An Overview of

Environmental Regulation

Introduction

In 1970, the United States had No major federal legislation controlling the

discharge of pollutants into the air and waterNo national regulations covering the disposal

of hazardous waste onto landNo process for reviewing new chemicalsNo protection for endangered species

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.

Regulatory Approaches

Early years (prior to 1990): Mostly “Command and Control” Uniform standardsUniform technology requirements

Since 1990: Increasing use of incentive-base approaches: cap & trade, fees and taxes.

Statewide Initiatives Prior to 1970, the states had sole

responsibility for pollution control activitiesOregon initiated the first statewide air pollution

control effort in 1952Only California had mandate emission standards

for cars by 1970In the late 1950s and 1960s, the federal

government passed laws encouraging decentralized efforts to regulate pollution

Cleaning the Air

The Clean Air Act (CAA)Passed in 1963, focused on federal assistance to

the statesMajor amendments in 1970, 1977, and 1990

shaped national regulatory frameworkStandards set to provide an “ample margin of

safety”○ Congress ruled out use of cost-benefit analysis

Air Pollutants• Criteria (urban) air pollutants

○ Particulates, sulfur dioxide, carbon monoxide, nitrogen oxide, ground-level ozone, and lead

• Hazardous air pollutants or air toxicsCriteria pollutants: EPA sets National Ambient Air

Quality Standards (NAAQS)Ambient air quality refers to the average quality of

air in a particular region

NAAQS NAAQS are minimum standards, uniform around

the country For areas already cleaner than the NAAQS, the

1977 CAA amendments established three tiersClass I

○ Air quality to be maintained at current levelClass II

○ Some deterioration allowedClass III

○ Air quality allowed to deteriorate to NAAQ levels, but not below

NAAQ Standards

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

The Clean Air Act

Alphabet Soup Regulations require firms to install certain

technologies: LAER: Lowest achievable emission rateBACT: Best available control technologyNSPS: New source performance standardsRACT: Reasonably available control technologyMACT: 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

Fishable and Swimmable Waters

Federal Water Pollution Control Act (FWPCA) of 1972

Clean Water Act of 1977Technology-based regulation, similar to CAA

○ Best Practical Technology (BPT)○ Best Available Technology (BAT)

Federal grants to municipalities for construction of sewage facilities

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

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

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.

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

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.

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

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 industriesAny 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

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

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)

FIFRA Manufacturers must conduct and submit

scientific studies of the toxicity of major new ingredientsRegistering 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

Benefit-Cost Analysis Under FIFRA

Highlights many of the problems associated with such analysesInformation about the benefits and costs of

regulation is not easy to obtainRegulators must often turn to regulated firms

to obtain access to the information that is available

Lobbying resources and political orientations matter

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 compoundsIf the agency determines the chemical is

potentially hazardous, it can prohibit the manufacture of it

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

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 costThe rationale for the law is strictly anthropocentric

“God Squad” can overrule ESA decisions on efficiency grounds

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

Endangered Species

In 2000, there were 1,238 listed species960 were endangered268 were threatened

In 1995, the government spent about $80 million in total on listing and recovery: not much.

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

Summary