Econ 201 Lecture 9.4

1
Econ 201Lecture 9.4

• Water Pollution
• Puget Sound Clean Up
• 3-6-09

2
Efficiency and Cost-Effectiveness

• Ambient Standards and the Zero-Discharge Goal
• The shift from ambient standards to a zero
  discharge goal was problematic.
• The feasibility of meeting such a goal is small
  and thus enforcement is a problem.
• On-going law suits
• For some pollutants, such a high cost might be
  justified. However, the zero discharge goal does
  not distinguish among pollutant types.

3

• National Effluent Standards
• Enforcement Problems
• Cost-effectiveness requires individual standards
  for each source,
• instead EPA chose general standards for broad
  categories of sources
• Allocating Control Responsibility
• Studies show that uniform standards do not
  closely approximate the least-cost allocation.

4
TABLE 17.2 Empirical Studies of Water Pollution
Control
5
Pretreatment Standards

• Nonpoint Pollution
• Nonpoint source pollution has become a
  significant part of the total water quality
  problem.
• Howerver more intensive controls have been placed
  on point sources as an attempt to compensate for
  nonpoint sources.
• Studies suggest that some nonpoint sources could
  be controlled at low costs, especially with
  policies aimed at reducing nitrogen use.

6
TABLE 17.3 Summary of NPDES Trading Programs
That Have Traded at Least Once
7

• The European Experience
• In Europe, economic incentives such as effluent
  charges play a much larger role.
• German experience
• Pay 100 on all pollutants if exceed threshold
• 50 on all if meet minimum standard
• If 75 lower than standard, pay only 50 on
  actual
• Waived for 3 years if new equipment purchased
  which reduces to 20
• Estimated to cost 1/3 of uniform standard

8
Puget Sound Clean Up

• Objectives
• Reduce 150k per day pounds of toxic chemicals
  that enter Puget Sound daily
• Over 2 years -gt equivalent to Exxon Valdez spill
• Acquire/restore prime marine habitats
• Replace degraded shorelines, wetlands, estuaries
• 40 major species have declined

9
Puget Sound Clean Up Initiative

• Governors proposal
• Added 42M to already allocated 90M
• Puget Sound Partnership
• 10 person team of elected official, business
  leaders
• Proposed actions
• 21M faster clean-up of pollution and shoreline
• 6.5M upgrade of septic systems -gt into PS
• 4M for Parks to upgrade sewer systems
• 3M restore estuaries (wetlands)
• 2M to remove creosote logs
• 1.5M for oil spill and hazardous chemical
  clean-up, including storage

10
Puget Sound Clean Up

• Whats happening today
• Port Gardner Bay Clean Up (9 sites)
• Oil, gasoline, diesel fuels, heavy metals
• Everett shipyard
• North Marina
• Baywoods
• Exxon/Mobil storage
• Weyerhauser
• East Waterway
• ASARCO (Arsenic)

11
An Overall Assessment

• Use of cost-effective policies would reduce costs
  substantially while not affecting the benefits.
• Economic incentives would also facilitate change
  better than technology-based standards that are
  rigid.
• Marketable permits for water pollution control
  are being explored for many bodies of water in
  the U.S.
• Permits will encourage firms to try to minimize
  costs.
• Economic incentives put pressure on sources to
  find better ways to control pollution.