COLUMN LEFT : A New Low in Capitalism: Selling Smog : AQMD’s pollution-credit proposal needs a reality check.

The city synonymous with smog may soon be trading cancer futures. Such is the plan now being discussed by a “market committee” appointed by the South Coast Air Quality Management District. The idea is to let the free market work its presumed magic by abandoning regulatory standards, setting instead an overall level of sanctioned pollution.

Against this level, every business, large and small, would be allocated a number of pollution credits or shares. Those needing less than their allocation could sell the surplus credits to those needing more. The amount of pollution represented by each share would shrink 5% each year. Private pelf and public weal would march forward hand in hand.

Eric Mann, director of the Labor/Community Watchdog, a grass-roots environmental organization in Los Angeles, has a more realistic description, informed by his membership of the AQMD’s famous market committee: “Suppose all oil refineries are asked to reduce nitrogen dioxide by 5% and one refinery reduces it by 10% and another not at all, the first refinery could sell the extra 5% over the limit for a profit. So the most polluting refinery would buy this 5% and show a corresponding reduction on its books. Meanwhile, children across the street from this particular refinery would continue to show high levels of toxic chemicals in their lungs.”

There’s nothing particularly new in all this. The market strategy began to find favor with big business lobbyists and their neo-liberal intellectual helpmeets in Washington in the late 1970s, when the first wave of environmental regulations was beginning to impose serious costs on big business. A decade later, the new Clean Air Act, signed into law by President Bush last year, included a pilot program inspired by the same theory. Under its terms, power plants can trade “emission allowances” of sulfur dioxides.

Big business loves the idea, because big business hates regulation. Indeed, the market approach has a businesslike rationality, allowing for the cheapest pollution to be bought up first. Let’s say Arco needs a new refinery and thus more pollution credits. Arco buys up credits from some dry cleaners and they shut down. But what happens a few years down the road when there are no cheap pollution credits to buy, no cheap way to knock the mandated annual 5% off the pollution levels? The market approach is not “technology forcing.” Suddenly there are hard, expensive choices, and the big oil company says forget the 5% target or we take the plant and the jobs some place else.

Business lobbyists love to poke fun at government red tape, but enforcing the “market rights” approach would be a labyrinthine nightmare.

Power plants in the Clean Air Act pilot program do not present so much of a problem, since monitoring is a matter of checking emissions gauges on each stack. But consider the problem of a manufacturing company.

Under old-fashioned regulation, you simply told the company to limit solvents in its process and forced it to install an afterburner on its oven to burn up the emissions. Under the market approach, you establish a level of pollution for the whole operation against which you issue credits. But how realistic is this? Hydrocarbons are coming from myriad sources around the factory site as people carry around solvents for cleaning, painting and so forth. How are these “fugitive emissions” to be measured, and gains and losses tallied? The EPA gave up on its old “alternative emission control plan” for just such reasons. Why should AQMD do better?

Think of the problems of monitoring compliance in a pollution market of 15 auto-body shops. Under regulation, you simply limit solvents in their paints and mandate high-efficiency spray guns. With the market approach, you have to establish current emission levels in each shop and allocate credits, and check whether the shop selling its pollution shares has actually gone out of business.

In today’s economic climate, is it desirable to install a program that tempts small business to sell their pollution rights, close shop or move to Tijuana? Why install a “pilot program” that in fact involves all stationary sources of pollution in the South Coast Air Basin, whose results will be impossible to measure reliably for several years, when more tha half of the pollution comes from mobile sources?

There’s a deeper question: How come business suddenly has the right to profit by selling shares in poison? Arco, launching its cleaner gasoline, is even now having the effrontery to ask for extra pollution credits at its Carson refinery.

The folly comes in confusing “market forces” with public rights and with the public good. A market approach to abolitionism would have had plantations trading “slave credits.” You don’t clean up a city by trading in cancer futures.