Policy Debate: Should anti-pollution standards be strengthened?

Although a great many scientists believe that global climate change is already underway, the more serious potential damages associated with increasing concentrations of greenhouse gases are not predicted to occur for decades. This means that the benefits of climate protection are very difficult to quantify. And, while the potential costs of reducing greenhouse gas emissions may be more immediate, they too... are difficult to predict with any certainty. Many unanswered questions exist about biophysical systems, potential thresholds, and economic impacts. In short, if anybody tells you that he or she has the definitive answer as to the costs and benefits of particular climate change policies, I would suggest that you raise your collective eyebrows.
~ Janet Yellen, Chair, Council of Economic Advisers, July 17, 1997

Nearly everyone agrees that pollution is undesirable (the only likely exceptions are those individuals whose income depends on the provision of pollution abatement services). It is socially optimal, however, that some level of pollution be tolerated. The reason, of course, is that there is an opportunity cost associated with pollution abatement. A cleaner environment requires higher production costs and a lower level of output.

There are two underlying economic principles that virtually all economists accept:

• an optimal level of pollution occurs when the social marginal benefit is equal to the social marginal cost of pollution abatement, and
• pollution should be reduced in a manner that results in the lowest possible opportunity cost.

In recent years, the effect of carbon dioxide emissions on global warming has been the focus of a great deal of debate among scientists, economists, and politicians. The Kyoto Protocol, an international treaty formulated at a December 1997 U.N. conference in Kyoto, Japan, represents an attempt to impose more stringent restrictions on carbon dioxide and other "greenhouse" gas emissions. The U.S. remains alone among industrialized countries in opposing this treaty. It is likely that the restrictions imposed by this treaty will continue to be a major focus of debate in the near future.

Another area of recent controversy involves the EPA's introduction in 1997 of more stringent standards restrictions on the emissions of ozone and particulate matter (of size greater than or equal to 2.5 microns). Critics argue that there is little evidence that these tougher emissions standards will benefit public health yet the implementation costs are high. Supporters argue that there is substantial evidence that health benefits will occur.

A similar debate has taken place recently concerning allowable arsenic levels in water. Supporters of stricter standards emphasize the health benefits while opponents emphasize the implementation costs.

• U.S. Environmental Protection Agency
  http://www.epa.gov
  The Environmental Protection Agency is charged with administering and enforcing environmental legislation in the United States. It is charged with measuring pollution levels, conducting studies of the effect of pollution and alternative pollution abatement measures, and proposing environmental regulations. The home page of this agency contains information about the EPA, a discussion of environmental laws and policies, and online copies of its publications. At this site, you can view the EPA's National Air Pollutant Emission Trends, 1900-1998.

• Environmental Defense Fund
  http://www.environmentaldefense.org/home.cfm
  The Environmental Defense Fund is an environmentalist organization that lobbies in support of more stringent environmental standards. The home page of this organization contains numerous online articles and an online Chemical Scorecard that provides visitors with estimates of the quantity of a variety of air pollutants released into the local air by local firms. At this site, you can also compare the air quality in your community with that in other zip codes, counties, and states. (Visitors should note that virtually every community will fall into the bottom 20% on some pollution criterion.)

• U.S. Global Change Research Program
  http://www.usgcrp.gov
  The U.S. Global Change Research Program was created in 1989 to conduct research on global climate changes resulting from industrial production. This web site contains documents created by this group and links to other U.S. and international agencies studying global climate change.

• United Nations Environment Programme
  http://www.unep.ch/
  This page contains information on United Nations activities, programs, and organizations dealing with environmental issues.

• Environmental Protection Agency, "Climate Change"
  http://epa.gov/climatechange/index.html
  This Environmental Protection Agency website contains information on the scientific evidence concerning climate change. Studies dealing with the emissions of greenhouse gases and the possible effects of this on global warming are available on the site. In particular, this website provides predictions of the effects of climate changes in each of the U.S. states and (using broader geographical regions) for the rest of the world.

• Environmental Protection Agency, "President Clinton's Climate Change Proposal"
  http://yosemite.epa.gov/oar/globalwarming.nsf/content/ResourceCenterPublicationsPositionPapersClintonProposal.html
  President Clinton's climate change proposal is the U.S. response to the Kyoto Protocol. A general description of this proposal is contained on this site.

• Environmental Protection Agency, "The Kyoto Protocol and President Clinton's Policies to Address Climate Change"
  http://yosemite.epa.gov/oar/globalwarming.nsf/content/ResourceCenterPublicationsPositionPapersWhyKyoto.html
  This July 1998 study provides a detailed economic analysis of the problem of global warming and President Clinton's proposed response. (To view this document, the Adobe Acrobat viewer plugin is required. You may download this viewer by clicking here.)

• Janet Yellen, "Statement before the Senate Committee on Environmental and Public Works"
  http://www.senate.gov/~epw/105th/yell7-17.htm
  In this statement, Janet Yellen, the Chair of the Council of Economic Advisers, discusses some of the major problems in establishing standards on carbon dioxide emissions. In her statement, she suggests several regulatory strategies that would be expected to reduce the cost of imposing higher standards.

• Resources for the Future, "Weathervane: A Guide to Global Climate Policy"
  http://www.weathervane.rff.org/
  On this web site, Resources for the Future provides analysis and discussion of global climate change policies introduced by various countries. Summaries of recent studies of policy effectiveness are also provided.

• United States Geological Service, "USGS Fact Sheets (listed by Environmental Theme)"
  http://water.usgs.gov/public/wid/index-environ.html
  This site contains summaries of studies completed by the United States Geological Service on a variety of environmental issues. Most of these studies deal with the causes and consequences of water pollution.

• Richard Woodward, "Effluent Trading: Tradable Pollution Permits for Improved Environmental Quality"
  http://agecon2.tamu.edu/people/faculty/woodward-richard/ET.htm
  This web site, provided by Richard Woodward, contains a collection of links to sites that contain information about pollution permit programs. Extensive information on pollution permit programs may be found by visiting these links.

• Environmental Protection Agency, "Arsenic in Drinking Water"
  http://www.epa.gov/safewater/arsenic/
  This EPA web page contains information on the process of setting new arsenic standards for drinking water.

• Dale W. Jorgenson, "The Economics of Climate Change"
  http://www.senate.gov/~epw/105th/jorg0710.htm
  In his July 10, 1997 testimony before the Senate Committee on Environment and Public Works, Dale Jorgenson, an economist at Harvard, argues that an international agreement on carbon dioxide emissions is desirable even though the expected benefit from this policy is relatively small. Jorgenson proposes that a carbon tax be introduced to reduce carbon dioxide emissions in the U.S.

• Timothy E. Wirth, "Statement before the Senate Committee on Environment and Public Works"
  http://www.senate.gov/~epw/105th/wir_7-17.htm
  In his July 17, 1997 testimony, Timothy E. Wirth, the Under Secretary of State for Global Affairs, provides an argument in support of the need for a treaty requiring a reduction in greenhouse gas emissions. He argues that there is compelling scientific evidence of the need for such restrictions.

• Stephen H. Schneider, "Climate Change: Causes, Impacts, and Uncertainties"
  http://www.senate.gov/~epw/105th/schn0710.htm
  Stephen H. Schneider, a biologist at Stanford University, summarizes the state of scientific knowledge concerning global warming. In his July 19, 1997 testimony before the Senate Committee on Environment and Public Works, he describes the types of studies that need to be conducted and provides a summary of the 1991 National Research Council's plan to deal with global warming.

• Kevin J. Fay, "Statement before the Committee on Environment and Public Works"
  http://www.senate.gov/~epw/105th/fay_7-17.htm
  Kevin J. Fay is the executive director of the International Climate Change Partnership, a coalition representing industrial interests. In his July 17, 1997 testimony, he states the concerns of this group about the establishment of an international treaty on greenhouse gas emissions. Fay suggests that any treaty must include the developing countries, must provide some degree of flexibility in meeting targets, and should take into account reliable estimates of economic costs and environmental benefits.

• John R. Christy, "Testimony before the Senate Committee on Environmental and Public Works"
  http://www.senate.gov/~epw/105th/chri0710.htm
  John R. Christy, an atmospheric scientist at the University of Alabama in Huntsville, discusses the use of satellite data on microwave emissions to measure the earth's temperature. This data suggests that the rate of global warming is less rapid than found in several earlier studies. Christy suggests that, while global warming may be a serious problem, it is not as urgent as many have argued.

• National Council for Science and the Environment
  http://ncseonline.org/
  The National Council for Science and the Environment is an organization that conducts and funds research on environmental issues. Its stated goal is to improve the scientific basis for political decision making.

• Dean Baker and James Barrett, "Cleaning Up the Kyoto Protocol"
  http://www.epinet.org/content.cfm/issuebriefs_ib131
  In this May 21, 1999 EPI Issue Brief, Dean Baker and James Barrett suggest that the introduction of international emissions permit trading would provide an improvement over the existing Kyoto protocol. Under their plan, developing countries could finance capital investment by selling emissions permits to developed economies. This would provide these countries with an alternative to export-led growth. Baker and Barrett argue that developed economies would also gain by being able to sell clean technologies to developing economies.

• Paul J. Georgia, "Market-Based Chimera: Emission Trading Fails to Deliver"
  http://www.cei.org/gencon/004,01639.cfm
  In this online Competitive Enterprise Institute policy brief, Paul J. Georgia argues that tradeable emissions permits have not been as effective as claimed by the Clinton Administration. He suggests that while these permits have resulted in a relatively substantial reduction in sulfur dioxide emissions, the ability to "bank" these permits for future use means that the U.S. will be unlikely to achieve its longer term emissions target. Georgia argues that the low volume of trade for these permits indicates that the ability to trade these permits has not been a substantial factor in pollution reduction.

• C. David Kelly, "Jumping the Gun on the Global Climate Change Treaty?"
  http://www.fb.org/index.php?fuseaction=newsroom.focusfocus&year=1997&file=fo0728.html
  C. David Kelly, on behalf of the American Farm Bureau, expresses opposition to the Kyoto accord in this July 28, 1997 document. It is argued that the Kyoto Accord would place burdensome requirements on U.S. producers without placing similar restrictions on foreign competitors.

• William F. O'Keefe, "Statement before the Committee on Environment and Public Works"
  http://www.senate.gov/~epw/105th/okee0717.htm
  William F. O'Keefe is the Chairman of the Global Climate Coalition, an organization representing firms and industries that are strongly opposed to more stringent restrictions on emissions of greenhouse gases. In his testimony, O'Keefe argues that there is no compelling evidence of a need for such restrictions. He also suggests that the economic cost of imposing such restrictions would be very high.

• FreedomWorks, "Environment"
  http://www.freedomworks.org/informed/key_template.php?issue_it=8
  FreedomWorks argues that many current and proposed environmental standards are set at an inappropriately high level. This page contains a discussion of their philosophy on environmental regulation and links to a variety of publications dealing with specific environmental standards. In general, these publications argue that the benefits of environmental regulations tend to be overstated by the executive branch while the costs tend to be understated.

• Robert W. Crandall, Fredrick H. Rueter, and William A. Steger, "Cleaning the Air: EPA's Self-Assessment of Clean-Air Policy"
  http://www.cato.org/pubs/regulation/reg19n4c.html
  In this Cato Institute publication, Crandall, Rueter, and Steger argue that the EPA's study of the effect of regulation on air quality is seriously flawed due to the absence of reliable data on emissions. This report also notes that the EPA's study entirely focuses on the total benefits and the total costs of pollution abatement. As the authors of this article argue, it is necessary to measure the marginal benefits and costs of pollution abatement to determine whether the regulations are specified at an appropriate level. They also suggest that the EPA overstated the health benefits of improved air quality and understated the costs of complying with EPA regulations.

• Wayne T. Brough, "The EPA's Proposed Air Quality Standards: First, Do No Harm"
  http://www.freedomworks.org/informed/issues_template.php?issue_id=460
  Wayne T. Brough, in this FreedomWorks study, argues that more stringent air quality standards imposed in 1997 result in more harm than good. It is suggested that the primary reason for this policy is that the EPA is supposed to establish policy based only on projected health benefits without taking costs into account. This document contains a very good argument for taking costs into account when evaluating environmental policies.

• John Hawksworth, "The World in 2050: Implications of Global Growth for Carbon Emissions and Climate Change Policy"
  http://www.pwc.com/extweb/pwcpublications.nsf/docid/.../$file/world2050carbon.pdf
  John Hawksworth examines the effect of alternative policies concerning carbon emissions on climate change in this September 2006 PriceWaterHouseCoopers study. He observes that the rapid projected growth in 7 emerging economies (China, India, Brazil, Russia, Indonesia, and Turkey), combined with growth in the rest of the world, will substantially increase global energy usage and global carbon emissions. These environmental impacts and costs are addressed under a variety of alternative environmental policy scenarios. They find that reductions in carbon emissions will result in a reduction in economic growth. He suggests, though, that the "baseline 'business as usual' scenario implies rapidly rising levels of carbon emissions that might be associated with significantly increased risks of adverse climate change and severe negative socio-economic effects in the long run." (To view this document, the Adobe Acrobat viewer plugin is required. You may download this viewer by clicking here.)

• Andrew Leonard, "New Growth Climate Change Theory"
  http://www.salon.com/tech/htww/2006/10/13/mitigation/index.html
  Andrew Leonard discusses the economics of climate change policy in this October 13, 2006 Salon article. He notes that the evidence suggests that there will be costs in terms of economic growth associated with reducing carbon emissions, but argues that the potential costs of not doing anything are also very large. Leonard cites the October 11, 2006 Friends of the Earth study (described below) that indicates that the cost of increased carbon emissions could be as high as $20 trillin by 2100.

• John Hawksworth, "The World in 2050: Implications of Global Growth for Carbon Emissions and Climate Change Policy"
  http://www.pwc.com/extweb/pwcpublications.nsf/docid/.../$file/world2050carbon.pdf
  John Hawksworth examines the effect of alternative policies concerning carbon emissions on climate change in this September 2006 PriceWaterHouseCoopers study. He observes that the rapid projected growth in 7 emerging economies (China, India, Brazil, Russia, Indonesia, and Turkey), combined with growth in the rest of the world, will substantially increase global energy usage and global carbon emissions. These environmental impacts and costs are addressed under a variety of alternative environmental policy scenarios. They find that reductions in carbon emissions will result in a reduction in economic growth. He suggests, though, that the "baseline 'business as usual' scenario implies rapidly rising levels of carbon emissions that might be associated with significantly increased risks of adverse climate change and severe negative socio-economic effects in the long run." They find that the annual cost of damages at over $20 trillion by 2100. (To view this document, the Adobe Acrobat viewer plugin is required. You may download this viewer by clicking here.)

• Frank Ackerman and Elizabeth Stanton, "Climate Change - The Costs of Inaction"
  http://www.foe.co.uk/resource/reports/econ_costs_cc.pdf
  Frank Ackerman and Elizabeth Stanton examine the potential economic cost of climate change associated with increasing carbon emissions in this October 11, 2006 Friends of the Earth report. They find that a 2 degree increase in temperature will result in negative net benefits for vurtually all countries and regions. This increase is likely to occur by 2050. In the later half of the 21st century, temperatures will increase even further if no action is taken in the near future. They find that these consequences would be extremely costly, resulting in "a world crippled by food and water shortages, extreme and variable weather, extinctions and other ecosystem damage, and a growing danger of an even more severe catastrophe." (To view this document, the Adobe Acrobat viewer plugin is required. You may download this viewer by clicking here.)