Thursday, July 08, 2004
'Polluter pays' policy would be the best way to clean up the Chesapeake
From the RoundTable blog
Read the latest entries
±
Stephenson is an associate professor in the Department of Agricultural and Applied
Economics at Virginia Tech. He specializes
in environmental economics.
In a May 16 editorial ("A small step toward a cleaner Chesapeake"), The Roanoke Times lamented that the state budget included only $30 million in new money to clean up the Chesapeake Bay and expressed approval of efforts to increase this amount with a possible "flush tax."
Two days later, a commentary by Virginia Secretary of Natural Resources W. Tayloe Murphy Jr. ("Virginia is letting its environment degrade") reiterated the point.
The current strategy is to collect general tax revenues to pay dischargers to install nutrient treatment technologies. State agency personnel then select the dischargers and treatment strategies on which to spend the money. The general philosophy can be summarized as "tell people what to do and pay them to do it."
However well-intentioned, this is not a particularly fair or cost-effective way to improve the bay's water quality. State spending on pollution control technology should not be equated with the state's commitment to cleaning up the bay. Relying on state general funds to pay for the bay's cleanup violates the "polluter pays" principle. The polluter pays principle is a simple ethic based on the belief that those who degrade public air and water resources should pay to clean them up.
If this seems reasonable, then it would be unreasonable to ask the general taxpayer to pay people not to pollute. Instead of raising money from the general treasury, some feel a "flush tax" is an answer to the financing challenge. The flush tax would impose a state-level surcharge on everyone's sewer bill. The state would collect the money and then decide which deserving discharger to give it to.
A flush tax would also move us closer to the polluter pays principle. After all, every person living in the bay drainage is a small contributor of pollutants (nutrients in this case) running into the bay. But then one would have to ask, why should the state be involved in setting and collecting this fee in the first place? A local sewer authority can set its own rates. The local sewer authority is also in a better position to determine just how much is needed to pay for new pollution control strategies.
Collecting money from sewage treatment plant customers, sending it to Richmond, which sends it back to the sewage treatment plants, simply adds unnecessary administrative layers. A more direct policy would require individual polluters themselves to pay for strategies and technologies to limit pollutants.
If regulatory programs are properly crafted, such an approach need not be excessively burdensome or costly. One option would be to place a nutrient "cap" on a group of sewage treatment plants. A cap is a total maximum amount (measured in pounds or kilograms) of pollutants that can be released. The cap is also mandatory and enforced. If total discharges exceed a cap, the treatment plants pay a financial penalty. Despite all the rhetoric about commitments to clean up the bay, Virginia has never required dischargers to limit nutrient pollutants.
A cap would allow the sewage treatment plant operators to seek and implement cost-effective pollution control strategies. Since the cap applies to the group and not a specific plant, the dischargers that could reduce nutrients most cheaply could do the most treatment.
Furthermore, the cap would not prescribe a particular way or technology the plant operators would have to use to reduce nutrients. The basic idea is, "Here's the job, figure out the best way to do it."
The people who operate the sewage treatment plants are intelligent, capable professionals. Plant operators are in the best position to get the job done - to discover and implement low-cost and innovative nutrient treatment strategies that some experts now think exist.
New state agency staff would be needed to create and implement enforceable group caps and to develop new permitting strategies. This would represent a true state commitment to clean up the bay but would represent a tiny fraction of the cost to the taxpayer compared to paying polluters not to pollute.
