Page images
PDF
EPUB

6.

7.

8.

9.

10.

11.

The Administrator of the Environmental Protection Agency has authority under section 110 of the Clean Air Act to adopt disincentives other than parking surcharges if he finds them necessary components of state implementation plans to achieve ambient air quality standards. States are not pre-empted

from adopting disincentives applicable to sources of air pollution other than new motor vehicles, aircraft or fuels.

The Administrator of the Environmental Protection Agency
has authority under section 3(d) (1) (C) of the Federal In-
secticide, Fungicide and Rodenticide Act (FIFRA), as amended,
to adopt disincentives applicable to the use of pesticides
classified for restricted use. He may also have authority
to impose payment of disincentive charges as conditions of
experimental use permits under section 5. States are not
pre-empted from adopting disincentives applicable to pesti-
cides classified either for general use or restricted use.

The Administrator of the Environmental Protection Agency
may have authority under section 104(a) of the Marine
Protection, Research, and Sanctuaries Act of 1972 to impose
payment of disincentives as conditions of permits to dump
material into ocean waters. Section 108 would authorize
him to adopt regulations providing for disincentives applic-
able to ocean dumping. States are pre-empted from adopting
disincentives applicable to ocean dumping.

The Administrator of the Environmental Protection Agency has no authority under the Solid Waste Disposal Act to adopt disincentives but states are not pre-empted from doing so.

The Administrator of the Environmental Protection Agency
does not have authority under section 6 of the Noise Control
Act of 1972 to adopt regulations imposing disincentives on
products which are major sources of noise but may adopt
regulations under sections 17 and 18 imposing disincentives
to control noise from interstate rail and motor carriers.
States are not pre-empted from adopting disincentives applic-
able to use of new products covered by federal noise emission
limits. As to rail or motor carriers states may adopt use
limitations or disincentives only if approved by the Adminis-
trator of the Environmental Protection Agency. States or
their subdivisions may impose disincentives on the noise
from flights into airports they own.

The Oregon and Vermont laws imposing mandatory deposits on non-returnable beverage containers are constitutional.

12.

13.

14.

15.

16.

17.

18.

The City of New York ordinance levying a tax based on levels
of cigarette tar and nicotine content and requiring the
tax differentials to be reflected in retail prices is consti-
tutional.

The City of New York tax on sales of plastic containers but
not on other containers has been declared illegal and un-
constitutional by the New York State Supreme Court.

The Vermont tax on capital gains from speculative land sales
is constitutional.

The charges imposed on discharges of wastewaters and emissions
of air pollutants in the German Democratic Republic, Hungary,
Czechoslovakia, France, The Netherlands, and the Land (cf. State)
of Northrhine-Westphalia in the Federal Republic of Germany
are more analogous to fines or user charges than to disincen-
tives.

Enforcement of federal and state pollution control laws prior
to 1970 was uneven. Economic disincentives or charge systems
are seen by some as more effective and more economically
efficient approaches to environmental quality management
than previous and existing federal approaches. The political
dimensions and general strengths and limitations of charge
systems as alternatives or supplements to existing regulations
are explored in analyses of recent proposals for sulfur taxes,
parking surcharges, and lead additive taxes. In weighing
the desirability of disincentive systems, consideration must
be given to the scope and level of the charge, the nature of
business response, and the administrative burden imposed on
government and on those subject to charges.

Proposals for national sulfur emission taxes produced con-
flict over the scope and level of such taxes. Concern was
expressed as well over both their industry-specific and
regional impact. The administration could not find Republican
sponsors for its proposals. All bills establishing sulfur
emission taxes died, without hearings being held, in the House
Ways and Means Committee. The proposed sulfur emission
taxes were designed to spur industry development of sulfur
emission control technology. EPA contends that the utility
industry does not appear to have made a serious commitment
to development of such technology.

The tax on lead additives was proposed by the administration
as a means of increasing demand for lead-free fuels, thereby
providing an incentive to gasoline manufacturers to enlarge

19.

20.

21.

22.

23.

24.

25.

refining capacity for production of such fuels. The House Ways and Means Committee held hearings on the proposal and failed to report it. Little outside support was obtained for it and industry voiced considerable opposition on economic grounds.

Parking surcharges were proposed by EPA as part of state transportation control plans. Its actions were highly controversial and resulted in congressional action forbidding EPA from requiring parking surcharges as part of state transportation control plans.

At this time, it is unclear whether the existing, complex regulatory system established by the Federal Water Pollution Control Act Amendments of 1972 is going to succeed or whether it is going to founder under a deluge of litigation, missed deadlines and unsatisfied unrealistic expectations. States may question the feasibility of adopting disincentives given the present difficulties of statutory implementation and charges' potential for overburdening municipalities and industries.

Charges (such as sulfur emissions charges) other than parking surcharges could be used as a supplementary means of encouraging compliance with the deadlines established for state implementation plans under section 110 of the Clean Air

Act.

Pollution charges might be desirable as supplements to new
source controls under the Clean Air Act so as to prevent
significant air quality deterioration while encouraging
considerable industrial development in regions with relatively
clean air. On the other hand, if the Clean Air Act permits
no significant air quality deterioration to occur, then a
ceiling or quota for emissions would have to be imposed
on individual dischargers and there would be no need for
pollution charges.

The structure of hazardous emission regulation under section 112 of the Clean Air Act does not lend itself to inclusion of supplementary disincentive devices.

It may be feasible to incorporate disincentives into the
regulatory scheme for restricted use of pesticides under
the Federal Insecticide, Fungicide, and Rodenticide Act.

Criteria used in evaluating applications for ocean dumping permits might serve as the basis for establishing ocean dumping disincentive charge rates. However, these criteria could be improved and there is still much to be learned about

26.

the effects of ocean dumping.

The decibel A-scale (dB(A)) is a commonly accepted indicator
of sound levels. Many municipalities presently have ordinances
prohibiting noises in excess of specified decibel readings.
This approach might serve as the point of departure for
federal or state or local regulation of noise by imposing
disincentives on noise emissions.

RECOMMENDATION

1.

The Environmental Protection Agency should consider adopting
disincentives as supplementary means of control under
the Clean Air Act, the Federal Insecticide, Fungicide and
Rodenticide Act, the Marine Protection, Research, and
Sanctuaries Act of 1972 and the Noise Control Act of 1972
(see conclusions 6-8 and 10). States should consider
adopting disincentives as supplementary means of control
under the statutes enumerated above (with the exception of
the Marine Protection, Research and Sanctuaries Act of 1972)
where not precluded from doing so by federal preemption,
and under the Federal Water Pollution Control Act Amendments
of 1972 and the Solid Waste Disposal Act.

SECTION II

A DEFINITION OF DISINCENTIVE

At the outset, this report should set forth its authors' definition of a disincentive and distinguish a disincentive from several mechanisms (e.g., fines, user charges, license fees) commonly employed by legislatures to encourage or regulate or sanction certain conduct.

A disincentive is a monetary charge levied by government on conduct which is not illegal but which does impose social costs, for the principal purpose of discouraging the conduct. The mechanism which is employed may be called a charge, a tax, or a fee, but if its principal purpose is to discourage the conduct it applies to (rather than to compensate the public for the use of public resources or to raise revenues or to punish illegal conduct) then it may properly be characterized as a disincentive.

This report confines itself to disincentives. Similar devices are often discussed in the literature of economics, (e.g., proposals for effluent charges), where they are justified theoretically as promoting internalization of social costs and proper allocation of resources. In the next section Vermont pollution charges and Michigan surveillance fees, which are often mentioned as "effluent charges", are described and distinguished from disincentives, but first the following mechanisms are distinguished. These mechanisms are not disincentives because their purpose is not usually to discourage conduct.

1. Fines: The most common sanction for violating a law or regulation is payment of an amount of money determined, after a trial or hearing, on the basis of the seriousness of the infraction. Fines may be imposed for committing a misdemeanor or felony, i.e., for being convicted of violating a provision of law which states it is a crime to behave in ways it proscribes, or they may be imposed as so-called "civil money penalties" for behavior which is not defined as criminal but which is nevertheless deemed illegal. The distinctions between fines and civil money penalties are not important here. What is important is the distinction between both of them and disincentives: both are imposed as the result of a judicial or quasi-judicial determination that a violation of law has occurred. Examples of fines and civil money penalties are thosel providing for fines of $2,500-$25,000 for willful or negligent violations of several

1See 33 U.S.C. §1319 (c) and (d).

« PreviousContinue »