There are two basic ways associations which have water quality management functions distribute the costs of carrying out these functions among their memberships; (1) according to the expenses which accrue (or would accrue) from treating a particular member's wastewaters; or (2) according to some measure of the effect (or harmfulness) of the member's wastewater discharges. The Linksniederrheinischeentwasserungsgenossenschaft follows the first approach, the Ruhrverband and the Emschergenossenschaft the second for example. There are varying degrees of refinement in distributing the costs of an association's wastewater treatment activities according to the effects of a member's wastes. Some associations simply multiply the volume of an industry's wastewaters times a factor based on the kind of industry. Others, such as the Ruhrverband, add up the pollution unit values (based on information provided by the members' annual reporting forms), divide the sum into the figure which represents the total budget needs for the year (in order to arrive at a "rate" for each unit of pollution), and then multiply this rate times the units discharged by each discharger. If a discharger is able to reduce his pollution load, he obviously reduces the share of the budget he will be assessed. There are likewise complicated formulas for what the municipalities' shares are. It should be clear from the above that the assesments which members of water management associations pay are not disincentives but rather user charges to help fund the activities which the associations are required by law to carry out. The amounts of assessments paid by the members of the Ruhrverband to support a staff of 900, the operating expenses of over a hundred sewage treatment plants, and the annual payments on the loans to build those plants are not insignificant, but they are spread over more than 1200 members and so do not constitute nearly the burden individual treatment plants would be for each member. The associations are quasi-public entities with specific mandates to manage water for the public welfare. As such they may assess those who use the facilities they build and the services they provide in proportion to the amount of that use. 23 23 For more details on the water management associations of Northrhine-Westphalia and their assessment systems see, Irwin, Charges on Wastewaters in Europe, forthcoming as Environmental Law Institute Monograph No. 2. SECTION VII ECONOMIC DISINCENTIVES: POLITICAL AND ADMINISTRATIVE DIMENSIONS INTRODUCTION This section discusses aspects of the political and administrative feasibility of federal or state adoption of disincentive measures in matters within the jurisdiction of the U.S. Environmental Protection Agency. It begins with a brief review of the conceptual bases of disincentives (particularly those using the mechanism of effluent charges). It then describes Congress' treatment of proposed taxes on sulfur emissions and on lead in gasoline, and Congress' reaction to the Environmental Protection Agency's proposal to impose parking surcharges as elements of transportation control plans to achieve ambient air quality standards. It concludes with brief discussions of the feasibility of adopting disincentives under the statutes EPA administers. THE ROLE OF ECONOMIC DISINCENTIVES IN ENVIRONMENTAL REGULATION: Environmental quality management, like other areas of governmental regulation, is susceptible to manipulation by public and private parties seeking to minimize the adverse economic impact upon them of strict control. Environmental quality management can be more symbolic than substantive if the regulatory procedures established are weak and resources devoted to their operation are inadequate. With increasing frequency, pollution charge proposals dot the landscape of the economic and environmental control literature. Economic disincentives schemes are preferred by some to schemes of environmental regulation based on standard setting and civil and criminal enforcement of compliance, ostensibly because polluting interests would have a lesser incentive to delay achievement of environmental quality goals than they have had under regulatory systems. The following subsection discusses the weaknesses of past regulatory systems and the general strengths and limitations of charge systems as alternatives or supplements to existing regulatory systems. It is designed to provide an overview of the principal assertions that have been made on the several sides of the pollution charge debate. The succeeding subsections illustrate how these agruments figured, along with political factors, in the fate of proposals for sulfur taxes, parking surcharges, and lead additive taxes. Regulatory Systems Enforcement of pollution control laws prior to 1970 was an exercise in futility. In the area of water pollution, federal jurisdiction was considerably limited, no effluent standards existed, no provision was made for civil penalties, and the conference-hearing procedures established to promote abatement were "cumbersome and timeconsuming."1 To achieve compliance, the government's most powerful tool was the judicial cease and desist order, non compliance with which was punishable as a contempt of court. The Council on Environmental Quality has stated that the procedure under which enforcement had been carried out was less than satisfactory. There was no clear pattern to the convening of enforcement conferences, but in the early days of the water pollution control program these conferences apparently avoided focusing on major, heavily polluted water courses.2 In many cases abatement schedules, once established, were substantially disregarded. The ultimate step in enforcement was filing of an abatement suit in federal court. This point was reached only once, in a case concerning municipal pollution from St. Joseph, Missouri. This instance demonstrates how cumbersome the enforcement process could be. The initial abatement conference was held in 1957, but shortly thereafter St. Joseph citizens rejected an environmental bond issue that would have funded sewer construction and primary sewage treatment facilities. The second abatement step, a public hearing, was reached in 1959, but one year later a bond issue was again rejected. Suit was then filed and a court order obtained requiring completion of municipal treatment facilities by 1963. By 1967, the treatment plant was completed, but only half of the necessary sewer connections had been made. Court action was again necessary, producing an order to the city to expedite work. City officials replied that they could not complete all the projects necessary to provide comprehensive primary treatment until 1973. Air pollution control was sadly similar. Federal jurisdiction was limited, the conference-hearing procedure was cumbersome and timeconsuming, and no civil penalties could be levied. Only one enforcement action, involving Bishop Processing Corporation in Maryland, was undertaken by the federal government and this also took many 1 Council on Environmental Quality, First Annual Report 2 See David Zwick and Marcy Benstock, Water Wasteland (New York: years to complete.3 Enforcement has always been the most politically sensitive aspect of federal pollution control programs, and the choice of targets for enforcement actions has been determined not only by the seriousness of the problem in an area but by the possible political ramifications of initiating an enforcement case. In general, the primary purpose of the federal enforcement actions, when they occurred, was to prod state and local control agencies into taking action; there was greater reliance placed on informal bargaining rather than on legal proceedings. Informal negotiation was also often preferred to a judicial process that could impose a considerable demand on limited time and manpower resources and which placed a heavy burden of proof on government enforcement personnel. Even the strongest set of regulatory powers would be meaningless, absent a commitment of manpower and resources to carry them out. In an August 1973 report, the General Accounting Office found in seven states it surveyed a lack of complete emissions inventories of sources of air pollution, insufficient enforcement resources, and inadequate surveillance of air polluters. The report alleged in addition that there was too great a reliance on voluntary compliance and negotiation. Effluent and Other Pollution Charges The failure of the regulatory systems of the 1950's and 1960's has led to development of new, tougher regulatory frameworks that include effluent standards and civil penalties. But it has also been suggested that these be supplemented or supplanted by systems of pollution charges or similar disincentives according to which polluters would be required to pay for each unit of pollution discharged to the environment. The original rationale for some form of pollution charge is found in the literature of welfare economics.5 There it is argued, for 3 For a discussion of federal enforcement efforts in general, see J. Clarence Davies, The Politics of Pollution (1970), especially the chapter on compliance. For a muckraking view of enforcement efforts in the air arena, see John Esposito, Vanishing Air (New York: Grossman, 1970). 4 Reported in the Washington Post, August 29, 1973. "This discussion is based on review of the following material: Allen V. Kneese, "Strategies for Environmental Management;" A My example, that air and water pollution occurs because air and water are treated as free goods in production decisions; their use as rick Freeman III and Robert H. Haveman, "Water Pollution Control, Hearing on Economic Analysis and the Efficiency of Government Harold Wolozin, "The Economics of Air Pollution: Control Problems," Paul Gerhardt, "Incentives to Air Pollution Control," George Hagevik, "Legislating Air Quality Management: Reducing Theory to Practice," Law and Contemporary Problems 33: 227, 358, 169 (Spring 1968). Edward Selig (ed.) Effluent Charges on Air and Water Pollution (Washington: Environmental Law Institute, 1973). Allen V. Kneese et al. Economics and the Environment (Baltimore James C. Hite et al., The Economics of Environmental Quality Legal, Frederick R. Anderson, Allen Kneese, Russell Stephenson and Sarge Talbot Page "Economics of Recycling," in Resource Conservation, Resource Recovery, and Solid Waste Disposal. Studies prepared for the U.S. Senate Committee on Public Works by the Environmental Policy Division of the Library of Congress Congressional Research Service, Committee Print, (November 1973). Robert H. Haveman and Julius Margolis (eds.), Public Expenditures and Policy Analysis (Chicago: Markham, 1970). H. Rep. No. 89-1330, "Views of the Governors on Tax Incentives and Effluent Charges," Twenty-First Report by the Committee on Government Operations, 1966. |