Pollution can be controlled with less government regulation

From the bubble concept has come the possibility of buying and selling pollution offsets. Assume that a firm wants to move into an area that already is as polluted as allowed by EPA standards. It can set up operation by purchasing offsets from an existing polluter in the area. This allows a company that believes its new polluting activity will generate more value to transfer pollution from existing bubbles to a new one. This type of exchange, much like swapping rights, allows the greatest value to be generated with a given amount of pollution. It also encourages polluters to come up with cheaper ways of reducing the condition, since the firm that does so is able to sell the credit to others. Pollution reduction can be profitable.

Although the pollution market still is in its infancy and many legal considerations are yet to be resolved, some offset exchanges have taken place. The Times Mirror Company completed a $120,000,000 expansion of its paper plant in the Portland, Ore., area after purchasing the right to discharge an additional 150 tons of hydrocarbons annually from other polluters. Mobil Oil paid Torrance, Calif., $3,000,000 for rights to dump 900 pounds of reactive vapors daily. Under the Clean Air Act of 1990, electric utility companies can buy or sell the rights created by pollution regulation.

Despite the advantages of rights and offset exchanges, the political response to ecological concerns almost entirely has been to embrace the direct regulation and control approach. There are reasons for the political popularity of directly regulating pollution sources that have nothing to do with environmental concerns. In some cases, the latter simply are a convenient vehicle for promoting hidden agendas that actually can result in a reduction in environmental quality.

COPYRIGHT 1993 Society for the Advancement of Education
COPYRIGHT 2004 Gale Group