Pollution can be controlled with less government regulation

IN MANY RESPECTS, a clean environment is no different from any other desirable commodity. In a world of scarcity, people can increase consumption only by giving up something else. The dilemma they face is choosing the combination of goods that enhances well-being the most. Few would enjoy a perfectly clean environment if they were cold, hungry, and generally destitute. On the other hand, an individual choking to death in smog hardly is to be envied, no matter how great his or her material wealth. Only by considering the extra cost as well as the additional benefit of increased consumption of all goods, including clean air and water, can decisions on the desirable combination be made properly.

It is practically impossible to get widespread agreement on what the appropriate level of pollution should be. People with their own preferences and situations are going to have different ideas about the costs and benefits of pollution abatement. For example, consider a community which contains both a college and an oil refinery that emits large quantities of nauseating and potentially noxious fumes into the atmosphere. Who do you think is most likely to participate in a protest favoring stringent pollution controls on the refinery: college students or townspeople? It is a safe bet that the answer is the collegians. This might be because they are more aware of and sensitive to the environmental quality of the community, but the long-term residents--those who plan on staying there and raising children--certainly are worried about its air quality. Indeed, they well may be more concerned about local pollution than the college students who, after all, will live in the community only while they are attending school.

The difference between townspeople and students probably is not found primarily in a dissimilarity in desire for a clean environment. It likely is explained best by the fact that the expense of cleaning up the environment will fall almost entirely on the townspeople. It is their jobs, incomes, and retirement plans that will be jeopardized by strict pollution control requirements on the refinery. The students will not have to pay this cost, since their job prospects and current income will be quite independent of the plant's profitability. Consequently, it is the students who will be more eager to clean up the refinery. They will get many of the benefits and pay none of the cost. The townspeople will be a little less enthusiastic about environmental purity since they will be the ones stuck with the bill.

The point is not to decide which group is right or wrong. Both are quite rational, given the situation they face. The purpose is to emphasize that controversy is sure to arise when a community of people have to share a common, or public, good. Conflicts are inevitable because individuals have varied preferences and face different costs. This explains much of the controversy revolving around environmental issues. If everyone could pay for and consume a preferred level of environmental quality, independent of that paid for and consumed by others, controversy over ecological protection would disappear. There is no way to avoid this type of dispute completely when, as always will be the case, public goods are being provided in a community. It should be recognized, however, that one way people somewhat spontaneously moderate such contentions is by sorting themselves out in relatively homogeneous groupings. Communities that contain residents with similar backgrounds, preferences, and circumstances are more likely to avoid socially divisive controversies than are those containing more diverse populations.

What would be the objectives of an ideal pollution control policy? First, and most obviously, it should be reduced to the efficient level that maximizes the value of all resources. This means continuing to cut pollution one more unit only as long as the value of the improved environmental quality is greater than that of what is sacrificed.

A second aim is to lower it as inexpensively as possible. There are two separate considerations here. If the process is to be done economically, each source obviously has to abate at minimum cost. There are many ways to cut back on pollution, but in general there will be only one least-cost method. Even if all polluters are abating as cheaply as possible, it does not necessarily mean that the over-all problem is being reduced at least cost. Since some will be more efficient at reduction than others, the lowest-cost pattern will require certain polluters to clean up more than others. In general, the least-cost pattern of abatement will find the price of lessening pollution by one more unit the same for all polluters. If this condition is not satisfied, the expense of achieving a given amount can be cut by having the low-cost abater reduce pollution by an additional unit and the high-cost one do so by a unit less. This type of adjustment will continue to decrease cost, without increasing pollution, until reducing pollution the additional unit runs everyone the same.