Acid Rain

Major Areas of Environmental Regulation

 

In the United States, the federal government regulates in three major areas of environmental protection: air pollution, water pollution, and land pollution (solid and hazardous waste). This section will review the major ecological issues and the U.S. laws pertaining to each, with comparative references to similar initiatives in other nations.

 

Air Pollution

 

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Air pollution occurs when more pollutants are emitted into the atmosphere than can be safely absorbed and diluted by natural processes. Some pollution occurs naturally, such as smoke and ash from volcanoes and forest fires. But most air pollution today results from human activity, especially industrial processes and motor vehicle emissions. Air pollution degrades buildings, reduces crop yields, mars the beauty of natural landscapes, and harms people’s health. The American Lung Association (ALA) estimated in 2014 that 148 million Americans, almost half of the population, were breathing unsafe air for at least part of each year. Fully 70 percent of the cancer risk from air pollution is due to diesel exhaust from trucks, farm and construction equipment, marine vessels, and electric generators. People living near busy highways and workers in occupations that use diesel equipment are particularly at risk.5

 

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One approach to reducing diesel pollution is a service called IdleAir, operated by Convoy Solutions of Knoxville, Tennessee. IdleAir provides an alternative for longhaul truck drivers who idle their engines at truck stops in order to provide power to the cab during rest breaks. An inexpensive window-mounted adapter allows drivers to hook up to a service module, so they can continue to enjoy heating, cooling, cable TV, and Internet access with their engines off. The solution is less expensive for truckers because it uses one-tenth the energy of idling, andreduces pollution by completely eliminating diesel emissions during rest breaks.6 The EPA has identified six criteria pollutants, relatively common harmful substances that serve as indicators of overall levels of air pollution. These are lead, carbon monoxide, particulate matter, sulfur dioxide, nitrogen dioxide, and ozone. (Ozone at ground level is a particularly unhealthy component of smog.) In addition, the agency also has identified a list of toxic air pollutants that are considered hazardous even in relatively small concentrations. These include asbestos, benzene (found in gasoline), dioxin, perchloroethylene (used in some dry-cleaning processes), methylene chloride (used in some paint strippers), and radioactive materials. Emissions of toxic pollutants are strictly controlled. In 2014, the Supreme Court ruled that the EPA could regulate emissions of carbon dioxide (one of the main contributors to global warming) at facilities it already regulated for other pollutants.7

 

A special problem of air pollution is acid rain. Acid rain is formed when emissions of sulfur dioxide and nitrogen oxides, by-products of the burning of fossil fuels by utilities, manufacturers, and motor vehicles, combine with natural water vapor in the air and fall to earth as rain or snow that is more acidic than normal. Acid rain can damage the ecosystems of lakes and rivers, reduce crop yields, and degrade forests. Structures, such as buildings and monuments, are also harmed. Within North America, acid rain is most prevalent in New England and eastern Canada, regions that are downwind of coal-burning utilities in the Midwestern states.8 The major law governing air pollution is the Clean Air Act, passed in 1970 and amended in 1990. The 1990 Clean Air Act toughened standards in a number of areas, including stricter restrictions on emissions of acid rain–causing chemicals.

 

The efforts of the U.S. government to reduce acid rain illustrate some of the difficult trade-offs involved in environmental policy. These are described in Exhibit 10.A.

 

Exhibit 10.A       Moving Mountains to Fight Acid Rain

As part of its efforts to control acid rain, the U.S. government in 1990 initiated stricter new restrictions on the emission of sulfur dioxide by utilities. Many electric companies complied with the law by switching from high-sulfur coal, which produces more sulfur dioxide when burned, to low-sulfur coal, which produces less. This action had the beneficial effect of reducing acid rain.

 

But the law had some environmentally destructive results that had been unintended by regulators. Much of the highest-quality low-sulfur coal in the United States lies in horizontal layers near the tops of rugged mountains in Appalachia, including parts of West Virginia, Kentucky, Tennessee, and Virginia. Some coal companies discovered that the cheapest way to extract this coal was through what came to be known as mountaintop removal. Explosives were used to blast away up to 500 feet of mountaintop. Massive machines called draglines, 20 stories tall and costing $100 million each, were then used to remove the debris to get at buried seams of coal. A 2009 study using satellite images estimated that 1.2 million acres had been ravaged in this manner by surface mining. Although coal operators were required to reclaim the land afterward—by filling in adjacent valleys with debris and planting grass and shrubs—many environmentalists believed the damage caused by mountaintop removal was severe. Many rivers and creeks were contaminated and habitat destroyed. Aquifers dried up, and the entire region became vulnerable to devastating floods. Many felt it was deeply ironic that a law that was designed to benefit the environment in one way had indirectly harmed it in another.

 

Since 2008, coal production at mountaintop removal mines has declined. Partly, this reflected an overall shift from coal to natural gas during this period. But, it also reflected decisions by major banks, including PNC, Bank of America, and Citigroup, to stop funding these environmentally destructive practices.

 

Alternative Policy Approaches

 

Governments can use a variety of policy approaches to control air, water, and land pollution. The most widely used method of regulation historically has been to impose environmental standards. Increasingly, however, government policymakers have relied more on market-based and voluntary approaches, rather than command and control regulations, to achieve environmental goals. These different approaches are discussed next.

 

Environmental Standards

 

The traditional method of pollution control is through environmental standards. Standard allowable levels of various pollutants are established by legislation or regulatory action and applied by administrative agencies and courts. This approach is also called command and control regulation, because the government commands business firms to comply with certain standards and often directly controls their choice of technology.

 

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One type of standard is an environmental-quality standard. In this approach a given geographical area is permitted to have no more than a certain amount or proportion of a pollutant in the air. Polluters, such as utilities and factories, are required to control their emissions to maintain the area’s standard of air quality. For example, in 2014, the EPA issued new, more stringent standards for air concentrations of ground-level ozone, which the agency called the “most pervasive and widespread pollutant in the country.”17 A second type is an emission standard. For example, the law might specify that manufacturers could release into the air no more than 1 percent of the ash (a pollutant) they generated. Sometimes, the EPA mandates that companies use the best available technology, meaning a particular process that the agency determines is the best economically achievable way to reduce negative impacts on the environment.

 

Market-Based Mechanisms

 

In recent years, regulators have begun to move away from command and control regulation, favoring increased use of market-based mechanisms. This approach is based on the idea that the market is a better control than extensive standards that specify precisely what companies must do.

 

One approach that has become more widely used is to allow businesses to buy and sell the right to pollute, in a process known as cap-and-trade. The European Union’s tradable permit program for carbon emissions, described in one of the opening examples of this chapter, illustrates this approach. The U.S. Clean Air Act of 1990 also incorporated the concept of tradable permits as part of its approach to pollution reduction. The law established emission levels (called “caps”) and permitted companies with emissions below the cap to sell (“trade”) their rights to the remaining permissible amount to firms that faced penalties because their emissions were above the cap. Over time, the government would reduce the cap, thus gradually reducing overall emissions, even though individual companies might continue to pollute above the cap. Companies could choose whether to reduce their emissions—for example, by installing pollution abatement equipment—or to buy allowances from others. One study showed that the tradable permit program for acid rain may have saved companies as much as $3 billion per year, by allowing them the flexibility to choose the most cost-effective methods of complying with the law.18

 

Another market-based type of pollution control is establishment of emissions charges or fees. Each business is charged for the undesirable waste that it emits, with the fee varying according to the amount of waste released. The result is, “The more you pollute, the more you pay.” In this approach, polluting is not illegal, but it is expensive, creating an incentive for companies to clean up. In recent years, governments have experimented with a variety of so-called green taxes or eco-taxes that levy a fee on various kinds of environmentally destructive behavior. In addition to taxing bad behavior, governments may also offer various types of positive incentives to firms that improve their environmental performance. For example, it may decide to purchase only from those firms that meet a certain pollution standard, or offer aid to those that install pollution control equipment. Tax incentives, such as faster depreciation for pollution control equipment, also may be used. Governments may also levy eco-taxes on individuals.

 

Since 2008, for instance, auto registration fees in Ireland have been based on greenhouse gas emissions, with owners paying €104 to €2,100, depending how polluting their vehicle is. The eco-tax was designed to encourage people to buy cleaner cars. Other countries with similar programs include the Netherlands, Portugal, Canada, Spain, and Finland. Germany has enacted eco-taxes on gasoline and electricity, with the intention of promoting energy efficiency.19 Page 214In short, the trend has been for governments to use more flexible, market-oriented approaches—tradable allowances, pollution fees and taxes, and incentives—to achieve environmental objectives where possible.

 

Information Disclosure

 

Another approach to reducing pollution is popularly known as regulation by publicity, or regulation by embarrassment. The government encourages companies to pollute less by publishing information about the amount of pollutants individual companies emit each year. In many cases, companies voluntarily reduce their emissions to avoid public embarrassment.

 

The major experiment in regulation by publicity has occurred in the area of toxic emissions to the air and water. The 1986 amendments to the Superfund law, called SARA, included a provision called the Community Right-to-Know Law, which required manufacturing firms to report, for a list of specified toxic chemicals, the amount on site, the number of pounds released, and how (if at all) these chemicals were treated or disposed of. The EPA makes this information available to the public in the Toxics Release Inventory, or TRI, published annually. Evidence shows that at least initially, reporting manufacturers in the United States cut their releases and disposal of these chemicals to the air, water, and land, apparently fearing negative publicity. Recently, however, the TRI numbers have begun to trend up—mostly reflecting toxic emissions from the metal mining industry.20

 

The advantages and disadvantages of alternative policy approaches to reducing pollution are summarized in Figure 10.2.

 

FIGURE 10.2

Advantages and Disadvantages of Alternative Policy Approaches to Reducing Pollution

 

 

Civil and Criminal Enforcement

 

Companies that violate environmental laws are subject to stiff civil penalties and fines, and their managers can face prison if they knowingly or negligently endanger people or the environment. Proponents of this approach argue that the threat of fines and even imprisonment can be an effective deterrent to corporate outlaws who would otherwise degrade the air, water, or land. In 2014, the EPA brought criminal charges against 187 defendants. For example, in 2014 the environmental control manager of Tonawanda Coke was convicted of violations of environmental law and sentenced to one year in prison after he was found to have concealed the illegal release of gases containing dangerous benzene directly from coke ovens into the