Environmental Policy
Water Pollution
Air Pollution
State & Local Issues
Global Environment
Types of Water Pollutants
 Organic wastes
 Sewage, residuals from
factories, pesticides, oil,
detergent
 Inorganic substances
 Toxic metals, salts,
acids, nitrates
 Non-material
 Radioactivity, heat
 Infectious agents
 Bacteria, viruses
 Point source vs.
Non-point
source
 Continuous vs
episodic
 Persistent vs
degradable
Water Pollution Policy
 Refuse Act (1899)
 Water Pollution Control
Act (1948, 1956, 1972)



Introduced TBES in 1972;
moved away from AQ
standards
Loan subsidies for
construction of water
treatment facilities
Zero discharge goal by 1985
 Clean Water Act (1977)


Fishable-swimmable goal
Focus on toxic effluents
 Water Quality Act (1965,
1987)


Converted water treatment
subsidies to revolving loan
fund
Focus on non-point sources
 Initial burden was on
states/localities
 EPA established in 1970
 Federally set TBES
 State/local enforcement
 Municipal treatment
subsidies
Technology-Based Effluent Standards
 Effluent standard set at the level of emissions a
source would produce if it used particular
technologies
 Best Practicable Technology (BPT) by 1977
 Best Available Technology (BAT) by 1983
 Best Conventional Technology (BCT) after 1984
Estimated Total Costs and Emissions from Sugar-Beet Plants
Using Alternative Abatement Technology
Technological Options
Emissions
No
Control
A
B
C
D
E
BOD
5.80
3.60
2.20
1.05
0.23
0.00
TSS
10.20
5.70
2.50
1.02
0.30
0.00
0.0
$8.00
$14.40
$23.40
$36.50
$78.80
(kg/kkg of raw product
processed
Total Costs
($ mil/yr)
BPT = ?
BAT = ?
BCT = ?
Rivers and Streams Supporting Recreational Uses:
With and Without CWA
Increase in Use Support
Highest Supported
Use
Without-CWA
Conditions
(miles)
With-CWA
Conditions
(miles)
Miles
Percent
Increase
Percent of
Maximum
Increase
Swimmable
222,120
238,627
16,507
7.4
49.5%
Fishable
399,999
424,712
24,713
6.2
57.8%
Boatable
454,038
475,894
21,856
4.8
59.4%
Nonsupport
178,514
156,658
-21,856
-12.2
59.4%
632,552 Miles Analyzed during the mid-1990s
If all point-source
emissions are eliminated
Comparison of Point Source Water Pollution-Control Costs:
TBES vs Least-Cost
Study
Water Resource
Water Quality Target
(mg/liter)
Ratio of TBES
to Least-Cost
Johnson (1967)
Delaware Estuary
2.0 mg/liter DO
3.0 mg/liter DO
4.0 mg/liter DO
3.13
1.62
1.43
O’Neill (1980)
Fox River
(Wisconsin)
2.0 mg/liter
4.0 mg/liter
6.2 mg/liter
7.8 mg/liter
DO
DO
DO
DO
2.29
1.71
1.45
1.38
Eheart, Brill, and Lyon (1983)
Willamette River
4.8
7.4
3.0
3.6
DO
DO
DO
DO
1.12
1.19
3.00
2.92
Deleware Estuary
mg/liter
mg/liter
mg/liter
mg/liter
Kneese and Bower (1968)
Delaware Estuary
2 ppm DO
3-4 pm DO
3.10
2.90
Kerri (1966)
Willamette River
5.0 mg/liter DO
1.58
Goodwin and Dobbins (1966)
Merrimack River
3.0 ppm DO
1.34
Bennett, Thorpe, and Guse
(2000)
Long Island Sound
Total nitrogen loading (tons)
1.25
Water Policy Innovations
 Focus on Non-point sources
 Design standards
 No agricultural cultivation on steep slopes
EPA estimates 50%+ of
water violations due to NPS
 Designs on urban storm sewers
 Home builders must control run-off
 Tax materials/activities leading to NPS
 Fertilizers, chemicals
 Total Maximum Daily Load program
 Emission limits if TBES don’t achieve ambient standards
 Tradable Discharge Permits
 Fox River, Chesapeake Bay, Long Island Sound, Dillon
Reservoir
 Problems
 Thin markets
 Trading ratios
Air Pollution Policy
Ozone: filters out ultraviolet radiation
Other gases provide for “greenhouse” effect
78% Nitrogen
21% Oxygen
Federal Air Pollution Control Laws
 Early law was local in nature; focus on “nuisance laws”
 Air Quality Act (1967)
 Required states to established ambient standards for
“criteria pollutants”
 expanded grants to states for air pollution control plans
 Clean Air Act (1963, 1966, 1970, 1977, 1990)




Established uniform NAAQS
Established TBES
Stationary vs mobile sources
SO2 tradable discharge permits
Criteria Pollutants
Particulate Matter
Health: breathing symptoms; aggravation of existing respiratory and cardiovascular disease;
impairment of the body’s immune systems; damage to lung tissue; premature mortality
Welfare: damage to materials, soiling; visibility impairment
Sulfur Dioxide
Health: adverse effects on breathing; respiratory illness; alterations to lung’s defenses,
aggravation of existing respiratory and cardiovascular disease
Welfare: foliar damage on trees and crops; contribution to acid rain; accelerated corrosion of
buildings
Carbon Monoxide
Health: exposure to elevated levels causes impairment of visual perception, work capacity,
manual dexterity, learning ability and performance of complex tasks; individuals with existing
cardiovascular disease are at greater risk
Nitrogen Dioxide
Health: lung irritation, reduced resistance to respiratory infection; continued or frequent
exposure may cause higher incidence of acute respiratory disease in children
Welfare: contributes to ozone formation and acid rain
Ozone
Health: reduced lung functioning; damage to lung tissue, increased sensitivity of the lung to
other irritants
Welfare: reduction in crop yields; foliar damage to crops and trees, damage to ecosystem
Lead
Health: damage to kidneys, liver, nervous system, and blood forming organs; changes in
fundamental enzymatic, energy transfer, and homeostatic mechanisms in the body; excessive
exposure can cause neurological problems such as seizures, mental retardation, and/or
behavioral problems
National Primary and Secondary Ambient Air-Quality Standards (NAAQS)
Pollutant
Primary Standard
Secondary Standard
150 µg/m3
Same as primary
15 µg/m3
35 µg/m3
Same as primary
Same as primary
9 ppm
35 ppm
None
None
0.053 ppm
Same as primary
8-hour mean
0.075 ppm
Same as primary
Quarterly mean
0.15 µg/m3
Same as primary
0.03 ppm
0.14 ppm
none
Same as primary
Same as primary
0.50 ppm
Particulate Matter (PM10)
Daily mean
Particulate Matter (PM2.5)
Annual mean
Daily mean
Carbon Monoxide
8-hour mean
1-hour mean
Nitrogen Dioxide
Annual mean
Ozone
Lead
Sulfur Dioxide
Annual mean
24-hour mean
3-hour mean
Source: http://www.epa.gov/air/criteria.html
Stationary Source Control: TBES
 Non-Attainment Areas
 Existing Sources: RACT (Reasonably Available Control
Technology)
 New Sources: LAER (Lowest Achievable Emission Rate)
 Prevention of Significant Deterioration (PSD) Areas
 Existing Sources: None
 New Sources: BACT (Best Available Control Technology)
Note: New Source Bias
 Creates incentives to hold onto older, dirtier, factories
 Creates incentives for older factories to produce to
capacity whereas newer factories may have excess
capacity
Cap-and-Trade (CAP) Program
 1990 CAA: reduce SO2 emissions by 40% from 1990
levels
 Phase I: 1995 – 2000
 110 power plants in 21 eastern/midwestern states
 # permits = (Avg Btu of fuel used) x (2.5 lbs SO2/million Btus)
 Phase II: 2000 – present
 Covers all power plants in US (approx. 1000)
 # permits = (Avg Btu of fuel used) x (1.2 lbs SO2/million Btus)
 Overall cap of 8.95 million permits in 2010
 Trading Rules
 Participants: corporations, individuals, green groups, speculators
 EPA tracks all trades, monitors emissions
 $2581 fine for excess SO2
Clean Air Markets in Action
EPA Acid Rain Allowance Auction
$1,000
$900
$800
$700
$600
$500
Affected Sources
Allowance Prices
Trends in SO2 Emissions
Cross-State Air Pollution Rule
Spot
7-year Advance
$400
 AEP Muskingum River Plant
$300
$200
 98,515 tons of SO2 in 2010
 4 coal-units producing 840 MW
 159 full-time workers
 AEP Dresden
$100
 Natural gas unit producing 580 MW
1996
1998
2000
2002
2004
2006
2008
 25
full-time
workers
$0
1994
2010
2012
Mobile Source Emissions
Total
Emissions
=
Number of
Vehicles
x
Average Miles
Traveled
x
Emissions
per Mile
Federal focus has been on emissions per mile
Equimarginal principle suggests all RHS factors should be
balanced
New Car Emission Standards
VOC, NOx, CO, PM
“Technology forcing”
Inspection and Maintenance programs
Technology Standards
Reformulated fuels
Alternative fuels: methanol, natural gas, hydrogen
Clean cars: electric vehicles, hybrids
Massachusetts v US EPA: Supreme Court
rules 5-4 that CO2 is a pollutant and the
EPA is responsible for its regulation
Stationary and Mobile Sources of Criteria Pollutants in the US
Emissions (million short tons)
1970
1980
1990
2000
2010
Carbon monoxide
Stationary
Mobile
29.4
174.6
24.9
160.5
22.5
131.7
22.2
92.2
22.5
45.3
Nitrogen oxides
Stationary
Mobile
11.5
15.3
12.3
14.8
12.1
13.4
10.0
12.6
5.8
7.2
Volatile organic compounds
Stationary
Mobile
16.1
18.5
15.1
16.0
12.0
12.1
9.5
8.0
9.0
4.5
Sulfur dioxide
Stationary
Mobile
30.6
0.6
25.2
0.7
22.2
0.9
15.7
0.7
7.7
0.2
Particulate matter (PM10)
Stationary
Mobile
12.4
0.6
6.3
0.7
27.1
0.7
23.2
0.6
10.5
0.3
39.2
181.7
9.5
64.7
3.8
1.2
Lead
Stationary
Mobile
Source: Table 15.1, Field and Field (5e), p302
Estimated Impacts of 1990 Clean Air Act
Emissions (hundred tons per day)
1990
Actual
2000
Without
CAA
2000
With CAA
VOC
62.2
66.0
46.8
NO
67.3
67.8
49.5
CO
258.6
242.1
201.5
SO2
61.3
64.8
48.5
PM10
77.5
78.8
76.9
Source: Table 15.2, Field and Field (5e), p302
State & Local Issues
Municipal Wastes
Land Use Control
Municipal Solid Waste
 Disposal Options
 Landfills
 Incineration
 Recycling
 NIMBY
Media switching?
Municipal Solid Waste
Municipal Solid Waste
1960
1970
1980
1990
2000
2010
Total quantity generated
(mil. tons)
88.1
121.0
151.6
208.3
242.5
249.9
Quantity generated per
capita (lbs/person/day)
2.7
3.3
3.7
4.6
4.7
4.4
93.6
0.0
6.4
93.1
0.3
6.6
88.6
1.8
9.6
69.3
14.5
16.0
57.5
13.9
28.6
54.3
11.7
34.0
Disposal, percent of total:
Landfill
Combustion
Recycled
Source: http://www.epa.gov/epawaste/nonhaz/municipal/pubs/msw_2010_data_tables.pdf
Source: http://www.epa.gov/epawaste/nonhaz/municipal
Source: http://www.epa.gov/epawaste/nonhaz/municipal
Source: http://www.epa.gov/epawaste/nonhaz/municipal
Economics of Recycling
Producer and Consumer Decisions
Private costs versus social costs
Reasons to Recycle
1. Feels good?
2. Saves energy?
3. Saves money?
4. Creates good jobs?
5. Saves trees?
6. Improves environment?
7. Saves landfill space?
Producer Decisions
$
S1
Increase reuse ratio?
 Raise q1, hold q0
S2
Public curbside collection
 Reduce q0, hold q1
Reduce overall demand
PV + t
PV
 do both!
D
q1
q2
q0
With S1: q1 units will be recycled; reuse ratio = q1/q0
Minimum content standards?
Cost Effectiveness?  Taxes or TDP?
Materials
Increase PV thru tax
Consumer Decisions
Which goods to buy? In what quantities?
Should I recycle?
Worksheet on Landfill vs Recycling
Mandatory recycling
Disposal taxes
Deposit Refund
Product A
Product B
Value to Consumer
140
160
Purchase Price
100
100
40
60
Private Costs
10
10
External Costs
10
40
Private
30
Social
20
10
Private
10
40
Community Transport
--
10
External Costs
10
0
Value of Recovered Materials
0
20
Private
30
Social
20
Net Value
Landfill Option
Disposal Costs
Net Benefits
(20)
50
(10)
Recycling Option
Disposal Costs
Net Benefits
(20)
20
30
(30)
Global Environmental
Issues
Ozone Depletion
Global Warming
Biodiversity
Global Warming
Major Greenhouse Gases
Gas
Preindustrial
Level
Current
Level
Major Source
CO2
280ppm
387ppm
Fossil fuel combustion, deforestation,
cement production
CH4 (methane)
700ppb
1745ppb
Landfills, enteric fermentation
N 2O
270ppb
314ppb
Water Vapor
CFC-12
 Climate Sensitivity
 Doubling of CO2  + 1°C
 Feedback effects
 Water vapor: + 1.7°C
 Clouds ???
Fertilizers, biomass burning, fossil fuel
combustion
Refrigerants, propellants
280ppm  560ppm: + 1°C
560ppm  1120ppm: + 1°C
“Hockey Stick” graph
IPCC Report
 Temperature increases caused by (human
generated) CO2 increases
0.5°C (1° F) over last 100 years
1.5° - 4.5°C over next 100 years
 rising sea levels on coastal societies
 rapid change does not allow for evolutionary
changes
 agricultural and forestry changes
Stern Review
Critique of Stern Review
Global Warming Policy
 Kyoto Protocol (1997)
 Prescribed emission reduction targets for 6 GHGs
 Signatories must reduce GHG 5% below 1990 levels by 2008-2012
 Technical Responses
 Increase earth’s absorption abilities
 Reduce emissions
Total CO2 Production = pop x (GDP/pop) x (energy/GDP) x (CO2/energy)
 Stern Review
 Damage estimates: 5-20% loss in annual global GDP
 Annual mitigation costs: 1% global GDP to meet 550ppm target
 Policy Options
 Differences in control costs suggests incentive-based strategies
 Tradable discharge permits
 Emissions tax
 Differences in contributing factors complicate global agreements between
nations
Cost-Effectiveness of Alternative Means of Reducing CO2
Means
Costs per Ton of
CO2 ($)
Co-firing boilers with natural gas
$10
Early retirement of coal plants, replaced with nonfossil fuels
280
Increased energy efficiency in homes
175 to 300
Increased energy efficiency in commercial buildings
-190 to 75
Cogeneration—commercial
85 to 210
Increased fuel efficiency in cars
-220 to -410
Increased fuel efficiency in light trucks
-510 to -410
Mass transit
Cogeneration—industry
1,150 to 2,300
55 to 120
Urban tree planting
180
Afforestation with CRP
35
Increased CO2-abscorbing capacity through management of
existing forests
Source: Table 20.3, Field and Field (4e)
150 to 200
Stern Review
“Climate change is the greatest market failure the world has ever seen”
 CO2 target = 550ppm
 Choice:
Requires emissions 25% below current levels by 2050
 Costs of strong and early action (1% GDP)
 Costs of not acting (5% - 20% GDP)
 3 Elements of Policy
 Pricing of carbon: taxes, cap-and-trade, regulation
 Support innovation and deployment of low-carbon technologies
 Remove barriers to energy efficiency (inform, educate, persuade)
 International response is required




Emissions trading
Technology cooperation
Reduced deforestation
Adaptation
Kyoto Protocol (1997)
Stern Critique: Overestimated MD
 Demographics: assumes rapid
pop. growth and low income
growth in low latitudes
 Discount rate
 Low discount rate (r = 1.4%)
use for evaluating the cost of
future damages
 Mitigation costs are evaluated
using r ≈ 4%
 Adaptation is not taken into
account
 Extreme weather events
increase: from 0.2 percent of
GDP to 5% of GDP
 Non-market damages suffer
from sampling bias
 Equity: extra weight given to
damages suffered by poor
people
$
MDStern
MACStern
MDMendelsohn
t*
550
E*
PV of damages = $85 per ton of CO2
($300 per ton of carbon)
CO2e
Stern Critique: Underestimated MAC
 Must reduce emissions by 25% $
below current level by 2050
 Renewable energy sources
(42%)
 Nuclear power (15%)
t*
 Carbon capture (15%)
 Energy efficiency (27%)
 Ignores value of lost fossil fuels
 Ignores impact of renewables
on land usage/prices
MACStern
MACMendelsohn
MDStern
MDMendelsohn
550
E**
CO2e
Global Warming Policy
Economic and CO2 Emissions Data for Selected Countries, 2008
Country
Population
(millions)
China
GDP per
capita ($)
Total
Emissions
Emissions
per capita
(million tons)
(tons)
Emissions
per Dollar
GDP (kg/$)
1,326
6,679
7,030
5.3
1.027
303
42,656
5,670
18.7
0.455
India
1,125
2,622
1,740
1.6
0.597
Russia
142
14,730
1,710
12.0
0.853
Japan
127
31,275
1,210
10.0
0.329
Germany
82
32,786
787
9.5
0.312
Brazil
192
9,682
393
2.0
0.212
United States
Source: Gapminder.org
Copenhagen Consensus
“What would be the best ways of advancing global welfare, and
particularly the welfare of the developing countries, illustrated by
supposing that an additional $75 billion of resources were at their
disposal over a four-year initial period?”
Global Warming Policy
Economic and CO2 Emissions Data for Selected Countries, 2008
Country
Population
(millions)
China
GDP per
capita ($)
Total
Emissions
Emissions
per capita
(million tons)
(tons)
Emissions
per Dollar
GDP (kg/$)
1,326
6,679
7,030
5.3
1.027
303
42,656
5,670
18.7
0.455
India
1,125
2,622
1,740
1.6
0.597
Russia
142
14,730
1,710
12.0
0.853
Japan
127
31,275
1,210
10.0
0.329
Germany
82
32,786
787
9.5
0.312
Brazil
192
9,682
393
2.0
0.212
United States
Source: Gapminder.org
United Nations Climate Change Conference from Durban, South Africa
Biodiversity
Types
Genetic material
Species
Ecosystems
Species Stock
Random mutations
Extinction rates
Over-exploitation
Habitat destruction
Introduction of non-native species
Policy Approaches
Endangered Species Act (1973)
1,967 species have been listed as endangered or
threatened
51 species have been removed
Prohibition on takings
23 have been recovered
Protection of habitats
12 listed in error or due to taxonomic change
CITES (1975)
Export/import controls
5000 animals/28,000 plants
Coase Theorem Alternative?
Zimbabwe’s CAMPFIRE
Costa Rica and Merck
10 have gone extinct
6 discovery of new populations