1. An Overview of Environmental Regulation

2. Introduction  In 1970, the United States had No major federal legislation controlling the discharge of pollutants into the air and water No national regulations covering the disposal of hazardous waste onto land No process for reviewing new chemicals No protection for endangered species

3. States-> Feds ->States -> Feds  Prior to 1970: Most regulatory action at the state level  1970-1990: Most regulatory action at the Federal level  1990-2008 (Global Warming): All regulatory action at the state level  2008-Present (Global Warming) EPA active under a 1970 Law: Clean Air Act.

4. Regulatory Approaches  Early years (prior to 1990): Mostly “Command and Control” Uniform standards Uniform technology requirements  Since 1990: Increasing use of incentive- base approaches: cap & trade, fees and taxes.

5. Statewide Initiatives  Prior to 1970, the states had sole responsibility for pollution control activities Oregon initiated the first statewide air pollution control effort in 1952 Only California had mandate emission standards for cars by 1970 In the late 1950s and 1960s, the federal government passed laws encouraging decentralized efforts to regulate pollution

6. Cleaning the Air  The Clean Air Act (CAA) Passed in 1963, focused on federal assistance to the states Major amendments in 1970, 1977, and 1990 shaped national regulatory framework Standards set to provide an “ample margin of safety” ○ Congress ruled out use of cost-benefit analysis

7. Air Pollutants Criteria (urban) air pollutants ○ Particulates, sulfur dioxide, carbon monoxide, nitrogen oxide, ground-level ozone, and lead Hazardous air pollutants or air toxics Criteria pollutants: EPA sets National Ambient Air Quality Standards (NAAQS) Ambient air quality refers to the average quality of air in a particular region

8. NAAQS  NAAQS are minimum standards, uniform around the country  For areas already cleaner than the NAAQS, the 1977 CAA amendments established three tiers Class I ○ Air quality to be maintained at current level Class II ○ Some deterioration allowed Class III ○ Air quality allowed to deteriorate to NAAQ levels, but not below

9. NAAQ Standards

10. Role of the States Develop implementation plans detailing how emissions would be controlled to achieve NAAQS from ○ Stationary sources ○ Mobile sources Divide territory into air quality control regions, geographic areas sharing similar air pollution problems

11. The Clean Air Act

12. Alphabet Soup  Regulations require firms to install certain technologies: LAER: Lowest achievable emission rate BACT: Best available control technology NSPS: New source performance standards RACT: Reasonably available control technology MACT: Maximum achievable control technology  The legal struggle to define these terms for individual industries has been one of the primary battlegrounds in the regulatory information war

13. Fishable and Swimmable Waters Federal Water Pollution Control Act (FWPCA) of 1972 Clean Water Act of 1977 Technology-based regulation, similar to CAA ○ Best Practical Technology (BPT) ○ Best Available Technology (BAT) Federal grants to municipalities for construction of sewage facilities

14. FWPCA  Called for the safety-based goal of the achievement of “fishable and swimmable waters” by 1983  Called for the elimination of all risk--zero discharge of pollutants into navigable waters by 1985  Prohibited the discharge of “toxic materials in toxic amounts”  Individual states are left to draft their own water quality emissions guidelines that must be consistent with FWPCA

15. The Big Problem  Regulation of non-point water pollution (runoff from storm sewers, farms, and construction sites) has been designated the responsibility of the states, and has been quite difficult

16. Hazardous Waste Disposal on Land  Resource Conservation and Recovery Act (RCRA), 1976. Covers disposal of municipal and hazardous waste  Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, better known as Superfund): Clean-up of abandoned dump sites.

17. Love Canal  From 1942 to 1953, the Hooker Chemical and Plastics company (now Occidental Chemical) buried millions of pounds of chemical wastes in the abandoned canal. Hooker then sold the site to the city for $1 as a possible location for an elementary school

18. Love Canal  A suburban housing development grew up around the area. Liquid waste began to pool on the surface and seep into people’s basements  In 1978, the state of New York ordered the area immediately around the dump evacuated  In spite of the contamination, and many reported cases of illness, it has been hard to show definitive impacts of Love Canal exposure to residents.

19. Waste Disposal Under RCRA EPA designates which substances are hazardous Requires cradle-to-grave tracking of such wastes Facilities that treat, store, or dispose of hazardous waste are to be regulated under a safety standard

20. Superfund  Superfund provides a mechanism for cleaning up abandoned dump sites  Government collects money for Superfund through two means Taxes on the chemical and petroleum industries Any party that disposed of waste in a particular dump can be sued by the government to finance the entire cost of the cleanup ○ Known as strict, joint, and severe liability ○ Fear of future liability under Superfund has spurred manufacturers to reduce their use of hazardous chemicals and to take greater care in their disposal practices

21. Status of Superfund Sites on the National Priorities List, End of FY 2000

22. Chemicals and Pesticides  Efficiency-based legislation: the EPA reviews both new and currently marketed pesticides and chemicals for their environmental impact.  The agency can then recommend restrictions on such products if they pass a benefit-cost test.  Laws: The Federal Insecticide, Fugicide, and Rodenticide Act (FIFRA) Toxic Substances Control ACT (TSCA)

23. FIFRA  Manufacturers must conduct and submit scientific studies of the toxicity of major new ingredients Registering a new ingredient may cost as much as $5 million to $7 million and take as long as 3 years  If the EPA deems a new ingredient to be potentially harmful, it can conduct its own special review process

24. Benefit-Cost Analysis Under FIFRA  Highlights many of the problems associated with such analyses Information about the benefits and costs of regulation is not easy to obtain Regulators must often turn to regulated firms to obtain access to the information that is available Lobbying resources and political orientations matter

25. TSCA  The EPA must be notified ninety days before the manufacture of a new chemical  No scientific data need be included with the notification  The EPA then reviews the new chemical, testing for toxicity with similar compounds If the agency determines the chemical is potentially hazardous, it can prohibit the manufacture of it

26. Toxics Release Inventory  After a 1984 chemical plant explosion in Bhopal, India killed and maimed thousands, the US Congress passed the Emergency Planning and Right-to-Know Act  Requires companies to report on their releases of 450 chemicals suspected or known to be toxic  Called the Toxics Release Inventory (TRI), it provides data on chemical releases on a plant-by-plant basis across the country

27. Endangered Species Act  The ESA is our one piece of ecologically motivated environmental legislation  Requires protection of a certain type of natural capital--species--regardless of the cost The rationale for the law is strictly anthropocentric  “God Squad” can overrule ESA decisions on efficiency grounds

28. ESA  Under the ESA, federal agencies are required to list animals and plant species considered to be endangered or threatened  Recovery plans for these organisms must be developed and then critical habitat designated  Once this has been done, both public and private actors must refrain from damaging this habitat

29. Endangered Species  In 2000, there were 1,238 listed species 960 were endangered 268 were threatened  In 1995, the government spent about $80 million in total on listing and recovery: not much.

30. Criticism of the ESA Large economic costs for private landholders? Not much evidence of this. Incentives: The ESA gives landowners no incentive to go beyond the letter of the law, leading potentially to “shoot, shovel, and shut up” actions Biological: The ESA’s focus on species rather than ecosystems distracts attention from the primary task--preserving biodiversity

31. Summary