Econ 201
Lecture 9.4
Water Pollution:
Puget Sound Clean Up
3-6-09
Efficiency and CostEffectiveness
Ambient Standards and the Zero-Discharge
Goal
• The shift from ambient standards to a
zero discharge goal was problematic.
– The feasibility of meeting such a goal is small
and thus enforcement is a problem.
• On-going law suits
– For some pollutants, such a high cost might
be justified. However, the zero discharge goal
does not distinguish among pollutant types.
National Effluent Standards
• Enforcement Problems:
– Cost-effectiveness requires individual
standards for each source,
• instead EPA chose general standards for broad
categories of sources
• Allocating Control Responsibility
– Studies show that uniform standards do not
closely approximate the least-cost allocation.
TABLE 17.2 Empirical Studies of Water
Pollution Control
Pretreatment Standards
Nonpoint Pollution
• Nonpoint source pollution has become a significant part
of the total water quality problem.
• Howerver more intensive controls have been placed on
point sources as an attempt to compensate for nonpoint
sources.
• Studies suggest that some nonpoint sources could be
controlled at low costs, especially with policies aimed at
reducing nitrogen use.
TABLE 17.3 Summary of NPDES Trading
Programs That Have Traded at Least Once
• The European Experience
– In Europe, economic incentives such as
effluent charges play a much larger role.
– German experience
• Pay 100% on all pollutants if exceed threshold
• 50% on all if meet minimum standard
• If 75% lower than standard, pay only 50% on
actual
• Waived for 3 years if new equipment purchased
which reduces to 20%
• Estimated to cost 1/3 of uniform standard
Puget Sound Clean Up
• Objectives
– Reduce 150k per day pounds of toxic
chemicals that enter Puget Sound daily
• Over 2 years -> equivalent to Exxon Valdez spill
– Acquire/restore prime marine habitats
• Replace degraded shorelines, wetlands, estuaries
– 40 major species have declined
Puget Sound Clean Up Initiative
• Governor’s proposal
– Added $42M to already allocated $90M
– Puget Sound Partnership
• 10 person team of elected official, business leaders
• Proposed actions
–
–
–
–
–
–
$21M faster clean-up of pollution and shoreline
$6.5M upgrade of septic systems -> into PS
$4M for Parks to upgrade sewer systems
$3M restore estuaries (wetlands)
$2M to remove creosote logs
$1.5M for oil spill and hazardous chemical clean-up,
including storage
Puget Sound Clean Up
• What’s happening today
– Port Gardner Bay Clean Up (9 sites)
•
•
•
•
•
•
•
•
Oil, gasoline, diesel fuels, heavy metals
Everett shipyard
North Marina
Baywoods
Exxon/Mobil storage
Weyerhauser
East Waterway
ASARCO (Arsenic)
An Overall Assessment
• Use of cost-effective policies would reduce costs
substantially while not affecting the benefits.
• Economic incentives would also facilitate change better
than technology-based standards that are rigid.
• Marketable permits for water pollution control are being
explored for many bodies of water in the U.S.
– Permits will encourage firms to try to minimize costs.
• Economic incentives put pressure on sources to find
better ways to control pollution.