Foresight and Cleaner Air Have Much in Common

Can clean air be good for business--or will it just make us poor?

For California, particularly struggling Los Angeles, those questions arose last week when the Environmental Protection Agency issued a comprehensive plan to clean up the air that includes stringent new rules for trucks, planes, trains and ships.

Heavy trucks would have the same low-emissions requirements as passenger cars by 1999. Ships would have to reduce engine emissions when coming into the ports of Los Angeles and Long Beach. The EPA has estimated the cost of cleaning the air at $3 billion to $6 billion a year.

At first blush, the EPA action seems to deal a body blow to Los Angeles’ vision of becoming a trading city for Asia and Latin America in the 21st Century. That idea relies heavily on expansion of airports and ports and completion of the Alameda Corridor rail and highway route, which would speed freight from the harbor through the city and out to the rest of the United States.

Businesses last week were saying they wouldn’t be here to play that game. Shippers said they might move operations to Seattle or Ensenada, Mexico. Truckers were furious. “This will further depress the California economy,” said Allen Schaeffer, vice president for environmental affairs at the American Trucking Assn. “Soon it will be a place where only environmental activists live.”

But bluster and fear don’t paint a full picture. First, EPA doesn’t make rules only for California. Sooner or later regulations designed for California’s environment are applied to the rest of the country, too. So talk of moving elsewhere is often more emotional than real.

More positively, EPA regulations are not bureaucratic caprice but legal responses to evolving public consciousness. Last week’s action was court-ordered and, in fact, designed to push California itself to come up with specific proposals for clean air in Sacramento, Ventura and Los Angeles.

Nor is it only harsh medicine. EPA rules are often--not always, but often--a guide to new business. Over the last two decades, regulations about hazardous wastes and air and water quality have spawned a vast industry in environmental products and services. Industry revenues at hundreds of companies are now $134 billion a year--$18 billion in California--according to Grant Ferrier of Environmental Business International, a San Diego research firm.

To be sure, regulations can have adverse effects. “Where in all this fine-tuning of air quality is there any mention of job creation?” asks California historian Kevin Starr. “We have unemployed young men needing manufacturing jobs in Los Angeles.”

Also, the new regulations duck the toughest issue: The EPA leaves to California the politically difficult task of curbing use of passenger cars.

But then, EPA anticipates controversy; the agency calls for a full year of discussions about these proposals. And local businesses should take an active part, especially as the envisioned rules are part of a larger effort worldwide to develop low-emissions transport, including electric cars.

“A smart company would look at what is needed and try to get out front in providing it,” says Patricia O’Toole, a partner in the Lamb & O’Toole law firm and a specialist in environmental issues.

For example, in stipulating automobile standards for heavy trucks, the EPA recognizes that alternative fuels or redesigned engines will be needed and it is trying to give technology a push.

The goals are not impossible for 1999. Many companies in California today use natural-gas powered vehicles. Other experiments abound and technology is moving. A company in Sweden said last week it has developed a fuel which cuts toxic emissions by 50%. A heads-up trucking industry would be helping develop new fuels, new engines.

That’s what the worldwide shipping industry is doing. The 147-nation International Maritime Organization, an agency of the United Nations, has been working for three years on new rules for engine emissions.

“It’s a consensus effort,” says Roger Kohn, an official of the London-based IMO. “Shippers, harbor masters, insurance companies, all consult with our officials.” The standard that emerges will change ships’ fuel or engines or both. And rules for Seattle and Ensenada will be no different from those for Los Angeles, so tough standards won’t lose business for the ports of Southern California.

Consensus rule-making has worked before. Separation and Recovery Systems is a small Irvine firm founded 23 years ago with a method of cleaning ships’ polluted bilge water to make it safe for discharge into harbors. It seemed an uncertain business, says Joseph DeFranco, president of SRS, who started the company with backing from his friend, the late actor John Wayne. Not all harbors were concerned then about discharges; environmental laws were still being debated even in the United States.

But the International Maritime Organization worked on the problem and banned discharges. Today SRS is a successful, $15-million company, and there are many like it around the world. Environmental consciousness has grown enormously; commercial ships and pleasure craft are now forbidden from discharging just about anything.

The point is that environmental rules evolve with public demands and recognition of true costs. A polluting factory that turns out low-priced goods is no bargain--just ask Eastern Europe.

On the other hand, the potential opportunity for California is vast in a world becoming more environmentally conscious. Europe and Asia generally trail the United States in environmental matters. And the emerging industrial countries have even greater needs. Compared to the smog of Taipei or Mexico City, the air in Los Angeles is pure.

If California can come up with environmentally sound transportation and urban systems--zero emissions vehicles, computer controlled highways, non-polluting manufacturing--the world will beat a path to its door. And if necessity is the mother of such invention, regulation can be its midwife.

“High environmental standards worldwide are necessary if Los Angeles is to be a center for transportation technology,” says Richard Weinstein, dean of UCLA’s School of Architecture and Urban Planning.

Clean air make us poor? On the contrary. If we work it right, higher standards can make us rich, in more ways than one.