Clean Air Has Its Price So Let’s Charge Polluters

At a congressional hearing last month on air pollution in Southern California, Rep. Henry A. Waxman (D-Los Angeles) charged the South Coast Air Quality Management District with having “lost control” of the situation and called its “historically progressive image . . . a myth.”

Among other things, Waxman charged that less than one-third of 1% of new industrial sources of pollution have secured “smog credits” from existing sources, although the law requires all new sources to do so. Further, he said that although the law theoretically penalizes firms that do not seek a pollution permit before construction, 60% have not done so. The penalties that the AQMD has imposed on these firms have been “a slap on the wrist,” Waxman said. The AQMD did not deny Waxman’s allegations.

The AQMD has also been severely criticized by the state Air Resources Board and the federal Environmental Protection Agency. The AQMD’s defense is to blame its failings on Southern California’s rapid growth and a lack of federal financial support. What has gone wrong?

Unfortunately, more extensions of the many deadlines that the district has already missed will not solve the problem.

The problem is in the tools--governmental rules--that the AQMD has been given to do its job. In some cases the rules say how much of a particular pollutant a facility can release. In other cases they say what kinds of anti-pollution devices or processes a facility must use. But there are far too many kinds of pollution sources than anyone can hope to organize effectively through rules. As a result, the rules rarely fit, they have loopholes, they are confusing, and they are difficult to enforce.

The problem is aggravated by the rapid pace of industrial change. It generally takes years to design the rules and get them into effect, by which time many of them are already obsolete. New ways that air pollution harms us are discovered every year, yet the existing rules fail to take these developments into account. The AQMD itself has noted the trend away from large industrial polluters to small manufacturing sources as a factor in making its job increasingly difficult.

That the Gordian knot can be cut, however, is proven by the fact that it has been in other places in the world.

The sword is an emissions fee system. After the harms of each pollutant have been estimated, every source is charged according to its share of the total pollutants of the kind that it emits. Of course the shares have to be approximated in most cases. An automobile’s share, for example, presumably would be estimated on the basis of its make, model and age and the rated effectiveness of its anti-pollution device.

Emission fees have two great advantages over the present regulations. They are vastly simpler to administer and they encourage polluters to reduce their emissions in order lower fees. Studies show that, on the average, $1 spent on reducing pollution in Southern California will reduce the harms from that pollution by $8. Thus if an emissions fee system is put into effect, polluters will practically climb over each other to install better anti-pollution equipment.

The AQMD already imposes emissions fees on the larger stationary sources, but they are not nearly enough to have the critically needed incentive effects. They just reimburse the AQMD for some of its enforcement costs.

Under an expanded emissions fee system, large sources are simply monitored and charged for the amounts they emit. Prosecutions are rare, since there are so few rules to violate. Small sources such as automobiles can be required to pay their shares along with their annual license or registration fees. This could be done as part of the smog check inspection.

Further, the establishment of emission fees encourages research in ways to reduce pollution less expensively, by providing large and eager markets in which the new technologies can be sold.

The principal obstacle to emissions systems is their effectiveness. Those who have a vested interest in polluting exert political pressure to prevent legislatures from adopting such measures. There are also other obstacles in California. Here the large stationary sources are reaping monopoly profits because the pollution rules are stricter for new businesses than for established ones. The current rules also allow established sources to profit from selling their “smog credits,” often for millions of dollars.

Fortunately, however, the courts can overrule the state Legislature. Air pollution is what the law calls a “battery” to the extent it harms people and a “trespass” to the extent it harms property. The courts therefore already have the authority to require polluters to compensate every one they harm. By virtue of a 1980 state Supreme Court decision, it is not necessary to trace each grain of pollutant back to the source that emitted it. It is enough to prove the approximate amount that the source contributed to the total.

The only new legal element would be in enforcing the judgments, which could not be done individually against millions of polluters. The means I have devised is for the state to be held liable for the total, which it could collect back from the polluters through the emissions fee system. The proceeds would go to local governments and school districts, in proportion to the pollution harms being inflicted on the local populations.

Since the total liabilities would be required by law to compensate for the total harm, and the total harm would be determined by judges and juries, political and pressure groups could not prevent the fees from being high enough to force emission rates down.