Environmental Policy

Water PollutionAir Pollution

State & Local IssuesGlobal 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

Initial burden was on states/localities

EPA established in 1970 Federally set TBES State/local enforcement Municipal treatment

subsidies

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

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 (kg/kkg of raw product processed

No Contr

olA 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

Total Costs ($ mil/yr)

0.0 $8.00 $14.40 $23.40 $36.50 $78.80

BAT = ?

BPT = ?

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 DO3.0 mg/liter DO4.0 mg/liter DO

3.131.621.43

O’Neill (1980) Fox River (Wisconsin)

2.0 mg/liter DO4.0 mg/liter DO6.2 mg/liter DO7.8 mg/liter DO

2.291.711.451.38

Eheart, Brill, and Lyon (1983)

Willamette River

Deleware Estuary

4.8 mg/liter DO7.4 mg/liter DO3.0 mg/liter DO3.6 mg/liter DO

1.121.193.002.92

Kneese and Bower (1968) Delaware Estuary 2 ppm DO3-4 pm DO

3.102.90

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

EPA estimates 50%+ of water violations due to NPS

Focus on Non-point sources Design standards

No agricultural cultivation on steep slopesDesigns on urban storm sewersHome builders must control run-off

Tax materials/activities leading to NPSFertilizers, 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 marketsTrading ratios

Water Policy Innovations

Air Pollution Policy

78% Nitrogen21% Oxygen

Ozone: filters out ultraviolet radiation

Other gases provide for “greenhouse” effect

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

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 PollutantsParticulate Matter

Health: breathing symptoms; aggravation of existing respiratory and cardiovascular disease; impairment of the body’s immune systems; damage to lung tissue; premature mortalityWelfare: damage to materials, soiling; visibility impairment

Sulfur DioxideHealth: adverse effects on breathing; respiratory illness; alterations to lung’s defenses, aggravation of existing respiratory and cardiovascular diseaseWelfare: foliar damage on trees and crops; contribution to acid rain; accelerated corrosion of buildings

Carbon MonoxideHealth: 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 DioxideHealth: lung irritation, reduced resistance to respiratory infection; continued or frequent exposure may cause higher incidence of acute respiratory disease in childrenWelfare: contributes to ozone formation and acid rain

OzoneHealth: reduced lung functioning; damage to lung tissue, increased sensitivity of the lung to other irritantsWelfare: reduction in crop yields; foliar damage to crops and trees, damage to ecosystem

LeadHealth: 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

Particulate Matter (PM10)Daily mean 150 µg/m3 Same as primary

Particulate Matter (PM2.5)

Annual meanDaily mean

15 µg/m3

35 µg/m3

Same as primarySame as primary

Carbon Monoxide8-hour mean1-hour mean

9 ppm35 ppm

NoneNone

Nitrogen DioxideAnnual mean 0.053 ppm Same as primary

Ozone8-hour mean 0.075 ppm Same as primary

LeadQuarterly mean 0.15 µg/m3

Same as primary

Sulfur DioxideAnnual mean24-hour mean3-hour mean

0.03 ppm0.14 ppm

none

Same as primarySame as primary

0.50 ppmSource: 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 BiasCreates incentives to hold onto older, dirtier, factoriesCreates incentives for older factories to produce to

capacity whereas newer factories may have excess capacity

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 BiasCreates incentives to hold onto older, dirtier, factoriesCreates 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

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

Affected SourcesAllowance PricesTrends in SO2 EmissionsCross-State Air Pollution Rule

AEP Muskingum River Plant 98,515 tons of SO2 in 2010 4 coal-units producing 840 MW 159 full-time workers

AEP Dresden Natural gas unit producing 580 MW 25 full-time workers

Mobile Source Emissions

Federal focus has been on emissions per mileEquimarginal principle suggests all RHS factors should be balanced

New Car Emission StandardsVOC, NOx, CO, PM“Technology forcing”Inspection and Maintenance programs

Technology StandardsReformulated fuelsAlternative fuels: methanol, natural gas, hydrogen Clean cars: electric vehicles, hybrids

TotalEmissions

Number ofVehicles

Average MilesTraveled

Emissionsper Mile= x x

Massachusetts v US EPA: Supreme Court rules 5-4 that CO2 is a pollutant and the EPA is responsible for its regulation

Massachusetts v US EPA: Supreme Court rules 5-4 that CO2 is a pollutant and the EPA is responsible for its regulation

Emissions (million short tons)

1970 1980 1990 2000 2010

Carbon monoxideStationaryMobile

29.4174.6

24.9160.5

22.5131.7

22.292.2

22.545.3

Nitrogen oxidesStationaryMobile

11.515.3

12.314.8

12.113.4

10.012.6

5.87.2

Volatile organic compounds

StationaryMobile

16.118.5

15.116.0

12.012.1

9.58.0

9.04.5

Sulfur dioxideStationaryMobile

30.60.6

25.20.7

22.20.9

15.70.7

7.70.2

Particulate matter (PM10)

StationaryMobile

12.40.6

6.30.7

27.10.7

23.20.6

10.50.3

LeadStationaryMobile

39.2181.7

9.564.7

3.81.2

Stationary and Mobile Sources of Criteria Pollutants in the US

Source: Table 15.1, Field and Field (5e), p302

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

Estimated Impacts of 1990 Clean Air Act

State & Local Issues

Municipal WastesLand Use Control

Municipal Solid WasteDisposal Options

Landfills Incineration Recycling

NIMBY

Media switching?

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

Disposal, percent of total: Landfill Combustion Recycled

93.60.06.4

93.10.36.6

88.61.89.6

69.314.516.0

57.513.928.6

54.311.734.0

Municipal Solid Waste

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 DecisionsPrivate costs versus social costs

Reasons to Recycle1. Feels good?2. Saves energy?3. Saves money?4. Creates good jobs?5. Saves trees?6. Improves environment?7. Saves landfill space?

Producer Decisions

D

S2

S1

PV

PV + t

q1 q2 q0

With S1: q1 units will be recycled; reuse ratio = q1/q0

Increase reuse ratio?

Raise q1, hold q0

Reduce q0, hold q1

Public curbside collection

Reduce overall demand

do both!Increase PV thru tax

Materials

Cost Effectiveness?

Minimum content standards?

Taxes or TDP?

$

Consumer DecisionsWhich goods to buy? In what quantities?Should I recycle?

Worksheet on Landfill vs RecyclingMandatory recyclingDisposal taxesDeposit Refund

Product A Product B

Value to Consumer 140 160

Purchase Price 100 100

Net Value

Landfill Option

Disposal CostsPrivate Costs 10 10

External Costs 10 40

Net BenefitsPrivate

Social

Recycling Option

Disposal Costs

Private 10 40

Community Transport -- 10

External Costs 10 0

Value of Recovered Materials 0 20

Net BenefitsPrivate

Social

40 60

30

20

50

10

30

20

20

30

(20) (10)

(20) (30)

Global Environmental

IssuesOzone DepletionGlobal Warming

Biodiversity

Global Warming

Climate Sensitivity Doubling of CO2 + 1°C

Feedback effects Water vapor: + 1.7°C Clouds ???

Major Greenhouse Gases

Gas Preindustrial Level

Current Level

Major Source

Water Vapor

CO2 280ppm 387ppm Fossil fuel combustion, deforestation, cement production

CH4 (methane)

700ppb 1745ppb Landfills, enteric fermentation

N2O 270ppb 314ppb Fertilizers, biomass burning, fossil fuel combustion

CFC-12 Refrigerants, propellants

280ppm 560ppm: + 1°C

560ppm 1120ppm: + 1°C

“Hockey Stick” graph

IPCC Report

Temperature increases caused by (human generated) CO2 increases0.5°C (1° F) over last 100 years1.5° - 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 ReviewCritique 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

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

Total CO2 Production = pop x (GDP/pop) x (energy/GDP) x (CO2/energy)

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 1,150 to 2,300

Cogeneration—industry 55 to 120

Urban tree planting 180

Afforestation with CRP 35

Increased CO2-abscorbing capacity through management of existing forests

150 to 200Source: Table 20.3, Field and Field (4e)

Stern Review

CO2 target = 550ppm Choice:

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

“Climate change is the greatest market failure the world has ever seen”

Requires emissions 25% below current levels by 2050

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

MACSternMDStern

CO2e550

t* MDMendelsohn

$

E*

PV of damages = $85 per ton of CO2

($300 per ton of carbon)

Must reduce emissions by 25% below current level by 2050 Renewable energy sources

(42%) Nuclear power (15%) Carbon capture (15%) Energy efficiency (27%)

Ignores value of lost fossil fuels Ignores impact of renewables

on land usage/prices

MACSternMDStern

CO2e550

t* MDMendelsohn

MACMendelsohn

E**

Stern Critique: Underestimated MAC

$

Economic and CO2 Emissions Data for Selected Countries, 2008

Country Population(millions)

GDP per capita ($)

Total Emissions (million tons)

Emissions per capita

(tons)

Emissions per Dollar GDP (kg/$)

China 1,326 6,679 7,030 5.3 1.027

United States 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

Source: Gapminder.org

Global Warming Policy

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?”

Economic and CO2 Emissions Data for Selected Countries, 2008

Country Population(millions)

GDP per capita ($)

Total Emissions (million tons)

Emissions per capita

(tons)

Emissions per Dollar GDP (kg/$)

China 1,326 6,679 7,030 5.3 1.027

United States 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

Source: Gapminder.org

Global Warming Policy

United Nations Climate Change Conference from Durban, South Africa

BiodiversityTypes

Genetic materialSpeciesEcosystems

Species StockRandom mutationsExtinction rates

Over-exploitationHabitat destructionIntroduction of non-native species

Policy ApproachesEndangered Species Act (1973)

1,967 species have been listed as endangered or threatenedProhibition on takingsProtection of habitats

CITES (1975)Export/import controls5000 animals/28,000 plants

Coase Theorem Alternative?Zimbabwe’s CAMPFIRECosta Rica and Merck

51 species have been removed 23 have been recovered 12 listed in error or due to taxonomic change 10 have gone extinct 6 discovery of new populations