AN ECONOMIST’S PERSPECTIVE BY DWIGHT R. LEE
ON AIR POLLUTION
ound environmental those tradeoffs by facilitating techpolicy has to be in- nological progress. Ultimately, formed by sound sci- however, good environmental polence. This proposi- icy must provide a way to obtain int i o n s h o u l d b e formation on the value sacrificed to improve environmental quality, 1 obvious to everyone, and is certainly em- and to motivate people to make the braced by readers of best use of that information. Environmental Science b Technology. But although The equal marginal principle It is now possible to offer a goal scientific knowledge is necessary for effective environmental policy, f o r e n v i r o n m e n t a l policy t h a t it alone is not sufficient. Unless en- should he unobjectionable. Who vironmental problems are recog- would oppose achieving, at least nized as economic problems they cost (the least sacrifice of alternawill not be addressed sensibly, no tive value), whatever level of envimatter how sophisticated our scien- ronmental quality is desired, or ohtaining as m u c h environmental tific knowledge. Economics is fundamentally a quality as possible for any given study of the implications of scar- cost [sacrificed alternative value)? Ensuring environmental quality city. The l i m i t s of n a t u r e a n d knowledge constrain our ability to at least cost requires satisfying the obtain desirable things from our re- following condition: The cost of source endowment, and our only achieving a given improvement in environmental quality by reducing unlimited ability is the ability to want more. The scarcity resulting pollution a marginal amount from from our limited ability to produce, one source must equal the cost of and our unlimited ability to want, is achieving the same improvement in the source of every problem we environmental quality by reducing face. All problems are rooted in the pollution a marginal amount from fact that obtaining more of one de- any other source. In economics this sirable thing requires sacrificing condition is known as the “equal other desirable things. Environmen- marginal principle,” and the intutal problems arise because, to some ition behind it is straightforward. If, for example, it costs $2 to improve degree, environmental quality has to be sacrificed when we satisfy our environmental quality by margindemand for other things that add ally reducing pollution from one value to our lives-for example, source, and only $1 to do so from convenient transportation, comfort- another source, then the same total able i n d o o r temperatures, life- improvement in environmental saving drugs, and publications on quality can he realized for $1less by allowing more pollution from the environmental issues. Science can increase our knowl- first source while reducing polluedge of the tradeoffs between pro- tion an offsetting amount from the tecting environmental quality and second source. Although it is easy to understand satisfying other needs, and reduce the equal marginal principle, impleViews are insightful commentaries on menting it is difficult. The best way timely environmental topics, represent to reduce pollution varies from situon author’s opinion, and do not neces- ation to situation, and the relevant sarilyrepresent aposition ofthe society information is dispersed widely or editors. Contrasting views are in- among people whose knowledge encompasses only local circumvited. 1980
Environ. Sci. Technol., VoI. 27, NO. I O , 1993
stances. It is impossible to collect all this information and transmit it to remote authorities so that they can determine the cheapest way for each polluter to reduce pollution and the amount of pollution that should be reduced to achieve the least-cost pattern of reduction-in accordance with the equal marginal principle. This problem suggests that current environmental policy, relying primarily on commands and controls issued by EPA officials, is formulated in an informational vacuum. Even if EPA scientists could provide scientific guidance u n tainted by political pressures, they could not keep u p with the constantly changing, location-specific economic conditions and circumstances relevant to the appropriate response for each pollution source. Lacking such information, EPA tends to issue “one size fits all” regulations requiring uniform ahatement technologies a n d practices that are inappropriate for many polluters. We can do more to protect the environment and at less cost. EPA is no better at central planning than the Soviets were. It would be far better for EPA to use its scientific knowledge to establish broad standards, then allow individual polluters to satisfy those standards any way they chose. Each polluter is better informed than EPA authorities on how to reduce pollution at least cost and is certainly more motivated. Because many polluters contribute to outdoor air pollution, everyone would be free to determine how much to reduce emissions, subject to the requirement that a pollution permit
talk presented at the 23rd International Symposium on Environmental Analytical Chemistry, Jekyll Island, GA. June 1993.
0013-936X/93/0927-1980$04.00/0 0 1993 American Chemical Society
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be obtained for each unit of pollution discharged. The total number of pollution permits would be determined by the air quality standard, and permits would be bansferable at prices determined in a pollution permit market. The selfinterest of polluters would motivate everyone to reduce pollution until t h e cost of additional reduction
equaled the price of a pollution permit. The price of a permit would be the same for everyone in a given pollution area; thus, each polluter would reduce pollution until the marginal cost of doing so was the same for everyone. The equal marginal principle would be satisfied, and the air quality standard would be achieved at least cost.
The economic case for a market approach to pollution policy goes beyond armchair theorizing. Many simulation studies on reducing air pollution have estimated cost differences between a uniform command-and-control approach and a market-oriented approach. These studies ( I , page 403) commonly find that the command-and-conbol
Environ. Sci. Technol., Vol. 27, No. 10, 1993 1981
approach is four to six times and, in one case, 22 times more expensive than the market approach. Reducing air pollution currently costs tens of billions of dollars. We could realize enormous savings without sacrificing air quality, or we could have much better air quality at no additional cost, by moving to a market approach.
Measurement Chemistry sc.s,vr P‘rsen-in-; a-r -ec%ic .e? ano used for measurements,
s c‘ state-ofnstrmenta:ion atmospheric Measurement Chaiienges in Atmospheric Themistry summarizes progress in a lariety of areas of atmospheric research ind identifiesareas that should now be iddressed by the research community. It provides in-depth coverage of the neasurement of both aerosols and gases md reviews techniques for measuring pecies in the troposphere and mesosphere. An excellent reference for atmospheric cientists and an ideal intrauction to the ‘ield for analytical and gas-phase 1
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esearchers interested in atmospheric neasurement.
:ONTENTS lampling of Selected Labile Atmorpherlc Pollutants iutomated Measurement Of Atmorpherlc Trace crwr --... ‘art-Responle Chemlwi SonSon U M for Eddy Correlation Flux Measurements rroporpherir Sampling with Alrcraft n Situ Measurements Of Stratorpherlc Reattlve Trace Cares ’robing the Chemical Dynamlcr of AeroSoIs :omporitional Analysis of Size-Wegnted A e r m i Sampler
Hearuring the Strong Add Content of Atmmpherk Aerarol Partltles Hearurement Challengw of Nltrqen Specler in the Atmasohere Pnslyticil MethDdS U S A to ldenrlfy Nonmethane Organic Compounds In Ambient Atmospheres Heasurement Methods for Peroxy Radlralr In the Atmosphere rroporpheric Hydroxyl RadICai Measurement of Personal Exporun to Alr Pollution
Leonard Newman. Brookhaven National Laboratory. Editor Advances In Chemistry Series No. 232 408 pages (1993)Clothbound ISBN 0-8412-2470-6 LOA9$
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