Chemical In"---' SDendino on iil I m m How I t Relates 6u the Emissions-to-Jobs Ruth I BY PAUL TEMPLET y recent article published in these pages explained the use of an emissions-to-jobs ratio [E/J) for evaluating state pollution control policies and programs I l l . The E/I ratio uses emission data from EPA'S Toxic Release Inventory [TRI] (21 normalized by employment data from the Census Bureau ( 3 ) .E/J ratios can be developed by federal industry classification, called Standard Industrial Classification [SIC],at various levels, by country, state, region, media, or facility. There are large variations in the E/J ratio for the chemical industry (SIC 281 across 19 large chemical-producing states. For example, the ratio ranges from less than 300 lb of annual toxic emissions per job in New Jersey, California, and Pennsylvania to more than 14,000 lb per job in Louisiana. The reasons for this large variatio could include changes across statt in both emissions and jobs. For example, it is conceivable that different levels of automation would affect the number of jobs needed to produce a unit of chemical product, with its resulting emissions, and that low employment levels would increase the E/J ratio. However, there is a significant and positive linear relationship hetween the E/J ratio and emissions for the chemical industries of the 19 states [RZ= 0 . 7 5 , p < 0.0001) and no significant relationship between EIJ and jobs. Thus it is primarily the variation in emissions, not jobs, across states that causes the variation in E/J. This article explores a more prosaic variation than auto-
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'IO mation: that of SIC 28 pollution abatement spending, across states, and its relationship to TRI emissions levels and the E/J ratio. Explanation of spending The Census Bureau's Current Industrial Reports series (4) lists pol-
0013-936)(/93/0927-1983$04.00/0 a 1993 American Chemical Society
lution abatement spending [both capital expenditures [PACE] and operating costs [Gross Annual Costs or GACI) by year, state, media, and SIC category. This discussion will use SIC 28 total releases and capital outlay spending generally, but similar results were obtained from oper-
Environ. Sci. Technol., Vol. 27, No. 10, 1993 1983
ating costs as well as the sum of capital outlay and operating cost. A review of capital expenditures by the U S . chemical industry for 1988 through 1990 indicates a wide range of spending across states and shows that total capital outlay by the U S . chemical industry for pollution control is increasing over time while toxic emissions are declining (Figure l), which suggests a temporal relationship. In 1990 such spending represented 12.2% of all new chemical capital expenditures and 0.64% of the value of chemical shipments. Some variation i n spending across states is expected because the size of the industry is different in each state, states have different policies for pollution control, and federal law allows wide latitude to states in regulating emissions. The purpose of pollution abatement spending is to control emissions, so we should expect a relationship between spending and TRI emissions. A regression of PACE versus TRI total releases for 1989 and 1990 is significant and positive (Rz= 0.84 and 0.61. respectively), indicating that the level of emissions is significantly related to pollution abatement spending. However, the Texas and Louisiana chemical industries have total emissions much higher than those of any other state and cause the slope of the model to be sensitive to their spending-ar lack of it. The figures for the United States as a whole were added (the United States was treated as a state) to stabilize the linear relationship, with a resulting improvement in the relationship for 1989 and 1990 (Rz= 0.98 and 0.97, respectively), an intercept near zero, and a slope of $1.17 PACE/lb TRI emissions in 1990. Thus the average U.S. SIC 28 spending of $1.17/lb can be used to calculate the amount of capital expenditures a state's SIC 28 sector should have relative to the average of other states for their level of emissions in any given year. The calculated spending level is then subtracted from actual capital outlays to determine differences (Le., overor underspending relative to the average). T h e differences for 1990 are shown in Figure 2: positive numbers represent overspending and negative numbers represent underspending on capital outlays relative to other states ("relative PACE or GAC") for a particular level of emissions. A similar analysis was carried out for GAC.
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FIGURE 1
Chemical industry pollution abatement capital expenditures
(PACE)and emissions 3000
II , l
Results The question of whether capital outlay spending significantly affects the level of emissions and the E/J ratio can be addressed by regressing relative PACE versus emissions and the E/J ratio across the 19 states. This yields significant and
Underspending on pollution control results in higher emissions and fewer jobs. negative relationships (Rz= 0.23 and 0.59, respectively) and indicates that both total emissions and the E/J ratio rise when spending d e clines relative to the state model. However, capital expenditures in 1990 will affect emissions in subsequent years, and it may be better to compare relative GAC with emissions and E/J. Regressions of relative GAC versus emissions and E/J across states are si nificant and negative (Figure 3,='R 0.64 and 0.84, respectively, p < 0.0001 in both cases). Operating costs (GAC) are used
1984 Envlrm. Sci. Technol., Vol. 27, NO. IO, 1993
to maintain past equipment installations and reflect past cumulative capital expenditures. The E/J rises with reduced spending for two reasons: underspending on pollution control results i n higher emissions and fewer jobs, and spending on equipment reduces discharges. For every million dollars spent on US. pollution control, 23 jobs were created in 1992 (5).One of the driving forces for pollution abatement expenditures is state policy. A regression of relative GAC averaged for 1989 and 1990 versus environmental policy ( 6 ) across the 19 states is significant (R' = 0.30, p = 0.017) and negative (a higher state policy score indicates poorer policies). Thus as state environmental policies improve, pollution abatement spending increases relative to other states. In conclusion, it appears that the variation in the chemical industry E/J ratio across states is caused primarily by variations in emissions which, in turn, are caused by variable pollution abatement spending and policies across states. When state chemical industry spending is low relative to the United States average, emissions and the E/J ratio rise. Louisiana and Texas ranked 1 and 2,respectively, in total TRI releases in 1991 and are well ahead of other states' emissions even though both states have recently increased spending. On the basis of this analysis it is apparent that Texas, whose
&a1 industry capital outlay relative to U.S. average by
chemical industry spent well above the average in 1990, will lower its emissions faster than Louisiana, >>~.i whose chemical industry is spending well below the average. The analysis predicts that Louisiana will remain the largest discharger of toxic chemicals with the attendant environmental and economic risks (7)and retain its number one rank until its state policies and industry pollution abatement spending rise toward the national norm.
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Note The figures given in a sentence in the author’s May 1993 ESBT article need lo be corrected. On page 812, the second sentence in the first full paragraph should read, “Since 1987 the Louisiana chemical industry EIJ ratio has decreased from approximately 30,000 Ib per job to the current 14,108, or about 51%, while the U.S. chemical industry EIJ ratio has declined from 3416 to 1859 Ib per job, or 46%, in the same period.”
References (11 Templet, P. H. Envimn. Sci. Technol. 1€393,27[5), 810-12. (21 “Todcs in the Community, National and Local Perspectives, The 1990
Toxics-releaseInventory National Report”; U S . Environmental Protection Agency. U S . Government Printing Office: Washington, DC. 1992; EPA 7WS-92-002. I31 “1990 Annual Survey of Manufac-
’ GJRC 3 I990 State chemical industry pollution spending versus thi ?missions-to-jobsratio (E/J)
tures, Geographic Area Statistics”; U S . B m a u of the Census. U S . Department of Commerce. Economics and Statistics Administration: Washington, DC, 1992. (41 “Current Industrial Reports. Pollution Abatement Costs and Expenditures”; U.S. Bureau of the Census: Washington, DC,1992; MA200(90]-1. (51 Ennron. Sci. Technol. 1993. 27l51. 771. I61 Hall, B.; Kerr. M. L. G m n Index, 1991-1992: Island h s s : Washington, DC,1993. I71 Templet, P. H.; Faher, S. Ecological
Economics. Elsevier Science Publishem,in press.
State chemical industiy E/J (Ibhob)
Paul H. Templet is on associate professur a t Louisiana Stnte University’s Institute for Environmental Studies. He has an M.S. deg r e e in p h y s i c a l chemistry from D u k e Universitv and o Ph.D. in chemical physics from Louisiano State University. His research interests are in economic-environmental interactions, program evoluation. pollution prevention, and policy anolysis. Templet was Secretmy of the Louisiana Department of Environmental Quality from March 1988 to lanuary 1992. Envimn. Sci. Technol.. Vol. 27, No. IO. 1993 1986
