United States
Environmental Protection
Agency
Office of Public Awareness
(A-107)
Washington, D.C., 2O460
Volume 5
Number 1
January 1979
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The Economy and the Environment
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"WELL, MAYBE THtSOME WILL FLY
The Economy
and the
Environment
As EPA Journal begins in
1979 its fifth year of pub-
lication, the magazine takes a
look at a critical issue—the
impact of the environmental
cleanup on the economy.
Unquestionably one of the
most difficult problems EPA
must grapple with is how to
press the cleanup efforts with-
out crippling industry and con-
tributing to unemployment.
To review this complex and
controversial subject, the views
of a wide range of authorities
are presented.
Among those offering their
insights are EPA's leadership
including Administrator Doug-
las M. Costle, Deputy Admin-
istrator Barbara Blum, and
William Drayton, Assistant Ad-
ministrator for Planning and
Management,
From outside the Agency per-
ceptive comments are made by
such distinguished observers as
Dr. Paul Samuelson, the Nobel
prize-winning economist, and
Senator Gary Hart of Colorado,
winner of a national award for
his leadership in protecting air
quality.
An engrossing account of the
tragedy caused by chemicals
dumped in Love Canal near
Niagara Falls, N.Y.. is provided
by Eckardt Beck, EPA's Region
2 Administrator. The Journal
plans to review the national
problem of hazardous waste
disposal in its next issue.
Copyright 1978 by Herblock in the Washington Post
Another aspect of the impact
of the environmental cleanup on
the economy is reported by in-
dustrialist Richard Hoard, who
notes that the business of sell-
ing pollution control equipment
is booming.
Public support for environ-
mental cleanup remains strong,
even with today's economic
concerns, suggests a poll re-
ported by Robert Mitchell and
Kathryn Utrup of Resources for
the Future.
In other stories, Federal aid
available to help ease the im-
pact of pollution cleanup is
reported by Edwin Clark, II, a
special assistant to the EPA
Administrator. The Director of
EPA's Office of Legislation,
Charles Warren, explains how
Congress acts on EPA's budget.
Key facts on the economy
and the environment are pro-
vided in a special one-page
report. Also reported is the
start-up of the new Regulatory
Council, with streamlining and
improvement of Government
rules as one of its main con-
cerns, n
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United States
Environmental Protection
Agency
Office of
Public Awareness (A-107)
Washington, D.C. 20460
Volume 5
Number 1
January 1979
SEPA JOURNAL
Douglas M. Costle, Administrator
Joan Martin Nicholson, Director, Office of Public Awareness
Charles D. Pierce, Editor
Truman Temple, Associate Editor
John Heritage, Chris Perham, Assistant Editors
L'Tanya White, Staff Support
Articles
EPA is charged by Congress to
protect the Nation's land, air and
water systems. Under a mandate
of national environmental laws
focused on air and water qual-
ity, solid waste management and
the control of toxic substances,
pesticides, noise and radiation,
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.
The Benefits of a Cleaner
Environment 2
Administrator Douglas M. Costle
reviews the issue of the economy
and the environment.
An Economist's
View 4
Observations by Nobel prize-
winner Dr. Paul Samuelson.
A Lawmaker's
View 6
Senator Gary Hart discusses the
real cost of cleanup.
An Environmental
Balance 9
The view of Deputy Adminis-
trator Barbara Blum.
The Economy and
Regulatory Reform 10
An interview with Assistant
Administrator William Drayton.
The Environment
and Economics 15
A fact sheet highlights progress,
benefits, and costs.
The Love Canal
Tragedy 16
A report by Eckardt Beck.
Cleanliness Pays 20
A report by Richard Hoard on
Industry Cleanup Savings.
Cleanup Impact Aid 22
Edwin Clark II explains Federal
aids to ease the cost of cleanup.
The Public's View
Robert Mitchell and Kathryn
Utrup report on attitudes toward
cleanup costs.
Regulatory Savings
Douglas Costle predicts huge
savings possible with regulatory
reform.
How EPA
Gets Its Money 30
The budget process in Congress
is explained by Charles Warren.
Departments
Almanac 25
Nation 32
People 34
News Briefs 37
Update 38
Front cover: Construction workers
are shown in this photo by Burt
Glinn of Magnum.
The EPA Journal is published
monthly, with combined issues
July-August and November-Decem-
ber, by the U.S. Environmental
Protection Agency. Use of funds for
printing this periodical has been
approved by the Director of the
Office of Management and Budget.
Photo credits: Terry Eiler', Love
Canal photos courtesy of Buffalo
Courier-Express and Niagara
Gazette, Bovd Norton", Lee
Lockwood', ENTHEOS', Burt
Glinn/Magnum, Ernest Bucci,
RayThacker
* Documerica
Text printed on recycled paper.
Views expressed by authors do not
necessarily reflect EPA policy. Con-
tributions and inquiries should be
addressed to the Editor (A-107),
Waterside Mall, 401 M St., S.W.,
Washington, D.C. 20460. No per-
mission necessary to reproduce
contents except copyrighted photos
and other materials. Subscription:
S10.00 a year, S1.00 for single
copy, domestic; S12.50 if mailed to
a foreign address. No charge to
employees. Send check or money
order to Superintendent of Docu-
ments, U.S. Government Printing
Office, Washington, D.C. 20402.
-------
Environmentally Speaking
r
The Benefits of
a Cleaner Environment
By Douglas M. Costle,
EPA Administrator
N
one of us can be unconcerned that
. _ prices continue to rise, that Ameri-
cans are again jittery about having to pay
more and more for the essentials—food,
shelter, and clothing.
As the President leads the attack on in-
flation, we at EPA must be concerned about
whether the environmental program con-
tributes to the inflation rate.
Some say the root of inflation is in the
government's monetary and fiscal policies.
Others emphasize excessive wage settle-
ments and price increases that don't reflect
increased product value. But there are other
reasons as well, including possibly the
effect of costs imposed by regulations. So
we must continually evaluate our actions to
be sure that they are not unduly inflationary.
As measured by standard yardsticks,
such as the Consumer Price Index, EPA's
programs do contribute modestly to infla-
tion. Our most recent analysis, done by the
respected firm of Data Resources, Inc.,
estimates that EPA's air and water pollu-
tion control programs will add an average of
0.3 percentage points annually to the Con-
sumer Price Index from 1 970 through 1 986.
Thus, if the Index were to increase by
6.0 percent in a particular year without pol-
EPAJOURNAL
-------
lution controls, it might increase by 6.3
percent with them.
The results of the Data Resources analy-
sis are in step with earlier studies done
for EPA and the Council on Environmental
Quality. All indicate that while the impact
of pollution control on the Consumer Price
Index is noticeable, any conceivable change
in current regulations wouldn't substan-
tially alter the Nation's underlying inflation
rate.
The major causes of inflation are else-
where. About 22 percent of the increase in
consumer prices in 1977 was due to food
price increases, with 39 percent due to
housing, 7.8 percent to energy, and 8.8
percent to medical care. Only a smalf frac-
tion of these increases is related to pol-
lution control requirements.
Clearly the major attack on inflation
must concentrate on the special causes of
increased prices for food, energy, housing,
and medical care and on avoiding the
wage-price spiral set off by these increases.
More importantly, the factthat environ-
mental regulations do slightly increase the
Price Index does not itself mean they are
truly inflationary. Projections in the Index
do not take into account the benefits of
regulation, such as improved public health,
reduced property damage, and increased
crop yields that result from pollution con-
trol spending.
Such benefits lead to a lower cost of
living. If the Price Index were adjusted to
take them into account, pollution control
spending would not appear inflationary, as
long as the benefits exceed the costs—
which I believe is generally the case.
The Federal environmental program,
closely coordinated with State and local
efforts, has already achieved significant
results, which are paying off in more bene-
fits to society. From 1970 to 1977, total
smoke and dust were reduced by 1 2 per-
cent. Nationally from 1970 to 1977 sulfur
dioxide was reduced by 30 percent. Some
rivers that were contaminated, even flam-
mable, are now open to fishing and swim-
ming.
These environmental improvements re-
sult in anti-inflationary effects such as fewer
illnesses, fewer lost workdays, lower medi-
cal bills, less material damages, and more
recreational opportunities. These must not
be ignored when considering whether
pollution or pollution control is more
inflationary.
Another way of looking at this problem
is to note that for many years polluters im-
posed additional costs of living on con-
sumers, in many cases without their knowl-
edge. Now, it seems irrational to me to
automatically call inflationary the programs
that are eliminating these costs by requiring
that the pollution be abated.
Our concerns about the inadequacy of
measures such as the Price Index parallel
those of economists such as Paul Samuel-
son and James Tobin, who have criticized
the Gross National Product as a measure of
economic performance because it does not
adequately consider the economic value of
changes in the quality of life.
Unfortunately, the state of the art for
putting a value on the benefits of pollution
control is not nearly as advanced as our
ability to measure the costs. We cannot put
a dollar-and-cents figure on many benefits,
and economists don't know how to
"model" the quality of life.
However, most Americans have a good
sense of how important a clean and healthy
environment is to them, and the polls have
consistently shown that they are demand-
ing such an environment. For instance, a
recent poll for Resources for the Future
found that those surveyed would choose by
a 3 to 1 margin to pay higher prices to
protect the environment.
I'm often asked by people, "Who are
these environmentalists?" My answer is,
they're your children, your spouses, and in
many cases, perhaps, yourselves. Most
people don't enjoy living or working in a
polluted environment, and they are telling
us that they think the benefits of environ-
mental cleanup are worth the costs.
We can all think of cases where environ-
mental protection is (or would have been)
clearfy worth the investment.
For example, the Kepone contamination
of the James River in Virginia has shut
down the fish and shellfish industry in the
area—probably for decades—because it
would cost billions of dollars to clean the
river bottom of the contamination. Prevent-
ing the problem in the first piace surely
would have been less costly.
Similarly, the cost of disrupting fishing
in and near the Hudson River by PCB con-
tamination has been estimated at more
than $11 million a year by New York State.
These are graphic examples where the
benefits of pollution control would have
been obviously reflected in increased per-
sonal incomes. Far more common are cases
where the benefits are measured in fewer
cancer patients or fewer schooldays or
workdays lost by asthmatics.
We would like to measure those benefits
that have economic value more accurately
than we're now able to. We're working on
that.
In the meantime, the Agency must and
will rely on judgment. In making those judg-
ments, we will make a fair assessment of
both costs and benefits to the maximum
extent feasible.
In sum, I believe that pollution cleanup
benefits, whether we can compute them or
not, exceed the costs, and, most important,
that the pubiic wants those benefits and is
willing to pay for them.
Nevertheless, we have to recognize that
our programs are costly. There are no quick
fixes or magic solutions, and we have to
make sure that we are accomplishing our
goals in the most efficient manner possible.
If we do not, then we can truly be accused
of causing inflation.
The Agency's developing Regulatory
Reform Program is designed to achieve this
efficiency. We will attempt to find the most
cost-effective, legally permissible way of
meeting environmental goals, and to regu-
late only when we are confident that the
benefits exceed the costs. Our national
economic problems make this approach
more important than ever. D
JANUARY 1979
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An
Economist's
View
An Interview With
Dr. Paul Samuelson
Do you think that environ-
mental regulations are
adding significantly to
current U.S. inflation,
unemployment, etc.?
The current combination of in-
flation and unemployment in
this country is what we econo-
mists call stagflation. It's re-
lated on one hand to fiscal pol-
icy and Federal Reserve money
supply creation and on the other
hand to the way wages and
other costs respond in the sys-
tem to different degrees of un-
employed labor supplies and
plant capacity. Environmental
regulations are really one small
and minor factor in that general
picture. So the answer is envi-
ronmental regulations contrib-
ute at most insignificantly to
current U. S. inflation and un-
employment problems.
What do you see as ma-
jor steps we could take
to make environmental
regulation more efficient?
It is easy for legislators to put in
fiats, to introduce regulations,
to set quantitative restrictions
on effluents and emissions.
Then it's a matter for the police
and courts to enforce them.
Economists believe that a
better approach often is to make
the process of environmental
control self-regulating by means
of some system of automatic
money penalties and rewards.
This means that a major needed
step is to use more measures
that motivate industry to clean
up the environment, such as tax
penalties, subsidies, and pecu-
niary enticements.
Dr. Samuelson is Professor of
Economics at the Massachu-
setts Institute of Technology.
He is also an Institute Professor
at the school, a rank reserved
for distinguished scholars.
In 1970, Dr. Samuelson won
the Nobel Prize for Economics.
The steel industry among
others has argued that
environmental regulations
put U.S. industry at a
disadvantage with respect
to foreign competitors.
Do you think there is any
truth to this charge? If so
should the U.S. attempt
to protect its business
and how?
At every international confer-
ence on environmental improve-
ment, we observe that repre-
sentatives from the developing
countries where life is nasty,
short, and brutish, and where
the GNP per capita is very low
and living standards are mini-
mal, those regions are anxious
to acquire some pollution and
some deterioration of the envi-
ronment if that is the price for
getting jobs.
In the more affluent countries,
such as Sweden, Switzerland,
Western Europe generally, the
U.S., and Japan, it's realized
that the whole purpose of pro-
duction, the whole purpose of
jobs and real income, is the
good life, in all of its dimen-
sions.
One very important aspect of
the good life is that it last, that
we do not die prematurely from
environmental blight, that while
we're living we're living under
skies that are reasonably clear
and with water that's reason-
ably pure. So the affluent coun-
tries like the U.S. naturally want
to put stiffer regulations on in-
dustry than do the developing
countries.
Now there are certain indus-
tries, which by their nature are
more frequently polluting than
others. It follows from eco-
nomic analysis that just where
things should be done in the
world, what the geographical
division of labor should be,
ought to be affected by this dif-
ference in tastes between the
advanced and the undeveloped
world. And so an extremely
filthy industry, which cannot by
any incentive scheme, or any
zoning and fiat regulation be
made clean, simply ought not
be in the middle of a prosperous
suburb or in the middle of a
prosperous country.
If the steel industry turns out
to be one which is irretrievably
polluting, and I don't believe
that to be the case, then it ought
to follow that the jobs which
have taken place in this self-
confessed dirty industry should
take place in some other site
where they will do less harm.
So if it were the case that the
steel industry simply could not
compete in the United States on
a decent, non-polluting basis,
that would be a very powerful
argument for letting that indus-
try move abroad.
Now this has nothing to do
with national defense. Obvi-
ously some crucial amount of
steel capacity for national de-
fense purposes, which is much
much less than the U.S. ordi-
narily produces, you would
want to keep here. That can be
done on an electric furnace
basis without the old Pittsburgh
and Gary, Ind., approach. (I was
born in Gary and I know the na-
ture of the old-fashioned, pol-
luting steel plant. Those plants
should go abroad.)
A century from now, even in
the poorer parts of the world
they will not be allowed to con-
tinue the old 1919 methods of
polluting the environment.
On the other hand, having
said all that, let's just really
look at the competitive situation
in steel. The U.S. industry has
not been losing out to imports
primarily because of environ-
mental concerns. The Japanese,
who have been some of the
most successful in capturing
American business on a cost
basis, are themselves beginning
ing to put in environmental con-
straints. Some are not much
different than now apply in East
Chicago, Gary, Pittsburgh, and
elsewhere.
So the steel industry, which
will be made to pay its way on
a non-polluting basis to the de-
gree that it's able to stay here,
will continue to be able to com-
pete here, that is if its other
problems, which are its rate of
technological advance in com-
parison with what's been hap-
pening abroad, are put in order.
The only case forthe U.S.
Government to come in to pro-
tect an industry like this, which
is losing ground because it will
not or cannot shape up to envi-
ronmental needs, is that work-
ers in that industry who have
staked their occupations and
fortunes on it should, as with
EPAJOURNAL
-------
other industries hurt by com-
petition, receive a transitional
subsidy to help them locate in
another industry. Beyond that I
don't think a strong case can be
made for the steel industry to
have walls built around it so
that on a clean basis it can com-
pete with industry abroad.
Aren't our economic
analyses inherently short
range and how can they
adequately include the
value of a lower cancer
rate or a cleaner river
when data on damages to
society are often incon-
clusive?
It isn't the case that modern
economic analysis is or must be
only short-range. We realize
that costs accrue even if they do
not show in the form of a
monthly bill to some corpora-
tions or to some households.
So the correct formulation
would be that our economic
analysis must be short-run,
must be intermediate-run, must
be long-run, and we must at-
tempt to quantify as best we
can the costs in terms of envi-
ronmentally-increased cancer
rates and costs in terms of
democratically-legislated
standards for clean air and
clean water.
Do you think economists
have developed adequate
ways of measuring the
benefits of pollution con-
trol regulations? Or are
many of these benefits
inherently unmeasurable?
I think we are only at the be-
ginning of making such meas-
urements. But we are at the be-
ginning, and there are many
improvements which will come
in the future in our ability to
meaningfully calculate costs
and benefits.
The fact that a thing is hard
to measure does not mean that
it is zero. And in the past we
have been treating costs that
were difficult to quantify as if
they were zero costs. That is a
logical error and we simply have
to do the best we can in terms
of new yardsticks.
How many hospital beds,
how many doctor days, how
many nurse years are going to
be involved in running our cities
the way the Victorian 1 9th Cen-
tury city was run? When you
apply these new yardsticks, it
will be found, and economic
historians will corroborate the
statement I am making, that far
from our now spending too
much on the environment, in
the remaining decades of the
century we will be spending
an increasing fraction of our
total resources upon this im-
portant area.
It's often said that invest-
ment in pollution control
equipment is "nonpro-
ductive." Is this true
from an economist's view-
point? Is such investment
less productive than,
say, investment in air-
conditioning equipment?
If you use the old-fashioned
methods of measuring outputs
then you may find that in a year
when more of our society's re-
sources go into keeping mer-
cury out of our lakes, keeping
sludge out of the ocean, the
Federal Reserve index of pro-
duction has not grown as rap-
idly in terms of mousetraps and
conventional goods and serv-
ices as would otherwise have
been the case.
However, economists have
always known that what's meas-
ured by the Federal Reserve
Board index of production or
what's measured by the real
Gross National Product is only
an approximation of something
more fundamental. And we are
gradually changing our notions
of what ought to be the meas-
ured Gross National Product.
I introduced into my elemen-
tary textbook in economics
some few years ago along with
the GNP, which is a conven-
tional measure of ordinary
goods and services, an auxiliary
measure of Net Economic Wel-
fare (NEW) which tries to take
into account the improved
amenities that are just as im-
portant to each living genera-
tion as the mousetraps and the
other ordinary items.
When you have calculated
these auxiliary measures of
physical production and of cor-
rected Gross National Product
then it's not the case that in-
vestment in pollution control
equipment is non-productive
and is a subtraction from what
could otherwise have been
produced.
On the contrary, it may be
that in any one year's spending
on these items in a society not
at the bare margin of existence,
these may be among the most
important welfare-creating
expenditures.
Do you then advocate a
different kind of yard-
stick?
Yes. I would, for example, not
dispense with our old GNP, but
I would always supplement it
with these auxiliary measures.
Has environmental
spending become a target
for some because the
GNP doesn't present a
true picture of cleanup
costs and benefits?
If I were a political scientist
and I tried to analyze the mo-
bilized forces of opposition to
environmental spending and
". . . environmen-
tal regulations
contribute at
most insignifi-
cantly to current
U.S. inflation and
unemployment
problems."
regulations, then I would not
list as important the fact that
the conventional GNP is meas-
ured wrong. Most voters, most
lobbyists, most people in the
street go whole hours without
thinking of the conventional
real GNP.
What a lobbyist does do re-
garding a particular regulation
that he thinks is hard on his in-
dustry is when he comes into
Congressional committee meet-
ings or into court, he quotes
from the GNP to buttress his
case. It's important that the
measures of environmental
benefits be available in order
to answer such debating tactics.
But I think that some of the
opposition to environmental im-
provement is rationally based.
A lot of people feel pinched in
buying their ordinary mouse-
traps, in paying for their ordi-
nary schooling, and they're
looking for something to econ-
omize on and they may have
blithely voted too high a stand-
ard for environmental purifica-
tion.
Looking at this problem, the
economist doesn't say, "The
more the merrier." If pure air is
good, why isn't the purest air
possible also good? Why
shouldn't you be able to swim
in the Hudson River off mid-
town Manhattan, someone
may ask. An economist says
you should really sacrifice that
last little purity of the Hudson
because that is the part which is
the most expensive to achieve.
To get all the air out of the jar
by vacuum pump is literally im-
possible. To get the first half of
the air out, creating half the
pressure of the ordinary atmos-
phere, is pretty cheap, and if it's
worth doing most people would
say it's a bargain. But they
wouldn't say it would be worth-
while to get 99.9 percent out.
So an economist's viewpoint
is always cost-benefit analysis.
Cleanliness is good, but what
do you want to pay for that last
little bit? I think the auxiliary
measures of economic progress
JANUARY 1979
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EPA JOURNAL
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A Lawmaker's View
By Senator Gary Hart
I n the battle to protect the natural environ-
' ment, a new counter-attack has surfaced.
It asserts that inflation and complex Federal
regulations are reasons for postponing or
abandoning pollution abatement. This
counter-attack can be repulsed with two
lines of arguments.
First, benefit-cost analysis, not inflation,
is the appropriate economic standard for
judging the merits of environmental con-
cerns. Second, regulatory complexity
should be replaced with regulatory simplic-
ity, not lower standards.
Fallacious Inflation Argument
Industry groups argue pollution control is
inflationary because it costs money and
therefore raises prices. Inflation is a bad
thing—by anyone's measure. If inflation is
bad, and, if one agrees that pollution con-
trol causes inflation, then pollution control
must be bad, too. This flaw in fogic results
from a glaring omission.
Inflation occurs when the price of a par-
ticular good increases with no change in the
size or quality of that good. As a hypotheti-
cal example, assume a standard-sized 1978
car with a given set of options cost $4,000
last year. If the identical car were $400
more this year, we call that inflation and
label it bad.
Consider a different situation, however.
Suppose cars manufactured this year were
required to have a more sophisticated pollu-
tion control system than cars manufac-
tured last year. Say the cost of the new
exhaust control was $400. In this case, the
price increase of that same car from $4,000
to $4,400 would not be inflation. The higher
price is for a higher quality car. To claim the
$400 price increase is inflationary is wrong,
therefore, because something of value
(cleaner air) also accompanies the payment
for the auto.
The $4,400 car with pollution control
equipment is actually a new commodity
which produces more net benefits to society
than the lower-priced $4,000 car. The
lower-priced car gave transportation to its
owner and poisonous exhaust to everyone
else in town. The total benefits to society of
the car's operation equals the benefits of
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. ;
-------
The car manufacturer also has a private
incentive not to install pollution control
equipment. The manufacturer wants to sell
as many cars as possible, each returning a
fair profit, and has no economic interest in
preventing pollution. However, the manu-
facturer cannot maintain a margin of profit
on car sales unless the price is increased by
the cost of adding abatement equipment.
And at a higher price the manufacturer will
sell fewer cars.
This is the dilemma. Goods which pre-
viously caused pollution obviously become
more expensive as pollution is abated.
Given that non-polluting goods and services
suffer no such price increase, they become
relatively inexpensive. The practical pro-
ducer will produce more and the practical
consumer will buy more of the original non-
polluting goods—and less of the goods
which now cost more due to new abatement
equipment. For example, people may see
more movies and drive less.
It is clear that when pollution results
from economic activity, private decisions
by producers and consumers do not result
in the best decision for society at large.
Because individual consumers and individ-
ual producers each have private economic
incentives to avoid pollution control, the
Federal Government must consider pollu-
tion abatement from the perspective of all
of society. That requires a new and different
approach.
Focusing only on the cost—by calling it
inflation, for example—yields the wrong
answer. Using the simplified example of
automotive exhaust, society is better off if
it can reduce the costs of damage from pol-
lution by $800 if that action costs only
$400 for abatement equipment.
The economically rational way to decide
how much to spend on pollution control is
to consider the net benefits of the expendi-
tures on abatement. As long as the addi-
tional benefits to society as a whole will be
larger than the additional costs to society
as a whole, greater and greater amounts of
abatement can be induced through
legislation.
A 1976 study of the cost of pollution
control by Chase Econometrics Assoc., Inc.,
exemplified the extreme short-sightedness
of analysis based only on the costs. This
study concluded that the Consumer Price
Index increases about .4 percent faster due
to pollution control expenditures. Nowhere
in this report was there a discussion of the
corresponding consumer savings derived
from pollution control. The report was pre-
pared for the Council on Environmental
Quality and EPA.
It is possible—indeed I believe it prob-
able—that consumers gain economic and
non-quantifiable benefits from pollution
control substantially greater than .4 percent
of their annual income. It is irresponsible to
discuss costs of pollution control without
comparing them to the benefits.
Measuring Cleanup Benefits
Of course, it is much easier to define the
optima! level of pollution control than it is
to calculate it in practice. Estimating the
costs of pollution cleanup equipment is
not much different than estimating the costs
of any other investment. But it is difficult to
put a dollar figure on the'benefits from
pollution abatement.
In the case of air pollution, it is generally
known that specific chemicals in the air
cause or aggravate many diseases. How-
ever, it is sometimes hard to measure the
exact relation between the quantity of
chemicals in the air and the quantity and
severity of particular diseases. Even when
this can be quantified, it is difficult to deter-
mine the costs of the adverse health effects.
Calculations on spending for medical serv-
ices underestimate the costs of pollution-
related disease, and the costs of pain and
suffering are not quantifiable in any dollar
terms.
Furthermore, the medical costs asso-
ciated with a disease are often related to
the wealth of the ill person. Hence, just
focusing on the actual costs underestimates
the value of pollution control.
Lester Lave and Eugene Seskin have col-
lected much information quantifying the
benefits and costs of air pollution control.
In their most recent book, "Air Pollution
and Human Health," they conclude, for ex-
ample, that presently mandated controls of
sulfur oxide and particulate emissions from
stationary sources are warranted on benefit-
cost terms. The costs of abatement in 1979
are $9.5 billion (in 1973 dollars), and the
benefits, in terms of improved health alone,
are estimatedat $16.1 billion.
Because it can't measure everything,
benefit-cost analysis must be a supplement
to subjective judgment by policymakers,
not a general substitute for it. Pollution con-
trol benefits cannot be measured easily, as
shown. They will usually be underestimated
in any quantified analysis.
When the measure of benefits exceeds
the estimate of pollution control costs, the
environment will presumably be improved.
However, when the measure of the costs
appears greater than the benefits, the deci-
sion is unclear. Policymakers and adminis-
trators must be careful to weigh benefits
subjectively against the costs when there
are substantial benefits which can't be
quantified.
Difficulty in quantifying benefits should
not be used as a reason to discount them.
An incomplete benefit-cost analysis should
not be used to justify weak environmental
standards.
Costs of Regulations
We must admit that environmental regula-
tion is costly by its very nature. Left to it-
self, any firm purposefully minimizes its
costs of operation by neglecting certain
environmental aspects of its production.
One reason that governmental regulations,
such as air and water quality permits, do
cost money to comply with is that studies
of environmental consequences have a
significant price tag.
It is probably not possible to reduce the
basic cost of obtaining information. How-
ever, it should be possible to cut the ex-
penses of dealing with the many levels of
government. Often, governments at local,
State, and Federal levels, as well as over-
lapping special districts, require similar
information—but want to receive it in dif-
ferent ways. The regulatory agencies
should work together—to combine hear-
ings, share information, and so forth—so
that full information is received by regula-
tors at minimum cost to those regulated.
Effluent Charges Cut Costs
The goal of pollution regulations is to
achieve a given quality of air or water. Cur-
rently, most pollution regulations require
each firm to meet the same discharge qual-
ity, regardless of the costs to each firm. We
could reduce the cost of pollution control
by shifting from regulation to a system of
pollution discharge fees which would, in
effect, recognize that some firms can abate
more cheaply than others. The costs of
abatement may vary because of the type of
equipment and the process used.
From society's perspective it is best to
achieve any given level of air or stream
quality at the minimum total cost to all the
firms involved. Total costs can be reduced
by having those firms that can abate cheap-
est do the most pollution control.
Under the regulatory approach, some
firms must spend large sums due to very
high costs of abatement peculiar to those
companies, while other firms spend less.
Under the pollution charge approach, the
firms with higher clean-up costs will spend
less on abatement, but pay a per-un/t levy
for the pollution they continue to discharge.
The total amounts spent on abatement will
be less under the pollution charge system
for the same amount of pollution control.
The pollution charges will substitute for
government income which would otherwise
have to be raised by taxes.
The potential economic effectiveness of
this pollution charge approach is demon-
strated with a study using the Delaware
River Estuary as a model. The regulatory .
method would set effluent standards for all
firms to meet. To reach a given stream
quality, that approach would cost all firms
a combined $20 million per year.
Continued to page 37
8
EPA JOURNAL
-------
An Environmental
Balance
By Barbara Blum
EPA Deputy Administrator
Somehow, somewhere, there has de-
veloped the myth that it is inappro-
priate for us regulators to be interested in
things like free enterprise, inflation and
economic growth. That myth has been
supported by another: That economic
growth and environmental protection are
fundamentally at odds. These myths de-
serve to be debunked.
It is pretty obvious, I think, that a healthy
environment and a healthy economy are
both necessities. You can't have sick
people or a sick environment, and you
can't have a weak economy, constantly
racked by inflation or unemployment. What
you can have, indeed what you must have,
is an environment which is sound enough
to support a productive economy and an
economy that makes good use of, but
doesn't use up the environment.
Frankly, I do find it tiresome to have our
work constantly judged in terms of "selling
out the environment to make life easy for
industry" or of "ignoring economic reali-
ties in pursuit of some super-idealistic
concept of the environment." Sometimes
we're attacked in both sets of terms for the
very same decision.
We are here to protect the environment,
under the terms of laws signed by both
Republican and Democratic Presidents.
And we are here to uphold our duties under
those laws at a minimum level of inter-
ference with business, industry, local
government, State government, and every-
one else the law tells us to regulate.
Let me speak to those of you who fear
that we are forgetting our duty to the
environment in order to make life easier
for business and industry—perhaps on
orders from some faceless "they" in this
Administration. You are wrong. That is not
the kind of Administration that Jimmy
Carter, the most dedicated environmen-
talist to ever occupy that office, wants.
Nor is it the kind of Administration I would
serve.
Excerpts from a recent speech by
Barbara Blum to the Environmental Law
Institute. Blum is Deputy Administrator of
the EPA.
And let me speak to those of you who
see us as equally narrow-minded from the
other side, pursuing the environment at
the expense of everything else, especially
the interests of business and industry. You
are equally wrong. You have to go back
several generations to find a President with
the real business experience of Jimmy
Carter, and the consequent understanding
of which complaints are real, and which
are crocodile tears. And incidentally, I
know what it is to meet a payroll from my
own business career.
We think that it's possible to clean up
the environment and do it in a way that
avoids unnecessary costs, and in a way
that takes account of the difficulties that
the sudden changes or adjustments com-
pelled by environmental laws impose.
We don't want to put companies out of
business, and we don't want people to lose
their jobs. But we don't want to be used
as an excuse for second-rate management,
either. We don't want to be blamed for
some company's distress because we seem
like an easier target than the Japanese, the
unions, changing consumer tastes, or just
a plain old-fashion failure to keep up with
the industry.
We do not make the laws, the statutes
that say how much polluting material can be
tolerated in the air or the water. But we do
make the regulations that implement those
laws and we don't think those regulations
have always been well-made.
Regulatory reform is one of our major
interests at EPA. It ranges from shortening
the time for various actions to making Eng-
lish the official language of the Agency.
For instance, there may be no alternative
for the cost of a scrubber that removes
emissions from a power plant smokestack,
but there is plenty of alternative for seven
forms when one will do. And perhaps if we
make the forms and the way we read them
ciear enough, there will even be alterna-
tives for the cost of lawsuits about them.
Beyond those changes in how we deal
with those we regulate we're at work on a
major effort to learn what we have gained
from several years of pollution control
effort. Specialists within the agency are at
work on a series of environmental indices
which should, when fully developed, tell
the American people what they are getting
in exchange for the time, trouble and money
that have been expended on behalf of a
clean environment. Publication of these
reports has already begun in our northwest
regional office; and we are pushing ahead
with national measurements.
We also think that we can make some
important changes in the way EPA does
business internally, changes that should
make it easier to deal with us.
Another major emphasis in our work will
be a much heavier investment in research to
determine as precisely as possible the
public health impact of various pollutants
and levels of pollution. For some elements
of our basic legal charters, such as auto-
mobile emissions. Congress set a specific
standard. For many others, it left the job of
deciding what was an "ambient" and
"hazardous" standard up to us. We are
going to be putting more money and more
effort into health effects research on those
issues.
The basic motivation of anti-pollution
legislation has not, after all, been esthetic.
EPA has been concerned with how pollu-
tion was effectively killing us, and we think
that we will be in a better position to judge
which general standards have proved too-
severe and which too-lenient.
Any time we can deal with an issue or a
problem before us in a way that will save
time, money, and jobs for the American
economy, but will not threaten the environ-
ment, we intend to do so. That is our posi-
tion, because we do not want pollution con-
trol to be a burden that is resisted.
Money saved by reducing unnecessary
regulation means more money available for
more pollution control, for modernization
of plant and equipment, for holding prices
down, for dividends for stockholders. Each
one of those uses is more desirable than
spending on unnecessary regulation.
Our motivation is to be part of an Admin-
istration committed to balanced economic
growth, reducing unemployment, and curb-
ing inflation. We do think of ourselves as
part of the Federal government in this
respect, not as a pristine little regulatory
island off on the horizon.
It is that same self-perception that led us
to work on developing an urban policy for
the Environmental Protection Agency, and
to join enthusiastically in developing the
Carter Administration's overall urban
policy.
Some people think that is kind of quaint
for us to shift any part of our attention from
the Grand Canyon to the Urban Canyons.
But if you think that way, try breathing in
Harlem in August. Or contemplate the snow
caps of the Rockies, if you can see them
through Denver's February smog.
We are not the economic development
administration. Our primary concerns are
environmental, not economic. If there is no
alternative between closing down a pollut-
ing factory and continuing an illegal level of
pollution—a level prohibited by act of
Congress—we will have that factory closed
down.
But we do not believe that extreme case
is typical or even frequent. We think that
we can work with industry, and with en-
vironmental organizations, for a healthy
environment, and a healthy economy. Q
JANUARY 1979
-------
The Economy
and
Regulatory
Reform
An Interview with
William Drayton,
Assistant Administrator
for Planning
and Management
Do you see regulatory
reform as perhaps the
chief cost-cutting, anti-
inflationary effort now at
EPA?
Watch out for that inflation ar-
gument! Environmental regula-
tion was created to correct a
major market failure, a failure
that made our economy ineffi-
cient, that denied our citizens
the true mix of safety, goods,
and services they want. To the
extent that we succeed in get-
ting them a mix closer to what
they want, we are making the
economy more efficient. I think
environmental regulation is on
balance highly anti-inflationary.
What is inflation after all ? It's
when you have to pay more real
resources to get the same thing.
It's not inflationary to pay more
to get something new.
Unfortunately, the Consumer
Price Index measures only the
cost increases of the products
our regulations affect. If pollut-
ant abatement costs push the
price of TV's up, the market
basket of goods used to define
this index increases and there-
fore the index goes up. But the
consumer is very probably get-
ting a more valuable deal from
our economy than before. His or
her market basket has some-
thing new in it—better health,
the ability to swim or fish in a
nearby river, less property de-
terioration. The consumer's
dollar is buying more, not less.
However, the Consumer Price
Index doesn't include these
sorts of "purchases" in its mar-
ket basket, chiefly because they
are so hard to measure. The
index is, as a result, danger-
ously misleading. It overstates
the rate of inflation (which cre-
ates real inflation because so
many people base their de-
mands on what the index says).
And it lends apparent substance
to the ironic mistake of thinking
of environmental regulation as
inflationary.
Let me illustrate with an
analogy: Statisticians discov-
ered a decade or so ago that the
housing component of the infla-
tion index was going up too fast.
Indeed, people were spending
more for housing; but the aver-
age house had more rooms,
more square feet, more brass
doorknobs, and more air condi-
tioners. So they had to redesign
that portion of the index to hold
quality constant so they could
truly measure if the same goods
were costing more.
We have exactly the same
problem in the environmental
area where, in effect, people
are insisting on buying the bene-
fits that EPA's programs pro-
vide, but the national accounts
aren't measuring it. Almost all,
perhaps all the inflation attrib-
uted to environmental regula-
tion by this index, then, is an
accounting delusion.
Further, even within the fal-
lacious framework of the tradi-
tional index, cleanup's infla-
tionary effect is very small—
roughly three to four tenths of
one percent of ^he inflation rate
according to the Chase Man-
hattan Bank's economists.
However, because we're very
visible, we seem to be an invit-
ing target. Perhaps this has as
much or more to do with the
"hassle factor," to use one of
Douglas Costle's phrases, as it
does with real economic costs.
Taking people's time to fill out
long forms is a familiar exam-
ple, whether or not they're
necessary.
We are trying to get people
around the country to ration air
and water as limited resources.
Society uses property rights and
zoning, a pretty complex mech-
anism, to manage our scarce
land resources. The zoning
process takes a lot of people's
time. But it's not new. People
are used to it.
In the environmental area,
we're putting in the same sort
of rationing devices and trying
to get local governments and
their citizens to use them. We're
also still trying to define and
design these processes. That's
one of the reasons we're so very
visible now.
Recently I toured a part of
the Ohio River Valley with
which I am familiar. Ten years
ago the mayors and many of the
citizens of these towns would
not have been able to talk about
the relationship between the
lining of fly ash pits and the pro-
tection of underground aquifers,
let alone rationing clean air.
They had not focused on these
issues before.
In the course of the last dec-
ade, such matters have become
part of even a small-town may-
or's job and part of the life of
the business people of that
community. They have also be-
come a concern of a number of
citizen groups.
This learning process takes a
lot of people's time and energy.
Then, it's going to take addi-
tional time after people adjust
and carry on. It's like the intro-
duction of zerobased budgeting
in the Agency. It's a big hassle.
You're putting people through a
learning period. People resent
this. It requires a change in how
they think, which is probably
more painful than the amount
of time they have to spend on it.
And it's extra work.
But one of the things that
regulatory reform is all about is
trying to get us through this
transition, and into a steady
state situation that imposes the
least amount of hassle possible.
The less hassle, the greater the
acceptance.
10
EPAJOURNAL
-------
Is regulatory reform a
potential money saver in
pollution control?
Yes. If we can increase the rate
of technology development by
providing positive incentives
for finding new methods of con-
trol, we will reduce the cost of
pollution cleanup. We can also
get more pollution out with
cheaper existing methods. If we
reduce the cost of cleanup, we
probably are going to get so-
ciety buying more of a clean
environment. That's basic eco-
nomics: if the price goes down,
people buy more.
In a five-year perspective, by
far the most important impact
is the development of new con-
trol technology and the reduced
costs that will make it possible.
There's also another type of
lowered cost: We'll have less
delay and less litigation, be-
cause we'll have everyone's
attention on how to get the job
done, how to find cheaper,
more efficient ways of getting
pollution out, rather than on
political fights over local
growth versus environmental
protection.
If we were in the situation of
saying that local communities
simply could not have any
growth, rather than saying that
they have to ration and reduce
pollution to offset new sources,
everyone would be snarled in
an enormous political battle,
and everyone would lose. The
costs of such a snarl in terms of
continued pollution as well as
EPA management time, busi-
ness' management time, and
local political leadership's time
is not easily quantified but it
is certainly very significant.
When you say regulatory
reform, what do you
Finding better ways to do our
job. There are many different
kinds of regulatory reform. Let
me identify the most important
and give an example of each
from among the projects on
which EPA is now working.
First, we're trying to find
practical complements and al-
ternatives to traditional "com-
mand and control" regulation.
Most regulation now follows a
common pattern: The regulatory
agency writes a series of rules
that define what the public must
do, and then it seeks to enforce
these rules through the courts.
We are trying to complement
this traditional legalistic ap-
proach with more flexible, more
economically-oriented alterna-
tives where possible.
Oneexample iseconomically-
determined penalties for firms
that ignore their cleanup respon-
sibilities. Weare implementing
this reform now. We will seek
civil penalties equal to what
violators save by not complying,
including the rate of return they
can earn while their money is
not invested in abatement ex-
penditures. Under this new
approach, it pays to comply.
Second, we're trying to im-
prove the internal process we
use to develop regulations. This
process was the model for the
President's recent Executive
Order on Improving Govern-
ment Regulations. It ensures an
open discussion and a review of
issues such as environmental
impact, economics, and public
participation, as well as full
peer collaboration across
Agency organizational lines.
For instance, we will subject
the most significant new regula-
tions to a Regulatory Analysis,
studying the environmental,
economic, and energy effects of
each proposal and of alternative
options. Also, we have made
English our official language:
We will not approve regulations
unless we have written them
clearly and the public can
understand them.
Third, we're trying to reduce
regulatory burdens. Where we
can reduce the burden of regula-
tion without environmental loss,
we must do so. Reducing the
paperwork tasks we impose on
both business and State and
local governments is one such
opportunity we are pursuing
vigorously. For example, all
reporting requirements con-
tained in new regulations will be
subject to a "sunset" provision,
i.e., we will review them rou-
tinely after five years to see if
EPA can show a continuing
need for the information and to
combine overlapping requests.
Fourth is simpler, faster pro-
ceedings. We are trying to sim-
plify and speed our hearings,
grant reviews, permitting proce-
dures and other actions. For ex-
ample, we have changed our
grant regulations so applicants
need to file only one application
when seeking funds under sev-
eral different EPA programs.
Fifth is increased public par-
ticipation in EPA decision-mak-
ing. We are trying to remove
obstacles to public participa-
tion. For instance, we have a
pilot project to reimburse the
expenses of participants in de-.
veloping proposed regulations
to control polychlorinated
biphenyls (PCB's).
Is the Administration con-
sidering a lid on the addi-
tional costs that govern-
ment could impose on
industry in a given year
because of environmental
or safety precautions?
You're referring to the currently
fashionable regulatory budget
idea. It clearly has developed an
intellectual following. The argu-
ment runs roughly as follows:
One of the most important im-
pacts the government has on the
private sector is through regula-
tion. What should count is not
only direct expenditures and
costs; it's also hidden costs and
hidden benefits. This leads to
the apparently logical conclu-
sion that there should be a regu-
latory budget through which the
government as a whole con-
sciously controls the effect it's
having.
That logic is very hard to dis-
agree with. However, could the
government implement such an
approach? I'm afraid that many
agencies are far from even
knowing what the impacts of
their particular actions are.
Even EPA can only measure a
part of the costs and benefits of
its regulations.
Moreover, because no one
can reasonably estimate costs
or benefits before they know
what will be asked of whom, we
can't expect useful impact esti-
mates until late in the regulation
development process. That
means that regulations in proc-
ess are going to be a bit tricky to
budget. I find it hard to believe
that we're going to have a reg-
ulatory budget in the immediate
future.
Even if it were technically
possible to construct one,
I doubt we would know how to
use it. For example, it hardly
would make good public policy
to bar a regulation with benefits
far exceeding all costs simply
because the government's
"budget" had been used up,
Further, at least in the health
and safety area, we can't real-
istically compare dollar costs
with human lives and suffering
with anything resembling
budget-like rigor. It's hard to
budget judgments.
JANUARY 1979
1 1
-------
Does EPA have any safe-
guards to ensure that it
knows the economic im-
pact of new regulations?
We do an economic analysis of
ali our new regulations. So yes.
We can't always do it as pre-
cisely as we'd like but, by and
large, we have a good feel for
the economic costs of every
major regulation. Especially
when compared with most other
agencies, we can be proud of
our record in this regard. Our
reputation for good economics
and regulatory balance has
brought us a lot of credibility
and independence.
Some critics say that
EPA is using the right
goals but the wrong
methods to achieve pol-
lution cleanup. Are they
correct?
That's a rather bald statement.
A lot of the methodology we've
developed over the last years is,
in fact, very effective. We're
generally trying to improve and
refine, not replace.
For example, we've devel-
oped a quite innovative set of
relationships with state and
local governments, so much so
that we haven't quite finished
figuring out how we're going to
operate it. We've dared to trust
people, on the front lines—with
the result that we've engaged
the energies of thousands of
good people and can respond
knowledgeably, quickly, and
flexibly to individual and local
problems. Against that gain our
residual management problems
are minor.
What is EPA's chief regu-
latory reform opportunity
now?
Giving those we regulate the
flexibility and incentive to find
new, more economic and effec-
tive ways of complying. Espe-
cially now that we've regulated
most easy targets, increasing
the rate of control technology
innovation becomes extremely
important to our hopes. I think
we can do this through in-
creased use of offsets and the
bubble policy, reinforced by
both the banking of reductions
and the use of deal-making
brokers. We're gradually build-
ing a process that will allow us
and our regulatees to trade one
cleanup commitment for more
efficient, equal cost alternatives
—and that will remain fully en-
forceable and administrable.
Those last two criteria are
obviously critical.
Let's take a very simple ex-
ample to explain the bubble,
which is like placing a theoreti-
cal canopy over a pollution
source. Within any plant we
may regulate anywhere from a
handful to a hundred different,
separate processes. The mar-
ginal cost of removing a pound
of pollutant from one process,
fuel storage, may be 50 cents
whereas it may cost $20.00 to
remove a pound of the same
pollutant from a paint spray
booth. There can be very wide
ranges.
It clearly makes sense from
the company's point of view,
and assuming that the change is
as enforceable as the existing
arrangement, it makes sense
from ours, to get more pounds
of pollution out of the fuel area
and less out of the paint spray
booth area. If we can remove a
pound of pollution for 50 cents
instead of a dollar, we should
do it.
That's one advantage and
that's the easiest to see in a
way. But I think the most impor-
tant objective from our point of
view is different. This approach
for the first time provides a posi-
tive incentive for industry to
find new ways of cleaning up.
Especially as society gets
denser, as growth continues,
we're either going to have to
squeeze smaller and smaller
sources or we're going to have
to find more efficient ways of
controlling existing ones. Now,
the only way we can stimulate
new control technology is
through the blunt, limited nega-
tive approach of putting a stand-
ard on which we think will really
squeeze industry. (We're gen-
erally not allowed to impose
standards that are so tight they
can't be achieved.)
Once one company has used
a positive, innovative tradeoff
approach to clean up pollution,
we can require it in other com-
panies. Of course, some of our
worst-polluting, most scofflaw-
prone firms are typically the
least innovative in terms of
technology. But even when we
are faced with that type of in-
dustry, this approach will work
because many of its processes
are the same as those used in
other industries. If we find a
better way of controlling hydro-
carbons in an automobile plant
spray booth, we can require the
same sort of procedure for
spray booths in other manufac-
turing plants.
If we can create incentives
for people to develop new tech-
nologies more rapidly than is
now the case from pollution
control standards, our job is
going to be a lot easier.
This interview was conducted
by Charles Pierce, Editor;
Truman Temple, Associate
Editor; and John Heritage,
Assistant Editor; all of EPA
Journal.
The Team Leaders
Two Deputy Assistant Adminis-
trators and three A ssociate A s-
sistant A dministrators help
William Drayton, Jr., run EPA's
Office of Planning and Manage-
ment. They are responsible for
managing the Office's 1.163
people and its $115 million
annual budget.
Paul J. Elston
Deputy A ssistant A dministrator
for Resources Management.
Elston leads the Agency's effort
in zero-based budgeting. He is
also responsible for financial
management, program review
and analysis, grants administra-
tion, the Agency's comptroller's
function, and its accountability
reporting.
Before joining EPA, Elston
served in the New York State
government as Deputy Director
for the Division of the Budget
and First Deputy Commissioner
of the Department of Environ-
mental Conservation. He was
also Assistant Commissioner of
Environmental Health Services
(his rat control program is now
a familiar textbook success)
and for Employment in New
York City. He began his career
as Mayor Lindsay's environ-
mental budget specialist.
Elston received his under-
graduate degree in civil engi-
neering from Merrimack Col-
lege and his MBA from Harvard
Business School.
EPA JOURNAL
-------
Roy N. Gamse
Deputy A ssistant A dministrator
for Planning and Evaluation.
Bill Carter
Associate Assistant
A dministrator for Planning and
Management.
John Robinson
A ssociate A ssistant A dministra-
tor for Program Management
and Policy.
Saul R. Rosoff
Associate Assistant Administra-
tor for Management Reform.
Gamse is responsible for the
Agency's standards and regula-
tion devetopment process, its
statistics, its regulatory reform
program, its analysis of eco-
nomic impact, its energy policy
analysis, its program evalua-
tions and guidance, and its
long-run planning.
Previously, Gamse was Di-
rector of the Economic Analysis
Division. Before coming to EPA
he was a systems analyst with
the MITRE Corporation. He re-
ceived his undergraduate train-
ing at the Massachusetts Insti-
tute of Technology and his MBA
at Harvard Business School.
Carter shares Bill Drayton's
responsibility for the Agency's
planning and management, in-
cluding policy development,
priority-setting, provision of
common services, and overall
management design.
For the last year. Carter, as a
Senior Project Manager for the
Agency's Management Task
Force, helped develop and im-
plement its ambitious agenda
of management reforms—from
revising how regulations are
developed to strengthening
EPA's executive corps, from
strengthening headquarters/
regions/State ties to reviewing
the Agency's computer
services.
Before joining EPA, Carter
was a management consultant,
working on projects in the
United States, Jordan and
Indonesia. He holds his
Master's and Ph.D. in interna-
tional economics from the
Fletcher School of Law and
Diplomacy at Tufts University
and his B.A. in history from
Wesfeyan University.
Robinson is assuming respon-
sibility for the internal manage-
ment of the Office of Planning
and Management, as well as a
variety of special projects both
within and outside the Agency.
In his year with EPA, Robin-
son has managed several inter-
agency projects, among them
EPA's role in the Administra-
tion's Urban and Regional
Policy Group and the Resource
Conservation Committee.
Before coming to EPA Robin
son was a program analyst at
the Department of the Interior,
a certified mountaineering in-
structor, the general manager of
a small corporation, and then
the successful founder and
president of his own company.
He is a graduate of Washington
University and Harvard
Business School.
Rosoff is responsible both for
leading Agency-wide manage-
ment reform and for managing
a number of major reforms in
the Agency's central services.
He will soon be joined by a new
Deputy Assistant Administrator
for Management and Agency
Services.
He joined EPA after more
than 20 years'of service with
the Federal Government, pri-
marily with the Department of
Health, Education, and Welfare.
Most recently, Rosoff was Dep-
uty Commissioner and Acting
Director for the Administration
for Children, Youth and Fami-
lies, where, among other things,
he made Head Start and the
Children's Bureau succeed.
Previously, Rosoff was Dep-
uty Assistant Administrator
for Management at the Health
Services and Mental Health
Administration at HEW and
Executive Officer of the Bureau
of Health Services.
Rosoff did his undergraduate
work in government at the Uni-
versity of Connecticut and grad-
uate work at Syracuse Univer-
sity and at the Woodrow Wilson
School, Princeton.
JANUARY 1979
13
-------
William
Drayton, Jr.
A ssistant A dministrator
for Planning and
Management
Before coming to EPA,
Drayton worked for six
years as a management
consultant with McKinsey
& Company serving both
public and private clients,
including state and local
environmental agencies.
He also taught regulatory
and management reform
at the Kennedy School of
Government at Harvard
and law as a Visiting
Professor at Stanford.
Immediately before join-
ing EPA, he served on the
Carter-Mondale transition
team, where he was pri-
marily responsible for
regulatory and manage-
ment reform. Drayton
managed the staff of the
Connecticut Enforcement
Project, developed and
put in place the first
economic civil penalties
and prepared "Economic
Law Enforcement," a six-
volume report published
by EPA in 1975. He
authored articles in the
Yale Law Journal includ-
ing "The Public Trust in
Tidal Areas" and "The
Tar and Nicotine Tax:
Pursuing Health Through
Tax Incentives." He re-
ceived his A.B. with
highest honors, Phi Beta
Kappa, from Harvard; his
M.A. with First Class
Honors from Oxford
University; and his J.D.
from Yale Law School,
where he was on the
Board of Editors of the
Yale Law Journal and
founded Yale Legislative
Services. He was active
in the early civil rights
movement, has a deep
interest in India and the
lesser developed coun-
tries, and is an ardent
backpacker.
The Economy and
Regulatory Reform
Continued from page 12
What is the difference
between the emission
offset approach and the
bubble technique?
Logically, it's the same concept
and ultimately I think the two
will merge. But at the moment
they are two different regulatory
schemes. The emission offset
involves tradeoffs with other
plants and with other sources in
the same area. A Volkswagen
plant moved into Pennsylvania
and we had the State changing
its type of road asphalt to offset
the new plant's emissions. As
we're now thinking of the bub-
ble, the tradeoffs are just within
the particular plant.
You're talking about some
departures toward more
effective regulation.
Would you say that it's
just the beginning or is
it a new direction that's
well underway?
It's very much underway. We
have some 40 significant regula-
tory reform projects underway
in one or another part of the
Agency. That in turn builds on
the very innovative history of
the Agency. For instance, the
offsets were developed in 1976.
That was really a major innova-
tion. It got us out of the situation
of demanding that local growth
stop. It got us out of the false
conflict between local growth
and environmental cleanup.
We now have the emission
offset as part of the Clean Air
Act and EPA is implementing it
as the first of the control trading
devices. This experience is
making it easier to move to the
bubble concept for single plants
and to develop marketable
rights.
In tact, I think one of the most
attractive aspects of working
with EPA is that it has an enor-
mous number of people who are
willing to be innovative. They're
problem solvers. And it doesn't
come from just one part of the
Agency. It comes from the re-
gions, the States, and the labs as
well as from headquarters. For
instance, Region 9was one of
the earlier innovators in this
whole area of developing offsets
and marketable rights.*
Regulatory reform is essen-
tially a problem-solving proc-
ess. The Agency's very good at
that. We're pushing the frontiers
of regulatory technique because
the problems we're dealing with
are very new and rather com-
plex. We're also at a stage in the
Agency's history where we have
enough experience with the first
approach we took in a lot of pro-
grams. Now it's logical to step
back and ask some questions
about whether the first way we
tried to solve a particular reg-
ulatory problem is the best way
and whether there may be a
better way.
We've also had experience
with a range of different ap-
roaches in different parts of our
program. We can step back to
consider how the permit ap-
proach for the water program
worked and whether it could
have application in the air.
' Editor's Note: Marketable rights is
being studied as an alternative way
of regulating fluorocarbon emis-
sions from non-aerosol sources.
Under this proposal. EPA would
allocate (possibly by auction) the
permits for production or use of
fluorocarbons. Manufacturers or
users with permits could then in
turn trade or sell them. Thu's the
market would decide which fluoro-
carbon uses should continue and
which should end.
A lot of that depends on how
skillful we are at designing the
rules and incentives. The great-
est risk associated with these
new techniques Is that of our
carelessly allowing loopholes.
We have to design our innova-
tions against the worst case.
We have to do that with any
regulatory system. The greatest
risk of shifting to a new system
is our not working it through
carefully enough to find in ad-
vance where all the possible
loopholes are.
Such dangers are the reason
we need the intensive internal
discussions we've been having,
and why we have to work care-
fully with a number of test cases
so we make sure the reform
does not allow new rounds of
litigation to hold up the process.
I think we've found ways to
avoid such pitfalls. But that is
clearly our biggest single design
problem. Once we are confident
we have solved all our potential
administrative and enforcement
weaknesses, I believe the incen-
tive approach is likely to lead to
quicker cleanup.
Under the framework we're
thinking of, we would have to
approve any alternative scheme
that regulatees might propose.
They would not realize any cost
savings until we have approved
their approach. That reverses
the usual arrangement in which
every delay works in the reg-
ulated person's favor, not the
Agency's. They would have to
continue under the old arrange-
ments until we approve the new,
more efficient method. So they
would have an incentive to co-
operate to gain the savings ben-
efits the new approach makes
possible.
The risks are there. Any time
you change a complex system
there will be sorne mistakes and
you have to make a judgment of
whether it's worthwhile.
14
EPAJOURNAL
-------
Environment and Economics:
Fact Sheet
This information was supplied by EPA's Office of Planning and Management
From 1970 to 1977, total smoke and dust
were reduced by 1 2 percent.
Nationally from 1970to 1977 sulfur
dioxide was reduced by 30 percent.
From coast to coast, some rivers that were
contaminated, even flammable, are now
open to fishing and swimming.
More than 80 percent of 31,000 major
air and water pollution sources now
comply with the Clean Air and Clean
Water Acts.
At the same time that pollution cleanup
has been progressing, the economy has
continued to grow. The GNP increased 18
percent from 1970 to 1976.
There is a price for pollution reduction. But
in terms of the entire economy it is small.
EPA regulations add about 0.3 to 0.4 per-
cent annually to the inflation rate.
Pollution control investments amounted to
$6.9 billion in 1977 and accounted for
5.1 percent of industrial plant and equip-
ment investment.
Total U.S. annual expenditures
for pollution control were estimated at
$34.3 billion in 1976.
Air Pollution Control $12.1 billion
Water Pollution Control
(Municipal) $10.3 billion
Water Pollution Control
(Industrial) $ 4.8 billion
Solid Waste, Radiation,
Noise and Toxic
Substances $ 7.1 billion
$34.3 billion
Pollution control expenditures as a result
of Federal legislation were $1 5.0 billion in
1976.
Air Pollution Control $ 9.4 billion
Water Pollution Control
(Municipal) $ 1.5 billion
Water Pollution Control
(Industrial) $ 3.3 billion
Solid Waste, Radiation,
Noise and Toxic
Substances $ 0.8 billion
$15.0 billion
In comparison, the Nation spent $1 6.2 bil-
lion in 1976 for tobacco.*
The environmental cleanup program
has significant economic benefits.
EPA's program to construct wastewater
treatment facilities totals $24.5 billion
authorized by Congress for the next five
years. Each billion dollars spent for con-
struction produces 1 5,000 workyears on
the construction site and 19,500 offsite.
(A workyear is the equivalent of one person
working one year.)
Firms making equipment used to clean up
air and water pollution had sales of $1.8
billion in 1977 and are growing about twice
as fast as the rest of U.S. industry." *
If an industry is having trouble meeting
environmental requirements, aid is avail-
able. Nine Federal agencies have assist-
ance ranging from loans to tax breaks.
Many States also have similar programs.""
Public support for the environmental pro-
gram is strong. A 1978 survey for Re-
sources for the Future showed that 62
percent of the public was willing to accept
higher prices to protect the environment
while 18 percent was opposed.
Gross National Product is approximately
the same now as it would have been with-
out pollution control.
The net effect on employment is close to
zero. The environmental program causes
some plant closings and reductions in
demand. But it also creates employment in
the construction, manufacture, and opera-
tion of pollution control facilities.
* The figure on tobacco is from personal consump-
tion spending estimates by the U.S. Department of
Commerce.
'' These figures are from a new study done for EPA
by Arthur D. Little. Inc.
'' 'See "Cleanup Impact Aid"on page 22.
JANUARY 1979
15
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tras
16
EPA JOURNAL
-------
The
Love Canal
Tragedy
Quite simply, Love Canal is one of the
most appalling environmental trag-
edies in American history.
But that's not the most disturbing fact.
What is worse is that it cannot be re-
garded as an isolated event. It could hap-
pen again—anywhere in this country—
unless we move expeditiously to prevent it.
It is a cruel irony that Love Canal was
originally meant to be a dream community.
That vision belonged to the man for whom
the three-block tract of land on the eastern
edge of Niagara Falls, New York, was
named—William T. Love.
Love felt that by digging a short canal
between the upper and lower Niagara
Rivers, power could be generated cheaply
to fuel the industry and homes of hts would-
be model city.
But despite considerable backing. Love's
project was unable to endure the one-two
punch of fluctuations in the economy and
Louis Tesla's discovery of how to econom-
ically transmit electricity over great dis-
tances by means of an alternating current.
By 1910, the dream was shattered. All
that was left to commemorate Love's hope
was a partial ditch where construction of
the canal had begun.
In the 1 920's the seeds of a genuine
nightmare were planted. The canal was
turned into a municipal and industrial
chemical dumpsite.
Landfills can of course be an environ-
mentally acceptable method of hazardous
waste disposal, assuming they are properly
sited, managed, and regulated. Love Canal
will always remain a perfect historical ex-
ample of how not to run such an operation.
In 1 953, the Hooker Chemical Company,
then the owners and operators of the prop-
erty, covered the canal with earth and sold
it to the city for one dollar.
It was a bad buy.
in the late 50's, about 100 homes and a
school were built at the site. Perhaps it
wasn't William T. Love's model city, but it
was a solid, working-class community. For
a while.
Beck is A dministrator of EPA Region 2.
By Eckardt C. Beck
If you get there before I do
Tell 'em I'm a comin1 too
To see the things so wondrous true
At Love's new Model City
From a turn-of-tha-century advertising jingle
promoting the development of Love Canal.
Give Me Liberty. I'veAlready Got Death.
From a sign displayed by a
Love Canal resident, 1978.
On the first day of August, 1978, the
lead paragraph of a front-page story in the
New York Times read:
NIAGARA FALLS, N.Y.—Twenty-five
years after the Hooker Chemical Company
stopped using the Love Canal here as an
industrial dump, 82 different compounds,
11 of them suspected carcinogens, have
been percolating upward through the soil,
their drum containers rotting and leaching
their contents into the backyards and base-
ments of 100 homes and a public school
built on the banks of the canal.
In an article prepared for the February,
1978, EPA Journal, I wrote, regarding
chemical dumpsites in general, that "even
though some of these landfills have been
closed down, they may stand like ticking
time bombs." Just months later, Love
Canal exploded.
The explosion was triggered by a record
amount of rainfall. Shortly thereafter, the
leaching began.
I visited the canal area at that time. Cor-
roding waste-disposal drums could be seen
breaking up through the grounds of back-
yards. Trees and gardens were turning
black and dying. One entire swimming pool
had been popped up from its foundation,
afloat now on a small sea of chemicals.
Puddles of noxious substances were
pointed out to me by the residents. Some
of these puddles were in their yards, some
were in their basements, others yet were on
the school grounds. Everywhere the air had
a faint, choking smell. Children returned
from play with burns on their hands and
faces.
And then there were the birth defects.
The New York State Health Department is
continuing an investigation into a disturb-
ingly high rate of miscarriages, along with
five birth-defect cases detected thus far
in the area.
I recall talking with the father of one of
the children with birth defects. "I heard
someone from the press saying that there
were.on/y five cases of birth defects dis-
covered here," he told me. "When you go
back to your people at EPA, please don't
use the phrase 'only five cases.' People
must realize that this is a tiny community.
Five birth defect cases here is terrifying."
A large percentage of people in Love
Canal are also being closely observed be-
cause of detected high white-blood-cell
counts, a possible precursor of leukemia.
When the citizens of Love Canal were
finally evacuated from their homes and
their neighborhood, pregnant women and
infants were deliberately among the first to
be taken out.
"We knew they put chemicals into the
canal and filled it over," said one woman,
a long-time resident of the Canal area, "but
we had no idea the chemicals would invade
our homes. We're worried sick about the
grandchildren and their children."
Two of this woman's four grandchildren
have birth defects. The children were born
and raised in the Love Canal community. A
granddaughter was born deaf with a cleft
palate, an extra row of teeth, and slight re-
tardation. A grandson was born with an eye
defect.
Of the chemicals which comprise the
brew seeping through the ground and into
homes at Love Canal, one of the most prev-
alent is benzene—a known human car-
cinogen, and one detected in high concen-
trations. But the residents characterize
things more simply.
"I've got this slop everywhere," said an-
other man who lives at Love Canal. His
daughter also suffers from a congenital
defect.
JANUARY 1979
17
-------
On August 7, New York Governor Hugh
Carey announced to the residents of the
Canal that the State Government would
purchase the homes affected by chemicals.
On that same day. President Carter ap-
proved emergency financial aid for the
Love Canal area (the first emergency funds
ever to be approved for something other
than a "natural" disaster), and the U.S.
Senate approved a "sense of Congress"
amendment saying that Federal aid should
be forthcoming to relieve the serious envi-
ronmental disaster which had occurred.
By the month's end, 98 families had
already been evacuated. Another 46 had
found temporary housing. Soon after, all
families would be gone from the most con-
taminated areas—a total of 221 families
have moved or agreed to be moved.
State figures show more than 200 pur-
chase offers for homes have been made,
totalling nearly S7 million.
A plan is being set in motion now to im-
plement technical procedures designed to
meet the seemingly impossible job of de-
toxifying the Canal area. The plan calls for
a trench system to drain chemicals from the
Canal. It is a difficult procedure, and we are
keeping our fingers crossed that it will yield
some degree of success.
I have been very pleased with the high
degree of cooperation in this case among
local. State, and Federal governments, and
with the swiftness by which the Congress
and the President have acted to make funds
available.
But this is not really where the story
ends.
Quite the contrary.
We suspect that there are hundreds of
such chemical dumpsites across this
Nation.
Unlike Love Canal, few are situated so
close to human settlements. But without a
doubt, many of these old dumpsites are
time bombs with burning fuses—their con-
tents slowly leaching out. And the next
victim could be a water supply, or a sen-
sitive wetland.
The presence of various types of toxic
substances in our environment has become
increasingly widespread—a fact that Presi-
dent Carter has called "one of the grimmest
discoveries of the modern era."
Chemical sales in the United States now
exceed a mind-boggling $112 billion per
year, with as many as 70,000 chemical
substances in commerce.
Love Canai can now be added to a grow-
ing list of environmental disasters involv-
ing toxics, ranging from industrial workers
stricken by nervous disorders and cancers
to the discovery of toxic materials in the
milk of nursing mothers.
Through the national environmental pro-
gram it administers, the Environmental
Protection Agency is attempting to draw a
chain of Congressional acts around the
toxics problem.
The Clean Air and Water Acts, the Safe
Drinking Water Act, the Pesticide Act, the
Resource Conservation and Recovery Act,
the Toxic Substances Control Act—each is
an essential link.
Under the Resource Conservation and
Recovery Act, EPA is making grants avail-
able to States to help them establish pro-
grams to assure the safe handling and dis-
posal of hazardous wastes. As guidance for
such programs, we are working to make
sure that State inventories of industrial
waste disposal sites include full assess-
ments of any potential dangers created by
these sites.
Also, EPA recently proposed a system to
ensure that the more than 35 million tons of
hazardous wastes produced in the U.S. each
year, including most chemical wastes, are
disposed of safely. Hazardous wastes will be
controlled from point of generation to their
ultimate disposal, and dangerous practices
now resulting in serious threats to health
and environment will not be allowed.
Although we are taking these aggressive
strides to make sure that hazardous waste
is safely managed, there remains the ques-
tion of liability regarding accidents occurring
from wastes disposed of previously. This is
a missing link. But no doubt this question
will be addressed effectively in the future.
Regarding the missing link of liability, if
health-related dangers are detected, what
are we as a people willing to spend to cor-
rect the situation? How much risk are we
willing to accept? Who's going to pick up
the tab?
One of the chief problems we are up
against is that ownership of these sites
frequently shifts over the years, making
liability difficult to determine in case of an
accident. And no secure mechanisms are
now in effect for determining such liability.
It is within our power to exercise intelli-
gent and effective controls designed to sig-
nificantly cut such environmental risks. A
tragedy, unfortunately, has now called
upon us to decide on the overall level of
.commitment we desire for defusing future
Love Canals. And it is not forgotten that no
one has paid more dearly already than the
residents of Love Canal. D
\e
EPAJOURNAL
-------
DISASTER
AREA
FAILED
TAXATION
WITHOUT
REPRESENTATION
FED. fini/T lin P
(Clockwise from /eft./
Children who live near Love
Canal are no less concerned
than their parents about the
situation.
S/gn posted by residents of the
Love Canal neighborhood.
A Love Canal resident looks at
contaminated water dipped
from a sump system in the base-
iTmnt of her home.
nal view shows the land-
fill area suriounded by homes.
JANUARY 1979
19
-------
20
EPAJOURNAL
-------
Cleanliness Pays
By Richard L Hoard
Pollution cleanup—once seen by most
of industry as a financial albatross—is
looking more and more like a good invest-
ment for the dollar.
Until recently, it might have seemed im-
possible to persuade businessmen that
pollution cleanup can actually be a cost
reduction tool. But new deveiopments in
pollution control technology make the job
easier each day.
For example:
• An $8 million water treatment system
installed by Great Lakes Paper Company
reduced overall plant operating costs by
$4 million a year.
• A refuse plant on Boston's North Shore
burns 438,000 tons of garbage a year to
provide steam equal in energy value to 27
million gallons of fuel oil to local industry.
• Low excess air burners installed at a
Florida Power Corporation generating plant
to reduce particulate emissions not only
comply with clean air standards but save
the company 4,000 barrels of oil a year.
• Solid waste incinerators at the
Dubuque, Iowa, works of Deere & Co. burn
waste material to generate steam heat for
the factory, saving about $1,175 per day in
waste disposal andfuel costs.
• The 3M Company in Minneapolis has
developed a wide range of im-
provements that eliminate the production
of pollutants during the manufacturing
process. In the first year and a half, 3IV1 cut
out the equivalent of 73,000 tons of air
pollutants and 500 mill!on gallons of
polluted wastewater annually and saved
approximately $11 million in actual or
deferred costs.
Pollution control is growing into a big
and profitable business. And as the above
examples show, the profits go not only to
the companies that manufacture and sell
control technologies but also, in a growing
number of cases, to those who use them.
Richard Hoard is chairman of the Envi-
ronmental Industry Council, an organiza-
tion of companies making pollution clean-
up equipment. He is a/so vice president of
Ecodyne, one of these companies.
Refuse pit fit Boston North Shore steam
facility.
Profit From Recovered Waste
Recovery of materials formerly lost in the
waste stream is one of the most promising
and potentially most profitable side effects
of pollution control. Such valuable indus-
trial chemicals as sulfur, mercury, ammonia
and aromatics extracted from waste
streams in large amounts and sold as raw
materials to companies in the petrochem-
ical and fertilizer business could work
major changes in the economics and geog-
raphy of those industries.
Milton Godfrey, president of the Econo-
scope Group, an economic modelling firm,
emphasized this point at a recent meeting
of the Synthetic Organic Chemical Manu-
facturers. He said, "new processes, better
economics, and broad geographic distribu-
tion, all resulting directly from pollution
abatement, should support the next major
phase in the development of the chemical
industry."
Such processes are already on line in the
glass industry. In an effort to cut back par-
ticulate emissions by the 52 percent re-
quired by the EPA, for instance, Glass Con-
tainers Corporation, a Connecticut bottle
manufacturer, discovered that the use of re-
cycled glass in the bottle-making process
significantly reduced air emissions. The
glass, the company found, loses most of
its pollution-causing impurities when orig-
inally refined from the raw materials.
Ignoring standard glass-making rules,
the company increased the recycled glass,
or cullet, content in its product from the
supposed possible maximum of 1 5-20 per-
cent to a daring 50 percent. Emissions fell
to within EPA requirements with no loss in
glass quality. The company also found cul-
let easier to melt than raw material, reduc-
ing energy use 10-15 percent and putting
production and employment at an all-time
high. Said plant manager Ed Sleasman, "If
EPA hadn't put the squeeze on us, none of
this would have happened."
Greater Efficiency
While commercially salable products,
whether chemicals, minerals, or energy, are
the most obvious money-makers resulting
from pollution control measures, a less
noticeable but equally valuable commodity
is the increased efficiency and productivity
that often results when a company has to
adjust its production methods to meet man-
dated emission restrictions.
ALCOA, for example, developed
several variations of a fluidized bed tech-
nology to reduce fluoride and tar emissions
from refining and smelting operations and
ended up cutting energy requirements in
two processes by 30 percent. The new tech-
nology also reduced water consumption by
millions of gallons daily and decreased the
amount of fluoride used by 50 percent.
Increasing Evidence
Other instances could be cited to illustrate
the growing trend of turning what once
were costly waste disposal burdens into
profit, but there are at present few statistics
available on the extent of the overall com-
mercial and technological benefits of
pollution controls.
The report of a recent literature search
conducted by the National Science Founda-
tion concluded that "almost no work has
appeared . . . which has attempted to meas-
ure or even to model in a rigorous way the
impacts of environmental regulation on
technological innovation." But a related
National Science Foundation study in five
foreign countries found that environmental
regulations in each nation had stimulated
innovation among certain large industries
previously slow to act.
Despite the lack of detailed statistics in
the United States however, evidence is
showing that anti-pollution regulations
bring substantial positive effects hen: as
well. In addition to the examples already
listed, many companies who enter the Na-
tional Environmental Award competition
have demonstrated that their environmental
protection efforts have led to more efficient
processes, less waste, and ultimately lower
operating costs. The competition is co-
sponsored each winter by the Environmen-
tal Industry Council and the Council on
Environmental Quality.
Furthermore, the overall productivity of
whole industries "should actually improve
as high-cost marginal producers modernize
can: -isic/t.'hack cover
JANUARY I 979
21
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EPA JOURNAL
-------
Cleanup Impact Aid
By Edwin H. Clark, II
A! EPA analyses show, the total eco-
nomic impact of pollution cleanup is
not severe. But in a particular location,
plant shutdowns can seriously affect the
company, workers, and the community.
Most threatened plants are the older,
marginal facilities in an industry. If these
plants are clustered in certain communities,
the local impact of closings can be particu-
larly severe.
EPA tries to keep track of plant closings
through its "Early Warning System." These
surveys, as well as those done yearly by the
Bureau of Economic Analysis in the U.S.
Department of Commerce, indicate that
there haven't been large numbers of shut-
downs.
But pollution control agencies at both
the Federal and State level have consist-
ently been concerned about the impacts of
plant closings. A series of assistance pro-
grams has been implemented to help
avoid these impacts. Also, State and Fed-
eral agencies have often spent substantial
effort in trying to reach an appropriate bal-
ance between pollution abatement and
economic costs.
The assistance programs at the Federal
level have been under review by an inter-
agency task force established by the Coun-
cil on Environmental Quality. The aim of
the task force is to determine whether the
effort could be made more effective and to
identify any gaps in aid.
In an interim report, the task force con-
cluded that the existing programs appear
reasonably adequate regarding the type of
assistance they offer. It found that rela-
tively minor changes could substantially
improve the delivery of this aid.
Many of the recommendations of the
task force are being implemented, and the
Dr. Clark is a special assistant to the EPA
A dministrator and in his previous position
at the Council on Environmental Quality
was Chairman of the Interagency Task
Force on Improving Assistance Programs
to Mitigate Economic Impacts of Environ-
mental Programs.
group is continu;ng its efforts to identify
possible additional improvements.
Here is a status report on the Federal
assistance programs.
Where the Help Is
The various assistance programs are in
several different agencies. Some of the
programs focus on impacts resulting from
pollution control efforts; some were estab-
lished to deal with impacts related to a
much broader range of government pro-
grams; and some have been created to
provide general assistance to needy firms,
communities, or workers. The most im-
portant of these programs are described in
a new manual entitled "Federal Financial
Assistance for Pollution Prevention and
Control" (see box),
Help for Private Businesses
Several programs provide financial help for
private businesses that could not otherwise
afford to pay for pollution abatement equip-
ment. In dollar terms the biggest program
is the industrial revenue bond program
which allows firms to sell tax-free bonds to
finance pollution control investments
through a municipality or other public
body. Because there is no income tax on
the interest paid on these bonds, they can
be sold at lower interest rates than normal
commercial bonds.
However, most of the over $3 billion in
tax-exempt pollution control financing goes
to the Nation's largest and most credit-
worthy companies. Smaller firms have diffi-
culty selling bonds in the municipat bond
market. In an attempt to correct this prob-
lem. Congress gave the Small Business
Administration (SBA) authority to guaran-
tee industrial revenue bonds issued by
small businesses. The SBA expects to have
established such guarantee programs in
half the States soon.
Several other efforts have been set up
specifically to help small businesses. The
Small Business Administration has special
programs which will provide loans or loan
guarantees for meeting pollution control
equipment requirements. EPA has to verify
that the equipment is necessary in order to
comply with Federal law
The Farmers Home Administration in
the U.S. Department of Agriculture has
similar programs directed at farm indus-
tries and rural industries in general. The
Economic Development Administration in
the Commerce Department also has a loan
program which is available to firms in eco-
nomically depressed areas that are too
large to benefit from small business aid
programs.
EPA's grant program for publicly owned
wastewater treatment works also helps
businesses in that, although private firms
have to repay their portion of facility con-
struction costs, the repayment terms are
equivalent to the firm's receiving a 30-year,
interest-free loan.
Finally, the U.S. Tax Code and many
State tax codes provide tax breaks to firms
investing in pollution control equipment.
These tax breaks take the form of acceler-
ated depreciation, tax credits, and exemp-
tion from property taxes. These tax breaks
can be claimed by any firm, but are only
helpful, of course, to those making enough
profit to be able to benefit.
Help for Farmers
The Agriculture Department also has sev-
eral programs to help farmers control pollu-
tion. The most widely used are the pro-
grams administered by the Agricultural
Stabilization and Conservation Service.
These provide cost-sharing to help support
the construction of erosion control invest-
ments, settlement ponds, waste disposal
pits, and structures to prevent pollution
runoff from animal feed lots.
These programs have assisted in the con-
struction of tens of thousands of such proj-
ects. Meanwhile, in their pollution clean-up
aid programs, the Farmers Home Adminis-
tration, and more recently the Small Busi-
ness Administration, are also authorized to
provide loans to farmers.
Help for Communities
Communities can receive planning assist-
ance from a number of different agencies.
For instance, there are several programs
available to support general community
JANUARY 1979
23
-------
development planning. Also, EPA, the De-
partment of Transportation, the Depart-
ment of Housing and Urban Development,
and the Economic Development Adminis-
tration have signed interagency agreements
to support coordinated environmental
planning.
Once a plan is finished, several different
agencies can help support the construction
of roads, sewers, and other public facilities
included in the plan. The Economic Devel-
opment Administration and the Farmers
Home Administration also have programs
which more generally support the imple-
mentation of such plans.
The Economic Development Administra-
tion's Title IX program is especially flexible.
It can provide grants to communities to
carry out almost any project in an approved
plan, including loans to private firms to
help them abate pollution or improve their
production capacity.
Help for Workers
Usually, the best help for workers is to keep
their employer from having to close. Ulti-
mately, all the programs listed above are
programs to help workers. The only specific
legislative provisions which directly refer
to workers affected by pollution control
laws are those in the Clean Water Act and
the Clean Air Act which protect employees
from being dismissed because they assist
in the enforcement of these laws. The 1977
Amendments to the Clean Air Act require
the Department of Labor to study possible
worker assistance programs, but this study
has not yet been completed. At present,
workers whose job loss is related to pollu-
tion control requirements have no more
access to unemployment, retraining, and
other such benefits than any other unem-
ployed worker.
Other Types of Help
Most States have assistance programs that
are similar to or complement the efforts
described above. There are also some non-
economic forms of assistance which can be
important. One of these is technical aid.
Especially for smaller firms that cannot
afford to pay for initial consulting studies.
the correct information on what sort of
equipment they need can be very useful.
EPA provides technical assistance through
the Technology Transfer Office in the Office
of Research and Development.
Another major source of such assistance
for business can be trade associations. The
Department of Agriculture, of course, has
a very active program to provide technical
assistance to farmers and farm businesses.
Steps Toward Improvement
The programs described above seem gen-
erally adequate to deal with the problems
of economic impacts caused by pollution
control programs. However, they have not
been widely used. One apparent reason for
this is that their existence is not widely
known. Therefore, EPA and the Council on
Environmental Quality prepared a pam-
phlet describing these programs and in-
forming people where to go to get help.
Copies of this brochure are being sent to
every EPA waste discharge permit holder.
There also seems to be insufficient
knowledge about these programs within
the concerned agencies. As a first step to
correct this, EPA has designated one per-
son in each regionahoffice as the Financial
Assistance Coordinator who is responsible
for having detailed information on all these
programs and for assisting applicants to
get the help they need. The Economic Anal-
ysis Division in EPA headquarters coordi-
nates the Agency's involvement with these
programs and can assist the regional
offices. EPA, with the strong support of the
interagency task force, hopes to be" able to
expand these efforts.
These changes should improve the effec-
tiveness of the programs significantly, but
two caveats should be kept in mind:
• The first is that most of the assistance
programs, particularly those which apply to
private firms, are designed to provide aid in
limited types of situations. Their purpose is
not to provide a genera I subsidy for envi-
ronmental improvements. They are not de-
signed to help the firm that is secure and is
able to finance its investment out of its own
retained earnings or to obtain a commercial
loan. Neither are they designed to prop up
a firm that is likely to fail regardless of the
j environmental requirements. Their purpose
is to assist those firms that cannot finance
the required expenditures by normal means,
but that have a good prospect for making it
if they are given a little help.
• The second is that the funds available
through these economic assistance pro-
grams are limited. Some qualified appli-
cants may not be able to get immediate
assistance because the available funds are
exhausted. The government is committed
to providing assistance to the extent it is
needed, but the programs like all others
face budget limitations. Q
Federal Assistance
Manual
A manual describing the various forms of
Federal assistance available to small busi-
nesses, non-profit organizations, public
groups, communities, and organizations
for acquiring pollution control equipment
is scheduled for publication this spring.
The manual is being co-sponsored by
EPA and the Council on Environmental
Qua-lity's Interagency Task Force on Im-
proving Assistance Programs to Mitjgate
the Economic Impacts of Environmental
Programs. Entitled "Federal Financial As-
sistance for Pollution Prevention and Con-
trol," the publication describes loans and
grants, interest subsidies and tax breaks
the government will provide qualified busi-
nesses, organizations and public bodies
required by law to install anti-pollution
equipment.
Included in the manual are programs
operated by EPA, the Small Business,
Economic Development, Farmers Home,
and National Oceanic and Atmospheric
Administrations and the U.S. Departments
of Agriculture and Housing and Urban
Development.
EPA will issue an announcement when
this publication is available for public dis-
tribution and copies may be obtained by
contacting EPA's Washington headquarters
or Regional Offices. Advance copies
can be obtained by writing Sheldon Sacks
(WH586), Environmental Protection
Agency, Washington, D.C. 20460.
24
EPAJOURNAL
-------
Environmental Almanac: January 1979
A Glimpse of the Natural World We Help Protect
/< i wl
4 -
The Nature
Outlook
Even though Nature is an
aging producer it is ex-
pected to provide an impressive
and essential array of goods
again for the world in 1979.
It is a puzzling fact that the
generally good quality of the air
and water most of us will re-
ceive during the new year will
be perhaps the most precious
assets we have but rarely do we
consciously appreciate them.
Yet obviously all cash,
stocks, bonds and other prop-
erty would be worthless without
the free gifts of Nature.
It was because Nature's
treasures were held cheaply far
too long that we allowed them
to become so soiled with pollu-
tion. Fortunately, there is a
growing appreciation that every
individual should count among
his assets the quality of his
environment.
An EPA-funded study found
that smog hurt real estate
values in some areas of Los
Angeles. And in relatively un-
developed areas of the Ameri-
can West, a recent study dis-
covered, residents were willing
to pay substantial sums to avoid
pollution interference with
mountain views.
But many of Nature's gifts go
unappreciated.
What's the value of seeing a
flaming red cardinal perched on
a snow-dusted spruce tree?
What would you pay to see a
flight of ducks flying low under
a glowering purple sky on their
way south?
What would it cost to get a
fragrance as sweet as that
proffered by the blossoms of a
milkweed plant?
What's the worth of a tulip
poplar bud with its leaves for
the new year folded inside with
the precision of jeweled clock-
work?
Would you bid on a spar-
kling puddle reflecting a rain-
drenched forest around it?
How much for the tremulous
sound of an owl calling on a
winter night? For the deep
silence after a snowfall?
The value of rivers alone is
incalculable. Most cities have a
river or lake free for the looking,
but how many people eat lunch
beside these waters?
Even though a river is within
walking distance of many
downtown workers, most even
on a sunny day will eat inside
theirbuildingortakeataxitoa
stuffy and crowded restaurant
with no view.
Although the Potomac is still
polluted, it offers spectacular
vistas as it sweeps through the
Capital. Even in winter on many
days in Washington it is possi-
bleto sit on a park bench and
enjoy a river which still retains
some of the splendor of its
stretches above the city limits.
Sea gulls provide free enter-
tainment almost daily. They
perform aerial acrobatics as
they skim over the water. When
one catches a fish a noisy quar-
rel begins over which bird
should really have the right to
devour it.
As breezes roil the water,
boats dip up and down at their
slips likeaquatic rocking
horses. You can hear the soft
sfap of waves hitting a bulk-
head.
What does the waterfront in
your city have to offer? Is it
being properly protected? It's
your river. No one has a right
to foul it any more than they
would to throw their garbage in
your backyard.
What can you do about
abuses? Begin by asking your
local officials. The one axiom
that will always be true is that
"This too shall change." Run-
ning a close second in the
eternal truth sweepstakes is the
saying that "the squeaking
wheel gets the oil." It will be
even more true if you have the
wisdom to lodge your initial
complaints in a reasonable and
courteous manner.
After all it's your river and
your air. Isn't this the year to
make sure your share of this
public property is properly pro-
tected? How longare you going
to put up with the pollution by
people who know the price of
everything and the value of
nothing?—C. D. P.
JANUARY 1979
25
-------
The Public's View
By Robert Mitchell
and Kathryn Utrup
The dragons of taxes, inflation and un-
necessary government spending must
be slain, but not at the expense of environ-
mental quality, This is a major finding of a
comprehensive national telephone poll on
environmental protection conducted for
Resources for the Future, a non-profit
Washington research institution.
The survey interviewed more than one
thousand randomly-selected persons by
telephone during July, 1978, while inflation
rates scored double-digit figures and short-
ly after the overwhelming passage of Cali-
fornia'stax initiative, Proposition 13.
Several of the survey questions ad-
dressed environmental protection versus
cost tradeoffs. Others tapped the individ-
uals' concern about inflation, taxes, un-
employment, and the quality of life. Many
questions were repeated from previous
national polls in order to analyze trends in
environmental support.
The results of the survey refute the wide-
spread assumption that public support for
environmental programs will automatically
weaken in the face of competing pocket-
book issues. True, some 64 percent of those
polk'H fci:t that infl.ition is ;i "very snrinus"
problem, and an additional 30 percent pro-
claim it to be "serious." Furthermore, 7 out
of 10 declare that taxes in this country are
"unreasonable"—a result which concurs
with the findings of a contemporary Harris
poll.
Nevertheless, responses to a variety of
tradeoff questions as well as a look at the
trends reveal that allegiance to environmen-
tal quality holds firm in 1 978 despite these
pressing economic concerns.
Asked whether they think that "now it is
more important to pay higher prices to pro-
tect the environment, or to pay lower prices
but have more air and water pollution," the
public chose to pay higher prices by a 3 to 1
margin in the Resources for the Future poll.
Mitchell is a Senior Research Associate and
Utrup is a Research A ssociate at Resources
for the future, a group studying resources
and environmental quality.
As shown in Table 1, this level of support
is virtually unchanged from the answers to
the same question when it was asked by
the Opinion Research Corporation in 1975
and 1 977. In all three years, 60 percent or
more of a national sample chose the
"higher prices" option.
The depth of the public's commitment to
continued environmental protection is fur-
ther illustrated by their responses to a
lengthy tradeoff question. Those being
polled for Resources for the Future were
asked which of the following three options
came closest to their opinion:
1) Protecting the environment is so Im-
portant that requirements cannot be too
high and continuing improvements must
be made regardless of cost.
2) We have made enough progress on
cleaning up the environment that we
should now concentrate on holding down
costs rather than requiring stricter
controls.
3) Pollution control requirements and
standards have gone too far: it already
costs more than it is worth.
The majority (53 percent) chose the very
strongly worded pro-environmental option
favoring environmental progress "regard-
less of cost." Roughly a third (31 percent)
felt that we should concentrate on "holding
down costs." Only a small minority (10
percent) agreed that "it already costs more
than it is worth."
When the same question was used by the
Opinion Research Corporation in January,
1977, it yielded the very similar results of
55-20-19 percent in the three categories
respectively. Rather than revealing any
environmental backlash, the direction of
change from 1977to 1978 isfromthe
"costs more than it is worth" category to-
wards the more moderate position of "hold-
ing down costs,"
Further analysis of the 1978 Resources
for the Future poll found that 52 percent of
those who felt that taxes are "very unrea-
sonable" still believed that environmental
improvements must be made regardless of
cost. This public view suggests that the tax
revolt has not undermined support for
environmental quality.
Another sign of the public's long-held
economic commitment to achieving envi-
ronmental goals is the environment's firm
position as one of the top five domestic pro-
grams that the public is wil ling to increase
spending on. Each year since 1973, the
University of Chicago's National Opinion
Research Center has asked a large national
sample whether they think "we're spending
too much money, too little money, or about
the right amount" on a set of eleven na-
tional programs, including programs for
"improving and protecting the
environment."
The trend traced by the answers from
1973 to 1977 shows a gradual decline in
the percent who feel we're spending "too
little" money on environmental protection
—from a high of 61 percent in 1973 to the
lower hut still substantial level of 47 per-
cent in 1977. Concurrently, there has been
a gradual increase in the number who con-
sider the spending level to be "about right"
—26 percent rising to 34 percent. At no
point during this five year period did the
percent who said that we are spending "too
much" rise above 11 percent.
The most recent National Opinion Re-
search Center poll, taken in the spring of
1978, actually shows a 5 percent increase
in support of more environmental spending,
the largest increase of any of the eleven
programs reviewed. In this latest survey,
fifty-two percent said we are spending "too
little," 33 percent said "about right," and
10 percent said "too much" to improve and
protect the environment.
Not only has the public's support for en-
vironmental protection held firm, it is far
more broad based than many people realize.
The recent Resources for the Future study
confirms the findings of other studies which
show that environmental concern is not
unique to the white middle class. The ana-
lysis of the answers to the tradeoff ques-
tions shows that blacks and members of
union families are as high or higher in their
support of the environment than are whites
and members of non-union families.
Also, in almost every case, support for
the environmental side of the tradeoff did
EPAJOURNAL
-------
r j
JANUARY 1979
27
-------
Another costs vs ' QUL-K
lion from a nnti<-> ••/idge fit-,
/tic , .n July 1978, at the
::rvey tor RFF. foun-
••ny the pi
' of 5 7 pi-rcfn! to '.-•'h pf
-------
Regulatory
Savings
Inevitably, the Regulatory
Council is going to find sub-
stantial cost savings in Federal
regulations that could amount
to billions of dollars over time,
Douglas Costle has predicted.
The President appointed
Costle as Chairman of the new
Council that will monitor the
economic effects of government
regulation. Costle will continue
as EPA Administrator.
At the first meeting of the
Council, Costle said regulatory
issues "are long term and re-
quire for their solution the best
brain trust in this Administra-
tion. The Council represents
that brain trust."
Costle said a draft of a calen-
dar of governmental regulations
should be available for review
at a Council meeting in January
this year. The first calendar is
scheduled to be published in
February. The calendar was re-
quested by the President as a
key information tool in measur-
ing regulation's impact.
Costle proposed five subject
areas for concentration by
Council work groups. They are
health and safety, finance and
banking, economics, social
justice, and resource develop-
ment. The Chairman will form
teams from various agencies to
review staff work by subject
area.
Council priorities for the near
future, Costle said, would be
finding a staff, holding a meet-
ing with the President, and de-
veloping an agenda of cross-
cutting issues.
At the first council meeting,
all of the Cabinet agencies
except State and Defense—
which don't have regulatory
programs—were represented.
Thirteen independent regulatory
agencies also sent represent-
atives.
The Council idea began to
firm up when White House staff
members asked regulatory de-
partment and agency heads to
a meeting in October and in-
vited them to develop a mecha-
nism for improving Presidential
relations to the regulation
development process.
The department and agency
heads recommended formation
of the Regulatory Council. The
President announced his crea-
tion of the Council in an October
24 speech and Administrator
Costle was appointed Chairman
on October 31.
Costle explained the Coun-
cil's approach in recent remarks
to an executive briefing spon-
sored by the Opinion Research
Corporation.
"We are not in this just for
the quicky changes, although
there undoubtedly will be
some," Costle said. "We are
organizing to make improve-
ments that will rationalize and
streamline the entire body of
Federal regulation for years to
come."
In explaining such action,
Costle first pointed out that "the
need for regulation may have
dwindled in some areas, but not
in most. The social injustices of
the workplace, the environment,
the consumer market, and other
areas still cry out for rectifica-
tion. . . ."
"In the field of social regula-
tion," he continued, "the last
ten years have produced a
sometimes inconsistent array of
regulatory laws, agencies and
rules. But I believe they were
created in good faith, with
sound judgment, and with pop-
ular support...."
"The difference is that today
the margin for error is smaller
in conducting regulatory pro-
grams, and the explosion of
scientific and cultural knowl-
edge has often outpaced our
ability to find solutions," Costle
said.
"We now realize that the air
and water we used for free in
past decades actually had a
cost, and quite a high one," he
said. "We are now trying to pay
in a few short years for dam-
ages incurred over centuries."
"Regulators are also trying to
catch up with a medical science
that may be only months or
years old—especially in the
area of cancer," Costle ex-
plained. "Just our ability to
measure chemicals in the parts
per million or billion range has
produced a flurry of new regu-
latory concerns."
"My point is that whether we
are trying to catch up with dec-
ades or days of social abuse, it
is the right thing to do and wev
must continue," Costle said.
"But we must also realize,"
he emphasized, "that in the race
to catch up there have been
quick fixes, duplication, over-
lap, and unnecessary public
costs that now must be
eliminated. . .."
"The President's Regulatory
Council is committed to reduc-
ing these costs—whether they
be in dollars, time, effort, or the
strangling of opportunity," the
Council Chairman said.
In a recent speech to the
National Association of Manu-
facturers, Costle saw prevention
as another key to cost-effective
regulation.
"Most government regulation
has its roots in private failure
to act in the public interest," he
told the manufacturers. "With
a greater mutuality of effort to-
wards prevention, we can not
only be more cost effective in
environmental protection, but
we can avoid the necessity of
proliferating regulation."
In previous remarks, Costle
has pointed out that EPA is
more and more trying to prevent
environmental and health dam-
ages rather than deal with them
after the fact. O
JANUARY 1979
29
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How EPA Gets Its Money
By
For the current fiscal year, which started
October 1, EPA's budget will be more
than $5.4 billion. The process by which the
Agency received this sum is extraordinarily
complex, involving interaction between
Congress and the Executive Branch over a
long period of time.
The Constitution gives Congress the
power to approve money for the running of
the government. All Agency funds must
come from Congress in one way or another.
However, prior to Congressional action, a
long process of Agency and Executive
Branch budgeting has taken place to deter-
mine how much the Agency will receive in
the Presidential budget sent to Congress
each January. In actual fact, over the years
Congress did not change the President's
budget to any significant extent.
But in the early 1970's Congress woke
up to the fact that it had very little practical
control over the national budget. Not only
wore its own Members undermining what
should ordinarily have been an orderly
budgetary process, but the Office of the
President through the powerful Bureau of
the Budget (now called the Office of Man-
agement and Budget) was dominating the
process.
One heard bitter complaints from Mem-
bers of Congress of both parties that appro-
priations were being considered in a piece-
meal fashion. They decried the failure to
consider future consequences or the
broader national picture. Most of all they
resented what they saw as the President
usurping traditional Congressional pre-
rogatives.
Warren is Director of EPA 's Office of
Legislation
For Congress the low point came when
the practice of executive impoundment of
funds appropriated by Congress reached
epidemic proportions under the Nixon
Administration. Out of this atmosphere the
Congressional Budget and Impoundment
Control Act of 1974 was born and had its
first dry run in 1975.
The Budget Reform Act, as it is com-
monly called, was designed to set Con-
gressional spending levels for a fiscal year
against which Congress could then measure
its progress in meeting realistic budgetary
goals. If the Executive Branch decides that
funds the Congress appropriates should be
withheld for one reason or another, the
Budget Reform Act forces the President to
return to the Congress for approval. In addi-
tion, the Act changed the fiscal year from
a July-June to an October-September time
frameand established a Congressional
Budget Office, as a counterpart to the Presi-
dent's Office of Management and Budget.
The Act sets a specific and tight time-
table for moving through the budget proc-
ess. March 1 5 is the first deadline. By then
all the standing or legislative committees
of the Congress must report to the House or
the Senate Budget Committees their ex-
pected spending levels for the various
activities within their jurisdiction. By April
1, the Congressional Budget Office must
submit its report to the Budget Committees.
It includes alternative levels of budget
authority and spending, total income, a
discussion of national budget priorities,
and the allocation of resources among
major programs.
By April 1 5, the Budget Committees
must report on what action the Con-
gress expects to take on the President's
budget for that fiscal year. This is the First
Concurrent Resolution on the budget, en-
tirely for the purpose of setting spending
goals, expected revenue, and any related
surplus or deficit. Both Houses of Congress
must pass the Resolution by May 1 5.
The same process for a Second Concur-
rent Resolution ends in mid-September,
after a review of what the Congressional
appropriations and authorizing committees
are doing. This is a tool to encourage the
committees to adhere to the spending
levels in the First Resolution. If the totals
contained in the First and Second Resolu-
tions do not match, Congress must take
other action to cut back specific spending
bills or vote explicitly to raise the general
spending total and the projected deficit.
Such actions to reconcile money differ-
ences are to be taken by September 25.
With the fiscal year starting October 1, it
is also expected that all bills appropriating
money will be passed by then. This was
often not the case under the old system,
and there are still delays that occur as a
result of controversies associated with par-
ticular appropriations bills.
How well has this process worked? To a
great extent, it has brought order out of
chaos. Some Congressional critics claim,
however, that it has raised an army of
bureaucrats on Capitol Hill and created
much more work for the Members of Con-
gress, many of whom are already heavily
overworked. But for the Members of the
30
EPAJOURNAL
-------
House and Senate Budget Committees, it
has been a labor of love and has created
many unusual and unexpected political
bedfellows.
At the same time that the Congressional
budget targets are being set by the law
makers, a complementary process for ac-
tual appropriations is being set up. Mem-
bers of the Senate and House Appropria-
tions Committees' hierarchy meet to make
decisions on levies and timetables for each
appropriations bill with an eye toward what
the Budget Committees are doing.
Within a few weeks after the President
submits his budget request to the Congress
in late January, appropriations hearings get
underway. Each Congressional appropria-
tions committee has a number of subcom-
mittees, which are divided into relatively
logical categories. Top officials of each
agency appear with their deputies to justify
their requests. These requests have already
been cleared by the President through ex-
tensive internal review. In addition. Mem-
bers of Congress and the public also appear
before the subcommittees, usually to ask
for more money for an agency than is con-
tained in the President's budget.
The"appropriations subcommittee hear-
ings are generally open, except where such
matters as national security are involved.
In most cases, sessions are held in cramped
quarters, and the debates are sometimes
intense. The questioning is almost always
energetic, as both national and regional
concerns vie for attention. Agencies supply
volumes of material "for the record," so
that the staff and members of the subcom-
mittees will have all of the information at
hand needed to make their decisions.
The subcommittees which handle EPA
appropriations also have jurisdiction over
funds for the Department of Housing and
Urban Development, National Aeronautics
and Space Administration, National Sci-
ence Foundation, Veterans Administration,
Council on Environmental Quality, and a
number of other independent boards and
commissions.
Thus it is not for some time after the sub-
committee hearing that the membership
and staff feel comfortable enough to sched-
ule a "mark-up." The mark-up consists of
taking an agency's budget justification
book, going over it page-by-page, and
item-by-item, and making comparisons with
the interests of the various members of
the subcommittee. Sometimes these in-
terests are parochial in nature, as well as
deriving from a careful scanning of the
agency's needs.
The subcommittee then reports a "com-
mittee print" of its mark-up to the full
Appropriations Committee, which then
meets, makes its decisions, and reports a
bill to the full House for consideration.
Generally the full committee goes along
with the subcommittee's decisions.
Under the rules of the House, an appro-
priations bill and report must wait on
the House Calendar for a period of three
days in order to give the membership full
opportunity to study them. It would prob-
ably be helpful to point out that, historically,
appropriations bills have originated in the
House. Some years ago, the Senate Appro-
priations Committee took umbrage at this
so-called prerogative of the House and
decided to initiate the process on its own.
The result was utter chaos for executive
agencies which were caught in the middle.
This "High Noon" scenario has not been
repeated since and, hopefully, will not be.
During action by the full House of Repre-
sentatives, an appropriations bill is often
amended to reflect interests other than
those of the originating committee. Tradi-
tionally most of the amendments have been
made in the Senate, however, which has a
longer time to consider the bill.
When the House completes action on
the bill, it is sent to the Senate, where it is
referred to the counterpart Senate Appro-
priations Subcommittee, and the process is
repeated. Usually the Senate has held hear-
ings and gathered information at the same
time as the House proceedings were going
on.
After the Senate has worked its will upon
the measure, there are inevitably differ-
ences between the versions approved by
the House and by the Senate. A conference
committee is named by both Houses to
resolve the differences.
An appropriations conference committee
generally consists of members of both the
House and Senate Appropriations subcom-
mittees which originally considered the
agency's budget requests, along with four
additional members: the chairmen and
highest ranking Republicans of the full
House and Senate Appropriations Commit-
tees. After several hours of give and take,
sometimes light-hearted and often trying,
the conferees finally decide on one version
to take to their respective Houses.
The House of Representatives acts first
on the conference bill, with the Senate fol-
lowing and clearing the bill for the Presi-
dent's signature. As with all bills, the
President must sign the measure within ten
days (exclusive of holidays and Sundays)
after he receives it or the bill becomes law
without his signature. If the Congress
adjourns during the signature period, how-
ever, the President may "pocket veto" the
bill. That is, he simply lets the bill die by
not signing it at all. (In an actual veto, the
President sends the bill back to the Con-
gress with a message containing his rea-
sons for refusing to approve the measure.)
If an agency is unhappy with the way its
appropriations are shaping up, it has sev-
eral chances during the Congressional
process to send fetters of appeal, to ac-
quaint the lawmakers with the Administra-
tion's thinking on items contained in the
bill. Letters of appeal are drafted with the
aid of the Office of Management and
Budget and generally reflect the position
contained in the President's budget.
In addition to the regular appropriations,
there are other special appropriations
bills which work their way through the
Congress. For example, there are often sup-
plemental appropriations measures, and
continuing appropriations resolutions. Sup-
plementals are bills passed during the fiscal
year to take account of new circumstances
not provided for in the regular bills that
were enacted. The continuing appropria-
tions, which provide money at the same rate
as in the prior fiscal year, become neces-
sary when some unfortunate agencies do
not receive their regular funding by the due-
date of October 1 for the current fiscal year.
While the budget and appropriations
processes are going on, the authorizing
process proceeds on a parallel track. The
standing or legislative committees of the
Congress, which are charged with over-
sight and legislative responsibility for
various governmental programs, act to
extend authorizations or provide for new
programs. Generally money will not be
appropriated if not first authorized. The
authorization usually sets the upper limit
on the appropriation.
Often there is a creative tension between
authorization committees and appropriation
committees. Many times, legislative com-
mittees authorize programs or sums for
particular agency programs which the
Appropriations Committees may deem
either undesirable or too costly. If so, it is
the appropriations process which wins out.
Agencies can only spend what is appropri-
ated, rather than what is authorized.
In some instances, an authorization bill
will direct an agency down a path contrary
to that ordered by the appropriations bill.
When this situation arises, the hapless
agency is caught in crossfire between its
parent authorizing committees, its appro-
priations committees, and the Office of
Management and Budget. Generally such
disagreements can be defused through
mediation, but if not, the problem continues
into the next fisca I year. Often, specific
direction to the agency will be contained
in the authorizing legislation and in the
reports of the appropriations committees.
EPA's task, like that of other agencies, is
to work its way through the maze of the
budget and appropriations process with its
basic needs provided for and with enough
flexibility in the use of its money to effec-
tively carry out its mandate. This is usually
much more difficult than it appears. D
JANUARY 1979
31
-------
Around the Nation
Environmental
Quality Assessed
EPA's Boston office re-
cently released the An-
nual Report on Environ-
mental Quality for New
England. According to the
report, smog continues to
be one of the most seri-
ous pollution problems
in New England. Rhode
Island and Connecticut
have passed automotive
inspection and mainte-
nance programs to help
control hydrocarbons that
contribute to smog, and
Massachusetts is working
on a program for the
next legislative session.
The report projects that
85 percent of the Region's
major river mileage will
meet the fishable/swim-
mable standard by 1983;
53 percent of the waters
are safe now. Lead con-
tamination of drinking
water is dropping in re-
sponse to treatment with
caustic soda in Cambridge
and Boston, Mass., and in
Bennington, Vt. The re-
port notes significant
progress in implementing
programs to control solid
waste. New England has
some 300 community re-
cycling programs, with
43 programs having sepa-
rate curbside collection
of recyclable materials.
Maine, Vermont, and
Connecticut now have
container legislation to
deal with the litter and
throw-away bottle prob-
lem. According to the
report, one of the most
serious environmental
issues facing EPA in the
future is the management
of hazardous wastes.
Bronze Medals
Awarded
Region 1 has conferred
its highest award, the
Bronze Medal for work
excellence, on the Sys-
tems Analysis Branch.
The recipients are Branch
Chief and Acting Manage-
ment Division Director
Lou Gitto, and Al Ika-
lainen, Marv Rosenstein,
Mike MacDougall, Bill
Serovy, Doug Little, and
Lynne Bleakney.
of the Board by Region 2.
Part of the settlement,
which the Environmental
Quality Board has already
collected, includes a stip-
ulation that the facility's
existing sulfur
recovery plant be either
operating properly by the
end of the year or be re-
placed with a new plant
by July, 1979.
Oil Company Fined
Caribbean Gulf recently
paid some of the largest
penalties ever assessed
in Region 2 for violations
of air and water laws at
its refinery in Bayamon,
Puerto Rico. The facility
was fouling the waters of
the Malaria Control Canal
in violation of the dis-
charge permit issued by
EPA. In addition, the com-
pany failed to take pollu-
tion abatement measures
in a time period agreed to
in its compliance sched-
ule. The Region 2 En-
forcement Division asked
Judge Juan R. Torruella
for $206,250 in civil pen-
alties against the com-
pany for not meeting the
requirements of the Clean
Water Act. The judge
granted EPA's request,
the money was collected,
and turned over to the
Treasury Department.
In a separate action,
Puerto Rico's Environ-
mental Quality Board re-
cently filed for an admin-
istrative order asking
that Caribbean Gulf pay
$1 50,000 for violations
of the Commonwealth's
air quality standards by
particulate emissions.
This violation and another
involving the venting of
untreated hydrogen sul-
fide, a very poisonous
gas, at the rate of 520
pounds per hour was
brought to the attention
Polluters Convicted
A Federal jury in Phila-
delphia has convicted
James and Guido Frezzo
on six counts of discharg-
ing wastes without a per-
mit under the Federal
Clean Water Act. The two
are corporate officers of
Frezzo Brothers, Inc., a
mushroom growing and
compost manufacturer.
The case is one of four
involving Chester County,
Pa., mushroom growers
charged with discharging
wastes without a Federal
permit. The growers have
been under investigation
by Region 3's Surveillance
and Analysis Division and
Enforcement Division, the
U.S. Attorney's Office in
Philadelphia, and the
Chester County Health
Department. The Penn-
sylvania Department of
Natural Resources pro-
vided witnesses for the
trial. In other cases. Groc-
ery Store Products Co.
was fined $1 5,000 and
Penn Green Farms, Inc.,
$7,500 for discharging
without a permit, in cases
resolved through plea
bargaining. Hudson
Farms, Inc., pleaded
guilty to four counts of
discharging without a
permit and agreed to pay
$50,000 in fines. Clinton
Ruble, Vice President of
Hudson Farms, Inc.
pleaded guilty to one
count and has agreed to
pay a $5,000 fine.
Advisory Council
Formed
Region 4 has initiated a
special public participa-
tion project for air and
hazardous materials. Two
outstanding environmen-
talists from each State in
the Region have been
chosen to serve as lead-
ers. They will organize
public participation activ-
ities relating to clean air,
hazardous waste disposal
siting, and toxic sub-
stances. In addition, the
sixteen environmentalists
are members of the Re-
gional Advisory Council,
which will meet regularly
with Regional Adminis-
trator John C. White and
key staff members to be
briefed on EPA issues.
The Council members will
also bring concerns and
problems from their
States to the attention
of EPA officials. The first
meeting of the Council
was held last month in
Atlanta at the Regional
Office.
forcement Division, ex-
pressed satisfaction with
the improvement, as did
the U.S. Attorneys for the
Western and Eastern Dis-
tricts of Wisconsin. Mc-
Donald said that appropri-
ate action will betaken
against the few remaining
violators. The District
Attorneys promised fol-
low-up inspections in the
future.
Hazardous Wastes
Discussed
Staff members from the
Region 5 Waste Manage-
ment Branch met recently
with the Michigan De-
partment of Natural Re-
sources and representa-
tives of Hooker Chemicals
and Plastics Corporation.
They met to discuss the
Hooker waste disposal
site in Montague, Mich.
The company presented
plans to the State for use
of soil and synthetic liners
to cover the wastes. The
State rejected that pro-
posal and said that wastes
shall be placed in vaults
that are insulated on all
sides by 10 feet of clay.
The Department of Nat-
ural Resources agreed to
review the company's
draft report, and EPA
pledged its continuing
support for an environ-
mentally sound corrective
action for the site.
Most Dischargers
Comply
A recent series of unan-
nounced inspections in
Wisconsin by the Reg ion
5 Enforcement Division
revealed that all but a few
industrial dischargers are
in compliance with the
water pollution self-moni-
toring procedures that are
required by their Federal
water discharge permits.
A similar survey one year
ago found many viola-
tions. James 0. McDon-
ald, Director of the En-
Tribal Concerns
Heard
Regional Administrator
Adlene Harrison and ten
program staffers met with
the Indian tribes of New
Mexico recently. The Re-
gional Office presentation
outlined EPA activities
and programs, particu-
EPAJOURNAL
-------
larly in areas where assist-
ance might be given to the
tribes. The meeting was
coordinated by La Donna
Harris, president of
Americans for Indian
Opportunity, and was well
attended by tribal mem-
bers including several
tribal governors. The re-
gional staff is foliowing
up on problems outlined
by the Indians at the
meeting.
Public Seminar Set
The Dallas Regional Office
has arranged a public par-
ticipation seminar on con-
struction grants under
Section 201 of the Clean
Water Act. It will beheld
March 21-24. A citizen
advisory group is helping
with the seminar, which
will include a cross-
section of citizens who
are directly affected by
environmental regulations
and activities. They will
learn active involvement
in environmental deci-
sion-making through role-
playing and community
problem solving.
Standards Clarified
Earl N. Kari, Dallas Dep-
uty Regional Administra-
tor, met recently with offi-
cials from the Louisiana
Stream Control Commis-
sion in Baton Rouge. The
purpose of the meeting
wasto help the State
agency clarify the lan-
guage in Louisiana's wa-
ter quality standards,
providing consistency in
determining waste treat-
ment requirements for in-
termittent streams and
man-made ditches with-
out jeopardizing or dam-
aging downstream uses.
Water quality criteria are
not being affected by
these changes.
Discharge
Investigated
Region 7 Administrator
Dr. Kathleen Q. Camin
has requested a water
quality survey of the
Cedar River watershed at
Charles City, Iowa, by
EPA's National Enforce-
ment Investigation Cen-
ter. Salsbury Labora-
tories, a manufacturer of
veterinary pharmaceuti-
cals, was discharging
waste products containing
organic chemicals and
heavy metals into the
Cedar River through the
Charles City municipal
waste treatment plant and
the solid waste dump that
the company has used for
over 20 years. Dr. Camin
describes this as one of
the most severe environ-
mental problems in Re-
gion 7. Orthonitroaniline
(ONA), a chemical prod-
uct associated with the
Salsbury process, was
found in water supply
wells in Waterloo, Iowa,
65 miles downstream. In
the six wells sampled
there, ONA occurred in
concentrations ranging
from 0.01 2 parts per
billion to .26 parts per
billion. Eight other water
supplies were sampled for
traces of the chemical.
Wells in Plainfield con-
tained .20 to .73 parts per
billion; those in Janesville
contained .05 parts per
billion. With EPA's assist-
ance, the Iowa Depart-
ment of Environmental
Quality will issue dis-
charge permits to limit
the nature and quantity of
materials discharged into
the Cedar River under the
authority of the National
Pollutant Discharge Elim-
ination System. EPA and
the Iowa State Hygienic
Laboratory will continue
to monitor water sources
along the Cedar River.
Fuel Switching
The use of leaded gaso-
line in vehicles requiring
unleaded fuel is a problem
of increasing concern to
EPA. This practice, com-
monly known as fuel
switching, is a violation
of EPA's unleaded gaso-
line regulations. It is of
special concern in Region
8 where the major metro-
politan areas do not meet
EPA air quality standards
for pollutants associated
with automotive emis-
sions. The increasing
emphasis that Region 8
has placed on its Mobile
Source Enforcement Pro-
gram resulted in the as-
sessment of a $7,800 civil
penalty against the Board
of County Commissioners
of El Paso County for the
introduction of leaded
gasoline into vehicles
operated by the El Paso
County Sheriff's Depart-
ment. In addition, the
Sheriff's Department has
agreed to check the com-
pliance of their vehicles
with applicable emission
standards.
Older Workers
Successful
Fifteen Mexican-Ameri-
cans who are former mi-
grant workers have been
working in the Senior En-
vironmental Employee
development program to
train farmworkers in the
safe use of pesticides.
They work from the Fed-
eral Rural de Salud, Inc.,
a non-profit health clinic.
A $ 100,000 grant for next
year's program will allow
the older workers, who
are located in numerous
State agencies, to survey
the health of migrant
workers, report pesticide-
related illnesses, and
work with county agricul-
tural commissioners in-
vestigating pesticide mis-
uses. President Carter
recently commended
representatives of the
Senior Environmental
Employee development
pilot program for making
it a nationwide success.
Chemical Survey Set
Region 9 is working in co-
operation with research-
ers who will survey 1,000
students who attended
Saugus Elementary
School, north of Los
Angeles, Calif. The sur-
vey will investigate how
their health has been
affected by vinyl chloride
emissions from the nearby
Keysor-Century Corpora-
tion facility. The pilot
group was exposed to
high concentrations of the
chemical, a known car-
cinogen, fifteen to twenty
years ago. Most of the
students attended the
school for up to six years.
Researchers will also de-
termine average and peak
concentrations to which
the group was exposed,
and establish an individ-
ual tracking system to
continue evaluations of
long-term health effects.
Likes Regulations
George Caraker, a San
Franciscan, wrote the
following to the Region 9
Office in support of EPA's
New Source Performance
Standards: "The stronger
the regulations, the better.
I believe a one or two
dollar increase in electric
bills is a small price to
pay for cleaner air."
Noise Agreement
Set
Region 10 late lastfall
reached agreement with
the Bonneville Power Ad-
ministration and the Ore-
gon Department of Envi-
ronmental Quality to have
Bonneville Power replace
by 1982 a noisy trans-
former at one of its sub-
stations near Portland.
The transformer had been
emitting a steady "buzz"
20 decibels higher than
State noise codes allow,
and has been the object
of complaints from nearby
residents. The consent
agreement is in keeping
with President Carter's
recently signed Executive
Order that requires Fed-
eral facilities like Bonne-
ville Power to comply
with all applicable pollu-
tion control requirements.
Grazing and Clean
Water
Region 10 personnel are
finishing a report that will
show how grazing prac-
tices used by western
woolgrowers and cattle
ranchers influence water
quality. The report, being
prepared by EPA and the
Bureau of Land Manage-
ment, demonstrates that
livestock managers al-
ready have available to
them techniques that not
only minimize water pol-
lution but can also pro-
duce less soil erosion.
The result is more forage
for the herds. The report
"Livestock Grazing and
Water Quality" will be
available in early 1979.
To get on the mailing list
to receive a copy, contact
Publications Clerk, EPA,
1 200 6th Avenue, Seattle,
Washington 98101. D
JANUARY 1979
33
-------
Russell W. Fitch
He has been named Acting Di-
rector of the Office of Public
Awareness and Intergovern-
mental Relations in Region 8.
Fitch spent the last three years
at the Federal Energy Adminis-
tration, where he was FEA rep-
resentative to the Federal Re-
gional Council, and headed
several interagency committees
on energy affairs. From 1972-75
he directed EPA's Research and
Development grants program in
Region 8. His previous Federal
services includes directing the
Office of Retailing in the Cus-
tomer Services Group, U.S.
Postal Service and acting as a
consultant to the Office of Sci-
ence and Technology at the
White House. Prior to joining
the government Fitch worked
for General Electric Company,
the American Chemical Society,
Atlantic Research Corporation,
and Melpar, Inc. He received a
bachelor's degree in chemistry
from Asbury College and a
master's degree in chemistry
from American University.
Dr. Lester D. Grant
He has been appointed Director
of the recently established Envi-
ronmental Criteria and Assess-
ment Office in EPA's Research
and Development Program at
Research Triangle Park, N.C.
To accept the position he has
taken a two-year leave of ab-
sence from the University of
North Carolina, where he has
been associated with the De-
partments of Psychiatry and
Anatomy since 1 970. He is as-
sociated with the Biological
Sciences Center of the Child
Development Institute at the
University and Co-Director of
the Neurobiology of Environ-
mental Pollutants Program
there. The Environmental Cri-
teria and Assessment Office
provides the Agency with scien-
tific documents that are the
basis for a wide variety of envi-
ronmental regulations. The
Office also prepares special re-
ports, some of which are man-
dated by Congress. Dr. Grant
received a bachelor's degree in
psychology from the University
of Pittsburgh, and a master's
degree and doctorate in that
subject from Carnegie-Mellon
University. In 1969-70 he
worked in an interdisciplinary
research and training program
in biomedical science atthe
University of Chicago, where he
held a postdoctoral fellowship
from the National Institute of
Mental Health.
Thomas W. Devine
He is the new Director of the
Air and Hazardous Materials
Division in Region 4, following
four years as Chief of the Air
Program Branch in the Agency's
Boston office. His Federal serv-
ice began with the Federal
Water Pollution Control Admin-
istration, an EPA predecessor
agency, in 1966 as a sanitary
engineer at the Northeast Water
Quality Management Center in
Region 1. After becoming part
of EPA he served as Chief of the
Industrial Waste Section and
Chief of the Technical Opera-
tion Section of the Enforcement
Branch. Prior to his Federal
service Devine worked in the
air and water programs of the
Commonwealth of Massachu-
sets and for a private consult-
ing firm. Devine received a B.S.
in civil engineering from North-
eastern University in 1964 and
did a combination of work at
Harvard, Tufts, and Northeast-
ern Universities to earn a Mas-
ter's Degree in civil engineering
with environmental specialization
in 1972.
Joseph T. Piotrowski
He has been appointed New
Source Coordinator in Region
3, responsible for integrating
and expediting EPA environ-
mental reviews required for the
issuance of permits needed by
proposed new industrial sources
of pollution. The position was
created in response to a pledge
by Deputy Administrator Bar-
bara Blum to save time and
money for industries under-
going environmental reviews.
Piotrowski has worked for EPA
since 1973, most recently as
Special Assistant to the Region
3 Deputy Administrator. Before
that for two years he prepared
Environmental Impact State-
ments for new industrial sources
and municipal sewage treat-
ment plants. He has also held
positions in the Air and Water
Divisions in Region 3. Before
joining the Federal Government
he worked for the Common-
wealth of Pennsylvania as an air
pollution engineer. Piotrowski
holds degrees in physics and
environmental science.
34
EPA JOURNAL
-------
Eighth Annual Awards
Ceremony
Four individuals and four group
efforts were awarded gold med-
als for exceptional service last
month at the EPA annual awards
ceremony. The individuals hon-
ored were:
Valdas V. Adamkus, for his
distinguished leadership in Re-
gion 5 and outstanding contri-
butions to international environ-
mental control; Dr. Elizabeth L.
Anderson, for her outstanding
leadership and personal contri-
bution to the development and
application of EPA policy on
carcinogens; Martha Prothro,
for her commendable contribu-
tion to enactment and imple-
mentation of enforcement au-
thorities for stationary sources
of air pollution, and Gordon G.
Robeck, for his outstanding
service and leadership in the
establishment of national drink-
ing water standards, and major
contribution to the Nation's
health and welfare.
V. Adamkus
Andrew D. Mank and Judith
A. Nelson, the Pretreatment
Task Force, received a gold
medal for their work in the de-
velopment and promulgation of
regulations to control the dis-
charge of industrial wastes into
publicly-owned sewage plants.
The Federal Insecticide, Fun-
gicide, and Rodenticide Amend-
ments Task Force was honored
for their work toward the enact-
ment of the 1978 Amendments.
Members of the Task Force are:
Arnold L. Aspelin, Edward C.
Gray, John J. Neylan III, Susan
Sherman, John C. Ulfelder, and
Robert H. Wayland III. The Flue
Gas Desulfurization Program
was honored for their achieve-
ments fostering the national
acceptance of that concept. The
program members are Robert
Borgwardt, Michael Maxwell,
Everett Plyler, Frank Princiotta,
and Richard Stern. A gold
medal went to the Title II Con-
struction Grants Regulations
Team for their commitment to
developing responsive regula-
tions for the municipal con-
struction grants program. The
team consists of Michael B.
Cook, Belle N. Davis, Ronald
DeCesare, Joseph H. Easley
and Larry D. McBennett.
Ten individuals and three
groups received silver medals
for superior service. The silver
medals went to Terry L. Ander-
son, Region 8; Anne L. Asbell.
Region 4; Michael P. Bonchon-
sky. Region 2; Lisa K. Friedman,
Headquarters; Jack Griffith,
Headquarters; Myron 0. Knud-
son, Region 6; Dr. James P.
Law, Jr., Ada, Okla.; Delores J.
Platt. Cincinnati, Ohio; Cheryl
Wasserman, Headquarters, and
Dr. William E. Wilson, Jr., Re-
search Triangle Park, N.C.
Medals also went to the Foot-
hills Project Review Team in
Region 8: Gary R. Johnson,
W. Steven Jones, and Dale J.
Vodehnal; the Small and Minor-
ity Business Programs Group at
Research Triangle Park, Cin-
cinnati, and Headquarters: Paul
Quitter, Frank J. Rzasa, Glen-
wood D. Sites, Alfred R. Smith,
Jr., Byron S.Vranas.and Margie
A. Wilson; and the Toxic Sub-
stances Control Act Inventory
Work Group at Headquarters:
Stephen M. Caldwell, Edward
H. Cohen, Paul E. DesRossiers,
Grace Prothro
Norman E. Dyer, Irving Grunt-
fest, Steven Leifer, Susan G.
Lepow, Carl Mazza, James C.
Nelson, Sammy K. Ng, Patricia
Ott, George M. Semeniuk, and
Steven R. Weil.
The Administrator's Award
for Excellence was conferred
upon Evelyn Lewis-Alston,
Headquarters; Olivia H. Ed-
wards, Headquarters; Kenneth
L. Kropp, Cincinnati, Ohio;
Paula R. McElroy, Las Vegas,
Nev.; Vivian A. Skinner, Re-
gion 6; and Donna Sowinski,
Region 5.
Winners of the Public Health
Service Meritorious Service
Medal were, David R. Dunbar,
Research Triangle Park, N.C.;
Stephen K. Goranson, Region 5;
Jack W. Hoffbuhr, Region 8,
and Charles D. Larson, Region
1. Distinguished Career Awards
went to Douglas C. Hansen,
Region 10, and Margaret R.
Well, Headquarters.
Gordon G. Robeck
Dr. Elizabeth Anderson
JANUARY 1979
35
-------
An Economist's View
Continued from page 5
will not only serve as refutation
in debates but will also enable
us to sharpen up our rational
opposition to too much environ-
mental spending. Everything up
to a margin is justified and any-
thing carried to excess econ-
omists would have to say, as
any wise person would, is an
aberration of judgment.
Considering some of the
intangibles in pollution
cleanup, what is the best
way to decide environ-
mental policy? By eco-
nomic analysis or Con-
gressional vote?
There is no substitute for demo-
cratic control of the policies of
the society. So in the last anal-
ysis it is the electorate deciding.
Now under representative
government that means that
most of the decisions will have
to be deliberated on by leigsla-
tive representatives. Any legis-
lature must acquire informed,
expert knowledge and use it in
making judgments.
But as every representative
legislature in the world knows
and has always known, the Con-
gress, the State House of Repre-
sentatives, and the committee
of aldermen cannot make the
day-to-day decisions. What
you have to do is set down good
guidelines in the form of tax
rates on effluents, in the form of
zoning regulations. But these
must be in forms that are en-
forceable, understandable, and
are optimally designed in terms
of the degree of environmental
control the democracy ulti-
mately desires.
So voting is important, but
we economists believe it's very
crucial for the voters and their
representatives to set things up
in such a way that many policies
are self-enforcing. This way,
the private pocketbook inter-
ests of the steel company are
made to coincide with the in-
terests of the community.
Make no mistake about it,
under a competitive process no
one firm out of the goodness of
its heart, out of altruism, can
take on the job of a higher level
of environmental protection
than its competitors. And no in-
dustry can ever spontaneously
and through its trade associa-
tions be counted upon to do the
job.
This doesn't mean that the
people in an industry are any
worse than the people in any
other industry, including my
own, college teaching. It just
means that it's against their
money interests to impose a
higher standard than we the
community insist upon there
being imposed.
Therefore, there is no escape,
in the last analysis, for demo-
cratic control involving the fair-
handed coercion through the
due process of law.
Polls show that the public
is willing to pay for en-
vironmental cleanup.
What kind of factor is
that in economic policy
toward the environment?
Is it being taken into ac-
count adequately?
Yes, although if you're a per-
fectionist you might despair at
the slowness of the process. I've
just come back from southern
California and I was a little bit
appalled by the smog. On the
other hand, I recall earlier times
when it was worse. It would
have been much worse if we
had not already imposed what
many people in that part of the
world regarded as a painful
constraint—the need for a
higher and more expensive level
of pollution control on auto-
mobiles.
The job is never finished, but
I think the American people are
getting on with the job. These
problems are not going to go
away. On the contrary, they are
going to get bigger even as we
are more effectively solving
them. There is only so much
land, and only so much atmos-
phere and rivers and fakes and
underground water. Because of
past demography we're putting
a very, very heavy load in our
modern industrial society on
these limited resources of
nature.
We've talked about inter-
nalizing costs, making
environmental protection
part of our daily affairs.
Are we beginning to do
this in our economy? In
wastes and pollution?
We have made a beginning. I
know plants here in New Eng-
land which have been in busi-
ness for 250 years, and the
owners tell me they just didn't
know until ten years ago what
it was their own plants were
doing. They were simply doing
what their uncles and grand-
fathers had done before them.
It was unthinking.
It reminds me that not until
we had a corporate income tax
and personal income tax did
accounting get developed in
this country. Businessmen so
often didn't know their own or-
dinary money costs and revenue.
Similarly, the force of law is
bringing home the need to in-
ternalize more of these environ-
mental costs. The costs were
there. They just weren't per-
ceived until it was too late and
they weren't brought home to
those people who were causing
damages.
Now I'm not pointing my
finger at businesses and corpo-
rations only. In the last analysis
the consumers who want steel,
who want products which re-
quire certain chemicals for pro-
duction, must be prepared to
pay the bill for making these
acceptably sa^fe. And certain
products, certain asbestos prod-
ucts for example, will not be
able to meet those stringent
requirements in the future and
they will have to be replaced by
substitutes that can.
So it is not just a matter of
internalizing costs into some in-
dustry or business. It means
internalizing them to us, the
public, the ultimate consumer,
the ultimate electorate whose
dollar votes are swinging the
patterns within which our eco-
nomic resources are devoted.
Basically, looking at it
over the long run, can we
have a clean environment
and a strong economy at
the same time?
Yes. The productivity of the
American system—the tech-
nological and managerial know-
how, the skill of our labor force,
the education and human capi-
tal—is such that although we
are not growing as fast as in
earlier post-WWII decades, we
still have a considerable margin
of growth. Part of that margin
can prudently go into an expan-
sion of the ordinary conven-
tional private goods and serv-
ices. But part of it can and, if the
electorate wanted, should go
into the improved good life with
respect to a more healthful and
more pleasant environment.
When we look at the sources of
American growth and consider
our best future projections, it
becomes apparent that there is
room for both environmental
cleanup and ordinary goods and
services.
Is there any special message
you would like to give?
Sometimes the enthusiasms of
certain proponents of environ-
mental control may appear to
ordinary, more conventional
citizens as hysteria. But one
man's complacency is another
man's hysteria, and in order to
self, sometimes you have to
oversell.
So on the whole, it seems
to me that we have been well
served by the more altruistic
among us, often the more youth-
ful members of the population,
who have raised the conscious-
ness of the rest of us. I think
most of us, as we look to what
would otherwise be the case,
the hell that you could have here
in North America in the wake of
the post WWII baby boom and
industrial affluence boom, real-
ize that things are much better
than they otherwise would be,
and I for one am grateful. D
This interview was conducted
by John Heritage, Assistant
Editor of EPA Journal.
EPA JOURNAL
-------
Mews Briefs
Cleanup
Agreement
Gasoho1
Allowed
The Tennessee Valley Authority, in a "landmark"
step for public health, has agreed to a major
pollution cleanup involving 10 of its power
plants in the southeastern U.S. The settlement
was described by EPA as "the largest ever made
with a major source of air pollution." The
agreement heralds "a new era of concern for
public health by the Nation's largest public
utility," according to Marvin Durning, EPA's
Assistant Administrator for Enforcement. He
said the pollution controls under the agreement
would remove more than 970,000 tons of sulfur
dioxide and 85,000 tons of dust material a
year from the Tennessee Valley air.
EPA recently announced that the marketing of
Gasohol may continue. It would be premature
to stop the use of Gasohol now before a
national policy regarding alcohol fuels is
recommended by the National Alcohol Fuels
Commission, EPA officials said. EPA retains
the authority to regulate or ban Gasohol if
it is ultimately determined that the fuel
poses unsolvable problems. Gasohol has 10
percent ethanol and 90 percent unleaded
gasoline.
States Served by EPA Regions
Region 1 (Boston)
Connecticut. Maine.
Massachusetts. Now
Hampshire. Rhode Isla
Vermont
617 223 7210
Region 2 (New York
City)
New Jersey. New York.
Puerto Rico. Virgin
Islands
212 264 2525
Region 3
(Philadelphia)
Delaware. Maryland.
Pennsylvania. Virginia.
West Virginia. District of
Columbia
215 597 9814
Region 4 (Atlanta)
Alabama. Georgia
Florida. M ssissinpj
North Cart linn. South
Carolina Tt nm:ssee.
Kentucky
404 881-4727
Region 5 (Chicago)
Illinois. Indiana Ohio
Michigan Wisconsin.
Minnesota
312 353.2000
Region 6 (Dallas)
Arkansas. Louisiana.
Oklahoma Texas. New
Mexico
214 767 2600
Region 7 (Kansas
City)
Iowa Kansas Missouri
Nebraska
816374-5493
Region 8 (Denver)
Colorado Ut.ih
Wvornrnr] Montana
North Dakota South
Dakota
303 837 3095
Region 9 (San
Francisco)
Arizona CaWornia
Nevada Hawaii
415 5bG 2320
Region 10 (Seattle)
Ausk.i Idaho Oregon.
Washington
?0(> 44? 1 220
A Lawmaker's View
Continued from page 8
In contrast, an alternative mechanism
would charge each firm a fee in proportion
to the pollution it discharges. A firm which
could control pollution cheaply would do
more abatement to avoid the pollution
charge. Using this effluent charge system,
the same stream quality could be achieved
if all the firms spent a combined $12 million
per year on pollution control. This would be
$8 million a year cheaper than under the
regulatory system. Under a third, more
complex system, which based effluent
charges on the damage pollution wouid do
to a particular part of the river, the cost
would be only $9 million per yearto
achieve the same (eve! of stream quality.
Not only would a pollution charge sys-
tem reduce the costs of abatement, but it
would also speed cleanup. Today a pollut-
ing firm has strong incentives to postpone
installation of abatement equipment. By
claiming that pollution cleanup is difficult
or uncertain, a firm can often obtain re-
peated "temporary" exemptions from
standards. Thus, delay is now rewarded
with lower costs to the firm.
An effluent charge system would replace
the incentive to delay with a new incentive
to abate quickly. A firm would seek ways to
abate to avoid the pollution charge as soon
as possible.
Summary
In sum, the economic problem of pollution
control is twofold. First, from the perspec-
tive of the individual consumer, pollution
control costs appear to be inflationary be-
cause the consumer pays for the pollution
control but receives very little apparent
benefit as a result. Actually, from the per-
spective of society, pollution control is not
inflationary because the abatement costs
produce benefits that are worth more.
It is proper to challenge environmental
legislation to be sure that Congress, which
represents the people, believes that the
benefits of abatement exceed its costs.
However, it is improper to quantify the
costs of pollution cleanup, and label these
expenditures as bad, without first consider-
ing the benefits of abatement.
Second, the costs of pollution cleanup
can be reduced if a system of pollution
charges is used, instead of the current reg-
ulatory standards approach. By focusing
clean up efforts on firms where abatement
is less costly, a cleaner environment can be
achieved at lower costs to all consumers
combined. Q
JANUARY 1979
37
-------
Update
ENFORCEMENT
Chrysler Recall
EPA Administrator
Douglas M. Costle has
upheld the decision of
the Agency's administra-
tive law judge that certain
1975 Chrysler cars are
exceeding the Federal
emission standard for
carbon monoxide. He
ordered Chrysler Corp. to
recall 208,000 automo-
biles.
Costle affirmed the
February 10, 1978. de-
cision by Judge Edward
B. Finch that a substantial
number of cars with 360
and 400 cubic inch dis-
placement engines and
two-barrel carburetors do
not meet the carbon
monoxide standard of
1 5 grams per mile. The
Administrator told Chrys-
ler to submit a plan to
correct the problem within
30 days.
Models affected by the
recall order are Chrysler
Cordoba and Newport,
Plymouth Fury and Grand
Fury, and Dodge Monaco,
Charger SE and Coronet.
Agencies Weigh
New Rules
For Chemical
Spokesmen for the EPA
and the Occupational
Safety and Health Admin-
istration said recently
the agencies have been
concerned about ethylene
dibromide (EDB) and are
looking at possible new
rules for the chemical.
But exposure to the
chemical, widely used as
a pesticide and as an
additive in leading gaso-
line, is declining rapidly
because of Federal pro-
grams to reduce use of
leaded fuels, said
Benjamin Jackson, EPA's
Acting Deputy Assistant
Administrator for Mobile
Source and Noise
Enforcement.
"It remains to be seen
whether we could do any-
thing quicker than these
programs already are
doing it, such as an out-
right ban on the use of
EDB," Jackson said. The
Agency is expected to de-
cide in January whether
the chemical's use in
agriculture should be
banned.
Voluntary Recall
British Leyland Motors,
Inc., is voluntarily re-
catling about 50,000 of
its MGB vehicles to
correct defective emis-
sion control parts, EPA
announced. The recall
involves 1975 model year
MGB'sbuiltforsalein
California, alt 1976 and
1977 MGB's built for
nationwide sale, and
some 1978 model year
vehicles.
Due to a resonant vi-
bration in the exhaust
system during normal
engine operation, one or
more of the following
could happen: a cracked
exhaust manifold or
catalytic converter, de-
struction of the interior
matrix of the catalyst,
breakage of the main fuel
metering needle in the
carburetor, or loosening
of the carburetor fuel
bowl retaining screws.
These could result in
the affected vehicle
emitting pollutants above
exhaust standards. They
may also cause a loss of
engine power, and in
extreme cases there is a
potential risk of fire
caused by fuel leaking
from the carburetor.
EPA is accepting a
voluntary recall of these
cars because of British
Leyland's expeditious
identification, investiga-
tion, and solving of the
problem.
GENERAL
COUNSEL
Court Upholds EPA
No direct showing that a
chemical may cause
cancer in humans needs to
be established before the
EPA can prohibit dis-
charge of the chemical
into the Nation's water-
ways, the U.S. Court of
Appeals ruled recently.
In two cases involving
manufacturers' protests
against EPA rules, the
Court upheld the Agency's
power to bar the dis-
charge of toxic chemicals
into waterways even if
there is no conclusive
evidence that the chemi-
cals may be harmful to
humans.
One case involved
electrical manufacturers
protesting a ban on PCB's
(polychlorinated bi-
phenyls) which are used
in liquid electrical
installation.
The other opinion re-
sulted from two similar
cases consolidated by the
Court in which two manu-
facturers protested rule-
making procedures at
EPA and the Agency's
methods in setting toxic
standards for the pesti-
cides endrin and toxa-
phene.
PESTICIDES
Risk, Benefit Review
EPA is reviewing both
the possible health risks
and the economic bene-
fits of several major
pesticides used mostly to
preserve wood products
such as railroad ties,
marine pilings, and fence
posts.
Those being reviewed
are creosote—the largest
volume U.S. pesticide—*
and coal tar, neutral oil,
inorganic arsenic, and
pentachlorophenol.
Wood preservatives are
considered pesticides
under the 1972 Federal
pesticides law because
they control insects,
fungi, and bacteria that
damage wood.
EPA's review is likely
to last about 18 months,
and in the meantime the
pesticides in question
may continue to be sold
and used. The technical
name for the review is
"rebuttable presumption
against registration."
EPA Proposal
on Pesticides
EPA has proposed that
uses of the pesticide
endrin be allowed to con-
tinue on wheat and apple
orchards, and on cotton
in some areas. The
Agency would require
precautions to reduce
potential risks from
endrin's use to human
health, fish, and wildlife.
However, most uses of
endrin on cotton would be
stopped because of
potentially serious health
and environmental risks.
"In general, EPA has
concluded that for some
uses the risks of endrin
outweigh most of its
social and economic
benefits," said EPA Ad-
ministrator Douglas M.
Costle. Endrin has caused
birth defects in laboratory
animals and may pose
the same danger to
humans, he pointed out.
Endrin also is a threat to
wildlife, and is acutely
toxic to fish, Costle added.
SOLID WASTE
Hazardous Waste
Survey
EPA recently released a
preliminary survey listing
103 sites nationwide
where hazardous wastes
have been put.
The sites "are the ones
on which we have the
most information," said
Administrator Douglas
M. Costle. "They aren't
necessarily the most
dangerous sites. Indeed,
some have been cleaned
up and others are under
litigation. We are con-
tinuing to work with
States and localities in
monitoring these sites."
In the survey, EPA's
Regional Offices also pro-
vided a rough estimate
of the landfill, storage,
and other sites which may
contain some hazardous
waste which now or
potentially could cause
adverse impact on public
health or the environment.
The number was 32,254.
The Regional Offices
also provided a rough
estimate of the sites that
may contain significant
quantities of hazardous
wastes which could cause
significant imminent haz-
ards to public health. The
number was 638.
Under the new
Resource Conservation
and Recovery Act, EPA
is developing a hazardous
waste disposal system
that will track these
wastes throughout their
life and insure they are
finally disposed of in
approved facilities pro-
viding long-term public
safety, Costle said.
But EPA's authority to
clean up inactive sites is
quite limited, Costle said.
"... Many States have
more authority than the
Federal government to
deal with these problems.
We will work closely
with all States to provide
technical assistance or
any other help that we
can."
!8
EPAJOURNAL
-------
Resource Recovery
Funds
EPA announced recently
aprogramof $1 5 million
in grants to local govern-
ments to develop ways to
convert their trash and
garbage into energy and
to recover valuable
materials, such as metals,
glass, and paper.
"It's time we recog-
nized the full potential of
waste—putting as much
of it as possible back in
the marketplace," said
EPA Deputy Administra-
tor Barbara Blum.
The grant funds are
some of the first to be-
come available under
President Carter's urban
policy, which offers finan-
cial aid to cities to help
relieve social, economic,
and environmental prob-
lems.
TOXICS
Cooperation
On Toxics
Four Federal agencies,
including EPA, have out-
lined cooperative steps
to curb the hea Ith and
environmental threats
posed by a group of toxic
substances.
In a new report, titled
"Hazardous Substances,"
the agencies describe
their actions to protect
workers and the public
from disease and illness
caused by the unsafe
manufacture and handling
of 24 compounds, from
coke oven emissions to
asbestos.
Under a cooperative
agreement, which created
the Interagency Regula-
tory Liaison Group, the
agencies are pooling
their knowledge and re-
sources to gain the most
efficient health protection
programs at least cost to
the regulated industries.
The agencies are EPA,
Occupational Safety and
Health Administration,
the Food and Drug Ad-
ministration, and the
Consumer Product Safety
Commission.
Citizen Role
In Toxics
EPA is funding a pilot
program in New Jersey
and New York to test and
develop ways to involve
citizens in controlling
toxic substances. Thirty-
six public interest organi-
zations and nearly 500
people will participate.
The purpose of the
program is to determine
if a model for citizen
involvement in toxic sub-
stance control can be
created and then used
elsewhere.
"We are all affected by
chemicals in the environ-
ment," said Administra-
tor Douglas M. Costle.
"So citizens have a major
role to play in determining
safe, cost-effective
methods for the manufac-
ture and use of these
compounds."
WATER
New Agreement
For Great Lakes
A new agreement was
signed recently between
Canada and the United
States calling for pro-
grams and measures to
further abate pollution in
the Great Lakes.
Secretary of State
Cyrus Vance and Can-
ada's Secretary of State
for External Affairs Don
Jamieson signed the pact
in Ottawa. The agreement
reaffirms and updates the
two countries' commit-
ments to enhance water
quality in the Great Lakes
which contain 97 percent
of America's fresh water
storage.
EPA Deputy Adminis-
trator Barbara Blum, a
co-signer, praised the
cooperative efforts of the
International Joint Com-
mission in bringing about
the new agreement. "This
cooperative effort re-
affirms our determination
to restore and enhance
the quality of Great Lakes
water." Blum said.
Remaining Problems
In Water Pollution
Despite significant prog-
ress in cleaning up the
Nation's waters, many
pollution problems re-
main due to discharges
from industry and from
municipal sewage treat-
ment plants, the EPA
recently reported to
Congress.
The problems include
"traditional" ones such
as bacteria, excessive
levels of suspended
solids, organic materials
causing depletion of
oxygen in the water, and
excess discharge of
nutrients such as phos-
phorus and nitrogen lead-
ing to nuisance growths
of algae and other aquatic
plants.
However, the States
are also voicing increas-
ing concern over the
effects of toxic pollutants
such as heavy metals, and
pesticides and other
chemical compounds.
Among them are phenols,
cyanide, and PCBs (poly-
chlorinated biphenyls).
While generally em-
phasizing these remaining
problems, the report also
points out that overall
trends are good for most
pollutants monitored over
the past several years.
Procedure Reforms
For Sewer, Water
President Carter recently
announced streamlined
Federal procedures de-
signed to save rural areas
hundreds of millions of
dollars in construction of
sewerand water facilities.
The refined procedures
for such projects also are
expected to save as
much as a year's time in
the processing of appli-
cations for loans and
grants.
The five main agencies
involved in the new
system are EPA, the
Economic Development
Administration, Farmers
Home Administration,
Housing and Urban De-
velopment Department,
and Community Services
Administration.
AGENCYWIDF'
Cooperative Steps
On Spills, Health
Acting under a year-old
agreement to pool effort
and information in con-
trolling toxic substances,
four major Federal regu-
latory agencies have
achieved successes rang-
ing from unified re-
sponses to chemical
emergencies to setting up
a joint EPA-FDA labora-
tory in Research Triangle
Park, N.C.
The four agencies are
the Consumer Product
Safety Commission, the
Food and Drug Adminis-
tration, the EPA, and the
Occupational Safety and
Health Administration.
Their cooperative effort
stems from creation of an
Interagency Regulatory
Liaison Group.
Successes include joint
action to clean up a spill
of toxic chemicals at a
Philadelphia trucking
firm. EPA's Region 3 was
involved in the effort.
Cooperation also in-
cluded checking the
health of workers and
safety of food in the
vicinity of a pesticide
explosion at the Stauffer
Chemical Co. in Chicago.
EPA's Region 5 was
involved.
Region 4 was involved
in another joint effort,
where the four agencies
provided technical assist-
anceto North Carolina
to clean up roadways
contaminated by PCB's
(polychlorinated
biphenyls).
RADIATION
EPA Proposes
Criteria For
Radioactive Waste
Administrator Douglas M.
Costle recently proposed
environmental protection
criteria to be used by all
Federal agencies with
responsibilities for man-
aging or regulating all
forms of radioactive
wastes.
The proposed criteria
are designed to guide the
agencies in making radio-
active waste management
decisions. In the criteria,
EPA outlines the pro-
posed principles to be
applied for protection of
public health from the
various forms of radio-
active materials.
After public comment,
the proposed criteria wilt
be forwarded to the
President for approval. Q
Environmental
Ethics
A new book, Footprints
on the Planet, reports on
attitudes toward th,
vironment in business,
industry, and government.
The author, Robert Cahn,
talked with leaders of
some of the Nation's
largest corporations as
well as their environ-
mental critics. Thr
Pulitzer Pri.
journalist found that some
com] , naxi-
mum return on invest-
ment, by any means
,,iry, as their pri-
mary sociiil responsibility.
while others art; building
envii, concerns
into thoir overall planning
An oi
the Council on Environ-
mental Quality, Cahn also
provides a survey of the
environmental programs
of Presidents from Theo-
dore Roosevelt to Jimmy
Carter. The book is
S10.95, published by
Universe Books, New
York.
JANUARY 1979
39
-------
The Economy and
Regulatory Reform
Continued from page 14
I believe that it is. Over a five-
year time period we will start
getting the benefits of the new
technologies, the new ap-
proaches to pollution cleanup
that private engineers are going
to come up with because for the
first time it's profitable for them
to find new ways of control.
We'll be well ahead of where
we are now. That's strictly in
terms of reduced pollution.
On the surface some of
EPA's regulatory reforms
might appear to make it
easier on industry. Could
there conceivably be any
kind of slowdown of the
Agency's cleanup efforts?
A number of the reforms we're
looking at will reduce the com-
pliance burden on industry or
the states. None would reduce
our overall cleanup effort. If we
cut back a reporting require-
ment that we're not using, that's
a reduction in the amount of
effort we have to expend to col-
lect, receive, process
and store it. Doing so will not
weaken actual pollution control.
If we make our hearing process
simpler and less legalistic, rely-
ing more on discussions be-
tween our professional, tech-
nical, and engineering staffs
and the regulatees, as we've
been trying to do, that helps us
as well as the regulatees.
If we decide that we're not
going to regulate a large number
of very small sources that con-
tribute only a few percent of
overall pollution loadings,
which we did recently in the
PSD regulations, that's less of a
burden on industry. It's also less
of a burden on our own limited
resources. We may calculate
that it makes better sense to
loosen up a little bit on one
industry but tighten up on some
others because the new mix is
easier to enforce and a fairer
distribution of the burden. But
that sort of tradeoff is hardly a
softening of our bottom line
ambient requirements.
We simply do not have the
people to regulate everyone in
the world. One purpose of regu-
latory reform is to find the ways
of doing our work that impose
the least avoidable costs while
meeting our statutory require-
ments and advancing towards
our cleanup objectives in as
efficient and quick a manner as
possible.
Does EPA hope to per-
suade other regulatory
agencies to adopt some
of the same reforms this
Agency is now making?
(s there a cooperative
effort?
Absolutely. We are the largest
regulatory agency, and also the
agency with the broadest reg-
ulatory agenda. We regulate
everything in the country in ef-
fect, from very small pollution
sources to very big ones, involv-
ing all sorts of technology under
different conditions.
As a result, the White House
is looking to us to provide prac-
tical leadership for the entire
Administration in developing,
testing, and implementing new,
better ways of regulating. The
fact that the President looked to
us to take the lead in establish-
ing his Regulatory Council is
another reflection of the Agen-
cy's leadership.
Let me cite a few examples of
how our work serves as a
model.
Our new economic penalties
policy could easily apply wide-
ly. When society decides to reg-
ulate, it's usually because it's
trying to get someone to do
something that costs them
money that they would not
otherwise spend. The logic of
charging them what they have
saved to put them in the same
position as people who have
complied and to take away the
incentive to delay applies in
virtually all regulatory settings.
Our contribution is to take
such very simple ideas and
work out a practical, adminis-
trable, enforceable way of mak-
ing them happen, and working it
through with the states so they
can do it. Once that's been
done, other agencies and the
states can pick up the device
easily.
The President's regulatory
reform executive order was
modeled chiefly on our regula-
tion development process.
Marketable rights and emission
offsets have very broad appli-
cability beyond EPA. So do our
new hearing procedures—and a
host of other innovations.
Doug Costle and I hope that
one of the things this period of
EPA's history will be remem-
bered for is the large number of
practical innovations the
Agency has put in place. Many
of these changes will affect the
development of regulation well
beyond EPA.Q
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Cleanliness Pays
Continued from page 2 /
or disappear and new plants incorporate
environmental needs in their initial de-
signs," according to Professor James Brian
Quinn of Dartmouth University's Tuck
School of Business Administration.
Quinn also stated that the costs of pollu-
tion controls will "undoubtedly be further
reduced by lower process costs from
innovation or by-products use. . . ."
Economic Growth
Investment in pollution controls also has a
stimulating economic effect in developing
new areas in science, management, and in-
dustry that will result in the creation of
thousands of additional jobs. An estimated
300,000 persons now work directly for
companies in the pollution control business
Twice that many jobs are found in other
enterprises such as construction, which
directly support the industry.
But beyond the direct economic benefits
to firms that either use or produce emission
controls, society as a whole benefits even
more from the reduction of pollution's
harmful effects on almost every aspect of
our national life.
Air pollution alone, for example, may be
causing as much as $2.8 billion a year in
soiling damage to walls, windows, and
Venetian blinds in households. This nation-
wide projection is based on a sampling of
the effect of particulates in the Philadel-
phia metropolitan area. The preliminary
estimate is from a recent joint study by the
EPA and Resources for the Future.
In addition, air pollution causes major
damages to other materials including rub-
ber products, textile fabrics and dyes, and
electrical components.
Although complete and current data are
not available, the EPA estimated that air
pollution damage to crops and ornamental
vegetation such as commercial flowers and
shrubs was about $200 million in 1970.
EPA's estimate was based largely on a
study by the Stanford Research Institute.
Any reduction in these damages by cut-
ting back on the amount of pollution in the
air can translate into almost immediate fi-
nancial benefits. Savings also result from
curbing water pollution or managing solid
wastes.
Also, while pollution's damage to the
natural and rnanmade environment is ser-
ious, it is far outweighed by the injury, ill-
ness, and death caused to humans.
Environmentalists feel that such losses
more than justify the cost of pollution
abatement for the Nation as a whole, but
convincing a board of directors that emis-
sion controls make fiscal sense is another
matter.
To date the only incentive employed has
been the negative one of Federal and State
emission limitations backed up by fines for
failure to comply. While this approach has
produced significant gains in cleaning up
the environment, it has met with consider-
able foot dragging from businesses whose
instinctive reaction is to resist additional
costs unless they can be shown to have a
positive effect on profits.
For this reason, the Environmental Indus-
try Council, in cooperation with several
other private organizations and government
agencies, will devote its fourth annual con-
ference to examining more closely the costs
and benefits of pollution control. The con-
ference will be in Washington, D.C., Febru-
ary 28-March 1, 1979. It plans to feature
the researchers of the major cost/benefits
studies, key government and Congressional
decision makers, and industry leaders.
Rather than expending all of their effort
fighting industry's instinct to reduce costs,
environmentalists might do better to har-
ness it by selling business the idea that
emission controls can make money. By
combining the stick of statutory pollution
limits with the carrots of improved effici-
ency and new sources of energy and raw
materials that modern control technologies
offer, industry may yet be convinced that a
clean environment can also be good
business. FJ
Above. A paper plant located tin the hunks
ol t/in St. Croix River near Bangor. Me.
Back cover Old growth sitka spruce forest
in the North Cascade Mountains near Lake
Che/an, Wash.
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