Environmental Policy Water Pollution Air Pollution State

Environmental Policy Water Pollution Air Pollution State & Local Issues Global Environment

Types of Water Pollutants p Organic wastes n Sewage, residuals from factories, pesticides, oil, detergent p Inorganic substances n Toxic metals, salts, acids, nitrates p Non-material n Radioactivity, heat p Infectious agents n Bacteria, viruses Ø Point source vs. Non-point source Ø Continuous vs episodic Ø Persistent vs degradable

Water Pollution Policy p Refuse Act (1899) p 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 p Clean Water Act (1977) § Fishable-swimmable goal § Focus on toxic effluents p Water Quality Act (1965, 1987) § Converted water treatment subsidies to revolving loan fund § Focus on non-point sources p Initial burden was on states/localities p EPA established in 1970 n Federally set TBES n State/local enforcement n Municipal treatment subsidies

Technology-Based Effluent Standards q Effluent standard set at the level of emissions a source would produce if it used particular technologies q Best Practicable Technology (BPT) by 1977 q Best Available Technology (BAT) by 1983 q 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. 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-1990 s 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 DO 4. 0 mg/liter DO 6. 2 mg/liter DO 7. 8 mg/liter DO 2. 29 1. 71 1. 45 1. 38 Eheart, Brill, and Lyon (1983) Willamette River 4. 8 mg/liter DO 7. 4 mg/liter DO 3. 0 mg/liter DO 3. 6 mg/liter DO 1. 12 1. 19 3. 00 2. 92 Deleware Estuary 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 q Focus on Non-point sources q Design standards EPA estimates 50%+ of water violations due to NPS q No agricultural cultivation on steep slopes q Designs on urban storm sewers q Home builders must control run-off q Tax materials/activities leading to NPS q Fertilizers, chemicals q Total Maximum Daily Load program q Emission limits if TBES don’t achieve ambient standards q Tradable Discharge Permits q Fox River, Chesapeake Bay, Long Island Sound, Dillon Reservoir q Problems q Thin markets q 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 p Early law was local in nature; focus on “nuisance laws” p Air Quality Act (1967) n Required states to established ambient standards for “criteria pollutants” n expanded grants to states for air pollution control plans p Clean Air Act (1963, 1966, 1970, 1977, 1990) n n Established uniform NAAQS Established TBES Stationary vs mobile sources SO 2 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/m 3 Same as primary 15 µg/m 3 35 µg/m 3 Same as primary 9 ppm 35 ppm None 0. 053 ppm Same as primary 8 -hour mean 0. 075 ppm Same as primary Quarterly mean 0. 15 µg/m 3 Same as primary 0. 03 ppm 0. 14 ppm none Same as primary 0. 50 ppm Particulate Matter (PM 10) Daily mean Particulate Matter (PM 2. 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 p Non-Attainment Areas n Existing Sources: RACT (Reasonably Available Control Technology) n New Sources: LAER (Lowest Achievable Emission Rate) p Prevention of Significant Deterioration (PSD) Areas n Existing Sources: None n New Sources: BACT (Best Available Control Technology) Note: New Source Bias p Creates incentives to hold onto older, dirtier, factories p Creates incentives for older factories to produce to capacity whereas newer factories may have excess capacity

Cap-and-Trade (CAP) Program p 1990 CAA: reduce SO 2 emissions by 40% from 1990 levels p Phase I: 1995 – 2000 n 110 power plants in 21 eastern/midwestern states n # permits = (Avg Btu of fuel used) x (2. 5 lbs SO 2/million Btus) p Phase II: 2000 – present n Covers all power plants in US (approx. 1000) n # permits = (Avg Btu of fuel used) x (1. 2 lbs SO 2/million Btus) n Overall cap of 8. 95 million permits in 2010 p Trading Rules n Participants: corporations, individuals, green groups, speculators n EPA tracks all trades, monitors emissions n $2581 fine for excess SO 2

Clean Air Markets in Action $1, 000 EPA Acid Rain Allowance Auction $900 $800 $700 $600 $500 Affected Sources Allowance Prices Trends in SO 2 Emissions Cross-State Air Pollution Rule Spot 7 -year Advance $400 q AEP Muskingum River Plant $300 $200 q 98, 515 tons of SO 2 in 2010 q 4 coal-units producing 840 MW q 159 full-time workers $100 q AEP Dresden q Natural gas unit producing 580 MW 1996 1998 2000 2002 2004 q 25 full-time workers $0 1994 2006 2008 2010 2012

Mobile Source Emissions Total Emissions = Number of Vehicles x Average Miles x Traveled 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 CO 2 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. 1 9. 5 8. 0 9. 0 4. 5 Sulfur dioxide Stationary Mobile 30. 6 25. 2 0. 7 22. 2 0. 9 15. 7 0. 7 7. 7 0. 2 Particulate matter (PM 10) 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 (5 e), p 302

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 SO 2 61. 3 64. 8 48. 5 PM 10 77. 5 78. 8 76. 9 Source: Table 15. 2, Field and Field (5 e), p 302

State & Local Issues Municipal Wastes Land Use Control

Municipal Solid Waste p Disposal Options n Landfills n Incineration n Recycling p 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 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 $ S 1 Increase reuse ratio? S 2 Ø Raise q 1, hold q 0 Public curbside collection Ø Reduce q 0, hold q 1 Reduce overall demand PV + t PV Ø do both! D q 1 q 2 q 0 With S 1: q 1 units will be recycled; reuse ratio = q 1/q 0 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 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 CO 2 280 ppm 387 ppm Fossil fuel combustion, deforestation, cement production CH 4 (methane) 700 ppb 1745 ppb Landfills, enteric fermentation N 2 O 270 ppb 314 ppb Water Vapor CFC-12 p Climate Sensitivity n Doubling of CO 2 + 1°C p Feedback effects n Water vapor: + 1. 7°C n Clouds ? ? ? Fertilizers, biomass burning, fossil fuel combustion Refrigerants, propellants 280 ppm 560 ppm: + 1°C 560 ppm 1120 ppm: + 1°C

“Hockey Stick” graph

IPCC Report q Temperature increases caused by (human generated) CO 2 increases q 0. 5°C (1° F) over last 100 years q 1. 5° - 4. 5°C over next 100 years q rising sea levels on coastal societies q rapid change does not allow for evolutionary changes q agricultural and forestry changes Stern Review Critique of Stern Review

Global Warming Policy p Kyoto Protocol (1997) n Prescribed emission reduction targets for 6 GHGs n Signatories must reduce GHG 5% below 1990 levels by 2008 -2012 p Technical Responses n Increase earth’s absorption abilities n Reduce emissions Total CO 2 Production = pop x (GDP/pop) x (energy/GDP) x (CO 2/energy) p Stern Review n Damage estimates: 5 -20% loss in annual global GDP n Annual mitigation costs: 1% global GDP to meet 550 ppm target p Policy Options n Differences in control costs suggests incentive-based strategies p Tradable discharge permits p Emissions tax n Differences in contributing factors complicate global agreements between nations

Cost-Effectiveness of Alternative Means of Reducing CO 2 Means Costs per Ton of CO 2 ($) 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 CO 2 -abscorbing capacity through management of existing forests Source: Table 20. 3, Field and Field (4 e) 150 to 200

Stern Review “Climate change is the greatest market failure the world has ever seen” q CO 2 target = 550 ppm q Choice: Requires emissions 25% below current levels by 2050 q Costs of strong and early action (1% GDP) q Costs of not acting (5% - 20% GDP) q 3 Elements of Policy q Pricing of carbon: taxes, cap-and-trade, regulation q Support innovation and deployment of low-carbon technologies q Remove barriers to energy efficiency (inform, educate, persuade) q International response is required q q Emissions trading Technology cooperation Reduced deforestation Adaptation Kyoto Protocol (1997)

Stern Critique: Overestimated MD p Demographics: assumes rapid pop. growth and low income growth in low latitudes p Discount rate n Low discount rate (r = 1. 4%) use for evaluating the cost of future damages n Mitigation costs are evaluated using r ≈ 4% p Adaptation is not taken into account p Extreme weather events increase: from 0. 2 percent of GDP to 5% of GDP p Non-market damages suffer from sampling bias p Equity: extra weight given to damages suffered by poor people $ MDStern MACStern MDMendelsohn t* 550 E* PV of damages = $85 per ton of CO 2 ($300 per ton of carbon) CO 2 e

Stern Critique: Underestimated MAC p Must reduce emissions by 25% $ below current level by 2050 n Renewable energy sources (42%) n Nuclear power (15%) t* n Carbon capture (15%) n Energy efficiency (27%) p Ignores value of lost fossil fuels p Ignores impact of renewables on land usage/prices MACStern MACMendelsohn MDStern MDMendelsohn 550 E** CO 2 e

Global Warming Policy Economic and CO 2 Emissions Data for Selected Countries, 2008 Country Population China Total Emissions per capita (million tons) (millions) GDP per capita ($) (tons) Emissions per Dollar GDP (kg/$) 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 CO 2 Emissions Data for Selected Countries, 2008 Country Population China Total Emissions per capita (million tons) (millions) GDP per capita ($) (tons) Emissions per Dollar GDP (kg/$) 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