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?/EPA JOURNAL
United States
Environmental Protection Agency
Office of Communications,
Education, and Public Affairs
William K. Reilly
Administrator
Lew Crampton
Associate Administrator
Charles Osolin
Director of Editorial Services
John Heritage
Editor
Karen Flagstad
Associate Editor
Teresa Opheim
Assistant Editor
Gregg Sekscienski
Assistant Editor
Ruth Barker
Assistant Editor
Jack Lewis
Assistant Editor
Nancy Starnes
Assistant Editor
Marilyn Rogers
Circulation Manager
Editorial Assistance
Leighton Price
Design Credits
Ron Farrah
James R. Ingram
Robert Flanagan
Front Cover: Action on the floor
of the Chicago Board of Trade.
The exchange plans to launch a
futures market /or EPA's sul/ur
dioxide allowances early next
year. See articles on pages 21
and 27 discussing the use of
the marketplace jor pollution
control. Photo by Robert Frenck
for Tony Stone Worldwide.
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EPA JOURNAL is printed on recycled paper.
A Magazine on National and Global Environmental Perspectives
May/June 1992
Volume 18, Number 2 175-N92-003
From the Editor
Is the nation's environmental cleanup taking a new shape as the
decade moves along? For clues, watch the progress of
approaches such as pollution prevention, information transfer,
and the use of economic incentives.
The pollution control effort launched in the 1970s has been
carried out largely by command-and-control regulations. These
require all sources in a class to take specific actions by a certain
time. The installation of catalytic converters on automobiles was
brought about by such a regulation.
But several trends have developed which may be setting the
stage for the introduction on a major scale of new approaches—or
"tools"—to implement the cleanup. These trends are:
• An increased consensus that there are other ways to
accomplish society's ends in a democracy than directives from
government institutions. As much pollution might be eliminated
by citizens armed with facts about a local plant's waste output as
by a new federal rule. An environmentally educated population
might produce cleaner, healthier surroundings over the long run
than institutional fiats.
• A widening understanding that the pollution battle will not be
won by focusing on industry alone. A big part of the enemy is
us—our driving and buying habits, our leisure time lifestyle.
• Concern about a mounting pollution control bill in a period of
national economic squeeze. Innovative thinkers have produced
the notion that there might be less expensive ways to achieve the
same environmental goals.
• The emergence of globe-spanning environmental problems that
cannot be dealt with by controls issued by any one nation's
agencies. In one response, many of the countries of the world
have launched a joint effort to meet the challenge of stratospheric
ozone depletion, using a wide range of implementation tools.
These trends don't signal the end of command-and-control
regulation. There is a big body of federal law that requires the use
of this approach. But alternatives are in the "toolkit" and they are
being taken out and actively tried, by Congress, the
Administration, and some environmental groups and industry.
There are skeptics, but a move towards innovation is clearly
afoot.
Some sad news: Our friend and colleague, Assistant Editor
Jack Lewis, died on June 21. He will be sorely missed.
Among his many contributions to EPA Journal over the years,
Jack invented our "Titans in Conservation" feature, and his story
on Rachel Carson appears on page 60 of this issue.
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Contents
"Tools" to Protect
the Environment
*l A Need for New
' Approaches
by Alvin L. Aim
Jobs at Hand
;:
15
16
18
Solid Waste:
Incentives that Could
Lighten the Load
by Terry Dinan
Pesticides:
The Potential for
Change
by Marcia E. Williams
Ozone Loss:
Modern Tools for a
Modern Problem
by David Lee
The Denver Airport:
Pollution Prevention by
Design
by Jack W. McGraw
In the Toolkit
ECONOMIC INCENTIVES
i)4 Harnessing the
^ I Marketplace
by Robert N. Stavins
OC A Skeptic Speaks
"" by Michael Gartner
07 The Market-Based
' ' Approach at EPA
by Richard D. Morgenstern
00
"'
An Answer to the
Dilemma on the Front
Line?
by Henry Lee
A Forum: The Los
Angeles Venture
Trades to Remember:
The Lead Phasedown
by LiJy Whiteman
POLLUTION PREVENTION Departments
•j Heading Off Potential
' Problems
by Richard Andrews
INFORMATION TRANSFER
tc Attacking a Problem
0 with the Facts
by Caron Chess
ENGINEERING AND
TECHNOLOGY
New Davids to Tackle
Environmental Goliaths
by Erich W. Bretthouer
Making the Tools
Work'
The Institutional
Challenge
by Terry Davies
and Frances Invin
0 Newsline
Newsline
News and Comment
on EPA
CT Featuring EPA
' The Mobile Scanner Van
Reports for Duty
by Yasmine S. Khonsary
and Colleen F. PetuIIo
59
60
62
64
Letters to the Editor
Titans in Conservation
Rachel Carson
by Jack Lewis
Cross Currents
Taking the Pulse of Our
Renewable Resources
A Book Review
by Douglass Lea
On the Move
New Name
in a Key Agency Post
EPA is charged by Congress to protect the nation's land, air, and water systems. Under a mandate of national environmental laws, the Agency strives to
formulate and implement actions which lead to a compatible balance between human activities and the ability of natural systems to support and nurture life.
EPA JOURNAL is published by the U.S. Environmental Protection Agency. The Administrator of EPA has determined that the publication of this periodical
is necessary in the transaction of the public business required by law of this agency. Use of funds for printing this periodical has been approved by the
Director of the Office of Management and Budget. Views expressed by authors do not necessarily reflect EPA policy. No permission necessary to reproduce
contents except copyrighted photos and other materials.
Contributions and inquiries should be addressed to the Editor, EPA JOURNAL (A-107), Waterside Mall, 401 M Street, SW., Washington, D.C. 20460
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NEWSLINEL
"Cash for Clunkers" to Cut Pollution
A new EPA plan allows air
pollution emissions credits
to be earned through
scrapping oJder (more
polluting] automobiles.
States can design their own
programs under the plan.
Typically, a smokestack
industry that was under the
gun to reduce its emissions
would buy old cars from the
public and scrap them. For
each car destroyed, the
industry would receive an
emissions credit. The
amount and lifetime of the
credit would depend on the
age of the car. To make sure
the clunkers were taken off
the road and not off the
junk heap, they would have
to be registered in the same
state for the previous year.
Although most stationary
sources have already
reduced their emissions to a
large extent, many will
have to go further under the
1990 Clean Air Act. The
further they have to go, the
more expensive become the
controls. In cities where air
pollution is severe, and
emissions must be reduced
substantially, buying and
scrapping old cars may be
cheaper than clamping
down further on
smokestacks.
The Washington Post
reported: "... The
'Cash-for-Cl tinkers'
program, patterned on a Los
Angeles experiment in 1990
by Unocal Corp., an oil
company, would pay
owners of 1981-model and
older cars a
yet-undetermined price to
turn in their aging vehicles
.... The program . . . was
announced ... at the White
House by Michael J. Boskin,
chairman of the President's
Council of Economic
Advisers. The . . . program,
coming in an election year,
is viewed by detractors as a
sop to industries trying to
evade federal clean-air
rules. 'It's an ineffective and
costly clunker,' said
Clarence Ditlow, executive
director of the
Washington-based Center
for Auto Safety. In effect,
the program would allow
companies to continue
polluting the air in return
for removing polluting cars,
Ditlow said. Such a swap
will do little to clean up the
environment, but it could
do much to hurt poor
consumers in an era of
escalating new- and
used-car prices, he said.
Bush administration
officials disagreed. The
'primary purpose' of the
Cash-for-Clunkers program
is to implement new federal
rules affecting smokestack
pollutants 'in a
cost-effective way,' said
Boskin. The program might
also boost new-car sales by
encouraging people to trade
in old cars for fresher
models, some supporters
said. But Boskin attempted
to play down that possible
benefit, saying, 'One would
not expect everyone who
trades in a clunker to walk
into a new-car showroom
and buy a new car.' Auto
industry analyst Dennis
Virag agreed. 'I seriously
question the number of old
cars that the government is
going to be able to get off
the road for $700,' said
Virag, a senior partner at
Automotive Consulting
Group Inc., an industry
research and consulting
firm in Ann Arbor,
Michigan. The government
hasn't set an exact price for
cars in the new program,
but Unocal paid $700 each
to people turning in
1970-model and older cars
in its one-year experiment
in Los Angeles. The firm
bought 8,400 cars during
the year, said Unocal
spokesman Michael Riehle.
A survey of 800 of the
people who ditched their
old cars for cash showed
that 80 of them did not
replace their vehicles, that
another 360 already had
other cars, and that the
remaining 360 used the
$700 as a down payment to
buy new cars or used
models that were in better
condition, Riehle said. The
people who bought new or
better used cars paid an
average of $5,000 for them,
he said . . "
The Washington Times
commented: "... Another
controversial
announcement—relaxing
the required average miles
per gallon for autos using
reformulated or oxygenated
fuel, including ethanol
mixtures—is expected soon,
according to Michael
Boskin, chairman of the
President's Council of
Economic Advisers. The
standard currently is 27.5
miles per gallon. An
administration official said
there would be a huge
environmental benefit from
buying and junking old
cars. 'Our cash-for-clunkers
program ... is just one
example of the innovative,
market-based approaches to
pollution reduction that
have been pioneered by our
Environmental Protection
Agency,' Mr. Bush said in a
written statement
announcing several
regulatory changes .... 'We
call it mobile-stationary
source trading and
emissions control,' [Acting]
Assistant EPA
Administrator Richard
Morgenstern explained with
a straight face at a briefing.
Mr. Morgenstern said cars
built before
1980—representing 38
percent of cars on the road
today—produce 86 percent
of all hydrocarbons and
carbon dioxide spewed out
of exhaust pipes. Along
with nitrogen oxide, these
chemicals become smog
when they reach sunlight.
'The dirtiest 6 percent of
the cars on the road today
emit 50 percent of the
hydrocarbons. The cleanest
50 percent of cars emit only
3 percent of these
hydrocarbons,' Mr.
Morgenstern said . , . . "
EPA JOURNAL
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Ongoing Enforcement Actions
Close to $3 Million
Sought in Complaint
Against Kerr-McGee
Coal
In a complaint against
Kerr-McGee Coal Company,
EPA is seeking $2,963,579
in penalties for 110
hazardous waste violations
at the Jacobs Ranch Mine in
Campbell County,
Wyoming. The complaint
was filed under the
Resource Conservation and
Recovery Act (RCRA). Most
of the charges allege that
Kerr-McGee shipped wastes
to facilities in Wyoming and
Colorado that were not
authorized to treat, store, or
dispose of them; the
remaining charges allege the
company failed to provide
EPA with information
required under the law,
wrongly labeled some
shipments, and stored truck
cleaning and degreasing
wastes improperly.
Luxury Car Importer
Faces Fines
The Department of Justice,
on behalf of EPA, is seeking
$170,000 in fines from JBA
Motorcars Inc. of
Deerfield, Florida, for
illegally importing new
cars, mostly BMWs and
Mercedes Benz. Under the
Clean Air Act, all vehicles
imported into the United
States must be covered by
an EPA certificate
indicating that a prototype
of their emissions control
systems has been modified
to conform to EPA
standards and tested for
compliance. An importer
must notify the Agency of
any vehicles he intends to
import that are
representative of the
prototype; he must maintain
records documenting
modifications he has made
to emissions systems to
bring vehicles into
compliance; and he must
provide emissions repair
warranties to purchasers.
The civil suit, which alleges
17 violations of these
regulations, arises from an
audit of the company by
EPA; attempts by the
Agency to settle out of court
with JBA Motorcars have
failed.
Bethlehem Steel
Makes $32 Million
Improvements;
To Pay $6.7 Million
in Fines
Under agreements with EPA
and the Pennsylvania
Department of
Environmental Resources,
Bethlehem Steel
Corporation (BSC) will
bring manufacturing plants
at Bethlehem and
Johnstown into compliance
with emissions standards
through a $32-million
capital improvement
program. In addition, the
company will pay civil
penalties of $6.7 million for
past violations of the
standards. The agreements,
incorporated in two
separate consent decrees,
were made under the
authority of the Clean Air
Act.
Under the Bethlehem
plant agreement, BSC is
taking steps to control
gaseous emissions from
coke oven doors and to
control particulate
emissions arising from the
transportation of hot coke.
The organic soup of
carcinogens discharged from
coke ovens especially
concerns EPA because of
risks to public health.
Under the Johnstown
agreement, BSC will
continue to operate
improved controls on its
electric arc furnaces; the
controls, installed at EPA's
urging during the settlement
negotiations, reduce
particulate emissions.
Ship Loses Arsenic
Drums in Atlantic;
EPA Files Suit
The Justice Department, on
behalf of EPA, has filed suit
against the Santa Clara I for
losing more than 400 drums
of arsenic trioxide off the
coast of Cape May, New
Jersey, and Delaware Bay.
Arsenic trioxide is a
hazardous substance used
as rat poison and as a wood
preservative. The ship,
which is owned by a
Panamanian company and
operated by a corporation
based in Peru, remains
anchored in the harbor at
Charleston, South Carolina.
The suit prevents her
departure, thereby making it
possible for EPA to recover
the costs of finding the
drums and retrieving them.
Under the Superfund law,
the owner and operator of a
vessel that releases a
hazardous substance to the
environment are liable for
the costs of corrective
action and for any damage
to natural resources.
Corning, Asahi
to Pay for
Violations of
Arsenic Emissions
Standards
Under a consent decree,
Corning, Inc., and Asahi
Glass America, Inc., have
agreed to pay $1.8 million
for exceeding arsenic
emissions limits at glass
manufacturing plants in
State College and Charlerol,
Pennsylvania. Also party to
the agreement is Corning
Asahi Video Products, a
partnership. The agreement
stems from a civil
complaint brought against
Corning early in 1990; many
of the violations occurred
before Asahi became a
partner with Corning. The
arsenic emissions limits
were set by EPA under the
National Standards for
Hazardous Pollutants
provisions of the Clean Air
Act.
In addition to paying the
penalty, the companies have
agreed to install
computerized equipment to
diagnose and prevent
problems with the
electrostatic precipitators
that control arsenic
emissions. They have also
agreed to write operation
and maintenance
procedures for the
precipitators, and to
perform maintenance at
least once a year.
MAY/JUNE 1992
-------
NEWSLINE
United States, Mexico to Clean Up Border
EPA and Mexico's
environmental agency,
SEDUE, have developed a
comprehensive plan for
cleaning up pollution along
the border of the two
countries. The plan calls for
the expenditure of well over
$1 billion over the next
several years by the United
States, Mexico, the border
states, and private industry.
In commenting on the plan,
EPA Administrator Reilly
said: "Economic growth in
the border region this past
decade and the prospects
for more economic
opportunities from a free
trade agreement have
prompted new attention to
environmental issues in
that area. Thanks to the
initiative of Presidents Bush
and Salinas in asking for an
integrated border plan, we
now have a much better
understanding of the
environmental problems
along the border, we have a
joint plan of action for
correcting these problems,
and we have commitments
for the money to get the job
done. Never be/ore have
two nations made such a
commitment and developed
so extensive a plan to
improve the health and
environment along their
entire border."
The Los Angeles Times
reported: "... Trying to
build support for a North
American Free Trade
Agreement, the Bush
Administration on Tuesday
unveiled an unprecedented
binational effort to clean up
the environment along the
2,000-mile U.S.-Mexico
border, a region where
untreated sewage and
dumped chemicals course
through waterways, tires
Robert Dowson pholo. Copyright If)fl9. National Museum o/ American Art.
smolder in landfills and old
cars belch leaded-gasoline
fumes .... Among [the
improvements] is
completion of a
long-delayed international
sewage treatment plant for
Tijuana and San Diego, and
a project to heal the New
River, one of the world's
most polluted waterways,
which flows north from
Mexicali into California's
Imperial County. It also
calls for improved drinking
water and wastewater
treatment systems for the
colonies—makeshift
settlements in Texas—and
increased cooperation
between environmental
authorities in both countries
.... The joint proposal,
however, drew immediate
criticism. Environmental
activists said it did not go
far enough, calling it vague,
underfinanced, and difficult
to enforce. Although U.S.
Trade Representative Carla
Hills said she expects the
plan to improve the free
trade pact's chances on
Capitol Hill, one legislator
who has been an influential
supporter said its
weaknesses may hurt the
campaign for an
open-market agreement ....
Although most lawmakers
had not seen the entire
proposal, one prominent
Democratic legislative aide
said U.S. contributions of
$140 million this year and
$240 million next year
amount to 'a start,'
especially because the
Administration had been
talking about as little as
$6 million last year ....
However, the legislative
aide said it is 'a drop in
the bucket when you look at
what the needs are down
there,' citing studies by the
University of Texas that
estimated the costs at $18
billion. Some credible
experts, he added, have put
the figure at $50
billion . . . ."
The Wall Street Journal
commented: "... The
millions of people living
along the border aren't the
One of the world's most
polluted waterways, the New
River flows from Mexicali into
California. This photo is part
of an exhibit, Between Home
and Heaven: Contemporary
American Landscape
Photography, which is
traveling to Pittsburgh, New
Orleans, Albany, Cleveland,
and Virginia Beach.
only ones who are
vulnerable: Public-health
specialists fear sewage
contaminants may be
coursing through U.S. food
supplies as border packing
houses ship produce and
seafood filled with ice that
may be laden with parasites
and viruses .... The report
calls on business to play a
role. But one analyst
familiar with the final
document says it offers no
new initiatives, such as user
fees on plants that strain the
region's infrastructure or
bonds to fund
sewage-treatment plants,
and lacks cross-border
enforcement mechanisms
.... Sewage, which largely
flows from south to north
into the U.S., has become
one of the biggest problems.
What had been a trickle of
Mexican sewage has, in
recent years, turned into a
daily torrent of millions of
gallons as armies of
Mexican job seekers have
flocked to the border area's
largely U.S.-owned factories
EPA JOURNAL
-------
and assembly plants. The
combined population of
Ciudad Juarez, Mexicali,
and Tijuana has jumped
almost fivefold since 1960
to three million. But neither
the cash-strapped Mexican
government nor the
companies—who like the
cheap labor and lax
environmental
enforcement—have installed
much basic infrastructure.
Water treatment plants in
the border region have the
capacity to treat only 16
percent of the municipal
and industrial wastewater.
Many Mexican border cities,
such as Ciudad
Juarez—which generates 22
million gallons of raw
sewage a day—have no
sewage system at all ....
American cities, of course,
have their share of sewage
problems. But concerns
about Mexican sewage are
greater because of the
higher prevalence of
disease-causing organisms.
Typhoid, for example, is
100 times higher on the
Mexican side of the border
than on the U.S. side,
according to the Pan
American Health
Organization .... Eager for
solutions, the region's
residents propose a variety
of alternatives to the official
report, including
debt-for-nature swaps and a
development bank similar
to the Eastern European
Bank of Reconstruction and
Development. Perhaps the
most practical solution
would be user fees on
foreign assembly plants, to
be used toward sewage and
water treatment plants and
other infrastructure.
Because Mexico has been
eager to attract foreign
employers, these plants now
pay little tax . . . . "
Wet Weather Runoff is Nation's
Most Serious Water Quality Problem
According to EPA's latest
national inventory of water
quality, runoff of rain and
snowmelt from farms and
urban areas is the most
serious of the remaining
water pollution problems.
Runoff from fields, lawns,
streets, and parking lots
carries sediment and
chemicals into waterways,
where they can threaten
human health and poison or
choke the life out of aquatic
ecosystems. Over the past
20 years, there has been a
marked decline in pollution
from sewers and from
industry outfalls—the
federal government, alone,
has invested more than $58
billion in sewage treatment
plants. However, pollution
from so-called "nonpoint"
sources may be on the rise.
The inventory, which is
based on assessments by the
states, shows that although
two thirds of the waters are
good enough to suppqrt
such uses as swimming and
fishing, the remaining
waters are impaired to some
degree, and the leading
contributors are nonpoint
sources. In fact, the states
report that agricultural
runoff is the most prevalent
source of water pollution in
the country today. The
states assessed
approximately 36 percent of
total U.S. river miles, 47
percent of lake acres, and
75 percent of estuary square
miles.
The states indicate that
commercial and residential
development are the leading
causes of the continued loss
of wetlands, followed by
conversion to agriculture.
The United States has lost
more than half its original
wetlands; 2.6 million acres
were reported lost between
the mid-1970s and the
mid-1980s. Ground water,
used as drinking water by
more than half the nation's
population, is also
threatened. The major
culprits are underground
storage tanks, septic
systems, municipal
landfills, farming practices,
and hazardous waste sites.
The inventory derives
from data collected in 1989
and 1990. It is the eighth in
a series of reports sent to
Congress by EPA every
other year beginning in
1975. D
Runoff from farmland after a brief norm.
Tim McCabe photo.
MAY/JUNE 1992
-------
.S" TO PROTEC
Dealing with modern
environmental
problems, such as
acid rain, requires
ingenuity and new
approaches.
-------
A
FOR NEW
APPROACHES
Command-and-control is
no longer a cure-all
by Alvin L Aim
Over the last two decades, so-called
command-and-control regulations
have dominated environmental control
efforts and achieved measurable
successes. But the nation has reached a
critical juncture. In the last decade of
the 20th century, we are facing a host
of new and diverse environmental
challenges—ranging from global
climate change and ozone depletion to
indoor air pollution in homes and
offices—at the same time that we must
deal with residual problems that have
not been solved over the last few
decades.
fAlm, a former Deputy Administrator
of EPA, is now Director and Senior
Vice President of Science Applications
Internationa] Corporation in McLean,
Virginia. As a member of EPA's
Science Advisory Board, Aim chaired
the Strategic Options Subcommittee of
the Relative Risk Reduction Strategies
Committee.]
MAY/JUNE 1992
These new and residual problems
cry out for innovative solutions. The
traditional regulatory
approach—establishing a regulatory
limit for a given pollutant or
specifying a technology for its
control—will no longer suffice. Dealing
with the problems of the next few
decades will require increased
ingenuity and new approaches. Many
such approaches have been suggested
by EPA's Science Advisory Board
(SAB) in its landmark 1990 report,
Reducing Risk: Setting Priorities and
Strategies for Environmental
Protection. This article grows out of
my participation in the development of
that report.
Historically, the U.S. regulatory
system was shaped during the 1970s as
environmental concerns emerged as
major public policy issues. The first
pollution control act of the decade, the
1970 Clean Air Act, set a precedent
and forged a new direction: It
mandated technological standards for
all new sources of air pollution, called
for the control of toxic air pollutants,
and set mandatory deadlines for
compliance. The Clean Water Act of
1972 followed in the direction of the
Clean Air Act, creating effluent
discharge standards for all new and
existing dischargers and a permit
system to assure compliance with
these technology standards. These two
acts were successful in most respects.
Water quality improved in visible
ways throughout the country. Certain
forms of air pollution were cut
dramatically.
This command-and-control approach
was broadened dramatically in
hazardous waste legislation—through
both the Resource Conservation and
Recovery Act (RCRA) and the
Comprehensive Environmental
Response, Compensation, and Liability
Act (CERCLA, or "Superfund"). Other
new laws followed in the
command-and-contro] mode, so that
EPA now operates under 13 different
statutes, and rooms full of regulations
have been generated under these laws.
Despite many successes, the
situation that has evolved is far from
optimum. Old-fashioned air and water
pollution is still a serious problem in
many areas. New problems are heaped
on the nation's environmental agenda,
with none removed. The total annual
cost of environmental regulation is
considerably over $100 billion a year
and growing rapidly. And
command-and-control measures seem
particularly inappropriate to cope with
today's more diffuse problems because
large point sources of pollution are not
the main problem.
In what ways has our traditional
system fallen short? Why are we
searching out new approaches? Let's
get down to basics.
First, command-and-control
regulatory systems do not adapt well
to changes in population, technology,
and economic activity. In many cases,
technological change can bring
environmental improvement as less
polluting and less energy-intensive
technologies replace older ones. In
general, however, urbanization and
population growth create increasing
pollution pressures. Since 1970, there
has been almost a 20-percent increase
in U.S. population and a 160-percent
increase in economic output. Given
marked increases in
pollution-generating activities, the net
reductions achieved since then in
emissions of most pollutants are
impressive. For example, population
growth, greater urbanization, and
increased vehicle miles traveled tend
to cripple our efforts to achieve air
quality standards for smog in urban
areas. Each new and costly regulation
is at least partially offset by the growth
in emissions sources.
Second, current regulatory programs
are generally organized around single
media or single classes of pollution. As
we now know, part of the initial
success of EPA's air and water
pollution programs resulted from
shifting air and water pollutants to
land. Now that RCRA and CERCLA
greatly constrain that option, the
danger is that new regulatory actions
may have the effect of shifting
pollution around, rather than actually
reducing it.
Third, as mentioned earlier, many
newly emerging environmental
problems are ill-suited to
command-and-control regulatory
systems. Indoor air pollution or global
climate change, for instance, are
-------
TOOLS' TO PROTECT THE
problems that are not very amenable to
end-of-the-pipe solutions.
Fourth, the time-scale of traditional
regulation makes it a cumbersome tool
During the four to eight years that
regulations wend their way through
the rulemaking process, a great deal of
damage to the environment can occur.
Moreover, given such a protracted
process, regulations do not lend
themselves to fine-tuning if any
regulatory action creates an unforeseen
result.
Finally, certain types of regulations
are extremely costly. With pollution
control costs expected to reach $160
billion annually by the end of the
century, any alternative way to reduce
costs must be considered. This is why
market incentive systems that rely on
private sector actions to achieve
least-cost solutions represent critical
tools for reducing pollution control
costs.
In fact, frustration over the timing,
inflexibility, and cost of regulations
has led to redefining some of the goals
of environmental quality. In concept,
traditional environmental programs
were aimed at reducing contamination
so that residual risk was driven to
zero. For example, the 1970 Clean Air
Act defined ambient air standards in
terms of protecting public health with
an adequate margin of safety. But over
time, it became increasingly clear that
eliminating all risk was simply not
possible. Moreover, continuing to
ratchet down regulatory systems
became an expensive and often
fruitless exercise.
In the late 1980s, environmental
cognoscente developed a new
hierarchy of risk reduction goals.
Under this revised hierarchy, the
number one priority is to prevent
pollution in the first place, either by
using material substitutes or effecting
process changes. Second, where
pollution prevention either is not
possible or is limited in its
applications, every effort should be
made to recycle products that cause
pollution. Ranked third in the new
hierarchy is treatment to detoxify or
otherwise lessen the environmental
impact of pollutants. The fourth
option: isolating contaminants in
various ways through proper disposal.
I believe this new paradigm will
have major impacts on how the nation
approaches risk reduction. If the major
goal of environmental policy is to
prevent pollution, then traditional
ways of setting ambient and
technological standards are less
relevant than in the past. In a sense, if
this goal truly replaces the previous
goal of treating wastes to reduce
residual risk, we are faced with a
fundamental contradiction. There
really is no good way to mandate
pollution prevention or recycling
through command-and-control
approaches. Noncompulsory systems
need to be created, whether they are
stimulated by market forces,
self-interest in avoiding future liability,
public relations, or just good
citizenship.
What alternatives are there? What
sorts of tools can supplement or
substitute for end-of-the-pipe
regulations? The five kinds of
alternative mechanisms to traditional
regulations evaluated by the SAB's
Strategic Options Subcommittee and
discussed in "Appendix C" of
Reducing Risk provide a good
beginning. They are: scientific and
U.S. Population
Vehicle Miles Traveled in the U.S. U.S. Pollution Control Costs
250 Million
230
-210
190
170
.150
2,00
1.75
1.50
1.25
1.00
175
•150
125
100 ™
•76
'50
25,
1950 1960 1970 1980 1990
Source: Population Reference Bureau (U.S Census Figures!
1970 1975 1980 1985
Source: Federal Highway Administration
1990
1972 1987
Source: EPA
1992
2000
EPA JOURNAL
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Environmental
legislation of
the /as( 20
years has
much
improved the
environmental
quality of
places such as
Steubenville,
Ohio, which
suffered from
obvious
pollution
problems in
the 1970s.
technical measures; provision of
information; market incentives;
cooperation with other agencies and
nations; and enhanced enforcement of
existing regulations. I'd like to focus
here on the first four.
Science and technology can play a
great role in environmental
improvement. The potential here
should be obvious. The recent
quantum jumps in our ability to
discover and monitor environmental
contaminants have resulted in a much
larger regulatory universe. New
technologies tend to be inherently less
polluting and less energy intensive.
Research and development of new
technologies and the transfer of such
technologies to the private sector can
play an important role in reducing
risk. Moreover, sometimes simply
sharing R&D information can
encourage voluntary efforts by
individuals to protect themselves or
take action to reduce pollution in their
environment, such as recycling.
Providing information, particularly
R&D results, has been an important
tool used by government to influence
private behavior. Historically, the most
Husly Kennedy photo. AP/Wide H'orld.
important example of government
technology transfer has been in
agriculture, where R&D from land
grant colleges has been effectively
conveyed through the extension
services to farmers across the nation.
Some of this expertise directly or
indirectly affects the environment,
such as certain technologies and
changes in agricultural practices that
can reduce pesticide use or slow soil
erosion.
Information transfer has tremendous
potential to change behavior. Given
present levels of concern over
environmental issues, industrial firms,
citizen groups, and individuals are all
searching for sensible ways to reduce
environmental stress. For instance, the
chemical industry's Responsible Care
program represents efforts to establish
guiding principles, institute
self-evaluating operations in light of
those principles, and share information
to improve overall industry
performance. Green labeling initiatives,
of course, can help citizens make
environmentally responsible
purchases.
There are viable ways for
government to tie information transfer
programs to voluntary agreements for
action. EPA's "Green Lights" program
for energy-efficient lighting is a good
example of this. (See page 44.) But
information does not necessarily need
to be transferred by government to be
an effective tool in reducing pollution.
The emissions reporting requirements
established by the Emergency Planning
and Community Right-to-Know Act of
1986 have proved instructive in this
respect. When the required data on
emissions entered the public domain,
plain business sense prompted many
large chemical companies to set
voluntary goals to reduce their
emissions. (See box on the Toxics
Release Inventory (TRI) database on
page 49.) Taking his cue, EPA
Administrator William Reilly set up a
voluntary emission reduction program
called "33/50" (see page 42).
Market incentives represent
potentially the most significant
alternative to regulation. The most
well-known forms of market
incentives—charges (taxes or fees),
deposit-refund systems, and
marketable permits—all have different
effects on the environment and on the
cost of compliance. (See article
on page 21.)
Until recently, market incentives
have been more the province of
academic economists than legislators
and policy makers. Several proposals
have been made to enact pollution or
energy taxes in the United States over
the years; but frequently such taxes
were not even formally introduced and
none were passed. The exception here
is a tax on CFCs (see article on page
16).
Presently, however, the interest in
market incentives has picked up
substantially. As the cost of
conventional regulatory programs has
skyrocketed and their effectiveness
increasingly has been called into
question, new voices have been raised.
Among the early and influential
voices: the late Senator John Heinz
(R-Pennsylvania) and Senator Tim
Wirth (D-Colorado). In the landmark
"Project 88" study co-chaired by these
two senators, strong arguments were
advanced for using a variety of market
forces to deal with environmental
problems ranging from global climate
MAY/JUNE 1992
-------
tfg
Information
transfer can be
a powerful
force in
reducing
pollution. For
example,
because of
information
provided by
the North
Carolina
Alternative
Energy Corp.,
poultry farmers
have installed
energy efficient
lighting.
North Curnlimi Alternative Energy Corp- photo.
change to preserving open space.
The unprecedented support of the
Bush Administration for the most
important market incentives yet
proposed—the market-based provisions
in the recent Clean Air Act
amendments—suddenly advanced the
concept of market incentives to a
realistic policy option. Passed by
Congress in 1990, the amendments
included, among other market-based
innovations, a new system of
marketable permits (or tradable
"allowances") for sulfur dioxide
emissions, which cause acid rain. EPA
has estimated that this flexible new
system will enable the nation to
achieve significant improvements in
air quality at compliance costs
approaching $1 billion lower than
would otherwise be possible.
Unfortunately, however, rigid attitudes
and practices by state regulatory
commissions may undercut the
realisation of these savings.
Coping with global climate change
represents the current battleground for
potential use of economic incentives.
A carbon tax has been suggested as a
way to reduce emissions of carbon
dioxide, which contributes to global
warming. Although there are
uncertainties about all the
modest tax increases are currently
political anathema in the United
States, it is only realistic, to consider a
carbon tax a very long shot at present.
Finally, substantial risk reduction
could be achieved by cooperation
among agencies and among nations. A
great deal could be accomplished by
focusing the efforts of federal agencies
on the environmental impacts of
activities under their jurisdiction. For
example, substantial environmental
impacts are associated with
agriculture, primarily runoff of
sediment and contamination of surface
and ground water with nutrients and
pesticides. Most air pollution problems
and a host of other environmental ills
result from the extraction, transport,
and consumption of energy. Severe
urban air pollution problems result
primarily from entrenched living and
transportation patterns that require
individual vehicles to transport people
over great distances.
ramifications of a carbon tax, it could
be a powerful tool to reduce carbon
dioxide emissions.
The argument for a carbon tax is
compelling. Global climate change
clearly poses a threat to long-term
ecological stability and potentially to
economic viability in many parts of
the world. Considering the grave
consequences implied, it is not
unreasonable to structure a tax system
that discourages production of carbon
dioxide. Such a tax could be
"revenue-neutral." That is, the large
proceeds from such a tax could be
rebated to businesses or individuals
through reductions in corporate
income tax, social security, or income
taxes. Some portion of the tax could
also be used to reduce the federal
deficit.
A carbon tax would encourage
conservation by boosting energy prices
in general, and it would stimulate
greater use of natural gas. It would
discourage use of petroleum products,
thereby reducing our national
dependence on foreign oil sources, and
help improve the balance of trade.
Despite these benefits, it is unlikely
that Congress or the administration
will seriously consider a carbon tax, at
least in the near term. Since even
The Compleat Toolkit
Research and Development. Systemic
studies undertaken to establish facts or
principles, to discover insights, and to
make technological advances.
Innovation. Transform scientific
discoveries into beneficial uses.
Consumer Information. Reduce risk to
individuals (radon) or damage to society
(disposal of pesticides); inform
community of potential threat (TRI).
Technical Assistance and Technology
Transfer. Measures to spread the word
about mitigation techniques; may go to
those causing the problem (Best
Management Practices to farmers to
control runoff) or to professionals
assigned to mitigation (training sewage
treatment plant operators).
Auditing. Visits by experts to sites where
pollution is generated (factory, farm) to
observe operations and suggest
improvements.
Marketable Permits. Total amount of
pollution established by regulation;
permits to pollute then allotted among
polluters. Those who reduce pollution
below their allotment can sell or trade
surplus permits to others (under the acid
10
EPA JOURNAL
-------
The confluence of environmental
and other policies was recognized over
22 years ago with passage of the
National Environmental Policy Act
(NEPA), which required federal
managers to consider the
environmental impacts of their actions.
In fact, NEPA has never realized its
potential to change federal decision
making as it relates to the
environment.
If federal agencies had, historically,
considered environmental quality as
an integral part of their
responsibilities, the impact could have
been tremendous. The contribution of
sediment, pesticides, and fertilizer
would be much smaller if the
Department of Agriculture's technology
transfer efforts were focused on
environmental improvement. Energy
efficiency might have been the major
goal of energy policy, and greater
efforts would have been directed at
environmentally less harmful energy
technologies. Transportation and urban
policies could have helped shape
urban development in a more
environmentally satisfactory manner.
There are two major reasons why
government policies have diverged so
greatly from environmental policy.
First, each federal agency considered
its main responsibilities to be to its
specialized constituencies. For
example, the Department of
Agriculture saw agribusiness, farmers,
and the forest products industry as
their main constituents—not
environmentalists or the general
public. Second, there is really no
mechanism to explore how
environmental and other policies can
be reconciled. While ad hoc legislation
and task forces have been created, no
sustained effort has been made to
determine how changes in current
policy could reduce environmental
damage.
rain program, TVA has purchased SO2
permits from Wisconsin Power and
Light).
Deposit/Refund. Surcharge on item (soft
drink bottle) is refunded when item is
returned.
Fees and Taxes. Fee or tax assessed on
emissions (SO2 from power plant) or on
product of polluting activity (electricity).
Subsidies and Tax Credits. Measures that
reduce the cost of control, rather than
recovering it (federal matching grants for
building sewage treatment plants).
End-of-Pipe Controls. Regulations
prescribing emissions limits (National
Pollution Discharge Elimination System
permits) or specific technologies
(catalytic converters on cars).
Use Restrictions. Limits on the way
substances can be used (bans on CFCs in
aerosols).
Product Specifications. Standards specify
content or performance of products
(tolerances for pesticide residues on
foods).
Monitoring and Disclosure. Polluters
monitor and report emissions to enable
government enforcement of rules (SO2
from power plants). Public disclosure
enhances enforcement through activities
of public, interest groups and citizen
suits.
Cooperation With Other Agencies.
Concerted approach to problems through
use of other federal, state, or local laws,
expertise, delivery mechanisms (EPA and
Army Corps of Engineers).
Cooperation With Other Countries.
Same as above (Montreal Protocol).
Enforcement. Vigorous enforcement is
required if penalties are to be seen as
more costly than control. Applies across
the board.
—Adapted from 1990 Report of the
Strategic Options Subcommittee, EPA
Science Advisory Board Relative Risk
Reduction Project.
Cooperation between EPA and other
agencies represents great potential for
risk reduction. For example, EPA
could work even more intensively with
the Department of Agriculture to
reduce nonpoint-source pollution and
fertilizer and pesticide use. Working
with the Department of Energy, EPA
could help pursue ways to promote
energy conservation and a more benign
fuel mix. EPA could even work with
the Departments of Housing and Urban
Development and Transportation on
urban and transportation strategies and
their environmental impacts.
Historically, however, federal agencies
generally have not appreciated help
from other agencies.
Hence, concerted efforts by agencies
to improve environmental performance
in their areas of responsibility will
require leadership at the top. For
inter-agency coordination of this kind
to be successful, the President would
need to give his unequivocal support
to such an effort and insist that his
Cabinet members take it seriously. In
addition, some mechanism needs to be
created to carry out this policy. For
example, a permanent council could
be created to promote environmental
quality as part of other federal policies,
or the responsibility for this function
could be given to the Council on
Environmental Quality. In either case,
some agency must be in charge if
environmental concerns are to be given
high priority.
In sum, if the United States is to
move toward a more flexible and less
costly system of environmental
improvement, a much wider pool of
measures must be employed. This is
essential if we are serious about
pollution prevention becoming our
primary strategy.
The challenge of the next decade
and beyond is fundamentally different
from that of the last two decades. Yet
the necessary policy and programmatic
changes may take decades to happen,
just as a supertanker does not change
direction easily. But, to pursue this
analogy, the bow is turning around.
We are now seeing the first glimpses of
some fundamental and presumably
irreversible changes in the way we
cope with environmental problems, n
MAY/JUNE 1992
11
-------
SOLID WASTE:
INCENTIVES THAT COULD
LIGHTEN THE LOAD
by Terry Dinan
Let's balance the costs against the
benefits of disposal
12
Americans generated four pounds of
solid waste per person per day in
1988, and this figure is expected to
grow to 4.2 pounds by 1995. Despite
increases in the amount of waste
incinerated and recycled, the vast
majority of this still goes to landfills.
Waste disposal imposes costs on
society, including the expense of
collecting the waste and building and
operating disposal facilities. The
possible environmental and health
(Dinan is an analyst at the
Congressional Budget Office and has
recently authored a report entitled
Federal Options for Reducing Waste
Disposal.]
EPA JOURNAL
-------
Economic incentives (o reduce waste
may help ease the growing burden on
U.S. landfills.
Chicago-Sun Times photo.
effects of leakage from landfills and
emissions from incinerators are hotly
debated, and many communities have
encountered strong resistance to siting
new disposal facilities. This resistance
and the limited capacity of existing
landfills in some areas have put a
premium on decreasing the amount of
waste generated and increasing the
amount that is recycled and
composted.
Although waste disposal imposes
costs on society, the activities that
generate waste also provide benefits.
For example, packaging keeps food
clean and may help in its preparation.
Being able to dispose of waste easily is
also a valued benefit. Setting out trash
for pickup is quicker and easier than
MAY/JUNE 1992
finding another use for it in the home,
composting it in the backyard, or
taking it to a recycling center.
Ideally, the costs and benefits of
disposal would be taken into account
when deciding how much to change
consumption patterns to reduce waste,
to recycle, or to compost. Economic
incentives may play a key role in
helping society balance these costs and
benefits. Three types of incentives that
might be useful in achieving this
balance are household charges,
combination disposal tax and reuse
subsidies, and recycling credit
systems.
Most households pay for waste
disposal services through their local
property taxes or by a fixed fee to a
private collector. Under this flat-fee
system, they don't have a monetary
incentive to change their consumption
behavior or to increase their recycling
and composting efforts.
Some communities have begun to
charge households according to each
bag or can of trash that they discard.
These "unit-based pricing" programs
encourage households to weigh the
convenience of waste disposal against
the charge for an additional bag or can.
Under these programs, households can
save money by buying goods with less
packaging, or by recycling and
composting their waste. A study of
three unit-based pricing programs in
Perkasie, Pennsylvania; Ilion, New
York; and Seattle, Washington, found
that such programs may significantly
decrease the amount of waste sent to
the landfill or incinerator.
Unit-based pricing programs hold
much promise, but there are some
important concerns. They may, for
example, create an incentive to
illegally dispose of waste. Tracking
illegal disposal is very difficult, and
most estimates are tenuous, but
anecdotal evidence indicates that some
people in unit-based pricing programs
are illegally burning waste, dumping it
in vacant lots, and disposing of it at
public facilities, private dumpsters, or
in surrounding communities. EPA is
investigating the effects of unit-based
pricing and will provide guidance
about the types of communities where
it may be effective. For example,
suburban communities may be better
suited for unit-based pricing than rural
areas where illegal dumping would be
easier. Communities with
predominantly single-family housing
may be better suited than areas with
multifamily housing, where monitoring
the waste generated by individual
families is more difficult.
Under these programs,
households can save money
by buying goods with less
packaging, or by recycling
and composting their waste.
Under a combination disposal tax
and reuse subsidy policy, producers
would be taxed according to the cost
of disposing of the goods that they
produce, and importers would be
taxed for the cost of disposing of the
goods they import. This would
encourage them to reduce the amount
or the toxicity of waste associated with
their products. In addition, firms that
use recycled materials (referred to as
end users) would receive a subsidy,
thereby encouraging increased
recycling.
Idaho has established a combination
disposal tax and reuse subsidy
program for tires. The state imposes a
$1 surcharge on all tires sold; the
revenue is used to subsidize recycling.
Firms that retread tires receive up to
$1 per reprocessed tire; other end
users of old tires receive $25 per ton.
A disposal tax would encourage
13
-------
producers to reduce the amount of
waste associated with their products as
long as the cost of doing so were less
than the tax. Likewise, the reuse
subsidy would encourage end users to
use recycled materials as long as the
cost of doing so were less than the
subsidy. Provided that the government
set the disposal tax and reuse subsidy
so that each were equal to the benefit
that society received from reduced
waste disposal, this policy would
provide an incentive for firms to
balance the costs and benefits of waste
disposal.
An advantage of this policy is that it
would not create an incentive for
illegal disposal. However, its
application is limited: To administer a
set of taxes and subsidies on all
consumer products would not be
feasible. The policy could be targeted
at items that had the potential for
increased recycling and were
particularly problematic components
of the waste stream, such as old car
batteries, tires, and used oil.
Under a credit system . .. old
newspapers would go into
whichever products could use
them most cheaply.
Under a recycling credit system, the
government would set a target for a
product, and producers and importers
would be responsible for ensuring that
the required percentage of the product
was recycled. They would do this by
buying "credits" from firms that
recycled their type of product. For
example, if a 50-percent recycling
target was set for newspapers, for
every ton of newspapers it sold,
Hometown Daily would have to buy
half-a-ton's worth of newspaper
recycling credits. It would buy them
from companies, such as cardboard
container producers, that used old
newspapers in their production
processes. Firms that could use old
newspapers in their production
process would have an increased
incentive to do so.
An advantage of a credit system over
one that mandates the recycled content
level of individual products is that it
produces an incentive for firms that
can reuse the old product at the least
cost of doing so. For example, a system
that mandated content level would
require that old newspapers go into
making new newspapers. Under a
credit system, however, old
newspapers would go into whichever
products could use them most cheaply.
Because of this, a recycling credit
system would help to ensure that the
recycling target set by the government
is achieved at the lowest cost to
society.
A recycling credit system guarantees
that the recycling rate set by the
government will be met. The
government must take care, therefore,
to set the target at a level where the
cost of meeting it is equal to the
benefits received. In other words, the
increased cost of using the additional
amount of recycled materials must be
balanced by the decreased cost of
disposal.
Congress has considered using a
recycling credit system for a variety of
items, including tires, used oil, and
old newspapers. Like the combination
disposal tax and reuse subsidy policy,
a recycling credit system would be
feasible for a limited number of
items. Q
TUl-EK copyright Thu Buffalo News. Reprinted tvilh permission of Universal Prpss Syndicate /Ml ri«h[s rfi.servpd
1.1
EPA JOURNAL
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PESTICIDES:
THE POTENTIAL
FOR CHANGE
Give the user an incentive
to cut back
by Marcia E. Williams
Pesticides are extremely varied.
They include products which kill
weeds and other unwanted plant life,
insects, rodents, and fungi, and
products which regulate plant growth.
While there are over 25,000 individual
pesticide products on the market
today, only about 400 chemical
compounds actually perform a
pesticidal function. These basic
ingredients are mixed with each other
and with other non-pesticide
chemicals to result in the large number
of products.
Unfortunately, pesticides can have
unintended impacts: health risks to
applicators and to farmworkers, as
well as to the general public—through
residues on foods or through
contamination of air or water.
Pesticides may also harm non-target
plants and contaminate the habitat of
fish and other animal species.
Current law requires EPA to evaluate
new pesticides and to re-examine
existing ones to ensure that the
benefits of a given use outweigh any
risks associated with the use. EPA
does this by looking at the active
ingredients in the pesticide and
evaluating data on exposures and on
health and environmental effects.
Needless to say, these reviews are very
time consuming.
The volume of
pesticides used in
the United States
continues to
grow. Worker
exposure is just
one concern.
(Williams is President of Williams and
Vanino, Inc., a Los Angeles-based
environmenfa/ management consulting
firm.)
MAY/JUNE 1992
If, for a given use, the risks outweigh
the benefits, the Agency can constrain
the use by regulating what the
manufacturer can include on the
pesticide label. In fact, EPA has a
number of control options, including
limiting the amount of pesticide which
can be applied to a particular crop,
changing the formulation of the
product to result in less exposure,
requiring workers to wear protective
clothing, and requiring workers to stay
out of sprayed fields for a specified
period after spraying. If EPA can't
identify a way to reduce the risk to an
acceptable level, it can prohibit the
specific use of the pesticide.
The volume of pesticide use in the
United States continues to grow, and,
while safer pesticides are clearly
desirable, less pesticide use would
most directly reduce exposure and
environmental burden. This can be
aided by:
• Providing incentives for farmers to
practice "sustainable agriculture" (SA).
SA combines biological pest controls
Earl Hotter phuto
with chemical ones, thereby reducing
dependence on chemicals.
• Prohibiting unnecessary use of
pesticides.
A broad spectrum of market
incentives can be used to encourage
reduced use of pesticides. Fees are
one. EPA could test imposing fees on
particular crop uses, particular
geographic areas, or particular
high-risk pesticides. For example, once
a pilot project was identified, a fee
could be charged for each pound of
pesticide purchased and applied for a
given use. The size of the fee could be
based on the toxicity of the pesticide
or on its persistence. Alternatively,
EPA could charge different fees based
on the sensitivity of the location or on
the volume of the pesticide which the
user applied. By its very nature, such a
fee would encourage users to apply
lower volumes. At the same time, the
15
-------
money collected from the fee could be
used to fund other pilot projects.
EPA could also work more actively
to prohibit unnecessary use of
pesticides. The cosmetic use of
pesticides, for example, does not
improve the quality of the food crop
but only makes it look prettier. As an
alternative to direct prohibition, EPA
could require users to label food that
has been treated purely for cosmetic
reasons.
Another approach to reducing the
unnecessary use of pesticides would
be to require large-volume users to
submit data showing that the use is
fully effective and is necessary to
control the "target pest." Again, a pilot
program could focus on a limited
number of sensitive geographic areas
or pesticides of particular concern.
Such a fund could function
like the current Superfund
and would be used to clean
up contamination or provide
alternate water supplies.
Reducing the use of pesticides can
also be achieved, in part, through
public knowledge and involvement. A
knowledgeable community can have a
significant effect on locally undesirable
environmental practices. Experience
has also shown that the mere exposure
of a company's actions to public
scrutiny can bring them more in line
with what is publicly acceptable.
Under a community right-to-know
program, major users could be required
to report annually on the quantities of
pesticides used and the purposes
served. The reports would be made
available to the public by depositing
them at a central location, such as a
library, or by publishing portions of
them in the local newspaper. Such a
program could be phased in by
focusing first on large-volume users of
pesticides of concern, or on sensitive
geographic areas. As part of the
reporting, users could be required to
share their plans to reduce future use
of pesticides. As a supplement to user
reporting, retailers and wholesalers
16
could be required to publish
information on sales volumes of the
pesticides included in the program.
Yet another category of incentives
could be designed to reduce pesticide
use, particularly in sensitive locations,
by large-volume users. The following
are examples of such incentives.
• Require environmental impairment
liability insurance to cover third party
claims and the costs of cleaning up
soil or water contamination.
• Require extra licenses or special
training requirements for anyone
buying large quantities of pesticides. A
variation would require users of
certain pesticides or users in certain
locations to get a prescription for the
pesticides they want to apply. The
USDA extension service would be one
possible group to write the
prescriptions.
• Require large volume users to pay
special fees into a ground-water fund.
Such a fund could function like the
current Superfund and would be used
to clean up contamination or provide
alternate water supplies. Responsible
parties would be expected to
reimburse the fund.
• For sensitive environments, require
ground-water or surface-water
monitoring throughout the period of
pesticide use.
• Require stormwater discharge
permits for rainwater runoff.
• Require large-volume users to
contract with agricultural specialists to
perform independent pesticide-use
audits, with the goal of minimizing
use.
These approaches will require
extensive discussions with states, other
federal agencies, and Congress. Many
cannot be implemented under current
law and would require new legislative
authority. However, many could be
piloted at the state level. While the
protection provided by the current
registration and re-registration program
is important, a balanced approach
which focuses on pesticide users as
well as pesticide manufacturers may
well achieve a greater degree of
environmental protection at a reduced
regulatory cost. Q
OZONE LOSS:
MODERN
TOOLS FOR
A MODERN
PROBLEM
Market forces are being
used to prevent pollution
by David Lee
EPA's market-based strategy for the
control of ozone-depleting
substances provides a useful example
of how a combination of means, other
than traditional engineering controls
and product-based bans, can serve
pollution-abatement goals.
The legal framework for the strategy
comes from several sources: the 1990
Clean Air Act; the Omnibus
Reconciliation Act of 1990; and the
Montreal Protocol on Substances that
Deplete the Ozone Layer, the
international treaty first signed in 1987
in an effort to limit production and
consumption of ozone-depleting
chemicals. The strategy has four major
components: a marketable permits
system; an excise tax; a program to
ensure the safety of chemicals
developed as substitutes for
ozone-depleting substances; and a
recycling program.
The cornerstone is the marketable
permits system, which is designed to
harness free market forces to direct
users toward alternative chemicals.
(Lee is Chief of the Stratospheric
Ozone Protection Branch of EPA's
GJobaJ Change Division.)
EPA JOURNAL
-------
Portable
machines
enable
recycling of
CFCs from car
air conditioning
systems.
When the original Montreal Protocol
was adopted in 1987, the Agency was
charged with limiting production (the
actual amount of ozone-depleting
chlorofluorocarbons, or CFCs, and
halons manufactured) and
consumption (the amount of such
chemicals produced plus the amount
imported minus the amount exported).
EPA looked at several options to meet
the protocol's requirements before
deciding to adopt a marketable permits
system.
Initially, the Agency considered
imposing controls that would limit
emissions of these chemicals by the
various users, EPA's traditional
MAY/JUNE 1992
approach for dealing with pollutants
once they have been produced. For
ozone-depleting chemicals, however,
this would have been unwieldy: There
are more than 10,000 different uses for
them.
Alternatively, with only five CFC
and two halon manufacturers, EPA had
a more manageable community to
regulate. Market-based incentives
could be applied to limit the
production and therefore the
consumption of these chemicals. After
considering several programs, the
Agency issued regulations which
assigned production and consumption
allowances to manufacturers based on
their 1986 production and import
levels.
There were several advantages to
this approach. Companies were
assigned allowances based on the total
volume of the five CFC chemicals
covered by the regulations, each
weighted by its ozone-depletion
potential. Under this system, a
company could alter its production or
import mix to meet the demands of a
changing market. For example, a
company producing CFC-113 (a
solvent in the electronics field) in 1986
could later cut production in response
to a decreased demand for CFC-113
and increase its production of CFC-115
(needed by the refrigeration industry)
without violating the regulations.
Another advantage built into the
marketable permits program was the
option of companies to trade
allowances. The intent was for the
most efficient companies to receive
trades from less efficient producers
who could not otherwise compete in
the marketplace. And in fact, over the
past several years there have been
many trades among companies as they
have made adjustments for shifting
markets and relative plant efficiencies.
The marketable permits program
serves to ensure that the United States
remains in compliance with the
Montreal Protocol. Allowances are
parcelled out annually to each
company based on its imports, exports,
and production in 1986 and must be
within limits set by the protocol. Since
the original protocol schedule required
annual reductions amounting to 50
percent by 1998 for CFCs, the Agency
revises allowances downward
accordingly. As the production of
these chemicals decreases, prices
increase, creating an incentive for
users to switch to less costly
alternatives wherever available. The
intended result: a more efficient
allocation of resources and in turn less
cost to society.
The second major component of the
Agency's strategy to protect
stratospheric ozone is the excise tax
mandated by the Omnibus
Reconciliation Act. Passed by Congress
in 1990, the act imposes an escalating
tax on the production for sale of
ozone-depleting chemicals ("virgin
stocks"). Indeed, the remarkable drop
in demand for ozone-depleting
17
-------
chemicals over the last two years may
have been due, at least in part, to this
tax, which amounts to a tariff that
pushes up the cost of the newly
produced chemicals.
The Agency's safe alternatives
program is the third component of the
program. The Clean Air Act
Amendments of 1990 charge EPA with
reviewing the health and safety
impacts of all new and existing
alternatives to ozone-depleting
chemicals. Specifically, the Agency
must review alternatives for potential
health and environmental effects
including ozone depletion, toxicity,
worker and consumer safety, and
global warming potential. EPA's Office
of Air and Radiation, with assistance
from the Office of Toxic Substances, is
developing the program. Where serious
health and environmental problems are
identified, chemicals may be stopped
from entering the marketplace.
The new Clean Air Act also required
the Agency to establish a notional
recycling program, which is the fourth
major component in EPA's
ozone-protection strategy. The aim is
to recycle used refrigerant for use in
air conditioning and in
refrigeration-related industries, thus
diminishing the need for producing
more from virgin materials. Costly
retrofit or early retirement of
equipment that requires
CFC-containing refrigerant is avoided
by permitting the continued use of
recycled refrigerant beyond the
production phaseout of
ozone-depleting chemicals. The
recycling initiative also allows time for
producers to manufacture alternative
chemicals.
The various components of EPA's
strategy for protecting the Earth's
stratospheric ozone layer fit together in
an approach that stresses pollution
prevention by limiting the production
of ozone-depleting chemicals in the
first place. These are sound policies
which provide environmental
protection while minimizing the cost
to society through the efficient use of
resources. Q
THE DENVER AIRPORT:
POLLUTION PREVENTION
BY DESIGN
by Jack W. McGraw
When the first of an expected 34
million passengers per year
begin flying into America's newest and
largest airport in October 1993, the
planning that went into it will be
obvious in the space-age architecture,
the park-like setting, and the smooth
flow of travelers and aircraft through
its highly accessible layout. Not so
obvious, but every bit as revolutionary,
will be the environmental planning
that went into the facility—a concept
called "pollution prevention by
design."
For unlike any of its predecessors,
Denver International Airport (DIA) will
embody features built into it
specifically to cut the pollution that
might otherwise accompany such a
mammoth public works project. In
another unique twist that has potential
application across a wide range of
public projects, EPA's regional office
in Denver assigned one of its own
scientists to help design those features.
Preventing pollution in the first
place simply makes more sense in
economic and environmental terms
than traditional "end-of-the-pipe" or
"cornmand-and-control" strategies.
This new thinking was percolating in
the regulatory world at the same time
that impetus was growing for a new
airport in the metro area. The two
connected in an Intergovernmental
Personnel Act agreement assigning
EPA scientist David Duster to a
one-year tour of duty at DIA.
Duster's first obstacle would be to
overcome the single-focus approach
(McGraw is the Acting Regional
Administrator for EPA's Region 8,
headquartered in Denver, Colorado.)
18
that regulators develop when they
work in specific programs such as air,
water, waste, and toxics. Building
pollution prevention into a $2.7 billion
facility on a 53-square-mile parcel of
land obviously calls for a "big picture"
view—what EPA now calls
"multi-media."
Planned during an economic
downturn, when air travel trends were
flat, the project was not without
critics. The expected economic
benefits figured prominently in
successful election campaigns to
secure local approvals and to approve
the sale of bonds to fund the
construction. The project and ancillary
development promised jobs in an area
still suffering from contractions in the
energy industries, which boomed here
in the 1980s.
State and civic planners see Denver
as an aircraft hub to the world.
Equidistant to Tokyo and London, the
airport is ideally positioned to handle
the flow of goods and people between
the economic giants of the Pacific Rim
and a renewing Europe. Airport
boosters see DIA as assuring Denver
and Colorado a preeminent role in the
global economy of the next century.
While most futurists see continuing
struggles with pollution in the next
century as well, conscious design
choices such as those made for DIA
should help substantially. Here are just
some of the impact-reducing measures
slated.
• Embedding some 180,000 tons of fly
ash (unburned fuel particles from
nearby coal-fired energy plants) in
concrete, rather than sending it to
landfills, will save enough space to
accommodate the solid waste
EPA JOURNAL
-------
Pollution prevention features at Denver International Airport will include a
Teflon-coated fiberglass roof to take advantage of natural light.
generated by a city of 40,000 over nine
years. The fly ash also helps
strengthen the concrete and make it
more durable.
• Collecting 760 tons per year of
glycol de-icing fluids and reusing them
both for de-icing and reformulation
will mean a 95-percent reduction in
the amount going to wastewater
treatment.
• Installing ultra-low flow toilets
(currently being tested at the area's
existing airport, Stapleton
International) throughout DIA should
conserve 130 million gallons of water
annually, enough to supply the yearly
water needs of 1,570 families.
• Irrigating, starting in 1999, airport
and surrounding development
landscaping with reclaimed
wastewater (not treated to drinking
water levels) from the city of Denver.
This is expected to save 542 million
gallons per year.
• Conserving energy through measures
built into the facility, from a
Teflon-coated fiberglass roof to take
advantage of natural light to the use of
natural gas chillers for air conditioning
and energy efficient lighting consistent
with EPA's "Green Lights" program
(see page 44). This will mean the local
utility, Public Service Company of
Colorado, will not have to significantly
increase its power supply capabilities
(or air emissions) to serve DIA.
• Controlling "volatile organic
compounds"—vapors—via floating
roofs on fuel storage tanks and
capturing those vapors during fuel
transfers will keep some 52 tons per
year of smog-forming chemicals out of
the metro area's atmosphere.
• Designing parking to take advantage
of natural ventilation to disperse
carbon monoxide, and offering
employees staggered shifts,
compressed work weeks, and shuttle
services to cut their contribution of
auto-related emissions by an estimated
7,000 pounds per year.
• Landscaping with a heavy reliance
on the West's own water-stingy plants,
especially prairie grasses, will yield
water savings in the hundreds of
millions of gallons per year.
• Building an energy-saving power
plant for airport operations. Even with
all these conservation measures built
in, DIA will have to maintain its own
central power plant for heating and
cooling. But even here, pollution
prevention will be built in: Low
nitrogen-oxide boilers and flue gas
recirculation will mean that 90 tons
per year of nitrogen oxide will not be
going into metro air.
• Driving fleet vehicles fueled by
natural gas, rather than gasoline,
thereby cutting both emissions of
carbon monoxide and nitrogen oxide.
• Designing a solid waste plan aimed
at cutting waste at its source, and
reclaiming and recycling a variety of
materials with a preliminary goal of
reducing solid waste disposal by 16
tons per day.
Air. Water. Waste. These are the
three basic pollution problems for any
new facility, no matter how carefully
planned.
Critics make the point, in fact, that
the largest airport in the United States
with its ancillary development will
ultimately cause more pollution than it
can ever mitigate. Those arguments
were present when Denver and
Colorado voters went to the polls on
two occasions. Since voters supported
going forward with the airport, EPA
decided to get involved early on with
the project planning. This enabled us
to employ the latest tools to minimize
the impact of the project.
It has been an excellent experience
for this Agency. Not only have we
learned to apply new thinking and
tools to technical challenges, but we
have learned a new way to relate to
the regulated community. There have
been so many winners in this
process—including the
environment—that I believe we can
expect to see "pollution prevention by
design" become the normal way of
doing business through the rest of this
century and into the new one. Q
MAY/JUNE 1992
19
-------
Deposil-refund
systems lor cans are
one example of
successful
market-based
mechanisms.
EPA JOURNAL
-------
HARNESSING
THE
MARKETPLACE
We have to do more
with less
by Robert N. Stavins
(Stavins is an Associate Professor of
Public Policy and a Senior Research
Associate, Center for Science and
International Affairs, at the John F.
Kennedy School of Government,
Harvard University, and a University
Fellow of Resources for the Future. He
is the Director of Project 88 and a
member of the Environmental
Economics Advisory Committee of
EPA's Science Advisory Board.]
I f there was ever a time when the
I United States—or any other nation
for that matter—couid afford to
consider environmental protection in
isolation from costs, those days have
ended. According to EPA figures, the
nation now spends well over $100
billion annually to comply with
federal environmental laws and
regulations.
Heightened concern over the
economic impact of these regulations
has fostered increased caution about
the regulatory burdens placed upon
businesses and individuals. More than
a decade of high budget deficits,
sluggish productivity growth, and
intensified foreign competition has
spurred serious interest in alternative
environmental approaches that can
lower compliance costs and regulatory
burdens. Citizens and policy makers
have not lost sight of the benefits of
environmental protection. However,
they are giving greater attention to
cost-effective environmental policies.
In this context, political leaders are
now giving more consideration to a
promising set of new environmental
policies that recognize market forces
not only as part of the problem, but as
potentially part of the solution. Such
"market-based" or
"economic-incentive" policy
mechanisms can, in many cases,
enable environmental goals to be
achieved effectively and. at lower
aggregate cost to society. For EPA and
other federal, state, and local
regulatory agencies, an important task
is to do "more with less," wherever
possible. Devising ways to deal with
both ongoing and new environmental
problems by harnessing, rather than
obstructing, market forces is consistent
with this goal.
The purpose of this article is to
provide an overview of the major types
of cost-effective, economic-incentive
policy instruments that can be used to
harness market forces on behalf of
environmental protection. But first
let's take a look at conventional
environmental regulation, since any
policy must be considered in the light
of feasible alternatives. How does the
traditional command-and-control
approach work?
Conventional regulations tend to
force all firms to shoulder identical
shares of the pollution-control burden,
regardless of the relative costs to
individual companies. In effect, these
regulations typically set uniform
standards for firms, the most prevalent
being technology-based and
performance-based standards.
Technology-based standards, as the
name suggests, specify the method,
and sometimes the equipment, that
firms must use to comply with a
regulation. For example, every firm in
a particular industry might be required
to use the "best available technology"
to control water pollution. As a more
extreme example, all electric utilities
might be required to employ a specific
The right technology in one
situation may be wrong in
another.
technology, such as electrostatic
precipitators, to remove particulates.
A performance standard, on the
other hand, sets a uniform control
target for firms while allowing them
some latitude in how they meet it.
Such a standard might set a limit on
the allowable units of a pollutant that
can be released per time period, but no
limit on the means by which this goal
is achieved.
Holding all firms to the same target
can be expensive and in some
circumstances counterproductive.
Uniform standards can effectively limit
emissions of pollutants, but they
typically exact relatively high costs to
society in the process by forcing some
firms to resort to unduly expensive
means of controlling pollution. The
reasons are simple: The costs of
controlling emissions may vary greatly
between firms, and even within the
same firm, and the right technology in
one situation may be wrong in another.
Indeed, the cost of controlling a given
pollutant may vary by a factor of 100
MAY/JUNE 1992
21
-------
or more, depending on the age and
location of the plants involved and the
control technologies available.
Possibly an even more serious
drawback: Conventional regulations
tend to freeze the development of
technologies that could provide greater
levels of control. When the focus is on
conforming to standards, little or no
financial incentive exists for firms to
exceed their control targets. In fact, a
firm that successfully tries out a new
technology may be "rewarded" by
being subsequently held to a higher
standard of performance, with little
opportunity to benefit financially from
its investment. As a result, dollars that
might have been invested in
technology development are diverted
to legal battles over the definition of
acceptable technologies and standards
of performance.
On the other hand, some
environmental problems are highly
localized and attributable to pollution
from individual sources, in such cases,
a command-and-control approach,
such as a source-specific emission
limit, may be the preferred policy.
Command-and-control regulations
target the individual polluter. Let's
now consider market-based policies,
which characteristically aim at what is
often the real target of concern: the
overall amount of pollution for a given
area. What we care about most, after
all, is not how much pollution the
local factory emits, but the quality of
the air we breathe.
Incentive-based approaches seem
virtually tailor-made for aggregate
pollution problems over a large area
(for example, acid rain). Under a
market-based approach, the
government establishes financial
incentives so that firms in an entire
industry or region are driven to take
the necessary steps to reduce the
aggregate level of pollution to a
desired level. Then, as with any
regulatory system, the government
monitors and enforces compliance.
In policy terms, market-based
instruments achieve the same
aggregate level of control as might a
command-and-control approach, but
they permit the burden of pollution
control to be shared more efficiently
among firms. In economic terms, they
provide market incentives for the
greatest reductions in pollution by
those firms that can do so most
cheaply. The result is cost-effective
because fewer total economic resources
are used to achieve the same level of
pollution control—or, alternatively,
more pollution control is obtained for
the same level of resources.
Theoretically, the government could
achieve a similarly cost-effective
solution by setting different standards
for individual firms, so that the costs
of additional increments of pollution
control would be distributed
"equitably." However, this would
require detailed information about the
control costs each firm
faces—information that the
government lacks and could obtain
only at great cost, if at all.
Market-based policies provide a way
out of this impasse because by their
very nature they lead to the
cost-effective allocation of
pollution-control costs among firms.
By forcing firms to factor
environmental costs into their decision
making, market-based policies create
powerful incentives for firms to find
cleaner production technologies. Such
policy instruments can also help
elucidate the environmental debate for
the general public by focusing
attention on environmental goals
rather than on technicalities, which
become primarily the worry of the
firms involved.
But market-based systems do not
represent a iaissez-/aire approach to
solving pollution problems. A
market-based approach recognizes that
environmental problems can be traced
to market failures—cases where the
decision-making processes of firms and
consumers do not reflect the
consequences of those decisions for
society. Incentive-based policies reject
the notion that such failures justify
"scrapping" market forces and
dictating the behavior of firms or
consumers. Instead, they provide
businesses and consumers with
freedom of choice in determining the
best ways to reduce pollution.
Market-based mechanisms come in a
variety of forms: pollution charges;
tradeable permits; deposit-refund
systems; removal of government
barriers to market activity; and
elimination of government subsidies.
Each of these warrants serious
consideration.
Pollution Charges
Producers of pollution can be charged
a fee or a tax on the amount of
pollution they generate (not simply on
their pollution-generating activities).
This makes it worth their while to
reduce pollution to the point where
their expenditures for additional
increments of pollution control are
equal to the pollution tax rate. As a
result, firms will attain different
degrees of control, depending on
whether their control costs are high or
low. An effective pollution charge
system minimizes the aggregate costs
of pollution control and gives firms
ongoing incentives to develop and
adopt newer and better
pollution-control technologies.
Pollution charges potentially offer an
additional advantage over conventional
environmental-policy mechanisms:
They can generate substantial revenues
for government. Applied together with
proportionate reductions in other
taxes, they can be used to introduce
revenue-neutral policy
changes—revenue-neutral in that the
total revenues paid to government
remain the same. The important point
here is that government can reduce
taxes that discourage desirable
activities, such as labor and the
generation of capital, and rely more
heavily on taxes that discourage
undesirable behavior, such as
environmental pollution.
Critics say
below-cost Umber
sales and other
government subsidies
promote
economically
inefficient and
environmentally
unsound resource
use.
EPA JOURNAL
-------
In economic terms, this policy
option involves a gradual movement
from "distortionary" to "corrective"
taxes. Thus, pollution charges offer the
possibility of a double dividend: first,
environmental protection at minimum
cost, and second, increased efficiency
in the tax structure.
The downside of pollution charges is
that in some cases, an effective system
can impose a significant monitoring
burden on government. Further, it is
difficult to estimate in advance how
large a charge will be required to
obtain a desired level of pollution
reduction. It may also be difficult, in a
political context, to establish charges
large enough to achieve given
environmental objectives.
Air and water pollution charges have
been adopted in France, the
Netherlands, Sweden, Norway,
Denmark, Finland, Italy, and West
Germany. However, these countries'
charge schemes have been designed
primarily as revenue-raising devices
rather than as environmental policy
instruments. More recent European
Community initiatives with energy
charges are closer to true "green
taxes." Potential applications in the
United States include a carbon dioxide
(carbon or BTU) charge to help curb
greenhouse gas emissions;
"environmental costing" at electrical
utilities, whereby environmental
impacts are factored into choices
among various power-generation
sources; and unit charge
("pay-as-you-throw") systems for
pickup and disposal of municipal solid
waste.
Tradeable Permit Systems
Unlike a charge system, a system of
tradeable permits allows the
government to specify an overall level
of pollution that will be tolerated. This
total quantity of allowable emissions
or discharges is parceled out, or
allotted, in the form of permits among
polluters. Firms that keep their
emissions levels below the allotted
level may sell or lease their surplus
allotments to other firms or use them
to offset excess emissions in other
parts of their own facilities. Such a
system tends to minimize the total
societal cost of achieving a given level
of pollution control. Like pollution
charges, permit systems can be used to
improve environmental quality, not
just to maintain the status quo.
Continued on ne>\t poge
I
APiWide World photo.
MAY/JUNE 1992
23
-------
If the number of regulated sources of
emissions is great, the administrative
(transaction) costs of tradeable permit
systems can be very high. On the other
hand, if very few sources are involved,
certain firms may heavily dominate the
permit market, and the result may be
noncompetitive behavior and
consequent inefficiencies. Finally,
regulators must decide how to allocate
permits among sources. Should they be
given away as an endowment, or
should they be sold through an
auction? If they are distributed free of
charge, what criteria should be used in
the allocation?
Tradeable permits have been used
primarily in the United States under
EPA's emissions trading programs, in
the nationwide phasedown of lead in
automotive fuel, and in
chlorofluorocarbon (CFG) reduction
initiatives. Most recently, of course,
Congress has enacted a sulfur dioxide
tradeable allowance system for
acid-rain control, expected to save the
economy up to $1 billion per year.
Other potential applications for
For Further Reading
The following publications provide
more thorough overviews of the
potential use of market-based
mechanisms for environmental
protection:
Anderson, Robert C., Lisa A.
Hofmann, and Michael Rusin. The
Use of Economic Incentive
Mechanisms in Environmental
Management. Washington, DC:
American Petroleum Institute, June
1990. Available by contacting the
American Petroleum Institute,
1220 L Street, NW, Washington,
DC 20005.
Moore, John L., et al. Using
Incentives for Environmental
Protection: An Overview.
Washington, DC: Congressional
Research Service, June 1989.
Available to government
employees from the Library of
Congress' Congressional Research
Service at (202) 707-5700.
Members of the general public
must make their requests through
their U.S. Senator or
Representative.
Stavins, Robert N., ed. Project
88—Harnessing Market Forces to
Protect Our Environment:
Initiatives for the New President.
A Public Policy Study sponsored
by Senator Timothy E. Wirth,
Colorado, and Senator John Heinz,
Pennsylvania. Washington, DC,
December 1988. Available from
either Senator Wirth's office, 380
Russell Senate Office Building,
Washington, DC 20510, (202)
224-5852; or Robert N. Stavins,
Assistant Professor of Public
Policy, John F. Kennedy School of
Government, Harvard University,
79 John F. Kennedy Street,
Cambridge, MA 02138, (617)
495-1820.
Stavins, Robert N., ed. Project
88—Round II, Incentives for
Action: Designing Market-Based
Environmental Strategies. A Public
Policy Study sponsored by Senator
Timothy E. Wirth, Colorado, and
Senator John Heinz, Pennsylvania.
Washington, DC, May 1991.
Available from (see above).
U.S. Environmental Protection
Agency. Economic Incentives:
Options for Environmental
Protection. Office of Policy,
Planning, and Evaluation,
Economic Incentives Task Force,
21P-2001. Washington, DC, March
1991. Available from EPA's Public
Information Center, 401 M Street,
SW, Washington, DC 20460, (202)
260-7751.
U.S. Environmental Protection
Agency. Reducing Risk: Setting
Priorities and Strategies for
Environmental Protection. Science
Advisory Board, SAB-EC-90-021.
Washington, DC, September 1990.
Available from EPA's Public
Information Center (see above).
tradeable permits include point- and
nonpoint-source water-pollution
control; control of global climate
change through international trading in
greenhouse gas permits; and recycling
credits (which combine recycling
targets with tradeable permits).
Deposit-Refund Systems
Nine states, several Canadian
provinces, and a number of European
nations have enacted bottle bills to
reduce littering with beverage
containers. In effect, purchasers of
potentially polluting products pay a
surcharge, which is refunded when the
product is returned to an approved
center for recycling or proper disposal.
Deposit-refund systems eliminate or
reduce the incentive for illegal
"midnight dumping," which
admittedly exists under a pollution
charge system.
Deposit-refund systems could be
used for containerized hazardous
waste and for some other forms of
solid waste. Lead-acid batteries, used
motor-vehicle oil, vehicle tires, and
industrial solvents are potential
candidates. Rhode Island and Maine
have enacted deposit-refund systems
for automobile batteries, and Maine
has a system for commercial-size
pesticide containers. Denmark has
such a plan for mercury and cadmium
batteries, and Norway and Sweden
have implemented deposit-refund
systems for car bodies.
Removal of Government Barriers
to Market Activity
In some cases, environmental
protection could be improved simply
by removing existing
government-mandated barriers to
market activity. Measures that facilitate
the voluntary exchange of water rights,
for example, can promote more
efficient allocation and use of scarce
water supplies while curbing the need
for expensive and environmentally
disruptive water supply projects.
A major market-oriented water
exchange has recently been initiated in
Southern California based on this
24
EPA JOURNAL
-------
Proponents argue
that a charge on
sources of carbon
dioxide could help
reduce greenhouse
emissions.
Mike Hrisson photo.
approach. In 1988, the Metropolitan
Water District of Southern California,
serving much of the Los Angeles-San
Diego region, reached agreement with
the Imperial Irrigation District on a
$233 million water conservation and
transfer arrangement, based largely
upon a 1983 proposal by the
Environmental Defense Fund.
Similarly, properly designed
comprehensive least-cost bidding at
electrical utilities can promote
economically rational energy
generation and consumption by
encouraging electric utilities to
consider both conventional,
supply-side augmentation of generating
capacity and demand-side reductions
in energy use through conservation.
Elimination of Government Subsidies
Many government subsidies promote
economically inefficient and
environmentally unsound
development. A major example is the
U.S. Forest Service's "below-cost
timber sales," which recover less than
the cost of making timber available for
harvesting by private lumber
companies. The resuit: inefficient
timber cutting on government lands,
which has led to substantial losses of
habitat and damages to watersheds.
Gradual removal of these subsidies
would foster environmental protection
and, additionally, increase net federal
revenues. Other examples of programs
that may be both economically
inefficient and environmentally
disruptive include some U.S. Bureau
of Reclamation water supply projects
and certain U.S. Army Corps of
Engineers flood-control projects. The
Corps projects have the effect of
providing unintended incentives for
private landowners to convert their
forested wetlands to dryland
agriculture, bringing a host of
environmental concerns, including
degraded water quality.
Choices We Face
In many cases, market-based
approaches will allow a given level of
environmental protection to be
achieved at lower total cost than
would be possible with conventional
policy approaches. By imposing a cost
on pollution-causing activities,
incentive-based systems allow
individual firms to decide how they
will achieve the required level of
environmental protection. In a
competitive market economy, market
forces tend to drive these decisions
toward least-cost solutions.
Incentive-based policies can also
stimulate the private sector to develop
new pollution-control technologies and
expertise. Because investments in
pollution control can improve firms'
profits under incentive-based systems,
firms will be encouraged to adopt
superior pollution-control
technologies. This in turn creates
incentives for research and
development of cheaper and better
pollution-abatement techniques.
Market-oriented policies, however,
will certainly not fit every problem.
Moreover, practical problems may
make it impossible to implement
incentive-based environmental policies
successfully, even if they are
appropriate on theoretical grounds.
Such implementation problems can
render even the best policy idea quite
useless. To build appropriate
market-based programs, it will be
necessary, in some cases, to adapt
present approaches—in other cases, to
abandon them.
Of course, no single policy approach
is likely to be appropriate for all
environmental problems. The policy
agenda ought to be shaped by its
objectives—presumably including the
reduction of environmental risk to
acceptable levels. The choice of the
most effective mechanisms for
achieving this and other legitimate
objectives will need to draw upon the
broadest possible array of potential
instruments. Market-based
mechanisms, along with conventional
command-and-control policies,
education programs, and a host of
other instruments, belong in the policy
maker's toolkit. The real challenge is
to choose the right tool for each. Q
MAY/JUNE 1992
25
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A SKEPTIC
SPEAKS
by Michael Gartner
There must be something about this
that I don't understand.
The way I read it, if you own a
factory that pollutes more than the law
allows, and 1 own one that pollutes
less, I can sell you my excess pollution
"rights." You can keep polluting the
heck out of the place, and get by with
it, and I can make money on the deal.
We can both feel really good about the
arrangement.
This is being praised by some
businessmen and by some
environmentalists. They think it's
dandy. All in all, they say, it keeps
pollution at an acceptable average, on
a nationwide basis. And I'm sure it
does.
But here's what 1 haven't heard any
businessman or environmentalist talk
about:
(Gartner is president of NBC Nuws and
editor/co-owner of the Ames, fowa,
Daily Tribune. This article originally
appeared in USA Today.)
What about the people who live
around the plant that bought the rights
to foul up its neighborhood to excess?
Is it OK if they get emphysema or
cancer or something because someone
else didn't get emphysema or cancer?
How do you explain that to them?
How come no one is asking that
question?
Here are the facts:
Under the Clean Air Act of 1990,
industries are ordered to cut their
pollution by 1995. But if they go below
TVA Energy C'unservfition fr Snlnr Institute phnlo.
the standards, they'll be able to sell
that excess—it will sell in dollars per
ton—to companies far away that
decide not to meet the standards by
1995.
Some states are doing the same
thing, letting a polluter in one
neighborhood buy smogging rights
from a non-polluter in another
neighborhood. There is talk of a global
market, a market in which a whole
nation can buy or sell pollution
rights ....
EPA JOURNAL
-------
The Paradise Fossil
Plant of the
Tennessee Valley
Authority. TVA
bought rights to emit
sulfur dioxide from
the Wisconsin Power
and Light
Company.
Already, deals are being made.
Wisconsin Power and Light Company
has sold the Tennessee Valley
Authority and Duquesne Light
Company the right to spew an
additional 25,000 tons—tons—of sulfur
dioxide into the air. Sulfur dioxide is
that foul-smelling stuff that helps
cause acid rain.
What do the people of Pennsylvania
and Tennessee and Alabama and
Kentucky think of this deal? Do they
understand it?
Let's change the example. Let's say
every restaurant in town has a
no-smoking section. Let's say a couple
of restaurants decide to ban smoking
entirely. Let's say the law then allows
them to sell their smoking "rights," so
another restaurant suddenly lets you
smoke wherever you sit. And let's say
that that smokers' restaurant is the
only one in your neighborhood, the
only place you can get to for evening
dinner.
Would you want to go to that
restaurant, to chance sitting next to a
couple who smoke like chimneys, who
blow it your way, who ruin your
meal—and perhaps your lungs?
I doubt it. You'd raise Cain. So
would your local politicians.
Clean air is not a commodity like
baseball cards or pork bellies. If you
own a factory and you cut pollution,
you should be praised and
rewarded—with tax breaks, perhaps, or
some other true economic incentive. If
you own a factory and you
overpollute, you should be
penalized—fined, or, for the worst
offenders, put out of business.
But being able to buy the right to
pollute? That's ridiculous at best.
Dangerous at worst.
Why is everyone saying it's such a
great idea? o
MAY/JUNE 1992
THE MARKET-BASED
APPROACH AT EPA
Economic Incentives have recently entered
the Agency's mainstream
by Richard D. Morgenstern
Environmental policy in the United
States is evolving—perhaps more
rapidly than most people realize—from
an almost exclusive reliance on
command-and-control regulation to the
use of economic incentives. Economic
incentives are not a cure-all. However,
used appropriately, they can achieve
environmental goals at lowest possible
cost, more effectively reduce pollution
from large numbers of small dispersed
sources, and provide a greater stimulus
for innovation and technological
change. A new consensus is
emerging—among the Bush
administration, Congress, industry, and
environmental groups—that market
forces can play a key role in
addressing a wide range of
environmental problems.
History
The idea of harnessing market forces
for environmental protection is not
new; economists have been advocating
it for more than 40 years. EPA adopted
its first economic incentives program
in 1976 and has progressively
expanded its use of market-based
approaches since then. Only recently,
however, have economic incentives
(Morgenstern is EPA's Acting Assistant
Administrator/or Policy, Planning and
Evaluation.]
entered into the mainstream of EPA's
regulatory activities.
Emissions Trading. EPA's oldest
economic incentive programs entail
four variations of air emissions trading:
offsets, netting, bubbles, and banking.
Each of these programs involves the
creation of "extra" reductions at one
emissions point and their
compensatory use at another.
• Offsets allow a firm to construct a
major new emissions source (or
expand an existing one) where the
source would otherwise cause or
contribute to air quality problems.
Under this program, firms must secure
sufficient extra reductions from other
sources in the same vicinity to
compensate for any new emissions
they will add.
• Netting allows a firm to construct or
modify a major emissions source in an
existing plant without triggering
special requirements for new sources,
as long as the firm reduces emissions
from other sources in the same plant
by a corresponding amount.
• Bubbles (which involve placing an
imaginary enclosure around a group of
existing sources) allow firms to
increase their emissions where control
costs are high, in exchange for extra
reductions where costs are low—so
27
-------
long as each trade is enforceable and
produces air quality results equivalent
to the original requirements.
• Banking allows firms to "save"
credits for extra emissions reductions
for future use in emissions trading
transactions.
More than 2,500 offsets have been
approved throughout the country,
along with thousands of netting
actions. Both programs continue to be
actively used.
Use of the bubble program has been
more limited. Approximately 50
bubbles have been approved by EPA,
and many more have been authorized
by states under EPA-approved rules.
Projected compliance savings from the
bubble program exceed $400 million.
Relatively few bubbles have been
adopted in recent years. However, the
Clean Air Act Amendments of 1990
will greatly expand future
opportunities for using bubbles.
Banking has also received limited
use to date but may have greater
potential under the 1990 amendments.
Lead Phasedown. The lead
phasedown program, which allowed
trading and banking of lead credits,
was probably EPA's largest, most
dramatic early success in the use of
economic: incentives. (See article on
page 38.)
Truck Emissions Averaging. Since
1985, EPA has permitted
manufacturers of heavy duty trucks to
average nitrogen oxide and particulate
matter emissions across different
engine lines produced by a single
company. Such averaging has enabled
companies to optimize their emissions
control strategies. Beginning in 1990,
companies were also allowed to bank
and trade emissions reduction credits,
which further extended the benefits of
averaging and allowed manufacturers
with a limited number of engine lines
to benefit from the program. Cost
savings from averaging and trading
have been estimated at $130 million
per year.
CFG Trading. EPA's 1988
stratospheric ozone protection program
phased down the production and use
of chlorofluorocarbons (CFCs) in
accordance with the schedule in the
1987 Montreal Protocol, which the
United States ratified in 1988. This
program includes a marketable permits
provision, under which at least 80
trades between 23 entities have
occurred to date. (See article on page
16.)
Recent Developments
In the 1990 Clean Air Act
Amendments, Congress authorized the
broad use of economic incentives in
state and local air quality plans, as
well as in federal rules for reducing
emissions of hazardous air pollutants,
acid rain precursors, and ozone-
depleting chemicals. While the acid
rain program's sulfur dioxide
allowance-trading provision, with
expected compliance savings of $0.7 to
1.0 billion per year, is the largest and
most prominent economic incentive
program specifically mandated in the
amendments, other programs are also
important.
The new air toxics program, for
example, which represents about a
third of the projected compliance costs
under the new amendments, is
expected to include trading involving
more than one pollutant as well as
other economic incentive approaches
to reduce costs and assure strong and
early compliance. The new
stratospheric ozone protection
program, which requires the complete
phaseout of CFCs and other
ozone-depleting chemicals, continues
EPA's 1988 marketable permits
program by permitting allowance
trading at national and international
levels; it also provides for the use of
consumer education to influence
market behavior. Both the reformulated
gasoline and the oxygenated fuels
programs contain averaging and
trading provisions expected to reduce
costs by $75 to 85 million per year.
Spurred in part by the recent 90-Day
Review of Regulations announced by
President Bush, EPA has developed or
expedited additional economic
incentive proposals. For example, a
new accelerated vehicle retirement
program would give localities and
companies in nonattainment areas the
option of taking high-polluting, older
cars off the road (by purchasing them)
as one way to meet clean air
requirements.
Except for some experiments with
trading between point sources and
between point and nonpoint sources of
water pollution in the mid-1980s,
EPA's use of economic incentives has
been very limited outside of the air
program. But here, too, the situation is
changing. Under the 90-Day Review of
Regulations, EPA has advanced a
number of initiatives that will apply
market-based incentives to water,
waste, and pesticide control programs.
Specific examples include a watershed
management program that will
promote trading as a cost-effective
compliance tool and a safer pesticides
program that will consider waiving
certain fees and registration
requirements to lower the cost of
bringing "low-risk" products into the
marketplace.
As these examples illustrate, a
variety of economic incentive
programs have been established and
are working. Many others are currently
being developed. Regulators are
gaining valuable experience in
designing and administering such
programs, and the public is gaining
confidence in them. The jury is still
out on just how extensively policy
makers will adopt additional economic
incentives for pollution control, but
the prospects look bright. Q
28
EPA JOURNAL
-------
EPA's new watershed
management
program will
encourage trading
between point and
nonpoint sources as
a cost-effective
compliance tool.
ikfi Ihisnon pkoto,
MAY/JUNE 1992
29
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AN ANSWER TO THE DILEMMA
ON THE FRONT LINE?
Help is needed if states and cities are to change
some old traditions
by Henry Lee
Ten years ago, Seattle's average
single-family household brought
three-and-one-half 30-gallon cans of
trash to the curb for weekly pickup.
(',OIH.(>nii:d uliout i!s dwindling landfill
capacity and eager to increase
recycling efforts, the city embarked on
an innovative unit-pricing program
.that offered residents incentives for
reducing the amount of trash they
generated: Instead of assessing a flat
fee for garbage pickup on each
household, regardless of how much it
produced, the city began charging for
trash collection services in proportion
to the amount of refuse left at the
curbside. The result has been a
dramatic reduction in the amount of
refuse generated. By 1989, 87 percent
of participating Seattle households
subscribed to a program allowing them
to have one 32-gallon container or less
picked up each week.
In a similar effort to introduce
market-based incentives to
environmental regulation, the public
utilities commissions of 26 states have
either implemented, or are considering
implementing, rules designed to help
them incorporate the monetary cost of
environmental damages into their
decisions about meeting future
electricity needs. Their idea, borrowed
from economics, is to internalize the
full costs—the private costs to the
firm, plus those external costs of
damage to human health and the
(Lee is the Executive Director of the
Environment and Natural Resources
Program and an Adjunct Lecturer at
the John F. Kennedy School of
Government, Harvard University.]
30
environment—into the price of doing
business. The result will be to put an
end to any bias in favor of cheaper, but
more polluting, energy sources.
These two efforts signal a major shift
in how state and local governments
approach the task of reducing
pollution and improving
environmental health. Historically,
environmental regulators at both the
federal and state levels have relied
almost exclusively on
command-and-control mechanisms.
Today, there is a growing interest in
expanding the menu of options to
include market mechanisms, such as
Southern California's permit trading
scheme (see Forum feature on page
32), that can provide greater
environmental protection at a lesser
cost to the economy. This article
provides an overview of the
opportunities and obstacles to
expanded use of these tools by state
officials.
Although press coverage of
environmental regulation usually
focuses on Congress and various
federal agencies, enforcement and
implementation of most national
environmental laws occur at the state
level. States implement and enforce
regulations to meet national standards
for water pollution, drinking water,
toxic materials, hazardous waste,
facility siting, noise, solid waste, and
air pollution.
While EPA provides broad guidance
to the states regarding which state
initiatives might be acceptable and
which might not, states are left with
considerable flexibility. They are
required to produce formal
implementation plans which, when
accepted by EPA, provide the vehicle
by which the federal government
formally delegates enforcement
authority to the states. State regulatory
actions can have a significant impact
on both regional and national
economies—in many cases more so
than federal regulatory initiatives
whose costs are presently the target of
much debate between Congress and
the administration.
In the past 15 years, Congress has
dramatically increased the scope of
responsibility delegated to the states.
The Clean Air Act Amendments of
1990 are the best example of this
trend. Over the next three years, states
will have to develop and implement
dozens of new regulations ranging
from limiting the emissions of air
pollutants from motor vehicles to
limiting the amount of sulfur and
nitrogen oxides emitted by power
plants.
For state governments, implementing
these new regulations could not have
come at a worse time: Their resources
are limited and their economies are in
a recession. Tight budget constraints
will prevent state environmental
agencies from hiring hundreds of
additional rale writers and inspectors.
Furthermore, as Congress seeks to
reduce ambient pollution to lower and
lower levels, states must begin to
regulate hundreds of smaller sources.
It is much easier to monitor and
enforce emissions restrictions at 15
large power plants than at 5,000 small
businesses.
Confronted with these constraints,
states are finding that traditional
command-and-control regulation is a
cumbersome and expensive tool which
often is insufficiently flexible to meet
the diverse requirements of literally
thousands of additional sources. In
particular, state governors find
themselves caught in a troubling
political bind. Their constituents
expect them to be environmental
leaders and to fully implement the
regulations. Yet, they also expect them
to promote economic growth and job
creation, especially during
recessionary periods. As regulators in
Los Angeles are about to find out,
cost-effective market mechanisms may
provide an answer to this dilemma.
State environmental officials have
traditionally looked at economic tools
with suspicion. Economic analysis was
EPA JOURNAL
-------
Soirih Coos! Air Quality Management Di.sfrirl pholo.
perceived as a methodology used
primarily by industry lobbyists striving
to maintain the status quo. The
message from today's proponents of
market-based mechanisms is different.
The need for pollution reduction is not
questioned. However, once Congress
has set environmental standards,
proponents argue that they should be
met in the most cost-effective manner.
Incentive-based tools like tradeable
permit systems, emissions fees, and
charge and deposit-refund systems can
significantly improve the efficiency of
efforts to reduce pollution. Many states
are already using some of these tools.
Witness the deposit-refund system on
beverage containers in the Northeast
and the deposit system on lead-acid
batteries in Maine and Rhode Island.
While the potential benefits of
pursuing market mechanisms may be
great, substantial obstacles remain.
Over the past 20 years, state
environmental agencies have built an
organizational culture around the use
of command-and-control regulation.
Most agencies are populated almost
exclusively by engineers and lawyers,
and with the exception of two or three
states, none have the in-house
capability to do serious economic
analysis. If market incentives are to be
a part of the arsenal of tools used by
state agencies, their organization and
infrastructure must change in order to
alter the existing bias toward
command-and-control regulation.
In the short term, states will need
help from EPA. Simply issuing
directives and telling states to do more
will not help. States will need
MAY/JUNE 1992
guidance, information, and access to
additional funding. Guidance can take
the form of identifying opportunities to
effectively use market incentives and
pointing out likely implementation
problems. Information about
cost-effective policies derived from
successful demonstrations in other
areas of the country would be
enormously useful.
For example, empirical information
about which aspects of Southern
California's emissions trading scheme
are working, and which are not, would
be very valuable to the states. EPA
must be much more aggressive in
getting this type of information out to
the states, while simultaneously taking
great pains to allow states to reach
their own determinations regarding
where and when to use market
mechanisms.
The latter point should not be
ignored. Each state faces different
problems. We should not expect
Wyoming to adopt the same plan as
Ohio. Market mechanisms are not
all-purpose panaceas; in some
instances, they can have high
administrative and transaction costs
and may be inferior to
command-and-control options. Some
states will embrace incentive
mechanisms, while others will need
more time to educate their relevant
constituencies.
The federal government should also
avoid the temptation to pressure states
to reassess their existing regulations
and implementation plans. Given
states' inexperience with
most incentive-based policies, the task
Operators of small
businesses, such as this
California picture framer,
increasingly are affected by
state envrronmenta/
regu/ations.
of developing a cost-effective plan to
implement the many facets of the
Clean Air Act Amendments will be a
sufficiently daunting challenge.
Furthermore, Congress is likely to pass
legislation in the next four years which
will amend most of the other major
national environmental laws, thus
providing ample opportunity for states
to explore possibilities for greater use
of market incentives in areas other
than air pollution.
Finally, the federal government
should provide financial support to
start the process of building an
in-house capacity to evaluate and
compare the cost effectiveness of
regulatory and market-based options.
Without this support, existing budget
constraints will not allow states to
move quickly enough to build any
measurable familiarity or expertise
with economic incentives prior to the
submission of their Clean Air
implementation plans.
In fact, states' environmental
agencies are stretched so thin that
some are actively considering the
possibility of returning authority for
one or more of the major
environmental laws to the federal
government. Although generating
support in Congress and EPA for
increased funding for a state grant
program will be difficult, it is justified
by a cost-benefit principle we can all
understand: The costs of assisting
states will be measured in the millions
of dollars, while the potential benefits
to the national economy will be
measured in the billions.
It is only through building this
capacity that the traditional cultural
bias of state agencies to favor
command-and-control regulation will
be replaced by a willingness to
aggressively pursue cost-effective
market incentive approaches, a
31
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VES
A FORUM:
THE
LOS ANGELES
VENTURE
The same geography and weather
patterns that make Southern California
a warm and inviting place to Jive aJso
conspire to give it the nation's worst
air pollution probJems. Over the years,
the region's methods for dealing with
pollution problems have been a /airly
accurate barometer for the nation's
evolving approaches to pollution
control.
Recently, Southern California's
South Coast Air Quality Management
District fSCAQMD) created the
Regional Clean Air Incentives
Market—known as RECLAIM—to enlist
market incentives in the battle against
air pollution. The goal is to use market
forces to cut air pollution levels at the
lowest possible cost to society. EPA
Journal asked the executive director of
SCAQMD for his overview of the
program. We also asked a number of
people who will be affected by the
plan for their points of view. The
overview and commentaries follow.
EPA JOURNAL
-------
The Plan
James M. Lents
On March 5, 1992, Los Angeles
regional air quality officials
approved a historic shift in the way
they will manage urban air quality by
approving in concept the RECLAIM
program.
RECLAIM seeks to harness the profit
incentive to clean up the nation's
dirtiest air. It substitutes emissions
trading for traditional
command-and-control regulations.
The shift to emissions trading comes
at a time when command-and-control
regulations have become increasingly
numerous and specific for our region's
businesses. Over the past 40 years, we
have made considerable headway in
reducing pollution under these
regulations. Peak pollution levels have
been cut in half since the 1950s,
despite a 170-percent increase in our
region's population and a 290-percent
increase in motor vehicles.
Recent legal and policy shifts at the
state and federal level, however, have
opened new market-based options that
allow us to surpass existing programs
for air pollution control. These new
market-based options promise to
(Lents is the Executive Director of the
South Coast Air Quality Management
District, the air pollution control
agency in California for Los Angeles,
Orange, and Riverside counties and
the non-desert part of San Bernardino
County.)
harness the entrepreneurial ingenuity
of our business community to clean up
the air. Moreover, the comparative
flexibility of this concept of
"harvesting pollution" makes the old
command-and-control approach seem
rigid and costly.
RECLAIM will mark the first time
that emissions trading will be used on
a large scale to clean up urban air
pollution. SCAQMD analyses show
that it will achieve equivalent public
health protection at a lower cost and
with less impact on jobs. By tapping
the profit incentive, RECLAIM will
also spur technological innovation.
Under RECLAIM, emissions will
continue to decline, but firms will gain
flexibility in the timing and method of
emissions reductions.
RECLAIM initially may cover more
than 2,000 businesses: those that emit
more than four tons per year of either
volatile organic compounds (VOCs),
nitrogen oxides, or sulfur oxides.
Smaller sources will remain under
traditional regulations for the time
being.
Each business under RECLAIM will
be relieved of emissions limits on
individual pieces of equipment and
placed under a facility-wide permit
that specifies a mass emissions limit
for the whole plant. In no
circumstances will this facility-wide
limit be greater than what would
otherwise be allowed under existing or
adopted rules.
Under this "bubble" approach,
SCAQMD will establish an emissions
baseline for each pollutant based upon
historical factors, such as the business
cycle and previous history of
emissions control. Then firms will
have to reduce emissions by 6 percent
per year for VOCs, 8 percent per year
for nitrogen oxides, and 8.5 percent
per year for sulfur oxides.
Firms that do not or cannot reduce
emissions by these percentages will
have to obtain equivalent credits from
other firms that make excess
reductions. For example, by switching
to a less-polluting paint, a company
that paints boats might be able to
reduce emissions of VOCs below its
target at a cost of $2,000 per ton. But a
silicon chip manufacturer may have to
spend $30,000 per ton to meet its
target reduction of the same pollutant.
So the chip maker could buy credits
from the boat firm at $15,000 per ton,
cutting its cost in half, while the boat
company makes a $13,000 profit.
In essence, businesses will be able to
reduce pollution where it is least
expensive to do so, rather than having
to reduce it where and when they are
told to by regulators. Under the
command-and-control rules, industries
have no incentives to go beyond the
letter of the law to reduce pollution.
Under RECLAIM, they will.
An SCAQMD economic analysis
shows that businesses in the South
Coast Air Basin will save more than
$400 million in compliance costs in
1994 alone.
One of the most crucial elements of
the program is to verify that emissions
reductions are actually being made.
These reductions must be real and
verifiable to satisfy the Clean Air Act
and a skeptical public.
Fortunately, new technologies are at
hand that will allow SCAQMD to
electronically monitor emissions. For
instance, continuous emissions
monitors will be used to monitor
nitrogen oxide emissions on large
sources, such as power plants and
refineries. Meters will measure fuel
use and allow computerized
calculation of nitrogen oxide emissions
on smaller sources, such as boilers and
stationary internal combustion engines.
Solvent use will be monitored and
reported electronically as well, using
bar codes and scanners on paint
containers.
Data from all these devices will be
fed directly into SCAQMD's central
computer where violations will be
detected instantly. This electronic
monitoring system, already in use on a
smaller scale, will be backed up with
random emissions audits.
Further safeguards are built into the
program:
• Backsliding, or increases in
emissions, will be prevented by
requiring that all existing pollution
MAY/JUNE 1992
33
-------
control equipment remain in place and
be kept operable.
• Good housekeeping and regular
maintenance will continue to be
required to minimize emissions.
• Toxic pollutants will continue to be
controlled under existing rules and
laws and will not be eligible for
trading under RECLAIM.
• SCAQMD will verify all emissions
credits claimed under the program.
However, to keep the market truly free,
SCAQMD will not require that trading
of verified credits be approved.
SCAQMD's staff is working with a
broad-based, community advisory
committee to develop a detailed set of
rules that will implement RECLAIM.
Numerous public workshops have
been and will continue to be held;
rules will be adopted only after public
hearings. Startup is expected in 1994.
Among the major issues to be
worked out are: Will small businesses
be affected, and how? Will some
businesses abandon our region for
other areas to profit from selling
pollution credits? Can the reduction of
VOCs be adequately monitored to the
public's and EPA's satisfaction?
We hope RECLAIM will be the ticket
for clean air in the 1990s and beyond,
as well as a program offering renewed
opportunity for businesses.
In Response
Michael M. Hertel
Southern California Edison is the
major supplier of electricity in
Southern California's SCAQMD. Our
business depends directly on the
health and well being of the
community in which we operate. The
nonattainment status of our region is a
direct threat to the health and well
being of our community. Yet, bringing
this basin into attainment must be
achieved in a manner consistent with
the economic realities and the needs of
our customers. For that reason, we
support the concept of replacing
traditional "command-and-control" air
quality regulation with market trading
approaches. The RECLAIM program
has the potential to reduce and control
the costs of the emissions reductions
necessary to clean up our air by as
much as 25 percent.
For RECLAIM to realize its potential,
certain key principles must guide the
rule development that is now
underway at the SCAQMD.
• The market-based approach must
replace the command-and-control
regulations. We can't have both.
Micromanagement of market segments
distorts the market and limits overall
gains. Some are calling for daily
(Dr. Hertel is the Manager of
EnvironmentaJ Affairs for Southern
California Edison.j
emissions limits to be placed on some
sources; the SCAQMD should turn a
deaf ear to these requests.
• More sources must be allowed to
participate in RECLAIM than presently
proposed. The broadest base of sources
opens up the most opportunities for
lower costs in a market-based system.
In addition to the cutoff at four tons
per day that is currently proposed, we
suggest adding a "willing trading
partners" concept. Trades would be
allowed between any sources so long
as the SCAQMD pre-approves a
contract that specifies the emissions
base, the methods of reduction, and
the enforcement mechanism for the
sources involved.
• The program must have a reasonable
start point, rates of reduction, and end
point. The baseline, or initial
allocation of emissions to sources, is
under debate. We are pleased that the
SCAQMD is operating on the principle
that initial allocations must be at least
as large as each source's present actual
emissions. The proposed "discount
rate" (rate of reduction) for sources has
been increased several times since the
program was first announced. We are
concerned that the temptation will be
great to set discount rates that are too
steep. The end point is not yet clear.
Only 15 percent of the basin's
emissions inventory will be part of the
initial market. Should they be required
to continue to reduce, no matter what
the cost, until attainment is achieved,
whether or not other sources are
reducing emissions at similar rates?
If the end point and rates of decline
exceed what can be achieved by
employing best available control
technology, then the only way the
basin can continue with emissions
reduction would be through shutdown
of business and consequent loss of
jobs. We believe the program should
establish preset "off ramps" that would
halt the downward decline in
emissions if the market cost rises too
high to be economically tolerable.
EPA JOURNAL
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• If needed, RECLAIM should permit
short-term special incentives to foster
new pollution-reduction technology.
These incentives can give the program
a long-term focus. Some effective
solutions might otherwise be unable to
compete in the climate of short-term
cost decisions and trading rules.
• Finally, the program must insure
that all sources be treated equally.
Some are calling for certain sources to
be given lower than average
allocations, or otherwise treated in
ways that would unreasonably distort
the market. We support the SCAQMD's
view that, in order for the market to
work, all sources must be treated
equally.
Mary D. Nichols
The RECLAIM plan will
replace all existing and proposed
regulations limiting emissions of sulfur
oxides, nitrogen oxides, and reactive
organic gases from over 2,000
stationary sources. These sources are
in a four-county region with a
marketplace in which companies will
buy and sell quarterly emissions
allowances. Like weary consumers in
the former Soviet Union,
environmentalists wait apprehensively
to see what will be in the shops when
the doors open; what we fear is not
shortages, however, but a permanent
surplus in pollution.
RECLAIM assumes current permit
holders will be given initial allotments
which will then be automatically
discounted by a fixed percentage each
year until federal air quality standards
are met. We question whether a plan
designed to achieve long-term,
area-wide reductions can also assure
attainment of hourly or daily
standards, prevent creation of toxic hot
spots, and avoid shifts in emissions to
more reactive compounds or more
problematic areas. The SCAQMD's
proposal lacks any safeguards to
prevent trading of low-reactivity
solvents for more reactive products, or
to discourage the substitution of toxic
for less toxic organics. RECLAIM must
be designed to assure that in terms of
air quality, it is at least as protective of
(Nichols is a Senior Attorney for the
Natural Resources Defense Council.)
the health of residents of all parts of
the air basin as is the current air
quality management plan.
The danger inherent in such a clean
air bazaar is much greater than a slight
rearrangement of today's pollution
problem. By launching a free-for-all
among all types of industries
competing for a newly valuable
commodity, RECLAIM runs a risk of
discrediting the very concept of
market-based alternatives to regulation.
Already the regulated industry is
squabbling over the allocation of the
original pie. More disturbing, industry
is now demanding that the pool of
stationary source emissions—which is
already much too big—be enlarged by
tweaking the inventory—for example,
by adding in previously uncounted
fugitive emissions. All these efforts to
find cheaper substitutes for cleaning
up existing industrial pollution are
great if they are used to clean the air
faster or better than current
regulations. But to the extent these
new emissions credits are used to
delay or eliminate the existing
reduction requirements, we are simply
trading one type of control for another.
The trading of emissions allocations
requires a degree of precision and
confidence in data far beyond anything
in use today. Enforcement based on
auditing of companies' trading records
will also generate new kinds of
reporting requirements and new
penalty structures. All of this accounting,
tracking, and monitoring will take
some time to develop and certainly
will involve some trial and error.
For these reasons, environmentalists
prefer to begin the trading experiment
with a smaller universe, thereby
reducing the damage from the mistakes
that will certainly be made and
allowing the launch of a meaningful
trading program at an earlier date. We
propose a nitrogen oxide trading
program to start. With 700 permitted
sources, there would be ample
opportunities for trading, but the
commodity would be much less
variable and much more easily
measured than would be reactive
organic gases.
MAY/JUNE 1992
Continued on next page
35
-------
VES
Verne Wochnick
Cleaning the air in Los Angeles has
not been a simple task. It has been
costly and, at times, disruptive to the
economy. This has become even more
acute as the recession continues to
place ever-tighter burdens on every
company's working capital. The
historic command-and-control
regulatory process has become too
inflexible, and it appears to be
incapable of achieving compliance
with the 1990 Clean Air Act.
This situation has led many in
government and the business
community to search for alternative
methods of regulating air quality. The
SCAQMD's RECLAIM program appears
to be the solution; however, it will
require sacrifice.
Under any program, emissions
reductions of 85 percent will force a
number of companies to leave the L.A.
basin. The district's goal, therefore,
should be to develop a regulatory
system that not only cleans the air but
does it in a cost-effective manner. The
system should be broad enough to
establish the lowest possible allocation
price, and it should rninimi/.e the
administrative burden. These factors
can help mitigate or at least reduce
much business flight from the basin.
(Wochnick is the manager for
government affairs for the Hughes
Aircraft Company.)
If kept simple, RECLAIM offers that
promise. While there are many issues
to be debated as the program develops,
none will be more critical than the
establishment of an adequate baseline
and the need for a simple trading
system.
In establishing a baseline, the
SCAQMD will not only be setting an
emissions limit but will be laying the
framework for the region's economic
future. To that end, emissions
allocations must not penalize firms for
current economic downturn. If the
forecast is for the economy to rebound,
then the district should establish an
emissions baseline that represents a
period of economic health. Likewise,
firms must not be penalized for their
historical offsets or reduced onsite
emissions that have been obtained
under existing permit levels. By
combining both historical and
permitted emissions levels, a fair
foundation can be achieved. That base
must be established before any
workable trading system is developed.
If a trading system is to work, it
must be simple. A trading program
cannot be viewed as a seasonal control
mechanism. It is merely a means of
buying and selling entitlements. To
make it anything other than that, to
break it down into quarterly or
monthly markets, makes it too costly
and cumbersome. Problems resulting
from seasonal emissions can and
should be dealt with through a
facilities permit. That way, the trading
system can remain fluid and simple
while the permit program preserves
the environmental review process.
Let us recognize that RECLAIM will
fundamentally restructure the region's
economy. However, if done correctly,
RECLAIM will minimize job losses and
negative economic impact far better
than the existing system.
Kelly Candaele
The SCAQMD has embarked on an
ambitious program that could clear
the air but inadvertently reward
business flight from a Los Angeles
already economically weakened by job
losses and cuts in defense spending.
By establishing a market for
emissions, the SCAQMD would create
value for a
commodity—pollution—that
previously was the antithesis of value.
The problem is what kind of
incentives such a system would bring
into play.
If a company decided to move to
New Mexico, it could sell its emissions
credits to another company that
needed them to continue operating or
expand production. The departing
company would, in effect, make an
immediate profit by shutting down
production—a golden parachute for
bailing out of Los Angeles. The
company rents a U-haul trailer with
the money earned from its emissions
credits and heads for New Mexico to
start over.
Back in Los Angeles, workers would
be left in need of retraining, health
care, and income to sustain their
families. They would face the prospect
of finding other jobs in a recessionary
(Candaele is a political representative
for the L.A. County Federation of
Labor, AFL-CIO, and is a member of
the SCAQMD Marketable Permits
Committee.)
EPA JOURNAL
-------
economy. The region's tax base would
be undermined, its social services
further strained by the ills associated
with unemployment.
If there is any doubt that the money
earned from selling emissions credits
is sufficient to support a business
change of address, consider this: In
1990, two medium-sized Shell Oil
refineries in Carson, California, were
permitted to emit 1,900 tons of
reactive organic gases and 1,400 tons
of nitrogen oxides, annually. Based on
SCAQMD staff estimates, credits for
these emissions would be worth about
$17.4 million. That kind of money can
move quite a bit of furniture.
Companies that leave Los Angeles
should not get off so easily, or be so
richly rewarded. There is a social
character to business enterprise that
must be recognized. The SCAQMD
should structure the trading market to
help workers and establish a
disincentive for business flight. The
district should create, if you will, a
"social market."
Here's how the process might work.
If a company decides to close shop in
Los Angeles, let it sell its credits in the
marketplace. This would avoid
distortions in the smog-for-sale market
that might set back business activity
and job creation. But once the trade is
made, a portion of the money earned
from the sale should go to help
workers left in the economic lurch by
business flight. The money could be
easily channeled to already existing
worker retraining programs or be put
in a fund to provide health insurance
or supplemental unemployment
insurance.
In the United States, moving from
job to job is a jarring, often devastating
experience. If workers bear the major
burden of environmental cleanup, they
will rightfully ask, "Why should we be
the ones who sacrifice for other
people's ideological enthusiasms?" The
SCAQMD can help preempt this
economic discrimination.
Gary L. Stafford
I he SCAQMD is developing what
' has been called a revolutionary
market-incentive program to achieve
emissions reductions from stationary
sources. Some claim that there is gold
in the smog that blankets the district.
That gold, however, may look more
like red ink to manufacturers.
One area of critical concern to
furniture manufacturers is the
allocation of the initial baseline. Under
RECLAIM, a manufacturer will be
assigned an annual emissions
allocation which will then have to be
reduced by a percentage each year.
Currently proposed methods of
assigning the initial allocations are
based on historical emissions for the
years 1989 to 1991. The district will
have to take into account additional
factors to provide an equitable baseline
for furniture manufacturers.
First, furniture manufacturers have
made significant reductions since 1988
as a result of SCAQMD
command-and-control regulations. If
they are allocated baseline emissions
based on historical emissions, they
will be penalized relative to industries
that have not been as severely
impacted by those regulations.
Furniture manufacturers that have
(Stafford is Vice President/Chief
Financial Officer for Terra Furniture,
Inc., and a past president of Western
Furnishing Manufacturing
Association.]
reduced their emissions beyond
average levels need to be given a larger
initial baseline allocation.
Second, furniture manufacturers'
emissions have been reduced since
1988 as a result of industry recession.
RECLAIM needs to recognize that
these reductions are temporary and
assign an allowance that will
compensate for them during the
baseline period.
Finally, the initial allocation needs
to provide an allowance for exempt
solvents. In the past, the district has
encouraged the use of these solvents in
paint formulations because they did
not cause smog. We now know,
however, that they deplete the ozone
layer and are likely to be phased out.
When they are phased out, they will
have to be replaced with reactive
organic gases (ROGs). Unless industry
receives credit for the exempt solvents
in its initial baselines, it will have to
purchase large amounts of ROGs later
on.
This is what makes an equitable
baseline allocation so important.
Without it, as production recovers
from the recession, as exempt solvents
are phased out, and as the 5-percent
annual reduction in ROG emissions
begins, furniture manufacturers will be
net purchasers of ROG emissions.
The SCAQMD has projected that the
cost of a ton of ROG emissions in 1987
dollars will exceed $10,000 in 1994
and will rise to $40,000 by 1997. That
equates to a tax of $110 per gallon on
today's compliant lacquers, which
would be prohibitive to the furniture
manufacturer.
One way to resolve the questions of
fairness would be to assign the
baseline at existing permit limits.
Trading could be restricted to
reductions in actual historical
emissions. This would preclude the
increases in emissions that could
result from the trading of previously
unused permitted emissions. This
simple method of allocating the initial
baseline could determine whether
furniture manufacturers and many
other small businesses find gold or red
ink in the RECLAIM program, n
MAY/JUNE 1992
37
-------
TRADES TO REMEMBER:
THE LEAD PHASEDOWN
The carrot approach achieved the standard and saved millions of dollars, too
by Lily Whiteman
The 1979-to-1988 phasedown of
leaded gasoline proved that market
incentives could do what conventional
command-and-control regulations
could not: hasten the nation's retreat
from the leaded gasoline market at the
lowest possible cost.
But just what was lead doing in
gasoline, why did EPA want to remove
it, and how did this effort succeed?
Since the 1920s, refineries had been
stoking gasoline with lead, the
cheapest source of octane, in order to
reduce engine knock and improve
engine performance. But the latter half
of the 20th century saw a steady
accumulation of evidence linking lead
exposure to mental and cardiovascular
disorders. The urgency of the problem
was underscored by studies from the
1970s showing that blood lead levels
of sample populations immediately
reflected changes in the lead content of
gasoline.
By the latter half of the 1970s, lead
consumption began to decline. During
this period, manufacturers began
equipping new cars with
pollution-cutting catalytic converters
in order to meet tightening emissions
standards for various pollutants.
Because catalytic: converters are
poisoned by lead, their proliferation
meant reduced lead consumption and
increased availability of unleaded
gasoline. Despite such progress, leaded
gasoline remained quite concentrated,
averaging about 2.0 grams per gallon in
1975.
(Whiteman is a policy analyst with
EPA's Of/ice o/ Mobile Sources.]
High lead levels, coupled with the
gathering storm over health effects,
inspired EPA during the late 1970s to
take quick and direct action to hasten
the decline of leaded gasoline.
But there was a problem: Although
many of the nation's newer refineries
had been equipped to handle new
octane boosters, other less modern
facilities had not yet been retrofitted
for the conversion. This older segment
of the refining industry would have
been shut down by an immediate ban
on lead. Balancing heterogeneous
industry capabilities against health
considerations, EPA initiated a series
of successively more stringent lead
limits.
Lead Use in Gasoline and
Average Blood Lead Levels
Early regulations demanded equal
progress from all facilities at the same
time. However, EPA eventually
speeded the transition to unleaded
gasoline by adopting trading and
banking options that offered older
facilities alternatives for meeting
standards otherwise beyond their
reach.
Through trading, facilities could pay
other producers to compensate for
their excesses. Consider, for example, a
refinery that wasn't ready for the 1.10
grams per leaded gallon (gplg)
standard set in 1982. That facility
could still legally produce a given
amount of gasoline at 1.30 gplg if it
purchased credits during the same
calendar quarter from more modern
facilities that produced an equal
amount of gasoline at 0.90 gplg.
Under a banking program begun in
1985, credits gained by early
achievement of phasedown limits
could be spent through 1987 to delay
adherence to tougher, more stringent
standards. For example, suppose that
after the 1.1 gplg limit was set in 1985,
a company pumped out a given
amount of gasoline at 0.8 gplg. This
"overcompliance" could entitle either
that facility or another trader with
credits to produce the same amount of
gasoline at 0.4 gplg even after the
standard dropped down to 0.10 gplg in
1986. Between 1985 and 1987, up to
20 percent of total lead consumed
passed through banking deals.
By squeezing timely lead sacrifices
from modern facilities without
strangling older ones, trading and
banking programs helped preserve the
refining industry's economic viability.
1976
1977 1978
1979
1980
38
EPA JOURNAL
-------
FOR USE AS A
MOTOR FUEL ONLY
CONTAINS
LEAD
4TETRAETH*
Market incentives helped
EPA speed the transition to
unleaded gasoline.
Moreover, because the phasedown was
implemented earlier than conventional
standards could have been, it
produced health benefits from reduced
lead consumption years earlier than
otherwise would have been possible.
The market-based phasedown also
allowed for the physical properties of
lead. Here's how: As the lead
concentration of gasoline decreases,
the octane power of each unit of lead
increases; the more dilute the gasoline
mixture, the more work each unit of
lead accomplishes, and the greater is
its value. Because of these principles,
lead removal from concentrated
gasoline mixtures is easier and cheaper
than lead removal from dilute
mixtures; each step in a lead
phasedown is incrementally more
difficult and expensive than the
preceding one. Of course, the health
benefits of removing a given quantity
of lead are the same whether it is
taken from a concentrated or dilute
mixture.
By allowing refineries that possessed
lead credits for overcomplying with
the 1.10 gplg standard to slow their
transition into the tough 0.10 standard,
banking and trading programs—in
effect—encouraged modern facilities to
exchange cheaper, early reductions for
more costly, later ones. Such trade-offs
saved money. Due entirely to banking
alone, the phasedown cost industry
$220 million less than conventional
regulations would have. But because
market incentives did not permit
increases in total lead consumption,
such savings were achieved without
compromising health benefits.
For the sake of a few old farm
Everett /ohnson pholo. FoJio. Inc.
engines that may still need residual
lead levels for valve protection, limits
currently remain at 0.10 gplg.
Nevertheless, market forces have
already driven leaded gasoline out of
most urban areas. A complete ban will
take effect in 1996.
Although EPA worked hard to
develop enforceable regulations,
according to John Holley of the Office
of Mobile Sources, it would have been
impossible to foresee and preemptively
eliminate every potential scamming
opportunity. Simply because of their
complexity, banking and trading
programs incorporate numerous cracks,
murky boundaries, and shadowy folds
that can be manipulated to obscure
illegal activities. Unintended loopholes
permitting environmentally harmful
actions that violated the spirit—if not
the letter—of the law posed other
vexing problems.
The lead phasedown hinged upon a
self-reporting system similar to that
underlying IRS tax returns. EPA
checked refiners' reports of lead
consumption against lead
manufacturers' records, and also
cross-referenced refiners' reports of
banking and trading transactions
against the records of other
participants in such deals. In addition,
refiners' reports of gasoline output
were selectively verified by sleuthing
through often complicated paper trails,
and by conducting site audits where
necessary.
EPA investigators did uncover a
number of operations that exaggerated
gasoline sales in order to artificially
dilute lead concentrations into
compliance. In a celebrated 1986 case,
EPA fined a company $40 million for
spiking 800 gallons of gasoline with an
excess of 135 grams of lead. This
violator, like many others, was turned
in by legitimate refiners who resented
the unfair competitive edge gained by
illegal operations. Other scammers
were betrayed by their own transparent
reports to EPA, or by audits.
EPA has recently written trading
mechanisms into other clean fuels
programs. Because these programs vary
with location and apply to a variety of
gasoline properties, they will likely
pose new challenges. Armed with
lessons from the lead phasedown, EPA
is gearing up for the next evolutionary
phase of market incentives, o
MAY/JUNE 1992
3!)
-------
.K
f
Using /ess harmful forms of energy, and
using them less wastefully, is an important
form of pollution prevention.
•in
EPA JOURNAL
-------
HEADING OFF
POTENTIAL PROBLEMS
It's not as easy
as it sounds
by Richard Andrews
(Andrews is the Director of the
Environmental Management and
Policy Program at the University of
North Carolina at Chapel Hill.)
Which makes more
sense—throwing away waste
materials and paying higher and higher
rates to bury or burn them, or using
them in byproducts? Buying expensive
equipment to treat toxic wastewater
before discharging it, or using a
non-toxic substitute in the first place?
Paying for materials when you buy
them and then paying again to dispose
of them when you throw them away,
or buying only what you need?
Polluting ground water and then
spending millions of dollars trying to
clean it up, or avoiding contamination
through careful operation and
maintenance? Mining large amounts of
coal and oil, polluting the air by
burning them, and then using the
resulting energy wastefully—or using
less harmful forms of energy, less
wastefully, in the first place?
As these examples suggest, pollution
prevention in principle is just common
sense. Over the long run, and even for
the economy as a whole in the short
run, it is the most effective and the
cheapest tool we have for
environmental protection. And it is an
essential feature of a competitive and
sustainable economy as well. As
President Bush pointed out in 1990,
"Environmental programs that focus on
the end of the pipe or the top of the
stack, on cleaning up after the damage
is done, are no longer adequate. We
need new policies, technologies, and
processes that prevent or minimize
pollution—that stop it from being
created in the first place."
But if that is true, why aren't we
already doing it? The answer is that in
some cases we are. But in many other
situations, pollution prevention is hard
to define and hard to measure, and its
real benefits and costs are often
distorted by both prices and policies
that do not accurately reflect them.
Pollution prevention means actions
that minimize the wasteful use of
natural resources and the generation of
harmful materials that would
otherwise be released into the
environment. Carefully maintaining
equipment to eliminate leaks is
pollution prevention. Training
employees to avoid spills and wasteful
cleaning practices is pollution
prevention. Recycling residual
materials and energy more completely
within manufacturing and farming
processes is a major form of pollution
prevention. And substituting nontoxic
ingredients for toxic ones, so that less
hazardous materials are dug out of the
ground and put in circulation in the
first place, is arguably the most basic
kind of pollution prevention.
There is already a large and growing
record of examples of pollution
prevention success stories, many of
which were initiated voluntarily by
businesses that recognized that
pollution prevention pays. Over 20
years ago, fruit canneries began
recycling their wastewater to capture
more of the juice in byproducts,
dramatically reducing discharges to
streams. Some metal plating firms have
now redesigned their rinsing tanks to
recapture far more of the toxic and
expensive metals used in their
processes. Previously these metals
were simply released into the rivers
causing serious pollution and wasting
money.
Since fuel prices rose in the 1970s,
energy conservation by both businesses
and households has drastically slowed
the growth rate of U.S. energy
consumption. This has prevented
pollution from-a significant number of
additional power plants (and
associated coal and oil extraction) that
would otherwise have been needed.
Since publication of the annual Toxics
MAY/JUNE 1992
41
-------
Release Inventory several years ago,
more and more businesses have found
ways to dramatically reduce emissions
of the especially hazardous chemicals
that must be reported.
EPA itself has developed two
high-visibility pollution prevention
initiatives: the "33/50 Program" for
reducing toxic emissions and the
"Green Lights Program" for
energy-efficient lighting (see boxes).
In many other real choices, however,
defining pollution prevention is not as
easy as it sounds. For instance, should
you use paper or plastic grocery bags?
Both are now recyclable; paper does
biodegrade, but not in most landfills,
and it is both bulkier and heavier to
handle; plastic-making has an image as
a pollution-intensive industry, but
papermaking is too. Suppose a
manufacturer reduces the use of a
toxic chemical, but substitutes one that
produces a much larger discharge of
non-toxic organic material in
wastewater. Is that pollution
prevention, or just substitution of a
different kind of pollution? Suppose
that manufacturer continues to use the
toxic material, but invents a way to
incorporate it more completely into the
product itself. Is that pollution
prevention, or just pollution
displacement to a different time and
place—when the product is discarded?
Suppose the manufacturer simply
stops making the product: Will its
consumers buy an alternative that
pollutes less—or more? Most
A pollution prevention success
story: Kryptonics, Inc., a
Colorado manufacturer, invented
a process that eliminates the
company's need (or CFCs.
EPA's 3350 Program
When EPA Administrator William
Reilly asked 600 companies in
January of last year if they would
voluntarily reduce their
environmental releases and off-site
transfers (amounts sent to other
facilities) of certain toxic
chemicals, nobody was quite sure
what would happen.
As it turns out, EPA's 33/50
Program—so called because of the
two-tiered reduction goals of 33
and 50 percent—is going strong.
By January 1992, nearly half of
those companies had committed to
substantial reductions over a
seven-year period. And now, with
the invitation to participate
expanded to more than 6,000
companies, almost 800 companies
have joined the program. The
result: a projected reduction of
over 300 million pounds of
chemical releases by 1995.
The program sets two voluntary
EPA JOURNAL
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important, can the consumer or
manufacturer even determine which
choices really prevent pollution best?
In some cases this can be determined,
especially where the stakes are high
enough to warrant detailed analysis. In
many others, however, the answers
remain frustratingly ambiguous,
because they require complex
comparisons of products with their
substitutes over their entire
life-cycles—mining, manufacturing,
use, re-use, and disposal—involving
many assumptions and uncertainties.
Even when the scientific choices are
clear, the economic ones often are not.
From an environmental standpoint,
less pollution is always preferable to
more—but how much more preferable,
and at what cost? Many pollution
prevention actions make sense for both
business and environmental reasons,
and these are what we are now seeing.
The only reasons they were not done
years before was that no one stopped
to think about them. The problem was
simply old habits and routines,
thoughtlessness, or just lack of
engineering attention to designing
more efficient alternatives.
For some other situations, pollution
prevention—from the polluter's
perspective—pays now but did not pay
before because the real costs of
environmental damage were simply
being ignored. For instance, rising
energy costs in the 1970s focused
people's attention on conservation, and
in the 1980s, new landfill and
incinerator safety standards have
raised the cost of waste disposal. And
many more pollution prevention
actions would pay now except for
perverse policy incentives that actually
reward environmentally damaging as
well as uneconomical actions.
Examples include below-cost logging
of national forests, artificially cheap
prices for public water and mineral
and energy resources, subsidies for
wasteful overproduction in agriculture
and some military industries, and even
some environmental regulations that
require expensive end-of-pipe
treatment facilities rather than
preventive alternatives.
But what about preventing pollution
when it really does cost the
business—or you or me—more to do so
than to throw it away? Should we
promote pollution prevention only to
the extent that it really does serve the
individual's own self-interest? Or at
the other extreme, should we seriously
pursue a goal of total pollution
prevention—that is. zero pollution
discharge? Or is there some reasonable
compromise between these two
positions that should guide pollution
prevention choices?
In principle, the answer is that
everyone who causes pollution should
be charged its full costs when they buy
the products that cause it. These costs
include the costs of extracting,
reduction goals for 17 targeted
chemicals: a 33-percent reduction
for 1992 release and transfer totals
from 1988 levels, and a 50-percent
reduction by 1995. In 1988, there
were 1.4 billion pounds of releases
and transfers of the 17 targeted
chemicals. The 33/50 program
aims to cut the figure in half—a
700-million-pound reduction—by
1995.
The 17 chemicals were chosen
because they meet three criteria:
They all pose serious health and
environmental concerns; they are
high-volume industrial chemicals
with substantial releases; and they
can be reduced through pollution
prevention. They include
chemicals like lead—a pervasive
chemical that has had especially
harmful effects on
children—benzene, and toluene.
The data on the chemicals are
taken from reports that companies
are required to file with EPA
under section 313 of the
Emergency Planning and
Community Right-to-Know Act.
This information is compiled and
released annually by EPA as the
Toxics Release Inventory.
Many companies have reported
deriving tangible benefits from
their participation in 33/50:
improved community relations,
improved employee morale, and
monetary savings from cutting
waste management costs and
potentially avoiding future costly
liabilities associated with waste.
The companies also benefit from
being recognized publicly by EPA
as voluntarily reducing their
pollution levels. And an awards
program is in the works to reward
companies for technical
innovations and other pollution
prevention measures.
EPA is helping companies with
the technical problems associated
with the 33/50 Program. The
Agency is offering workshops
explaining the 33/50 Program and
providing industry-specific
information on pollution
prevention. EPA has also set up a
Pollution Prevention Information
Clearinghouse and a Pollution
Prevention Information Exchange
System (PIES). Both the
Clearinghouse and PIES
information are available via
computer modem. To learn how to
access either, call (703) 821-4800.
For more information about the
33/50 Program, call EPA's Toxic
Substance Control Act (TSCA)
Hotline at (202) 554-1404, Monday
through Friday, between 8 a.m.
and 5 p.m. (EST), or write to TSCA
Hotline, Environmental Assistance
Division, U.S. EPA (TS-799), 401
M Street SW, Washington, DC
20460.
—Eds.
MAY/JUNE 1992
43
-------
manufacturing, and disposing of the
products as well as the full costs of
preventing or restoring the
environmental damage caused during
the process. Moreover, these funds
should be spent to prevent or restore
the damage, not simply be reallocated
to other uses. This tenet does not
require zero pollution discharge or any
other unrealistic goals. It simply states
clear principles of stewardship, that
we leave the Earth in at least as good
condition as we found it; of economic
efficiency, that each economic
transaction should reflect the true
costs involved; and of fairness, that
those costs should be borne by those
who in fact cause them. These
principles are absolutely consistent
with both environmental protection
and mainstream principles of
free-market economics.
There are policy tools that we could
use to move a long way toward
implementing these principles, but
there is great resistance to them. Those
who should pay pollution charges
would rather avoid them, and no one
speaks for the new businesses and jobs
that would be created if the full
environmental costs were charged to
promote proper pollution prevention.
Budget officials resist earmarking
revenues to pay the actual prevention
and clean-up costs; both polluters and
environmental groups have deep stakes
in the status quo and are apprehensive
about the uncertainties of a new
approach; and domestic polluters
argue that if they pay the full costs of
pollution they cannot compete against
foreign firms that do not. It is also
hard to establish precisely the "right"
level for such charges.
Five immediate steps would help us
to move toward more effective progress
in pollution prevention:
• Ask these questions in all choices by
businesses, governments, and
individuals: Am I preventing pollution
by the decision I am making? Could I
prevent pollution better by making a
different choice? Could I prevent
pollution better by persuading
someone else to provide me with
additional options?
• Take obvious steps to move in the
right direction. Systematically identify
the materials and energy you use (as a
business or a household), eliminate
waste and leakage and unnecessary
use, substitute less harmful
alternatives, and invest in changes that
have reasonable payoffs. In
government, eliminate policy
incentives that are both
environmentally and economically
perverse.
"Green Lights'
Created in 1991, EPA's "Green
Lights" program encourages major
U.S. corporations, state and local
governments, and other
organizations to install
energy-efficient lighting. The
response has been positive—more
than 525 corporations and
governments have signed on as of
late April, yet another indication
that a pollution prevention ethic is
beginning to take hold in the
business world. Here's how Green
Lights works.
A company interested in joining
the program must become a
"Partner" or an "Ally." "Partners"
are companies not in the lighting
business that agree to survey their
existing lighting and work toward
a reduction of energy used for
lighting in 90 percent of their
buildings within five years. They
also agree to document the
changes they make, use energy
efficient lighting in any new
buildings, and educate their
employees about ways to cut
lighting costs.
"Allies" are lighting-related
companies—such as power
companies, lighting manufacturers,
and lighting consulting
companies—that agree to the same
energy-saving surveys and actions
for their own lighting systems as
"Partners" do, but they also assist
EPA in promoting energy efficient
lighting and in providing technical
information to their customers and
other Green Lights participants.
EPA, for its part of the deal,
agrees to provide state-of-the-art
expertise and technical support, to
recognize participating companies
for their public service in
preventing pollution, and to
promote public awareness about
lighting efficiency.
The Green Lights program is
being promoted in a number of
ways. There is Update, EPA's
monthly Green Lights publication;
there are Green Lights buttons,
Green Lights slide shows, Green
Lights newspaper and magazine
advertisements, and even a Green
Lights video. It all ties in with a
key element: the use of a "Green
Lights" logo by the companies
involved. The logo is a seal of
participation that the company can
use in its advertising, although not
on specific products, to promote
its role in pollution prevention.
All uses of the lighting logo by
industry—"Allies"—must be
approved by the EPA Green Lights
staff.
The Agency is also offering
technical reports—called Light
Briefs—about specific
energy-saving devices,
performance evaluation guides,
software to help companies in
making assessments of their
existing lighting and options for
44
EPA JOURNAL
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• In every situation possible, charge
the full costs of both disposal and
environmental damage, and commit
the revenues to environmental
restoration.
• Seriously evaluate pollution
prevention opportunities in costly
long-term decisions: capital
investments in facilities and
infrastructure, new product lines,
major construction or other land- and
water-transformation actions, and other
similar choices. These are the choices
in which the long-term benefits and
costs of pollution prevention are most
likely to be distorted by perverse
short-term incentives—the outcomes of
which will most powerfully shape
future pollution prevention or damage.
Therefore, these decisions must be
carefully analyzed to be sure that the
full costs are reflected in the decisions.
With Unicoat, a new paint developed by the U.S. Navy
Exploratory Development Program, VOCs and hazardous waste
from the painting process are reduced by 67 percent.
U.S. .Vavv photo.
changes, technical workshops, and
financial assistance through public
and private sources to help
companies get the systems in
place.
Among the more than 525 Green
Lights "Partners" and "Allies" are
companies like Boeing, L.L. Bean,
The American Louver Company,
3M, and Nike; utilities like the
Puget Sound Power & Light
Company, Central Power of Maine,
and Tampa Electric; non-profit
organizations like the World
Resources Institute, the
Environmental Defense Fund, and
the Natural Resources Defense
Council; universities and colleges;
11 state governments; five cities; a
couple of counties; a school
district; a town; and the Virgin
Islands.
If you're interested in finding
out more about the Green Lights
program, call the Green Lights
Hotline at (202) 775-6650.
—Eds.
A "pollution prevention impact
statement," along with clear and
effective economic incentives to make
such decisions based on long-range
benefits and costs of pollution
prevention, would be a valuable
innovation in the analysis of these
special kinds of decisions—by both
businesses and governments.
• Finally, identify and document
pollution prevention successes and
their causes. To paraphrase the
National Rifle Association,
technologies don't cause
pollution—people cause pollution. Yet
EPA has almost no budget for research
either on the human dimensions of
pollution causes, or on the
effectiveness of the Agency's policies
and programs in creating better
incentives for pollution prevention.
EPA clearly needs to understand
environmental conditions and control
technologies, and it needs research to
justify its regulations. But most of all,
it needs to understand what factors
affect individual and business
decisions to pollute or prevent
pollution, and which of its own
actions help or hinder pollution
prevention.
In short, pollution prevention may
be hard to regulate, but it is only
common sense as a principle and a
strategy. The opportunities are real,
and the basic principles are clear, fair,
and consistent with both
environmental goals and free-market
economics. Debate will continue about
its details, but we can and should be
moving in the right direction while we
continue the debate. Q
MAY/JUNE 1992
-------
.K
ATTACKING
A PROBLEM
WITH
THE FACTS
Government and industry
must take communication
seriously
by Caron Chess
(Chess is the Director of the
Environmental Communication
Research Program, Cook College,
Hutgers University. The program has
developed a variety of risk
communication publications. For
information, please write to the
Environmental Communication
Research Program, Cook College,
Hutgers University, Box 231, New
Brunswick, N/ 08903.j
A call from a homeowner about oil
in her well prompted the Wood
County Health Department to launch a
communication campaign for the
largely rural Ohio county. Testing of
the well showed concentrations of
polychlorinated biphenyls (PCBs) that
had leaked from the well's
malfunctioning submersible pump. So
Larry Sorrells, the county director of
environmental health, turned to the
Wisconsin Department of Natural
Resources, which had been tracking
the problem in that state for years.
Then, following Wisconsin's lead, he
attacked the problem with information.
Although the likelihood of PCBs
being drawn into homes was low, the
potential consequences—permanent
contamination of entire plumbing
systems—were serious. Since PCBs are
suspected of causing cancer in
humans, Sorrells decided that telling
people about the problem was the only
responsible way to go: "My job was to
give people facts so that they could
make up their own minds."
His budget didn't allow him to solve
the problem—or even pay for water
testing. But he could afford to send
news releases to the local media and
notification letters to plumbers and
water-system contractors. The
information he sent out included a list
of suspect pumps, a method for
cleaning up a contaminated well, and
a way to dispose of the
PCB-contaminated waste.
The result was the identification of
nearly 200 wells at risk and six already
contaminated. Furthermore, the first
successful effort in 70 years to levy
taxes for the health department's
programs grew directly out of the
success of the department's modest
program to alert homeowners about the
potential threat to their wells.
It's not news that information can
help reduce risks—and even save lives.
Witness the number of smokers who
have quit, prompted, in part, by the
knowledge that smoking is hazardous
to their health. What is news is that
environmental officials are becoming
increasingly aware that not all
headlines are bad news.
Communication can be as essential
to solving environmental problems as
laws and science. Reducing solid
waste, water pollution, and air
pollution will require not only market
incentives and technological changes,
but also changes in our collective
behavior. Making these behavioral
changes will require not only
providing information but also putting
more effort into communication.
Breaking the environmental gridlock
that stalls resolution of critical
issues—from dealing with Superfund
sites to land-use planning—requires
better understanding of the
communication problems that
commonly develop between scientists,
regulators, and laypeople. And
resolving these impasses requires
experts to listen to the concerns of
nonexperts as well as to deliver
information.
Obviously, dialogue about
ovt Spurs
a
Stat,
eases
-------
The P/N5 Hotline (Prompt
Inquiry and Notification
System) can send information
And safety alerts to neighbors
of Sybron Chemicals in
Pemberton Township, New Jersey.
environmental problems is only one
step toward resolving them. Acting as
if communication is the solution to our
environmental ills may be as unwise
as treating communication as
irrelevant.
For communication to be part of the
solution, environmental problem
solvers have to plan for it. Because
everyone communicates everyday, we
take it for granted. It is often the last
item on the agenda and the first to be
dropped—if communication makes it
to the agenda at all. Take the agency
officials who spend months, if not
years, conducting a scientific study.
Two days before the scheduled release
of the report, they call in a public
affairs person to make hasty
arrangements—often with predictably
mediocre results. No wonder the
communication doesn't convey the
importance of the science.
Just like good science or good
environmental policy, good
communication takes some
forethought. The Wood County
example provides some basic lessons
about communicating effectively:
• Releasing information. Instead of
cringing from releasing potentially bad
news, Sorrells grappled with how to
release it responsibly—and how to
handle public response. Rather than
trying to field all the questions
himself, he gave homeowners enough
information to begin dealing with the
problem themselves. Communities
rarely "panic" from the release of
information—even if it's bad news.
OPERATIONS
CENTER
Em'ironmenld! A/fciirs Jnstitule photo.
Agency officials are more likely to
panic about being messengers of bad
news.
• Timing. The health department
released the information shortly after
learning of the concern. Imagine the
headlines if Wood County officials had
decided to duck the issue, and the
homeowner had gone to a reporter.
Sorrells might have been swamped
with phone calls from people asking
why their health department didn't
alert them about the potential—albeit
potentially small—risk.
• Agency learning. The agency
avoided reinventing the wheel. Sorrells
drew heavily on the Wisconsin
Department of Natural Resources'
research and adapted the informational
materials to suit Wood County's needs.
• Targeting information. Information
was directed at key audiences.
Agencies which try to communicate
with "everyone" are doomed to failure.
Even advertisers with budgets bigger
than the total funding of many
environmental agencies don't try to
reach "everyone." Wood County
targeted plumbers and certified
water-system contractors because they
were most likely to identify the routine
pump failures that lead to leaking oil.
Effort went into notifying these
professionals rather than attempting
the massive—and ultimately less
productive—job of mailing to every
homeowner in the county.
• Listening. The communication was
two-way. A homeowner alerted the
health department to the problem, and
the health department took her call
seriously. Too often such calls get
bounced around endlessly in
government agencies.
• Using the media. Reporters were
contacted to alert people to the
problem, but media attention wasn't
expected to solve the problem. Instead,
the media attention was more likely to
encourage contractors to pay attention
to the notification letters sent to them
by the health department.
vironnve
ir
Nation
n
-------
• Providing guidance. The
information told people what they
could do. The fact sheet put out by
Wood County posed two questions:
First, is there oil in your well? Second,
if you have a submersible pump, is it
on the suspect list? Sorrells said he
was often asked by homeowners about
the risk of cancer but was leery of "the
numbers game." He suggested that if
homeowners were concerned, they
could replace a suspect pump and stop
worrying.
• Dealing with uncertainty. The
uncertainty of the risk was
acknowledged and put into
perspective. Sorrells knew that the risk
of drinking PCB-contaminated water
probably was not high—and he said
so. But he also told contractors and
homeowners that it was a risk that
could be easily avoided.
• Planning. The agency planned its
communication effort. The health
department not only considered what
to say but also critical details—like
who would answer the phone. Too
often environmental problem solvers
contend there is not enough time for
communication—let alone
communication planning. As a result,
they end up putting out a lot of
communication fires that might have
been avoided.
The Wood County effort
undoubtedly wasn't perfect. Some
might question whether the risk
merited Sorrells' attention at all, given
the range of environmental problems
on the county's agenda. According to
Sorrells, the issue warranted his
concern because of the potential of a
homeowner needing to replace
PCB-contaminated plumbing if the
problem went too long undetected.
Certainly, the Wood County case
raises additional questions: What
would have happened in a county
where homeowners were too poor to
pay for their own water testing? What
if the contamination had occurred in
an area where English was a second
language to many? What if the risks
were more serious—or more
immediate? Or what if Sorrells had to
reassure people about a risk they were
already frightened of—as opposed to
alerting them to a risk they hadn't
heard of?
None of these concerns would
obviate the need to communicate.
They would only change the
communication.
When environmental officials do
consider communication, they most
often think of dealing with reporters or
the elusive "general public." But
communicating with businesses can be
at least as important. Effective
implementation of existing
environmental statutes may depend on
the regulated community
understanding ways to fulfill its
obligations—not just effective
enforcement. Pollution prevention
efforts may hinge on government
agencies better understanding
industrial constraints and incentives.
Information can also indirectly
pressure industries to improve their
environmental practices. Take, for
example, the federal right-to-know law
that requires manufacturers to make
public information about releases to
the environment, the so-called Toxics
Release Inventory (see box). This
legislation may be as important for
encouraging corporate self-policing as
for conveying information to
communities.
Innovative companies are even
reducing environmental risks as a
result of improving their
communication with plant neighbors,
according to Rutgers' research of
corporate communication efforts.
Sybron Chemicals Inc., a small, New
Jersey-based specialty chemical
manufacturer, literally made a stink in
the surrounding community when it
accidentally released ethyl acrylate one
October morning at 2 a.m. The
resulting community outcry led the
plant to couple major changes in plant
operations with a crash course in
community relations. As part of this
effort, the plant also installed a
sophisticated telecommunications
system to call neighbors in the event of
an emergency.
More importantly, plant neighbors
now can contact plant operators
through this two-way system. Anyone
with a complaint is encouraged to call
the plant 24 hours a day. Plant
operators can quickly link the location
of an odor complaint with
meteorological and other data to track
the source and get it under control.
The system is working so well that
Sybron has trained volunteers in the
neighborhood to literally sniff out
releases that have wafted over
operators' heads.
Urged on by a skeptical public and
difficult environmental problems,
government agencies and businesses
are looking to improve
communication. But for
communication to improve
environmental problem-solving,
agencies and industries must take it
seriously.
Public affairs staff in government
and industry too often have limited
access to senior officials. Research is
devoted to solving technical issues, not
to resolving communication questions.
Yet, funding technical efforts
generously while scrimping on
communication is false economy. And
putting communication towards the
bottom of every "to do" list is a way to
guarantee that there is never enough
time to communicate effectively.
Instead, communication must be part
of resolving environmental problems,
rather than sugarcoating them, n
48
EPA JOURNAL
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Toxics Release Inventory
How much lead was released into
the U.S. environment in 1990 from
manufacturing facilities? How
much benzene? Chloroform? And
just how much of these toxic
chemicals was released in
Nebraska? In California? In my
hometown?
Anyone who wants to find
answers to questions such as these
can do so through EPA's Toxics
Release Inventory, also known as
TRI. The database, maintained by
EPA and first made available in
1989, is required under Section
-313 of the Emergency Planning
and Community Right-to-Know
Act, passed in 1986. The data are
taken from reports manufacturers
must file annually estimating the
amount of more than 300 toxic
chemicals they have released,
either as routine emissions or
accidental releases, into the
environment. The companies must
also report the amounts they have
transferred to other facilities—for
any purpose, including further
treatment or incineration. The
1990 data, released to the public
earlier this year, were culled from
more than 80,000 reports from
about 22,000 facilities.
The database is released "as is,"
unedited by EPA, though quality
control measures for the data are
strict. This format allows citizens,
public interest groups, state and
local governments, and other
interested parties the same access
that EPA has to the raw numbers.
Numerous groups have used TRI
data to lobby for more stringent
state and federal regulations
governing toxic chemicals and to
exert pressure on local industries
to decrease their releases of these
toxics.
In addition, many companies,
upon reviewing their own release
reports, have voluntarily adopted
pollution prevention measures to
reduce their chemical emissions.
And whether it is due to the
lobbying efforts by citizens or
public relations and cost-cutting
measures of companies, the results
are the same: fewer toxic
chemicals released into the
environment.
While a key concern is making
the data available to the public,
EPA also uses TRI data as a basis
for pinpointing problems in
specific geographic areas or
industries that might merit further
investigation. The database figures
are used for other projects like the
voluntary 33/50 Program (see page
42). And the 1991 reports, for the
first time, will require companies
to document any pollution
prevention policies currently in
use or planned. This information
will be available when the 1991
data are released next year.
The TRI database is available on
computer diskettes, microfiche,
compact disc (CD-ROM), and
standard paper format, or it can be
accessed through phone lines via
computer modem. To find out
more about access to the TRI data
you can contact the Emergency
Planning and Community
Right-to-Know Hotline at
800-535-0202 (in Virginia:
703-920-9877) or write to the TRI
Reporting Center, P.O. Box 70266,
Washington, DC 20024-0266, Attn:
Public Inquiry.
—Eds.
Toxics Release Inventory
Percent Changes in Releases and Transfers
Surface Water Undergroun
Injection'
•Three quarters of the 1989 -1990 decrease is due to a change in EPA's reporting guidance for one chemical
and does not represent an actual decrease in the amount of the waste injected underground
"• POTWs -Publicly Owned Treatment Works
MAY/JUNE 1992
49
-------
.K
AJfjskcl Ijiorcrnciffulfon /Vojrf I
Oil-eating microbes helped clean
up this beach contaminated by
the Exxon Valdez spill.
50
EPA JOURNAL
-------
NEW DAVIDS TO TACKLE
ENVIRONMENTAL GOLJATHS
Using microorganisms to give nature
a helping hand
by Erich W. Bretthauer
I ook at it as an environmental
•"—version of the David and Goliath
story: To tackle a big challenge, think
small—even microscopically.
In its 1990 report Reducing Risk, the
EPA Science Advisory Board
recommended that the Agency
"substantially broaden its kit of
environmental protection tools." One
of the tools that the Board suggested
the Agency give serious consideration
to was innovation in pollution-control
technology. The recommendation
underscored a principle that EPA had
already embraced: As environmental
problems become more complex and
costly, it becomes increasingly
necessary to look for fresh
technological solutions that everyone
can use.
In the Office of Research and
Development (ORD), this thinking has
already been carried to the laboratory
(Brerthauer is EPA's Assistant
Administrator for the Office of
Research and Development.]
MAY/JUNE 1992
bench: Engineers and other specialists
are developing and testing a variety of
innovative technologies, from a
cleaner, less-polluting, wood-burning
stove to portable devices for quicker,
less costly detection and measurement
of heavy metals and toxic compounds
at hazardous waste sites.
In this search for new ways to tackle
environmental Goliaths, EPA has also
begun recruiting its own Davids: the
bacteria, fungi, and other
microorganisms that live everywhere
around us. The Agency is in the
forefront of efforts by scientists in the
government, private industry, and the
academic community to find new ways
to use naturally occurring
microorganisms to clean up
environmental contaminants.
It is well known that
microorganisms are the key players in
certain biochemical processes that
convert complex organic compounds
into simpler materials. In nature, these
processes help clear the environment
of dead matter; for example, fungi help
decompose dead trees by feeding on
cellulose in the wood, thereby
promoting the breakdown of the wood
fiber. Scientists are trying to apply
similar principles to convert hazardous
chemical wastes to non-toxic or
less-toxic materials. This approach is
called bioremediation.
In general, bioremediation simply
amounts to giving nature a helping
hand. By establishing conditions in
which everyday microorganisms can
flourish—for example, by adding
nutrients or moisture to contaminated
soil—scientists stimulate faster
reactions in which toxic organic
compounds are converted into water,
carbon dioxide, and other safe
materials.
Similar principles have been used
for many years in treating waste water,
and the potential for their wider
application began to be recognized in
the 1980s. The technology moved into
the public spotlight in 1989 when
Exxon and EPA worked together to
assess the effectiveness of biological
treatment in cleaning up the Exxon
Valdez oil spill in Prince William
Sound, Alaska.
Continued on next page
51
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Traditional methods called for
spraying hot water at high pressure
onto the rocky shoreline to wash the
spilled oil back into the water, where
it was collected by skimming and
vacuuming. EPA scientists
supplemented this treatment by
applying fertilizer to parts of the coast
to stimulate natural oil-degrading
bacteria. In some locations, this
application visibly cleared oil from
some rocky surfaces in a matter of two
to three weeks. Subsequent studies
showed that this treatment caused oil
to degrade approximately twice as fast
as the oil in untreated areas.
This was truly pioneering work. Its
success encouraged new interest in
existing EPA bioremediation programs
and led to further efforts to advance
the technology. Research in
bioremediation has increased three to
four times over pre-VaJdez levels. At
the invitation of Administrator Reilly,
scientists from EPA, other agencies,
industry, and the academic community
met in February 1990 and again in
June 1991 to explore the potential of
bioremediation. From these meetings
came the Bioremediation Action
Committee, a forum in which industry,
the government, and the scientific
community can come together to
identify current research needs and
promote wider use of bioremediation.
ORD has established a
Bioremediation Research Program to
organize and focus its own work in
this area. Under a five-year strategic
plan, ORD is working to:
• Conduct research and demonstration
projects
• Identify the status of bioremediation
technology, and note current gaps in
knowledge
• Find effective technology-transfer
systems for quickly moving new
discoveries from the laboratory into
the field.
ORD scientists also are conducting
their own research on bioremediation
techniques. In one recent study, they
applied white rot fungus, a common
wood-degrading fungus, to soil
samples contaminated with
pentachlorophenol (PCP) and other
toxic compounds.
The researchers laid out 11 plots of
soil from a waste sludge pile at a site
where a company had treated
Nutrients were added,
centrifugal pumps were used
to emulsify the wastes, and
subsoil was mixed in with a
hydraulic dredge.
telephone poles with PCP and creosote
from 1946 to 1986. They then applied
three species of white rot fungus in a
statistically based experimental design
and added wood chips as a food
source for the fungi. Preliminary
results from the study show that PCP
concentrations of up to 1,000 parts per
million (ppm) were reduced by 85 to
90 percent. Some reduction from
natural degradation was found in plots
that had not been treated; however, the
fungus accounted for the significantly
greater share of the reduction in the
treated plots, converting the PCP to
carbon dioxide and non-hazardous
organic matter.
At a Texas site, researchers treated
petrochemical wastes with a process
that began with the injection of air into
the liquid to encourage aerobic
degradation—that is, reactions
involving bacteria that function in the
presence of oxygen. Nutrients were
added, centrifugal pumps were used to
emulsify the wastes, and subsoil was
mixed in with a hydraulic dredge.
Within 120 days, volatile organic
compounds in the waste were reduced
from 3,400 ppm to 150 ppm, benzene
concentrations from 300 ppm to 12
ppm, and vinyl chloride levels from
600 ppm to 17 ppm. The process cost
$47 million, in contrast to estimated
costs of $63 million to $167 million for
other options evaluated.
At a U.S. Coast Guard air station in
Michigan, EPA treated ground water
contaminated with benzene, toluene,
and xylene from an aviation fuel spill
by adding hydrogen peroxide as an
oxygen source to stimulate indigenous
microbes. Within six months, the
ground water was brought within EPA
drinking water standards.
As the experts readily admit, the
current techniques have drawbacks.
They do not destroy heavy metals that
may be present in many sites, such as
areas around former mining sites.
Unlike incineration, bioremediation is
a slow process, and it does not remove
all quantities of a contaminant from
treated soil.
On the other hand, the technology
has a number of attractive features. It
provides a less costly alternative to
traditional clean-up methods, in which
tons of soil have to be excavated and
either incinerated or otherwise
processed to remove contaminants. In
addition, by converting toxic
chemicals to other materials,
bioremediation actually removes those
toxics from the environment, rather
than merely separating them for
disposal in a later step.
"Bioremediation has the potential to
be a dominant treatment technology
for site clean-up in the future,"
Administrator Reilly said in 1991. The
Agency's initiatives and a budget that
has shown significant growth in the
past two years—$10,6 million
proposed for extramural research in
fiscal year 1993, $3.5 million over the
1991 level—are evidence that EPA is
committed to fulfilling that
potential, Q
52
EPA JOURNAL
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RK
Construction can cause serious environmental damage. Too often,
environmental impacts are not considered in development decisions.
THE INSTITUTIONAL
L'SUA pholo.
CHALLENGE
by Terry Davies
and Frances Irwin
The environment should be a factor in all
of society's decisions
Currently, environmental laws and
programs are largely isolated from
the individual, corporate, and
governmental decisions that cause
pollution and habitat destruction. The
institutional challenge of the next
decade will be to root the
environmental factor as firmly as the
economic factor in these decisions. If
we are to build a sustainable world,
the environment must become a
positive force in an individual's choice
of where to live and how to get to
work, a manufacturer's selection of
what materials and processes to use,
and a congressional member's vote on
an agricultural, transportation, energy,
or other economic sector bill.
Today, most pollution and
protection laws and programs are
constructed to mitigate the effects of a
project after it is designed or to treat
waste after it is generated.
Environmental practitioners are
engineers, lawyers, and scientists who
try to control these impacts and
wastes. A very small proportion of the
public and private resources spent on
the environment is used to change our
agricultural, energy, manufacturing, or
transportation technologies so that
they are fundamentally less polluting
and damaging to begin with. For
example, only 2 percent of
governmental agricultural research
funds go to research on sustainable
farming systems. The product and
process designer is just beginning to
become as involved in company
environmental decisions as the
engineer at the end of the pipe or
stack.
As the 20th century ends, we can
see a doubled population and a
quintupled economy on the horizon.
To deal with them will require
(Davies is Executive Director of the
National Commission on the
Environment and a Senior Fellow at
World Wildlife Fund. Irwin is Director
of World Wildlife Fund's Pollution
Prevention Program.)
MAY/JUNE 1992
53
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THE TOOLS
.South MtiriiJu Wnli-r .Vluiiiigciiii'iit Dislriil phut
Before (above) and after
(below): Channeling
Florida's Kissimmee River
resulted in great ecological
damage. The economic
and ecological penalties of
failing to factor environmental
issues into public policy decisions
are very real.
simultaneously inculcating an
environmental perspective at the heart
of all decisions in economic sectors
and strengthening environmental
agencies. From the view of an
environmental agency, this means
external integration into agricultural,
energy, transportation, and
manufacturing decisions, and it means
internal integration of its own
decisions around these sources of
pollution as sectors and facilities, as
well as around geographical regions.
Putting the environment at the core
of decisions in economic sectors
means rethinking goals, broadening
constituencies, gaining new skills,
gathering new kinds of data, and
considering longer time frames.
Traditionally, for economic sectors,
cheap and abundant
supply—increasing production—has
been the goal. Shifting emphasis to
product quality and to efficiency in
using materials offers new goals for
some manufacturers. Power
companies, for example, are learning
to use conservation as a "source" of
energy.
Achieving new goals means dealing
with different people, arranging new
training programs, and developing new
databases. For instance, neither the
sector's own data nor EPA's may be
adequate for putting the environment
into decisions at the source.
Environmental data have been
gathered for compliance or protection
purposes. By way of example, the
Department of Energy surveyed EPA
and other sources to support a research
initiative on industrial waste reduction
technologies and practices to reduce
energy use. The researchers found that
combining EPA's air, water, and waste
data was difficult, because definitions
as well as methods of collection,
analysis, and access varied. The Toxics
Release Inventory was limited to data
about releases of a small subset of
chemicals, while their project required
looking at production data as well.
54
EPA JOURNAL
-------
Thus, "external" integration of
environmental concerns into a sector
such as energy may, in turn, encourage
EPA to integrate and expand its
databases around pollution sources
and regions.
At least four approaches show
promise for integrating the
environmental factor into economic
sectors.
National Environmental Policy Act
The National Environmental Policy
Act (NEPA) was adopted to ensure that
federal agencies incorporated the
environmental factor in their
decisions. To implement this
provision, federal agencies established
environmental offices which, often for
the first time, introduced
environmental skills and perspectives
into cultures trained to build dams or
highways or increase agricultural
production. Much of NEPA's success
can be attributed to these offices.
Although they were weakened in the
1980s, they can provide starting points
for a reinvigorated "fifth column."
The environmental impact
assessment process has mitigated
damage from major development
projects, but it has been less successful
in changing basic goals and
approaches of programs. NEPA
requires that "all agencies of the
federal government shall . . . include
in every recommendation or report on
proposals for legislation a detailed
[Environmental Impact Statement] by
the responsible official . . . ." Court
interpretations of this provision are
mixed, however, and programmatic
impact statements continue to be rare.
They could be a potent force for
incorporating environmental
considerations into federal programs if
political pressure can be built to
support such an initiative. NEPA could
also be broadened to inject
environmental factors into other
governmental decision-making
processes, particularly budgeting.
MAY/JUNE 1992
"... Governments' general response
to the speed and scale of global
changes has been a reluctance to
recognize sufficiently the need to
change themselves. The challenges
are both interdependent and
integrated, requiring
comprehensive approaches and
popular participation.
"Yet most institutions facing
those challenges tend to be
independent, fragmented, working
to relatively narrow mandates with
closed decision processes. Those
responsible for managing natural
resources and protecting the
environment are institutionally
separated from those responsible
for managing the economy. The
real world of interlocked economic
and ecological systems will not
change; the policies and
institutions must . . . ."
—from Our Common Future, The
World Commission on
Environment and Development,
1987.
Amending Economic Sector Laws
The environment also needs to work
its way into legislation governing
transportation, agriculture, energy, and
uses of resources such as forests and
fisheries. Sectors are at various stages
of this often contentious process. As
the following examples from
transportation and agriculture
demonstrate, preventing pollution and
protecting the environment are
becoming stated goals in some
economic sector laws. The hard work
of bringing environmental concerns
from the periphery to the center of
these sectors comes in changing the
budgets and actual practices, of course,
and is a lengthy process.
The Intermodal Surface
Transportation Efficiency Act of 1991
received little attention from
environmental specialists or the press,
but it may harbor a revolution. The
environment is incorporated as an
equal goal: The Act's purpose is to
develop a transportation system that is
"economically efficient and
environmentally sound . . . ."
Although still dominated by highway
building, the law now provides for
research and planning of "systems"
that include other modes of
transportation, from pedestrian
walkways to bicycles and trains.
Developing a system that reduces
energy consumption and air pollution
while at the same time promoting
economic development and
international commerce, will depend
to a large extent on a broadened
constituency, including the groups
concerned about air quality,
community land use, and energy
efficiency that got these provisions
into the law.
The 1985 Food Security Act is a
landmark example of addressing
environmental concerns in agriculture.
Under the Conservation Reserve
Program, farmers have shifted millions
of acres of cropland to vegetative cover
for 10-year periods in exchange for
annual payments. Additionally,
"sodbuster" and "swampbuster"
provisions protect vulnerable lands.
The 1990 Food, Agriculture,
Conservation, and Trade Act shifted
the goal of agricultural research and
education programs from productivity
to long-term sustained productivity,
profitability, and ecological soundness.
It also set up a program to train all
extension agents in sustainable
agriculture within five years. Changes
in goals must be followed by changes
in budget if they are to make a real
difference. The National Academy of
Sciences has recommended a 10-fold
increase in sustainable agricultural
research.
The debate over the energy bill
exemplifies the struggle to mesh
energy and environmental goals. The
wrangling over whether the Health and
Environment Subcommittee or the
Energy Subcommittee should have
jurisdiction over the global warming
55
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THE TOOLS
issue in the House illustrates the
congressional version of the structural
difficulties posed by integrating these
goals into a coherent policy.
Getting the Prices Right
Federally supported and regulated
activities are a small part of the
economic activity in the United States.
We need to use the marketplace to
integrate the costs of environmentally
damaging activities into decisions by
consumers, corporations, and
governments. The cost of using
environmentally dangerous products
should reflect the damage they cause.
Gasoline, pesticides, and solvents are
three examples of products whose
prices do not reflect their social costs.
A carbon dioxide tax may well prove
one of the most effective ways of
dealing with global warming.
Focusing EPA Regulatory Functions
on the Sources and Resources
Integrating environmental agencies
themselves around the sources of
pollution and the resources to be
protected may be one of the most
effective ways of encouraging external
integration. EPA can become more
"user-friendly" by establishing offices
to work with the major economic
sectors. The Agency is beginning to do
this through its pollution prevention
work. EPA and USDA signed a
Memorandum of Agreement in April
aimed at reducing agricultural
pollution. The Office of Pollution
Prevention and Toxics is developing a
"Design for the Environment" program.
The Pollution Prevention Act of
1990 provides a way to focus both
technical assistance and regulatory
requirements on improving industrial
technologies upfront. The act requires
EPA to review regulations for their
effect on source reduction. EPA's
Source Reduction Review Project is
introducing analysis to identify
opportunities for source reduction and
avoiding cross-media impacts during
the development of air, water, and
waste regulations.
Internally integrating information
around sources and geographical
regions or protected areas is a critical
step in providing the public with the
types of information it needs to make
choices. The Toxics Release Inventory
is a tool that provides publicly
accessible multimedia data about
pollutants linked to their source at a
facility. States and private groups, as
well as EPA programs, are analyzing
the data by region as a basis for
targeting sources where changes are
needed.
One measure of whether integration
works will be the extent to which
environmental agencies begin to find
their strongest allies in other agencies,
companies, and citizens who recognize
the need for environmental research,
improved data, and strong
enforcement, o
I-?- ^x 1
Y ScMECNEkAS \
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5^^l
^)T^
56
HERMAN copyright 1982 Jim Vngrr. tteprinteti with [wrmission of Univursnl Prvss Syndicate. A)) rights reserved.
EPA JOURNAL
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FEATURING EPA\
The Mobile Scanner Van
Reports for
Duty
But for the logo,
it could have passed
for a bakery truck
EPA photo.
by Yasmine S. Khonsary
and Colleen F. Petullo
(Khonsary is an Environmental
Protection Specialist and PetuJJo a
Health Physicist with EPA's Office of
Radiation Programs in Las Vegas,
Nevada.]
MAY/JUNE 1992
The scene was Lansdowne,
Pennsylvania, a suburb of
Philadelphia, in the fall of 1991. A
modified 1979 Ford commercial
delivery van cruised slowly up and
down neighborhood streets. Sometimes
it stopped, and people gathered
around, talking among themselves and
to the van operators. Except for the
EPA logo and lettering on its side, the
van could have passed for a bakery
delivery truck. But its business was
not delivering bread; it was looking for
radioactive contamination—and in
many cases, finding it.
Earlier in the year, a local citizen,
using a simple radiation detection
instrument, had discovered radioactive
contamination on the premises of a
Lansdowne house adjacent to the old
Cummings Chemical Company radium
processing factory. She reported her
finding to state and federal radiation
officials. Pennsylvania and EPA
radiation personnel followed up with a
radiation survey performed with
hand-held instruments. Their findings
confirmed the citizen's discovery.
Information obtained by EPA
showed that the Cummings factory had
operated from 1915 to 1922. The
radium processing operation had
closed down 70 years ago!
Further investigation revealed a
complicated chain of events. During
the time of the factory's operation,
thousands of tons of raw uranium ore
were shipped to Lansdowne from
Colorado and Utah. It took
approximately 90 tons of raw ore to
produce just one ounce of pure
radium, and the radium was extracted
almost literally grain by grain. The
radium was then used in the treatment
of cancer and in luminescent paints for
watches and aircraft instrumentation.
Because of the ore-to-product ratio (3
million to 1), a thimbleful of radium
cost $100,000—a lot of money in an
age when a Model T Ford cost $360.
The arduous extraction process left
behind tons of sandlike tailings laced
with tiny amounts of radioactive
particles. Since no one realized the
dangers of radium or radiation at that
time, the sandlike tailings were used
by local residents for gardening and
construction purposes. Building
contractors also used this aggregate in
concrete, stucco, and plaster in homes
in the Lansdowne area. Contrary to an
initial belief that most of this material
would have been placed in landfills,
these tailings had been built into
peoples' houses.
Enter EPA's mobile scanner van. In
September 1991, the van, which is
operated by the Office of Radiation
Programs" Las Vegas Facility, was
enlisted to assist Region 3 personnel in
determining the magnitude of radium
contamination.
In concept, the mobile scanner van
was born in Colorado in 1970, when
EPA was tasked with locating potential
radioactive uranium mill tailing sites
around the Grand Junction area. The
first mobile scanner van was actually a
station wagon. After this first project,
the station wagon was judged too
small for EPA's purposes. Several
vehicles and detector systems later, the
final version was developed and is
used to this day.
The core component of the scanner
system mounted in the van is a very
sensitive gamma radiation detector that
is surrounded on three sides by lead.
The detector can "see" out of only one
side of the van and is sensitive enough
to pick up increased radiation levels in
structures up to 200 feet away. Air
conditioning is provided to keep the
electronic equipment cool. The roof of
the van is high enough to allow room
for a winch, which is needed to raise
the four-foot, 1,000-pound detector
assembly to its operating height. In
addition to a driver, the van requires a
skilled operator at the rear
instrumentation console to examine
the detector printout and spot any
abnormalities in radiation levels.
To report for duty, the mobile
scanner van was driven from Las
Vegas, Nevada, to the Lansdowne,
Pennsylvania, area. The van was used
to monitor radiation levels within a
two-mile radius (a 12-square-mile area)
of the old factory. This survey
included Eastern Delaware County and
57
-------
Southwest Philadelphia.
Roger Shura, chief operator of the
scanner van, worked six days a week,
sunup to sundown, for five weeks.
During this period, over 100,000
buildings were scanned. Shura recalls
surveying as many as 3,500 buildings
per day.
Within Philadelphia (a small portion
of the 12-squaie-mile area), the van
traveled under police escort. There
were two reasons for this: First, since
the detector can "see" out of only one
side of the van, the police provided
traffic control when it was necessary
for the van to drive the wrong way on
one-way streets. Second, for accurate
scanning, the van must not travel
faster than 10 miles per hour, well
below the posted speed limit, and the
escort served to alert other drivers to
the slow-moving vehicle.
In addition to working overtime to
ensure that each street was scanned
thoroughly, part of the job was being
sensitive to people's
concerns—answering questions, taking
time to explain what was going on. If
the van stopped for any reason, many
residents would rush over, worried
that the mysterious van had found
their home to be contaminated. On the
whole, however, most people
expressed relief at knowing that their
home was being surveyed.
In cases where radium
contamination may be located in the
foundation or underground basement
of a house, the surrounding dirt can
sometimes provide enough shielding to
prevent the detector system from
seeing the elevated radiation levels.
For this reason, in addition to
deploying the scanner van, EPA
recommended that radon tests be
performed in area houses built or
remodeled between 1915 and 1925.
Since radon is a radioactive decay
product of radium, elevated levels of
radon—if not from natural sources
such as granite rocks or phosphate in
the building materials—could indicate
the presence of radium.
By the end of January 1992, 28
residences were discovered to have
radiation levels greater than
This radium processing factory wa.s closed in 1922 but. left a legacy of
radioactive contamination.
EPA-recommended guidelines. Eight of
the 28 homes had levels high enough
to cause the immediate temporary
relocation of the families.
If radiation levels in a house
indicate the need for relocation,
residents are compensated from EPA
"Superfund" monies. These funds
come from a federal surcharge placed
on the chemical industry. The fund
pays for hotel accommodations and
per diem expenses. This allows time to
locate replacement housing for the
affected families while further
assessment of their present house takes
place.
Moving for such a reason can be
extremely traumatic, especially since
there are many unknowns at the time
of relocation. In an effort to lessen the
anxiety of the families affected, EPA
attempts to find comparable housing in
the same community, neighborhood,
and school district, whenever possible.
Superfund pays the cost of rental
housing until a family returns to their
home or until they are permanently
relocated. EPA also pays for the
family's moving costs and the utilities
on the vacated dwelling.
The house is repaired if further
assessment determines that needed
repairs are feasible and cost effective.
In some cases, repairs may extend to
jacking up the house and replacing the
foundation.
However, if the radioactive
contamination is spread throughout
the house, making repairs impractical,
the dwelling is dismantled and
shipped to a licensed low-level
radioactive waste disposal facility.
Previously, in a similar situation
elsewhere, EPA and the state
compensated homeowners for the loss
of their homes. EPA is attempting to
negotiate a similar agreement with the
state concerning those houses that are
irreparably contaminated.
In February 1992, the factory and 28
residences were formally placed on
EPA's National Priorities List (NPL) for
Superfund cleanup. The NPL identifies
the most hazardous sites in the United
States. In most cases, once a site is
listed on the NPL, the next step is a
remedial investigation, a carefully
designed assessment which includes
extensive sampling and laboratory
analysis. The results provide decision
makers with detailed information to be
used in selecting the best clean-up
strategy.
After the remedial investigation, the
next steps are the feasibility study and
the actual cleanup. Since clean-up
actions have to be tailored to the needs
of each house, the feasibility study
serves the practical purpose of
analyzing those needs and evaluating
alternative clean-up approaches in
terms of their effectiveness and cost.
And where is EPA's mobile scanner
van today? It has returned to Las Vegas
but it has by no means retired. It is
slated for further field assignments in
conjunction with the Superfund
program. In addition, other federal and
state agencies are exploring
prospective uses of the scanner van.
You can expect to hear more about
it. n
EPA JOURNAL
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LETTERS TO THE EDITOR
From time to time EPA Journal receives and publishes
letters to the Editor, which are always welcome. Our
March/April 1992 issue, which focused on race, poverty,
and the environment, elicited an unusual number of
responses from readers. Letters responding to the
March/April issue are printed below.
Here the Buck Stops
Your March/April issue of EPA Journal is an excellent first
step toward increasing awareness among your readers of a
new dimension and field of activity for environmental
activists.
Some of us have been working in this field for some time
and are familiar with multiple opportunities for
"mainstream environmental professionals" to practice their
preaching. Here the buck stops. We surely must all be
painfully aware by now that without justice, including
environmental justice, there can be no peace in our
communities.
We look forward to policy changes in facility sitings,
enforcement actions, and new funding priorities for
environmental education with a watershed scope. We look
forward!
Robert E. Boone, Executive Director
Anacostia Watershed Society
College Park, Maryland
Slanted Political Rhetoric?
I have just finished reading "Expanding the Dialogue: Have
Minorities Benefited . . . ? A Forum" in the March/April
1992 issue of EPA journal. I found the treatment of this
issue totally biased and one-sided.
I grew up on the southside of Chicago in a working class
neighborhood in the 1950s through the 70s. Our first home
was just blocks away from the stockyards, which filled the
air with their own special aroma. In the late 50s we moved
farther south (to escape the gang wars), to the edge of
Chicago. After about a year at this home, a former clay
quarry located about a block to the north was converted
into a garbage dump. To the south about two blocks, the
Chicago Copper Chemical plant belched out air so polluted
that it hurt to breathe, literally. When the winds blew from
the northerly direction the stench of putrefied garbage filled
the air. When the "lake breeze" would greet us from the
east, the air was thick with graphite and sulfur from the
mills. I grew up playing by factories which later became
Superfund sites. The high school I attended (D. D.
Eisenhower) was located within a block of the Clark Oil
Refinery—which made the air barely breathable many days
of the week.
In the 70s the first environmental laws came into being
and the effects were dramatic. Chicago Copper Chemical
was forced to close. The dumps ceased activity and the
mills no longer darkened the skies. Today this
neighborhood enjoys clean air and is no longer threatened
with toxic chemicals falling from the sky. No, it's not
Beverly Hills, and factories and railroads still ring the area
and the hammer from the mill may still be heard at night.
The Clark refinery is still located a block from my high
school. But the air no longer is filled with its awful smell.
My point is that to portend that minorities have not
benefited from the environmental movement is a patently
false statement. Those with fewer options (to live where
they would like to have lived, for example) may have
benefited even more than those who could afford to live
and work in areas not threatened by pollutants.
Please, keep your publication free of this slanted political
rhetoric, or at least present all sides of an issue.
Richard Rupert
Phoenix, Arizona
Building Bridges
Just a short note to congratulate the Journal staff for the
outstanding portrayal of the web of race, poverty, and the
environment. The many issues spun into that web were
presented comprehensively and with sensitivity.
National environmental groups are now confronting the
fact that their agendas too often reflect the interests and
concerns of the affluent. Local environmental groups tend
to address issues and problems defined by land use and
greenspace. Now, both can see the issues that people of
color and the poor care about.
Let's hope this issue is remembered as EPA's successful
effort to build bridges between all races and economic
groups concerned about their global and local environment.
John L. McCormick,
Commonweal
Washington, DC
Get Real!
Having just finished reading the article entitled "Innovative
Housing in Atlanta," I was very impressed that someone
out there had a great idea to provide housing for the poor,
while safeguarding the environment. Home ownership
means that you take interest in the community you live in,
and it provides a sense of pride, as well as an investment in
the future. One flaw is that these homes have only one
bedroom for an entire family. However, as the article states,
additional bedrooms can be easily added.
Finally, the article states that "the first cottage home has
been completed, and eight more are planned this year."
Nine homes per year—what fantasy world are you living
in? Get real! We need thousands of these homes, and
communities built around them. Why is it that in this
country, the greatest on Earth, adequate housing is
provided to only the upper and middle classes?
Christopher Crigler
Denver, Colorado
A Timely Issue
I have today read the March/April edition of tin; HP A
Journal. It is excellent.
Both scientists and non-scientists who want to raise their
level of awareness about the broader dimensions of
environmental protection in the United States will find the
collection of papers in the Journal extremely valuable.
I commend you for having the foresight to devote the
March/April edition to such a timely issue.
Bailus Walker, Jr.
Professor, Environmental Health and Toxicology
Dean, College of Public Health
University of Oklahoma
MAY/JUNE 1992
b9
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TITANS IN CONSERVATIONS
Rachel
Carson
by Jack Lewis
Rachel Carson by Una Hanbury, on
view at The National Portrait Gallery,
Washington, DC.
Rachel Carson did not live to see
the banning of DDT in 1972 or the
passage of such landmark legislation as
the National Environmental Policy Act,
the Clean Air Act, the Clean Water
Act, and amendments to the Federal
Insecticide, Fungicide, and
Rodenticide Act. Yet historians have
credited Carson with providing an
impetus for all of these groundbreaking
laws. The namesake for a new EPA
award mandated by the National
Environmental Eduction Act of 1990,
Carson proved through her writings
just how powerful the right blend of
professionalism and passion can be.
Rachel Carson was a literary and
scientific unknown when she
published her first bestseller, The Sea
Around Us. The work resulted in a
National Book Award for Carson, who
by then had spent 16 years at the U.S.
Fish and Wildlife Service, many of
those years as Editor-in-Chief of its
many publications. Today, few people
realize that it was this book about the
world's oceans and their
multitudinous life forms that won Miss
Carson global fame, financial
independence, and a place in the
American literary and scientific
establishment. In 1952, Carson quit her
job at the Fish and Wildlife Service,
and thus ended long years of burning
the midnight oil writing in her modest
home.
The Sea Around Us was a glorious
piece of research, synthesis, and poetic
inspiration. Here is Carson's
description of changes observable in
the world's vast oceans:
"The face of the sea is always
changing. Crossed by colors, lights,
and moving shadows, sparkling in the
(Lewis was an Assistant Editor at EPA
Journal for eight years.]
sun, mysterious in the twilight, its
aspects and its moods vary hour by
hour. The surface waters move with
the tides, stir to the breath of the
winds, and rise and fall to the endless,
hurrying forms of the waves. Most of
all, they change with the advance of
the seasons. Spring moves over the
temperate lands of our Northern
Hemisphere in a tide of new life, of
pushing green shoots and unfolding
buds, all its mysteries and meanings
symbolized in the northward migration
of the birds, the awakening of sluggish
Milestones
1907 Born in Springdale,
Pennsylvania, on May 27th.
1929 Received her B.A. from the
Pennsylvania College for Women.
1932 Earned her M.S. in biology at
Johns Hopkins University.
1936-1952 Worked as a biologist
and editor at the U.S. Fish and
Wildlife Service, Department of
the Interior, Washington, DC.
1941 Published her first book,
Under the Sea Wind, which was
respectfully reviewed but not
widely popular.
1951 Published The Sea Around
Us, which was number one on the
U.S. bestseller list for 39 weeks.
1955 Published The Edge of the
Sea, another successful book about
the world's oceans.
1962 Published Silent Spring,
which sold millions of copies
throughout the world.
1964 Died at age 56 on April 14th.
tin
EPA JOURNAL
-------
Rachel Carson and colleague
Robert W. Hines colled
specimens in the Florida Keys.
amphibian life as the chorus of frogs
rises again from the wetlands, the
different sound of the wind which stirs
the young leaves where a month ago it
rattled bare branches. These things we
associate with the land, and it is easy
to suppose that at sea there could be
no such feeling of advancing spring.
But the signs are there, and seen with
understanding eye, they bring the same
magical sense of awakening."
The Sea Around Us proved that
Carson was a poetic and well-informed
nature writer. The book that cemented
her fame as a scientist, however, was
Silent Spring, her world-famous study
of pesticides and their harmful effects
on human and animal health as well
as on the vitality and balance of
ecosystems. Thirty years ago this June,
The New Yorker published selections
from the manuscript that had
tormented and obsessed Carson for
nearly five years, a book that she
would have preferred not to attempt,
as her health was beginning to fail.
By the time Silent Spring appeared
in book form, in September 1962,
Rachel Carson was in the eye of a
veritable hurricane of acclaim,
derision, and controversy. Powerful
industry voices ridiculed her concern
for dead spring songbirds and
attempted to undermine public
confidence in her scientific expertise.
Time and time again, scientific experts
backed up Carson, whose 1932
Master's thesis at Johns Hopkins was
entitled "The Development of the
Pronephros During the Embryonic and
Early Larval Life of the Catfish
(Inctalurus punctalus)." Rachel Carson
was not daunted by scientific
complexity, and her exhaustive
research into pesticides has stood the
test of time remarkably well.
No American book since UncJe
Tom's Cabin won more true believers
in such a short time than did Silent
r
U
Spring. It became the Bible of
environmental activists and
conservationists of the 1960s, and in
the brief two years between the
publication of the book and her death
from cancer, Carson received more
honors and testimonial dinners than
her failing health and her native
shyness could accommodate.
Silent Spring introduced many
readers to the concept of ecological
balance. In the book, Carson explained
why she believed that pesticides
threaten the ecological balance of
nature:
"From all over the world come
reports that make it clear we are in a
serious predicament. At the end of a
decade or more of intensive chemical
control, entomologists were finding
that problems they had considered
solved a few years earlier had returned
to plague them. And new problems
had arisen as insects once present only
in insignificant numbers had increased
to the status of serious pests. By their
very nature, chemical controls are
self-defeating, for they have been
devised and applied without taking
into account the complex biological
systems against which they have been
blindly hurled. The chemicals may
have been pretested against a few
individual species, but not against
living communities.
"In some quarters nowadays it is
fashionable to dismiss the balance of
nature as a state of affairs that
prevailed in an earlier, simpler
world—a state that has now been so
thoroughly upset that we might as well
forget it. Some find this a convenient
assumption, but as a chart for a course
of action it is highly dangerous. The
balance of nature is not the same today
as in Pleistocene times, but it is still
there: a complex, precise, and highly
integrated system of relationships
between living things which cannot
safely be ignored any more than the
law of gravity can be defied with
impunity by a man perched on the
edge of a cliff. The balance of nature is
not a status quo; it is fluid, ever
shifting, in a constant state of
adjustment. Man, too, is part of this
balance. Sometimes the balance is in
his favor; sometimes—and all too often
MAY/JUNE 1992
61
-------
through his own activities—it is
shifted to his disadvantage ....
"The trouble is that we are seldom
aware of the protection afforded by
natural enemies until it fails. Most of
us walk unseeing through the world,
unaware alike of its beauties, its
wonders, and the strange and
sometimes terrible intensity of the
lives that are being lived about us. So
it is that the activities of the insect
predators and parasites are known to
few . . . ." o
Note: Quotations from Silent Spring
(Houghton Mifflin, 1962) and The Sea
Around Us fOxford Univ. Press, 1951)
are reprinted by permission.
Remembering Rachel
Shirley A. Briggs, President of the
Rachel Carson Trust for the Living
Environment, has provided these
memories of Carson:
"I met Rachel Carson shortly
before the end of World War II,
when I took a job at the Fish and
Wildlife Service as a writer/artist
and had an office adjoining hers,
where she and Lionel Walford,
then Editor-in-Chief, shared space
and duties. (Rachel soon became
Editor-in-Chief herself.) Rachel and
I quickly found that we liked to go
bird-watching and otherwise
exploring the wild habitats near
Washington, and her mother
sometimes joined us. Not only
were she and Walford remarkably
enjoyable people with broad
interests in literary and similar
fields, but they brought in a
variety of engaging people to join
us for lunch—sandwiches and tea
concocted in the closet. There was
always a good deal of merriment
on these occasions, with Rachel
herself especially good at finding
wry humor or downright hilarity
in the workings of the
bureaucracy, especially coping
with the Government Printing
Office,
"Editing government reports for
publication can be a tedious
business, but she cheered us on
with humor and a determination to
improve the quality of our
government publications. Chandler
Robbins recalls being a young
scientist there then, and how
much they learned from her about
being accurate and writing with
complete clarity, for the public as
well as other scientists. She also
believed that government
publications should be as
attractive and interesting as those
from the private sector, and that
this does not require more
expense, just good design and
planning. She devised and got
published the Conservation in
Action Series, beginning in the
1940s, to explain and make the
public appreciate the National
Wilderness Refuges. (Compare
these with the format of then
current GPO design, if you can, to
see the difference.)
"Rachel's government job was
essential to support her
family—her mother and two
nieces—so her ambition to write
more broadly, combining her talent
for writing with her knowledge of
science, left her writing on
weekends and late at night. Her
second book, The Sea Around Us,
published in 1951, gave her the
broad recognition as both a
scientist and a writer of
remarkable ability, and also the
income for financial
independence. She could then
resign from Fish and Wildlife, to
the dismay of many people, and
devote herself to writing.
"Without the reputation The Sea
Around Us gave her, and enough
money to be invulnerable to the
rough tactics of the commercial
interests that opposed her, Rachel
would not have been able to write
Silent Spring. EPA has often
credited this book and the
environmental movement it
launched for the existence of the
Agency."
Taking
The Pulse
Of Our
Renewable
Resources
A Book Review
by Douglass Lea
How am I doing?" asked a
i
II
i former mayor of New York
City at virtually every opportunity a
few years ago. In both public and
private spheres, it seems, the human
species exhibits a characteristic
preoccupation with taking our own
temperature and measuring our
surroundings.
In that most public domain of
all—the environment—essentially the
same question is increasingly asked:
"How is it doing?" Government
agencies and environmental
organizations alike devote a great deal
of effort to producing answers to that
very question—and to many others far
more arcane. International
organizations, especially those
associated with the United Nations
and with national agencies engaged in
foreign aid, have mounted an
impressive array of global monitoring
programs to report on the status of
everything from local habitats and
flora and fauna to population growth,
agricultural production, and isotopes
in precipitation. Many of these
activities suffer from certain chronic
problems: insufficient funds; conflicts
with vested interests; security and
proprietary concerns; red tape;
tardiness; incompleteness; and
incompetence.
(Lea is a contributing editor to EPA
Journal.)
EPA JOURNAL
-------
[CflOSS CURRENTS^
In the data-gathering sector, the
Third World, understandably, trails the
richer countries. The World Resources
Institute (WRI) recently urged the latter
to provide "a data tithe" to help the
former "improve statistical operations
and generate information of immediate
use both to them (the developing
countries] and to the world
community."
The U.S. Council on Environmental
Quality, based in the Executive Office
of the President, is known to the world
mainly through its annual report on
the status of selected environmental
problems. The European Community
(EC) has authorized the establishment
of an environmental agency to gather
data and generate similar reports.
However, the start of the agency's
operations has been delayed while the
French try to secure a guarantee from
the other member countries that the EC
parliament will continue to meet on
French territory, in Strasbourg.
Both WRI and the Worldwatch
Institute in recent years have
conducted a worldwide trade in their
periodic pronouncements on the state
of the world. Less ambitious, perhaps,
are the publications of other
environmental groups with more
specialized interests. But the
underlying drive remains the same—to
make an authoritative statement, to
attract attention to the organization
itself, and, of course, to spotlight
looming problems. Seldom do such
publications bring good news.
An exception is America's
RenevvabJe Resources: Historical
Trends and Current Challenges, edited
by Kenneth D. Frederick and Roger A.
Sedjo (Washington, DC: Resources for
the Future, 1991; 296 pages). It says
that conditions are not so bad after all,
at least not in certain categories of
renewable resources: forests,
rangelands, water, and some varieties
of wildlife. The team of distinguished
researchers brought together by
Resources for the Future (RFF) does
find, however, that wetlands are in bad
shape and that erosion continues to
threaten soil productivity.
In contrast to the data mania that
marks most state-of-the-environment
publications, this book reads like
history. The editors chose a historical
approach for sound methodological
reasons: It allows them to produce a
book that describes in sweeping terms
how the quantity and quality of
America's forests, waters, rangelands,
soils, croplands, and wildlife have
changed over the last century and how
human intervention has contributed to
changes in the resource base. "As
such," write the editors, the book "is a
record of one country's experience
with the ingredients of sustainability
that will be instructive in managing
future demands on the resource base,
in the United States as well as in other
parts of the world."
The premise here is that much can
be learned about current and future
problems in renewable resources
through a better understanding of past
changes in the condition, use, and
management of each resource. Popular
perceptions tend to be strongly
influenced by short-term conditions.
Media reports of crop failures,
droughts, fires, blights, floods, and
other problems are likely to be
accompanied by dire forecasts of
impending catastrophe. Such reports
can seriously distort rational policy
making.
The RFF writers are aware of this
danger: "Differentiating between
long-term trends driven by
fundamental conditions and largely
ephemeral events that place a nation's
food, timber, or water resources under
stress is not an easy task."
Nevertheless, they insist that the effort
must be made and that the distinction
is important to the making of good
resource policy. "Understanding past
trends in the condition and use of the
resources and how society has
responded to prior resource stress,"
they write, "is an important step in
making that distinction."
The authors write that, at the
beginning of the European occupation,
the continent had been little marked
by the subsistence farming and
hunting of the two million Native
Americans then living in the area.
Even two centuries after European
exploitation began, the land's material
resources were still enormous
compared to the demands being placed
on them. Abundant resources were
there for the taking, and early settlers,
of course, had no choice but to take.
This habit persisted. When bustling
commercial centers began to depend
on the agricultural and forestry
products of the interior, these habitual
practices became destructive. Large
MAY/JUNE 1992
-------
areas of forest were gradually
converted to cropland and to pasture
for grazing domestic animals. By 1920,
according to the authors, "about 384
million acres or 40 percent of the
indigenous forest and the attendant
wildlife habitat had been cleared."
Meanwhile, a public outcry, led by the
founders of the conservation and
environment movements, ushered in
the era of modern management
techniques.
The good news in this volume
derives largely from the eventual
success of some of those techniques,
including specific programs aimed at
preserving and protecting important
portions of the country's resource base,
changes in federal land management
practices, and recent legislative
initiatives in environmental regulation.
To claim victory (or at least partial
success), it helps, of course, to confine
one's terrain to an area where success
is most likely—that is, it helps to focus
on resources which are, by definition,
renewable. Fortunately, the country's
renewable resources have displayed
considerable resilience and a capacity
to restore themselves once abusive and
exploitative uses are removed or
sharply curtailed.
Resource uses have also changed.
More efficient technologies have
enabled managers to consume fewer
resources and stretch them farther. The
forest industry, for example, has
reduced processing wastes and
increasingly used a greater range of
wood types, residues, and fibers.
Unintended side effects and
byproducts are constant hazards of
high-technology management of
natural resources. The chemical
fertilizers and pesticides employed by
modem agriculture to generate high
yields carry the unfortunate cost of
widespread contamination of water
supplies and aquatic habitats.
America's Renewable Resources:
Historical Trends and Current
Challenges is a significant contribution
to the environmental debate on at least
three counts. First, it demonstrates
convincingly that the good news about
the sustainability of renewable
resources is not really possible without
self-conscious management and
compatible institutions that "establish
the economic: incentives for producing
or conserving resources and that
impose a set of constraints on these
activities." Second, by building on the
historical context of environmental
policy, the book is a healthy reminder
of the importance of scale and time in
understanding the intersection of
phenomenon and policy. And finally,
this book shows that an account of the
state of the environment can be
credible and informative without being
boring, routine, or self-serving. Q
ON THE MOVEL
Leon Hampton, Jr. is the new Director
of the Office of Small and
Disadvantaged Business Utilization
(OSDBU).
His leadership comes at a time when
the office faces important challenges.
To meet them, he plans to identify
opportunities for better service for the
small disadvantaged businesses which
seek an opportunity to participate in
EPA procurement grants and other
requirements, to produce greater
productivity through quality
management, to improve ties to other
offices and programs in the Agency, to
build on an already good record in
placing even more set-aside funds with
minority- and women-owned firms,
and to strengthen the office's role as an
advocate and ombudsman for small
businesses in all EPA activities.
For the past three years Hampton
served as Program Advisor to the
Director in EPA's Office of Civil
Rights. He spent eight years at the
Department of Commerce in the
Minority Business Development
Agency—the last four years as the
assistant director for external affairs,
which involves overseeing that
agency's congressional and legislative
program, the public affairs and public
information office, and the advocacy
program.
From 1979 to 1980, he was a
consultant to Resources, Inc., a
Washington, DC-based,
minority-owned research and
management firm specializing in
minority business and equal
employment opportunity issues. Before
that, he served as deputy executive
director for the National Bankers
Association and as assistant to the
administrator at the U.S. Small
Business Administration. Hampton
began his federal career as a legislative
aid to former U.S. Senator Marlow
Cook of Kentucky, specializing in
federal activities in Kentucky,
including EPA programs. He has
received awards from several Kentucky
communities for assistance in using
federal grant programs and from
minority business groups, including
the Martin Luther King award for
advocacy presented by the Greater
Cleveland Roundtable and an
outstanding service award from the
Nevada Black Chamber of
Commerce, n
EPA JOURNAL
-------
i
Smith Coast Atr Quality Management District photo.
The pollution clean-up challenge is no
longer restricted to a few large sources. In
the Los Angeles metropolitan area,
manufacturers have reformulated charcoal
lighter fluid to comply with a rule designed
to limit emissions of hydrocarbons.
Back Cover: Relic from an earlier era—an
old gasoline pump that dispensed leaded
fuel. See article on page 38 explaining
how EPA's phasedown of lead in gasoline
helped usher in new approaches to
environmental protection.
Photo by Everett fohnson /or Folio Inc.
-------
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