1990
EPA/IMSD-90-005
6. TOTAL QUALITY MANAGEMENT
by Anne Twitchell, December 1989
EPA/IMSD-89-009
7. LEADERSHIP: QUALITY MANAGEMENT FOR THE FUTURE
by Anne Twitchell, September 1989
EPA/IMSD-89-005
8. COMMUNICATION SKILLS FOR EFFECTIVE MANAGEMENT
by Anne Twitchell, June 1989
EPA/IMSD-89-003
9. EFFECTIVE PERFORMANCE APPRAISALS
by Anne Twitchell, March 1989
EPA/IMSD-89-002
10. OFFICE OF THE FUTURE: THE MANAGER'S ROLE
by Anne Twitchell, December 1988
EPA/IMSD-88-013
11. OFFICE OF THE FUTURE: THE CHANGING ROLE OF SECRETARIES
by Mary Hoffman and Anne Twichell, revised May 1989
12. MANAGEMENT TRANSITION
by Mary Hoffman and Anne Twitchell, September 1988
EPA/IMSD-88-007
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13. MANAGING IN THE PUBLIC SECTOR
by Mary Hoffman, March 1988
EPA/IMSD-88-003
14. RESISTANCE TO CHANGE
by Mary Hoffman, December 1987
EPA/IMSD-87-011
15. INTRAPRENEURSHIP: THE EMERGING FORCE
by Mary Hoffman, September 1987
16. SUPERVISORS AND HUMAN RESOURCES
by Mary Hoffman, June 1987
EPA/IMSD-87-0062
17. TECHNICAL EXPERT TURNED MANAGER
by Mary Hoffman, March 1987
US. Environmental Protection Agency
Region 5, library (PI-12J) 12th Roor
77 West J»cks«n Boulevard, 12th rioor
Chicago, IU 60604-3590
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