Leg11 Enforcement Mechanisms

.Am . . - AKES iORY BOARD

LEG11 ENFORCEMENT MECHANISMS , Proceedings of a workshop held in Windsor, Ontario February 21-22, 1977 Sponsored by STANDING COMMITTEE OIV SOCIAL SCIENCES ECONOMIC AND LEGAL ASPECTS OF THE INTERNATIONAL JOINT COMMISSION'S GREAT LAKES RESEARCH ADVISORY BOARD

edited by

PATRICIA A. BONNER IJC Great Lakes Regional Office, Windsor

Editorial Committee Leonard Crook and Mary Gretchen Zale, Great Lakes Basin Commission Jack A. Donnan, Ontario Ministry of the Environment

IJC GREAT LAKES REGIONAL OFFICE WINDSOR. ONTARIO

OCTOBER 1977

Report Number R-77-1 NOTICE

Statements and views presented in these proceedings are totally those of the speakers and do not necessarily reflect the views and policies of the International Joint w om mission or its Research Advisory Board and Committees framework. Mention of trade names or commercial products does not constitute endorsement or recommendation for use.

~iblio~ra~hicCitation: Economic and Legal Mechanisms, proceedings of a workshop held in Windsor, Ontario, February 21-22, 1977. Sponsored by the Great Lakes Research Advisory Board Standing Committee on Social Sciences, Economic and Legal Aspects. Edited by Patricia A. Bonner. Report No. R-77-01. Windsor', Ontario, 1977. .. . Acknowledgement Preface Introduction Recommendations, Conclusions and Observations Research Topics Point Sources Introductions Implementation Incentives for Environmental Quality Management Blair T. Bower, Charles N. Ehler and Allen V. Kneese Pollution Abatement: Some Observations on Political and Legal Realities David Estrin Alternative Legal Structures for Controlling Point Source Pollution Jeffrey K. Haynes Point Sources: New Economic Mechanisms Donald N. Dewees Panel Presentations Richard Robbins Daniel Ciona Mitchell Zavon Co lin MacFar lane Highlights of Morning General Discussion Views on the Environment Stephen Lewis Point Sources Workshops Energy Pulp and Paper Chemical and Chemical Processing Municipal Transportation Mining and Mineral Processing Highlights - Afternoon General Discussion Jurisdiction Workshops Canada Federal United States Federal Province - Municipalities States Municipalities ~merica's Great Lakes Program : The Bureaucratic Mess in the U. S. Gaylord Nelson Non Point Sources 147 Introductions 149 Urban Non-Point Pollution - Approaches for Control Stephen Gordon 151 Agricultural Non-Point Pollution - Approaches for Control Wesley D. Seitz 159 Some Economic Aspects of Persistent Pollutants Anthony Scott 187 Summary Presentation of Anthony Scott paper 203 Panel Presentations 208 Mary Garner 208 Douglas Hoffman 213 John R. Adams 215 Mary Lee Strang 218 Highlights of Morning General Discussion 223 Non-Point Sources Workshops 233 Urban Non-Point - Controls 234 Rural Non-Point - Controls 237 Urban - Future Strategies 239 Rural - Future Strategies 241 Chemical and Metal Residues 243 Jurisdiction Workshops 244 Canada Federal 245 United States Federal 248 Province - Municipalities 251 States - Municipalities 254 Background Papers 25 7 Framework for Evaluation Jack A. Donnan 259 The United States Federal Framework Reinhold Thieme 263 A Survey of State Water Pollution Control Law William M. Eichbaum 267 Canadian Pollution Control Law - The Great Lakes J. Neil Mulvaney 273 Non-Point Pollution Problems - Great Lakes Basin Garth E. Bangay 279 Nominal Group Technique 286 Workshop Participants List 293 Terms of Reference - Standing Committee on Social Sciences, Economic, and Legal Aspects 299 Membership List - Standing Committee on Social Sciences, Economic, and Legal Aspects 301 Membership List - Ad Hoc Organizing Committee for the Workshop 303 Membership List - Great Lakes Research Advisory Board 305 These proceedings and the workshop on Economic and Legal Enforce- ment Mechanisms for achieving improved water quality in the Great Lakes must be attributed to the efforts of many individuals and agencies involved in resource management and associated with the International Joint Commission Great Lakes activities.

The initial concept for the workshop came from the members of the Social Sciences, Economics, and Legal Aspects Committee (SSELA) of the 1JC's.Research Advisory Board. Committee members greatly appreciate the support afforded to the concept by the Research Advisory Board. The Committee also wishes to recognize the participation and encouragement received from the International Joint Commission Washington and Ottawa staffs and the United States and Canadian Commissioners. The work of the staff of the Great Lakes Regional Office, Windsor, was essential for the successful conduct of the workshop and the preparation of these proceedings.

Detailed planning of the workshop was the responsibility of the Ad Hoc Organizing Committee whose members included: Mr. Leonard T. Crook, Great Lakes Basin Commission (GLBC), SSELA Chairman; Mr. Jack A. Donnan, Program Chairman, Ontario Ministry of the Environment; Ms. Patricia A. Bonner, International Joint Commission Regional Office; Mrs. Mary Gretchen Zale, Great Lakes Basin Commission (GLBC); Mr. Neil Mulvaney, Ontario Ministry of the Environment; Mr. Ronald Shimizu, Environmental Protection Service, Department of Fisheries and EnvironmentCanada; Mr. Garth Bangay, Environmental Protection Service, Department of Fisheries and EnvironmentCanada; and Mr. Tom Muir, Environment Protection Service, Department of Fisheries and EnvironmentCanada. Mr. Floyd Heft, of the Ohio Department of Natural Resources, Mr. Walter Lyon and Mr. William Eichbaum of the Pennsylvania Department of Environmental Resources also participated.

Dr. Leonard Dworsky, Research Advisory Board contact member, followed the course of the workshop from concept to completion.

Ms. Patricia A. Bonner deserves a special thanks for planning and arranging for workshop facilities, for the preparation and distribution of all workshop materials, for administrative and other work during the workshop, but particularly for her extensive work to focus the results of the workshop into meaningful proceedings. SSELA and the participants are indebted to the authors of the papers which enabled workshop participants to focus on the key components of innovative and imaginative mechanisms for water quality improvement.

The thoughtful and enthusiastic participation of the attendees was the reason the workshop was successful and productive. The Great Lakes Research Advisory Board of the International Joint Commission was established under the Canada-United States Great Lakes Water Quality Agreement under the following terms of reference: (a) To review at regular intervals these research activities in order to: (i) examine the adequacy and reliability of research results, dissemination, and the effectiveness of their application; (ii) identify deficiencies in their scope, and inadequacies in their funding and in completion schedules; (iii)identify additional research projects that should be undertaken; (iv) identify specific research programs for which international co-operation will be productive; (b) To provide advice and consolidations of scientific opinion to the Comission and its boards on particular problems referred to the Advisory Board by the Commission or its boards; (c) To facilitate both formal and informal international cooperation and co-ordination of research; (d) To make recommendations to the Commission.

To assist it in carrying out its functions, the Board established numerous committees in 1973. One of these, the Standing Committee on Social Sciences, Economic and Legal Aspects (SSELA), performed a literature search in 1974 to help members define the state of the art in economic, legal and.socia1 sciences research and applied research throughout the Great Lakes Basin. Gaps in knowledge were particularly notable in the areas of public information, citizen participation and pollution abatement through legal and economic rather than technological means.

Using the ~oard'sauthority to "seek analyses, assessments and recommendations from other professional, academic, governmental or intergovernmental groups about problems of Great Lakes water quality research and related research activities", the Committee sponsored workshops under the auspices of the Board and Commission. Proceedings of the June, 1975, Public Participation Workshop were published early in 1976. This document is the product of the Economic and Legal Enforcement Mechanisms Workshop held February 21-22, 1977, in Windsor, Ontario.

Planning began in January, 1976, when SSELA formed a workshop subcommittee to design and organize the event. This publication is a compilation of background papers prepared by that group, the invited presentations prepared for the workshop, panel reviews of the presentations, highlights of general discussions, suggested policies lists which resulted from workshop discussions focused on specific pollution sources, research topics identified by workshop participants, and recommendations and conclusions drawn by the editors from all materials associated with the workshop. j With the publication of these proceedings SSELA and its subcommittee were officially disbanded. In the future, a newly formed group, the Great Lakes Research Advisory Board's Expert Committee on Societal Aspects of Great Lakes Water Quality, will be carrying out related work through specific topic task forces. Biological, chemical and physical data concerning pollution and its effects are essential in identifying pollution problems and devising some of the technical methods of resolving these problems. A great deal of technical information is available and is being collected concerning the sources, the translocation and the effects of natural and man- induced contamination in the Great Lakes. It is generally conceded that levels of water pollution in various locations throughout the Great Lakes are such that remedial actions are required. It is also generally conceded that these remedial programs and actions are not proceeding as rapidly or as effectively as was originally intended. Why? What is missing?

The Great Lakes Research Advisory Board's Standing Committee on Social Sciences, Economic and Legal Aspects suggested that legal and economic policies, not technology, would perhaps provide more impetus for changing the behavior of polluters, be they individuals, private corporations, municipalities or other governmental units. This led the group to propose a conference which would focus on ways in which government can induce various corporate and individual members of society, including government itself, to shift from polluting patterns of behavior to non-polluting patterns.

In January 1976, the Standing Committee on Social Sciences, Economic and Legal Aspects proposed that the Great Lakes Research Advisory Board sponsor a conference to examine both theoretical and practical alternative economic and legal policy mechanisms currently in use or which could be applied to achieve environmental objectives in Great Lakes Basin jurisdictions of Canada and the United States. Participants in the event would be requested to identify specific questions or issues requiring more testing, development or research which would then lead to applicable policy mechanisms or improved methods of implementation.

To design the event, SSELA appointed a subcommittee. Its members soon recognized that though Canada and the United States on paper have the free enterprise system in comnon, and England's legal structure as their base, legislative and administrative policies and practices concerning the environment have evolved somewhat differently in each country. Differences needed to be defined for the international participants in the workshop. Attendees needed to be aware of the particular pollution problems of the Great Lakes Basin and the governmental structures that exist in each of the twelve jurisdictions which surround the Lakes. Further, since the subcommittee wanted to examine diffuse as well as point-source pollution, participants needed a clear understanding of the nature of non-point source pollution, as it would be discussed in the workshop sessions. The workshop planning group therefore determined that it was necessary to provide all participants with a common base level of information. Participants were sent a copy of the latest Great Lakes Water Quality Board Annual Report to the International Joint Commission, a document which reviewed the major water pollution problems, remedial programs and general water quality of the Great Lakes. Other papers describing the legal frameworks of the two nations, outlining a framework for use in evaluating economic policies, and defining non-point source pollution were prepared and sent to all participants and are part of this document.

Those attending would be asked to suggest incentives, both positive and negative, for meeting environmental objectives. To devise such incentives, participants would need to have a basic understanding of the state of the environmental, legal and economic systems, specific legislation, methods of implementation (guidelines, regulations, procedures), current and potential institutional arrangements and the present state of point and nonpoint source control technology. The dynamic relationship of all these factors makes selection of particular incentive strategies to solve specific source control problems extremely complex. Attendees, it was recognized, would come to the workshop with different perceptions of the many factors. Planners believed that discussions, invited papers and the background papers would serve to bring the differing perceptions closer together.

Invited papers were to be examinations of current and of new or untried legal and economic approaches to point source and diffuse pollution problems. A panel of reviewers, as well as all workshop participants, received these papers in advance. Therefore, only summaries of the papers were presented at the workshop. Because one such summary was prepared and given by someone other than the person who prepared the paper, this summary is included in these proceedings.

The comments of all eight panel reviewers are presented, but only highlights of the three general discussion periods have been incorporated. The luncheon and dinner addresses are also presented.

On each day a series of topic oriented workshops was held; six on the first day, five on the second. All sessions were conducted using the Nominal Group Technique which is described on pages 286 to 292. Lists of policies were made and participants chose the top five priority items. The prioritized lists are printed on pages 109 to 121 and 234 to 243 of this document.

To clarify the suggested policies and programs the various ranked lists were sent to participants after the workshop. Individuals made written comments on each list and these were incorporated in the prioritized listings this volume contains.

The products of the eleven topic sessions were examined in further group sessions divided along United States-Canada, state-provincial jurisdictions and again prioritized. Those workshop sessions are reported on pages 125 through 136 and 245 through 256. Research Topics identified in the process of the nineteen workshop sessions are listed on pages 11 and 12. The Recommendations, Conclusions and Observations were prepared by the workshop planning subcommittee after considering all information prepared for and generated during the meetings on February 21-22. INTRODUCTION

The editors have evolved the following conclusions and observations from the papers, discussions and policy lists contained in these proceedings. The recommendations have also been prepared by the editors. The editors have attempted to reflect the general attitudes of those participating in the workshop. Readers are, of course, invited to draw their own conclusions, but it is hoped that they will agree with the editors on at least one point: whether "new" policy mechanisms are used or not, state, provincial and federal pollution abatement agencies should inrplement more rigorous, specific, and effective pollution abatement enforcement measures in their relevant jurisdictions. In the case of point sources of pollution, efforts should be directed at providing polluters (municipal as well as industrial) with clear incentives (economic or legal) for changing their behavior. With respect to nonpoint .sources, particularly agriculture, the reliance on voluntary enforcement schemes should be re-inforced with mandatory policies and programs which incorporate financial assistance schemes where necessary.

RECOMMENDATIONS

1. Pollution abatement authorities should seriously consider the increased use of economic incentives as opposed to financial assistance, in the abatement of point sources of pollution. The relevant jurisdictions (i.e. states, provinces, and federal governments) should develop and implement suitable policies that will give polluters financial incentives to install controls and look for more efficient methods of abating pollution. 2. Governments should use their existing authority to more stringently enforce pollution abatement and should seek new legislation which permits less discretionary latitude. 3. Relevant authorities (i;e. the States and the Province of Ontario) should test some of the suggested point source control policies and report the results of these tests through the International Joint Commission. The types of tests envisaged are suggested in the lists of possible research topics found on pages 11 and 12. 4. The appropriate commiteee of the International Joint Commission (i.e. the Remedial Programs Subcommittee of the Great Lakes Water Quality Board) should compile and disseminate information on experimental and trial approaches to the enforcement of pollution abatement from point and non-point sources. 5. The appropriate state, provincial and federal agencies and authorities should adopt and implement more obligatory policies with respect to agricultural practices and should end the exemptions provided to agriculture under pollution control legislation. The adoption of more compulsory or obligatory regulations for agriculture should be accompanied by more financial assistance and policies that tie this assistance to the desired farm practices. 6. Legislation must be enacted to further institutionalize non- point controls. 7. The IJC and the responsible state, provincial and federal agencies should undertake expanded programs and efforts to involve the public in: (a) increasing the awareness of water quality and land use pollution problems, (b) the range of available alternative solutions to those problems, and, (c) the consequences of those alternatives (d) establYshing jointly agreed to environmental and water quality objectives; (e) determining more clearly the actual impact of environmental policies and, (f) determining the short and long range impacts of environmental policies' enforcement on employment and the overall quality of life. 8. Responsible agencies should establish or extend education programs to transfer information about economic and legal mechanisms for pollution abatement.

CONCLUSIONS FROM PAPERS AND DISCUSSIONS

Conclusions are presented in point form below:

1. In most instances, the policies and instruments suggested were new only in the sense that they are not currently being used by governments. 2. The public cannot continue to depend on technology and industrial ingenuity alone to solve pollution problems. Therefore, the public must either learn to live with the problems or develop a willingness to pay for clean up in costs of products; and/or people must help in the design of fair public policies which include vigorous regulation and en£orcement. 3. Environmental policies are made up of three essential components: technical capabilities or alternatives, institutional arrangements, and implementation incentives. More government action is required in the third component of environmental policy: implementation incentives, and that duplication of programs should be eliminated through improved institutional arrangements. 4. Effluent standards in combination with mandatory effluent charges for amounts in excess of standards will create a financial incentive for progress in abatement technology. 5. Since procedures and systems for enforcement have not been effective, implementation incentives should be included in enforcement. The effectiveness of pollution control programs should be judged by both the extent to which the desired behavior is induced and the speed at which the change occurs. Many participants argued that new implementation incentives are not needed so much as the political will to use the ones that already exist. The political will to undertake pollution abatement programs and the readiness to collect substantial environmental data are prerequisites to the adoption of any implementation incentives. 6. Even when used for coercive action against polluters, court action in both the United States and Canada has often been ineffective because penalties are low and there is a good chance that the offenders might not be convicted. This happens because: (a) both judicial systems emphasize private over public rights; (b) the standards of proof of damage are often impossibly high, given the levels of scientific knowledge about the effects of pollution, the lack of data countering polluters' claims, and the degree of toxicity of certain discharged substances; (c) courts tend to insist that an economically feasible technology be shown to exist so that pollution abatement will not be disruptive to the polluters, and (d) there is no provision for class action suits by citizens in Canada. 7. Legislators are reluctant to try alternative approaches to control because of vested interests in established regulatory or statutory structures. 8. Most of the criticisms leveled against effluent charges may be applied to other environmental policies as well, particularly permit schemes and stream classification programs. 9. Economists cannot contribute meaningfully to decisions about who is to pay for past mistakes. Given specific objectives concerning clean-up of persistent pollutants already lodged in the environment, economists can indicate how to find the most efficient mechanisms to achieve them. 10. Voluntary measures are insufficient to control non-point pollution. 11. Better and more comprehensive planning efforts are needed. Plans are of little consequence if implementation is not an integral part of the management process and if plans are not implemented. 12. There are as yet insufficient incentives to allocate more public and private resources to the abatement of water pollution in the Great Lakes. 13. As a general rule, relevant jurisdictions (counties, municipalities, states, provinces, federal governments) do have adequate authority to adopt and enforce needed ordinances and regulations to control diffuse sources of pollution. However, these instruments are often not enforceable or are not enforced.

OBSERVATIONS FROM THE WORKSHOPS

There was not enough time in the jurisdictional workshops to consider and re-rank each of the lists produced in the topic oriented workshops to reflect feasibility criteria (i.e. political, administrative, or economic feasibility). The primary contribution of the jurisdictional workshops was the restating and collapsing of a number of the policy suggestions into related and more coherent suggestions.

The lists and the rankings for each group of workshops have been presented in their entirety. Bearing in mind the limitations under which the various policy suggestions were ranked, a number of observations are made about the top five ranked suggestions in each of the point-source and non-point source workshop sessions. Point Sources

1. Economic incentives (not financial assistance) such as effluent charges, performance bonds, pric'ing schemes and surcharges on polluting products were mentioned in the top five policies in five of the six point source problem areas (the first group of workshops), including municipal pollution. 2. Financial assistance in the form of tax reductions or subs,idies was mentioned in the top five lists only once and in this case only as a mechanism to achieve greater energy conservation. 3. With the exception of effluent charges, most of the policies suggested would require only minimal, if any, changes in existing legislation. 4. Most of the suggestions dealt with more stringent enforcement mechanisms, economic incentives, and placing more responsibility on polluters to ensure that their wastes are not harmful;

Non-Point Source Workshops

1. A wide variety of legal, economic and technical solutions were cited for solving non-point pollution problems. It seems that decision-makers have given low priority to solving non-point problems and have, therefore, not provided funding or utilized enforcement powers, be they legal or economic. Reliance has been placed on voluntary actions to curb pollution, but market forces continue to encourage farmers, municipalities, and land developers to carry on their activities in ways that pollute. 2. The policies and options that were ranked in the top five of the Metal and Chemical Residues workshop all dealt with the prevention of additional materials accumulating in the environment and not with methods of removing residues that are already in the environment. 3. In both the Urban Non-point Controls and Future Strategies workshop sessions, the co-ordination and implementation of current and future planning efforts were ranked as the number one policies. 4. With respect to Rural Non-point Controls and Future Strategies, two approaches seem to be favoured: (a) making conservation practices on farms obligatory, and (b) providing more financial assistance to farmers who incur greater costs by implementing farming practices which are more environmentally suitable. 5. The lack of any clear pattern in the suggestions for non-point source abatement reflects the complexities and lack of knowledge about how to use abatement strategies in combination. OBSERVATIONS ABOUT GROW PROCESS

I The Nominal Group process is an excellent technique for generating ideas, cutting down on rhetoric, preventing speaker monopoly, meeting time constraints and forcing decisions. It is good for factual decision/ discussion situations, for identifying problem and solution elements and bringing differing judgement factors together in one decision area, but it does not appear to work as well when alternative "policy" decisions are required. It is, when used alone, a somewhat superficial approach. It worked well in the first series of workshops each day, but was cumbersome for the jurisdictional discussions.

Though the participants.were all well informed in their own special fields, and though each workshop session had at least one lawyer, an economist, a person representing each level of government in both nations, and an individual representing a "pollution" source as group members, few people were directly involved in deciding issues of overall legal andeconomic policies. The Nominal Group technique limited information discussion and exchange of ideas. Thus, ideas were not fully explained and consequently were understoodby different people in different ways, according to their preconceptions. This was more apparent in jurisdictional sessions when many ideas had to be explained by persons who had attended the workshop sessions where the thought was suggested. Again, explanations differed because of preconceptions or limited knowledge.

Were the jurisdictional discussions to be reconvened with a slightly changed make-up or even with the same membership, rankings would probably differ. This is due to the fact that the degree of specificity of the ideas could be changed and groups could therefore combine items in a slightly modified manner. Nothing can now be substituted for full examination of the alternative policies suggested during the first set of workshops each day. Such examination was not possible within the time constraints. A third day of discussions would have been extremely useful as it would have enabled participants to examine the first workshop idea sets each day. More valued rankings would probably have resulted from the jurisdictional workshop groups had there been more time for reflection about the alternatives and their consequences. As it was, participants did not have enough time to think about what had been said. The whole two-day period was completely scheduled and, though there was a summation at the close of the workshop, participants did not use the final session to discuss the two days in a holistic fashion.

An instructional session for leaders and discussion recorders was held the Sunday night prior to the workshop. However, it is felt that more training will be required before such events since the nominal group process should be practiced, not merely taught. One of the purposes of all Great Lakes Research Advisory Board- sponsored events is to identify areas where research is needed or underfunded, where findings are not being applied or are not known, and where international cooperation could cause research to be more effective.

During the eleven workshop discussions on topic areas and the eight jurisdictional sessions numerous suggestions were made for new or intensified research projects and programs.

Point Sources :

Establish a series of seminars to inform interested state, provincial and local government officials about economic implementation incentives. Assemble and disseminate the experience of municipalities in the use of sewer surcharges, a type of effluent charge. Assemble information and consequences of pollution damage compensation schemes. Determine how often, and at what cost must unannounced random inspections be made in order to induce abatement. Identify, test and demonstrate methods to more effectively incorporate the public into: (a) water quality standard setting, and (b) water use designations. Investigate the possibilities of unified bilateral enforcement on the part of statelfederal and provinciallfederal agencies. .Increase funding for development of structure activity correlation techniques. Develop and test methods, biological systems or equipment for removing toxic chemicals from water and sediment or develop techniques to "detoxify" the chemicals. Conduct regional power plant siting studies. Conduct an economics study of the mining and mineral processing industry similar to the pulp and paper industry study* in Ontario. Test a model area with new institutional controls on vessel transportation and wastes. Conduct research on the possibilities of reuse of toxic chemicals and their wastes. Study common use of transportation/utilities corridors. Examine environmental laws to eliminate duplication and overlapping agency responsibilities. Investigate constitutional law to fully define jurisdictional responsibilities of federal government, provinces and municipalities in environmental control in Canada.

* Donnan, Jack A. and Victor, Peter A. Alternative Policies for Pollution Abatement - The Ontario Pulp and Paper Industry (Toronto: Ontario Ministry of the Environment, 1974). 3 Volumes. Accelerate research leading to development of harmless disposal of toxic chemicals and radioactive wastes and development of safer sites for such disposal. Accelerate public health research to establish human tolerance limits for toxic substances. Study non-water waste conveyance systems. Identify criteria for choosing power plant sites and develop mechanisms to bring the public into this particular decision-making process. Compare the benefits and costs of implementing conservation measures with costs and benefits of developing and generating new energy sources. Investigate explicit strategies for implementing economic incentive policies.

-Non- ,Point Sources :

1. Investigate the applications of more mandatory soil conservation controls and demonstrate promising approaches. 2. Evaluate the following policies: (a) removing all agricultural subsidies, (b) tying some subsidies to implementation of soil conservation practices, and (c) tying tax exemptions on agricultural land to soil conservation practices. Investigate with the insurance industry the implications of a mandatory insurance program for: (a) the output of known hazardous materials, and (b) new chemical products. This insurance should provide compensation to victims and pay for clean up. Test performance bonds as an implementation incentive. Devise a non-point pollutants index to use in comparing pollution control programs over time and between jurisdictions. Increase research on biological pest controls to reduce use of pesticides, herbicides, fungicides and rodenticides. Intensify research on the utilization of biological wastes from agriculture and food processing industries. Study the long range transport of airborne pollutants to devise methods to reduce atmospheric contribution to the Great Lakes (international study). Develop a United Statesl~anadaTreaty on airborne pollution. Develop baseline data to distinguish between natural and man-made non-point pollution. Develop substitutes for road salt. Perform or publicize existing costlbenefit analysis on the use of road salt versus possible substitutes or no action.

lNTRODUCTIONS February 21, 1977

SPEAKERS

Blair Bower is the Consultant in residence of the Quality of the Environment Division of Resources for the Future, Washington, D.C. He is a member of several United States national advisory groups for the EPA and National Academy of Sciences, publishes extensively and is a guest lecturer in city and regional planning.

David Estrin is a member of the Ontario Bar. Recently he opened a private practice in Toronto where he is continuing to work in the environmental law area and enhance the reputation he developed as General Counsel for the Canadian Environmental Law Association.

Jeffrey Haynes is Associate Editor of the Environmental Law Reporter, which analyzes and reports all litigation and recent events in the field of environmental law on both the federal level and in the states. The Reporter is published by the Environmental Law Institute, a Washington, D.C.-based non-profit research organization concerned with legal and institutional issues of environmental regulation. A 1975 graduate of the University of Michigan Law School and a former Michigan Assistant Attorney General, Mr. Haynes is the author of a recently published comprehensive study of citizen suits filed under the Michigan Environmental Protection Act.

Donald Dewees is an associate of the Institutes for Policy Analysis and Environmental Studies and a member of the Department of Political Economy and the Faculty of Law at the University of Toronto. He has particular knowledge of the cost/benefits of pollution controls.

PANELISTS

Richard L. Robbins is Executive Director of Great Lakes Tomorrow, an international citizens organization concerned with the future planning of the Great Lakes. The group works through Task Forces on each of the Great Lakes on issues such as water quality, navigation, coastal planning and energy. Mr. Robbins is also Executive Director of the seven-year old Lake Michigan Federation concerned with similar issues. He is an electrical engineer and an environmental and land use attorney. Mitchell Zavon is a physician who has worked in public health, environmental control and consumer protection for the past 27 years. He has been involved in clinical medicine, teaching, public health and research during these years and is presently Medical Director for Hooker Chemicals and Plastics, Corp., headquartered in Niagara Falls, New York. As a health officer involved in regulatory activity for many years and now as a health officer for a major corporation, he is very much concerned with and interested in the whole question of pollution, pollution abatement, and the economic and legal mechanisms which are available to improve the effectiveness of pollution control.

Colin MacFmZane is the Ontario Minis try of the Environment ' s Director of the West Central Region, which is centered on the steel town of Hamilton. He has been exposed to the legal, economic and engineering aspects of environmental management for nine years. He firmly believes that law, economic sanctions and engineering cannot supplant thoughtful town planning as a major means of achieving peaceful co-existence between commerce and homes.

Daniel Ciona is the Chief Administrative Officer of the Regional Municipality of Haldimand-Norfolk. He has held various positions of municipal administration since 1963, and has a Canadian regionallmunici- pal perspective of environmental management. IMPLEMENTATION INCENTIVES FOR

ENVIRONMENTAL QUALITY MANAGEMENT

Blair T. Bower, Charles N. Ehler, Allen V. Kneese*

INTRODUCTION

A question that is increasingly being raised at all levels of government in the United States is, "How can environmental quality management programs be implemented more effectively, efficiently and equitably?" The Senate Government Cperations Committee has begun hearings of environmental regulations. The report of the House of Representatives' Committee on Interstate and Foreign Commerce on the "Clean Air Act Amendments of 1976" cites the limited nature of enforcement options, the implicit incentives to polluters to delay compliance, and other problems of implementation under current legislation. Even within EPA, having faced the task of already issuing over 40,000 National Pollutant Cischarge Elimination System (NPDZS) permits, but with an estimated 5C-100,000 to go, and the task of bringing over 200,000 stationary sources into compliance with State Implementation Plan (SIP) gaseous emissions limitations, some rethinking of alternative ixplementation strategies is taking place. In remarks to the National Conference on Regulatory Reform, the then Administrator of the Environmental Protection Agency--Russell E. Train-stated that, "...the only alternative, or effective supplement, to such regulation ~ouldbe a system of effluent and emission charges ...I1

On another front, departing from historical patterns of American planning--which have tended to ignore considerations of implementation-- requirements of both the Clean Air Act Amendments of 1970 and the Federal Water Pollution Control Act Amendments of 1972 call for the development of enforceable programs to implement state and regional environmental quality management plans, such as Air Quality Maintenance plans and Areawide Waste Treatment Management ("208") plans. Over the next several years state and local environmental quality management agencies will be considering and adopting a wide range of incentives through which to implement the plans of these federally required planning efforts.

The intent in this paper is to raise some basic issues of identifying and selecting incentives, both positive and negative, for the implementation of environmental quality management plans. Briefly described are: the management context in which implementation incentives must operate, including some of the shortcomings of existing legislation; the role

* Mr. Bower is with the Quality of the Environment Program, Resources for the Future, Washington, D.C. Mr. Ehler is with the Office of Research and Development, U.S. EPA, Washington, D.C. Mr. Kneese is with the Department of Economics, University of New Mexico, Albuquerque, New Mexico. The paper was first prepared in September 1976 and revised by Mr. Bower in February 1977. of incentives as one component in an overall environmental quality management strategy; a taxonomy of implementation incentives; and finally, criteria with -which to evaluate implementation incentives and overall environmental quality management strategies. Key points to be made are:

1. A wide range of implementation incentives exists, many of which are never identified or evaluated as alternatives during the planning phase of environmental quality management;

2. implementation incentives are only one component of an environmental quality management strategy, which also includes physical methods (technological options) and institutional arrangements; too much emphasis is currently placed on the evaluation of a limited number of physical methods (usually so-called wasteltreatment technologies) at the expense of little or no analysis of implementation incentives and institutional arrangements;

3. following point 2, strategy components must be identified and evaluated simultaneously, i.e., the evaluation of a single physical method or single implementation incentive in vacuo is virtually meaningless for management purposes; for example, limiting automobile traffic during certain periods and/or in certain geographic areas of a metropolitan region (a physical method) cannot be evaluated as to costs or effectiveness without considering how such a method would be implemented--through economic incentives such as increased tolls, through moral suasion, through direct regulation which closes off certain streets, or some combination--and through what institutional arrangement?

4. No single physical method or implementation incentive, or even class of incentives (e.g., regulatory, economic, etc.), will be effective, efficient, and equitable for all types of environmental quality management problems; an objective evaluation of alternatives is likely to result in a strategy combining several classes of physical methods, implementation incentives, and institutional arrangements.

BACKGROUND

A discussion of the role of implementation incentives in environmental quality management requires some prefatory remarks. First, producing and maintaining improved ambient environmental quality (AEQ)--as measured by some set.of indicators--involves functions which are carried out by many public and private actors--public at all levels'of government, private at national, regional, local scales. Producing the output of a desired level of AEQ requires a set of management functions including planning, research, legislation, translation of legislation into guidelines and procedures, design, construction and operation of facilities, monitoring of AEQ and of performance by activities, enforcement, and feedback of information. -All of these activities are essential to produce the desired product of improved

% ambient environmental quality. Second, the real world in which environmental quality management must be performed is a dynamic, stochastic world. The dynamic character is reflected in the continual changes which occur in an urbanized, industrial society in technology, qualities of raw materials, product specifications, factor prices, social tastes. For example, for an existing integrated steel mill with both basic oxygen and electric arc furnaces, an increase in the price of crude petroleum--resulting in an increase in the price of lubricating oil for rolling mills--likely to lead to a substantial increase in the amount of waste oil recovered and processed for reuse as lubricating oil, thereby substantially reducing the quantity of "waste" oil generated, and hence the BOD generated, per net ton of steel produced. Similarly, if the ratio of the average price of /I2 bundles of scrap steel to the average marginal cost of hot iron doubles, the generation of some liquid and gaseous residuals1 will increase by 30-40 percent. This is because the relative increase in scrap price induces the steel mill to charge more for hot iron and less for scrap. This in turn requires larger output at the blast furnace, and hence the generation of more residuals all along the line.

In addition to the responses to short-run variations in factor prices, there are longer-run variables, such as changes in product mix and product specifications, which affect residuals generation. In this context, "long-run" means time periods of several years to one or two decades. The effects of changes in product mix and product specifications in the steel industry can be implied from the effects of these variables on industry yield and home scrap produced. The trend in yield over a 20-year period is shown in Table 1.

1. The term, "residual," is used to replace the more traditional but semantically biased terms such as "wastes" and "pollutant." A residual is a non-product material or energy output, the value of which is less than the costs of collecting, processing, and transporting it for use. The definition is time-dependent, i.e., is a function of the level of technology in the society at a point in time and of the relative costs of alternative inputs. For example, manure in the United States is now typically a residual, whereas 30 or so years ago it was a valuable raw material. The term residual as used herein is an economic definition and should be distinguished from its use in a more narrow sense in Section 208(b)(2)(J) of the Federal Water Pollution Control Act Amendments of 1972 (P.L. 92- 500), which refers to "residual waste," meaning sludge from wastewater treatment plants. Sludge is an example of a "secondary1' residual; that is, a residual which is generated in the process of modifying a residual originally generated in an activity. Table 1

CALCULATED YIELDS IN STEEL PRODUCTION BASED ON RAW STEEL PRODUCTION AND FINISHED STEEL SHIPMENTS, BY FIVE-YEAR PERIODS, 1950-1969

Five-Y ear Raw Steel Production Finished Steel Shipments Yield Periods (million net tons) (million net tons) %

Source: Annual Statistical Reports, American Iron and Steel Institute

This trend is a result of the joint effects of several factors: (1) improved processing equipment; (2) higher and tighter specifications on product quality; and (3) changing product mix from heavier sections toward lighter, flat rolled products. The first has tended to increase yield and reduce scrap produced; the second and third have decreased yield and increased scrap produced. The combined result is lower yield, as shown in the table, and higher scrap production. To be more specific, flat rolled products accounted for 37-38 percent of steel shipments in 1950; for about 47 percent in 1969. Standard line pipe, rails and accessories, and wire and wire products, all having higher yields, decreased significantly over the period. In addition, production of alloy and stainless steels, with lower product yields than carbon steels, increased. The reduction in yield and increase in scrap production mean more processing per net ton of steel produced; hence, more water used, more lubricating oil used, more energy used, etc., per ton. In turn, these mean more residuals generated per net ton of steel.

The foregoing discussion of steel manufacture not only highlights the dynamic nature of the activity, but also indicates the many factors which influence residuals generation and discharge from individual plants in a given industry. Some of these factors are endogenous to the plant, but many are exogenous--such as tax policies relating to subsidies to virgin materials--and prices of future inputs established in national and international markets--such as industrial chemicals and crude petroleum. With respect to stochasticity, the natural systems involved in environmental quality management--aquatic, atmospheric, and terrestrial ecosystems--all have assimilative capacities which vary with time-- diurnally, daily, seasonally, from year to year. Similarly, residuals generation by various activities--households, industrial plants, agricultural operations, mines--varies within the day, from day to day, seasonally, even under "normal" operating conditions. In addition, there are upsets, spills, breakdowns, and clean-up operations which add to the variability in residuals generation. Finally, physical facilities "age" over time, and with that aging performance, e.g., efficiency of removal of residuals, tends to decline. Figure 1 shows hourly variations in the quantity and quality of the discharge from a dairy. Figure 2 shows the variation in daily quantity of discharge of phosphates from a fertilizer plant.

Third, physical, technological, and economic interrelationships exist among the forms of residuals--liquid, gaseous, solid, endrgy--and among the three environmental media--air, land and water. Measures to reduce the discharge of one type of residual may increase the quantity of other residuals generated, which in turn must be disposed of in some manner. For example, gaseous discharges can affect water quality via washout, as in the case of "acid rain." Solid residuals can become airborne residuals when incinerated.

Fourth--closely related to the third--is that building and operating waste treatment plants actually increases the total materials and energy residuals discharged to the environment. Conventional and so- called advanced waste treatment merely changes the form of a generated residual into one or more. These forms and/or one or more types of the same form are presumed to have less adverse effects on ambient environmental quality (AEQ) when discharged than the original residual. This transformation is accomplished by new inputs of materials, energy, capital.

Fifth, putting concrete and steel in place--that is, constructing some sort of residuals discharge reduction facility--does -not insure that a positive impact on AEQ will occur. The physical method to improve AEQ must be operated efficiently and cautiously. This in turn means that there must be some inducements to achieve such an operation.

These basic facts of life comprise the context for environmental quality management, and provide the background for consideration of, first, the philosophy of recent U. S . federal legislation relating to

2. The time rate of change in quality of ground water systems, is much slower than for the other natural systems.

3. The philosophy of most state legislation is similar. FIGURE 2: DAILY DISCHARGE OF PO, FROM A FERTILIZER PLANT, 1972

- I I 1/72 2/72 3/72 4/72 5/72 6/72 7/72 8/72 9/72 10/72 11/72 12/72

Day of Year FIGURE 1: HOURLY VARIATIONS IN BODS.COD, AND WASTE WATER DISCHARGES FROM A DAIRY

'12 2 4 6 8 10 12 2 4 6 8 10 12 MIDNIGHT NOON

TIME water quality--primarily The Water Pollution Control Act Amendments of 1972 (Public Law 92-500)--and second, implementation incentives as an integral component of environmental quality management.

PL 92-500 was an outgrowth of the conviction of many that the past strategy for improving water quality had "failed." That strategy was based on the establishment of ambient water quality standards, the allocation of responsibility to the states for achieving those standards by whatever means the states so chose, and the provision of federal grants to municipalities for construction--but not for the operation and maintenance--of sewage treatment plants.

PL 92-500 has been widely characterized as a "technology-based, prescriptive" act. It specifies that industrial point sources must apply "best practicable technology currently available" (BPT) by July 1977 and "best available technology economically achievable" (BAT) by July 1983. The act does not say explicitly how that adoption is to be induced, except for the provision of penalties for failure to do so. The interpretation by EPA, environmental groups, and industrial groups was that the language meant prescribing numbers in terms of kilograms of residuals discharge permitted per ton of product output or per ton of raw material processed. It was generally assumed that the technology to achieve the prescribed limits was to be specified as well. The numbers and the technology developed in the effluent limitation guidelines were to provide the basis for the issuance of discharge permits to individual plants under the National Pollution Discharge Elimination System.

For the other major type of point source, municipalities, the corresponding technology levels,were termed secondary treatment (ST) and Best Practicable Waste Treatment Technology (BPWTT). The former was administratively defined in terms of specified final effluent concentrations for biochemical oxygen demand (BOD) and total suspended solids (TSS) to be achieved; the latter was defined as being equivalent to at least ST, but with more stringent limitations on discharges where necessary, i.e., limitations on nutrient discharges.

Two important points concerning the language of the act and its interpretation merit emphasis. First, although the act has been characterized as "technology-based" and "effluent based," in reality it ultimately is keyed to ambient water quality. This is because the act expressly states that, where BAT and BPWTT are insufficient to achieve the adopted water quality standards--which were approved under the 1965 act, more stringent discharge limitations must be imposed; i.e., discharge limitations more stringent than BAT and BPWTT would be necessary. In the first year after the passage of PL 92-500, each state had to classify the stream reaches in its area. Approximately half of the reaches in the country were considered "water quality limited;" i.e., discharge limitations more stringent than BAT and BPWTT would be necessary. Second, the language in Section 208 of PL 92-500 refers to technology in general, not to waste treatment technology per se. It expressly includes process changes, materials recovery, and related options as alternatives to be considered as means for reducing discharges. But EPA and most industries have focused primarily on waste treatment technology. This is true of industrial groups particularly in their public statements, even though actual responses at the firm and individual plant level have generally been to assess a larger range of options and to adopt the least cost combination. With respect to municipalities, only waste treatment has been considered.. EPA has taken few steps to encourage municipalities to consider or adopt any other possible options to reduce their discharges of residuals or to reduce the costs of discharge reduction.

Given the facts of life and the nature of PL 92-500 set forth above, how might the deficiencies of the present approach to environmental quality management be characterized? First, there is insufficient attention to the critical activities of monitoring--particularly discharges--and application of sanctions, in order to induce compliance. The basic question is: how often must unannounced, randomly spaced (in time) inspections of a discharger be made to induce compliance within some specified limit? Second, PL 92-500 represents a steady-state, deterministic view of the world. The dynamic nature of the real world is ignored. Third, the physical interrelationships among the three environmental media are essentially ignorant. Keeping unwanted materials and energy out of water bodies means that inevitably many of them will be discharged to the air 'and on the land. Fourth, the major thrust is on the construction of sewage treatment plants. This ignores: the problem of achieving efficient operation of plants after construction; the fact that construction of sewage treatment plants adds to the total discharge to the environment; that subsidy for the capital cost of sewage treatment plants skews the choice of physical method toward such construction, even though in some or many cases alternative methods may be less expensive. Virtually no attention is directed toward the reduction in generation of residuals in the first place. Even final demand and product specifications should not be sacrosanct in the search for efficient and effective physical methods for improving AEQ. Fifth, the discharge standardsl5-year permit approach means that there is no continuing incentive in the discharger to search for ways to reduce his use of the common property resource, once he has met the standard specified. He is receiving free the use of a certain amount of assimilative capacity, the amount only being changeable at the end of 5 years, even though conditions in the region may have changed sufficiently in the interim to require modifications of the permit, if AEQ standards are to continue to be mec. Sixth, regional differences in residuals generating activities and in assimilative capacity are ignored. IMPLEMENTATION INCENTIVES

Relation to Environmental Quality Management

Given the foregoing background, what are implementation incentives in relation to the set of functions comprising environmental quality management? What is it that one is trying to induce households, institutions, mining operations, industrial operations, agricultural operations to do? Incentives can be positive or negative, but the objectives of the application of incentives is to induce action.

What action is desired? Broadly speaking, the action desired is reduction in the day-to-day use of the environment or maintenance of that use within some limits in order to achieve and maintain desired levels of AEQ. More narrowly, the actions desired are: (1) the installation of some facility or set of facilities or process changes or use changes or changed combination of factor inputs; and (2) the continuous operation of these facilities or changes at design levels over time. Most of the effort to date by management agencies at all levels of government involved in environmental quality management has been on the former; very little attention has been devoted to the latter. The focus has been on installation without a corresponding concern with operation and maintenance. One exception is EPA's recognition of the problems of maintaining the performance of vehicle emission control devices over time . Given the complexity of the task of achieving and maintaining specified levels of AEQ, both in the range of tasks and mix of institutions involved at various levels of government, the incentives problem can be characterized by a set of questions.

(1) What stimulates a state government to do what needs to be done in terms of its responsibilities for environmental quality management? Is it the provision of planning funds? Is it the designation of particular types of planning areas or planning agencies? Is it the requirement of obtaining approval of plans and designs by EPA? The provision of planning funds clearly has resulted, and is resulting, in the generation of planning documents; e.g., plans produced via water resources planning under the 1965 Water Resources Planning Act, State Implementa- tion Plans for air quality management under the Clean Air Act Amend- ments, areawide waste management plans under Section 208 of PL 92-500, coastal zone plans under the Coastal Zone Management Act, land use plans under Section 701 of the Housing and Community Development Act of 1974. But, to what extent have these plans been implemented; i.e., the desired output of improved AEQ actually been produced?

(2) What stimulates a state, in turn, to stimulate the actors within the state--municipalities, districts, industrial operations, state facilities--to act? Is it the provision of grants for construction of sewage treatment plants (or other facilities)? Is it the provision of grants for operation and maintenance? How can the states be induced to do a more adequate job of monitoring the activities of dischargers, and of enforcing whatever constraints are imposed on them? How can the federal government measure the performance of the states, and the states in turn measure the performance of lower levels of government?

(3) For what types of residuals generated by which activities are which implementation incentives most appropriate? Even if total suspended solid (TSS) residuals had the same environmental impacts, regardless of the source, the generation phenomena are not the same for industrial activities, mining activities, municipalities, urban storm runoff, agricultural activities. Assessing an effluent charge on TSS discharges from agricultural operations would be more difficult than assessing such a charge on an industrial discharge, but not impossible. The Soil Conservation Service (SCS) has been justifying its watershed programs for decades on the basis of its estimates of discharges under different farm management practices. (Admittedly, SCS has rarely gone back to evaluate what the actual TSS discharges have been). Evidently the Iowa legislature, which is passing legislation relating to TSS discharges from agricultural operations and establishing limits of one ton to five tons TSS discharge per acre, considered that discharges could in fact be measured (or at least estimated).

(4) Even if the installation of measures to reduce discharges can be induced, what incentives are there to induce operation of these measures over time in a manner so as to continue to achieve the reductions in discharge assumed? Operating facilities involves costs--any reduction in operation and maintenance for any activity--industrial, municipal, agricultural--reduces costs to that activity. Because there is no net gain to the enterprise accruing from reducing the discharge of its residuals, particularly if the beneficiaries are downstream, there is no internal incentive to operate facilities efficiently.

(5) There is considerable variation in residuals generation over time in most activities even under normal conditions, as noted previously. The maximum daily generation per unit of product or per unit of raw material processed can be three or four times the mean monthly generation for liquid residuals; the ratio can be even higher for gaseous residuals. Upsets, spills, breakdowns add to the variability of generation. This leads to the question, what are the most efficient implementation incentives to reduce the variability of, as well as the mean, discharge resulting from the variability in generation?

Under the present procedures, NPDES permits specify kilograms per day discharge permitted on a mean monthly basis, and a maximum day in a month. If the maximum daily amount permitted is exceeded, often the response of the industrial discharger is that the excess resulted from an "Act of God," or similar reason. The imposition of fines becomes a legal contest. When municipalities exceed the maximum day limitation, essentially nothing happens. (6) How can EPA induce other federal agencies to act--DOD,DOT, ELM? What about a state with respect to federal installations within the borders? What leverage does a state environmental agency have on other state agencies?

These questions reflect the crux of the incentives problem. That problem in turn is most usefully addressed in the context of environmental quality management strategies.

Components of Environmental Quality Management Strategies

An environmental quality management strategy consists of: (1) a set of physical methods; plus (2) implementation incentives; plus (3) an institutional arrangement. These interrelated components of an environmental quality management strategy are depicted in Figure 3.

he physical methods are those actions by individual activities-- households, institutions, industrial operations, commercial operations, municipalities which reduce or modify the discharge of residuals to the environment>nd/or directly improve the assimilative capacity of the environment. Implementation incentives are the positive and negative inducements which stimulate the installation and continued operation and maintenance of the physical methods. The institutional arrangement allocates the authorities to impose the implementation incentives and the responsibilities for carrying out other functions comprising environmental quality management: planning, research and data collection, design/construction/operation of collective facilities--such as regional sewage treatment plants, interceptor sewers, instream aeration facilities, and materials recovery/byproduct production facilities; monitoring of discharges and ambient environmental quality; enforcing standards; and collecting charges and fines. The three elements must be considered simultaneously if the desired output of improved AEQ is to be produced. In addition, the implementation incentives and institutional arrangements must be considered simultaneously at all levels of government, to insure that an incentive adopted at one level is consistent with an incentive adopted at a different level of government.

Table 2 presents a classification of physical methods. The examples are illustrative, and are not meant to be exhaustive. In connection with physical methods, a great deal of confusion has arisen over the use of the terms, "structural" and "nonstructural," in the environmental literature (as well as in the flood damage reduction literature). Structural measures have generally been defined as technological options, such as sewage treatment plants, emission control equipment on stacks, emission control devices on automobiles, and recycling plants. Zoning ordinances, subdivision regulations, permits, and effluent charges, have been defined as nonstructural measures. In practice, nonstructural measures have usually been applied only after the structural measures have been applied to their practical limits. But the connotation has clearly been that the choice is eitherlor; that is, nonstructural

4. Including ceasing to produce a given product or service measures are alternatives to structural measures, not concomitant with them.

In reality, the objective in environmental quality management always is to achieve some change in physical actions by the relevant actors. Therefore, using the terms "physical methods" and "implementation incentives" clarifies that they must be considered in combination. The adoption of a particular physical method by an activity can often be induced by more than one type of implementation incentive. For example, if a sewage treatment plant is selected as the physical method for modifying discharges, a federal or state grant to help finance capital costs exemplifies an implementation incentive to induce construction. But construction of the plant could also be stimulated by an effluent charge on the existing discharge. If a change in the spatial distribution of economic activities represents the selected physical method to achieve improved AEQ, then corresponding implementation incentives to induce the change are represented by zoning regulations, subdivision regulations, property taxes, purchase of open space, and capital improvements. The point is that these "hardware" and "software" considerations are not independent of one another, but must be identified jointly and their costs and effectiveness evaluated as combinations.

INSTITUTIONAL ARRANGEMENT

FIGURE 3: COMPONENTS OF AN ENVIRONMENTAL QUALITY MANAGEMENT STRATEGY Table 2: CLASSIFICATION OF PHYSICAL METHODS FOR IMPROVING AMBIENT ENVIRONMENTAL QUALITY

-- -

CATEGORY OF METHOD SUBCATEGORY ILLUSTRATIVE EXAMPLES

A. REDUCE 1. Increase longevity Longer-lived automobiles, appliances, clothing RESIDUALS of consumer goods GENERAT ION 2. Change type of raw High to low sulfur crude, fuel oil, coal; concen- material inputs trated vs. raw ore; use of residuals instead of virgin materials, e.g., aluminum cans instead of bauxite.

3. Change production Individual vehicles to mass transit; internal com- process including bustion engine to external combustion engine; H2S04 mode and/or motive to HC1 for pickling steel; standard bleaching of power of transport pulp to oxygen bleaching; ingot casting to continuous casting; less energy intensive process for producing aluminum

4. Change final demand

a. Change product mix Reduce number of grades or styles of product; e.g., chemicals, linerboard, paper, canned peaches;

b. Change product Reduce brightness of consumer paper products, such specifications as towels; short-lived, specific pesticides instead of long-lived, general pesticides; high octane to 1 low octane gas; prohibit non-returnable containers;

5. "In-plant" re- In beet sugar production, peach canning circulation of water Table 2 cont'd

B. MODIFY RESIDUALS 1. Materials recovery Chemical and fiber recovery in paper production; AFTER GENERATION, (direct recycle) recycling of mill scale in steel production IN ON-SITE ANDLOR COLLECTIVE FACILITIES 2. By product production (indirect recycle)

a. to final products Tomato pulp into pet food; citrus peels into candy; peach pits into charcoal briquettes; wood products residues into pressed logs

b. to intermediate Obsolete vehicles into steel scrap/steel; used products corrugated containers into linerboard; used aluminum cans into aluminum ingots; sulphite waste liquor to industrial yeast.

3. Modification of Combustion of solid residuals to generate energy; in- residuals stream cineration; landfill; composting; compression of solid residuals; land spraying of sludge; precipitation; sedimentation; scrubbing; biological oxidation; chemical oxidation-

4. Effluent reuse

a. Direct Sewage plant effluent for cooling water in same plant; recirculate water from bathing and/or washing to toilets and/or lawn irrigation

b. Indirect Ground water recharge with modified liquid residual Table 2 cont'd

C. MAKE BETTER USE OF 1. Change the spatial Locate industrial areas downwind of residential areas; THE ASS IMILATJVE distribution of establish auto-free areas CAPACITY OF THE existing and/or new NATURAL ENVIRONMENT activities

2. Change the temporal Phase the location of new activities until adequate distribution of existing public services are available; stagger office hours; and/or new activities change in production schedule

3. Change the spatial Pipe gaseous or liquid residuals to areas of higher distribution of the assimilative capacity discharge of residuals

4. Change the temporal Withhold residuals discharge during periods of low distribution of the assimilative capacity. discharge of residuals

D. INCREASE THE Low flow augmentation, artifical mixing, artificial ASSIMILATIVE aeration. CAPACITY OF THE NATURAL ENVIRONMENT Classification of Implementation Incentives

As stated, an implementation incentive is that which induces to action. An implementation incentive can be positive or negative; i.e., reward or punishment, direct or indirect, prescriptive or proscriptive. Thus, the term "incentive" is used in a broader context than it is used in the economic literature. Figure 4 indicates the flows of materials and energy into, through, and from the physical system that generates and discharges residuals, and the locations in the physical system where the implementation incentives can be imposed. These flows can be modified in quantity, quality, timing and location by the use of,alternative physical methods. The adoption of the physical methods is induced by the implementation incentives. In a given regional context, the institutional arrangement has a set of implementation incentives from which it can choose; each activity, in turn, has a set of physical methods from which to choose in responding to the implementation incentives imposed upon it. Finally, alternative institutional arrangements are possible.

Table 3 provides a taxonomy of implementation incentives. Each implementation incentive has its strengths and weaknesses, so that the implementation incentives chosen in a particular environmental quality management context must be matched to that situation. No one implementation incentive is likely to provide optimal environmental quality management at any scale--local, regional, national.

Although the categories of implementation incentives in Table 3 and the examples of implementation incentives therein are mostly self- evident, some further discussion is merited. First, some of the implementation incentives can be, and have been, imposed at more than one level of government. For examp1e;an upper limit on sulfur content of fuel has been specified by local governments and by state governments. Similarly, restrictions on non-returnable beverage containers have been imposed at both local and state levels. On the other hand, .some implementation incentives are more, or exclusively, relevant to one particular level of government, such as a national effluent charge on suspended solids discharge into water courses combined with an additional state effluent charge on such discharges.

Second, mixes of implementation incentives can be applied to the same activity. An effluent standard in terms of mean daily kilograms of BOD5 discharge by an activity can be coupled with an effluent charge, cents per kilogram, on all BOD5 discharges or on all discharge above the specified limit.

Third, with respect to what have been termed "administrative" implementation incentives, these reflect responses to external stimuli. That is, what is the stimulus or what are the stimuli leading the administrator--public or private--to adopt an administrative implementation incentive internaZZy within the scope of his jurisdiction? The stimulus may be economic, as when the costs of disposing of a plant's or an office's solid residuals increase to a level such that recycling used paper merits consideration. It may be a public relations move, without or with external pressure from a public interest group. It may be in response to the possibility of a class action court suit. It may be to set an example for other governmental agencies. Fig. 4: POSSIBLE LOCI OF IMPOSITION OF IMPLEMENTATION INCENTIVES

= Raw MateriallEnergy Inputs

RG = Residuals Generated RD = Residuals Cischarged M/E = Materials and/or Energy Table 3

CLASSIFICATION OF IMPLEMENTATION INCENTIVES FOR ENVIRONMENTAL QUALITY MANAGEMENT

Regulatory--by law, ordinance, permit

1. Specification of a physical method

a. Specify characteristic(s) of a raw material input, for example, no more than 1%sulfur fuel.

b. Specify production "process", for example: dry peeling in fruit and vegetable canning: road design and construction in national forests with respect to grade, drainage, en- croachment on stream channels; automatic turnoff valves on all water outlets in commercial, industrial, institutional facilities; orientation of buildings with respect to sun and wind; amounts of thermal and/or noise insulation in buildings; airplane movements on the ground; fencing, rotation, feeding and watering locations on grazing lands; operational procedures for landfills; frequency of street cleaning and litter removal in urban areas; design and construction standards for water and sewer pipes; 6" of insulation requirement in residential construction; restriction on type of pesticide and method of application; height of stacks; vehicle movement on certain streets.

c. Specify residuals modification and/or handling process, for example: activated sludge; debris basins on construction sites; require householders to separate used newspapers from other solid residuals; prohibit acceptance of used newspapers/used corrugated containers at municipal incinerators.

d. Specify product output characteristics, for example: no more than 8% phosphates in detergents; returnable beverage containers; number of sizes of cans for canned food production; amount of lead in gasoline;

2. Specification of a result of performance

a. Specify discharge per unit of product of per unit of raw material processes ' specified amount, for example: < X kilograms of suspended solids (SS) per ton of steel, per barrel of crude throughput, -< Z grams of HC per vehicle- kilometer.

b. Specify total quantity of a residual discharged per unit of time <- specified amount, for example: Y pounds of BOD5 per day. c. Specify maximum limit on concentration of residuals in effluent, for example: 5 30 mg/R of SS.

d. Specify that AEQ should meet or exceed specified levels for specified periods of time, for example: > 6 mg/R dissolved oxygen spring and fall, 5 mg/R remainder of year; mean annual concentration of sulfur dioxide -< 75 micrograms/m3. e. Specify performance, for example, an automobile must achieve at least 40 kilometers per liter of fuel in city driving; appliances must last at least 8 years; residuals modification facility must achieve at least 85% removal of BOD5 from a specified base; appliances must achieve at least a specified level of efficiency in energy use; building, plumbing, etc. codes based on performance over time, for example, heat loss specification.

f. Specify that producer must prove that a product is environmentally "benign," for example, pesticides.

3. Specification of limitations on location of activity, for example: by zoning or land use regulations of various types, such as: restriction of building where infiltration capacity for septic tanks is less than a specified rate; prohibition of strip mining on slopes > 25% with specified soil type; prohibition of building on slide-prone land; prohibition of development where utility capacity--water, sewer, electricity--is insufficient.

4. Specification of extent, timing, type of activity, for example: prohibition of trucks on particular routes during particular times; prohibition of automobiles in central business district; prohibition of all-terrain vehicles in environmentally fragile areas; limit number of users (campers, boaters, horse riders) to < a specified number per day; prohibit aerial spraying when wind >-8 kilometers per hour; staggered work hours; reduction or cessation-of production during adverse AEQ conditions.

5. Specification of procedure, for example: requirement that environmental impact statement for each project be prepared according to specified guidelines; requirement that planning for environmental quality management, for example, areawide water quality management(Secti0n 208 of PL 92-500)- be carried out according to certain procedures; registration of pesticides; excess packaging review; auto assembly ,line emissions testing; semiannual testing and inspection by state agency of emission controls on motor vehicles; requirement for public hearings.

Economic

1. Applied directly to residuals, for example: charge on each unit of residual discharged--cents per kilogram of BOD5, cents per kilogram of sulfur, cents per calorie of heat (with surcharges based on timing of discharge); fines for spills or accidental discharges; sale of discharge rights.

2. Applied to inputs or product outputs, for example: charge on each kilogram of DDT applied; charge on each kilogram of phosphates in detergents; charge on packaging--cents per kilogram of plastic used; surcharge on horsepower of automobile at time of purchase; annual surcharge on horsepower of automobile; severance taxes on virgin materials extracted; depletion allowances on virgin materials extracted; capital gains provisions for virgin materials; subsidies for use of secondary materials; expensing provisions relating to extraction of virgin materials; water intake pricing; surcharge on energy use; differential taxes on fuels--> gas, < diesel, < methanol; surcharge for power equipment in vehicles--air conditioners, power steering and power brakes, automatic transmission, except for vehicles used by disabled individuals ;

Applied to activities, for example: reduced parking fees for car pools; parking surcharges; provision by agency or firm of multi- passenger vehicles: subsidized freight rates; property taxes related to type of activity; subsidies for mass transit operations; reduced fares on mass transit; permission of higher- density development in exchange for meeting site and building design specifications (density bonuses); congestion tolls; airport noise taxes.

4. Applied to residuals modification, for example: federal and state grants for construction and operationlmaintenance of municipal sewage treatment facilities; municipal or state bonds to finance installation of residuals modification equipment in private operations; fast depreciationltax write-offs on costs of installation of residuals modification equipment in private operations; sewer and landfill user charges; industrial sewer surcharges; reduced taxes for installation of soil erosion reduction measures;

5. Direct public investment in other than residuals modification facilities, for example: open space, highways, mass transit, public buildings, bikeways.

Administrative--by order within governmental or private agencies

1. Applied directly to residuals, for example: separate various types of paper residuals in offices for recycling: collect all used lubricating oil from vehicle fleet for reprocessing; collect all used tires for reprocessing.

2. Applied to products used, for example: specify that only compact automobiles or those which achieve some minimum fuelldistance standard be purchased; specify that only unbleached paper towels .be purchased; specify that all writinglprinting paper have no more than 60-85 brightness; specify minimum number and shape of containers; specify lighting, energy limits not to be exceeded in new buildings.

3. Applied to activities, for example: specification of limits on thermostat settings for heating and air conditioning; specification that lighting levels within offices after working hours should be -< some limit. Judicial

Court and/or administrative law review and action, or threat thereof, to compel compliance; civil and/or criminal suits.

Educational/informational programs can be mounted to acquaint individuals, groups, employees within a firm or agency, of the implications of their activities with respect to residuals generation and adverse impacts on AEQ, and with alternative behavior patterns which would reduce such impacts, for example: car pooling, ride the bus, litter campaigns; provision of , technica1,information by public agencies and private groups to both residuals generators ("technology transfer") and individual citizens. Exhortation by slogan is an example of the "persuasive" implementation incentive, for example: "a good citizen does not litter"; "save water--shower with a friend"; "only you can stop waste. " Continued major "polluters" can be publicly identified , for example, Region 111's "~ozenDirtiest Dischargers," and the converse, public commendation provided for exemplary residuals management by private and public agencies; appliance labeling programs; fuel economy rating programs; pesticide labeling; model code and ordinance development.

Notes: 1. The line between regulatory and administrative implementation incentives is somewhat ambiguous. Regulatory implies imposition by one agency on another actor (public or private); administrative implies within an agency or set of agencies, for example, all federal agencies. It should also be emphasized that some of the economic incentives, such as effluent charges, surcharge on energy use, can be, and have been, applied within firms and within single industrial plants.

2. Many of the implementation incentives can be, and are, applied simultaneously.

3. Implementation incentives imposed on one residual can have positive and/or negative impacts on other residuals and/or environmental media. An ordinance specifying limits on concentration of particulate discharges from building incinerators may result in closing down some or many of these incinerators with a consequent increase in solid residuals for disposal. The response to an effluent charge on BOD5 discharge may often result in simultaneous reductions in discharges of SS and/or phenols.

4. Many of the implementation incentives are not under the jurisdiction of environmental quality management agencies. Probably the clearest examples are taxpolicies--depletion allowances, capital gains, severance, accelerated depreciation, real estate. Choosine Im~lementationIncentives

Consideration of implementation incentives begins with what now should be a universally accepted principle, namely, that environmental services, in terms of the capacity of the environmental media to assimilate residuals discharged to them, are no longer free; there is no "right" to the free use of such services, i.e., no "right to pollute." Given that principle, there are at least three problems common to all implementation incentives.

One, some materials are so toxic that their discharge into the environment should simply be prohibited. However, it is very clear that it is no easy task to determine just what materials in what quantities under what conditions are toxic to what species, including man. A particular concentration of a material in a water body may have no adverse effects on some fish species under a low or normal temperature condition, but very adverse impacts under high temperatures, or in the presence of some other material, or when dissolved oxygen is low. In some or many cases, there may be other contributing or "intervening" variables which affect the response, such as the state of health of the target species. Individuals with normal health and nutrition are generally better able to withstand a given level of adverse AEQ than those in poor health. Finally, toxicity is both a short-run and a long-run problem. Concentrations which result in immediate fish kills are obvious; those which result in a build-up in tissues and/or organs, over time, with long-run impacts on reproduction and viability or existence of the species, are not so obvious.

Two, and related to one, is the problem of a lack of or incomplete knowledge of both the impacts of the discharge of a residual on AEQ and the damages (effects) of the resulting change in AEQ on various species. Again, both short-run and long-run times frames are involved. The impact of discharges of fluorochlorohydrocarbons on ozone content of the stratosphere is one example. The long-run impact of particulate and C02 discharges on the atmosphere is another.

Three, criteria must be established for choosing the implementation incentives to be imposed in a given context. Economic efficiency, effectiveness, and equity are the logical ones to use, realizing that not only must the criteria be defined but that some weights must be given to them in the choice process. Under economic efficiency, administrative costs are included, because these comprise a critical component of environmental quality management costs, and different implementation incentives involve different administrative costs. Effectiveness includes both the extent to which the implementation incentive applied actually induces the desired behavior on the part of the residuals generators and residuals management agencies and the speed of their responses. But no implementation incentive will be effective without some procedure or system for enforcement. Again, this problem is common to all incentives, so that the enforcement procedure must be specified along with the implementation incentive, in order to be able to evaluate the implementation incentive. Equity relates to the effects of the application of the incentive on the distributions of costs and benefits among groups in society, i.e., the relationship between gainers and payers, between those who cause the adverse AEQ and those who pay for improving it. Two other criteria for choosing implementation incentives might well also be utilized: (1) the impact of the implementation incentive on technological change; and (2) the intermedia effects of the implementation incentive. With respect to the former, the relevant question is, "Does the implementation incentive bias the selection toward a particular discharge reduction technology or physical method for improving ambient environmental quality, or does it stimulate the investigation of the entire range of existing alternatives and new alternatives, not only in relation to production technology but in relation to altering factor inputs, final demand, product output specifications, residuals handling technology?"

With respect to the intermedia effects, does the implementation incentive tend to mitigate or exacerbate the effects on environmental media other than the one toward which it is directed? In some cases an incentive will result in reductions in several or all forms of residuals, such as those which induce a reduction in total materials and energy throughput in society. In other cases the implementation incentive, while reducing one type of AEQ problem, will increase one or more others, such as a requirement to install cooling towers at power plants resulting in added heat discharges to the atmosphere and possible fog problems.

Any useful discussion of the relative efficacy of implementation incentives should consider: the different types of residuals--liquid, solid, gaseous, noise, radioactive materials, heat--the different sources and types of generators--mobile, stationary, point, nonpoint--and the relevant legal, institutional, political context of environmental quality management. Basic to the selection of an implementation incentive (or set of incentives) is an understanding of the materials and energy- transforming and using process involved in a given residuals generating activity, be that activity an individual agricultural, manufacturing, residential operation or a total system, such as beverage container production-use-disposal system or nuclear fuel cycle. Given the physical methods for reducing the generation and/or discharge of residuals from the activity or system and/or for directly affecting the assimilative capacity of the environment, and their relative cost-effectiveness, then the question becomes, "What is the optimal implementation incentive (or set of incentives) to apply to that activity or system to induce the adoption of the optimal physical method (or set of methods)?" The points to emphasize are: (1) a wide range of implementation incentives can be used in environmental quality management; (2) in most cases the optimal environmental quality management strategy requires the simultaneous use of several different implementation incentives; and (3) effluent charges comprise only one of many available economic implementation incentives which are relevant for environmental quality management virtually all of which--especially effluent charges--have been given inadequate consideration to date. Criteria for Evaluating Environmental Quality Management Strategies

Because any given environmental quality management problem can be managed by a variety of alternative strategies, criteria for the selection of a "best" strategy for any given situation must be developed. Evaluation involves the rating and ranking of each alternative strategy. A list of suggested criteria for evaluating environmental quality management strategies is presented in Table 4.

Table 4

CRITERIA FOR EVALUATING ENVIRONMENTAL QUALITY MANAGEMENT STRATEGIES

1. Physical Effects and Their Distribution a. Reduction in discharge of residual from specific activity b. Reduction in discharge of residual in area c. Changes in ambient environmental quality d. Results of changes in ambient environmental quality

2. Economic Effects and Their Distribution a. Direct benefits b. Direct costs c. Administrative costs d. Indirect costs

3. Flexibility in Administration a. continuous or non-continuous application b. Selective or uniform application c. Retention of effectiveness under changing conditions

4. Simplicity in Administration

5. Timing Considerations a. Years before physical measure in place and operating b. Years before impact on ambient environmental quality realized

6. Political Considerations a. Priority in relation to other environmental quality management problems b. Priority in relation to other societal problems c. Impact on intergovernmental relations d. . Acceptability to public

7. Intermedia and Resource Use Effects a. Impacts on discharges to other environmental media b. Net energy, net consumptive use of water, net land required Each of the source category/physical measure/implementation incentive combinations would be rated with respect to each of the criteria indicated, for each residual relevant to that source category/physical measure/implementation incentive combination. Although most of the criteria are self- explanatory, some amplification to insure understanding follows:

1. Physical effects relate to the degree that the physical method will: a) reduce the discharge of a residual from a specific source category; b) reduce a specific total discharge of the residual in the environmental quality management area; and c) change the relevant index of AEQ; these changes in discharge and AEQ can, in turn, result in d) other physical effects such as decreased human mortality, decreased human morbidity, decreased deterioration of materials, and increased fish biomass.

2. Economic effects include: a) direct benefits, the translation of the changes in physical effects into monetary value where possible, such as reduced medical costs, reduced costs of cleaning and maintenance, and increased value of fish catch; b) the direct costs to the residuals discharger--industrial plant, municipality, feedlot--of implementing the physical measure in terms of capital and operating and maintenance costs, or to the environmental quality management agency for implementing physical methods which directly affect assimilative capacity; c) administrative costs-both private and public--in terms of accounting and reporting, monitoring, analysis of samples, supervision of operating personnel; and d) indirect economic effects in terms of employment effects, changes in income tax, changes in property taxes, increased costs of user goods and dislocation of people. For example, costs to the discharger could be expressed both in terms of absolute costs and as a percentage of gross value of output or of total production cost. Costs to consumers could be expressed in terms of, for example, dollar increase (or decrease) in annual heating bill. Costs to local government, for example, could be expressed as the increase in sewage disposal costs. Although administrative costs are direct costs, they are separately identified because they are too often ignored. I 3. Flexibility in administration refers to the administrative ease with which a physical measure/implementation incentive may be applied or removed, and.to the degree to which the combination remains effective under changed conditions. Continuous/non-continuous indicates whether it can only be applied continuously or can be appliedintermittently as needed. Selective/uniform refers to whether or not the physical measure/implementation incentive combination can be applied to selected activities--either within a category or among categories, or can only be applied to all activities generating the residual of interest. (In some institutional contexts it may be administratively easier to implement the adoption of a measure by all activities than to impose it selectively, even though total environmental quality management costs will be higher.) 4. Simplicity in administration refers to the procedural case with which an incentive can be applied. For example, a major criticism of the U.S. permit system is the multiplicity and duplication of applications and approvals which must be obtained before an activity can operate.

5. Timing considerations relate to the fact that physical measure/ implementation incentive combinations vary with respect to both the time required to put the physical measure in place and into operation and the time required after it is in operation before the effect on AEQ occurs. Timing is particularly important where there are adverse AEQ conditions which need to be ameliorated as soon as possible. Timing is affected also by legal considerations. If new legislation must be enacted, implementation may take longer than if legal authority already exists. Public receptivity also affects timing. A physical measure/implementation incentive combination which is new to the public may require more time than one which is not.

6. The political considerations criterion has six components. The first refers to the policy maker's sense of his constituency's perceived urgency of the particular environmental quality management problem in relation to other environmental quality management problems, e.g., improved air quality vis-a-vis improved water quality. The second refers to his constituency's perceived urgency of environmental quality management problems in relation to other social problems in the area, such as housing, transportation, employment, etc. The third is the impact on intergovernmental relations, e.g., federal-state, state-local, inter-local, which should be considered vis-a-vis the strategy's effect on the normal way of carrying out the government's business. The fourth component refers to the degree to which an implementation incentive imposed at one level of government is consistent with those imposed at other levels of government. The fifth component is public acceptance. A physical method/implementation incentive/institutional arrangement combination which is new and/or unexplained to the public may inhibit acceptance. Presumably public acceptance is most easily gained through the involvement of the public from the initiation of the planning process in objective-setting, strategy preparation, and strategy evaluation. The sixth component relates to the degree of difficulty in obtaining legal authority for the institutional arrangement to impose the implementation incentive. This includes such questions as: Does adequate authority to implement the strategy exist? Would existing legislation have to be changed to enable implementation, or would entirely new legislation have to be passed? Are there questions of preemption, due process, and takings?

7. Intermedia effects should be explicitly considered, with regard to the quantities of other residuals generated and discharged into any of the environmental media. The ,three primary resowce use effects to be identified are net energy required, net land required, and net consumptive use of water. An environmental quality management strategy may be energy intensive, or it may actually reduce total energy use in the area. The land required by an environmental quality management strategy, for example for disposal of mixed solid residuals and sludge, may be an important consideration in a densely urbanized area. A most important consideration with respect to both physical and economic effects is their distribution. Who benefits from improved ambient environmental quality and who pays in what forms for that improvement? Distributional effects should be determined in relation to: (a) political jurisdictions and socio-economic groups of the population within the environmental quality management area; and (b) the division between direct costs incurred within the area and incurred external to the area, the later referring to the proportion of the costs to be forthcoming from, for example, the federal or state treasuries.

It should also be pointed out that several of the above considerations, such as those dealing with perceptions of the relative importance of the problem with respect to both other environmental quality management issues and other social issues, can only be evaluated at the level of the total management strategy. All other considerations, however, should be evaluated for each physical method/implementation incentive/institutional arrangement combination.

After evaluating each strategy according to the indicated criteria, the final step in evaluating strategies is to combine the ratings on the individual criteria. This process involves assigning relative weights to the individual criteria, an activity which is the responsibility of the decision-makers, not the analysts. The responsibility of those in authority in any society is to make judgements concerning which criteria are more important than others.

Concluding Comments

It is fruitless to plan without explicitly considering implementation as an integral part of the management process. In this paper some of the basic issues of identifying and evaluating the wide range of alternative implementation incentives available for environmental quality management have been stated. Stressed has been the importance of evaluating physical methods, implementation incentives, and institutional arrangements as integral components of an environmental management strategy. No single management strategy will be best for all situations; mixes of physical methods, implementation incentives, and institutional arrangements are likely to provide the "optimal" strategy for any given environmental quality management problem in a given area.

Another approach to summarizing relevant aspects of the issue is to try to answer the question: What are the desirable attributes of a strategy--international, national, state, local--for managing water quality?

1. The strategy should be based on the concept that the water courses of the nation comprise a common property resource, a public good owned by the entire polity, the management of which is the responsibility of the government.

5. No attempt is made to distinguish between criteria and attributes. 2. The strategy should be based on the principle that those who utilize the environmental resource should pay for its use; i.e., dischargers should pay.

3. The strategy should provide that the AEQ targets (standards) bear some relationship to the present and anticipated uses of the water resource and hence to the related physical, economic, and aesthetic advantages resulting from changed water quality. The levels of water quality desired should be related to the costs of achieving the various levels in relation to the benefits gained.

4. The strategy should consider explicitly the dynamic and stochastic characteristics of water quality management.

5. The strategy should be efficient, i.e., involve the least resource costs to achieve the desired level of quality with the specified degree of certainty.

6. The strategy should be equitable, i.e., not adversely change the existing distribution of income. The emphasis is -not making the income distribution more adverse, even though it may not be improved by the strategy.

7. The strategy should consider the totality of physical measures for improving water quality; i.e., change in production process, raw material, product output characteristics, spatial location, materials recovery, time scheduling of production. Final demand should be considered explicity.

8. The strategy should consider all residuals simultaneously-- solid, liquid, gaseous, energy. Thus, the water quality management strategy should incorporate explicit consideration of the impacts of the strategy on air quality management and solid residuals management.

9. The strategy should recognize regional variations in conditions with respect to demands for water quality, environmental assimilative capacity, and residuals generation conditions.

10. The strategy should involve as small an administrative burden as possible; i.e., minimize the establishment and perpetuation of bureaucratic empires devoted to production of memoranda rather than improved water quality.

11. The strategy should minimize irreversible impacts on natural systems.

12. The strategy should incorporate provisions for positive and expeditious governmental adtion to compensate individuals and firms for economic dislocations stemming from the application of a strategy with the above attributes. POLLUTION ABATEMENT:

SOME OBSERVATIONS ON POLITICAL 6 LEGAL REALITIES

by David Estrin*

The legal techniques that may be brought to bear in the battle against on-going pollution are essentially similar in Canada and in the United States, both at the federal and provincial (or state) levels.

The "modern" statutes and regulations made in these jurisdictions in the last two decades aimed at effecting an abatement of present problems generally conform to the following description: they provide for a governmental agency to establish desirable ambient environmental standards and then prohibit certain types of pollution absolutely or prohibit it beyond the allowable standards; they provide penalties if the person responsible does not meet these requirements immediately or within a limited time; usually, they also provide for the agency to allow the polluter to continue a degree of pollution if he enters into a programme whereby within a given period of time his emission will be abated to the more desirable standards.

In this system the agency must set desirable standards of ambient environmental quality; and the agency must rely on the threat of legally imposed coercion to secure compliance with such standards.

Unfortunately, implicit in the use of such techniques is reliance upon assumptions and systems which are loaded against the public interest management and improvement of the natural environment.

There are some basic problems. Firstly, the system described above required that those acting in the environmental interests be the initiator in both standard-setting and in commencing enforcemer~tmeasures; it allows those who would consume or deteriorate the natural environment to continue their consumption until they are compellingly affected by an initiative taken by those concerned about the environmental interests. This first reality that an effective pollution abatement system must recognize has been described in the following terms:

"Essentially two classes of demands can be made on such resources as air, land, water, wildlife and so on: (1) demands which consume or deteriorate those resources (water pollution, the slaughter of wildlife, the harvesting of forests); (2) demands which do not consume or deteriorate them (swimming, bird-watching, hiking and camping). In a world without laws, those who wish to use resources for consumptive or deteriorating ends will always prevail over those who wish to use them for non- consumptive or non-deteriorating ends. This is simply because consuming users, by exercising their demands, can foreclose non-consuming users from exercising theirs, while the contrary cannot hold. In short, the polluter's use can stop the swimmer

* Mr. Estrin is a barrister and solicitor practicing law in Toronto, Ontario. from using and enjoying a lake, but the swimmer's use cannot stop the polluter from polluting in the lake."

I I Of course, we live in a system with laws, but it is a loaded system. And it is loaded precisely because of the point ... just made. For even in a world with rules against resource consumption (against, for example, pollution), the leverage inherent in resource consumers means that they can continue their conduct until sued. In short, they will almost inevitably be defendants, and those whose uses preserve rather than deteriorate will ineluctably be plaintiffs."'

Now we have erected in both Canada and the United States complex administrative agencies to deal with our modern environmental problems. But, unless one recognizes that these agencies must take initiatives in regard to causing abatement of on-going pollution, there is little to distinguish our modern administrative agency and its "modern" legal powers from the system which is commonly thought anachronistic and on which such administrative agencies were to greatly improve -- the old common law principles existing in Canada and the United States wherein private property owners aggrieved by pollution could invoke the civil courts and achieve damages for past pollution or an injunction to stop on-going problems. However, before the civil court system could effect pollution problems, someone aggrieved had to come forward to initiate the court action. The civil courts did not start proceedings themselves; they only ruled on specific cases brought before them. And the only persons who could initiate such proceedings almost exclusively were persons whose property or use of property was affected by a pollution source.

It was obvious to modern legislators that such a system could not deal with the complexity and toxicity of the contaminants modern science and industry had introduced into our environment; the corollary realization by legislators that we live in a closed biological system where we cannot ultimately escape from some form of exposure to material that may be cumulatively, if not immediately, toxic led to the creation of what were said to be new mechanisms wherein persons employed full-time in government agencies would act in the public interest and not just in the private interest to abate on-going pollution problems, through legal action if necessary.

The public has come to know and rely on such agencies. But, if these agencies fail to set any standard for a given contaminant or fail to issue directives for cleaning up presently-known problems, then, of course, we have identified the first real problem with our present system. And such a problem is a grave reality.

For example, the International Joint Commission, through its Great Lakes Water Quality Board, has identified the sources of many hazardous discharges into the Great Lakes and has repeatedly called for action in regard to such sources, but often to no avail. There has been a plethora of studies, even to the public naming in the I.J.C. reports of the pollution sources, but little or no abatement action by Great Lakes agencies or their governments.

(1) Krier, "Environmental Litigation and the Burden of Proof," in Baldwin & Page (eds.), Law and the Environment, 105 (1970). Another example of this problem is found in a recent story carried in the Toronto Globe and Mail, headlined "Contaminant Panel Hasn't Met Although Act Passed a Year Ago": "A federal interdepartmental committee set up af ter the Environmental Contaminants Act was passed more than a year ago has never met. The act, which received royal assent Dec. 2, 1975, allows the ~oveknmentto set regulations governing the maximum permissible concentrations for harmful substances, both in products and waste materials. However, the Environment and the Health and Welfare ministries -- which are jointly responsible for the act -- must consult other federal departments affected before they can take any action. Hence the purpose for the interdepartmental committee. The committee is to have representatives from six federal departments, including Agriculture, Consumer and Corporate Affairs and the Atomic Energy Control Board. At least one member of the committee has asked the chairman, Les Edgeworth, why there haven't been any meetings. Mr. Edgeworth, of the Environmental Protection Service, said yesterday the act 'has only been with us a short period of time,' and only now is staff being organized to work with the committee. Mr. Edgeworth said the prime purpose of the committee is to make sure that the interests of all other Government departments don't overlap. He also said that this function has so far been done through correspondence. However, it seems the committee's stated functions go beyond Government liaison. A document signed by the deputy ministers of the Environment and Health and Welfare recommends that the committee's terms of reference include: --Technological, economic, social, geographical and political (including international) factors are taken into account. --Information be provided to the responsible ministers about controlling dangerous substances. After being told of this, Mr. Edgeworth seemed surprised about the terms and said a meeting of the committee will be held shortly. He called back a few minutes later to say a first meeting of the committee is scheduled for Dec. 20, then said it might be held some time in the new year. The act, in effect since April, also gives the federal Government power to demand confidential information from private companies, to stop the use of metals and chemicals, and to jail company officials for up to two years and fine them as much as $10,000 for contravening the act."

(2) The Globe & Mail, December 9, 1976, p.4. A second assumption that we have built into our abatement systems is that once the agency does decide to set clean up standards the polluter will have an incentive for taking corrective action. Usually that "incentive" is more properly called coercion. That is, the legislation generally envisions that if the polluter does not abide by the standards set after a given period of time, the legal process will be invoked which will ultimately see the polluter fined.

This reliance on the coercive techniques of the judicial system to provide the incentive for the polluter has several real problems within itself which must be identified and discussed.

(a) Businessmen are in business to make money. Part of their business is to calculate the factors that interfere with their profits. In looking at the chances of any effective coercion being brought against their firms in terms of the legal system, they know, if they have any experience or any understanding of just how things work, that there is only a remote chance of an administrative agency taking a polluting company to court. That may be the case for several reasons:

(i) The agency does not have enough staff to adequately monitor and take action against the violators.

(ii) The polluting industry is very important to the economy of the jurisdiction or of various local centres within it and, therefore, there is a political disinclination to cause the company to undertake that which it claims it cannot afford. Part of this problem is that the industry has facts and figures which tend to support its claims that it cannot afford any effective abatement action; on the other hand, the agency does not have the information to counter such arguments.

(iii) In many cases, the regulatory agency has a lingering sympathy for the position of industry in that in many cases industry has trained the very personnel that the regulatory agency is now employing in its attempt to achieve abatement. Moreover, the fact that negotiations take place in secret does not allow the public to become aware of just what is ,taking place and therefore allow counter pressure to be put onto the agency so that the agency's position develops in a balanced way.

(iv) Again, since much information is secret, no members of the public could purport to enforce the terms of clean up orders that the agency may have outstanding against the polluter. If the agency does not choose to enforce its legislation for some of the reasons suggested above, the public is virtually precluded from knowing of or taking action about it.

A good (or, rather, sorry) illustration of some of these problems is found in a recent study prepared by staff of the Ontario Ministry of the Environment (but only made public after repeated question about it in the Ontario legislature), "Alternative Policies for Pollution Abate- ment -- The Ontario Pulp and Paper Industry.'I3

The report summarizes the history of regulatory attempts to clean up existing mills in Ontario from and after 1965. At that time, the Ministry of the ~nviroknent,or rather its predecessor, the Ontario Water Resources Commission, prescribed certain objectives with regard to the removal of certain suspended solids and reducing five-day BOD and/or COD and substances imparting tastes and odours and other substances toxic to aquatic life and in regard to controlling waste that impaired aestetic quality; the objectives generally being intended "to permit the existence of a warm water fishery in the receiving waters."

Eleven years after the directive was first issued in 1965, the report states that "the industry as a whole is still short of reaching the interim suspended solids objectives. Moveover it has made little progress towards curtailing BOD5 emissions."

The report notes in summarizing the situation between 1965 and 1976:

"Eleven years have elapsed since the pulp and paper industry was asked to clean up its waste waters. Moreover Ontario Water Resources Commission and Ministry of the Environment officials have worked closely with these mills to try to develop voluntary programmes that will be both technically and economically feasible. Despite these considerations the pulp and paper industry continues to generate about 87% of the BOD5 being discharged by all industries directly into lakes and rivers in the province. While some mills have made substantial progress, others continue to dump hundreds of tons of oxygen- depleting wastes into lakes and rivers each week. American Can's chlor-alkali plant continues to discharge mercury compounds despite the recognized dangers of mercury accumulations in sediments of fish.

"It is concluded, therefore: (1) based on past experience, the 31 mills are unlikely to achieve M.O.E. BOD5 and federal toxicity objectives without stronger inducements from the government; (2) despite considerable improvements in suspended solids abatement from many mills, the damages to receiving waters have been the same now as they were eleven years ago; and (3) if the industry continues to expand pollution problems could increase as well.

(3) J.A. Donnan & P.A. Victor, "Alternative Policies for Pollution Abatement -- The Ontario Pulp and Paper Industry," Summary and Update, (October 1976, revised edition.) Ont. Government Bookstore, Toronto.

Donnan & Victor, Supra, p. 19. The report notes that the pulp and paper industry did not initially agree with the 1965 abatement objective and that subsequent efforts were made by the Ministry of the Environment to develop voluntary abatement programmes that were technically feasible and were not financially damaging and that, consistent with that policy, from 1971 until late 1976 no prosecutions were laid against pulp and paper mills in order to give the industry time to implement their voluntary programmes.

It seems obvious that the pulp and paper industry took into account all the above factors and concluded that they did not really have to do much - if anything. They obviously felt that there was only a remote chance of the agency taking them to court for all of the reasons cited above and that if they were taken to court there was not much chance, for reasons described in the section below, of the court's levying a great penalty against them. The principal reason that the industry felt that they were safe in this position was their assertion, which one must suppose that they really believed, that they just could not afford to enter into these clean up techniques and, on the basis of those sub- missions, felt that the Ministry was not about to get tough with them. It was obvious to some Ministry personnel, however, in about the early 19701s, that the industry was perhaps dragging its feet and the referred to study was undertaken by Ministry economists so that the Ministry could fully answer these assertions by the industry. The report does not say so, but it is an obvious inference, that the Ministry decided, in other words, to ascertain as knowledgeably as it could, the true state of technology related to the feasibility of cleaning up such wastes and the economic conditions and expectations for the industry relative to whether or not the industry could afford to undertake measures to achieve the desired objectives.

Some of the more interesting conclusions from that study are as follows:

"Employment losses due to achieving the . . . abatement objectives . . . will be exceedingly few if, indeed there are any at all. Moreover, the costs to be incurred by the polluting mills will be well within their long run financial capabilities.

Pollution abatement is not. likely to generate severe adjustment costs because firms can avail themselves of tax concessions that reduce the impact of abatement costs on their profits . . . The tax system actually shifts about 50% of the financial burden to the provincial and federal governments.

The total costs to the entire industry of the Ministry's programme would be about $115 million over ten years. By contrast, the total capital expenditures undertaken by four Canadian paper companies during 1974 alone amounted to $174.5 million.

There would be a net increase in employment within Canada as a result of the purchase and installation of pollution abatement equipment. Most. . . mills in Ontario can 'afford' to control their pollution to a much greater extent than they are presently doing. Therefore adequate economic incentives are needed which will make polluting more costly than abatement.Il5

Once the Ministry was in a position to disbelieve the industry assertions (and once the public became aware of the true facts -- thanks only to the persistence of the leader of the Provincial Opposition, Stephen Lewis), it could begin to "get tough". Shortly after this study became public, the Ministry initiated prosectuions against some of the mills well known for pollution, as the following press report indicates:

I' More pulp and paper companies may be charged with failing to comply with pollution control orders, according to Ontario Environment Minister George Kerr. He told Opposition Leader Stephen Lewis in the Ontario legislature yesterday that the government recently laid charges against Reed Paper Ltd. in Dryden 'because the company substantially is in arrears in respect to its existing control order. ' Last week, the government laid 10 charges against Reed's Dryden Mill under the Environmental Protection Act and 22 charges against Abitibi Pulp and Paper Ltd. in Iroquois Falls under the protection act and the Water Resources Act. Mr. Kerr said a series of control orders have been issued against Reed which require it to meet certain pollution- abatement levels. A report prepared by the ministry and released by Mr. Lewis last weekend shows the Dryden mill dumped far more than the permissible levels of solid and organic wastes into the English-Wabigoon River system. Outside the house, Mr. Kerr said he is considering charges against one or two more mills for not complying with control orders but would not identify the companies involved. The report released by Mr. Lewis shows the Reed company almost doubled the amount of organic waste dumped daily between 1970 and 1975 -- to 46.2 tons from 24 tons. The ministry limit for discharge of organic waste by the mill is five tons daily. Mr. Kerr said his ministry charged Reed because the company wanted too much time to begin secondary treatment of waste from its mill. Abitibi officials said the Iroquois Falls mill is too old. and because of that, had no plans to comply with the control order. Mr. Kerr told the house there now are eight control orders on 'eight mills. Another 12 mills are negotiating t.erms of further control orders or have not fulfilled the terms of the old orders . . .'I [Emphasis added.]

(5) Donnan & Victor, Supra, pp. 42-47

(6) Montreal Star, November 30, 1976. (b) A second basic reason that the legal system provides little real assistance despite its general adoption as a coercive technique in all schemes is that if court action is taken the penalties for breach of a standard are usually fines of insignificant amounts in contrast to the legal expenses involved in a company defending itself in a judicial forum and even more miniscule in relation to the amount required by the industry to meet the abatement order.

These factors, taken together with the fact that there is a good chance of a company not being convicted or found in breach of the term or order or, if found in breach, being assessed a low penalty, all render the use of the legal system as the device of persuasion, in many cases, wholly inept.

A study done by members of the Faculty of Law at the University of Montreal in 1976 which reviewed the handling of air pollution cases in Montreal Island municipal courts indicates that the problems of which we are speaking are not limited to any one jurisdiction. 7

The study reviewed cases initiated against air polluters since the Montreal Urban Community department began its enforcement work in 1970. This study found that many polluters promptly plead guilty if summoned under the legislation. Most accused never appear in court but are represented by a lawyer, an employee or a relative. In 20% of the 856 cases, the accused did not even send a representative and was found guilty by default.

In the 833 cases where the accused either pleaded guilty or was found guilty, the average fine imposed was $91.45--$68.81 in Montreal and $154.93 in the suburbs. In the eleven municipalities no air pollution court actions have been conducted.

According to the authors, " to read some of the judgments of the municipal courts, we are inclined to believe that industry -- probably because of the standard of living it has provided and because it provides bread and butter for a number of people -- has acquired a right to pollute".

In reacting to this study, Jean Marier, head of the Montreal Urban Community's pollution control department, put the onus for the inefficient prosecution of polluters on the courts, saying that cases often get lost in the shuffle of municipal court business and fail to receive the attention they deserve from the presiding judge. "Our pollution cases might come up between a minor traffic offence and a parking violation. In the mass of cases the important ones don't stick out enough, I' he said.

(7) Jean Hetu & Y. Deuplessis, "La Pollution de 1'Air et les Cour Municipales du Territoire de la Communarte Urbaine de Montreal,'' to be published in La Revue Juridique Themis at the beginning of 1977.

(8)Montreal Star, November 24th, 1976. Why is it that when resort is had to the legal system there is a good chance that the industry may not be found in breach of the standard, or, if found in breach, that the penalty will be low?

Two factors seem to answer this question: (i) there is a bias in the judicial system in favour of private as opposed to public rights and in such a contest the polluting industry has the sympathy of the bench in protecting its private right to profit over general, undefined, public rights; (ii) the second factor is the evidentiary rules used in judicial forums which generally resolve any doubts about, for example, the harmful effects of the polluter's activity; or the cause and effect relationship. between the alleged harm and the polluter's activity; or the general need or reasonableness of the standard sought to be enforced, in favour of proprietory interests.

The bias of the judicial system that we spoke of in favour of private as opposed to public rights stems from the history of the common law. Lawyers, and thus obviously judges, worship this tradition that "statutes which encroach on the rights of the subject, whether as regards persons or property, are subject to a strict construction.... It is a recognized rule that they sould be interpreted, if possible, so as to respect such rights, and if there is any ambiguity the construction which is in favour of freedom of the individual should be adopted. "'

While this concept appears anachronistic when one is dealing with toxic substances, it is nevertheless alive and well as seen in a recent decision of the Ontario Court of Appeal wherein that court split two to one on the issue of whether or not the anti-pollution provisions of the Ontario Environmental Protection Act should apply to private as well as

public property.- - Although the definition of "natural environment" in that Act is very broad and talks about the "air, water and land of Ontario or any combination thereof", nevertheless at least one of three Appeal Court judges held in his opinion that the Act was only meant to apply to public resources not in private hands! Moreover, in that case, the Act was held to require a strict construction and not a liberal construction in so far as it was held by the majority to apply to private property. Although there may be found in our jurisprudence statements that there is a public right to clean air and clean water, nevertheless our legal principles have developed on the basis of dili- gent attempts to protect private property rights. There is implicit in our judicial system the concept that man's humanity is basically a function of property. When analyzed, the common law does not give rights to clean air and water in a vacuum. The only persons whom the common law permitted and still permits to come to court to seek relief against pollution are property owners (or those who have a very substantial interest in property). The very definition of "nuisance" as being an action which "materially interferes with the enjoyment of property or which causes damage to property" and which ignores any aspect of harm to people or health is, of course, illustrative. Now, of course, such respect for rights of property may be and, indeed, is in some cases limited by legislation. Nevertheless, even where legislation purports to provide for public rights and public officials to act in the public interest, our judges when interpreting these provisions come to the problem with a background described above. The problem has been put thus :

(9) Maxwell, The Interpretation of Statutes, 12th ed., p. 251. "Property is at once an inalienable right and a means of aggrandizing oneself; and the owner has a right to residuary use. Assuming that a collective decision is made that as a society we wish to husband certain resources, then the policy maker must recognize that an owner of those resources has the entire majesty and force of a thousand'years of legal decisions to oppose any attempt to interfere with the owner's rights to that resource. Any policy adopted in that regard will be whittled and narr0wed.b~the legal system not because of any malicious intentions on the part of judges or lawyers but because the development of the legal system has been based on the very principles which the policy is attacking. The notion of property as an inalienable right and the notion that owners have a right to residuary use are at the very centre of the legal system. It is a system, and like all systems, any change in one aspect creates a disequilibrium. To achieve a new equilibrium in the legal system requires a very long passage of time and is only achieved very gradually. Changes as fundamental as those confronting policy makers in the area of limiting growth or checking pollution, may cause a massive shock not only to the legal system but to the society which it serves."'

In regard to the evidentiary biases of the legal system, one writer has put it as follows: "... It is one of the simple facts of our present system that (for a host of reasons) plaintiffs most generally carry the major burden of proving most of the basic issues in a lawsuit. The result is striking: even with the system of substantive rules against resource consumption, our present rules insure that in cases of doubt about any facet of those rules, resource consumption will prevail." ' '

Standards of proof that have evolved in our court systems may be impossibly high given levels of scientific knowledge. This has been the experience of many federal Fisheries Act prosecutions where it is necessary to prove beyond a reasonable doubt that the substance is "deleterious to fish" and such lethal effects on the fish of a substance are suggested but unconfirmed; in this case, expert witnesses are likely to be unwilling to say that a substance is "deleterious". Many prosecutions, as a result, are not taken. Similar problems have occurred in prosecutions under the Food and Drugs Act. Even if a lesser standard of proof is called for, such as the civil burden of proof known as the "balance of probabilities" where scientific evidence shows only that the action in question creates an unquantifiable (i.e., unknown) risk, a court is not likely to find that the balance of probability standard of proof has been met. 12

(10) K.M. Arenson, "Of Things Held in Property", in The Allocative Conflicts in Water Resource Management, Agassiz Centre for Water Studies, U. of Manitoba, Winnipeg, 1974.

(11) Krier, supra.

(12) Franson & Lucas, Legal ~ontro'lof Hazardous Products in Canada, p. 85. [A study prepared for the Science Council of Canada to be published Such a judicial attitued is well set out in the U.S. Court of Appeal' s (8th Circuit-) decision in Reserve Mining v. United states13, wherein the court had to determine whether or not a temporary stay of the injunction issued by the district court should remain in effect.

The court noted that, in this situation, "foremost consideration must be given to any demonstrable danger to the public health....After such demonstrated health danger, the public interest may arguably be served.eitherway in environmental matters. In considering the stay application where no health hazard is shown, an appellate court must weigh, first, the seriousness of immediate harm to the environment which will result from allowing the alleged pollution to continue and, second, the economic and social dislocation to be suffered by the defendants and by the communities dependent upon them if the injunction immediately goes into effect.....Chief Justice Burger, sitting as a circuit judge, while refusing to grant a stay in an environmental context ... Observed:

11 Our society and its governmental instrumentalities, having been less than alert to the needs of our environment for generations, have now taken protective steps. These developments, however praiseworthy, should not lead courts to exercise equitable powers loosely or casually whenever a claim of "environmental damage'' is asserted. The world must go on and new environmental legislation must be carefully meshed with more traditional patterns of federal regulation. The decisional process of judges is one of balancing and it is often a most difficult task."

Both of the above referred to problems with regard to the judicial process, the bias of the judicial system in favour of private as opposed to public rights and the requirements of clear proof to meet the standards applicable in either civil or criminal cases (the failure of which resounds in favour of property or proprietary rights), are illustrated in the case Re Canada Metal Company Limited and MacFarlane. l4 Here, the Director of the Air Management Branch of the Ontario Ministry of the Environment (as that internal division of the Ministry was then called), issued stop orders which had the effect of shutting down the Toronto lead reclamation facilities at Canada Metal and an industry using the same stacks, Roto-Cast. The Director acted under provisions of the Environmental Protection Act which empower him to make stop orders when he is of the opinion "upon reasonable and probable grounds ...that a source of contaminant is ...discharging into the natural environment any contaminants that constitutes...,a n immediate danger to human life, the health of any persons, or to property ...It This actions was taken after data showing high lead blood levels in some persons residing near the plants was received by the Air Management Branch and had been publicized in the media.

The Supreme Court of Ontario had no difficulty in finding that the Director of the Air Management Branch, in issuing a stop order, must act judicially, and that he failed to do so in this case because he had adopted a subjective, instead of an objective test of the danger to health that was alleged to be caused by the applicant's operation.

(13) Court No. 74-1291, June 4, 1974.

(14) [I9741 1 O.R. 277. Mr. Justice Keith reviewed in detail the affidavit evidence and commented extensively on its value or lack thereof in terms of deciding whether the Director had acted judicially and decided that "viewing the matter objectively, which the Director should have done, his undoubted power was exercised arbitrarily and not judiciallyt'. Statements made by Mr. Justice Keith exemplify precisely the attitude of courts which one may expect to find when agencies seek to invoke their sanction-granting powers (or, as in this case, where industry invokes their power to review what are alleged to be arbitrary decisions by government officials in imposing clean up orders); in the Court's words:

"Much has been heard of the views of the community. It is all too easy to forget that the applicants and their employees and customers also have well-founded interests to be considered. All our freedoms depend on the proper exercise of the'rule of law, and the rejection of the rule of man in an unjudicial way..... For all these reasons, the applicants are entitled to succeed. ..I1 ' ,

Even where evidence is available to prove breach of standards, the prosecutor or plaintiff must show there are alternatives available:

"[The prosecutor] must also show that technology exists capable of curing the problem because whatever the vogue may become with regard to shutting down polluting industries, courts today are extremely reluctant to enjoin major economic activities. I am currently dealing with one industry in Illinois which employs eleven thousand people. There is not much dispute about the fact that they are causing serious environmental degradation. We deomonstrated this to the court, and the court simply said to us, 'If you think I'm crazy enough to put eleven thousand workers out of work, you're sadly mistaken.' ...The role of the public prosecutor, however, is to do everything possible to eliminate the emission source. Thus, in terms of proof, the big problem is not proving the pollution but showing that the technology exists to deal with it. In every case in which I have been involved, that is the first question the judge has asked. .. ." '

Having described the problems of the use of. the legal system in attempting to provide the incentives (albeit through a coercive process) for polluters to obey such initiatives as government agencies seek to have imposed, one may now turn to examine the solution of the economists.

A recent study referred to earlier for the Ontario Ministry of Environment discussed the interface between economics and the achievement of water pollution abatement within the pulp and paper industry. The study discussed, among other possibi1ities;the granting by government of direct financial assistance and concluded that it was unlikely to induce additional pollution control in some instances because if the amount given was not sufficient for the total action required, the

(15) Karanganis, "Public Suits: The Search for Evidence", in C. Hassett, Environmental Law (1971), pp. 50-1. abatement. action would still cost the company money and, in all likelihood, give the company no return and, therefore, it would still have an economic incentive to resist installing the pollution conzrol equipment. If, onthe other hand, a mill intended to put in the abatement equipment anyway, extra financial assistance would only be a windfall. The authors noted that such direct assistance might increase the already large share of pollution abatement costs currently borne by government and that such a policy could well be unpopular with the public. On the other hand, the authors were more positive about a system whereby companies would be liable for payment to the government according to the amount of effluent they discharge; rather, they were much more favourable about a more sophisticated form of such a system, whereby payments would also be dependent on the quality and composition of the effluent, the fluctuations in its flow, the time at which it is discharged and the state of the receiving water in its alternate uses. The basic principle as Drs. Donnan & Victor describe it, for setting the effluent charge, is that it would be directly related to the damage caused by the effluent. This charge, they say, would then act as an incentive for companies to reduce their effluent loading for which they are responsible. 16

Although this approach does appear to eliminate the problems with clean up using the legal system described earlier, it may nevertheless be pointed out (as Drs. Victor and Donnan do) that such a system and methodology employing a modified effluent charge referred to as a pollution control delay penalty lends itself most readily to controlling discharges which are made on a regular basis and in measurable quantities. As they say, other kinds of discharges may be best dealt with by enforcement of existing legislation. Moreover, even with such a system applicable to certain types of discharges, there still must be a methodology whereby an administrative agency takes initiatives so that industries undertake an assessment of the dis-economies of not undertaking abatement. Moreover, agencies must exist to prove if necessary that the harm they wish to have abated is actually the responsibility of that industry; further, the government agencies must be cognizant of sufficient technical options for controlling that industry's discharges so that the prescription of such an effluent charge system will be equitable. Finally, as with existing policies whereby standards must be set, "a pollution control delay penalty requires that discharge objectives be established for each mill". How and if these objectives are set still requires initiatives on the part of the administrative agencies.

Conclusions

Whether one employs economic or legal methodologies in an attempt to secure the clean up of on-going pollution, it isfundamentally necessary in the beginning that standards be set and clean up objectives articulated and that in the result these reasonably reflect both private and public interests in the environment.

(16) Donnan & Victor, supra, pp. 62-3. The system as it exists needs a massive dose of effective public participation both in establishing such standards and in determining how much time ought to be allowed for the clean up of particularly obnoxious industries. Such public participation is not envisioned as merely the holding of forums whereby the public can come if it is interested and express its views. What is being postulated here is a system whereby the public is made an important, indeed, an integral part of the process. This must be based on the full availability of information to interested and potentially affected members of the public so that they may make considered arguments based on facts. Such information that must be available in such a public participation process include:

effects and costs of the pollution sought to be abated in health, biological, and economic terms; alternative abatement techniques and costs presently and conceivably available in the short term; viability of the industry as a whole, in particular its ability to afford the technological devices necessary to clean up to the standards proposed, including tax incentives available and the dislocations in economic and human terms likely to be involved.

This information, together with money and community organizational personnel and techniques must be made available to arouse spokespersons on behalf of the public so that they become aware of the costs to their health and to their environment, so that they participate in the process of standard setting and enforcement.

Without the public participating in such a manner based on access to such vital information, our environmental agencies will continue to be left alone with the lobbying powers of industry and the political priorities of the government -- industrial growth and high employment, both of which are virtually incompatible with a healthy and attractive environment. When the public is excluded from the abatement process (and it may not have to be necessarily excluded by explicity legislative measures, but, rather, may be because of a failure to provide information and encouragement through the devices suggested above), then standard- setting, decision-making and action-initiating processes within an administrative agency, insofar as it is expected to work in the public interest, become extremely difficult. How can public officials, without such offsetting public pressure, affect the lobbying powers of industry, affect the working co-operation of industry for reasonable abatement programmes, and, at the same time, make equitable decisions that relate to a myriad of different problems affecting private interests in the environment? As has been said by the Canadian Environmental Law Re- search Foundation:

1 I Far too often an overworked bureaucracy develops a narrow single- mindedness of purpose. It evolves into its working entente with the person subject to the regulations which fosters a further narrowing of perspective. The probing of private citizens, through public hearings and other actions is the only cure for the normal malaise affecting any administrative agency, regardless of its zeal, equanimity of devotion to responsibility. It is a fact of administrative life. "1,7

It follows as a second conclusion from the above that agencies must be given more resources so that they can acquire the data on abatement alternatives and the economics of the industries which they seek to regulate so that they may counter the industrialists' usual claim that they cannot afford to affect the abatement measures at all or within the time perspective which the agency desires. Without such information, the agencies are not in a position to counter the very powerful arguments of the industries which are often reinforced by political leaders. With such information, however, politicians and the agencies are both able to counter industry pressure. Moreover, having such information available will also encourage agencies to use the court processes more often and will also assist the agencies when they do get into the judicial forum because such facts will also do much to convince the judiciary that the measures being sought by the administrative agency are reasonable.

The third major conclusion that may be drawn from above is that the legal system certainly has its problems when it comes to being effective in providing realistic coercion to achieve pollution abatement. Where the economic system can provide such incentives they should be used and therefore legislation should be enacted to provide for the kinds of economic persuasion that Drs. Donnan and Victor have described in their most useful study.

Fourthly, in those situations where economic incentives are not particularly apt, there appears to be no escape from the need to use the judicial system to provide coercion for the achievement of abatement methods. It is obvious that what is often lacking is initiative by the agencies involve. To some extent that involves added manpower. However, it also must involve the agency bringing to court information to show that it has addressed the technological ability and financial capability of the company involved to deal with the matter. Moreover, certain rules of evidence may need to be changed so that the courts view the administrative agency's request for abatement in the same terms that they do when a plaintiff requests an interlocutory injunction; i.e., by following a risk-benefit approach that permits them to use a flexible standard of proof with the degree of certainty required varying with the gravity of the alleged harm and the benefits of the defendant's activity. Courts will thus be able to enjoin risks to health in situations of uncertainty where the demonstrated benefits of the activity are found to be outweighed by the risks. The standard would be flexible in the sense that a "lower" standard of proof will suffice where (1) magnitude of the damage, should it occur, would be large, (2) the probability of occurrence is significant, and (3) feasible alternatives exist. For, insofar as we will continue to rely on judicial techniques to affect pollution abatement, our courts must be equipped and directed by the legislature to fashion effective remedies when evidence is presented which tends to establish not only immediate but also chronic hazard's.

(17) CELRF, "Critique of Proposed (Ontario) Environmental Protection Act, Bill 94, July 1971. " ALTERNATIVE LEGAL STRUCTURES FOR CONTROLLING

POINT SOURCE POLLUTION

Jeffrey K. Haynes*

INTRODUCTION

Out technological fix for controlling water pollution is not working. Far from being the answer to our water pollution problems, the technology- forcing approach taken by, among others, the Federal Water Pollution Control Act Amendments of 1972, has bogged down in bureaucratic fatigue, industrial reluctance, and political fiddling. As a result, defining standards, enforcing existing laws and regulations, and developing new control technologies has occurred haphazardly rather than in the finely- tuned manner envisioned by the FWPCA.

I suggest that these problems are only sysmptoms of deeper, more subtle conflicts than mere antipathy among the regulators, the regulated, and the legislatures and public. As societies become more complex, their structural webs become increasingly intricate and less amenable to easy analysis or control. This notion is reflected in pollution control programs. Of the various factors--nature of medium, type of discharge, and control process--that must be considered when building a pollution control structure, point source discharges into water would seem to contain the easiest set of factors. Unlike air, water is a relatively confined medium easily subject to consistent measurement. Discharges from point sources are identifiable and traceable, as their name implies. Control processes--according to the technological fix--can be manufactured for residuals that have been identified as pollutants. Costs can be historically quantified, if not projected.

Strategies for controlLing point source discharges, and for controlling other pollutants, are suboptimal because policymakers lack the requisite date to make necessary decisions. The legislative process is not the best vehicle for acquiring data, or acting on it. Similarly, statutorily-set implementation deadlines often subject administrators to unrealistically short time periods for devising control mechanisms. Information deficiencies take many forms, but, it seems, policymakers' ability to comprehend

* Associate Editor, Environmental Law Reporter, Environmental Law Institute, Washington, D. C.

.h.<%'.~?>~C . .;. i.._ ._ .. ., 1.1, .. ...& the water pollution problem depends to a great extent on their grasp that there indeed is a problem. This may not be a startling observation, but it can explain much of our current situation.

In brief, my thesis is that policymakers tend to ignore relevant facts and ideas about the water pollution problem because they become complacent about the efficacy of structures in which they have vested efforts. Once a new structure, such as the FWPCA (or any of its predecessors), is enacted, the tendency is to heave a huge legislative sigh of relief and move on to the next pressing problem. The giant broom of legislative inattention sweeps under the rug not only "old" problems but also alternative approaches to old problems. This attitude results in crisis. management at the legislative level that is basically'reactive to problems that have gotten out of hand precisely because of legislative inaction. A brief historical exegesis can demonstrate this point. \

AN ABBREVIATED HISTORICAL OVERVIEW

Much has been written about the failings of past and current regulatory approaches to control water pollution and need not be reviewed extensively here. It is useful to understand, though, the historical progression of water pollution control structures in order to place in some perspective the discussion below concerning alternative strategies. Also, we are saddled--or blessed--with the current technology-forcing approach to water pollution embodied in the FWPCA, and it is a reasonable tenet of debate to build on what we have.

As I have mentioned, pollution control structures are a function of the society's perception that a pollution problem exists. The law of nuisance is an appropriate example of this theorem. Private nuisance presumes a static world, governed by property rules, and is dependent on private action to seek correction of pollution problems. The remedies available--injunction or damages--bear little relationship to the total environmental scope of air or water pollution, since a plaintiff cannot introduce testimony concerning damage to their parties' property. Nuisance law worked, in a rural, static society, but could not cope with increasing industrialization and population mobility.

Realizing that increasing population pressures were causing public health problems, most states enacted health-related water pollution statutes, beginning in the 1920's. These statutes involved a slightly upgraded public nuisance standard. Only damage to public health was actionable in court. Public health issues required public authorities to oversee these statutes. Thus were born the precursors to our current water quality control agencies.

When it became apparent that the states could not control interstate pollution through these public health agency structures, the federal government moved in with the predecessor to the FWPCA, enacted in 1948. This act allowed the government to enfo'rce ambient standards in interstate waters and was based on the legislative realization that water pollution does not respect territorial or jurisdictional boundaries. The 1948 Act was modified in 1965 to allow the federal government to force the states to enact water quality standards for all navigable waters.

Probably in part due to the heightened environmental consciousness beginning in 1970, the Congress enacted the FWPCA Amendments of 1972. A radical approach was tried: water pollution was viewed as a .technological, rather than an ecological, problem and was dealt with accordingly. Following the lead of the Clean Air Act, the FWPCA required the promulgation of technology-forcing effluent limitations and guidelines, with stringent enforcement and a major public works project to finance upgraded municipal sewage systems. For once, a statutory scheme recognized that proper regional planning for all water pollution sources was the key to control. Unfortunately, the FWPCA's fine-tuned mechanism for standard promulgation, control process change, new technology introduction, sewage treatment plant construction, and coordinated federal-state enforcement broke down. The Environmental Protection Agency, whipsawed between im- patient environmentalists and dubious industries, could not meet its statutory deadlines, thus pulling the linchpin to the entire structure.

We can anticipate that on July 1, 1977, the mechanism will come crashing down, having not achieved the "best practicable treatment" standard optimistically included in the Act five years ago. The United States is firmly committed to the technology-forcing approach, though. Current proposals for amending the FWPCA are mere tinkerings with compliance deadlines, funding ratios, and allocations of enforcement jurisdictions. In other words, the vested interest in the FWPCA has created a regulatory momentum that generally stifles consideration of alternate control schemes.

ALTERNATIVE APPROACHES

The water pollution control structures that I will discuss are not "new" in the sense that they are untested, but are "new" to the extent that they are relatively unheralded or have been employed in a limited jurisdiction. These structures are also new in that they embody unfamiliar concepts--legal, political, and technical--that may be difficult to adjust our thinking to, since patterns of discussion in water pollution usually revolve around some variant of the effluent standards structure established by the FWPCA. For some of these systems, Anglo- American jurisprudential suppositions of due process and regulatory agency expertise and occasionally those creatures called hard economic realities must be discarded or modified.

Much of the scholarly debate regarding new pollution control systems involves new economic modes of legislation, regulation, or enforcement. The prime example of this new thought is effluent charg~s which require a uniform per unit price of emission for each discharger. (17 of course, such mechanisms, like any regulatory structure,,are intimately involved with the legal system. Also, "legal" or regulatory mechanisms employ cost-benefit considerations or economic incentives or inhibitors and thus cross disciplinary lines. With these caveats in mind, we can turn to several alternative legal structures for controlling water pollution.

Connecticut: Economic Law Enforcement

In 1973, the State of Connecticut enacted the Environmental Enforce- ment Act, which empowered the Department of Environmental Protection to impose civil a sessments on and require sureties of violators of pollution regulations. (2S The Act grew out of a legislative conviction that the Department's enforcement tools were inadequate to deal with its expanded regulatory role. Essentially, it was felt that the existing judicial remedy of injunction creates an untenable all-or-nothing enforcement situation and that existing sanctions give economic incentives for dischargers not to comply with pollution standards, since delay would always financially benefit the noncomplying discharger.

The Connecticut system imposes a penalty on noncomplying polluters in direct proportionto these accrued financial savings. Penalties are fit to the facts in each case, depending on equipment costs, annual . operating and maintenance costs, financing costs, and lost profits. BeLng an enforcement system, the Connecticut Act depends on existing administrative and legislative standards. As such, it forces private investmentwithout regard to particular costs or benefits, which have been subsumed into the standards.

Its advantage, its proponents claim, lies in its ease of enforcement. Judicial remedies are truly a final resort. The assessments are administratively imposed and are objective rather than dependent on (some would say) the whims of individual judges. Also, the penalties are flexible, ranging from a full-value assessment, to imposition of a performance bond, to less severe penalties for procedural infractions that serve as a tangible prod to the noncomplying discharger. At a maximum, the discharger is fined no more than it saves by breaking the law.

The system is not costly to enforce, because the agency uses cost curves and prepared tables for capital costs and equipment life. Also, agency manpower resources are conserved, because there is no advantage for a discharger to delay or contest the assessment in court.

Connecticut reports immediate compliance by historically trouble- some companies following imposition of an escrow account for accumulating assessments. Apparently, the system is accepted by businesses because it destroys the competitive advantage enjoyed by recalcitrant industries.

A version of the Connecticut system was included in the 1976 Clean Air Act Amendments that died in the last session of Congress. We can hope that the proposal will resurface, though, now that some congressional attention has been paid to it.

Michigan Environmental Protection AC~(MEPA)

One comprehensive approach to controlling all types of pollution is the Michigan Environmental Protection Act, which forbids "pollution, impairment, or destruction" of natural resources and the public trust therein, unless there is no feasible and prudent alternative. MEPA authorizes citizen suits to enforce this standard, either in the courts or through intervention in administrative proc edings. MEPA has worked successfully since its enactment in 1970. (39

Apart from MEPA's general standard, no preemptory standards are required by the Act, although MEPA certainly empowers administrative agencies to adopt regulations pursuant to it that would set out specific pollution control standards. Experience under MEPA shows that it is more likely to be used as a backup for administrative action rather than as a substitute, except in instances where a new environmental threat appears that has not theretofore been noticed by the legislature. The best example of this use of MEPA involves the dispersion of polybrominated biphenyl (PBB) across Michigan. Several suits are now pending that challenge the efficacy of the crisis-generated legislation and regulations in controlling PBB.

The relief available under MEPA is not limited to injunctive remedies. The court may issue any order that will reduce the defendant's pollution, impairment, or destruction of the environment and supervise the order's implementation. The court may also remand the controversy to an appropriate administrative agency to draw on the agency's expertise, but the court is not limited to review the procedural propriety of administrative orders, as is the case for normal judicial review of administrative action.

MEPA provides a powerful tool for environmental regulation. None- theless, its potential has rarely been achieved, whether through lack of plaintiff resources or through unimaginative lawyers. In one water pollution case, however, the full array of judicial power was brought to bear on a municipal sewage treatment plant that was at the time complying with the terms of an administrative order issued by the Michigan Water Resources Commission. The court made it clear that such compliance was not a defense to a suit claiming that the plant polluted the water, and then proceeded to promulgate specific standards for the plant when the WRC appeared not to be inclined to contribute additional technical expertise to the proceedings. Even after the defendants obtained a very strict WRC compliance order, the judge found these new standards inadequate. Although this is the only MEPA case in which detailed quantitative administrative standards have been revised by a court, its lesson remains for future use in the water pollution area.

The PBB litigation previously mentioned may equal the impact of the sewage treatment plant case, because the plaintiffs claim that PBB discharges are polluting the environment through massive biomagnification, even though the discharges are below the level of analytical sensitivity.

Another case, in which plaintiffs challenged the construction grant to the Owosso, Michigan physical-chemical sewage treatment plant, illustrates MEPA's potential for inaugurating alternative control strategies. Plaintiffs claimed that EPA and the Michigan authorities failed to adequately consider the land treatment alternative in authorizing the grant. Unfortunately for the plaintiffs, they produced no evidence that the plant's permit would pollute or that the approval of the grant constituted pollution. Had such proof been offered, it is conceivable that the entire sewage treatment grant program in Michigan would have to have been substantially revised.

Land Treatment Alternative

Section 201(g)(2) of the FWPCA requires that alternate sewage treatment methods be investigated by all treatment plant grant applicants as a condition of grant approval. One innovative type of water pollution control that has shown practical consequences is the treatment of sewage by dispersion over land. Proponents of land treatment argue that three principles dictate its use: air, water, and land are one system; the system is closed; and "wastes" are potential resources out of place. By allowing wastes to filt.er through land he land application recycles these resources within the closed system. *(45

This method has not been widely used or studied primarily because it threatens the technical-engineering basis of most water pollution treatment. Land treatment does have a substantial history, though, ranging from human waste use in China as "night soil", applications in Paris and Melbourne, experimental use at Penn State in the late 1950's, and finally a full-scale demonstration system in Muskegon, Michigan. The Muskegon system pretreats the wastes to remove pathogens, and then applies sewage sludge to the soil. In general, sludge application benefits crops and saves energy needed to produce fertilizers.

Certainly the land alternative threatens much of the regulatory structure of water pollution control. It would also, if implemented, erode the basis of the FWPCA's treatment plant construction grant program. Its wide-scale feasibility remains in doubt primarily because of political skepticism about performance, costs, and public health protection. There is also understandable opposition from property owners whose land would be used, although, if the system were instituted nationally, it would use 7.5 million acres, or about one percent of the land currently used to produce 59 major crops.

Japanese Victim Compensation Law

By far the most radical of the alternative approaches to water pollution control discussed here is the 1973 Japanese Law for the Com- pensation of Pollution-Related Health Damage. The Law creates an administrative structure to administer a fund for compensating the victims of designated diseases (e.g., bronchitis, pulmonary emphysema, arsenic poisoning). Medical expenses and loss of earnings are paid for, and polluters pay the entire cost of victim assistance. The Law creates a national fund for distribution to victims of multiple source pollution and requires local fund distribution for damage caused by individual pollutants. Judicial review is provided for.

A recent evaluation of the Law (5) suggests why a similar scheme has not been seriously considered in the United States:

In some ways our era resembles the state of the law of industrial accidents prior to the development of workmen's compensation. The law of pollution damage still views the problem as an individual struggle between polluters and victims. As a consequence, procedural barriers to class actions, the public nuisance doctrine, and difficulties in proving disease causation from multiple sources of pollution present powerful obstacles to relief, as did the defenses of contri- butory negligence, assumption of risk, and the fellow ser- vant rule a half century ago. Since most United States courts have refused to disturb these barriers to victim recovery, the economic forces which impelled the American business community to seek a more certain, less expensive, vehicle for compensating workers have not yet been unleashed in the pollution field.

The enactment of the Law grew out of four well-publicized pollution trials in Japan involving, among others, the itai-itai (cadmium poisoning) disease and the minamata (mercury poisoning) disease. In these trials, Japanese jurisprudence for the first time allowed proof of harm to be based on epidemiological evidence and statistical data rather than a strict cause-effect relationship between the discharge and the disease in the victim. The Law incorporates these causal notions into its procedures for designating pollution-risk areas and pollution victims.

The contribution required by the Law of polluters acts like an effluent charge in that it allows the polluter to determine a flexible response to the discharge problem. Several problems nevertheless remain in administering the Law, including "internalization" of the charge by industries who pass through costs to consumers, correlating a linear charge with exponentially increasing damage from the pollutant, and costs of administration.

As presently constituted, the Law can be integrated with present pollution standards. It then not only constructs a no-fault compensation scheme, but also stimulates risk assessment by industry and regulators to determine appropriate levels of risks for the society from particular pollutants. The Law is weakened by problems in establishing even the "soft" causality correlations. The causality question presents the severest obstacles to adoption of the Law in the Occident, in view of Western notions of strict scientific proof that is required to show damage. This barrier may become less significant, however, as legislatures and courts experiment with new methods of regulation in instances of substantial risk to the public by hazardous substances.

CONCLUSION

The debate over the proper and most efficient tools to use in controlling water pollution is not likely to end soon. Perhaps the most that we can hope for is that the sophistication of that debate increases rather than declines. The danger is that alternative strategies have difficulty in thrusting aside the momentum generated by existing institutions and mechanisms. My purpose has been to illustrate several of these alternatives and briefly describe how they have fared and can be expected to work.

A safe conclusion is that new structures and strategies that draw upon existing technologies, institutions, and standards will more likely be considered than those that present radical departures from current thought. The Connecticut system has achieved some legitimacy in the eyes of Congress and the regulators and therefore stands a better chance of immediate, widespread implementation than do the Michigan Act, the land treatment alternative, or the Japanese Compensation Law. Despite such incremental advances, worsening water pollution problems combined with industry and public exasperation with current approaches would spur us toward putting our eggs into several regulatory baskets. The combined strength of the approaches outlined in this paper would surely augment our present water pollution control efforts and help us achieve the clean water goal we seek. REFERENCES

(1) Dewees, D.N., "Point Sources: New Economic Mechanisms", Paper prepared for the conference, January, 1977.

(2) Connecticut Enforcement Project, Economic Law Enforcement, Vol. 1, Overview (Hartford, Conn., 1975).

(3) Haynes, J.K., "Michigan's Environmental Protection Act In Its Sixth Year: Substantive Environmental Law From Citizen Suits", Journal of Urban Law, 53:4 (University of Detroit Law School, May 1976), pp. 589-700.

(4) Boyer, H. & Reid, B., "Recycling on the Land: An Alternative For Water Pollution Control", Natural Resources Defense Council (Wash- ington, 1973).

(5) Gresser, J., "The 1973 Japenese Law for the Compensation of Pol- lution-Related Health Damage: An Introductory Assessment", Environ- mental Law Institute, Environmental Law Reporter, Vol. 5, pp. 50229-50251 (Washington, 1975). POINT SOURCES: NEW ECONOMIC MECHANISMS

Donald N. Dewees*

INTRODUCTION

Difficulty is being encountered both in the United States and Canada in achieving stated environmental quality goals. In many jurisdictions, ambient air quality and water quality standards have been adopted, schedules for approaching those goals have been publicized, yet the goals have not been achieved, nor are the schedules frequently adhered to. In case after case, the improvement in environmental quality comes slowly, and in some cases there is actual degradation rather than improvement.

The failure to achieve ambient quality standards is a reflection of both difficulties in defining and measuring emission standards, difficulties in enforcing those standards, and the slow emergence of new improved technology for pollution abatement. In many cases, most sources of water pollution can be monitored only once or twice a year, if at all, although it is widely recognized that very large numbers of even composite samples are necessary to establish a reasonable estimate of the effluent density. Even when there is a vigorous program to control a number of point sources, several years of experience will reveal that other sources, previously considered to be unimportant, constitute a significant portion of the problem. Finally, the rate of development of more efficient and less expensive technology for pollution control has been disappointingly slow in many important areas. Despite the ingenuity of Canadian and American industry, and the investment of millions of dollars in research and development, we have few examples of dramatic reductions in treatment costs, or great leaps forward in efficiency.

There are three possible reasons for the rather disappointing state of our progress in water pollution control. First is the possibility that we, the taxpayers, the consumers, and the voting public are not prepared to buy the pollution control that is implicit in our environmental quality goals. Perhaps the demand for tough environmental legislation was based on poor information about its costs or upon an emotional committment that has subsequently vanished. In any event, if there is a general feeling that environmental improvement is "not worth it" one could expect this to be reflected in poor progress in this direction.

A second possible explanation is that the technology simply does not exist to significantly reduce our emissions. If it is physically impossible to produce our current mix of goods and services in the economy without discharging the present level of waste into the water, then we should expect to find little reduction in emissions except where we are willing to abandon the underlying production itself. This explanation, however, seems less compelling than the first. In virtually all industries there are currently a variety of techniques for reducing effluent

*Dr. Dewees is an Associate Professor of Economics at the University of Toronto.

7 0 densities. Generally it is not possible to achieve 100% abatement, and frequently the cost of modifying an old plant or factory is high, but rarely is it impossible to achieve very substantial improvements.

A third possibility is that we have not yet found the legal and administrative methods necessary to call forththe best technological response to our environmental problems. Even if there is a strong public will to improve the environment, and if there is available a reasonable range of technology that can. achieve substantial pol1,ution reductions at not unreasonable costs, these technological alternatives will not be adopted without a vigorous program of regulation and enforcement. It seems to me and to others who have considered this problem !I) quite probable that at least a substantial portion of our failure to meet our stated goals can be attributed to weaknesses not in technological alternatives but in administrative alternatives: in failing to find the right combination of public policies that will lead to the development, adoption, installation and operation of those processes that will yield both a high level of economic production and a low level of environmental contamination.

It is the thesis of this paper that given continuing public support for environmental protection, substantial improvements in environmental quality will depend very heavily upon the design of public policies that are both just and effective. We have seen years pass without the widespread adoption of available technology. We have seen very slow rates of innovation in pollution control. This poor performance contrasts so sharply with the vigor with which industry can respond to private market incentives that it seems only natural to conclude that a better system of incentives could lead to better performance in pollution control as well. We will, therefore, examine the design of pollution control policies to achieve substantial pollution reductions at reasonable costs. This is not simply a matter of adopting increasingly vicious penalties. There have been failures to improve the environment both with legislation that is deficient in penalties and with legislation that carries potentially large penalties. Rather, it is necessary to develop a legislative framework that can appeal to the most productive instincts in the private sector and bend those energies toward efficient pollution abatement rather than toward disputes about what can and cannot be done.

The next section of this paper will examine the objectives that are sought with a pollution control program. We will then briefly review the administrative alternatives for pollution control. Both past and possible alternatives will be considered. We will deal specifically with the problem of monitoring, which is so important to effective pollution control, and then draw some general conclusions about the design of effective abatement policies.

Objectives

In some cases it may be clear that a pollutant must be eliminated completely and at once. Mercury would seem to fall into this category because of its persistence in the environment and the very serious hazards that it can cause to human health when sufficiently concentrated in the food chain. Some other heavy metals and particularly toxic chemicals may fall into this category. Where the health effects are sufficiently immediate and dangerous, it may be unnecessary to perform further analysis or compare alternative control policies. In such cases it may be clear to all that an outright prohibition on any further discharge is desirable.

In the vast majority of our pollution problems, however, the policy objective is not so clear-cut. Usually it is possible to identify a variety of harmful effects from a pollutant, and there may even be some information about relationship between concentrations of this pollutant and the extent of its damage. Where the damage does not include immediate problems of human health, and where the costs.of immediate cessation of all discharge would be high, the policy objective is usually to achieve a satisfactory reduction in emissions without in- curring excessive pollution control costs. In short, there is some balancing, however informal, of the costs and benefits of pollution control. In such a case, it is not essential to reach a certain pollution level at a specified time, but rather to achieve a degree of control that reasonably reflects costs and benefits, and do this as rapidly as possible.

Many of the pollutants for which we have established ambient quality standards could fall into this category. Even our existing ambient standards can rarely be justified on the basis that concentrations less than the standard are entirely harmless while concentrations even slightly above the standard are so devastating in their impact that they must be avoided at all costs. Rather, a standard is usually a reflection of a level below which significant harm has not yet been proven, or in some cases a level that already reflects some weighting of the costs and benefits of control. Nature offers us few examples of sudden transitions from total harmlessness to devastation with a very small change in concentration. Thus an ambient quality standard is necessarily somewhat arbitrary, and must be treated rather flexibly as a goal to be striven for, but not as a requirement that must be met completely and instantly.

This paper is addressed not to the deadly substances for which immediate action is essential, but rather to the large bulk of pollutants for which some comparison of costs and benefits make sense, and for which the abatement objective could be summarized as a desire significantly to reduce the ambient concentration in a reasonable period of time at a reasonable cost.

Where the objective is to achieve substantial reductions at a reasonable pace, we can identify some necessary steps toward achieving those objectives. First, the energies of those who currently discharge the pollutant must be directed toward analysis of their discharge, development of abatement strategies, and investment in whatever changes are necessary to reduce their emissions. Clearly, progress toward the desired goal will be faster if industry efforts are bent primarily towards achieving the environmental goal rather than fighting with the regulatory agency over the appropriate level of control of the desirable techniques to be used in achieving it. Engineering time spent testifying in Ottawa or Toronto or Washington or Columbus is engineering time that is not spent in designing and operating pollution control equipment.

Another task that is essential for the satisfactory solution of a number of environmental problems is the development of new and better abatement technology. In many cases we have the technological capability for reducing emissions of a specific pollutant but the installation and operation of the necessary equipment is very expensive. There are numerous examples in the field of water and air pollution where an intensive research and development combined with some years of field experience have led to tremendous reductions in the cost of achieving a given degree of environmental protection. Even as massive expenditures for controlling wastes from the pulp and paper industry in Ontario are discussed and debated, the construction of a mill 5 t is said to have very low emission rates and variable costs is going forward 'z'. One can identify numerous examples where a major change in technology has been the key to virtual elimination of a pollution problem.

One thing that must be remembered in this discussion is that even with the best technological advances a massive clean-up is going to be very expensive. Revolutionary new technology will at a minimum require large investment to replace existing equipment. Even seemingly simple concepts can be very expensive to implement in existing plans. Thus, in all but the most exceptional cases, it is a mistake to assume that we can achieve large improvements in environmental quality with negligible expenditures.

Alternative Regulatory Possibilities

Several other papers have described the regulatory procedures currently enforced in the United States (3)(4) and in Canada ('). In general, these approaches involve identification of an environmental quality standard, the use of a dispersion model and emissions inventory to relate ambient quality to emissions, and finally the specification of effluent regulations for various pollutant sources. The effluent standards are generally enforced by a program of reporting and inspections with possible prosecution and fining for proven violations of the standard. An important part of the regulatory process is the issuance of permits or approvals whereby those who use the lake or river for carrying off waste must report their current or proposed discharge rates.

In some cases, the emission standard is simply a requirement that the industry apply the best available or the best practicable technology for pollution control. Such a specification immediately raises questions whether costs should be considered, and engenders massive debate over what is the best technology.

Economists have long been critical of this traditional approach to pollution control. They argue that for a specific river basin or watershed the specification of effluent standards fo each source cannot achieve a given degree of pollution control at least cost Rather, cost minimizing requires that the marginal cost of pollution abatement at every source be equal and this can be achieved best through an effluent charge whereby every polluter pays the same price per unit of emission for the right to discharge his waste into the environment. In addition, economists have argued that the direct regulatory approach does not provide incentives for improving technology beyond the currently required emission levels. An effluent charge, on the other hand, because it imposes a cost for every pound or part per million of pollutant t at is released, offers a continuing incentive for technological development (7P. Any time a new process can be installed that will cost less per unit of emission than the effluent charge, it will be profitable to adopt it. Thus, the argument goes, this important technological progress will be faster with effluent charges. Finally, it has been argued that effluent charges will yield more rapid abatement than the system of standard setting because they eliminate the tremendous debate about what standard is "feasible" or "best available practice" or "economically justifiable". Once the effluent charge has been set, it is up to the industry to decide how much to control its emissions. The regulatory agency should estimate beforehand whether the maximum charge can be borne by the industry. If so, it need listen to no debates over what is possible and what is not. The effluent charges does not require, it merely urges, pollution control.

Clearly the traditional and economic approaches to environmental protection are worlds apart. Furthermore, we have vast experience with the regulatory approach, and very little experience with effluent charges. Legislative bodies have shown no inclination to adopt the nearly unanimous advice from economists over the last decade favouring market oriented mechanisms.

Why Are Effluent Charges Unpopular?

Why have effluent charges been so widely ignored despite the high recommendations of economists? Three primary reasons may be identified. First, the theoretically proper basis for setting an effluent charge is to determine the marginal benefit of pollution control and base the charge at this level. However, it is extremely difficult to establish a dollar value of marginal benefits for most pollutants, and when policies are being formed there is likely to be little or no evidence to use on this issue. Second, it is argued that most pollution control agencies cannot afford the extensive monitoring that would be necessary for an effluent charge system. If the charge levied upon a firm is to be reasonably related to its pollution level, then dozens and perhaps hundreds of pollution samples must be taken annually and tested carefully to determine effluent concentration. Such sampling would be many times the effort currently used in most jurisdictions, and enormously more expensive than almost any current program. Agencies argue they simply cannot afford this. Finally, the effluent charge places a price upon effluent but does not guarantee an environmental result. Presumably if you require 80% pollution abatement through a standard, you know what environmental quality will result. If, on the other hand, you impose a charge of 10~per pound for B.O.D. discharge, it is not at all clear how much pollution control will result in the short run or the long run.

A final objection to effluent charges is that the industry must not only spend money on pollution control, but, unless it eliminates all its pollution it must also pay for the remaining pollution discharge. To some firms this seems like paying twice. Furthermore, economists rarely specify what should be done with the funds collected. Certainly when there is some remaining effluent, it would appear that the financial burden on the average firm is greater with an effluent charge than with direct regulation.

Comparison of Standards and Charges

In fact, however, many of the above arguments are not fair criticisms of the effluent charge or do not truly distinguish between charges and standards. For example, while it is true that marginal benefits can rarely be estimated with accuracy, this is equally true for effluent charges and for emission standards. If the establishment of emission standards is intended to be based upon some consideration of costs and benefits, then the difficulty of estimatinn benefits is just as much a problem here as it is for the effluent charge. If standards are to be chosen arbitrarily, this should,be no worse than arbitrarily setting an effluent charge. Thus, this problem for effluent charges should be an equal problem for emission standards.

While the monitoring.costs for a fair and effective effluent charge would seem to be substantial, it is unclear why this is different from the situation with a fair and effective emission standard. If an agency currently monitors an individual source only once or twice a year, there is simply no basis for that agency to know whether the standard has been met unless the measured emissions are an order of magnitude below the standard. If one had a serious pollution problem with firms reluctant.to install controls, it would appear essential to make many direct measurements of discharge rates so that the extent and frequency of violations could be determined. Thus, a vigorous program of standards should have similar data requirements to an effluent charge. If the data collected is meager, the program can have little direct effect, whether regulation is by effluent standard or an effluent charge.

While it is certainly true that imposition of an effluent charge does not guarantee a particular environmental result, in fairness one must admit that a specific emission standard does not guarantee an environmental result either. Legislation and regulation have promulgated myriads of emission standards that are not being met although the time for compliance has long past. Such standards are often subject to negotiated delays and postponements before their effective date. In fact, any careful look at the history of direct regulation shows that the environmental result is very unclear here as well. Uncertainty is therefore not a drawback of the effluent charge, but rather -a characteristic of regulation where the costs are unknown but considerable.

Finally, the difference in financial impact between standards and charges will in some cases be smaller than might be imagined. If industry is reluctant or slow to achieve an emission standard, and if the regulatory agency prosecutes vigorously in the courts, then one could imagine fines being levied in a very substantial amount. In fact, one could imagine a level of fines that would yield the same revenues as an effluent charge. It is only in the case where the emission standard has been satisfied that the financial impact of the standard is necessarily less than an effluent charge.

Mixed Policies

If, however, one is seriously concerned about this financial impact, one can design a combination of the standard and charge that gives the best of both worlds. Instead of specifying that 10~per pound must be paid for all waste discharge, the legislation could impose 10C.per pound for every pound after the first 1,000 pounds per day per source. This is an example of a charge where there is a free base amount below which no charge is levied. If the base amount is set at the 1eve.l where a standard would have been imposed, then a firm that achieves that sta*dard pays no charge. Only the firm that exceeds the standard pays the charge and in this respect his financial burden could be similar to that under a standard andfinesystem (8 1 .

Thus, the effluent charge and the emission standard are not alternative approaches, but are merely the polar extremes of a continuum of policies. At one end of the continuum is the traditional emission standard with some vague fine for exceeding that standard. The next logical step is':to attempt to relate the fine more directly to the degree to which the standard has been exceeded. Thus, we have a standard for which every day of violation is a separate violation in computing the fine. In addition, one could specify that the fine should be proportional to the amount by which the actual discharge exceeded the standard on the particular day. Such a system gives a result very much like an effluent charge with a free base amount. The polluter pays in proportion to his emissions above the standard.. If one wishes to tie the policy to ambient quality rather than emissions, then the firm can be assigned an emission standard and pay for its excess over the standard depending upon the degree to which environmental quality at that time is below some specified ambient quality goal ('1.

If one is concerned about the financial impact on the firm, it is possible to design rebate schemes that will lower this impact. For example, in Connecticut a polluter who does not meet his compliance schedule must pay to the agency an amount that is related to what it would have cost him to meet that schedule. If at a later date the necessary equipment is installed and operated properly, the money may be refunded to the polluter. In essence then, the financial benefits of postponing ollution.control program are eliminated. The profit is taken out of pollution 65.

One can see the close relationship between standards and charges by taking some traditional legislation and making small amendments to it. For example, a regulation that prohibits discharges of BOD in excess of 350 parts per million with a fine for violation can be amended to prohibit such discharges, but in the event of an excessive discharge, an amount shall be payable equal to 10~per pound times the total pounds discharged. In short, the effluent charge merely changes the penalty for violating some effluent goal. It is a mechanism whereby large costs can be imposed upon the recalcitrant firm that refuses to attempt to meet an emission standard. This is exactly what happens under sewer surcharge programs in London, Kitchener, and elsewhere in Ontario. While courts may be reluctant to impose large fines upon a polluter who is convicted of one or two isolated emissions, the legislation can clearly specify large payments for large emissions. When the payment is in the form of a fee rather than a fine, the juaicial discretion is eliminated.

Differences Between Standards and Charges

What then are the true differences between effluent charges and emission standards? An important difference is that under an effluent charge the agency need not go to court repeatedly to prove continuing violations. If the measurement method is clearly specified in the legislation, the agency simply sends a bill on a regular basis for the estimated emissions. While there could be a court challenge on the procedure, if that challenge is unsuccessful, the parties need not reappear in court as they must for every other violation. Given the enormous cost of court appearances, this must be an important factor in policy design.

A second important difference is that the incentive of the polluter is radi- cally changed by an effluent charge. Under a system of effluent standards and fines, the polluter's strongest incentive is to argue for relaxation of the standard or postponement of his compliance date. Since it is unreasonable to fine someone for a violation if the technology does not exist to avoid it, it is always attractive to argue technolo~icalor economic infeasibility. There is always the threat that hundreds will be thrown out of work if the standard is vigorously applied because it can only be met by closing down.

This threat is simply not credible with an effluent charge. Under a charge, the agency can compute the maximum financial impact on the firm '1. If the total payment under existing emission rates and the proposed charge is thought to be , bearable, then there is no need for debate about timetables and technical feasibility. If abatement is impossible, the firm simply pays and pays. Once the in- evitability of the charge is established, the best strategy for the polluter is to install the best and most economical treatment facilities that cost less than the effluent charge itself. This is exactly the incentive that will maximize technological progress in pollution control.

The Monitoring Problem

What about the argument that the monitoring costs for an effluent charge are intolerably greater than the monitoring costs for a traditional standards and fine approach? The most important flaw in that argument is that no policy can be vigorously enforced without reasonably accurate information about who is discharging what and in what quantities. An agency that monitors significant sources only once or twice a year is an agency that is not achieving pollution control through its monitoring and enforcement program. The standard deviation of pollutant concentrations even in 24-hour composite samples tends to e of the same order of magnitude as the mean concentration in those samples (1 4'. It is nonsense to use two such composite samples as evidence that a standard is or is not being met on a day to day basis over the year. Such measurements are an inadequate basis for levying an effluent charge, and an equally inadequate basis for enforcing an effluent standard.

If one is going to use an effluent standard as a means for achieving substantial pollution reductions in cases where there is opposition (where pollution control costs are significant),one must have a reasonable basis for deciding who is in compliance and who is in violation of the~standard. Whatever method is used for this determination can in principle be used for imposing an effluent charge. For example, agencies that do little monitoring frequently say that their primary source of information is the type of equipment that has been installed for production and for pollution control. Certain equipment is deemed to meet the standard while other equipment is deemed not to meet it and receives closer surveillance. Exactly this information could be used for imposing an effluent charge. If one is using a charge with a free-base discount, then those firms with the approved equipment can be assumed to meet the standard and therefore pay no effluent charge. Other firms which do not have the approved equipment might be measured frequently and a charge based upon the observed measurements. If the monitoring budget is not sufficient even for such a program, still cruder methods can be used. For example, non-complying equipment might be classified according to basic design features. Average emission rates for the different designs could be established based upon past experience. Emissions could then be estimated based upon the average design emission rate and the utilization (total output or total input from the process over the course of the month or year). It is just as appropriate to base an effluent charge upon this kind of estimate as it is to determine compliance with a standard based upon the design of the equipment (13).

Estimating- emissions from equipment design and throughput data is inexpensive, but has some defects. It does not, for example, take into account variations in emissions caused by operation and maintenance of the production and pollution control equipment. Of course, an effluent standard based upon equipment design does not take these factors into account either, so this is not a basis for criticism of the effluent charge, but rather for criticism of a technique for estimating emissions.

It is, therefore, easy to agree that the cost of emissions measurement and the accuracy of emissions estimates are crucial elements in any pollution control program. They are not, however, a basis for choosing between effluent charges and emission standards. Any method of surveillance and emission estimation that can be used for enforcing a standard can also be used for establishing an effluent charge. The difficulty arises primarily because the effluent charge highlights the weaknesses and inequities in a poor monitoring program. It does not, however, increase these inequities nor increase the deficiences.

Finally, it must be noted that there is some possibility for separating the cost and the payment for a monitoring program. One alternative is for the regulatory agency to collect all samples, conduct all tests, perform all analyses and report the results to the sources under their jurisdiction. The other extreme is for the regulatory agency to require each source to collect samples and conduct tests under specified conditions and report the results to the agency. Naturally, the agency would be required to conduct some spot checks of its own in order to provide an incentive for continued accurate reporting by the industries. Other arrangements are also possible. For example, the government can do the testing but send the bill to the industry, or the industry can be required to test and report but claim some tax credit for these expenditures. Those who are concerned about the disposition of funds paid out for an effluent charge system might be happy to see part of the money used to support the monitoring program.

A final point is that massive monitoring is, with present technology, massive- ly expensive. Enormous resources can be consumed in collecting, testing and analyzing pollution samples. It is important not to require more such monitoring than is necessary for a successful program. It is also essential to provide incentives to develop more economical and accurate methods of monitoring. In the long run this mtght be just as important as technological progress in pollution control itself.

CONCLUSIONS

We have argued that in the absence of the political will to undertake a substantial pollution control program; no administrative alternative is likely to have much impact. Furthermore, it is impossible to regulate a process without information on the activity in that process, so that substantial emission data collection will be necessary. for any successful pollution control program regardless of the administrative alternative that is adopted. It is only when the political will is there and the readiness to collect substantial environmental data is present, that one needs to consider what administrative mechanisms should be used for regulating environmental discharges.

We have argued that there is an important class of cases where an effluent charge type of procedure will yield better results than an effluent standard. These cases are those where current emissions are not above some threshold of disaster, yet where the costs of achieving a satisfactory level of environmental quality are likely to be high. In such cases, and particularly where the costs of pollution control are uncertain, where they vary from one firm to another, and where there is some hope of substantial technological progress in the future, an effluent charge with or without a free base discount has several advantages.

First, it allows the collection of large amounts of money without a large number: of law suits with the attendant legal costs,. Since a strong financial incentive will be necessary for success in dealing with any serious pollution problem, the ability to collect large sums of money with a minimum of administrative costs is crucial.

Second, the effluent charge has a flexibility that can reduce delays and debates. Because the charge does not proport to offer a clear dividing line between meeting a standard and closing down, it is harder for polluters to argue that they must be given more time or that the standards must be relaxed. It is possible to calculate a charge that will give little possibility of bankrupting the firm or industry yet leave a powerful incentive for pollution control. In- dustry efforts are then bent on abatement not debate.

The real choice is not between standards and charges. The real choice is between arguing with recalcitrant polluters or imposing large costs on them. If large penalties are to be assessed, they can be imposed most effectively and at least court costs by a charge program rather than by fines for violations. Charges give certainty as to the penalty for not cleaning up, and they provide flexibility so that a firm which faces enormous control costs can choose to pay the charge. If we are going to apply the big stick to pollution control it should have the flexibility of a charge, so that it effects are not mortal. For difficult pollution problems, the choice should be clear. REFERENCES

1. Bower, B.T., C.N. Ehler, and A.V. Kneese, "Implementation Incentives for Environmental Quality Management", prepared for presentation at this conference, September, 1976. 2. Stevens, F. , "First Pollution-Free Bleached Kraf t Mill Gets Green Light", Pulp and Paper Canada, October, 1975. 3. Eichbaum, W.M., "A Survey of State Water Pollution Control Law", Background paper for this conference, January, 1977. 4. Thieme, R., "U.S. Approaches", Background paper for this conference, January, 1977. 5. Mulvaney, J.N., "Canadian Pollution Control Law - The Great Lakes", Background paper for this conference, January, 1977. 6. Kneese, A.V. and B.T. Bower, Managing Water Quality, Economics Technology, Institutions (Baltimore: Johns Hopkins Press, 1968), Chapters 7,8. I 7. Ruff, L.E. "The Economic Common Sense of Pollution" in A. Enthoven and A.M. Freeman, eds., Pollution, Resources and the Environment (New York: Norton, 1973). 8. Baumol, W.J. and W.E. Oates, The Theory of Environmental Policy (Englewood Cliffs: Prentice-Hall, 1975), Chapter 10. 9. Delogu, O.E., "A State Approach to Effluent Charge", Maine Law Review, 23:2 1971, pp. 281-313. 10. Connecticut Enforcement Project, Economic Law Enforcement Vol. 1. Overview, Connecticut Department of Environmental Protection, Hartford, 1975. 11. Donnan, J.A., and P.A. Victor, "Alternative Policies for Pollution Abatement: The Ontario Pulp and Paper Industry, Summary and Update", Ontario Ministry of the Environment, October, 1976. 12. Dewees, D.N. and D.P. Amborshi, "The Effect of A Sewer Surcharge on Effluent Concentration", unpublished paper, Institute for Environmental Studies, University of Toronto, November, 1975. 13. Dewees, D.N. "Economic Considerations in the Selection of Pollution Control egisl la ti on", Osgoode Hall Law Journal, 10:3, December, 1972, pp. 627-646. PANEL PRESENTATIONS

February 21, 1977

RICHARD ROBBINS:

Unfortunately, I walked out of my office with the wrong comments. I am going to give this talk anyway, because I think it is applicable to what is going on here.

It is evident that many of you cannot get to the water conveniently because of the cars blocking the main street. You have taken many precautions and tried a number of remedies, but they are not working well from what you see. I would like to talk more directly to some of the issues.

Parking is basically pollution - it pollutes the street with vehicles you do not want. In much the same way as water pollution controls, you have chosen a number of remedies that do not work very well. You have set up a permit system, not unlike the NPDES program in the United States, which essentially is cumbersome and involves a great deal of litigation. You have set up controls similar to the 208 areawide waste water program to control future parking in the region. But it too is bound and troubled with uncertainties and it does not seem like it is ever going to work.

Your case law does not support you either. Long ago it was decided that every person seems to have a right to park (as long as there is no contravening statute). However, your nuisance law - which you have just about forgotten about, and which is largely disregarded - seems to give you authority over parking, notwithstanding that right to park, providing you can prove some public interest. There is even an old case in your jurisdiction which essentially says that under nuisance law you can bar a funeral home or some other thing that bothers people, notwithstanding the fact that you could not prove that there was a specific relation to health or other damage to the community. What are you doing about parking with respect to that particular old case?

You certainly have not done very well, but there are many things you can do. You do not have a million parkers illegally parking as they do in New York City. You could very easily set up some sort of an administrative tribunal, or some sort of alternative that was based on why people were still illegally parking, what potential remedies were for illegal parking, and what you could do about it.

(1) Editor's note: There are numerous unstated parallels between parking pollution and water pollution controls in this talk. I think you ought to do an in-depth investigation of all the means of parking control you have. Does that guy going around on a little motor scooter, with a stick and chalk, have any effect on whether people park? Do your fines or fees have any effect on people's parking? What is working and what is not working and in what particular situations are these particular parking controls working? Do your permit processes work? Does litigation work? Is the Japanese system likely to work, or citizen suits, or punitive assessments?

Everybody in your community has his own reason to park illegally. Why not find out what that reason is, and tailor your remedies, so that. those people either may or may not park illegally in the future?

Sometimes you should ticket the Mayor. Divorcing enforcement and monitoring from political considerations is very critical. You.need an ambitious advocate, and one who is not constrained by political considerations. Your lawyers right now have what we call a lawyers relief act in enforcement of these parking regulations. Most of them in our community seem to make money, and to spend most of their time in court fighting standards and controls systems. As well, those people who could be designing the proper parking enforcement systems, are spending their time testifying for present regulations.

How can you mix parking meters, with regulations, with fines, and new parking garages? That is one thing you ought to find out and find out quickly. What about mass transit?

So you are developing a whole list of controls. We suggest instead that you figure out what is working and what is not working in what particular case, and where you want to go from fiere. You ought to seriously consider the public health issues from people being unable to get to the beach. You are not merely protecting water supply, or protecting people's access to clean water by getting rid of that parking. You are also protecting something [public health and welfare]* and that ought to be the objective of your individual regulations--not merely controls.

Your system is unfair. Many understand the inequity of it, from different points of view--the environmentalist, ,those people who park, and businessmen who benefit from the system. your system ought to be more equitable, and ought to relate more clearly to what people need, to the needs of the system, and to the needs of those people who are illegally parking. Like the pollution agencies, drop your police-like coersion. In all cases, universally fight across the board, and apply something more sensitive to the need to get to the beach, to the need for parking, and to the needs of the businessman to have the parkers nearby.

DANIEL CIONA:

I am going to bring out four points which I'think represent the municipal viewpoint. All four points are covered in papers.

* Brackets indicate editor's notes and sections which were clarified.

8,2 Waste, garbage or whatever you want to call it, is probably the key item we should dwell up on in the future. From everybody's point of view: from the individual family unit, the municipality, federal, provincial, what have you; the less waste we generate, the less waste we have to get rid of. This is one of the physical methods that Bower advocated in his paper.

The law is not very kind to a private person, private individual, private company when it is in disagreement with the law. Time and time again if you take a contravenor to court, the public body is always at the short end of the stick. Estrin highlighted that in his paper; I do not have to dwell on it. It is very important, and something else that has to be dwelt on in the future. Each individual tax payer not only has to look after his own waste, his water rates, sewer rates, garbage rates - right down the line - he has to contribute to the public purse, which then looks after the provincial/state waste. Then on top of that, he has to contribute over and above that to try to get rid of industrial waste through subsidies, law enforcement and various other means. John Q. Taxpayer is at the very bottom of the list.

In the Dewees paper, one point I would like to highlight, and refer to from a municipal viewpoint is this: municipalities are always, or at least usually, looked upon as culprits because we do not identify with enforcement standards. One of the reasons we do not is that when there is some industry, some organization that has gone over the limit, we have to do some arm-twisting, use moral suasion, or threaten, or we cannot get compliance. This is why I would highlight the effluent charge as being one major possibility to use to try to get particular polluters into line. [With charges, we would need to use a lot less pressure].

In his paper, Haynes mentions penalties in proportion to financial savings and court orders to supervise a judgment in reducing or rectifying a pollution hazard. These seem to be serious methods that should be addressed. The judge [Haynes referred to] is quite different from all the other judges 1,have run into. It seems [that his finding in applying the Michigan Environmental Protection Act to the operation of a sewage treatment plant contradicts my point of view.] But notice who was the contravening party in that case; it was a municipality. If you found that the contravening party was a private corporation, private citizen or what have you, things would be quite different, I am sure.

DR. MITCHELL ZAVON:

It is very easy to draw mistaken conclusions. When I walked in, I came to the immediate conclusion that to be a proper lawyer, you had to wear a vest. If you were wearing a vest, you obviously were a lawyer. Then I found that one of my colleagues here was wearing a vest, and was not a lawyer. Obviously my conclusion was in error. I think this is one of the problems we face in the area of what I might refer to as pollution control. We have another problem for people like myself. As a health person, as somebody professionally involved in health and health protection for more than a quarter of a century, you find when you work in a health organization, that you do not have to question motives. People may differ as to how they go about things, but basically they are all involved in one form or another of health care or health protection. Then when you get into municipal, state or federal government or industry, you find that that is not the case at all. People have different objectives and you sometimes have to question their motivation.

There is one point on which I think they all share the same objective. I know of few, if any, people in industry who have gone to work deli- berately to harm people, and yet, this whole conspirital theory of history that encompasses much of our environment today would have you believe that when something is not working it is because the people on the other side, whatever that side is, are in some sort of conspiracy. I had a little discussion with one of our foremost regulators in the United States a couple of years ago. I said, "Look, when you come along and tell someone that he is producing a cancer-causing material that is causing cancer in his factory, and he says, 'No, I am not,' just remember that he is doing exactly what the cancer patient does when you tell him that he has cancer. The instinctive reaction is, 'No, I don't'. You want to remember that, and condition your further response to that initial instinctive response".

I think too much of the adversary procedures that go on are generated from that first immediate reaction of "No, I'm not", or, "It can't be me", and then this becomes an antagonistic situation. I have found it terribly wasteful as I watched procedures, and participated in almost every major fuss since the radiation days of the 1950's when I started in the Colorado Plateau examining uranium miners with the Public Health Service. People get into antagonistic situations that need not exist.

As an aside, there is a point I might make in reference to one comment here a little earlier about keeping people from the beach. It might be a good idea from the standpoint of preventive medicine. We have too many people sunbathing and they are going to develop cancer of the skin in the future. One of the things that has been seriously advocated is to reduce the exposure to ultraviolet, so that in subsequent years they do not develop cancer of the skin. All this nonsense about how much cancer is caused by environmental factors neglects the fact that 60% of the cancer is skin cancer and that is largely from the sunlight. This might be one way of preventing it.

We have tended to lose sight of the need for protection of liberty in response to the need to protect health and the environment. I would emphasize that if we lose any ability to make rational, individual decisions as we protect "our environment" we may well regret that loss more than anything we can think of now. I would like to pose three (3) questions in closing:

(1) Who and what are we protecting?

(2) Laws and regulations enacted without near-term feedback are more often than not wasteful and misdirected. How can we build in correction?

(3) How do we ensure that the biota is safeguarded without making a fetish of control for control's sake?

COLIN Mac FARLANE:

Let me offer my praise to the authors of the papers that have been presented. It is abundantly clear that the arguments have been carefully wrought and well presented. I want to single out for special notice the paper given by David Estrin: "Pollution Abatement: Some Observations on Political and Legal ~ealities". I cannot recollect a more thoughtful or a more lucid discussion of the frailties of our political and legal systems as they affect environmental matters. I must admit that my experience of the courts has sometimes left me bewildered and cynical. I was prone to paraphrase Peter Finlay Dunne's views of laws made during America's Gilded Age: "~awsthat appear to you and me to be a stout brick wall of defense turn out to be a trium- phal arch for the lawyers". On reflection, I now realize that the courts and politics change relatively slowly and only reluctantly do they relinquish habits and rules which have been associated with past success.

I have noticed a tendency in the speakers to associate environmental concern exclusively with the discharge of toxic materials. There can be no doubt that toxic materials command prime attention, but too narrow a range of environmental interest will fail utterly to accommodate the public's view of pollution. It has been my experience that the public seeks to remedy those matters that offend the locally prevailing sense of propriety.

Health commands a more or less uniform respect in North America. However, the public proprieties encompass many conditions that offend the senses without any clear offence to health. I am thinking of the sight of algae in a recreational lake, the smell of a meat packing plant, or the noise of passing trains. The degree of offences that these create vary dramatically from town to town and from time to time. This variability posses a nice question. Should economic sanctions on pollution be tailored to local feelings? Whether we like it or not, it is fairly certain that a court's view will be markedly influenced by local feelings.

Lastly, it is becoming clear that the contribution to air and water pollution, made by urban (as contrasted with industrial) activities, is taking on a much greater significance than most of us had really recognized. For example, it is beginning to be noted- that street dust is often not only a predominating source of airborne particles, but it can also have a very marked effect on the discharge of waterborne solids and oxygen demanding materials into waters. Those who deal with both industry and municipalities, will immediately recognize that we tend to deal with municipalities with a great deal more sympathy for financial burdens than we do industry. This is implicit in the number of communities that are still without sewage treatment plants in North America.

I will leave aside the matter of land use planning which I feel is a major weapon in provident environmental management. Never- theless, I hope that it will receive attention in the course of the meeting. PO Z NT SOURCES HIGHLIGHTS-MORNING GENERAL DISCUSSION

ADMIRAL JAMES GRACEY: I had a concern about the Japanese system [compensation to victims]. As I understand it, we feel that if we just find some way to pay those who have been harmed by the pollution, it is okay to pollute. It seems to me that is kind of like saying we really do not have a gas shortage, all we have is people who are unwilling to sell it. It may be a short term solution, but it does not recognize the long range problem.

JEFFREY HAYNES: [Let me] elaborate a bit on the Japanese system. The compensation provision of that law dovetails with standard-setting. One of the large questions involving that law now is the extent to which the compensation not only acts, as a deterrent, but also allows dischargers to engage in risk assessment for their pollution discharges. The compensation system is not meant to supplant standards, but rather to act as a supplement to them, just as the Michigan Act is not necessarily supposed to supplant current regulatory standards but can act as a supplement in enforcement as well as in standard-setting.

JONATHAN ELA: It seems to be that there has been one aspect that has been somewhat neglected in the exceilent presentations we have had. That is the political context within which any mechanism is adopted. It seems to me that the concept of regulation and standard-setting in enforcement got a bit of a bum rap, because it is so easy to find where it has failed. Perhaps part of the reason it has failed is not due to , the defects of the concept itself, but rather to the specific political circumstances in which the actual Act was drafted, and the defects in the draftsmanship that took place at that time - I am thinking of 92- 500 in particular - and also the fact that there has been, at least in the United States, I think, a lack of political will to implement the Act once it was passed.

Certainly, in spite of its cumbersomeness, I would think that 92- 500 would have been more effective if we had not had impoundment of sewage grants, if we had not had under-funding of the Environmental Protection Agency, if we had not had a certain lack of will, both within the Executive and the Congressional branches in the last few years. I wonder - although certainly the arguments are persuasive for at least supplementing this approach with other approaches - if there is not a real danger in assuming that the problem is with the concept itself, [because, if we] reject the concept, and then, perhaps when we are at the point where it can take hold, [we go] with an entirely new concept, [it] will also have a difficult shake-down period. Adding to that, I do not think there has been any approach, whether it is in the field of taxation or regulation, that those affected have not been able to thwart if they are politically more powerful than those who have the social objectives that the law that was passed was supposed to address itself to. Maybe there is an almost entirely independent political

------indicates topic change context that has to be taken into account when devising changes, supplements or amendments to the systems that we are working under now.

BLAIR BOWER: Clearly, in any society, if there is no political desire or if the society has no consensus to implement any kind of system, it will not be implemented. PL 92-500 has to some degree actually been implemented, if you measure that by the number of discharge standards and permits which have been issued. The Environmental Protection Agency has done an amazing job in one sense. [First,they got some numbers. You may disagree with those numbers, as in some cases I have to disagree with the numbers, but the numbers have been developed. Second, on the basis of those numbers, in negotiating thousands of permits. ] I One of my questions is: to what extent do those permits as negotiated actually (a) induce action; and, (b) provide sufficient reduction in discharges to achieve the ambient environmental quality standards? The Act has been implemented with emphasis on point source discharges. Analysis shows very clearly that in many cases you are never going to achieve the agreed upon and adopted ambient water quality standards by a hundred percent reduction in point source discharge. We have concentrated, for at least to some extent political reasons and because of the assumption that non point discharges are much more difficult to get at, on point source discharges in the process of implementing 92-500 in the United States.

Another point: any system for implementation required some set of compliance monitoring and measuring and the application of sanctions. This is just as true of effluent standards as it is of effluent charges. One of the important differences between the two mechanisms, at least in our context, is the problem of negotiating individual discharge permits. If you look at the history in the United States, you find that this is one of the most cumbersome parts of the process. It is where you have another chance to get in and modify the objectives by the process of local political negotiations.

In the case of effluent charges, where you might, as someone has proposed, be looking at a regional context, not at the context of individual discharges, I think there is a greater possibility for reducing the play of powerful political forces. That conclusion is based on behaviour patterns over a long period of time. I think it remains to be seen whether that is true. [However,] if you look at tax policies in the United States as they are established, say in metropolitan areas, I think you will find there is a good case which can be laid that where you expand the spacial purview of the decision-making process, there is a greater chance of reducing the political potency of even the General Motors Corporation.

DON DEWEES: I think the point that without the political will no administrative system can succeed is an important one, and perhaps is why retaining some private remedies of the type that David Estrin talked about is important. If the attorney general will not sue, and the political environment has shifted away, there is a serious problem. Then, if you have a law that allows private actions, you can still have some sort of activity. If you have a two-part system of public enforcement and some private remedies, then a collapse or a lack of will on the part of the political process does not leave the individual completely helpless.

I think that raises one other nice feature of a charge system of the type I have talked about - and this is not generally acknowledged by economists as.being important. It brings in money, and in a political system both in Canada and in the United States, that is a feature that will not long escape attention. Even if the political will to control pollution were to falter at some point, the political enthusiasm for revenues is likely to be undiminished.

Even though we have not had very good success with the existing regulatory mechanisms, I would not suggest that they be entirely scrapped or replaced with something revolutionary. I think rather that what is needed is some blend of the best characteristics of the two. I would see a charge system of the type I have spoken of as being a useful and efficient means of enforcing a set of emission or ambient standards. Instead of writing a law that says that the penalty shall be a $1,000 fine if you are caught, you can write a law that says, you shall pay 10~ a pound for all discharges that exceed the standard. You maintain the standard; you simply add a regular payment rather than the cost of litigation or a potential fine for the violation.

MITCHELL ZAVON: I have long been intrigued with the concept of effluent charges as a means of accelerating the development and imposition of new technology which will control the residues, but only if the effluent charges are used as a fund for subsidizing those who have to pay them when they are in competition with industry that is not under the same duress. I think our society must recognize that we are only two nations in a very large world. If we impose controls on our environment which raise the cost of productivity, raise the cost of production to the point where we as a society are non-competitive with other societies that are not controlling to the same extent, then we have to make a conscious decision either to eliminate that particular form of end product, whatever it may be, in competition with less-regulated enterprises elsewhere in the world, or to subsidize [the industries] for finite periods of time, perhaps to re-evaluate the subsidies every three years or every five years on a strictly economic basis.

DAVID ESTRIN: Doctor, would it not be helpful, though, to take a look at the diseconomies of the continuation of the kind of effluent that is going out, and the savings that might result in public health care costs, if you do, in fact, cut back on the emissions going out? Say that it is going to cost. At the same time we may indeed affect a great deal of savings in public health care costs. MITCHELL ZAVON: Let us look at the case of the individual entrepreneur who has to make a decision on whether capital is going to be invested or not invested. Take a factory employing 50 people. The owner of that factory has to determine whether he is going to get more money for pollution control equipment. -You may find that not only at present prices can he not replace his original equipment through production, bu,t he cannot even get money from the bank for pollution control equipment. The savings in health may be very real for the society, but for that individual, or perhaps for that small town that is dependent on those 50 jobs, that is something off in the distance, and it is nice to talk about, but in practical terms it does not really mean a thing.

BLAIR BOWER: So far as I am aware we have not succeeded collectively in any transboundary situation to arrive at mechanisms for efficient and equitable management of common property resources. The one area where it appears some real management system is being developed is in the recently signed Scandinavian agreement which provides explicitly not for just a planning document, but for the implementation of measures by each of the countries in relation to the common property resource. If we economists are at all correct in believing the evidence which exists for behaviour in somewhat market-oriented societies - and this is even true under some of the eastern economies where modern techniques are being used - then many kinds of activities do, in fact, respond to an economic incentive in the way the classic textbooks suggest.

I would argue that there is basically no reason why the Inter- national Joint Commission could not consider as a mechanism for inducing more action, on both sides of the border, the adoption of an effluent charge. This could be on phosphates; it could be on organic materials; it could be on suspended solids. The technological basis and the economic basis for'such a charge is just as valid in a transboundary situation as it is is within the country, as far as I am concerned. There are, I suspect, perhaps more political problems in the transboundary situation; on the other hand, there may be less, in attempting to move toward the adoption of some sort of effluent charge or some sort of economic incentive. The reason I say that is I think that - and I am not that familiar with the situation; I have not followed it that closely - if you look at the history of what has happened over the years, there is some disparity on the two sides [Canada and the United States] about moving and how far you moved ahead. You have the problems of trying to get individual discharges and non point sources regulated and enforced, and you have the problem of responding to a dynamic situation in which economic conditions are changing, production is changing, increasing, etc. The fundamental question is can you ever move rapidly enough with the old techniques in this kind of situation to achieve the ambient quality standards? My conjecture is that the answer is no. I believe one would have to move toward some set of economic incentives grafted on to what in the United States would be best practicable technology (BPT). Start with a set of ambient standards which have already been adopted. Assume that everybody gets BPT - a lot of people aregoing to make it even by the deadline - now what do you do in addition? How do you go further to meet these standards? I would argue that probably the most flexible means is to move into some sort of effluent charge.

MAXWELL COHEN: I give away no secrets when I say that the prevailing mystique in the Connnission is that the Agreement is a towering achievement in many ways, judged by global standards of interstate co-operation. Therefore it is rather difficult for me to not try to add some kind of perspective of the achievability of human ends in an imperfect world. On the whole, those who designed both the Boundary Waters Treaty in 1909 with its remarkable Paragraph 2 in Article 4 "though shalt not pollute to the injury of health or property", and those who drafted the more sophisticated and elaborate Agreement of 1972, really drafted better than they knew. The richness of the possibilities for two countries to co-operate on a major resource is, I think, as great as the public will behind,it, the imagination of the bureaucrats running it and the stimulus

' of the academics supporting it or needling it.

In a way then, we have an enormous headstart on much of mankind. You only have to look at the Rhine and the Danube and other places to realize in what lousy condition those rivers are. I spoke to some members of the Rhine Commission. They cannot even exchange data; they have not even got an agreement yet on simple data exchange, whereas we are reaching a stage where, in all frankness, we have foregone the full flavour of sovereignty on both sides of the border. There is no absolute sovereignty left in the sense of being able to do in the Great Lakes Basin whatever you wish to do; you just cannot do it.

What I would like to see is the evolution of some common market of enforcement method--the Swedish, Scandinavian idea. The eleven governments ought not to be so far apart in methodologies here. There, I think, lies one of the interesting and imaginative opportunities for the future: how to get them closer on the whole programme of enforcement. On principles, they are well along the way.

PETER VICTOR: We have just been talking about agreement, or lack of it, between people from different jurisdictions. The kind of agreement I want to talk about is. agreement among the panelists, because I think there is really less agreement than meets the eye. That there should be some agreement in terms of analyzing the problem of pollution, and its control or lack of it, is perhaps not that surprising. We have heard from the economist that the market system, for various reasons, has not been able to deal with pollution control, partly because private rights to air and water have not been established in the past. We have heard from the lawyers that the legal system, which is based very much on private rights and private interests, has also not been able to cope. The fact of the matter is that the legal system and the economic system have evolved in tandem; both are centred around the importance of defending private interests; and both have been unable to cope with air and water quality to any great extent.

Now, what do we hear from the economists? We hear that part of the answer to the problem is to extend the applicability of the market system and the guides of effluent charges to resolve pollution control. I do not think we are hearing the same thing from the lawyers. What we are hearing there is that we have got to find means of giving expression to public interest in the environment. There need not be disagreement at this point. If we are just being told by the economists that effluent charges are a useful means of enforcement, then we can reconcile that kind of mechanism for enforcement with the public interest, however defined and arrived at. On the other hand, economists often go a lot further than just recommending charging schemes as a means of enforcement. They recommend that economic calculus be used to determine the desirable level of environmental quality. This is really leading up to the question I want to ask, and that is, are the economists who have spoken to us today really telling us that? Is this how far they want to take an extension of the market, into actually having it determine, by means of cost-benefit analysis and other such tools, the level of environmental quality that we should be heading for? If so, I think that is the point at which they will part company from the lawyers, and I would like to have clarified, maybe by at least one of the lawyers or one of the economists, whether I have been right in saying this is a point of agreement or disagreement.

DON DEWEES: Let us look at the calculation that would be done for an economist to be satisfied about perfect setting of effluent charges. It requires an ability to estimate the benefits of pollution control in dollar terms, and then taking the first derivative of that; in addition he would be able to estimate the costs. I have looked at a lot of pollution damage or pollution control benefit studies, and I do not think we are there yet.

That is not entirely the economistsf fault. Frequently, the marine biologists and the physicians cannot tell us what the physical consequences are of a given amount of discharge, or at best we have an idea that X% of some disease may be caused by a pollutant. But that is not enough. To do the perfect calculation the real question is, if we reduce the discharge of a specific pollutant by 25%, by what percentage would the incidence of a given disease be reduced, or the mass of fish in the water or some other index be increased? Rarely can the physical scientists or the life scientists give us the answer to that physical question, and without that data one cannot do the ideal economic calculation. When you come up with a physical figure, we will come up with the dollar value. I do not see that coming for some time; the methodology is much too difficult; our uncertainty is too great. So, as a practical matter, I think that what we are left with is getting the best handle we can on benefits, and that may be purely descriptive; if we could eliminate all discharge of PCBs into a water course, we think that the following would happen. Or, perhaps more importantly, for some pollutants there is a threshold below which we are not aware of harm. Above that threshold there may be a substantial degree of harm. In that case, there is a strong desirability to get below that threshold if it is economically feasible, and there, I think, a sensible objective might be to meet that environmental quality standard. In other cases, say, with phosphorus, there is no clear cut-off. There is not a certain concentration below which, no effect, above which, disaster. In that kind of case I cannot say how far we should go. I think it makes sense to say that reducing the phosphorus discharge by a kilogram may be equally useful at a variety of densities, and that an economic mechanism saying it is worth ten cents a pound, or whatever it is per pound, makes more sense than saying we ought to meet this standard,because there is no basis for most standards we can think of.'

What I am saying is that it may be possible to identify the shape of the function, the relationship between the damage and the concentration, more easily than we can put a dollar value on it. If we could identify the shape--is it a step function, is it continuous--that may be enough to greatly assist us in designing policies.

DAVID ESTRIN : I think the public has a role, whether we're talking about economic mechanisms or legal sanctions, as the device to be used. I think Don Dewees is saying that he sees a role for both economic methodology and legal sanctions. Both of them can use some development and honing and improvements. Indeed, my own personal view is that the legal system has a very limited role to play in many areas, and economics, in terms of the discharge penalty, also has its limitations. We have to bring these two together. If one assumes that is the method to be used, the public, nevertheless, has a very important role to play because we are still going to have an agency deciding when to set effluent standards and when to impose discharge penalties, and how much. There must be a lot of agency initiatives whether they are in an economic or a legal framework, and the public has to play a major role within that agency's thinking .

JEFFERY HAYNES: To the extent that lawyers are involved in any sort of political system, there will be a problem in quantifying economic benefits because lawyers do not deal with that necessarily. They deal with trying to enforce laws as written. Political processes and congressional enactments do not necessarily reflect accurate cost-benefits. I would give you the example of the Bill of Rights, which does not take account of dollar values in protecting criminal suspects. I would also say that there are a couple of systems now in existence, legal systems, that we need some experience with before we decide to junk them. The Federal Water Pollution Control Act Amendments is one. I gave two other examples [in my paper] that are still in a nascent stage. There is a lot of study to be done with them.

Now to say something about lawyers. Lawyers come in at the end of the process as they always have; protecting rights that have been in- jured, and I would see that as a basic distinction between the economist's role and the lawyer's role.

DICK ROBBINS: We have enough quantified public health issues in our water pollution control, but it seems like the 1972 Amendments and the activity in the last few years have been based upon unquantified fear of a hundred thousand or so man-made chemicals in the environment. How do your enforcement mechanisms deal with that kind of proof, or the economics, the public benefit that is gained from water pollution? That is one question. The second question is this: why do we not experiment in some way or another with a model approach to pollution control, isola- ting some areas in the Great Lakes, and attempting a comprehensive programme?

I still do not see, how you are dealing with the [fact] that we are really involved with two major systems: the industrial polluter and the water a number of feet or a number of miles away from his pipe that goes into the lake--right there is where we are working. We are working on effluent charge or enforcement. But as there is a whole public health area outside as well as the great economic and job loss issue and a whole bunch of other issues, where do your solutions or proposals fit that particular set-up? [Summary answer: with difficulty.] VIEWS ON THE ENVIRONMENT

Stephen Lewis*

I begin with an instructive little Indian proverb:

"The frog does not Drink up The pond in which He .lives. "

.... A pithy and predictable insight which ancient aphorisms, and the like of Aesop's Fables often brought to the attention of humankind, usually without effect.

In North America, the mere sullying of ponds is entirely passe. We have graduated to much higher levels of sophisticated depredation, so that there is now scarce a river or stream, tributary or lake, which pretends to pure water quality. That's quite a stunning achievement, all in all.

This speech is not intended, however, to be a quest for lost innocence. Moreover, I shall be much more tentative than definitive. But I truly appreciate the opportunity provided by this engagement because many of us in the New Democratic Party are coming to recognize, perhaps too slowly, that fresh water is probably the most precious limited natural resource we have, and that its unrelenting despoilation has reached epic proportions. I could cheerfully kick myself for being a part of the delayed reaction: but self-flagellation - even in politicians - is largely irrelevant, and almost never a useful route to social change.

First, assorted truisms by way of context. As an indispensable resource, the use of water, in its pure state, should be a right for everyone. No one user of the resource, nor multiple users, should have the unbridled opportunity to restrict or to impair its use for others. Yet that's exactly the contemporary pattern. Because the use of water as a receptacle for waste has been free, polluters have had .irresistable incentives to use adjacent waterways as a kind of private sewer.

The consequences are now writ large for everyone to see, and to regret. It's not just the loss of drinking, fishing, recreation, tourism and related personal or economic activities; it's the destruction of livelihoods dependent on those activities. For short-term economic advantage, we are hazarding long-term economic insecurity. It just doesn't make any sense.

The roll-call of persistent contaminants in Ontario's waters, or those which we share with the U.S., now conveys an enveloping litany. This is a knowledgeable audience, but let me remind you of some highlights.

* This speech was given by the Honorable Stephen Lewis, Member of the Ontario Legislative Assembly, Leader of the Opposition, New Democratic Party, at a luncheon, February 21, 1977. 1970, April: a total ban on all commercial fishing in Lake St. Clair due to mercury contamination in all species of fish. The economic consequences have been predictably catastrophic. According to Statistics Canada, Lake St. Clair fishermen in 1969, caught 919,000 pounds of live fish, valued on the market at $333,000, with equipment valued at $354,000. By 1975, the catch was zero, the value therefore zero, and the number employed was zero. It is safe to estimate that the intervening years have seen a loss of more than $2S million in gross income - hardly compensated for by a series of forgivable loans averaging out to about $7,5000 per fisherman. This coming March 15th will celebrate the sixth - the sixth - anniversary of the government's suit filed against the Dow Chemical Company. The prospects of this memorable writ ever coming to trial rival sea-faring fantasies about Oak Island treasure.

1970, April: a total ban on all commercial fishing in the English- Wabigoon river system due to mercury contamination in all species of fish. To this day, the Indian bands affected still have no adequate, alternative food supply. I suspect that the consequences to human health comprise a saga yet to unfold. Welfare costs on both major reserves had more than tripl'ed by 1974. There were, of course, no forgivable loans for the Indians. And no legal action - neither illusory, nor symbolic - has ever been threatened against Dryden Chemical.

1971: the Michigan Public Health Department issues its first warning about the presence of PCBs in lake trout and salmon caught in Lake Michigan - some registering twelve times the U.S. limit of 5 parts per million.

1973-74: the environmental scandal involving the Reserve Mining Company and the violations of water discharge permits for the western end of Lake Superior. The subsequent $1 million fine is salutary, though it cannot begin to approximate the long-term social costs of thorough clean-up.

1975, Spring: sufficient mercury found in fish from Lake Timiskaming to result in the issuance of warnings, by the Ministry of Health, that no fish should be consumed by pregnant women, nursing mothers, or young children.

1975, May: United States Food and Drug Administration seizes 124,812 five ounce cans of salmon, caught in Lake Michigan, showing PCB levels of 10.9 ppm.

1975-76: American-Can of Canada Limited at Marathon exceeded, regularly, the daily maximum emission levels of mercury under the chlor-alkali regulations of the Canada Fisheries Act. Discharge was into Peninsula Harbour, Lake Superior. Charges were finally - albeit reluctantly - laid by Ontario in October of 1976. 1975, Fall: the Credit River was found to show PCBs in coho salmon at a mean level of 10.55 ppm - the Canadian standard was then at 2ppm.

1975: PCB levels in lake trout in the Isle Royale section of Lake Superior range as high as 13.8 ppm.

1975: Lake Huron fish show PCB residues above the Canadian guideline.

1976: January: ban on sale of Lake Ontario eels because of PCB contaminat ion.

1976, April: Ministry of Health warns against eating smelt, suckers, catfish, and white perch taken near the Hearn generating plant or Frenchman's Bay, Lake Ontario - high PCB counts in all species.

1976, June: Algoma Steel Corporation at Sault Ste. Marie- thought guilty of excessive discharge of cyanide when readings rise well above permissible drinking levels downstream from the plant.

1976, Summer: Trent University students find unacceptably high levels of lead in fish from Stoney Lake, near Peterborough.

1976, July: Ministry of Health sounds alarm on Mirex in Lake Ontario, affecting coho salmon, white bass, yellow perch, white perch, brown bullhead, smelt, rainbow trout, and brown trout.

1976, September: U.S. Environmental Protection Agency confirms presence of kepone in Lake Ontario Fish.

1976, October: Ontario warnings issued against consumption of pickerel and pike with high mercury levels in Lake St. Frances and Lake St. Lawrence.

1976, December: further warnings - monotonous, regular, repetitive, anxious - about excessive levels of mercury in fish found in Ottawa and Rideau rivers. It seems the ultimate heresy that the National Capital itself should be threatened.

1976, December 30: Ontario Ministry of Health gives festivity a new dimension by ringing out the old year with warnings of excessive mercury levels in pickerel from the Thames River, a tributary of Lake St. Clair. 96.4% of fish tested were above the guide line of .5ppm.

1976-77: Serpent River system, near Elliot Lake, according to an MOE Status Report, shows contamination from radioactivity, ammonia, sulphates, lime, and other dissolved solids. The drinking water source for the town of Elliot Lake is apparently affected, as is, more directly, the drinking supply for those resident on the adjacent Serpent River Indian Reserve. The President of Rio Algom soothes the troubled waters by simply asserting that 11 ...what goes into the watershed is acceptable. The disposal of tailings can be done in a way that's not offensive. And if you look at these tailing sites, they are not offensive. Once they're revegetated, they look like football fields." Thus is corporate pollution aesthetically endowed. 1977, February: Minister of the Environment announces that arsenic is leaching into ground water from abandoned mines in the Cobalt area, and that arsenic has also been found in the Moira River.

As an +ominous, if inexplicable, counterpoint to this increasing tempo of water systems endangered, damaged, or destroyed, there were frequent statements about evidence of mercury contamination in a dozen different, and disparate lakes, large and small, all over Ontario, without any obvious industrial sources. Pushed to explain, the Hon. George Kerr, Minister of the Environment, said in committee, last November 29th, with a kind of sardonic exasperation: "I was handed a note here that Dr. Jemelow, who is a Swedish expert, says there are 100,000 metric tons per year of mercury descending on the earth's surface through de-gasification of the earth's crust. We may be fighting a losing battle here. Who knows?"

Oh yes indeed, and isn't it truly wondrous how so much of that degasified mercury finds its way unerringly into Ontario. Perhaps the I.J.C. should take a look at the C.I.A.

I have produced this list - terribly partial in its scope - primarily to emphasize that more battles are lost than won in the restoration of water as an undefiled resource. The job ahead is really quite awesome, not to say frightening. The I.J.C., in its own documents, talks of the nearly two thousand new chemicals released into the environment in the last couple of years alone - chemicals for whom the consequences are as yet unknown to scientists, public, or government.

In your Great Lakes Water Quality Annual Report, within the chapter titled "Toxic and Hazardous Polluting Substances", you rattle off PCBs, mercury, DDT, dieldrin, Mirex, chlordane, HCB, phthalates, cadmium, arsenic, zinc, lead, and nickel, as substances with higher or lower concentrations in various sediments of the Great Lake systems, and with the obvious capacity to "accumulate in food chains to the detriment of human health and aquatic ecosystems."

Things have gone so far that unlikely and bizarre touches now illumine the scientific studies which chronicle declines in water quality. Imagine herring gulls from Pigeon Island in Lake Ontario found to contain residues of fifteen organochlorine compounds and fourteen polynuclear aromatic hydrocarbon compounds in their tissues. It sounds more like science-fiction than bird-watching. Is it any wonder that those gulls have significantly lower reproductive success? And just how many of these chemical compounds will turn out one day to be carcinogens - carcinogens to which humans are susceptible?

Politicians need not be defeated by the information which surrounds us: but nor can we be either sanguine or optimistic. Let me speak from the experience of Ontario. Last July, at the IJC annual meeting, Mr. George Kerr talked fulsomely of ~ntario'sprogress in cleaning up the Great Lakes. And in comparative terms, he's right. Our record or response is, I think, better than several of the U.S. jurisdictions, and does provide for some patriotic chest-thumping. Mr. Kerr pointed out that we have now spent or committed $880 million, for the period 1971-1980, directed at municipal sewerage treatment for all the municipal point sources of pollution in the Ontario Great Lakes system. A tidy sum. A noble objective.

Ironically, in the same speech, the Minister pointed with pride to a figure of $250 million from the private sector for similar pollution control. The contrast is really quite stunning. The fact is that industrial polluters are responsible for significantly greater water pollution that domestic sources, and industrial pollutants tend to be more toxic and therefore more difficult to treat than domestic pollutants. Those two thousand additional chemicals aren't coming from your run-of- the-mill garden-variety garbage collections.

So here we have fully seventy per cent less in expenditure from that sector whence flows most of the contamination. Again it's the old, old story, the old double standard: a misplaced reverence for the private sector's right to proceed without adequate government monitoring, regulation, or intervention. I don't think that that's an analysis which can be faulted because it reflects a special bias or special ideological pleading. It simply remains to assemble the evidence.

Over the next several months, in a number of forums, the NDP intends to attempt an analysis of the debasement of our water resources, largely as a result of inappropriately regulated industrial pollution. We intend to trace the proliferation of dangerous chemical' discharge, sector by sector. We intend to try to show how control orders and ministerial orders placed upon individual companies, are drafted,with absurdly generous provisions for compliance. We intend to demonstrate the poverty of existing legislation. We hope to tabulate the enormous social and human costs which society bears - through jobs lost, health impaired, incomes forfeited, tax concessions granted, and the additional government expenditures required to provide the remedies which govern- .ment should not have to privde. We intend, above all, to show the pattern of sheer economic mismanagement - yet another chunk of our natural resource base squandered or imperilled.

The truth is, I would submit, that despite several allegedly good water quality and environmental statutes, we have often failed to develop adequate programs for controlling polluters, failed to enforce even those programs which exist, and failed to punish adequately those who have polluted. That's not a record; it's a travesty.

In an argument of this kind, we look for a microcosm which tells all; an example which speaks volumes. As it happens, we have one. And the documentation is nearing completion. I speak of the pulp and paper industry, long amongst the most notorious of water polluters, and an industry which currently dumps about 87 per cent of the oxygen depleting substances discharged by all industries directly into ~ntario'slakes and rivers. A politician might wax eloquent with such material; I shall of course invoke only twitches of hyperbole. The facts are pretty potent, unadorned.

As far back as 1965, the government of Ontario decided to get tough with pulp and paper polluters. The Ministry of the Environment set specific, and realistic water quality objectives for the industry. They were to be met in two stages; December 21, 1966 and December 31, 1969. The first stage required the removal of suspended solids from the effluents down to a level which seemed appropriate for eacll mill. The second stage, also on a mill by mill basis, involved reducing the amount of organic matter in,order to maintain adequate oxygen content removing substances imparting taste and odours to the receiving water, or to fish; removing substances toxic to aquatic life; controlling waste components which would impair the aesthetic quality of the receiving waters by foam, colour, or other effects.

Compliance with the 1966 deadline met with uniform failure. Compliance with the 1969 deadline met with uniform failure. Or, to put it another way: protection of the Great Lakes and related waterways met with uniform failure.

Somehow, the industry traduced the government into conceding that even the impotent guidelines were too much to expect, and then the parties entered into a series of voluntary programs which were "technically feasible and were not financially damaging."

The quite astonishing lack of government resolve is epitomized by the incontrovertible fact that between December 1966 and December 1971, there were a total of 12 convictions registered, under the Ontario Water Resources Act, against pulp and paper companies throughout Ontario. The average fine was $812.50!

As Dr. J.A. Donnan and Dr. P.A. Victor quietly understate in their comprehensive study of the "Ontario Pulp and Paper Industry: Alter- native policies for Pollution Abatement",

"It is essential to realize that, in the present economic and legal context, companies have a powerful financial incentive to continue polluting the air and water...Fines of this magnitude provide the companies with virtually no economic incentive to incur the much greater costs for pollution control."

It would be nice to believe that those words were written in 1971 when the failure in government policy was already clear. Alas, there isn't the case. Donnan and Victor were writing in late 1976 after another five years of co-operative programs and ministerial negotiations had resulted in non-compliance on almost every count. In short, for more than a decade the government of Ontario, knowingly and voluntarily, permitted the continued, and often gross pollution of major Ontario lakes and rivers by the pulp and paper companies. In large measure, the taxpayers will now foot the bill. The data which substantiates government neglect is now available for all to see. Studies were done in 1970, and again in 1975, to examine, scrupulously, the extent to which the mutually-negotiated targets had been achieved. The studies look particularly at changes in suspended solids and 5-day biochemical oxygen demand (BOD5). For those who may read this speech, but are untutored in the intricacies (as I am) of environmental standards, I should add that these are only two of several indicators of water quality, and say nothing about heavy metals or other toxic contaminants. They are, however, crucial. Suspended solids coat the bottoms of rivers and lakes, smother aquatic plants and animals, destroy fish habitat, and impair the aesthetic qualities of receiving waterways. Decomposition of organic materials can so deplete the oxygen supply in waters as to threaten the very survival of aquatic plants and animals.

Looking at the two crucial indicators then, we find that of the 31 pulp and paper mills discharging directly into Ontario water courses, 28 have failed to meet the target for oxygen demand, and 25 have failed to meet the target for suspended solids. Indeed, between 1970 and 1975, conditions actually deteriorated in 12 of the 31 mills! It sounds to me as though there's a lot more desecration than preservation at work in Ontario waterways.

Even closer scrutiny of the figures reveals the following: the target for all mills for the discharge of suspended solids was 103 tons per day. After ten years of government regulation, the discharge was 'down' to 269 tons per day - some 161 per cent above the objective. The target for all mills for the discharge of BOD5 was 153 tons per day. After ten years of government regulation, the discharge was 'down' to 860 tons per day - some 462 per cent above the objective.

We are allowing those precious water resources to be damaged sometimes irreparable - as surely as if we owned the polluting companies. Indeed, things are so severe, that the Ministry of the Environment itself, and the IJC have singled out four situations which are potentially dangerous to human health: Reed Paper in Dryden, American Can at Marathon, Abitibi at Fort William (Thunder Bay), and Abitibi at Port Arthur (Thunder Bay). In addition, five mills are identified as causing gross deterioration to the environment: Abitibi at Iroquois Falls, Abitibi at Smooth Rock Falls, Canadian International Paper in Hawkesbury, Kimberly Clark at Kapuskasing, and Kimberly Clark at Terrace Bay.

The question must necessarily be asked: how are such things allowed to happen? It isn't as if we're working in a vacuum of ignorance. The reason the government initiated a get tough policy almost twelve years ago was because it realized the crisis for our waterways. Yet, it's been downstream ever since.

Even though we appear to have binding and workable legislation, we've sacrificed it to a range of regulatory instruments and conciliatory cajoling which, taken together, are obviously self-defeating. No one likes coercion. Indeed, we democratic socialists have a positive fetish about cooperation. But there's got to be a limit; there's got to be a point where patience is broken. When the public's access to the use of water as a resource is jeopardized by wilful1 industrial pollution, then surely we have a right to cross our version of the Rubicon.

Let me try to recapitulate this way: The Ministry of the Environment in Ontario really has no regulations governing water quality. Rather, the Ministry has set objectives - in the pulp and paper industry for example - objectives which aren't legally binding. The Ministry seeks compliance by negotiating a pollution abatement program with each mill, and the mill agrees to install the required facilities over a specified period. Such programs can receive full approval from the Ministry, and under this approval the firm is shielded against prosecution for the duration of the program, regardless of what they may continue to dump into the water. Even if a given mill shows bad faith in complying with the program, it cannot be prosecuted until the program period ends. You really give up the game and the public interest simultaneously.

In addition, our Minister can impose control orders, or initiate prosecutions. But the control orders can be extended indefinitely (and often are) and the possibility of prosecutions, until recently, has been laughable. There are, at the moment, charges finally pending against three pulp and paper companies, but in the last nearly six years, there has not been one prosecution against any of the 31 companies - not one.

It isn't as if the statutes don't allow for stronger enforcement. They are really quite explicit. The Government of Canada Fisheries Act provides :

Section 33(2) "Subject to subsection (4), no person shall deposit or permit the deposit of a deleterious substance of any type in water frequented by fish or in any place under any conditions where such deleterious substance or any other deleterious substance that results from the deposit of such deleterious substance may enter any such water."

Section 33(11) "(a) any substance that, if added to any water, would degrade or alter or form part of a process of degradation or alteration of the quality of that water so that it is rendered deleterious to fish or to the use by man of fish that frequent that water."

The federal government's policy has been to delegate its responsibility for enforcing the Fisheries Act in Ontario to the Ontario Government.

Then there is the Ontario Water Resources Act:

Section 30 "Under sections 31, 32, 34 and 36 the quality ofwater shall be deemed to be impaired if, not withstanding that the quality of the water is not or may not become impaired, the material deposited or discharged or caused or permitted to be deposited or discharged or any derivative of such material causes or may cause injury to any person, animal, bird or other living thing as a result of the use or consumption of any plant, fish or other living matter or thing inthe water or in the soil in contact with the water. " Section 32 "(1) Every municipality or person that discharges or deposits or causes or permits the discharge or deposit of any material of any kind into or in any well, lake, river, pond, spring, stream, reservoir or other water or watercourse is guilty of an offence and on summary conviction is liable on first conviction to a fine of not more than $5,000 and on each subsequent conviction to a fine of not more than $10,000 or the imprisonment f0r.a term of not more than one year, or to both such fine and imprisonment. "

The Environmental Protection Act says:

Section 5 (1) "No person shall deposit in, add to, emit or discharge into the natural environment any contaminant, and no person responsible for a source of contaminant shall permit the addition to, emission or discharge into the natural environment of any contaminant from the source of contaminant, in an amount, concentration of level in excess of that prescribed by the regulations."

Section 14 (1) "Notwithstanding any other provision of this Act or the regulations, no person shall deposit, add, emit or discharge a contaminant or cause or permit the deposit, addition, emission or discharge of a contaminant into the natural environment that,

(a) causes or is likely to cause impairment of the quality of the natural environment for any use that can be.made of it;

(b) causes or is likely to cause injury or damage to property or to plant or animal life;

(f) renders or is likely to render any property or plant or animal life unfit for use by man."

So you see, it's all there if only we'd make use of it. In fact, there's even more. The Minister also has the power to issue a 'stop order', closing down the offending mill by way of ex parte injunction.

\ The trouble seems to be that there's just too much discretion. The Minister and the Ministry leave themselves so much permissive leaway that, for example, we're only now deciding what action to take in light of the statistical data and information from which I quoted earlier, based on 1975.

Again, Messrs. Donnan and Victor put it with admirable restraint:

I I In principle, the Ministry of the Environment is able to enforce its policy for pollution control by using the provisions for fines, stop orders and control orders that were established by the Ontario Water Resources Act. In practice, the Ministry has been reluctant to utilize these powers of enforcement, preferring to seek the cooperation of the companies concerned. This approach has met with only limited success in achieving effluent control by the pulp and paper industry. " That last cautious reference to 'limited success' encourages me to make two further points which have a considerable irony.

You will recall that during the fall of 1975 and early winter of 1976, the pulp and paper industry in Ontario was virtually shut down because of a prolonged industrial dispute. During mid-strike, as it were, the Ministry of the Environment conducted water quality analysis downstream of the four Thunder Bay mills. The results were startling. The BOD5 counts dropped from 74 to 98 per cent, with every reading under the Ministry's target. The phosphorus count dropped from 63 to 82 pa cent. Dissolved oxygen rose between 4 and 57 per cent. The turbidity levels improved by 53 to 83 per cent. As a anecdotal sidelight, one of my colleagues pointed out that the water on the Kam River, adjacent to the Great Lakes Paper Company, actually froze over for the first time in living memory.

Obviously, a shut-down is no long-term way to achieve water quality. But it does demonstrate, vividly, that where there's change, there's hope.

However, it also demonstrates, that changes in effluent discharge must be pretty dramatic in order for the receiving waters to benefit. And that's the other point of irony - some might say anomaly - some might say absurdity.

Buried in the pages of the massive government report, already enlisted in this material, is a summary of environmental effects given various objective conditions. Some of the information is really quite startling. It would appear that in several cases, even if the offending mills reach water quality objectives as set by the Ministry of 'the Environment, there will be little discernible change! That is simply to say that the negotiated programs between government and company can lead roughly nowhere.

Thus, under the column headed "Effects if Mill Meets MOE Water ' Quality Objectives, the following comment appears beside American Can: "Little effect on water quality." For Strathcona Paper: "BOD problem would still persist". For Dryden: "No improvement because river flow too small relative to mill discharge." For Abitibi, Smooth Rock Falls: "No change in DO." For Abitibi, Sturgeon Falls: "High BOD of effluent would persist." For Kimberly-Clark, Terrace Bay: "No change in Black- bird Creek." For Abitibi, Fort William: "Difficult to identify an improvement in water quality conditions." For Abitibi, Thunder Bay: "No detectable or measurable improvement in chemical conditions in Thunder Bay."

Now let me hasten to add that several other examples are quite encouraging. And I should also qualify matters by indicating that a significant amount of discharge into any given waterway can originate from other sources. Nonetheless, it is probably fair to argue that the government has been setting water quality objectives which are congenial to the industry, rather than indicative of standards which are desirable for the particular waterway under review.

There seems, in short, utterly no way by which reason-or logic can persuade the vast majority of pulp and paper polluters that our water resources must be protected. In truth, not even the unusual financial incentives appear to do the trick.

After all, expenditures for pollution control are deducted from taxable income. On top of this, a company can deduct its interest payments on borrowed funds. Furthermore, there is the accelerated depreciation allowance, and provincial sales tax is refundable for expenditures on pollution control equipment. Still, it's a struggle every step of the way to get the companies to comply.

In the government study, using informed estimates of interest rates, and corporation taxes, it is calculated that a company can pay as little as $160,000 of a $1 million capital outlay. Federal and provincial governments pay the rest in revenue foregone. Positing an appropriate industry-wide program, the costs, in terms of lost revenue, come , to $2.44 million per year for the provincial government, and $5.19 million per year for the federal government.

Yet withall, no amount of assistance or tax write-off seems to get. results. Apparently, if there is no other enforcement, the companies won't clean up unless the state pays for every penny. It,.sa not so subtle form of blackmail, and thus far the government keeps running between the boardrooms and the banks with undistinguished indecision.

Well, what are the remedies for this congenitally unacceptable state of affairs? I feel that I've indicated solutions, at least. implicitly, throughout. But I shall try to summarize to give a sense of focus. I see five specific directions.

First, there must, absolutely must be commitment. That's not some rhetorical device. Unless our natural resource heritage in general, and our water resources in particular, are treasured by government, we will always compromise unduly. No political party, no social institution,. . can ever have a compelling hold on the preservation of natural resources until those resources are seen to belong, inherently, to the people of the country in which the resources are found. Then the exercise of government is an exercise of trust, and commitment surely follows.

Second, there can no longer be guidelines and vague regulatory powers. There must be explicit standards, unequivocally set into legislation, enforceable in the courts. Fines and other punitive features should provide a deterrent sufficiently strong to encourage vigorous abatement.

This is not to say that government should be suddenly unreasonable. It is only to argue that we have erred on the side of negligence so long that it is now time to right the balance.

Nor need we be tied to old formulae or rigid procedures. For example, the concept of a 'Pollution Control Delay Penalty' has much to recommend it. Many of you will know that under such a scheme, the Ministry would establish a tough schedule of restricted discharges, dimishing over time. It would automatically penalize companies which fail to remain on schedule. Fines would be clearly set out before the event so that companies will know the penalities. The size of the penalty would depend on divergence in any given year (or half, or quarter) between permitted discharge and actual discharge. This kind of program might work well for regular pollutants such as BOD5 and suspended solids; but for irregular pollutants, or specific chemical discharge, it would have to be backed up by the full panoply of control orders, stop orders, and the ability to prosecute.

Third, the setting of standards must be done on a comprehensive basis - rather than industry by industry, mill by mill, or plant by plant. This is where an agency like the International Joint Commission can be invaluable. It is folly to look at problems in such splendid isolation. Surely, we should take a given water system, determine what water quality we want to achieve for that system - that, in turn, depends on the uses we want to make of it - and then consider all the industries involved in order to co-ordinate the most effective, least expensive overall abatement design.

There are, it is evident, multiple sources of discharges into complex environmental systems. Instead of recognizing that reality, we still fall back on the old "'best practicable technology" approach, specific to each industry. It will no longer suffice.

Fourth, we must call the bluff of the industrial polluters. I don't mean to sound belligerent or provocative, but it has always seemed to me that environmental protection too often goes the way of corporate intimidation. The ominous threat is always the same: we can't afford it; we'll close down; there'll be serious unemployment; whole communities will suffer. It's one of the oldest cons of industrial society, and it must be challenged.

Every time anyone ever does a study, the threat of corporate injury always seems to evaporate. It should surprise no one that Dr. Donnan and Dr. Victor conclude with the observation: "...There is no reason to believe that the costs of achieving pollution abatement levels specified by the MOE will seriously jeopardize the profitability of the paper companies in question, or cause them to close specific mills."

May I analogize from related exampleswith which I have some close personal experience?

In the field of environmental health, companies always stir the same clamour. Whenever it is demanded that they clean up the work- place, and eliminate dangerous 'levels of contamination, you would think that the end had come. And menacingly there lurks, ever in the background, the threat of closure.

How well I remember how Denison Mines just couldn't get its radiation exposures down to the working level months requested by government. Every excuse was offered from financial cost to technological impossibility. Then the government put its foot down. Lo and behold, within a matter of months, the levels were achieved.

How well I remember the United Asbestos plant at Matachewan, in Northern Ontario. Going out of business permanently was clearly the consequence.if the government enforced its indefensible threshold limit value of 2 fibres per cubic centimetre. The government dug its heels in. The most recent readings for United Asbestos are among the best in Canada, and in the greatest number of instances, well below the limits set.

In the United States, recently, there was a positive furor when OSHA (Occupational Safety and Health Administration) imposed a reduction in the polyvinyl chloride TLV from ten parts to one part per million. From Dow to Exxon, they prophesied a tattered balance-sheet. I was in Washington just last week and learned that 'with rare exceptions every industry is meeting the new standard with little discernible financial impact.

That's what I mean by calling the bluff. You can negotiate your way to eternity. At some point there has to be backbone.

Fifth, in Ontario we should seriously consider encouragement for common law remedies. In the United States, such avenues are often available. But here, in my home province, there are rugged obstacles to a private suit being launched against a company for environmental damage. It is by no means a solution; it may be a useful recourse.

When I began this lengthy address, I inclined toward the tentative. 1t's obvious that positions harden in the process of exposition. Never- theless, I still feel fairly cautious about some parts of the subject matters, and still look forward to elaboration on future occasions.

However, the premise will not alter: the preservation of our water resources is not some ephemeral abstraction. Defile those resources, and people feel real consequences. You can see it in the faces of the Lake Erie fishermen and in the eyes of native peoples at White Dog and Grassy Narrows. You follow it in the decline of local tourist trades. You know of it as chemical additives threaten a human tool, and you hear of it every time the media reports the latest violation. And next summer, some new beaches will be closed.

We've really taken the resource far too much for granted. It's time to give our governments another significant jolt. POINT SOURCES WORKSHOPS

On February 21, 1977, six discussion groups were formed to suggest economic, legal, procedural and institutional mechanisms and policies for abating pollution related to: 1. mining and mineral processing, 2. municipal sources, 3. pulp and paper, 4. chemical and chemical processing, 5. transportation, and 6. energy. The Nominal Group process (explained on pages 286 to 292) was used by all groups.

Each group was made up of 12 to 18 persons. At least one lawyer, an economist, someone representing each level of government in Canada and the United States, a citizen activist in the environment field, and one person representing the point source under examination were part of the group, as were a group leader and an individual who recorded all the mechanisms suggested.

The lists produced during the workshop sessions were cryptic. Those who participated were sent the list(s) from the workshop(s) they attended and were asked to restate any of the policies and suggestions which they thought required clarification. From those responses, the lists on the following pages were rewritten so that readers of these proceedings would have a clearer idea of the meaning of the suggestions.

Participants' ideas are presented in random order on the next few pages. To the left of the listing, the top five priority alternatives are indicated in Roman numerals. ENERGY RELATED POLLUTION

PRIORITY

Require reduced energy use for transportation by increasing public transportation opportunities and providing incentives for its use.

Require maximum use of existing transmission facilities and utility 'corridors and concentrate future utility, transportation and energy transmission lines in corridors.

Establish electrical energy pricing to encourage conservation, adding higher price for greater, use and higher price for use during peak times.

Impose substantial effluent charges on all emissions from power plants.

Provide tax incentives, e. g. sales tax removal or income tax deductions, for individual or corporate energy conservation efforts.

Integrate power plants and urban areas to greatly reduce land usage for utilities, make use of waste heat for residential heating feasible, and reduce loss of energy in transmission.

Establish maximum levels of concentration of pollutants generated in on-site production and transmission of energy.

Prohibit utility rate incr.eases unless firms meet emission standards.

Base the price of electrical energy on the additional cost of providing new capacity, not on an average cost of all operating capacity including older established plants.

Impose a tax on energy consumers 'equivalent to the social cost of pollution resulting from the production and use of that energy.

Make United States environmental impact statement process more efficient.

Limit the amount of energy available for use by industrial facilities.

Increase focus on risk analysis in order to define environmental benefits and penalties and compare them to the cost of eliminating the cause of risks of energy production technologies; i.e. nuclear energy. Optimize power plant size for total energy use.

Reduce tax diversion from energy industry in order to finance additional exploration and research.

Increase the price of electricity per unit as the consumption increases.

Improve government land use guidelines.

Require energy regulatory agencies to consider environmental factors in their licencing decisions and provide for reversal of these decisions if they do not.

Curb energy industry advertising.

Designate exclusive end uses of each energy form; e.g. natural gas for making plastic or heating homes.

Reduce total demand for energy by taxing energy intensive or wasteful end uses; e.g. large autos.

Remove price controls on certain energy commodities (oil and gas) to promote a more efficient use of energy through encouraging a more competitive market to determine prices.

Control runoff during construction.

Let producers prove reduction of emission and gain benefits; tax power plant emissions at an expected level of emission and reduce or rebate taxes if power plant can prove that emissions are reduced below expected levels.

Require siting in area of minimum environmental impact.

Develop uses for sulfur sludges produced by burning high sulphur coal.

Enable and encourage resource recovery; e.g. waste heat, fly ash, sulfur sludges, waste water, etc.

Impose a moritorium on nuclear development until radioactive waste management problems are solved.

Establish technical/scientific courts outside the existing judicial structure to decide scientific issues.

Develop minimum standards of efficient energy use for buildings, appliances, etc.

Compare the costs and benefits of implementing conservation practices with costs of developing new energy supplies. 32. Establish government-industry task forces on environment.

33. Require double hulls for new oil tankers used on the Great Lakes in order to reduce environmental risks.

34. Restrict use of energy-intensive recreational equipment.

35. Eliminate sales tax exemptions for certain classes of vehicles; e.g. farm equipment, trucks and commercial vehicles.

36. Legislate policies to implement energy conservation objectives.

37. Require independent assessments ,of emissions from power plants.

38. Abolish state licensing of approved sites and require only federal licensing so that the "best" sites for plants can be chosen, whatever the jurisdiction.

39. Encourage development of alternative or renewable energy sources (solar, wind, wood) through incentives and removal of current disincentives. PLlLP AND PAPER INDUSTRY POLLUTION

PRIORITY

I 1. Enforce existing authority at all government levels; set provincial and state standards; establish firm schedules and penalties, and conduct frequent monitoring.

I1 2. Legally designate responsible government and industry decision makers and provide for legal malfeasance charges against public officials for failure of duty and also plant managers for environmental harm.

I11 3. Establish graded scale of effluent charges, increasing as the amount and concentration of discharge increases, to be paid into an environmental protection fund for subventions, treatment facilities and compensation.

IV 4. Increase coordination of land, air and water.planning.

Inform and educate the public and involve them in establishing ambient water quality objectives.

Tax polluting plants to the point of being non-competitive.

Standardize effluent regulations at the international level to facilitate enforcement by jurisdictions and to ensure that so-called "pollution havens" do not develop.

Examine the economic and financial consequences of action/ inaction by all government levels.

Limit total paper use in daily newspapers.

Promulgate regulations requiring plants to recycle a % of discharge.

Authorize (through legislation) citizen/public interest group litigation in Canada.

Legislate full disclosure of industry financial status to enforcement agencies.

Increase or institute industry surcharges for use of public waste treatment facilities.

Increase public funds for research and development and demonstrations of abatement technology and methods.

Institute automatic injunctions against discharges upon demonstration of health hazards. 16. Appoint Resource Auditor General to be responsible'for resources accounting and insuring efficient use and long-term non-depletion of resources.

17. Reduce discretionary powers of enforcement agencies.

18. Examine need and alternatives for the industry and its products.

19. Examine plant relocation as an alternative abatement measure.

20. Encourage secondary materials use.

21. Develop water basin, water management plans (quantity and quality).

22: Legislate a shift to manufacture and use of natural colour and unbleached paper.

23. Force by-product recovery through legislation.

24. Restrict government purchases to complying mills.

25. Agree that international treaty commitments prevail over national, provincial, state regulations and policies. CHEMICAL AND CHEMICAL PROCESSING POLLUTION

PRIORITY

v 1. Require all dischargers to fully characterize wastes and provide data regarding prescribed self-monitoring programs.

Incorporate into Canadian Environmental Contaminants Act the requirement for testing toxic substances prior to use and prohibiting the use of such substances if found to have a detrimental effect on human health or the environment; in both Canada and the United States require pre-market testing proportional to persistence of chemicals.

Require dischargers to prove that their effluents are harmless.

Institute a statutory basis requiring public awareness and input to decision-making process.

Require annual surveillance and reporting of the chemical industries' inventory of acquisition, production and disposition.

Impose substantial effluent charges on toxic discharges until they are eliminated and apply substantial 2-level, seasonally varied charges on non-toxic discharges.

Use fines commensurate with mitigation costs coupled with enforcement orders to meet effluent standards.

Institute a formal hearing process whereby a discharger is summoned to give reason why punitive action should not be taken or to make a public commitment to eliminate or improve unsuitable conditions within a specified time fram.

Impose severe penalties for "bad faith" violations.

Incorporate labour into management monitoring programs.

Legislate uniform quality control programs for data in all Great Lakes Basin jurisdictions.

Require imposition of substantial, not nominal, fines for non-compliance.

Establish effluent limitations based upon requirements for attaining desired environmental quality rather than based upon treatment technology.

Impose surcharges on production, related to extent of pollution, the product and the cost of production. 15. Provide sufficient personnel and equipment to carry out an adequate international surveillance plan for the Great Lakes.

16. Perform separate hazard assessments and risk acceptability analyses and render independent decisions.

17. Increase the governments' use of injunctive authorities.

18. Prohibit manufacture of chemicals designated as injurious to health.

19. Remove various subsidies for the development of virgin materials.

20. Require that the concept of impingement and ambient control strategies be utilized when discharge permits or new or modkfications to discharging facilities are considered. (Once a maximum loading is established, no new facilities can be added if that maximum will thereby be exceeded. Therefore, established discharges will have to reduce their pollution in order to enable a new one to "impinge" upon their alloted polluting discharge amounts.)

21. Require permits to impose strict, but realistic, time limits for compliance; withhold permits for individual plants pending compliance with approved plans; and strictly enforce penalties for noncompliance.

22. Combine the planning function with other management functions, but not with regulation.

23. Encourage each agency and jurisdiction to perform separate inspections dictated by functional responsibilities. MUNICIPAL POLLUTION PRIORITY

1. Increase delegated authority of municipalities to make by-laws.

I1 2. Establish a sliding scale effluent charge system tied to a discharge system and/or stream standards.

3. Coordinate regional planning for provision of waste treatment services by: a. establishing environmental goals recognizing costs, b. correlating development goals with environmental impacts and goals to reduce or eliminate requirements for abatement, and c. requiring state/provincial approval of sewer extensions in order to insure compliance with municipal discharge permits and to insure adequate capacity to treat additional wastes.

I11 4. Reduce quantity of effluents.

IV 5. Improve standard of stormwater drainage systems by reducing land run-off, better locating stormwater outlets to the system, using an economic incentives system of stormwater and combined sewer discharge charges, providing federal funding and technical assistance to carry out improvements, and providing incentives to contributors of stormwater to seek alternative control measures by requiring that they pay for water quality damages caused by stormwater.

6. . Establish uniform, accredited state operator training schools for wastewater treatment facility operators and technicians.

V 7. Establish more stringent standards for specific pollutants.

8. Require that subdivision or building permits contain plan for minimizing soil loss from cuts, backfills, etc. to reduce runoff of sediment from disturbed soil.

9. Provide technical assistance through a federal program to municipalities.

10. Increase information release and public involvement.

11. Improve methodology for states to set priorities for spending federal dollars on water quality programs.

12. Augment direct local taxes used for water quality improvements with funds from other sources. Study alternative conveyance and transport systems (sewerage lines) to include non-wate~ and pressure conveyance, shallower sewers to reduce inflow and.infiltration, flow fluctuation, etc.

Incorporate elected representatives in policy setting boards of municipal sewerage systems.

Improve garbage disposal by providing incentives for material reclamation and energy conservation disposal means.

Apply interim achievable effluent limitations.

Subject projected requirements to expert review to ascertain consequences to municipalities.

Reduce water pollution by requiring street cleaning followed by land disposal rather than sewer system disposal

Enforce existing pollution abatement laws against municipalities as well as industries.

Implement a charge system commensurate with increased municipal costs for industries discharging into municipal systems.

Require maximum reuse of treated wastewater.

Streamline permit system. TRANSPORTATION RELATED POLLUTION PRIORITY

Resolve environmental questions prior to phased implementation of winter navigation; shorten the navigation season; prohibit highway and water transportation of petroleum or hazardous materials in winter.

Require liability bonds adequate to cover costs of damages and clean-up.

Conduct government-sponsored experiments in test areas with differing mechanical and institutional controls to minimize hazardous materials spills and their effects.

Revise national transport policies to: a. encourage use of the transportation mode with the least total environmental impact, b. develop economic incentives for industry to develop containers for various modes of commercial transport which would minimize environmental risk and harm, and c. develop multi-modal plans that optimize environmental quality.

Improve vessel design and operation standards related to transport of hazardous materials; require that better navigating equipment be installed on all commercial vessels, including foreign ships entering U.S. and C,anadian harbors, and institute inspections to insure government standards for installation and operation are met.

Require individual permits for transporting any of a defined group of hazardous substances and require any vessel transporting hazardous materials to have an onboard contingency plan to prevent and clean up spills.

Incorporate water quality planning and coastal zone management planning in local and regional port planning.

Consider water quality damage and public health when setting transportation regulations.

Establish effluent charges for vessel wastes.

Encourage use of energy efficient public transportation by increasing funding of mass transit systems and providing modes of public transit.

Assess penalties on spillers to coverthe cost of clean-up and an added sum to penalize the polluter. 12. Institute federal economic incentives for building safer containers, which would benefit and encourage private industry to do research to develop safer containers for land and water cargoes.

13. Require full containment of vessel waste within two miles of shore.

14. Provide government incentives for reclaiming materials in autos.

15. Institute universal no discharge standards for all vessels on the Great Lakes.

16. Reward individuals who report spills. (Does not apply to those required by law to do so.)

17. Require or encourage faster road building to minimize erosion and sedimentation.

18. Establish bilateral water quality standards for Great Lakes Region.

19. Encourage fuel efficiency, development of cleaner fuels and use of renewable energy sources.

20. Standardize and improve methods of vessel traffic control, particularly in hazardous and congested areas.

21. Assign transportation programs funds to: assessing public's needs-113; developing programs-1/3; selling programs-113. MINING AND MINERAL PROCESSING POLLUTION

PRIORITY

I 1. Establish legal requirement that companies must post bonds prior to starting operations, or pay extractive royalties adequate to ensure rehabilitation of the mine sites and open pits to cover problems with tailings areas or residual discharges; require total containment of tailings, and provide economic incentives for re-use of waste products.

Require bilateral planning for coal processing as part of a whole energy use plan; apply environmental assessment act (Canada) or impact statement (United States) with broad distribution to new and expanded mining facilities; determine public attitudes toward new facilities before approval.

Make acts more specific; include in statutes fines and penalties with definitive time schedules allowing less discretion by enforcers and providing more uniform enforcement.

Legislate economic incentives for effluent reduction.

Add graded effluent charge to permits with the charge to increase as the amount and concentration increase, the charge to occur only when the permit conditions are exceeded.

Clarify agency roles in regulating uranium production and control of radioactive wastes.

Enhance the economic benefit of reclaimed materials (see 1).

Establish an independent research agency to be financed by the private sector on an obligatory basis.

Centralize state/provincial agencies' operations.

Require upland disposal of mine tailings and prohibit discharge to watercourses.

Survey all discharge sources, weigh costs and benefits, and set abatement timetables in public sessions.

Create mechanism for public involvement in standard setting. (Canada)

Place the burden of proof upon the polluter and change the rules of standing to permit class action suits. (Canada)

Identify and protect environmentally sensitive areas from use by extractive industries. Legislate a term for review of standards (i.e. every 5 years) and the methods of enforcing them.

Establish mass limits for total SO2 emissions, by region and by facility.

Clarify body of law on long range transportation of atmospheric pollutants.

Establish Science Court to decide technical disputes between companies and enforcement agencies.

Establish performanee bonds for period of operation.

Design and fund an economic study of the mining industry similar to the study of the pulp and paper industry by Donnan and Victor.

Replace discharge objectives with legally enforceable standards. (Canada)

If meeting standards is not immediately feasible, then set acceptable discharges rather than acceptable procedures or equipment.

Analyze local economic and social impact of current laws.

Require the posting of bonds for litigation directed at blocking approved actions. PO I NT SOURCES HIGHLIGHTS-AFTERNOON GENERAL DISCUSSION

INTRODUCTION

Participants were asked to state the most controversial proposals which were put forward during the point source workshops.

BLAIR BOWER: [In the MINING and MINERAL PROCESSING workshop] I suggested that the current set of subsidies (capital gains taxes, depletion allowances, expenses) on'virginmaterials--primarily minerals, crude petroleum, sand and gravel--in some cases, be removed. These provisions, at least in the States, are available to users of virgin materials. The rationale behind this is the obvious one: that all of these subsidies have the effect of shifting the relative price in favour of virgin materials. They reduce the price of virgin materials vis-a- vis, secondary materials, and the use of residuals or what now are often termed waste discharges from various kinds of activities. If, in fact, you remove all of these-and there are many-then the use of residuals or what are sometimes called waste materials would increase and there would be many fewer'dischargesfrom a number of industries.

JACK VALLENTYNE: My proposal is that we should have a Resource Auditor-General. This is a person who would go about the country in the federal or in the provincial interests and simply ask the question within that domain: "Are these resources being used efficiently, and are the resources being used effectively with regard to the balance between use and supply?" If we had such a person, I think we might entertain such questions as inefficient resource conversion, misuse of resources essentially. He could get into a lot of the realm of waste disposal, pollution, throwing resources away, and I think most important of all, he might anticipate some resource deficiencies if he looked at the time perspective of use in relation to supply. I think we need something that counterbalances the demand which is inevitably put upon the politician to be responsive to the public in intervals of three or four years.

MAXWELL COHEN: I like your idea, sir, but I am afraid of its simplicity.

IAN EFFORD: The three main points that were raised in our ENERGY session can, I think, be summarized fairly simply. The main point, for one, is that it is very, very important to reduce energy demand. There were a number of suggestions as to how: price structure efficiency, reduction of waste, penalties against waste, for a few. There was a section of ideas on environmental design, pollution taxes in various forms, and there was a third section which was really on siting and better use of siting and energy: for example, district heating from a power plant rather than just have the plant throw its waste into the lake. Maybe we should be concerned about local jurisdiction over plant siting, and maybe we should look at much broader regional decision- making onplant siting. I think that is possibly more of a problem in the United States than in Canada. In Canada we are talking about a few sites with very large numbers of individual reactors, 12,000 megawatts or 8,000 megawatts type sites, and this really removes the possibility of using the total energy produced by the plant, 'the electrical energy and the waste heat, and I think that it overlaps with the problem that was raised by Commissioner Ross, that is, who is really making the decisions, are the decisions general enough, and are they broad enough when choosing sites?

ROBERT CARTER: I have a controversial proposal [from the MUNICIPAL session]: eliminate grants to municipalities. They have been getting by with murder for years [because grants enable them to charge] low, low rates [for water and sewage treatment.] I think it is time they learned that they too have to pay for wastes, and not expect only industry to pay for theirs. Every place that I have gone and talked about the need to do something at the municipal level, even when they are paying two dollars a month, I hear that they cannot afford anything more. JURISDICTION WORKSHOPS

After the first series of six point sources oriented workshops, participants attended jurisdictional sessions: Canada-Federal, province/ Municipalities, United States-Federal, and States/Municipalities. These four groups were given all of the prioritized lists produced during the topic discussions. Participants were asked to examine the top five items chosen for each topic and to determine individually whether they agreed that from the standpoint of implementability the top five mechanisms would be best for their jurisdictions.

If the mechanisms ranked highest by topic workshop members on the basis of effectiveness for abating pollution were not the best from a practical viewpoint, then jurisdictional session participants were asked to supplement the five with other mechanisms on the lists or with additional ideas. The lists which resulted then were ranked.

Each group produced six mechanisms lists ranked on the basis of practicality. Items are listed in random order with rankings indicated in Roman numerals. Pages 125 to 136 show the results. CANADA FEDERAL

PRIORITY

Energy Related Pollution

Establish flexible energy pricing to encourage conservation. Assess effluent charges on all emissions from power plants. Require reduced energy use by transportation through provision of public transit. Require maximum use of transmission facilities and corridors. Provide tax reductions for energy conservation. Establish federal energy policy instead of using various changing energy strategies. Provide more funding for energy research and development. Legislate energy conservation objectives. Consider imposing moratorium on nuclear power plants until problems of waste disposal are solved. Encourage use of renewable energy sources through subsidies and code changes. Establish marginal cost pricing for energy. Develop minimum efficiency standards for energy consuming products. Regulate power development further by: a. making environmental assessment mandatory, b. incorporating environmental standards in licensing procedures, and c. requiring siting in areas of least environmental impact. Remove price controls on oil and gas.

Pulp and Paper

Enforce existing authority under established laws and regulations by: a. setting standards, b. establishing firm schedules and penalties for not meeting them, and c. conducting frequent monitoring. Increase accountability by: a. identifying and publicizing government and industry decision makers , b. providing for malfeasance charges against public officials for failure to carry out duties, and c. providing for malfeasance charges against plant managers for environmental harm. Establish graded effluent charges paid into an environmental protection fund. Coordinate land, air and water use planning. Establish ambient water quality objectives with increased public participation and education. Standardize effluent regulation at international level. Restrict all government purchases to complying mills. Authorize citizen/public interest group litigation in Canada. Encourage secondary materials use. Reduce discretionary powers of enforcement agencies. Appoint a resource auditor general. Provide more public funds for research and development and demonstrations of abatement technology and methods. PRIORITY

Chemicals and Chemical Processing

Require the proof of harmless nature of chemical. Impose substantial effluent charges, including 2-level, seasonally varied charges on non-toxic discharges. Implement federal Environmental Contaminants Act, adding pre-market testing requirements which are proportional to the persistence of the chemicals. Establish surcharges on production directly related to the extent of pollution caused. Require discharger to fully characterize his waste and provide self-monitoring data in accordance with specifications. Impose strict realistic time limits for compliance. Insist that impingement and ambient control strategies be used in concept. Use needed environmental quality standards, not available treatment technology to establish effluent standards. Impose real, not nominal fines for non-compliance. Ensure environmentally harmless disposal of residuals from chemical wastes. Hold firm on environmental objectives during periods of non-compliance. Municipal

Require Regional planning for provision of waste treatment services. Tie a sliding scale effluent charge to discharge system and/or stream standards. Reduce quantity of effluent. Improve standard of stormwater drainage systems. Establish more stringent standards for specific pollutants. Require sediment plans be prepared prior to construction. Provide technical assistance to municipalities. Increase information release and exchange and increase public involvement. Provide incentives to improve garbage disposal. Establish national priority for federal funding of municipal cleanup programs in the Great Lakes Basin. Develop and fund research and development program for treatment and minimization of municipal wastes. Enforce existing laws against municipalities. Establish and use an incentive system to improve the standard of stormwater drainage systems. Establish a national certification program for sewage treatment plant operators. PRIORITY

Transportation

Improve vessel design and operations standards. Resolve environmental questions prior to phased implementation of winter navigation and shorten the navigation season. Require individual permits for transporting a defined group of hazardous substances. Coordinate and require local port and land planning to protect water quality, water use and coastal zone management goals. Reverse national transport policy to encourage use of clean transport; that is, use the mode with the least environmental impact for a given cargo and employ multi-modal planning. Increase public transport. Establish uniform water quality standards for Great Lakes Region. Require contingency plans for transportation of hazardous wastes. Prohibit port entry to flags of convenience. Include standards for vessel wastes in requirements for vessel design and operations. Require an insurance bond liability for all carriers and handlers of hazardous materials. Provide necessary equipment for clean-up under international contingency measures.

Mining and Mineral Processing

Encourage good management practices by: a. requiring posting of bonds to ensure rehabitation, b. requiring containment of tailings, and c. providing economic incentives for reuse of "wastes". Apply Environmental Assessment Act (Ontario) or require environmental impact statement for new and expanded facilities and include : a. determining public attitude toward facilities, and b. requiring bilateral planning for coal processing. Provide time related economic incentives including: a. tying prescribed fines and penalties in statutes to determine time schedules, and b. providing economic incentives for effluent reduction. Tie effluent charges to permits. Limit discretionary powers of regulators. Clarify agency roles in the uranium-nuclear industry. Enhance economic benefit of reclaimed materials by providing reuse incentives. Clarify international law on long range transportation of atmospheric pollutants. Change rules of standing and burden of proof. UNITED STATES FEDERAL

PRIORITY

Energy Related Pollution

Control demand by comprehensive conservation practices and economic incentives. Require reduced energy transportation use through use of public transportation. Require maximum use of transmission facilities and corridors. Assess effluent charges covering all emission from power plants. Develop flexible energy pricing to encourage conservation. Integrate power plants and urban areas. Develop inverted price structure for industry. Improve government land use guidelines. Reduce total demand by tax of end use. Remove price control on energy (oil and gas). Develop use for sulfur sludges. Enable and encourage resource recovery by requiring economic analysis of conservation compared to generation, legislating energy conservation objective, developing flexible energy pricing to encourage conservation, and providing tax reductions for energy conservation. Impose moritorium on nuclear plant construction until solid waste management is acceptable. Restrict high energy recreational equipment. Encourage development of non-pollution energy sources. Require polluting energy siting decisions to consider use of alternate energy sources. Eliminate subsidies for use of exhaustible materials. Protect hydro power in U.S., navigation, diversions and lakes levels programs.

Pulp and Paper Industry Pollution

I 1. Enforce existing governmental authority; state standards; establish.firm schedules and penalties, and conduct frequent monitoring. IV 2. Identify government and industry decision makers, provide for malfeasance charges against public officials for failure of duty, and plant managers for environmental harm. 111 3. Establish graded effluent charges paid into an environmental protection fund. V 4. Coordinate land, air and water use planning. 5. Establish ambient water quality objectives with more public participation and education. 6. Tax polluting plants to point of being non-competitive. 7. Examine consequences of government act ionlinac tion. 8. Limit size of daily newspapers. 9. Require full disclosure of financial status to enforcement agencies. 10. Appoint resource auditor general. 11. Encourage secondary materials use. 12. Develop water basin, water management plans (quantity and quality). 13. Force by-product recovery. V 14. Restrict all government purchases to complying mills. I1 15. Establish regulations to force and encourage use of recycled materials. . 128 PRIORITY

Chemical and Chemical Processing Pollution

Require discharger to fully characterize his waste and provide data. Enforce federal Toxic Substances Law with premarket testing proportional to persistence. Require proof of harmless nature of discharge from discharger; not proof of harmful nature from "harmed". Give public awareness and input to decision-making process a statutory basis. Impose substantial effluent charges with substantial 2-level, seasonally varied charges on non-toxic discharges. Use monetary mitigation with enforcement orders to meet effluent standards. Impose severe penalties for "Bad Faith" violations. Impose surcharge on production, related to extent of pollution. Provide sufficient surveillance personnel and equipment to perform the International Joint Commission co-ordinated surveillance plan for the Great Lakes and make that plan enforceable. Remove various subsidies for the development of virgin materials Insist that impingement and ambient control strategies be used in concept. Discourage intra- and inter- jurisdictional "piggybacking" with respect to inspection. Impose strict but realistic time limits for compliance.

Municipal Pollution

I1 1. Establish effluent charges on a sliding scale tied to discharge system, and/or stream standards. I 2. Require regional planning for provision of waste treatment services. I11 3. Reduce quantity of effluent. 4. Improve standard of storm-water drainage systems. 5. Provide technical assistance to municipalities. 6. Improve methodology for states to set priorities for spending federal dollars. 7. Provide incentives to improve garbage disposal. V 8. Impose more stringent standards for specific pollutants. 9. Require street cleaning. 10. Enforce existing laws against municipalities. 11. Streamline permit system. 12. Use federally funded intermediate technology systems. 13. Eliminate inflow and infiltration. 14. Design energy-efficient systems. IV 15. Provide incentives to improve garbage and sludge disposal and encourage secondary use for energy development, etc. 16. Develop and enforce rate-of-runoff controls. 17. Improve methods including use of basinlregional planning programs for municipal plant construction. PRIORITY

Transportation Related Pollution

I 1. Strengthen vessel design and operating standards. IV 2. Resolve environmental questions prior to phased implementation of winter navigation and shorten navigation season. I1 3. Require individual permits for transporting defined group of. hazardous substances and require onboard contingency plans for transport of hazardous materials. 4. Require local port/land planning to protect water quality, water use, and coastal zone management programs. I11 5. Revise national transportation policy to encourage use of clean transport; that is, the mode with least environmental impact for a given cargo, and employ multi-model planning. V 6. Require insurance bond liability to cover all damages and cleanup costs and impose use charges. 7. Test a model area with new institutional controls V 8. Develop spill penalties which exceed the cost of damages. 9. Develop economic incentives for building safer containers. 10. Adopt universal zero discharge standards. 11. Develop private reward system for spill reporting. 12. Develop uniform water quality standards for Great Lakes Region. 13. Encourage development of cleaner fuels of renewable nature for better fuel efficiency. 14. Insure full containment of vessel waste within 2 miles of shore. 15. Provide government incentives for reclaiming materials in autos and trucks . 16. Adopt specific discharge control standards for Great Lakes.

Mining and Mineral Processing Pollution

I 1. Require the posting of bonds for rehabilitation and operation, this to include tailings and discharges, and require containment of tailings, as well as provide economic incentives for re-use. 2. Apply Environmental Assessment Act or impact statement with broad distribution to new and expanded facilities, at the same time determining public attitudes toward new facilities. Also, require bilateral planning for coal processing. I1 3. Apply time-related economic incentives by prescribing fines and penalties in statutes, with a definitive time schedule, developing economic incentives for effluent reduction, and requiring discharge permits with effluent charges. V 4. Limit discretion of regulators by prescribing fines and penalties in statutes, with a definitive time schedule. 5. Enhance economic benefit of reclaimed materials, developing economic incentives for re-use. 6. Require upland disposal and containment of tailings. 7. Survey all sources together with costs and benefits. Set abatement timetables (with public hearings) and create mechanisms for public involvement in standard setting. 8. Identify and protect environmentally sensitive areas. 9. Require economic study of mining industry, (Donnan and Victor model). IV 10. Shift emphasis from acceptable equipment to acceptable discharge. 11. Require Federal plan to optimize siting of resource removal and re-use. 12. Require reclamation not restoration. 111 13. Complete mining removal plan before earth is broken. 130 PROVINCE - MUNICIPALITIES

PRIORITY

Energy Related Pollution

PRIORITY

Require reduced energy use by means of public transportation. Maximize use of transportation facilities and corridors. Establish flexible energy pricing to encourage conservation. Assess effluent charges for power plant emissions. Provide tax reduct ions for conservation. Incorporate environmental standards in the licensing process. Pass an Energy Assessment Act. Place a moratorium on nuclear power development until waste management problems are solved. Encourage renewable energy subsidies code. Remove price controls on gas and oil. Improve government land use guidelines. Remove subsidies for fossil fuels as a step in enabling and encouraging resource recovery.

Pulp and Paper

I 1. Enforce existing authority under established laws and regulations by: a. setting standards, b. establishing firm schedules and penalties for not meeting these, and c. conducting frequent monitoring. V 2. Increase accountability by: a. identifying government and industry decision makers, b. providing for malfeasance charges against public officials for failure to carry out duties, and c. providing for malfeasance charges against plant managers for environmental harm. I11 3. Establish graded effluent charges paid into an environmental protection fund. I1 4. Coordinate land, air and water use planning which includes development of water basinlwater quantity and quality plans. IV 5. Establish ambient water quality objectives with increased public participation and education. 6. Examine consequences of action vs inaction 7. Provide more public funds for research and development and demonstration of abatement technology and methods. 8. Encourage secondary materials use by requiring a fixed percent of quantity processed be recovered. PRIORITY

Chemical and Chemical Processing

I 1. Require that proof of harmless nature of chemical be established by the discharger through fully characterizing the wastes and providing data, including an annual inventory by entire chemical industry. I11 2. Impose charges such as: a. substantial effluent charge, b. 2-level, seasonally varied charge on non-toxic discharge, and c. production surcharge related to the extent of pollution caused. I1 3. Establish statutory basis for public involvement in and education about the decision making process. 4. Strengthen controls on chemicals by: a. implementing Federal Environmental Contaminants Act, b. adding to the Act premarket testing requirements which are proportional to the persistence of the chemicals, and c. giving responsibility for enforcement to an independent body. IV 5. Use ambient environmental quality standards rather than treatment technology when setting effluent limitations. V 6. Develop safe techniques for disposal and reuse of toxic materials and an incentives system to encourage the practices.

Municipal

Require regional planning for provision of waste treatment services, determining environmental goals at best cost, and correlating development goals with environmental goals. Tie a sliding scale effluent charge to discharge system and/or stream standards. Reduce quantity of effluent by placing explicit price on water and solid and liquid wastes on individual and corporate generators. Improve standard of stormwater treatment and control. Increase information release and exchange and increase public involvement. Require street cleaning. Withdraw public water supply downstream from wastewater treatment plant. Recycle treated wastewater. Provide incentives to improve garbage disposal. Require sediment plan prior to construction. PRIORITY

Transportation

I1 1. Improve vessel design and operations standards. 2. Resolve environmental questions prior to phased implementation of winter navigation and shorten the navigation season. IV 3. Require individual permits for transporting a defined group of hazardous substances. V 4. Coordinate and require local port and land planning to protect water quality, water use and coastal zone management goals. I 5. Reverse national transport policy to encourage use of clean transport; that is, use the mode with the least environmental impact for a given cargo and employ multi-modal planning. 6. Impose effluent charges. I11 7. Develop spill penalties which exceed the cost of damages. 8. Raise gas prices.

Minine and Mineral Processine

Encourage good management practices by: a. requiring posting of bonds to ensure rehabilitation, b. requiring containment of tailings, and c. providing economic incentives for reuse of "wastes". Apply Environmental Assessment Act or require environmental impact statement broadly to new and expanded facilities and include : a. determining public attitude toward facilities, and b. requiring bilateral planning for coal processing. Provide time related economic incentives including: a. tying prescribed fines and penalties in statutes to definitive time schedules, b. providing economic incentives for effluent reduction, and c. tying effluent charges to permits. Limit discretionary powers of regulators. Inventory pollution sources and types. Develop and use public information/involvement mechanisms in standard seteing. Identify environmentally sensitive areas. Change rules of standing and burden of proof requirements. Establish a system with net economic benefits provided for use of reclaimed materials. STATES - MUNICIPALITIES

PRIORITY

Energy

Promote public transportation. Require maximum use of transmission facilities and corridors. Institute flexible energy pricing. Institute effluent charge to cover power plant emissions. Provide tax reductions for energy conservation. Co-ordinate energy siting by different utilities to minimize impacts. Conduct studies of power siting on the state or regional level. Encourage use of renewable resources and substitute energy. Establish standards of minimum efficiency. Incorporate environmental standard in the licensing procedure. Establish regional licensing authority.

Pulp and Paper

Enforce governmental authority at all levels through state standards, firm compliance schedules and penalties and frequent monitoring. Identify government and industry decision-makers and provide for malfeasance charges against public officials for failure of duty, and plant managers for causing environmental damage. Establish graded effluent charges to be paid into an environmental protection fund. Co-ordinate land, air and water use planning. Establish ambient water quality objectives with more public participation required, and more public education. Impose injunctions upon demonstration of health hazard. Restrict government purchases to complying mills. Limit size of daily newspaper. Encourage recycling. Authorize public interest group litigation wherever it does not now exist. Require recycling a percent of discharge. Establish a resource auditor general post. Establish a discharge permit system with built-in non-compliance charges. PRIORITY

Chemical and Chemical Processing

Require industry to give proof of the harmless nature of a substance. Implement and enforce Federal Toxic Substances Control Act with pre-market testing proportional to persistence of chemical. Impose surcharges on production. Require data from industry fully characterizing discharges. Impose effluent charges. Provide a statutory basis for citizen awareness and involvement. Use severe penalties for bad faith violations. Develop an enforceable data quality programme for government and industry. Establish surveillance program to be paid for by effluent charges. Require proof of treatability of wastes before manufacturing proceeds. Require instream bioassays be performed by independant consultants to determine toxicity of products and wastes produced to aquatic life. Establish criminal law penalties for deliberate or flagrant violations. Use monetary mitigation with enforcement orders to meet effluent standards. Provide a surveillance plan and sufficient personnel and equipment to carry it out. Develop and enforce strict, realistic compliance schedules. Separate, require and render independent hazard assessment and risk acceptability decisions. Establish centralized waste disposal facilities on a state or regional basis. Ban phosphates in detergents.

Municipal

Establish co-ordinated regional planning for provision of waste treatment services to include: a. using sewer extension as a growth control mechanism, b. determining environmental goals at best cost, and c. correlating development goals with environmental goals. Establish effluent charges with a sliding scale tied to a discharge system and/or stream standards. Reduce quantity of effluent. Improve standard of stormwater drainage systems by: a. using an incentive system, and b. establishing stormwater and combined sewer discharge charge system. Establish more stringent standards for specified pollutants. Enforce existing laws against municipalities. Implement the same discharge system as applies to industry to municipalities. Incorporate elected representatives on policy setting boards, commissions, etc . PRIORITY

Improve vessel design and operating standards including: a. requiring better equipment, and b. tightening controls on hazardous cargos. Resolve environmental questions prior to phased implementation of winter navigation and shorten the navigation season. Require individual permits for transporting a defined group of hazardous wastes and require onboard contingency plans. Require local portlland planning to protect water quality, water use and coastal zone. Revise national transport policy to encourage use of cleanest transport mode with least environmental impact, (for given cargos). Establish uniform water quality standards throughout the Great Lakes Basin. Establish a universal zero discharge standard for all vessels. Require insurance bond liability.

Mining and Mineral Processing

Encourage good management practices by: a. requiring posting of bonds to ensure rehabilitation, b. requiring containment of tailings, and c. providing economic incentives for re-use of "wastes". Apply Environmental Assessment Act or require environmental impact statement broadly to new and expanded facilities and include: a. determining public attitude toward facilities, and b. requiring bilateral planning for coal processing. Provide time-related economic incentives including: a. tying prescribed fines and penalties in statutes to determined time schedules, and b. providing economic incentives for effluent reduction. Tie effluent charges to permits. Limit discretionary powers of regulators. Create mechanism for public involvement in standard setting. Perform an economics study of the mining industry. Identify and protect environmentally sensitive areas. Impose a state tax on mining for cost of environmental impact statements. Require operating performance bonds. Enhance economic benefit of reclaimed materials. AMERICA'S GREAT LAKES PROGRAM: THE BUREAUCRATIC MESS IN THE U.S.

UNITED STATES SENATOR GAYLORD NELSON*

The United States is making disappointingly slow progress, in its fight to protect and enhance the water quality of the Great Lakes. In the U.S., programs to upgrade and protect the environmental quality of the Great Lakes have, in my judgement, been weak, misdirected, and often times non-existent. Simply put, the programs and policies America has adopted over the last ten years to save this magnificent and unique natural resource may be accurately described as "the bureaucratic mess in the U.S."

Seventy-one percent of the world's surface is water. Less than one one-hundredth of this is fresh water. And the Great Lakes contain 20 percent of this fresh water. The world's largest body of fresh water, a series of five great lakes that contain over 65 trillion gallons of water, continues to be degraded by man. Until very recently, we have had absolutely no idea what the long-term adverse, ecological consequences of this continued pollution will be on the biotic life support systems of the Lakes. Now we are beginning to get glimmers of understanding.

Over the course of the last 150 years, all the problems that have plagued the Lakes have been the direct result of man's ignorant tinkering with a massive ecosystem. Municipal and industrial discharges of raw or partially treated effluent continue to pollute some of the cleanest water in the world. Agricultural runoff and large amounts of phosphorus accelerate the Lakes' natural aging processes. Toxic substances and pesticides poison the Lakes' fish, food chain, bottom sediments, and finally, the human population using the resource. Shipping contaminates the water with oil and sewage. The opening of the Welland Canal introduced exotic species, the lamprey and alewife, into the Lakes that have caused massive changes in the ecosystems of the Lakes. Reserve Mining continues' to dump 67,000 tons of taconite tailings a day into Lake Superior despite strong scientific evidence that the ingestion of these tailings cause cancer. The residents of the north shore are now drinking specially filtered water while the Federal Government rushes to install advanced water treatment facilities to purify these communities' water supplies. Moreover, the Corps of Engineers' proposed extension of the winter navigation season raises the most fundamental questions of long-term adverse environmental impact. What is the impact of the Corps' ice cover removal program? Will the heating of the water disrupt of alter fish reproduction cycles? What are the impacts on the entire Lake ecosystem? The Corps has no answers to these questions. We must know before any expansion of the navigation season is authorized.

* This speech was prepared for presentation by Senator Nelson. However, due to pressing requirements of the Senate Ethics Committee, the Senator was unable to give his talk. Mr. Jeffery Nedelman, his environmental aide, read this speech at the February 21, 1977 dinner. In less than 200 years, in less time than America has been a nation, a brief moment in terms of man's life on this planet, significant adverse changes in the Lakes' water quality have occurred. The responsibility for these changes rests solely with man.

This record should not be accepted as a harbinger of the future. The residence time of the water in the Lakes is long. In Lake Superior's case, 200 years long. Today's pollution becomes an immediate long-term problem that will adversely affect the entire chain of the Lakes over the next several hundred years. Consequently, we cannot afford to waste more time. We must move rapidly and decisively toward achieving the goals and objectives contained in the Federal Water Pollution Control Act Amendments of 1972 and the 1972 Water Quality Agreements.

America has had problems in the past in meeting its obligations. We are making more progress now, but we are still not moving fast enough. Furthermore, it is in our own vested interest to increase these efforts. Business and industry depend on the Lakes for shipping and water. Tens of millions of Americans depend on the Lakes for drinking water and recreation. A very large majority of the economic and social livelihood of the Upper Midwest is intrinsically tied to the continued health and well-being of the Great Lakes. To continue to degrade the biological productivity of these waters is to degrade the economic and social well- being of the heartland of the United States.

In the United States, the most fundamental problem facing the Great Lakes is the federal Government. Regretably, for the past several years, there has been an inadequate national commitment to the protection of the Lakes within the EPA. There is a refusal to acknowledge that the Lakes are threatened and that this continued threat poses a serious national and international problem. Rather than recognizing the significance of these bodies of water, the EPA continues to view the Lakes as a regional problem that must be solved using only regional resources. This policy is dead wrong and must be changed.

The Lakes are in trouble today because Washington has paid too little attention to their problems. There has been little or no national leadership paid to the Lakes since 1972.

Washington seems to have forgotten that it has a strong moral and legal obligation to the Lakes. The Lakes are a unique natural resource belonging both to the U.S. and Canada. They are "great" not only in their size, but in their beauty and power. The Great Lakes, like every other natural system, is not infinite. The Lakes are limited. Man cannot continually pollute without creating an adverse effect. Man cannot continually abuse a resource without degrading the resource. However, these basic ecological lessons appear to have gone unlearned. Man has caused the problems. Man must have the will to save the Lakes. There is no one else to do the job.

The legal obligations of my country are clear and concise. Two international agreements concerning the Great Lakes have been negotiated. The 1909 Treaty and the 1972 Agreement place responsibilities on each country to protect and enhance the water quality of the Lakes. The 1972 Agreement deals exclusively with various aspects of water quality. Objectives were established; goals and timetables were set. Unfortunately, many of these goals have been subsequently ignored by both countries.

As a U.S. Senator representing a State that borders on two.of the Lakes, Superior and Michigan, I am not proud to tell you this evening that the U.S. has not done its share in meeting its moral and legal obligations. I am not proud to tell you the Lakes have been victims of federal neglect and shortsightedness. However, I will tell you that things are not going to remain the same. I intend to introduce a major legislative program that will change the way my Government views the Great Lakes.

The roots of the second problem, the failure of the EPA to establish a viable research program, once again lie with the misplaced priorities of the past Administrations.

In 1972, the Congress gave the EPA rather broad authority to establish a viable and meaningful research program for the Great Lakes. Section 104(f) of the 1972 Water Pollution Control Act Amendments specially establishes a Great Lakes research program. However, it seems to be based on determining impact, not understanding how the Lakes work.

Only a small amount of work has been funded under this statutory authority--it is a skeleton program. The intent of the Congress in drafting a specific research program for the Great Lakes seems to have been lost by the Washington EPA policymakers. According to the FYI78 budget submitted by the Ford Administration, the ongoing bare bones research effort will be cut by nearly 40 percent.

We know relatively little about the ecology of the Lakes. Yet, four years after PL 92-500 became law, four years after a specific research program was legislated, the Great Lakes research program has no . line item budget. The entire program is continually at the mercy of Washington bureaucrats who determine the priority list for research funding on an annual basis.

In March 1975, the General Accounting Office (GAO), the investigative arm of the Congress, reported that at the current funding levels the U.S. would not be able to adequately support the water quality goals and objectives contained in the 1972 Water Quality Agreements. If the U.S. is to meet its research, surveillance, and analysis obligations contained in this Agreement, more dollars and more manpower will have to be obligated on a line item, multi-year basis. For example, during Mf77, the current budget cycle, Region V EPA will receive $2 million for baseline ecological research. Its need is estimated at $5 million. The surveillance and analysis (S&A) program is also being drastically underfunded. In M'77, the S&A program will receive $750,000 while its need is estimated at $3.5 million.

We are not only spending too little on basic scientific research, but misdirected priorities channel what funds exist into less important areas. A 1975 report to the Senate's National Ocean Policy Study states that $176.2 million was expended by all federal agencies on Great Lakes studies during M'74. Of this amount, only 5.9 percent was spent on research. Almost 60 percent was spent on navigation and transportation. If the water quality of the Lakes is to be improved, these priorities will have to be changed so that more money and manpower can be spent on basic ecological research.

While on a volume basis, municipal and industrial discharges comprise approximately 90 percent of the effluent emitted into the Lakes, a far greater danger is posed by the continued release into the environment of toxic and hazardous substances. Conventional treatment cannot remove these substances from the sewage. The continued discharge of these substances threatens human health, water quality, and the biotic productivity of the Lakes. The 1975 report of the Great Lakes Water Quality Board to the IJC recommendation correctly called for I1substantial priority consideration" in this area.

The Board's report stated, "...as a matter of high priority, source identification, monitoring, and control problems for persistent chemicals such as PCB, mirex, and mercury must be intensified."

As you may know, the 94th Congress enacted a toxic substances control law. This action culminated a five-year struggle between the Congress and the Administration. This new law speaks directly to the concerns raised by the IJC in its most recent report.

PCBs are a serious problem for all the Lakes. Lake Ontario has the dubious honor of containing the highest concentrations of this toxic substance. In the Wisconsin waters of Lake Michigan, the Wisconsin Department of Natural Resources has banned the commercial fishing of Lake trout and coho salmon because of PCB contamination. People throughout the region are warned not to eat fish coming from the Lakes more than once a week. State health officials in Michigan are now warning nursing mothers not to regularly eat fish taken from Lake Michigan. PCBs are the third most widely distributed environmental pollutant. Most organisms in all the Lakes have PCB levels greater than those called for in the 1972 Water Quality Agreements' objectives. Samples of Lake trout taken near Isle Royale National Park in western Lake Superior exceed the U.S. Food and Drug Administration's (FDA) standard by three. Carp taken from Green Bay contain 51 parts per million of PCB, the highest concentration found anywhere in the Lakes. The FDA safety level is five parts per million. These levels also greatly exceed the Water Quality Board's recommendation. There is no indication of a downward trend in the contamination.

However, the U.S. will be making more rapid progress in curtailing the introduction of new sources of PCBs in the future. An amendment I offered in the Senate to the Toxic Substances Control Act will effectively ban the manufacture of PCBs in less than two years. This legislation requires: (1) the EPA within the next four months to issue regulations governing disposal of PCBs and labeling of products containing PCBs, (2) within the next ten months a ban of the manufacture, use, and distribution of non-enclosed systems using PCBs such as paint, and carbonless carbon paper, (3) within the next 22 months a ban on all enclosed systems using PCBs, and (4) within the next 28 months a total ban on the manufacture of PCBs.

Since 1970 we have seen a 60 percent decline in mercury residue levels taken from fish in Lake Erie and Lake St. Clair. However, the levels currently found throughout the Lakes continue to exceed both the FDA's and Canadian Government's recommended minimums.

DDT levels in Lake Michigan fell dramatically in the 1969-1974 period. DDT levels in Lake Michigan are now within the FDA's guidelines. The levels in Lake Superior, however, have not decreased.

Residues of dieldrin, a widely used insecticide, first discovered in the Lakes in the early 1960s, have shown no decline even though Canada banned its use in 1969 and the U.S. in 1974.

Both countries face a new challenge on the toxic substance issue. For the last several years, attention has been almost exclusively focused on preventing toxic and other hazardous substances from entering the environment. Little attention and research has been devoted to getting the material out of the environment, once introduced. We have no idea whether it causes more danger to dredge the residues out or leave them in. If we do dredge them out, where do we put them?

Fourth, phosphorus continues to remain a major unresolved issue for the Lakes. The relationship between phosphorus and eutrophication was recognized as a significant problem crying out for attention when I first came to the Senate in 1963. In fact, one of the first bills I introduced, 14 years ago, called for the convening of a national commission to study the interrelationships between phosphorus and eutrophication in the Great Lakes. That legislation passed the Senate but was killed in the House. There is general scientific agreement that phosphorus is the major cause in the acceleration of the natural aging process in the Great Lakes. There is no doubt that the major and significant controllable source of the phosphorus is detergents.

On October 16, 1963, I testified before the Senate Public Works Committee's Environmental Pollution Subcommittee on the question of phosphorus degradation of' the Great Lakes. I said (in part) :

"But the solution to this problem cannot be postponed. It grows worse every day and every hour. And if we continue to delay in facing up to it, we may discover some day that it is too late--that our natural resources have been destroyed to such an extent that they can never be restored again."

Nine years later, after much dispute and disagreement, a first step was reluctantly taken. The Nixon Administration decided, despite all the evidence, not to support a phosphorus ban in detergents; rather, EPA proposed an extremely expensive program of requiring advanced phosphorus removal technology to be installed at municipal sewage treatment plants . that discharged effluent into the Lakes. Enough phosphorus would be removed, the EPA argued in 1971, to solve the problem. The most recent evidence on this subject, compiled coincidentally by the EPA, strongly suggests that the agency was wrong. It now seems clear that even implementation of advanced phosphorus removal technology will not remove enough phosphorus to protect the Lakes. Furthermore, the advanced methodology required for the removal of the phosphorus is very expensive and creates an additional problem of increased sludge disposal.

Every IJC water quality report since 1970 has recommended a ban on phosphorus in detergents used in the Great Lakes Basin. Each year the U.S. Government, the EPA, has refused to listen or take action on this recommendation. And I will be candid with you, despite all this evidence, the question remains unresolved within the EPA today. Technical and scientific experts at the regional level are pushing hard for agency support of such a ban, a position that is entirely logical and totally supported by the latest scientific findings. This evidence, in my view, is overwhelming and conclusive. Moreover, Russell Train, former Adminis- trator of the EPA, in a December 3, 1976 memo to the Region V Regional Administrator on this subject, said, "I believe that it is an effective method of achieving immediate improvements and should be considered throughout the Great Lakes Basin just as recommended by the International Joint Commission. . .I'

On the surface there seems to be an agreement, yet no action has been taken since this memo was drafted.

We need a uniform phosphorus ban for the Great Lakes Basin states, and we need it now. Since the EPA seems unwilling to listen to its own experts, it is obvious they will have to be prodded by the Congress. We need a piece of legislation for the Great Lakes that is modeled after the Minnesota Pollution Control Board regulation, a provision that sets a 0.5 percent by weight limit on the amount of phosphorus contained in cleaning agents and detergents. Implementing such a ban on a basin wide level, is the single most important action that should be taken to protect the ecological quality of the Lakes.

Fifth, another problem of significance that faces the U.S. and the Great Lakes is the municipal construction grant and combined sewer program.

The GAO estimates that the U.S. is three years behind the Canadians in constructing municipal secondary sewage treatment plants. Former President Nixon's illegal impoundment of $9 of the $18 billion appropriated for sewage treatment plant construction by the Congress in 1972 is directly responsible for at least half the delay. An additional year was lost in red tape while EPA revised its construction grant regulations.

According to the Water Quality Board's 1975 report, approximately 59 percent of the population of the U.S. within the Great Lakes Basin is currently served by secondary sewage treatment. When all the construction within this region that is now underway is completed, 94 percent of the populace will be served by secondary treatment. Full compliance with the secondary treatment requirements set by the Federal Water Pollution Control Act Amendments of 1972 is anticipated in the mid 1980's. Con- versely, in Canada, 94 percent of the Great Lakes Basin populace is already served by secondary treatment or its equivalent. One hundred percent compliance is expected in 1977.

The cost of compliance is high. EPA now estimates that an additional $62 million will be required to provide the secondary and advanced phosphorus standards for Great Lakes Basin municipal treatment plants.

In addition to the problems directly associated with the municipal sewage treatment plant construction program, we are faced with a larger and more expensive problem of storm water runoff and combined sewer overflow. A large number of municipal treatment plants now are capable of handling and processing dry flow discharges from their combined sewers. However, whenever there is a heavy rainfall, substantial amounts of raw sewage and runoff bypass treatment and are directly discharged in the Lakes.

Combined sewer overflow presents both countries with a major problem of considerable expense. Cooperation is needed and both countries should begin working together to develop a program that speaks to this concern. EPA conservatively estimates that $1 billion is needed in the Great Lakes Basin for construction of additional capacity and combined sewers.

Once again, the IJC correctly stated the problem and recommended the correct solution. "These efforts (accelerating the construction program)", the IJC said in 1975, "must be strengthened and in fact acce.lerated if the water quality objectives are to be achieved by the end of this century. " The IJC's 1975 assessment that "progress in implementing the terms of the 1972 Agreement has been generally slow, uneven, and in certain cases, disappointing," is unfortunately true. I don't believe we are repairing the damage quickly enough. Much more needs to be done.

National attention should be focused on the Great Lakes and national resources should be allocated to rapidly solving the policy and administrative problems that currently exist. When I return to Washington, I intend to introduce a three point legislative program to clean up "the mess in the U.S." I intend to press for early hearings and swift Con- gressional action on this package.

There is very strong public support for such a program to accelerate America's water pollution abatement effort. A Harris poll taken late last November showed that 67 percent of the people surveyed considered water pollution a serious problem. The degree of concern expressed by this poll is up 16 percent over a similar poll taken a little over a year ago. Most of the people questioned by the Harris organization last November correctly believe the U.S. Government is not doing an adequate job to abate water pollution.

The first major component of my legislative program will focus national leadership on the complex problems that confront the Great Lakes. The three point package will settle the internal EPA problems and make the Great Lakes a national issue of high priority.

To begin this process, I intend to revise and reintroduce S. 2797, a bill I sponsored in the 93rd Congress that deals with the organization of the American half of the International Joint Commission. This legislation, if enacted into law, will: (a) require that the three American Commissioners appointed by the President receive the consent of the Senate, (b) establish a fixed five-year term of office for the American Commissioners, and (c) require that no more than two of the Commissioners be members of the same political party, making the American side bi-partisan.

This legislation bill upgrade the stature of the Commission and strengthen its policymaking role. To be truly effective in recommending actions to the American Government, the Commissioners should have the full support and confidence of both the President and the Congress. S. 2797 will give the Commission .that important support.

Second, I intend to introduce legislation to formally establish an Office of Great Lakes Research within the Region V EPA Headquarters in Chicago. This office will be charged with the responsibility to develop, coordinate, and implement a baseline ecological research program for the Great Lakes. The responsibility for such a program will rest with the Regional Office, not with Washington. I will propose a five-year authorization level of $25 million, $5 million a year for FY'78-FY182. According to a confidential memo prepared by EPA, "to underatand and protect the Great Lakes ecosystem, as called for in the Agreement, optimum funding would have to be provided." This fi~e~yearauthorization represents EPA's estimate of that optimum funding level. Moreover, I will press hard for a review of the EPA's surveillance and analysis program. We need to upgrade and expand this effort. I will propose that the Great Lakes S&A program be funded at a $2.5 million annual level for the five-year (FY178-FY'82) period. According to the confidential EPA memo, "while this funding increase will not achieve parity with the Canadians or fulfill the IJC's program, it would be a major step in the right direction." As you know, the S&A program primarily is intended to provide information to address water quality issues and to assess achievement of water quality objectives.

Currently a little more than one percent of the total Agency's research and development budget can be directly identified with the Great Lakes. When one considers that these Lakes represent 97 percent of the nation's contiguous fresh water storage, excluding Alaska and Hawaii, one cannot help to conclude that the extent of the R&D budget for the Great Lakes must be considerably expanded.

By establishing this office and securing funding, the Agency will be able to move ahead and expand its basic research program in the toxic and hazardous substances field. We need an effective program that will help us understand the ecology of the Lakes. We need an effective program to monitor and properly interpret the current status of the Lakes. We need a program that can effectively assess any adverse changes in water quality. And we need a program to develop strong abatement efforts. We do not have such a program now.

Third, I will introduce legislation to ban the use of phosphorus in cleaning agents and detergents in any of the Great Lakes Basin states. A 0.5 percent limit by weight limitation would be statutorily established by the bill. The legislation would become effective within six months of the date of enactment. The EPA would be directed to evaluate the feasibility and advisability of extending this ban nationwide and report back to the Congress.

The Nixon-Ford Administration's program of limiting the discharge of phosphorus by requiring advance and very expensive technology to be added to municipal sewage treatment plants will not stop the rapid aging and dying of these Great Lakes. This program has failed to save the Lakes. A new approach is needed.

Recent scientific studies have confirmed phosphorus as the ~akes' limiting factor. Excess phosphorus is the problem and detergents are the principle manmade source of the phosphorus. Studies done the the Chicago Metropolitan Sanitary District and the State of Indiana indicate that alternatives are readily available and, depending on the hardness of the water, cost the consumer about the same. This controversy has,been continuing since the early 1960s. It is time we corrected a mistake in judgement and did something about it.

If this three point call for action becomes law, the U.S. will once again be full partners with Canada in a strong and vigorous program to clean up the Great Lakes. The moral and legal requirements are clear and cannot be disputed. More than adequate scientific and technical data exist to fully support the programs and policies contained in this proposed legislative program. All that is lacking is the will to commit the funds and manpower for the abatement program and research. The reform of the IJC and the phosphorus ban can be enacted with no direct cost to the Federal taxpayer. The additional research program and the acceleration of the municipal treatment and combined sewer programs can only be viewed as investments in the future.

It is obvious that these national treasures have enormous problems that require federal attention. It is also clear that the Canadians have done a better overall job than the U.S. in meeting its moral, legal, and environmental obligations. This is a logical time for the U.S. to make major changes in its attitudes and programs. I ask you to join with me in supporting this legislative package to save the Great Lakes from further degradation.

INTRODUCTIONS

SPEAKERS

Steven Gordon is currently an assistant professor in the Department of City and Regional Planning at Ohio State University. He has taught at Rutgers University, served as a senior planner in Cayuga County, New York, and has acted as a consultant to several city, regional, and state agencies. His specialties include land use, environmental modeling, and environmental impact analysis.

Wesley Seitz is Assistant Director of the Institute for Environ- mental Studies and Associate Professor of Agricultural Economics at the University of Illinois in Urbana. Most of his research is in the resource economics and environmental quality areas. Presently he is completing an interdisciplinary research project funded by EPA. It is the subject of his paper.

Anthony Scott one of Canada's leading economists, could not be with us today. In his place, and with his strong recommendation, we have one of his outstanding past students, Clive Southy, who is now teaching in the Department of Economics at the University of Guelph.

PANELISTS

Mary M. Gamer is an attorney in Washington, D.C., specializing in natural resources law. Until January, 1975, she was Deputy Director of the Natural Resources Division of the General Counsel's Office, U.S. Department of Agriculture. At present, she is serving as consultant to the National Association of Conservation Districts on federal and state conservation legislation and related legal matters.

With backgrounds in soil science, environmental studies and planning, Doug Hoffman characterizes himself as an environmental planner. It is in this area that the institution he represents, the Centre for Resources Development, has its major inter-disciplinary work in environmental studies on the Guelph campus.

John R. Adams is the Associate Director and Environmental and Water Resources Planner for the Toledo Metropolitan Area Council of Govern- ments. Recently he completed co-ordinating and executing the technical aspects of that agency's 208 program which included hydrologic, water quality and land based investigations and planning studies. In the process, TMACOG developed a computer based Land Resources Information System to evaluate relationships of land use and water quality. Mary he Strung is Chairman of the Lake Michigan Interleague Group of the League of Women Voters. Her years of work in environmental education and as an involved citizen participant in resource planning activities were recently recognized by the United States Environmental Protection Agency - Region V, when she was presented with a 1976 Environ- mental Quality Award. URBAN NON-POINT,POLLUTION - APPROACHES FOR CONTROL

by Steven I. Gordon*

INTRODUCTION

Non-point sources of water pollution represent a significant source of urban water pollution. The now well known study by the American Public Works Association demonstrated that the "first flush" or shock load of non-point storm runoff in Chicago was equivalent to 160% of the daily municipal sewage BOD load. Non-point urban pollution includes storm water runoff, runoff from lawns, streets, roofs, and highways, runoff from paved commercial and industrial areas, and, in less densely populated communities, septic system pollution.

Alleviation of this water pollution problem in already developed areas will be a difficult and expensive task. One study in New Jersey showed that the only way of obtaining acceptable dissolved oxygen levels in the Raritan River was to "depopulate" or "deurbanize" the City of New Brun~wick.~Obviously, such a solution is infeasible. This leaves a number of structural solutions to existing non-point source pollution loads: collection and secondary treatment over longer time periods, use of permeable pavement, dry wells, gravel barriers on flat roofs, and/or the use of other special pervious construction materials and measures to increase ground water absorption and time of concentration of runoff.

These options are very expensive to implement. As one report puts it:

''The control of urban non-point sources has not been based on structural solutions. Simulation has demonstrated that capturing and treating urban runoff involves costs far beyond the financial capability of any community in the basin. In addition, even if such controls could be financed, the benefits would not justify the cost^."^

* Mr. Gordon is an Assistant Professor, Department of City and Regional Planning, The Ohio State University.

(1) American Public Works Association, Water Pollution Aspects of Urban Runoff, Springfield, Va.: National Technical Information Service, #PB-215 532, 1969.

(2) George W. Carey et al., Urbanization, Water Pollution and Public Policy, New Brunswick, N.J.: Center for Urban Policy Research, Rutgers University, 1972.

(3) Ohio-Kentucky-Indiana (OKI) Regional Council of Governments Great Miami River Basin Plan Within the OK1 Region, Cincinnati, Ohio: OKI, Sept. 1976. An estimate of structural controls for Chicago put the capital cost alone at $1,323 million!

This illustrates the importance of future planning and control efforts to avoid these potential problems in newly developing areas. This paper focuses on these non-structural solutions to the urban non- point water pollution problem. In particular, the paper illustrates the input data necessary to simulate the non-point water pollution effects of alternative land use plans, methods of regulation and control which can be utilized to help implement the most desirable (i.e. least water pollution) plan, and considers the social and economic consequences of implementing these water pollution control strategies.

ASSESSING URBAN NON-POINT WATER POLLUTION

A number of factors affect'the quantity of non-point pollutants coming from a particular urban area. One of the primary pollutants associated with urbanization is sediment. Obviously, this pollutant is most prevalent during the construction phase of any building project. Following construction, the most critical factor affecting non-point water pollution is the amount of impervious surface. Pavement and roofs cover areas that once were permeable to water runoff. The time distribution of runoff is changed in urban areas with runoff occurring nearer the beginning of a storm and reaching a higher peak volume.

Pollutants carried with this runoff water can include organic residue, dust and dirt, heavy metals, phosphorus, nitrogen and other nutrients, and many other organic chemicals. The amount of these substances which will be carried by the runoff is affected, in turn, by air pollution levels, traffic amounts and patterns, land use, the frequency of street cleaning, the nature of the storm drainage system, and the amount of time between rainfalls. In suburban areas, at a lower density of development, the amount of non-point water pollution is also affected by the type of soil, slope, and the number and state of repair of septic systems in the area. Finally, in order to evaluate the impacts of these pollution sources, one must utilize stream or lake models which simulate impacts on nutrient, phytoplankton, oxygen, and the levels of other pertinent variables.

(4) M.B. McPherson et al., Management of Urban Storm Runoff, Springfield, Va.: National Technical Information Service #PB-234 316, 1974, p. 7-77. In order to assess the non-structural planning and control alternatives which will arrive at the most acceptable solution, it is necessary to simulate alternative land use, development, and control scenarios. This can best be illustrated by the relatively simple example of Owasco Lake, New York, one of the Finger Lakes in Cayuga County, New York. This lake serves as the primary water supply source for approximately 55,000 people, and in addition, serves as an important recreation site for boating, swimming, fishing, hiking, etc. The general design for the study of non-point water pollution in this basin is shown in Figure 1. New development in the basin is primarily limited to residential development. The lake itself is long and narrow with a relatively simple circulation pattern and a measured inflow and outflow rate. These factors combine to make the analysis of non-point pollution much simpler than that around the Great Lakes where a complex mixture of land uses and large daily, seasonal, and annual variations in lake circulation make any analysis much more complicated. However, the general approach would remain the same in this situation.

As Figure 1 illustrates, the study of Owasco Lake involved a study of septic system, erosion, and runoff nutrient contributions to Owasco Lake. Different development scenarios were simulated utilizing field data, published information, and several available models of soil loss, runoff, and lake eutrophication. Tables 1-5 are illustrative of the results of the analysis. Here one can see the contrasting impacts of the development of high versus low slope areas and of dispersed development (Tables 1-3) versus concentrated development (Tables 4 and 5).

IMPLICATIONS FOR CONTROL OF NON-POINT SOURCES

The results of the above analysis are illustrative of the consequences of different control and management strategies for minimizing non-point water pollution in urban and urbanizing areas. Essentially, there are three major (not mutually exclusive) implementable sets of regulations:

1) Land Use Controls - Establish zoning and subdivision regulations which define environm~?ntallysensitive areas and establish limitations to the types and intensities of development on these areas.

(5) The detailed discussion of these models is beyond the scope of this paper. The reader is referred to E. Joe Middlebrooks (ed.) Modeling the Eutrophication Process, Proceedings of a Workshop held at Utah State Univ. Logan, Utah: Utah Water Research Laboratory, Nov. 1973, U.S. Department of Agriculture, Soil Conservation Service, S.C.S. Handbook 282, Washington, D.C.: U.S. Government, 1965; USDA., SCS.,. National Engineering Handbook, Section 4, Hydrology, Washington, D.C.: U.S. Government, 1969. FIGURE 1: FLOW CHART OF STUDY DESIGN

Models and

- Compilation of Physical and Cultural Resources of Owasco Lake Basin Potential Impacts of New Septic Systems

Development Around

Equation ' -I- --- Impact of New Development .4 -I -I on Erosion, Runoff, and Nutrients J

Model

Potential Impact Evaluation of [Tn:ke SCS Ratings, Land Use, Mode 1 Eutrophication Health Regulations

Recommendations 4 TABLE 1

RUNOFF AND PHOSPHORUS IMPACT OF MAXIMUM DEVELOPMENT IN OWASCO LAKE BASIN SCENARIO 1 DEVELOPMENT ON HIGH SLOPE AREAS ONLY*

Soluble Phosphorus (mg)

Change in Rainfall Amt. Runof f (inches) (Acre Feet) @ 0.36 mg/l @ 0.90 mg/l

1.02 0 0 0 1.41 0.466 207115 417788 1.61 0.776 344737 861845 1.90 1.345 596818 1492047 2.10 1.501 666311 1665779 2.30 1.759 780770 1951924

*Projected increase in families is 143. Slopes are all greater than 10%.

TABLE 2

RUNOFF AND PHOSPHORUS IMPACT OF MAXIMUM DEVELOPMENT IN OWASCO LAKE BASIN SCENARIO 1 DEVELOPMENT ON LOW SLOPE AREAS ONLY*

Soluble Phosphorus (mg)

Change in Rainfall Amt. Runoff (inches) (Acre Feet @ 0.36 mg/l @ 0,90 mg/l

1.02 0 0 0 1.41 0.466 207115 517788 1.61 0.725 321573 803934 1.90 1.138 505524 1263811 2.10 1.345 596819 1492047 2.30 1.603 711277 1778193

*Projected increase in families is 143. Slopes are all less than 5%. TABLE 3

EROSION IMPACTS OF DEVELOPMENT AROUND OWASCO LAKE

Increase in Erosion During Construction VS Before Construction

(Tons/Average Storm over a One Year Period)

Sample All Development at Once Building Over 30 Years All Land Cleared 25% Cleared All Land Cleared 25% Cleared

Random 6059 1514 202 51 Low Slope Only 4448 1112 148 3 7 Intermediate Slope 7193 1798 240 60 High Slopes Only 12675 3165 422 106

TABLE 4

EROSION IMPACTS, SCENARIO I1

A Two Hundred Housing Unit Development

Increase in Erosion During Construction vs. Before Construction (~ons/AverageStorm over a One Year Period)

Sample Area All Land Cleared 25% Cleared

Low Slope 26 7 Intermediate Slope 5116 1279 High Slope 22995 5749

TABLE 5

POTENTIAL RUNOFF IMPACTS OF A TWO HUNDRED UNIT HOUSING DEVELOPMENT ON OWASCO LAKE, HIGH SLOPE SITE

Change in Phosphorus Increase (mg) Rainfall (inches) Runoff @ .36 mg/l @ .90 mg/l

1.02 0 0 0 1.41 0.09 332951 832378 1.61 0.14 51 9404 1298510 1.90 0.22 812401 2031003 2.10 0.26 963339 2408348 2.30 0.31 1145352 2863381 2) Land Acquisition - Acquisition of the most sensitive areas such as wetlands for public recreation and wildlife uses. Here programs such as the New York State Wetland Requisition and Reclamation program can be useful.

3) Performance Controls and Structural Controls - Utilize a mixture of performance controls and some small, structurally related regulations. These include construction performance controls such as requiring of performance bonds, regulations on land clearing and development practices, drainage ordinances, erosion control ordinances, strict septic system controls, and implementation of structural solutions such as retention basins in sensitive areas.

Most of the controls suggested above are enabled under the general police powers of local governments by state governments. They all require establishment of a subdivision and site plan review process whereby the potential impacts of new development are carefully assessed using the approach discussed in the previous section. All require careful land use and development planning not traditionally implemented in many areas around the Great Lakes. Each serves to control a different potential source of non- point water pollution; i.e. sediments, runoff, septic systems, by providing regulations which force the developer to either choose the sites whose development will result in the lowest impacts or choose to provide ameliorating controls such as retention basins, sediment basins and diversion channels.

SOCIAL AND ECONOMIC IMPACTS OF NON-POINT CONTROLS

The potential environmental benefits of non-point water pollution controls are evident and, to a degree, measurable in terms of improved water quality and its associated benefits. There are, however, certain potential social and economic costs. First, there is a great potential for implementation of these controls to result in the inequity of resource allocation. More specifically, by increasing the cost of development, certain individuals and/or industries may be priced out .of the land market. Thus, lower and

(6) For a comprehensive review see Charles Thurow et al., Performance Controls for Sensitive Lands, Chicago, Ill.: American Society of Planning Officials Report Nos. 307, 308, June 1975. middle income families may not be able to afford the cost of lake- shore recreational facilities or homes. Certain industries and commercial facilities will not be able to locate in areas around the lakes because of their potential point and non-point discharges. In sewered areas, strict application of non-point controls may result in an increase in density which is unacceptable to basin residents, while in unsewered areas there may be an increase in required lot sizes which is unacceptable from a social equity standpoint. Finally, increased development cost may price the small developer out of business and further aggravate problems in an already depressed building industry. This is not to say that the environmental benefits are not worth the costs but only that a careful analysis of the trade-offs involved must be made before final control programs are implemented.

SUMMARY

Non-point water pollution can only be alleviated in a cost- effective manner through non-structural, planning and management controls. The nature of the controls employed in any particular area can generally be derived through simulation of alternative locations for densities, and types of development. The example of Owasco Lake, New York, illustrates the results of such a simulation. Given these data, one can take three major approaches to non-point pollution control: land use controls, land acquisition, and performance controls combined with structural controls. The costs or benefits of implementing such controls must be carefully evaluated lest particular social and/or economic groups bear what should be the societal costs of alleviating water pollution problems. AGRICULTURAL NON-POINT POLLUTION-

APPROACHES FOR CONTROL

by Wesley D. Seitz*

INTRODUCTION

In this paper we will deal with several aspects of the development of public policy directed at the reduction of non-point sources of water pollution from agriculture. The paper is developed almost' entirely out of the work being completed at this time under a contract with the U.S. Environmental Protection Agency. 1

One of the difficulties in putting this paper together is the fact that it is being completed just as the research project on "hich it is based is being drawn to a close. Thus, new or revised information is constantly being made available and striking the balance between waiting for more relevant information and stopping to generate this paper is more difficult than usual. This problem is exacerbated by the fact that a flood of information relevant to this work is being produced by the National Commission on Water Quality, the U.S. Environmental Protection Agency, the U.S. Department of Agriculture, universities, the International Joint Commission, and others.

The paper begins with some comments on the physica1,nature of the problem and the assumptions under which the paper is developed. This commentary is followed by a section indicating the broad range of policy alternatives available for consideration and a brief discussion of the existing relevant institutions and laws. The next major section deals with the acceptability of policy alternatives. This section includes a discussion of a recent survey of farmer opinions, an analysis of the impacts of some alternative policies at the cornbelt level of aggregation, and sociological analyses of policy implementation. Another major section deals with the equity aspects of alternative policies.

* Associate Professor, Department of Agricultural Economics, Associate Director, Institute for Environmental Studies, University of Illinois, Urbana-Champaign.

(I) Individuals active in this project include Staff: R.G.F. Spitze, D.M. Gardner, J.C. VanEs, D.L. Uchtmann, S.K. Gove, E.R. Swanson, J.R. Karr, K.L. Guntermann, C.R. Taylor; Professional Employee: M.E. Hay; and .' Graduate Students: R.K. Petges, T.K. Clarke, L.C. Keasler, M. Nelson, K.L. Frohbert, R.S. Hewett, D.L. McLaughlin, C.S. Turner, S.B. Cherry, S.J. Raines, K.A. Olberts, I.J. Schlosser, and J.T. Hannon. A final report is currently in preparation for submission to the U.S. EPA for review, revision and publication. 'These individuals hold appointments in the Agricultural Experiment Station, the College of Commerce, School of Life Sciences, Institute of Government and Public Affairs or the Institute for Environmental Studies. The Physical Nature of the Problem

Based on conversations with experts over the last several years and review of a reasonable range of literature I have formed the following impressions as to the physical aspects of the problem of non-point sources of water pollution from agriculture. I attempt to present the essence of the problems without relying on the standard references to specific quantities.

The problem of non-point sources of water pollution from agriculture is quite complex. In the case of sediments and plant nutrients, we are concerned with substances entering water at a rate higher than would occur under natural conditions. We are not exactly sure of where they come from, how they are transported, or what damage they cause. On the other hand, we are sure of some of the sources, we know some of the important determinants of their movement, and we are sure that some damage occurs. For example, it is common knowledge that agricultural land is one of the significant sources of sediment and that the erosion process is generally harmful to the land. It is also common knowledge that sediment particles carry water quality-degrading substances and that the sediment itself is a pollutant, if only due to its water quantity aspects (reservoir capacity reduction and river and harbor dredging). Thus, the fact that the problem is complex and its exact magnitude is not known is probably not highly significant; that the appropriate policy direction is known is sufficient to begin appropriate actions.

Sediment

Agricultural land is one of the major sources of sediment. Several billion tons are lost (and significant quantities reach the streams) in an average year. The rates of soil loss are highly variable. Much of the land is flat enough or under management practices that result in insignificant rates of soil loss. However, there is a substantial number of acres that experience significant (5-20 tons per acre per year) soil losses. Much of this erosion occurs on soils where the A horizon soils are thin enough to make this loss significant from a maintenance of productivity perspective. (It is possible to control the loss through commonly accepted production and conservation practices.) In addition, there is a reasonable number of acres under cultivation that experience massive per-acre soil losses each year, perhaps 20-100 tons. In many cases, these losses occur on deep loess soils on which productivity will not be adversely affected for quite a long period of time and which will require drastic measures to achieve control. Often these lands must be converted to less intensive uses to meet generally accepted levels of soil loss whereas soils with lower levels of soil loss can be managed with commonly accepted production and conservation practices to achieve acceptable rates.

Sediment unquestionably has adverse water quantity effects. Reservoir storage capacity reduction, and filling of drainageways, rivers and harbors are among the obvious cases. It also can have adverse effects on aquatic life and recreational, and consumptive uses of water. Sediment can also be beneficial, for example, by adsorbing plant nutrients, thereby making them unavailable to the aquatic ecosystem. However, I am not aware of literature indicating that the current levels of sediment are needed to accomplish this function. Phosphorus

This plant nutrient is bound to the surface of soil particles and is therefore carried with sediment when erosion occurs. Since it is attached to the surface, great quantities of phosphorus can be carried by small soil particles. Thus, while reductions in erosion will result in reductions in phosphorus loss, it is expected that phosphorus loss may not be reduced proportion- ally because the size distribution of soil particles lost will shift downward.

Increased phosphorus loads in water are often the cause of algal blooms and eutrophication. Phosphorus occurs in water in several forms and it can be changed from one form to another. As a result, the extent to which phosphorus added as plant nutrients occurs in water in a form that causes water problems is not completely clear. But some does, or at least can.

Nitrogen

The nitrogen balance in agricultural land is even more complex than phosphorus. Substantial quantities of nitrogen are available in productive soils. Significant amounts are added from the atmosphere and other natural processes and the farmer adds significant quantities as well. It can be lost from the soil by volatization to the atmosphere, uptake by the crops, leaching through the soil into ground water or tiles leading to streams, or with the surface water runoff. Soil erosion control implies holding water on the soil allowing it to filter through it and through tiles to streams, rather than to allow it to flow over the surface. Soil erosion control will thereby reduce surface and increase leaching losses of nitrogen. The net effect is not clear. It is also unclear whether the proportion of nitrogen entering the water via either route is significant.

Nitrogen in water can be a cause of algal blooms and eutrophication, but in most cases phosphorus is the critical element. The concentration of nitrogen in water often exceeds the public health drinking water standards--but there is considerable disagreement on appropriateness of these standards.

Toxic Substances

While this paper does not deal with this problem, it should be noted that it is common for toxic substances, including pesticides, to move with sediments.

In general, the agricultural non-point source problem is quite different from the standard pollution problem. Rather than being concerned with a value- less residual (smoke) from a productive or consumptive process, we are concerned with preventing the loss of valuable, productive inputs (soil, plant nutrients) due to natural processes. Sediment, plant nutrients, and insecticides are all valuable when on the field but are pollutants when allowed to reach the water in excessive quantities. From the farm operator's perspective, the economic decision concerns the appropriate level of expenditure to prevent the loss of these productive inputs. From the social perspective, in the short run, the problem is a standard pollution prevention problem. In the longer term, the maintenance of productive resources becomes a relevant social concern. Physical Control Techniques

There are three types of decisions at the farm level that influence the rate of soil loss: (a) tillage practices; (b) conservation practices; and (c) cropping practices. Tillage practices include (1) the conventional moldboard plowing, (fall or spring) seedbed preparation and planting; (2) numerous types of reduced tillage operations such as chisel plowing; and (3) zero tillage. Cropping practices refer to the rotation of crops, with corn and soybeans being the most conducive to erosion and meadow or woodland the least. By combining various crops in rotation one can achieve desired average rates of erosion. Conservation practices include terracing, contour farming, strip cropping, grassed waterways, etc. By employing combinations of conservation, tillage, and cropping practices, the farmoperator can achieve a given expected level of soil loss.

POLICY ALTERNATIVES

The schematic in Figure 1 can be used to explain many of the wide range of policy alternatives available to society. The schematic is a list of the five components used in policy development. The schematic includes instruments (I), performance indicators (P) , control techniques (C) , compliance measures (M) , and temporary penalties (T). A number of combinations of these components can be used to develop a wide range of policies.

Sediment control instruments specify the various methods which can be used to persuade farm operators to modify their operations to reduce soil losses. Performance indicators are means of assessing the amount of damage occurring. Erosion control techniques are means of reducing the rate of soil loss or depo- sition in water. The compliance measures are used to determine whether the individual is conforming to the policy requirement. Temporary penalties are forms of punishment used in conjunction with mandatory policy instruments.

A brief elaboration on the greenbelt (or field border) technique may be of interest. Recent work carried out under this project suggests that greenbelts may play a quite significant role in improving water quality. They will filter sediment out of surface runoff waters and utilize plant nutrients in these waters. In addition, if a stream is allowed to meander through a vegetated area rather than being forced to flow in a straight channel, a complex ecosystem capable of utilizing additional nutrients will develop. Ecosystems of this type support the growth of desirable fish species. In this manner, the greenbelt is not simply a means of controlling erosion on land near streams.

In the most general case the policy will include one or more of the elements from each category. However, it is possible to omit several. Perform- ance indicators may be omitted in a policy which requires (or prohibits) the adoption of a given production or conservation technique. Erosion control techniques would not be specified in a policy which allowed the full range of choice. Temporary penalties would not be included in policies unless certain actions are mandated. SCHEMATIC FOR DEVELOPMENT OF PUBLIC POLICY FOR CONTROL OF EROSION-SEDIMENTATION

Sediment Control Performance Erosion Control Compl iance Temporary Instruments (I) Indicators (P) Techniques (C) Measures (M) Penal ties (T)

NO POLICY QUANTITY OF CONSERVATION SO IL TECHNIQUES Transferred Contouring Gross Soil ------Loss Equation Deposited Terracing ------Education ------Removed/Lost Land Forming OF SUBSIDY, ECONOMIC R INCENTIVES TILLAGE ------Subsidies -- --- Concentration of Water Quality Sediment ------Loans ------CROP ROTATION ------Catch Basin - - - Status of Market for Plant/Animal Rights PENALTIES ------Life IMPOSED Investment Catch Basin AERIAL ------Court Order Credits SURVEILLANCE ------Waterways ------Tax Tax Relief Land Use ------Ditching ------Fine Taxation Erosion Tiling ------Imprisonment Water Quali ty ------Prohibition of GRASS WATERWAY ------Property Use--- Regulations Mi~demeanor ------Prohi bitions I GREEN BELT 1 ------Erosion ------

Mass Media ------

SELF REPORTING

a and use includes crops produced, conservation practices, and tillage practices.

Figure 1 It is also quite possible, and in fact likely, that a policy would include several items from a category. For example, a policy may include education, subsidy, and regulatory instruments. It could mandate a soil and water conservation district to monitor the quantity of soil leaving agricultural land as a means of assessing the performance of farmers in the area. It could subsidize certain practices while prohibiting others. A wide range of compliance measures might be used. Penalties may be invoked for certain activities but not others. In fact, given the existing combination of federal, state, and local policies in Iowa, farm operators in this state are operating under a legal framework that closely approximates this example.

EXISTING SOIL CONSERVATION INSTITUTIONS

Public policies responding to problems of agricultural soil erosion origi- nated in the early 1930s. Development of these policies slowly followed a rising national consciousness appearing in the early 1900s about the waste and exhaustion of the nation's natural resources. Policies directed at conservation of the timber and mineral resources emerged first under President Theodore Roosevelt.

A quarter century later sufficient public awareness of the dramatic losses due to soil erosion was stirred to precipitate agricultural soil conservation policy. This development was largely stimulated by persistent educational and advocacy efforts of leaders such as Hugh H. Bennett. The concerns were for productive farm land, farm family livelihood, community economic viability, flood damage, and reservoir capacity. Water quality was a lesser concern. It was not by chance that the first important agricultural soil conservation policy emerged in a period of unprecedented farm and nation-wide economic depression, adverse weather conditions, crisis-bred social/institutional experimentation, rapid public policy development, fear of diminished food-producing capacity, and a time when a society held a strong agricultural fundamentalists' ideology.

Since the 1930s, the federal government has also, at times, used a variety of control techniques to reduce the production of farm products in order to "balance" product supply with demand at a more socially acceptable level of prices and resulting producer income. The soil bank was used to accomplish this purpose in the late 1950s. More recently production control has been achieved through a policy of voluntary land retirement. Producers were subsidized to idle land by shifting from crop production to a cover crop. Although not stipulated, economic forcesled to the selection of the more marginal, erosion-prone acreage to be idled. Therefore, this policy also had the indirect effect of increasing water quality, and would have a similar. impact if used again.

The Federal Soil Conservation Service, the local Soil and Water Conserva- tion Districts, and the Federal Agricultural Stabilization and Conservation Ser- vice are governmental agencies that were developed to address soil erosion concerns and as such they need to be considered in the current policy analysis. The Soil Conservation Service, developed in 1935 by consolidating several temporary programs, is still in existence. It set a policy of providing planning, organizational and technical assistance to individual farmers and watershed groups to encourage use of sound soil conservation practices. In 1929, $160,000 as first appropriated for soil erosion investigations. A temporary Soil Ero- sion Service appeared in 1933 as a part of the U.S. Department of Interior, partly as a conservation measure and partly as a means of providing employment through conservation demonstration projects in conjunction with the Civilian Conservation Corps and the National Industrial Recovery Act.

Finally in 1935, the various soil erosion activities of the U.S. Depart- ments of Interior and Agriculture were merged into the Soil Conservation Ser- vice within the latter Department. Its objective was to bring about desirable physical adjustments in land use with a view toward improving human welfare, conserving natural resources, establishing a permanent and balanced agriculture, and reducing the hazards of floods and siltation. These goals were to be a- chieved through complementary programs of soil conservation, farm forestry, flood control, submarginal land utilization, and drainage and irrigation systems. The central thrust was to extend sound land use practices to all public and private land vulnerable to soil erosion.

After finding the pace of achievement slow with a program operated at the federal level, a novel institutional development was fostered. Local identification was seen necessary to fashion a national program to meet local conditions, to assimilate the insights of the practicing farmers, and to encourage the necessary farmer cooperation. The means of achieving these goals was the Soil and Water Conservation District (SWCD) authorized under standard state soil conservation district enabling laws which outlined district functions, powers, and organizational arrangements. Legally, the districts are subdivisions of the state, but their function is to carry out the U.S. Soil Conservation Service policy. This cooperation is facilitated through a formalized memorandum of understanding.

All states have enacted the enabling legislation, generally patterned after a model act. The agency with other general code responsibilities for conservation and management of natural resources is often assigned the state coordination role. Essentially, all farm land of the nation is encompassed in the nearly 3,000 districts. These districts were created only upon petition of the farmers andarepartially governed by an elected farmer committee. Under the auspices of these districts the educational, planning, and technical assistance of federally funded and well-trained conservation specialists is provided to farm operators, by developing basic farm conservation plans.

Two types of powers are vested in SWCD. First, the districts offer a variety of voluntary conservation activities, such as developing plans, demonstrations, prevention and control measures, and the lending of equipment. The second provision, provided in a majority but not all states, and originally believed to be vitally important in the federal policy, is the power of the district to prescribe different types of compulsory land use regulations to prevent and control erosion subsequent to specified processes of petitions, hearings, and a referendum approved by the affected land users. For example, Illinois districts are authorized to adopt land-use regulations under the three-fourths approval by those land owners voting. Except in a few western states, few such regulations have been developed. These regulations are more frequently used in watershed drainage districts.

The SCS provides assistance to some 148 Resource Conservation and Develop- ment Program projects by agreement with public agencies involved in land or water management activities. The agency also cooperates with numerous other groups and agencies on a less formal basis.

The Federal Agricultural Stabilization and Conservation Service (ASCS) administers the other primary existing program focused on agricultural soil conservation. This Agricultural Conservation Program (ACP), is now also referred to as the Rural Environmental Assistance Program (REAP). Financial assistance,incontrast to SCS's technical assistance, is the major technique used in this program. This administering agency was first named the Agricultural Adjustment Administration (AAA), then the Production and Marketing Administra- tion (PMA), and now the ASCS. In addition to the ACP the agency is charged with production control, and price and income support. The local SWCD provides direction, the SCS provides technical assistance and the ASCS, ACP provides funding (up to $2500 per farmer per year) to cooperating farmers for the adoption of soil conservation practices.

The technical assistance, subsidization, and sometimes compulsory performance embodied in these existing agricultural soil conservation policies have obvious implications for the development of state policy for control of agricultural non-point sources of water pollution under the Federal Water Pollution Control Act.

ACCEPTABILITY

This section is comprised of our attempts to determine the acceptability of various policies for the control of erosion-sedimentation. It includes an analysis of the economic impacts at the cornbelt level of aggregation, the results of a survey of Illinois farmers, and a sociological analysis of policy implementation.

Cornbelt Model Analysis

One of the major analytical efforts in this project is the determination of themacro or welfare impacts of several alternative means of achieving policy goals of reducing erosion and nitrogen usage. While it is unlikely that a simple uniform policy of the type analyzed here would be implemented, the analysis does provide a basis for estimating the impacts of more complex policies on society. Estimates of therelative impacts on consumers of the policies is obviously of interest. It is also important to be able to estimate the impact on farmers in the aggregate. For example, several of the policies analyzed are viewed negatively by farmers because they expect that their incomes would be reduced. However, the model indicates that if the policy is applied to all farmers that total farm income will increase.

Given the current thrust toward state level planning for the control of non-point sources of water pollution it is important to realize that these results will not hold for relatively small regions such as states. Constraints that generate increased prices under a national level policy will result in resource transfers under a local or regional policy. Similarly, it should be clear that the impacts of a policy will not be equal for all farmers.

The model used for this analysis is a linear programming model of the production of corn, soybeans, wheat, oats, hay and pasture in the cornbelt (see Figure 2) .2 The production of corn and soybeans in this area accounts for about 70 percent and 60 percent, respectively, of the total United States production of these commodities. For this analysis to be valid in the strictest sense, it is necessary to assume that the cornbelt region will continue to produce these portions of the U.S. total production as demand shifts. Demand functions for corn and soybeans were incorporated into the model in a stepwise fashion, with steps in 2-cent increments. The quantities of wheat, oats, hay and pasture demanded were treated as constraints because of their relatively minor importance and because the inclusion of demand functions would result in a model too large to solve.

The objective of the model is to maximize consumers' and producers' surplus for corn and soybeans, less the total variable costs of producing a specified quantity of small grains, hay and pasture. This objective produces a competitive market equilibrium solution that is consistent with profit maximization by each farmer in the area which is an important advantage over other normative regional models. This model also efficiently incorporates fertilization rates allowing a more detailed model to be constructed.

The land acreage base for the model was obtained from the 1967 Conservation Needs Inventory. Acreage devoted to the six crops, idle land, and land in conservation programs was included. The land base for the area modelled was divided into 11 land capability units (LCU's) within each of 17 geographical regions which are land resource areas (LRA's) defined by the Soil Conservation Service.

Crop production activities in the model differ by crop rotation (an average of about 11 rotations for each LCU within each LRA), conservation practices (straight row, contouring, and terracing), and tillage methods (fall plow, spring plow, and chisel plow). Rotations rather than just single crop activities were included in the model to reflect the influence of the previous crop on the fertilizer and pesticide requirements of the current crop. The model has 14,821 activities and 545 constraints.

The gross soil loss coefficients used in the analysis were based on the universal soil loss equation.

Results

The specific non-point source controls considered in this study were: (1) gross soil loss restricted to be less than two tons per acre; (2) 100% cost

2~aylor,C.R. and Frohberg, K.L., "The Welfare Effects of Erosion Controls, Banning Pesticides, and Limiting Fertilizer Applications in the Cornbelt" forthcoming American Journal of Agricultural Economics. The model was developed under a grant from the Rockefeller Foundation on "Nitrogen as an Environmental Quality Factor. I' Figure 2. Major land resource areas of the corn belt. sharing for terracing cropland; (3) 100% cost sharing for terracing along with gross soil loss restricted to be not more than two tons per acre; (4) a tax on gross soil loss of $4.00 per ton; (5) a restriction on the use of nitrogen of 50 pounds per acre; and (6) a nitrogen restriction of 100 pounds per acre.

Three frames of reference are provided for analyzing the effects of the various non-point source controls. The first is a solution of the model with the acreage of land chisel plowed unconstrained. The model shows that farmers in the cornbelt would maximize profit by chisel plowing about 69 percent of the cropland. For the second benchmark, chisel plowing was not allowed in the model. Since chisel plowing has only recently been adopted, this second benchmark approximates the situation a few years ago. The third benchmark is a solution of the model with the acreage tilled with a chisel plow constrained to be no larger than about 28 percent of the land base. This approximates the current condition.

The model results are given in Table 1. Note that without chisel plowing gross soil loss is slightly over 5 tons per acre while with chisel plowing allowed it is about 3 tons per acre. With chisel plowing constrained to 28 percent of the land base, gross soil loss is about 4.3 tons per acre. The model therefore indicates that it is profitable for more of the land to be chisel plowed and that adoption of this practice will reduce gross soil loss by up to 1.3 tons per acre, which amounts to 147 million tons for the cornbelt.

It is likely that each of these solutions is projecting a somewhat lower level of soil loss than experienced in practice. While the benchmark solutions indicate production of realistic quantities of the several crops, it is likely that the model has allocated crops to producing areas in a more optimal fashion than actual. That is, the model may have less row crops and more pasture on sloping land (more row crops and less pasture on flat land) than observed. There also may be problems with the chisel plow soil loss coefficients. The coefficients are set assuming the practices are carried out in optimal fashion, whereas in reality farmers may do more seed bed preparation than recommended. It is also possible that the recent corn root worm concerns, pesticide carry over possibilities, and the resulting.extension service recommendations of combinations of moldboard and chisel plowing may result in less acreage being chiseled than expected.

Erosion Controls

The estimated effects of the various erosion controls are shown in Table 1. Note that effects are measured in terms of departures from the benchmark solution with chisel plowing unconstrained.

With gross soil loss restricted to be no greater than two tons per acre, soil loss is reduced from 2.96 tons per acre to 1.06 tons per acre. This causes the price of corn to increase by 6 cents per bushel and the price of soybeans to increase by 16 cents per bushel. Because of these price increases, consumer welfare, as measured by consumers' surplus, decreases by $150 million. The negative effect of this restriction on agricultural producers, as measured by ~roducers'surplus, is $22 million. This result is primarily due to the combination of the increase in prices of corn and soybeans with a decrease of 61.9 and 21.5 million bushels, respectively. Thus, aside from administrative and enforcement costs (which w N m I 0 u.rwL & ow-sm': 5 - n.

a m g2'nLH Uw,: -&Em I- w ;g JU . tff 0 - 0 n+ '6 X "72

w'n Y Z Cw 'n 0 'r'+ .-w w m C L w Ym'n .r - - .rC m Y 3 - 9 3 k . . €0@ n3 -'- -w mL L L '- .- u m> 7 m OC .- 'n ,LW E C . n. 'n m g--2 9 '4-C 7 0 .r .r L h - v woo 'n 3 UUw v Y- m 'nu u -0 UWOX n.L L *t would be high for such a restriction), the cost to society of a two ton per acre restriction is about $172 million annually. Expressed another way -this amounts to $1.54 per ton of reduction in soil loss from the unconstrained benchmark solution. However, comparing the 2-ton soil loss restriction with unlimited use of chisel plowing to the solution with restricted chisel plowing we find that the cost to society in producers and consumer surplus is approximately $70 million less than with the soil loss restriction. This implies that it is possible to increase social welfare and reduce soil losses by more efficiently organizing agricultural production.

The soil loss tax, while,not a politically viable alternative, was considered because it is a theoretical norm of economists. From Table 1 it can be seen that a $4.00 per ton tax would reduce gross soil loss to 0-.91 tons per acre. This tax costs producers $1008 million. Although the prices of corn and soybeans increase slightly, the values of hay and pasture decline to result in a net gain for consumers of $300 million. About $407 million in tax revenue would be generated annually. The cost to society per ton of soil loss eliminated is $1.37 annually. From society's viewpoint this policy is more desirable than the two-ton restriction. From the viewpoint of producers it would be much less de-, sirable.

The full cost sharing arrangement does not impact on crop prices or land values, but would cost the government $322 million annually to subsidize producers to build and maintain terraces. This subsidization policy would reduce gross soil loss to 2.41 tons per acre. Combining this subsidization policy with a two-ton per acre restriction would reduce soil loss to 0.95 tons per acre. The average cost of this subsidization plus restriction policy is $2.36 per ton of soil loss eliminated.

To reduce soil loss from 3 tons under the optimal solution to. about one ton we therefore see that the soil loss tax is the most efficient policy from society's viewpoint. This is closely followed by a per-acre restriction. These policies would also be the most efficient means of moving from the actual present levels of soil loss to a lower level. Either would encourage more rapid adoption of the economically efficient chisel plow technique.

The relationship between tillage practices and pesticide use rates is indicated. The quantity utilized increases as the number of acres chisel plowed. Of course, since the rate of erosion decreases,it is not clear that the quantity lost to streams would be increased. The results also indicate that the rate of nitrogen utilization is not significantly affected by the several soil loss policies.

Nitrogen Restrictions

For the nitrogen policy, it was assumed that the per-acre rate would be reduced from a mean rate of about 140 pounds to a maximum of either 50 or 100 pounds (Table 2). It was further assumed that a restriction would apply to any source of nitrates including those added by legumes. Since the precise relationship between nitrogen fertilizer applications and nitrate pollution damages has Table 2. CORNBELT MODEL RESULTS-:NITROGEN CONSTRAINTS

Bench Nitrogen Nitrogen Mark 50 lbs 100 lbs Run per A per A

Change in consumers' surplus (mil. $)**

Change in producers' surplus (mi 1. 8)

Government cost (mil. $ receipts or direct expenditures)

Crop prices:

Corn ($/bu.) Soybeans ($/bu.) Wheat ($/bu. ) Oats ($/bu.) Hay ($/ton) Pasture ($/ton)

Production: Corn (mi 1. bu. ) Soybeans (mi 1. bu. )

Acres terraced (mi 1 . ) Reduced ti11 age (mi 1 . acres)

Gross soil loss (mil. tons)

Gross soil loss (tons per acre planted)

Insecticide expenditures index

Herbicide expenditures index

N load (bil. lbs.)

N 1oad (1bs. /acre) - *Costs of Program Administration Rot Estimated **Excluding Environmental Benefits not been established 3 there is presently no sound basis for restricting fertilizer use to either level. The 50 and 100 pound levels were chosen to cover the range of possible restrictions.

The 100 pound restriction reduced consumers' surplus by $321 million while the 50 pound restriction reduced it by $3325 million. Producers' surplus increased by $21 million with the 100 pound restriction and by $2036 million with the lower restriction. Producers' surplus increased with the restriction primarily because of the inelastic nature of the demand for corn and soybeans. Thus we see that a nitrogen fertilizer restriction, which would clearly be to the disadvantage of an individual landowner if imposed only on his farm, would be to his advantage if imposed in a large region.

Under the 50 pound restriction, corn acreage increased by 3.5 million acres. But the higher acreage did not compensate for the reduction in per-acre yield. Hence, the quantity produced went down by 478 million bushels and price went up by 62 cents per-bushel. Although the restriction gave soybeans a comparative advantage over corn, the increased pressure on the land base for corn production increased the price of soybeans by 56 cents per bushel. The restriction reduced the acreage of corn grown in rotation with soybeans or small grains; hence, insecticide expenditures increased by 11 percent.

The average nitrogen load on corn acreage decreased from a benchmark level of 101 pounds per acre to 76 pounds per acre under the 100 pound restriction, and to 49 pounds per acre under the 50 pound restriction. The load is below the restriction level because the optimal nitrogen rate on some of the poorer land is below the restriction level and thus the average is pulled down. The nitrogen load was reported in terms of corn acreage because the other crops do not require substantial addition of nitrogen to the soil.

SOCIAL FACTORS

In addition to the analysis of the economic and institutional aspects, sociological aspects were analyzed, primarily through a review of the available llterature. The review identified social factors which may aid in, or make more difficult,the adoption of erosion control policies. The major concern was with the administrative organization needed to carry out an effective policy. The response of farmers and others in the community to the problem is the major determinant of effectiveness. The manner in which farmers are made aware of the problem, solutions are developed and implemented will have a major impact on effectiveness.

Administrative Organization

It is assumed that a new policy can be most efficiently implemented by an existing institution with compatible functions. Generally, the individuals - 3~ldrich,S.R., "perspectives on Nitrogen in Agriculture: Food Production and Environmental Implications." Paper presented at ~mericanAssociation for the Advancement of Science, February 1976 (mimeo). making decisions concerning the operation of a policy will be more effective if they are close to the locale in which the program is implemented. In the case of erosion control the appropriate measures vary greatly with location, increasing the need for local information and programs. The dual need for responsive- ness to local conditions and technological developments appears to be met most adequately, if the decision-making structure of the organization combines both technical expertise and meaningful local citizen participation.

Farmer Response

Farmer- response is a function of economic and cultural factors. Reactions will be influenced by the nature and source of information, perceived necessity for and legitimacy of the policy, and the extent to which suggested changes conform with existing behavior. It is possible that in the absence of a soil erosion control program, farmers may feel pressure to fully utilize their resources in line with a maximum production goal.

Community Response

While perhaps the most difficult to measure, the interdependent interests and actions of many individuals does influence the acceptance of policies. How- ever, the response of the rural community to this problem has not been substan- t ial.

The several policies and organizations will be discussed with reference to three aspects of problem solving: awareness of problem, development of solution, and implementation of solution.

Problem Awareness

The USDA Cooperative Extension Service has a long history of providing farmers with information and leadership toward better farming practices and they generally have a high level of credibility. The major thrust of their activity has been the introduction of technology devoted to increased productivity rather than socially-oriented resource conservation. The SCS has also carried out a more specialized program devoted to erosion control. The Environmental Protec- tion Agency has recently begun providing information relative to water quality. In spite of these efforts, considerably more information may be needed on the relationship between soil erosion and water quality. A concerted effort by the Extension Service with the cooperation of the SCS map be the most viable general educational approach.

Solution Development

In' the development of farm level solutions to erosion problems it is likely that the SCS, working under the guidance of local SWCD's and with individual farmers would be the most acceptable to farm operators. If current resources are not available to carry out this activity at the level needed, additional tax- generated funds could be made available or other funding arrangements could be developed. For example, a fee charged by SCS for technical service could be deducted from federal income taxes. This arrangement would have the advantage of reducing the size of the agency as the planning task is completed. If plan development is mandatory,there will be some adverse farmer reaction to the involvement of government in the farm decision-making.

-Solution Implementation

Plans may be implemented on a voluntary basis, with or without financial incentives, or on a mandatory basis, with or without compensation. The present voluntary program has apparently not been sufficient,even with the provision of some financial incentives. Perhaps a more aggressive program would achieve greater results.

The use of mandatory programs would change the major thrust of SCS from one of encouraging farmers to adopt conservation practices to providing assistance to farmers who are required by law to adopt. mile such programs have certain advantages, they also face the usual problems of any bureaucracy. A logical candidate for carrying out this function on a national basis is the ASCS. If organized at the local level, the SWCD seems to be a logical choice. While the EPA is also a possibility, it does not have substantial experience working with the agricultural decision-maker. It is likely that the EPA would be charged' with -water quality monitoring activities.

SURVEY OF FARMER ATTITUDES

A survey of Illinois farmers was undertaken to determine their perceptions of the fairness of alternative policies and their general experience and attitudes toward soil conservation practices.4 Farmers randomly selected from eleven counties were divided into two groups. One group received a questionnaire containing nine policies, the other received one containing eight. All seventeen policies were included in a questionnaire mailed to the ASCS County Executive Directors in the eleven counties. All respondents were telephoned to obtain their responses. Eleven ASCS direct~rsand 135 farmers received questionnaires; 10 directors and 87 farmers completed the questionnaire.

Of the 87 farmers responding to the questionnaire, 18% reported using contouring with an average of 76 acres contoured. Seventeen percent reported having terraced some of their land,with the average being 49 acres. The average number of acres in row crops of responding farmers was 440,with several reporting less than 50 acres and 200 acres being the largest. Further analysis of the attitudes and practices of those reporting contouring or terracing was not carried out due to the small sample size.

Another variable of interest is that of farmers self-description of their soil conservation practices. The results were as follows:

4~hissurvey was funded through a grant from the Illinois Institute for Environ- mental Quality. Excellent ...... 5.0% Adequate ...... 25.0% Average ...... 10.0% Best under circumstances ...... 35.0% Should do better...... 25.0%

100%

A thorough analysis comparing farmers' self-description against their perception of the fairness of the policies indicates that there is little relationship between the two.

Table 3 summarizes farmer attitudes on soil erosion control. It is clear that an overwhelming majority of the farmers feel that soil erosion control is needed, both to maintain productivity and achieve water quality. A reasonable number feel that erosion can be measured on a farm or watershed basis.

Table 4 gives farmer estimates of effectiveness of several practices to reduce soil erosion. The low percentage of farmers rating terracing and contouring as effective is rather surprising. A reasonable portion of farmers view the remaining techniques as effective. These data may imply that a reasonable number of farmers expect that it may be necessary to change crop rotations in order to achieve reduced levels of erosion.

Table 3 FARMER ATTITUDES ON SOIL EROSION CONTROL

Yes Maybe NotSure No TOTAL

Is erosion control needed to maintain soil productivity? Is erosion~controlneeded for achievement of water quality? 69.4% 9.4% 8.2% 12.9% 100% Can the amount of soil erosion be measured on a farm-by-farm basis? 44.7% 20.0% 18.8% 16.5% 100% Can the amount of soil erosion be estimated for a watershed? 42.9% 19.0% 22.6% 15.5% 100% Table 4 FARMER ESTIMATES OF EFFECTIVENESS OF PRACTICES TO REDUCE SOIL EROSION

- - -- Very Somewhat Not Very Not at All Effective Effective Effective Effective T0T.C

Terracing 19.8% 27.2% 28.2% 24.7% 100% Contouring 19.5% 39.0% 17.1% 24.4% 100% Conservation Tillage 53.7% 31.7% 8.5% 6.1% 100% Elimination of Mold- board Fall Plowing 45.2% 33.3% 9.5% 11.9% 100% Changing Crop Rotations 60.5% 29.1% 5.8% 4.7% 100%

Table 5 gives the response of farmers to the question of fairness for each of the 17 policies. The responses are further broken down to show the variation according to whether or not the farmer has developed a soil conservation plan. Fairness is of interest because it reflects a basic attitude. It gives indication of what farm operators will put up with based only on their conception of the problem as they ---see it now. Fairness is not the same as equity as discussed below. ~air;~~does not imply that farmers have analyzed the policy from a societal perspective. Rather it deals in a straightforward manner with whether the farmer perceives a given policy to be fair or unfair. Pretests established clearly that farmers under stood this concept.

When the total number of farmers rating policies as "fair" or "unfair", regardless of degree, is considered,the policies allowing some freedom of choice in the selection of techniques are favorably rated. Prohibitions of specific practices and nitrogen taxes or restrictions are unfavorably rated. The requirement of implementation of soil loss plans and 3 and 5 tons soil loss limits are viewed as fair, even without being explicitly combined with a cost sharing program. It is also interesting that the nitrogen oriented policies are most strongly viewed as unfair while the tax credit and interest free loans for soil conservation are viewed as the most fair.

Almost all farmers who have developed a soil conservation plan have worked with SCS. These farmers have been advised on the most appropriate soil conservation practices for their individual operations. Thus it is interesting to note whether or not those farmers who have developed a soil conservation plan perceive the fairness of the policies under study differently from those who have not developed such a plan. But a strong caution is in order. Only about one half of the respondents were asked about each policy. The expectation that the two groups would be uniform is largely true, except in the case of the percent having developed soil conservation plans. One group has approximately 66% reporting the development of a soil conservation plan, the other group only about 50%. Therefore, it is unlikely, but there may be some systematic differences Table 5. FARMER PERCEPTIONS OF FAIRNESS OF SELECTED AGRICULTURAL NPS POLICIES -- - - Very Somewhat Somewhat Very N Yes/No* Fa ir** Fair *** Unfair Unfair

Full Cost Sharing for 31 Yes 25.8 51 -6 9.7 12.9 Cost of Terracing 15 No 46.7 46.7 > 6.7 ---- 50% Cost Sharing for 18 Yes 33.3 44.4 > 11.1 11.1 Cost of Terracing 17 No 35.3 29.4 23.5 11.8 Required Contour or 32 Yes 40.6 37.5 6.3 15.6 Terrace Slopes 6 or 9% 17 No 29.4 35.3 > 23.5 11.8 50% Cost Share for 15 Yes 26.7 33.3 > 33.3 6.7 Slope Modification 17 No 29.4 35.3 23.5 11.8 Prohibition of Fall 32 Yes 15.6 18.8 < 31.3 34.4 Moldboard Plowing 17 No 11.8 11.8 17.6 58.8 Required Conservation 16 Yes 25.0 25.0 < 6.3 43.8 Tillage 19 No 10.5 26.3 42.1 21.1 100 Pounds of 19 Yes 21.1 5.3 < 31.6 42.1 Nitrogen/Acre Limit 19 No 26.3 15.8 15.8 42.1 Nitrogen Tax 20&/Pound 31 Yes ---- 6.5 < 16.1 77.4 15 No 6.7 13.3 6.7 73.3 Yes 5.3 15.8 78.9 Nitrogen Tax lOI/Pound 19 ---- < 19 No ---- 5.3 5.3 89.5 Interest-Free Loan 32 Yes 37.5 34.4 > 21.9 6.3 Conservation Work 16 No 62.5 25.0 6.3 6.3 Investment Tax Credit 19 Yes 57.9 36.8 , 5.3 ---- Conservation Work 18 No 50.0 38.9 5.6 5.6 Required Implementation of 18 Yes 22.2 22.2 > 16.7 38.9 Soil Conservation Plan 18 No 16.7 50.0 16.7 16.7 No Deduction of Taxes With- 32 Yes 15.6 18.8 < 18.8 46.9 out Soil Conservation Plan 17 No 5.9 29.4 11.8 52.9 Soil Losses <3 Tons/Acre 29 Yes 13.8 51.7 > 17.2 17.2 15 No 13.3 33.3 20.0 33.3 Soi 1 Losses <5 TonsIAcre 18 Yes 33.3 33.3 > 5.6 27.8 17 No 17.6 29.4 17.6 35.3 Required Recreational 32 Yes 21.9 31.3 > 18.8 28.1 Greenbelt, Streams 17 No 11.8 35.3 23.5 29.4 Required Non-Recreational Green- 17 Yes 41.2 23.5 < 11.8 23.5 be1t, Streams & Drainage Ditches 19 No 21.1 42.1 10.5 26.3 *Developed Plan? **Percent ***>indi a es he su of somewh t fa'r plyj ver$ fair exceeds the sum of somewkat unFalr p[Fus very unp alr. or a ar ers that limit absolute comparisons.

For all policies except two, it is apparent that having developed a soil conservation plan does not greatly affect the evaluation of fairness. For the policy of interest-free loans for the farmers share of soil conservation work, farmers who have completed a soil conservation plan perceive this as less fair than those not completing a plan. This may imply that those who have developed a plan feel it unfair that they were not given access to interest-free loans for this purpose. There are also noticeable differences for the policy of requiring development of a soil conservation plan. Approximately 66% of those not developing a soil conservation plan perceive this policy as in some degree fair while only 44% of those having such a plan think it fair. But more dramatic is the large percentage of those having a plan (39%) who perceive it as very unfair. This suggests some serious reservations among those who have adopted a plan about requiring others to do so as well.

EQUITY ANALYSIS

Whereas the earlier discussion of the fairness of the several policies considered reports the reactions a single group (farmers) based on whatever criteria they may hold (often their own self interest), this discussion is an attempt to evaluate policies on the basis of several general equity criteria. The three criteria are equality, benefit-cost, and least risk. Six potential policies are ranked in terms of the degree to which they would conform to the criteria from several perspectives. The ratings are subjective, and are based on simplistic assumptions. However, they do indicate that such an analysis can be undertaken and that it could be useful to policy makers in their selection among alternative policies.

A policy is rated consistent with the equality criterion if it would be expected to reduce the differences in income. A policy is consistent with the benefit-cost principle if it would result in (a) producing greater benefits for society and (b) it would result in affected individuals more nearly receiving full benefits for contributions and making full payment for costs generated. Conformity with the least risk principle requiresthat the policy maintain resources for future generations and postpone adoption of new technology until fully evaluated for significant adverse side effects.

The ratings assigned are given in Tables 6, 7, and 8. The following rating scales were used:

ft- Strongly Consistent + Consistent - Inconsistent - - Strongly Inconsistent NE No Effect U Consistency Undetermined 5 M Mixed Effects

his can be interpreted either as some members of the group being affected negatively and others affected positively or that the same member is affected both positively and negatively. TABLE 8 LEAST RISK CRITERION

1 2 3 4 5 6 ED JCATION 50% COST TAX CREDIT SOIL SOIL GREENBELT SHARING FOR CONSERVATION CONSERVATION TERRACING PLAN PLAN IMPLE- DEVELOPMENT MENTATION

GENERAL Consumers of Agri cultural Products - t tt - tt - -

Income Taxpayers t tt - tt - - AGRICULTURAL

High Soil Erodabil ity/ LOW soii Erodabil ity

Land Adjacent to Streams/ Away from Streams

Owners/ Renters

Current Owners/ Future Owners

CONSERVATION EQUIPMENT NE NE NE NE NE NE MANUFACTURERS

-WATER USERS Other Area Landowners t t t t t t

Municipal Water Suppl ies t t tt t tt tt Reservoir Benefi - ciaries (flood t t tt t tt tt control )

Water Recreation Users t t ++ t ++ tt

Industrial Water Users t t tt t tt tt

Commerci a1 Fishing Industry + t tt t tt tt TABLE 7 BENEFIT - COST CRITERION POLICY 1 2 3 4 5 6 Education 50% COST TAX CREDIT SOIL SOIL GREENBELT SHARING FOR CONSERVATION CONSERVATION TERRACING PLAN PLAN IMPLE- DEVELOPMENT MENTATION PERSPECTIVE

GENERAL

Consumers of Agri-. cultural Products + - - - + ++ ++

Income Taxpayers ------++ ++

AGRICULTURAL

Low Soil Erodability

Land Adjacent to Streams1 Away from Streams

Owners1 Renters

Current Owners1 Future Owners

CONSERVATION EQUIPMENT NE NE NE NE N E NE MANUFACTURERS

WATER USERS

Other Area Landowners + + ++ + ++ ++

Municipal Water Suppl ies + + ++ + ++ ++ Reservoir Benefi - ciaries (flood + + ++ + ++ ++ control )

Water Recreation Users + + ++ + ++ ++

Industrial Water Users + + ++ + ++ ++

Commerci a1 Fishing Industry + + ++ + ++ ++ TABLE 6 EQUALITY CRITERION POLICY 1 2 3 4 5 6 EDUCATION 50% COST TAX CREDIT SOIL SO IL GREENBELT SHARING FOR CONSERVATION CONSERVATION TERRACING PLAN PLAN IMPLE- DEVELOPMENT MENTATION PERSPECTIVE

GENERAL

Consumers of Agri- cultural Products U + + U - - - -

Income

Taxpayers u ' M M U U U

AGRICULTURAL

High Soil Erodabil ityl Low Soil Erodabil ity

Land Adjacent

Streams

Owners1 Renters

Future Owners

CONSERVATION EQUIPMENT ------N E MANUFACTURERS 3 WATER USERS

Other Area Landowners M M M M M M

Municipal Water Supplies t ++ +-+ + ++ ++

Reservoir Benefi- ciaries (flood M M M M M M control )

Water Recreation Users M M M M M M

~ndugtrialWater Users ------

Commercial Fishing Industry + ++ ++ + ++ ++ Equality

Here the equality criterion is used to judge the extent to which the policies diminish the difference between high and low income groups in this country in the short run. Those policies requiring conservation measures which would likely raise the cost of food production and consequently raise food prices to consumers, such as 5 and 6, rate negatively from this general perspective since the poor spend a greater proportion of their income on food than the rich. Policies 2 and 3 are rated favorably because of the cost reducing effect of the subsidy or tax credit. The effects of policies 1 and 4 are "undetermined" since the educational program on which they rely may result in the adoption of both cost reducing and cost increasing measures. The effect on taxpayers of the cost sharing policy is "mixed" since it will raise taxes progressively in accord with the equality criterion, but confer benefits on farmers who may or may not be the most disadvantaged. The tax credit plan similarly rates "mixed" with respect to taxpayers by progressively raising the income tax level to provide relief for those wealthy enough to take advantage of it. For both the tax credit and the cost sharing plans, the cost to taxpayers is considered to be significant while the public costs of the other policies are assumed minor.

The analysis of the agricultural sector was made under the assumption that farms on erosive soil are less profitable than farms on soils without erosion problems and that soil erosion control measures are not profitable at the farm level, in the short run.

In our pairings (i.e., high and low erodibility; owners and renters; near streams and away,from streams), we have rated each policy's efficiency in reducing the effect of erosion as a source of income inequality. If a policy reduces the difference in income between two paired groups, either by increasing low incomes or by reducing high incomes, the policy is given positive ratings on both entries. Mandatory policies 5 and 6 reduce the income of poorer farmers (high soil erodibility) without affecting the "wealthy" farmer's income, thus increasing inequality. Therefore, the policy is given a pair of strongly negative ratings. Policies 1 and 4 are assumed to educate farmers to opportunities to improve their operations and would thus have a weak positive effect. Policies 2 and 3 each subsidize the poorer farmers in the adoption of soil conservation practices on a voluntary basis. Thus, it is likely that practices which would minimize differences would be adopted.

Since the proximity to streams is not assumed to be correlated with income, all policies are rated U. It is assumed that owners are generally more wealthy than the renters that operate their farms and that owners incur the costs of soil erosion control (and receive any subsidy) as well as long-term positive effects on land value, and that owners and renters share in any increase in income that might result from improved practices. ', Under these assumptions, policies 1 and 4 are consistent with the criterion since the policies may result in improvements, at the owners expense, with shared benefits. Policies 2 and 3 are

6~hisassumption will depend on the nature of the contract between the owner and the operator. similarly rated because, while the subsidy will reduce the cost to the owner, it will stimulate greater improvements in which the renter will share. Policy 5 is strongly consistent because the operator is forced to incur the full costs and the assumed poorer operator shares in the benefits. Policy 6 reduces the land in cultivation for both and is therefore undetermined. Since the relative income position of current and future owners is not clear, the effects in this dimension-are undetermined.

For the "Water Users'' perspective, we assume an income position relative to the average income position. We assume that conservation equipment manufacturers and industrial water users are more wealthy than average, and thus policies 1-5 are all rated inconsistent to some degree. Policy 6 is also inconsistent with respect to industrial users in that water quality would be improved, but 6 would not affect conservation equipment manufacturers since the improvements would occur through reduced land use. We assume that any reduction in water treatment costs due to increased water quality would be more significant to the poor than the wealthy, so the erosion control policies are rated as consistent with the equality criterion. Since there is no reason to expect that other land area owners, and land owners in flood control areas, and water recreation users, are generally more or less wealthy than average, all policies are rated as mixed. For this analysis we assume that those in the cormnercial fishing are less wealthy than average and thus the policies are consistent with the equality criterion. Variation in the strength of the rating is due to efficiency of the policy in reducing erosion.

Benefit Cost

Conforming to the benefit principle demands that we have a strict positive correlation between costs and benefits.

Agricultural products, "benefits" produced on the land, should have their full cost reflected in their prices. Soil loss into streams is equivalent to waste disposal: its cost should be borne by the farmers directly and the consumers indirectly. Policies 5 and 6, whose effects are not primarily the result of tax funded programs of persuasion or incentives, transfer the costs to those receiving benefits, in accordance with the criterion. Policies 1 and 4 may encourage the adoption of some practices that result in transfers in the same direction, but to a lesser degree. Policies 2 and 3 do not generate such transfers since the actions are compensated, and for this reason they get negative ratings both in terms of consumers and taxpayers. Policies 1 and 4 also involve taxpayer costs while in 5 and 6 these costs would be minimal or non- existent. 7

In the agricultural sector, policies 1-5 are assumed to have no direct effects on farms with low soil erodibility. Policy six will have negative effects to the extent that soils-that are not erosive are removed from production to form greenbelts. The extent to which farmers on erosive soil are encouraged or forced to support soil erosion control determines their rating. Given the

7~neffluent tax policy would rate highly under this criteria, and under the equality criteria unless the revenue generated was transferred to the wealthy. assumption of equal distribution of erodible land near to and away from streams, it is not clear how policies 1-5 should be rated. Under policy 6, land adjacent to streams is rated mixed since erosive and non-erosive land would be removed from production, in part to control erosion from other areas. The land away from streams is given a negative rating due to the reliance on the other land to provide the control of sediment losses. Given the assumed relationship between owners and renters, the policies are rated in terms of the extent to which land owners are encouraged or forced to incur costs of reducing soil loss from their land. Since renters are not assumed to share in the cost of pollution control but do share in any benefits, policies 1-5 are rated in terms of their efficiency in achieving erosion control. Under policy 6, the renters would share through reduced land available to farm. If one assumes that the land market will accurately reflect the value of the land, eroded or in good condition, the distribution of costs between present and future owners should not be affected. Similarly, there is no reason to expect effects on the conservation equipment manufacturers.

From the water users perspective, any measure which decreases the input costs for the water user is consistent with the benefit principle. This judgment is made on the premise that farmland erosion is higher than the natural or primitive rate. Those policies.which decrease the unjustified costs expeditious- ly are rated higher to reflect this fact.

Least Risk

Invoking the least risk criterion implies that a favorable rating will be received by policies that encourage the use of historically safe technology and are effective in conserving resources.

For society in general, we would expect food consumers to favor any policy conserving arable land. As taxpayers, the general public should prefer those preventative measures designed to avert more costly programs that could be required if erosion control were postponed. It should also react negatively to those policies which do not dictate or highly encourage results, as would consumers.

For the purpose of analyzing this criterion from the "~gricultural"perspective, we assume that farmers evaluate the policy in terms of a responsibility to maintain the productivity of the soil for future generations. However, they would likely believe that society should incur the costs of doing so. They would rate policy 6 negatively because it does not achieve erosion control, only water quality, except for land near streams. Policies 1 and 4 also would be rated low, since they do not assure the maintenance of productivity. Policies 2 and 3 are rated positively because incentives are provided to insure some action and a sharing of costs among taxpayers. Policy 5 would be positively rated because it reduces productivity, but only weakly since society does not share in cost. These ratings hold for erosive soil, either adjacent to or away from streams and for current land owners. Future land owners would be expected to rate policies strictly on their effectiveness.

Water users will also rate policies on their appropriateness to the risk involved. Here the concern would be to generate a high quality aquatic ecosystem or to maintain reservoir capacity. Each of the policies is rated according to its assumed ability to achieve these goals. Education would likely get the weakest positive rating.

Use of Ratings

The criteria are meant as guidelines for anticipating fundamental reactions to environmental control policies. To the extent that they reflect the society's ethical trend, they sould be successful. The benefit-cost principle, as the norm of earned rewards, represents the perennial, conventional standard.

' The equality ethic, long an insurgent ideal, seems at present the most politically vigorous of the criteria. Finally, as the ethic of affluence and responsibility, the least risk criterion anticipates the results of continued "profli- gate" resource consumption. Together they compose a model spanning a spectrum of diverse sentiments capable of predicting the equity impact of prospective policies.

If one accepts the assumptions and interpretations of the several criteria, then the ratings presented here could be used in a policy analysis. Given these ratings, there are significant conflicts. None of the policies are rated uni- formly positively or negatively, as would likely be the case with any set. No attempt is made here to summarize the ratings (which must also be done on a subjective basis) of any of the policies.

If one analyzes these ratings, it becomes obvious that some improvement in the policies could be made before adoption and that combinations of them would, at least in some ways, be superior.

This analysis suggests the following: (a) there is an almost infinite number of policy alternatives available in this area; (b) it should be possible to set a national policy that does not have severe adverse impacts on most farmers; (c) there are several institutions in existence that could be used to carry out an effective policy; and (d) there are sufficient unknowns that it will not be possible to develop a "perfect" policy. SOME ECONOMIC ASPECTS OF PERSISTENT POLLUTANTS

by Anthony Scott*

INTRODUCTION

In this paper I attempt to summarize, for non-economists, what little economic analysis can contribute to policy formation for lakes that are already saturated with a permanent pollutant. This search for relevant analysis is bound to be disappointing, for economics necessarily has little to offer in connection with three important questions: the "just" distribution of income or wealth; the "correct" allocation of joint costs; .and the "proper" way of paying for bygones. These questions are important, but are not advantageously posed to an economist. In each of them a disciple of Solomon, not Adam Smith, is required; failing Solomon's wisdom, the humanity and experience of judges, accountants, priests and administrators may be helpful.

The discussion is divided into four sections. After this Introduction, Section I1 surveys a related, and easier, subject, the allocation of future- rights to discharge a persistent pollutant. Section I11 then examines the implications of the policies developed in Section 11. In Section IV I turn to such questions as retribution, restoration and compensation payments for past "errors" in pollution discharge.

The reader may find it helpful to know that throughout the paper I have kept in mind such persistent pollutants as the PCBs and such bodies of water as one of the Great Lakes. I have not considered the role of the IJC or any other member of the set of national or international institutions or the constitutions or treaties to which they owe their existence.

PERSISTENT POLLUTANTS AND POSSIBLE POLICIES

The economis approach to pollution has used instruments of analysis that became both familiar and serviceable during the past decade of ecological awareness.

The chief idea, accepted by both government officials and environmental activists, has been that when it comes to such restless media as the atmosphere and flowing water, the market system does not allocate resources well. The usual incentives, such as profit maximization, are still present. But the market fails to generate prices and values so that the economizing individual can profit by stopping his antisocial polluting and dumping activities.

* Dr. Scott is affiliated with the University of British-Columbia in Vancouver. Indeed, in current jargon, "market failure" is the technical term for the uncontrolled economy's neglect of the spillovers of wastes from production that degrade the environment. Market failure can be a dis- mayingly technical subject, but in the case of pollution economics, its main outlines are simple: pollution prevails precisely because markets where victims,might buy pollution-free surroundings fail even to exist. There are two clear cut instances of this. The first missing market is that for waste-material disposal. Because such waste-disposal media as rivers and lakes are "common property" with open access, neither the industrialist nor the citizen has been able to claim title. If they could not claim title, they could not assert rights to exclude others or to claim compensation for the use of "their" property. In particular, the typical polluter, although at one time unchallenged in his waste- discharging activities, could not charge rental either to other polluters or to consumers of the media's capacities and amenities for the absorptive capacity or the quality which "his" lake might offer. Because utilization of the medium could not be "rationed" among waste dischargers, or among private citizens, he could not gain by making it cleaner, or lose by making it dirtier.

The typical citizen was no better off. Because he could not claim property rights in the medium, he could not charge a price to the industrialist for the privilege of discharging wastes into it, or to his fellow citizens for the right to use water for recreation and amenity.

The second missing market stems from the "public good" or "communal" characteristics of the environment. Water and landscape do not occur in citizen-size chunks, but in indivisible blocks from which exclusion is nearly impossible. Such huge units provide amenity and recreation for many citizens simultaneously, without necessarily interfering with each other's enjoyment. Thus, whatever rights of enjoyment are possessed by a citizen are inextricably blended with those of others. Furthermore, the rights of industrial waste dischargers are blended with those of other dischargers. No individual's own actions can appreciably change the total quality. Consequently, the individualistic market cannot obtain offers from sellers or buyers. Each citizen is locked into a situation where it does not pay to disclose what he or she is willing to pay for a better environment, or what he or she would charge someone for the right to degrade the environment. In this sense the market fails because it cannot deal effectively in a "public good".

Understanding these two sources of the market's failure, the economist has not been reluctant to suggest non-market methods of cleaning up the environment. Suggested policies have included attempts to emulate a market by creating ad hoe types of property right to be held by dischargers or vict,ims. These would effectively ration the use of waste-disposal capacity. A less market-like approach, sill1 using economic instruments, is to invent economic incentives for private firms and individuals to act in the social interest even in the absence of a market. These incentives have included tax rebates, subsidies, and fines and other penalties associated with a regulator approach to waste discharge. For some kinds of pollution, such as the litter created by beer, soft-drink and milk containers, these economic incentives have been shown to be workable. The subsidy route has been followed chiefly in the attempt to deal with organic wastes from point sources such as municipal sewage systems and certain industries. Tsx rebates have been effective in inducing firms to install abatement equipment. And certain faltering attempts have been made to refine, and exploit, existing property rights, especially in the courts in connection with nuisance, and even as marketable items.

Thus the progress of economics in pollution matters has tended to copy the pattern of economic generalization in all matters. One of the most profound lessons in elementary economics is expounded in the opening pages of any textbook. This is that the multitude of individual decisions made in any economy about inputs and outputs can be boiled down to answering three separate questions: What to produce? How to produce it? and For whom is production carried on? The economic pollution policies surveyed above answer these three questions about an economy considering a water body: What goods and services (and how much of each) are to be produced? How are they to be produced (and how much waste does each method discharge)? For whom are these questions to be answered (and who is to get the benefits of the lake's capacity and amenities) ?

In addition to these important three questions, the persistent pollutants pose a fourth: When? These elusive and sometimes toxic substances are known for various charcteristics, particularly that their current ill effects do not seem to stem from identifiable points of current waste disposal, run-off, or seepage. From the economist's point of view, the most important implication of such a characteristic is that they do no decay. They persist, recurring cyclically or unpredictably, and build up not only in accumulations in water, silt and sludge, but also in the higher members of ecological food chains.

Thus, unlike the flow pollutants dealt with earlier, persistent pollutants, whatever their other characteristics, have the property of being a stock. Their mere existence and discharge imply that they raise the same three questions (What, How and For whom) posed by non-permanent pollutants. But in addition, like any stock, their persistence from year to year carries the implication that the time pattern of their accumulation and damage may be an object of private, or social, choice. A stock of anything--a capital good, a mineral deposit--endures through time. Increments can be added to it, decrements taken away. (Some stocks can also grow or decline endogenously, as though they were forests or animal populations, but not stocks of synthetic chemcial wastes).

When should these increments and decrements take place? This is the question of management over time. While it is possible to think of the management over time of a "bad", it is much simpler to consider a 11 good". A "good" is something which is. scarce and which is useful in the production of services which people enjoy and are willing to pay for. In the case of a persistent pollutant, the good to be managed is the space which the pollutant occupies: the receptive capacity of the medium into which the pollutant is discharged. We may think of this capacity as though it were a deposit of a mineral. The using up of its obsorptive capacity like the mine's complete exhaustion. Increments are not possible, only decrements. The persistence or non-decay of the pollutant is like the non-reproducibility of the mineral.

The aims of economic policy include those already mentioned for degradable pollutants: rationing access to the medium's absorptive capacity, and discovering the preferences of those enjoying the medium as a public good. They now also include a new aim: to set the annual rate of decumulation (using up) of the remaining absorptive capacity. This new aim does not necessarily point to the need for new policy instruments. The discharger of a persistent pollutant can, in principle, be subject to the same regulations and economic incentives as other businesses or establishments: discharge property rights, taxes and subsidies, damage suits, fines and penalties--all may be appropriate.

The economic difficulty of managing persistent pollutants lies not, therefore, in the absence of policy instruments, but in the complexity of decision about the ideal rate of discharge into the medium. The complexity can be seen by considering the differences between the management of three lakes, each having distinct characteristics chosen to illustrate the super-imposed complications of simple common property, public-good and persistence. The lakes are located in identical communities inhabited by people with identical preferences and incomes. Each community specializes in a local product. Each of the three products has its particular waste, which is discharged into the lake.

Lake W, the first, is threatened by the discharge of floating debris: each piece of this debris is a menace to the safe navigation of some vessel or other until, within a few hours of its escape, the debris is profitably salvaged and removed. The industries adjoining Lake X, however, are different. They discharge a bacterial waste which, making the lake unsuitable for water supply or recreation, damages the whole community's enjoyment. Thus while the pollutant in Lake W is suffered by (vessel-owning) individuals, the pollutant of Lake X is suffered collectively. The two lakes are, however, similar in that their pollutants occur as flows; the discharges do not accumulate into stocks and the levels of damage, in the absence of non-market intervention, are static. In the Lake Y region, the pollution situation is different again. Here the local industries discharge a non-decaying chemical, suchlas one of the PCBs. As in the Lake X region, the pollutant is experienced communally. But in Lake Y its .level is increasing inexorably with each annual discharge. It will continue to increase (in the absence of governmental intervention) until the harm experienced by the dischargers themselves is so great that they decide to change their process, migrate, or go out of business. Assume now, realizing how markets have failed, that each community decides to manage the quality of its own lake. Consider the differences in economic and institutional advice to be given to the \respective managing agencies.

Several alternatives are available for Lake W. For example, the community may adopt one of numerous suggested market-like schemes. One of these would be to label each item of debris as to its source and then to make each debris discharger fully liable for the damage imposed on an individual vessel owner. The economic literature is full of discussions of the merits of such institutional innovations, which work best when the interests of each discharger and victim can be individually identified.

Failing this scheme, the government, after deciding itself on the general maximum amount of floating debris, might endow the dischargers, or members of the public, with marketable warrants that would permit just the selected amount. Alternatively, the government could confine pollution to the chosen level by a policy of taxing or subsidizing the victims or the dischargers, as recommended by Pigou, or finally, by simply regulating the dischargers or the vessel owners in their use of the common-property lake.

But on Lake X, the workable policies are fewer. The market-like scheme will not work, because the sources of pollution cannot be traced to, or identified with, the individuals. Government or some collectivity must intervene. John Dales has shown that (as with the debris on Lake W) a marketable warrant scheme could work once some body has set the general level of bacterial waste discharge for Lake X. In the absence of government, a bilateral monoply could bring about abatement. The public-goods aspect of the lake means that there is need for a large syndicate of dischargers, and for a club of their victims, to bargain over the price to be charged for some solution to the conflict. The transaction costs of such institutional schemes may be formidable. In the absence of some unusually good research by dedicated damage- measurers and cost-,estimators, arbitrary, bilateral, compromises will be needed. The politicians may give initial property rights to one side or the other, but it is impossible to predict that the resultant level of pollution, or its price, will be acceptable, just, efficient, or even stable. In view of this, it is likely that the politicians will arbitratily settle on a regulatory regime, or a policy of discharge fees, subsidies, or fines, or penalties.

Given that the discharger is constrained by the need for an agreement, warrant, permit, or other entitlement or permission, some "price" for the right to discharge will emerge. The price may be approximated by the actual amount offered for a privately-owned warrant; the actual fee paid to or the actual subsidy paid by the government for a small change in the amount of discharge; or the rental value of the land from which, under regulations, some discharge is permitted. The economist's question about Lakes W and X is not whether this price, actual or implicit, exists, but, does the selected pollution policy generate the right price? The right price is the one that is associated with no more or less than the chosen permissible flow of pollutants.

Does the observed price fully reflect the incremental costs of abating pollution by those dischargers who are best placed to cut their effluents, rather than the costs of those whose abatement costs would be so high that they inflate the implicit value of the right to pollute? Does it reflect the amount that would be offered by excluded industries, rather than just by those who happen to have a discharge permit? On the victim's side, the economist will ask: Does it reflect the loss of satisfaction (damage) that each incremental amount of pollution imposes on the most affected member of the public, rather than the most complacent, or the most vocal?

These costs and losses are all elements in the welfare, or shadow, price of the right to discharge. Neither the community nor the economist will wish to prevent all pollution of Lakes W and X, but to bring about a situation where the value of the right to discharge the incremental amount of pollution, after all trading and exchange of rights, implicit or explicit, has taken place, will be such as to take into account, indeed to equate, all these incremental offers and reserve prices. When the implicit price is at this ideal level, the amount of pollution still discharged into the medium by firms, and the amount endured by citizens, will be that selected in advance. That is, no one will willingly offer a little more to secure a little more pollution abatement, and no discharger will willingly offer a little more to obtain permission to increase his flow of effluent.

These general ideas about the determinants of the ideal price therefore act as informal criteria for the best rate of discharge of degradable pollutants. We now turn to the persistent, stock pollutants of Lake Y. What change in these price criteria arises from the fact the PCBs and similar toxic substances do not decay, but remain to occupy the absorptive capacity of this lake, steadily worsening its condition?

Rules must now be developed that will take into account two stock elements in the allocation problem. First, the price today must recognize that the other dischargers who might be willing to offer more for the right to get rid of their wastes may be future, not present, industries. In this sense today's discharge competes with the potential discharges of each potential future firm. All firms, actual and future, are rivals for the limited rights to, at some time, deplete the lake's absorptive capacity. In the second place, the community must recognize that decisions about the rate of depletion of the absorptive capacity are implicitly decisions about the distribution of benefits. For example, postponement of pollution will benefit future users of the lake's amenities at the expense of earlier beneficiaries of waste-producing production; early pollution benefits the latter (and also may help to create capital goods that may benefit the future), but deprives the future of lake enjoyment. Because of common property and public goods, each community itself must decide about the "inter-temporal allocation" of its lake's absorptive capacity. This decision (and the price that explicitly or implicitly registers it) should be the same as would be reached in a market in which not only present, but also future offers were received and weighed. Before a particular present discharge permit is granted, the community must satisfy itself that today's value of exhausting one further unit of the lake's absorptive capacity is at least as high as the value of any other present or future use, such as the price that might be contained in an offer from another present or future bidder. Future bids for alternative incremental units of discharge would take into account future abatement costs, product values, and other influences on future demand for the lake's absorptive capacity. Furthermore, the community must satisfy itself that no amenity-seeking citizen, present or future, would ever be willing to bid a sum greater than that now attributed to the value of today's incremental discharge.

These conditions are stringent. In the case of a dangerous pollutant like the PCBs, they might well determine a community decision to deny permission for any further discharges of a persistent pollutant, unless: a) The rate of discount were "high" enough to raise a present value above the total of future foregone values. Then some early discharge would be permitted even if it eventually caused severe loss. (Even at a "low" discount rate, this result could occur if the lake had a very high absorptive capacity in relation to the expected near-future annual increments of pollutant). b) (Contrary to the general assumption of this paper), the pollutant were not harmful, or tended to decay; or if vaguely foreseen technical change, change in tastes, or improvement in re-cycling or clean-up were future probabilities (contrary to the assumptions made herein). It is sometimes said that a third condition would be the existence of a "sump'.' in the lake which could be filled without damage to anyone present or future; only after this sump was filled would citizens begin to suffer from the pollutant. This happy state of affairs would probably permit present discharges greater than if the sump did not exist and would prevent the implied price from becoming prohibitively high. But in general the problems of decision would still exist, and the price of a discharge right, if not astronomical, would still be a deterrant to discharging long before the sump was filled. The reader can understand this by reflecting that filling the sump today prevents its being filled later on. It has a forestalling-cost, equal to the future benefit foregone. It is just as worthy of consideration (though it may have a smaller present value) as if the present discharge actually caused some present damage. Thus, even if there is a sump, the community must make the allocation-over-time, or When?, calculations already outlined.

Enough has been said to suggest that the determination of the ideal "price", of the right to discharge today, and so of the ideal sequence of annual amounts, is very complicated. In general, market-like economics suggests that the ideal sequence will be large at the outset, and smaller and smaller each year, until it stops altogether. In the final year, the price of even a small further amount of discharge to an industry would be less than whatever are its alternatives, and the cost to it of whatever it may decide to do will be lower than the offer that it would receive from citizens not to discharge. If the effluent is dangerous, this potential offer may reach very high levels, and grow exponentially. Under these circumstances, even today's discounted value of the future value of the right to discharge may be so high that it is easy to justify a termination of all discharging.

IMPLICATIONS AND PREDICTIONS

In the previous section I developed a set of policies for lakes with pollution problems. These policies were of increasing complexity, corresponding to the increasing number of problems created when management attempts to deal with common property, when lake characteristics are enjoyed as public goods, and, finally, when its enjoyment must be allocated over time. In this section I will examine the implications of these policies for the level and the rate of decline of lake quality, starting with a no-management base case and concluding with a finely-tuned set of inter-user and inter-temporal controls on the rate of discharge. In each sub-section I also make some general predictions about the level or trend of the implicit price of discharge rights.

Before doing so, however, I must recognize, and dispose of, the information or risk-uncertainty, aspect of stock pollution. In the real world much simple analysis of an economic nature may be inapplicable because none of the actors knows what is going on. PCBs, as I understand it, were introduced to industry because they are (among other qualities) chemically inert. Those who developed them certainly did not anticipate that this inertness carried with it the threat of environmental and health damage in the event of accidental spills and discharges into the lake. We think we are better informed today, but much uncertainty remains, at all stages of the production and waste-discharge sequence. Our knowledge of the amounts annually discharged, the amount accumulated in our lakes, the eventual rate of decay, the possibility of new neutralising or abating techniques, and the intensity of future demands for receptive capacity and for recreational resources are all incomplete. Recognising all this, I wish nevertheless to explore the subject on the presumption that our present knowledge is all we will ever have. We must act as though we had complete certainty about economic and environmental relationships. To develop this subject fully, it is essential that someone attempt a game-theoretic approach to the best strategy involved today on the opposite presumption: that time will reveal new relationships, techniques and preferences. But that is not attempted here; the implications sketched below stem from an assumed "perfect knowledge". The Equilibrium State of an Unmanaged Environment

We have seen that in an individualist world, the market will fail, because of common. property and public goods.. Although decaying, the "stock" of pollutants may be at a very high level. Dischargers.wil1 stop using the lake's full absorptive capacity voluntarily only if other means of disposal are less expensive, or if the existence of .the pollution itself limits the flow of additional pollution. In general, the implied price of the right to discharge would be zero.

If individualism does not prevail, there may be collective bargaining between a significantly large groupof polluters and a group representing the citizens whereby the latter may bribe or subsidize the former to discharge less than they otherwise would. In this way, a discharge right would have acquired an explicit, positive, price.

The Outcome of Economic Management

As we have also seen, if government has power to control pollution, and if it is guided by welfare economics, the total rate of discharge of a degradable substance will probably be less than in an unmanaged environment. If government takes into account the demands of both dischargers and citizens, it will restrict discharges until the value of discharging the last unit of degradable waste into the lake is just less than the amount that citizens would offer to prevent such a final unit. Typically, however, such a calculation will not lead to the complete prevention of discharging. Some will be authorized. The right to discharge additional unit will have a positive price, which may be explicit or implicit.

If the pollutant is persistent, management must take into account also the anticipated demand of future dischargers and citizens. Then, during the period that the absorptive capacity is being exhausted, the managed rate of discharge will be less than if the pollutant were degradable, and will gradually approach zero.

It is interesting to attempt to guess at the equilibrium final level of the persistent waste in the lake after all permitted discharges have ceased. This may be done by assuming degradable and persistent pollutants that cause similar damage to water quality. Under management, discharges of the former will continue at a controlled annual rate so that the quality of the water will steadily be at a certain acceptable level. A persistent pollutant will be prevented from exceeding this concentration, but will be allowed steadily to accumulate toward it. The rate of convergence may be fast or slow. For example, if some industrial process has no inexpensive alternative mode of waste disposal, we may expect industries using such processes to represent a stream of anticipated offers, stretching into the remote future, for waste-disposal capacity. On the one hand, if the alternatives are characterised by increasing costs of waste abatement, these anticipated future offers can be expected to rise in value as the lake's remaining capacity shrinks. This stream of rising future bids will restrain the lake's managers from quickly exhausting the capacity. On the other hand, if the alternatives open to waste dischargers have elastic cost curves, the lake may quickly be used up. In either case, the rate of increase in these bids (the increase in the explicit price of an increment of waste disposal) can be predicted. Numerous models have shown that such prices, or net rentals, of an exhausting asset rise at the rate of interest used to discount future demands.

I must reiterate that, under welfare-economics management, the lake will not be freed of pollution. The economic calculation leads to the conclusion that the waste-disposal capacity of the lake should be exploited as long as other modes of waste disposal are more costly and as long as citizens are perceived to be unwilling to offer more to cut down the equilibrium level.

Bringing a Lake Under New Management

At any time a management plan for the exhausting of a lake's absorptive capacity will be in operation. Of course, the originally proposed sequence of future discharges is not binding on future water controllers. Each will, and should, consider the sequence anew, taking the existing water quality as given, and looking only to present (and future) costs and demands.

If the potential pollution is degradable, the new controller, in deciding upon the rate of discharge to be permitted, has no need to ask what has been permitted up to now. Only the future matters. He will set a rate, or a price of discharging, that reconciles the needs of present waste dischargers with present demands for water quality.

If the pollutant is persistent, he still need not ask what was the former programme of annual discharges. The present ambient quality (the result of accumulated discharge) is all he needs. With this information, and with information on future demand for discharge capacity and for water quality, he can determine a future schedule of discharges. Indeed, if tastes, knowledge and technology remain unchanged, we can predict that a detached observer would detect no break in the pattern of waste discharges. The new regime will appear to adopt the time-table of pollution discharges of the preceding regime. If the pollutant is degradable, the same annual rate, at the same price, will be set. If the pollutant is persistent, a declining trend of annual discharges will be continued by the new regime.

At some date, of course, the inflow of persistent wastes must be brought to an effective end. The new controller does not determine this date by research on what was discharged in the past. The past cannot guide him. Bygones are bygones. It is the future about which he must be concerned. PAST ERRORS: RETRIBUTION, COMPENSATION AND RESTORATION

"The past always looks better than it was; it's only pleasant because it isn't here." --Mr. Dooley (Finley Peter Dunne)

It is my impression that during the period of greatest political zeal for environmental causes, politicians and their supporters were far from clear about what coiild be done about the past. The activists could perhaps be arrayed between two limiting cases. At one pole were the "avengers", those who were impelled to bring retribution to those who in the past had insulted the environment. Their activity was mostly directed to finding the sources of present discontent, mostly industrial firms, and laying on them the burden of remedy. At the other pole were to be found the "purists", those who were impelled to restore the environment to an original state, regardless of the reasons for, or the agents of, its degradation or development. They were less interested in detecting the agents of change from pristine conditions than in discovering what had to be done to return the environment to a pre-industrial ecology. The avengers and the purists are of course extreme schools of thought, and most of us are to be found somewhere between them. But their doctrines are attractive, and natural, approaches to the problem of undesired change, and we can learn much by analyzing both them and the more frequent compromise positions between them.

To look into these questions is the purpose of this section. Although the previous section will have made clear that the decline of a lake's quality due to the accumulation of persistent pollutants may have been the conscious aim of a well-informed manager, I shall assume that this is =the case. I shall assume instead that for some reason pollution has been allowed to go too far.

Perhaps it has been found that citizens have a higher demand for water quality; that what was thought to be a degradable pollutant is more persistent or that the absorptive capacity of the water is smaller; or that alternative costs of waste disposal are higher, than was predicted. Perhaps it has been found that dischargers have been, illegally or ignorantly, exceeding the amounts of waste disposal to which they were annually entitled. Let us designate any or all of these as "errors".

The controller may turn to the economist for advice: what to do when an error has been made? Punish the wrongdoers (if any)? Force them to pay compensation? Subsidize the losers? Invest in turning back the water-quality clock? Make grants to evacuate the vicinity?

The Wrong Advisor?

The controller will soon learn that his staunch economist, so firm in making forward-looking discharge recommendations, is helpless when making policy judgements to rectify past errors. It is a pity that this is so, but it is no use pretending that a profession that already claims to combine the powers of psychologists, soothsayers and airline pilots also can double as judges. It is instructive to inquire why their skills leave economists ill-suited for recommending "just" remedies for past errors. The answer can be put in several ways, but all depend on the economist's commitment to a certain techniqueof analysis.

Whatever its source, the error was made by someone in the past. But the past cannot now be reached. The error is a fact of history; it cannot be erased. Neither can the past (or anyone who inhabited it) now transfer more resources to any present use or person than was actually done at the time. If justice or vengeance is sought, the most that can be done today is to cause some near-future resource user, thought to be "responsible" for a past error, to have less than was previously to have been allocated.

Such a change is merely a redistribution, a transfer. While its 'methods of payment and of collection may have minor side-effects on incentives to work, invest and pollute, we can in general regard it as neutral, having no impact on the real programme of future production and waste discharge. To the economist, a decision to make a transfer or to redistribute is not unimportant, but has no essential connection with the events that provoked it. It is not an input necessary for an output. For example, a pension paid to a war veteran is a transfer, not a necessary cost of war; its payment does not affect the past war nor does it constrain any conceivable present or future allocation of labour, material, or wastes. In such instances (apart from incentive effects), the economist's skills enable him to take transfers as given uses of ideal social products, costless "from the economic point of view".

Restitution

If, therefore, the controller intends to levy penalties or to make restitution payments, he will find his economic advisors reluctant to make recommendations. The economist's faculties for even distinguishing, let alone pro- posing, what is deserved, fair or just, are poorly developed.

For example, if society is looking for a villain or scapegoat, someone to blame for past errors, the problem is far different from that usually encountered in economics. The latter is known in the hiqory of economic analysis as the "imputation problem", and it was solved in the late 19th century simultaneously by several theorists, in the form of what is now simply referred to as the marginal-productivity adding-up problem. It depends on the knowledge of the production function and predicts that each type of input necessary for some final output will be offered a rate of pay equal to the value of the marginal product for which it is responsible. If inputs are offered a different rate, either their sellers or their employers can increase their incomes by re-allocating them until by supply and demand the competitive pay rate becomes the same in all alternative occupations. So goes the explanation of the equilibrium pay, the minimum amount that must be offered for an input which is necessary for final production.

Restitution is obviously entirely different from pay. It may be defined as the indemnification or reimbursement of those who have lost or been deprived of something they had expected or had claims to receiving. It can be regarded here as the endeavour to make amends to victims of persistent pollutions for the errors of past pollutant discharges. Generally, these victims will have suffered loss of property, loss of livelihood and loss of health and vigour. It is not a necessary payment for production; it is not promised prospectively for any voluntary individual action or sacrifice; but it is awarded gratuitously and retro- spectively for involuntary suffering.

The amount of restitution that ought to be paid is not an economic question; but economists may be able to help those who must make the decision. The following notes may be helpful.

First, restitution cannot be entirely financed out of some fund of ill- gotten or unexpected gains. Errors in plans cannot be likened to zero-sum games. In such games, whatever the victims lose is balanced somewhere by a gain to some other player; losses are just equal to gains. But when errors take place, the whole pot becomes smaller than it might have been, and society as a whole is worse off. Thus, although an error may (for example) incidentally diminish the welfare of future users of disposal capacity or water quality, and benefit earlier discharges or citizens, it should not be assumed that what has occurred has been a simple transfer of quality or capacity across time periods. The fact that an error has taken place means that the original management plan was not the optimum, so that some loss of availability of water quality or capacity has occurred. This loss will be a burden to someone and it will not be offset by an equal windfall to someone else. Thus the economist's advice will be that if policy demands that restitution be made to victims, it should not be linked to funds to be extracted from gainers.

Second, as to the precise amounts to be extracted from individual winners and paid to victims of errors, it will naturally occur to tax experts and lawyers that, analogously with excess-profits and capital-gains taxation and legal damage-suit procedures, governments might well start by attempting to cream off whatever surpluses or windfalls the errors have created. Analogously, they may , attempt to estimate and pay the damages and losses that have resulted.

In particular cases of speciffc lakes or pollution episodes, these calculations may be feasible, although in general one must be skeptical. Pollution after all plays a very small part in the lifetime flow of real income of most people. Furthermore, waste disposal, even at very high prices, would not be a major expense for most industries. Hence, for most polluters or victims the amounts will be small, the valuations and implicit prices shadowy and unrecorded, and different estimators' coefficient of variation around some rational true value very large. But let us assume that the attempt is to be made. The legal and accounting procedures already used in the civil courts, under expropriation statutes, and in business arbitrations should be helpful (although there is a great difference between a polluter who lives up to a schedule of permitted discharges that turn out to be based on an error, and a defendant who concedes that he has not completely lived up to some code or agreement). Third, while ordinary economics cannot help much in estimating individual amounts, one of its branches may, surprisingly, be of some assistance in establishing global totals. I refer to the New Economic history. Economic historians have, especially recently, attempted to make estimates of the outcome of "counter- factual" events. They ask, "What would have been the economic result if the Union Pacific Railway, or the CPR, had been delayed for ten years?" Specialists in related studies have by simulation or other calculation asked about the magnitudes in the two North American economies "with" and "without" the Canadian tariff on manufactured goods; the east-west direction of pipelines; the Alaska oil and the McKenzie gas pipelines; and the Columbia River hydroelectric power treaty. Doubtless readers know of other exercises of this kind. They form a useful model for estimates on global controls on the amounts of negative, or positive, restitution following errors in the management of persistent pollutants.

Fourth, in the special international situation on the Great Lakes, the problem of calculating each nation's gains or losses from errors in managing the build-up of persistent pollutants may be manageable, at least within the range of an order of magnitude. Instead of considering thousands of individuals, the retrospective estimator need only recreate economic history for a bilateral approach to an environment with zero discharge of PCBs or other persistent dangerous pollutants. Two questions: How much has each country gained? and How much has it lost? can be estimated by comparing this recreated history with the actual observable magnitudes. An expert board to advise the IJC might be able to converge on some approximations to these amounts.

But at that stage the economic advisor will wish to down his tools and move on to something else. Restitution of the gains and losses from genuine errors is not pay for services, and it is not compensation for negligence or malfeasance. It is not a concept to which ordinary ideas of justice, let alone compensation, apply. The professional economist may not oppose restitution, but he must classify its amount as arbitrary, random, subjective, or unverifiable. Its determination does not flow as a matter of logic from estimates of the gains or losses from counter-factual (no-error) situations. Hence its assessment, he may feel, is work for others: politicians, diplomats, priests, even pressure groups, charitable foundations, or vigilantes and terrorists.

Restoration and Adjustment Expenditures

In these days of developed environmental consciousness, there is an extra- ordinary flowering of ingenuity in inventing new ways to assist the environment to recuperate from past errors. If past pollutants really are persistent, these new ideas can take only two forms (three, if unrequited transfer payments to victims are also included). The first are ideas for cleaning up the whole lake itself: filtration, chemical neutralisation, harvesting of plants and animals in which the pollutant is concentrated. The second are adjustment investments to provide residents with new employments, water supplies, recreational sites, and food sources. These may involve using the lake in modified ways, or doing without it altogether, treating it as a no-man's land or abandoned mine or quarry, and going on to other things. Both are obviously extremely costly and indeed only partially feasible. Can economics suggest anything about the choice between them?

Our advisor is now able to offer only two pieces of advice. Both are little more than common sense.

The first is that in a developed countryside some combination of the two types of investment, some partial restoration plus some adjustment investment, is likely to be better than concentration on one of them only. A lake is an integral part of a region's transportation, location and raw material system. Attempting to make adjustments to its essentially abandoned condition would necessitate huge private and infrastructure investments. On the other hand, attempting to rid one of the Great Lakes of a persistent pollutant sounds, to a layman, like dumping costly resources into a bottomless hole. Instead, some combination of each may be the least costly, or most productive, response to a past error.

Blending Restoration and Restitution

We now return to the subject of transfer payments and restitutions. While they may be arbitrary and unconstrained, they may have a role to play as a complement to a programme of restoration and adjustment expenditures. When past errors have been made, it may be unwise to make amends by specialising activity either on a restitution scheme or on a restoration programme. A mixture of the two may not only be more effective, but also help to keep outlays within some constraint. For example, the potential existence of a restitution scheme will enable planners to screen particular restoration or adjustment projects by comparing such ~rojects'special contributions to the general task of making amends for past errors with that of simply spending its expected cost or making ex gpatia indemnification to today's victims of past errors.

The advantage is that the transfer payments that accomplish restitution need not themselves necessitate errors in allocation. That is, after an error has been recognised, the nation can replan its production, discharge and pollution economies without necessarily undertaking restoration and adjustment expenditures. The latter's benefits to the victims may be imprecise or ephemeral. Instead, the victims may be "compensated" out of the gains of more forward-looking policies.

The gains from specialization and the role of compensatory redistribution are parts of a subject that has a niche in economics. Years of boring debate about "potential welfare" criteria have finally told us that a new, and ideal, plan of production should not be judged acceptable if it only "potentially" makes restitution to those who lose by it. The potential to compensate is not enough --redistribuiton to losers ought really to take place.

What I am recommending here is a corollary of that conclusion. It is not necessary to reallocate real inputs to look after victims; redistribution through a restitution scheme may be better. In general, it will be best to blend them, letting bygones be bygones, using nature, land, capital and labour to produce whatever goods and environmental quality are feasible and demanded, and using some of the social product of such a programme as a source of restitution to meritorious, innocent or poor victims of past errors. SUMMARY PRESENTATION OF ANTHONY SCOTT PAPER

CLIVE SOUTHY:

Let me start off quoting from the paper to get some feel for the tone. The paper attempts to summarize for non-economists what little economic analysis can contribute to policy formation for lakes that are already saturated with permanent pollutants. This search for relevant analysis is bound to be disappointing, for economics necessarily has little to offer in connection with three important questions: the just distribution of income or wealth; the correct allocation of joint costs, and the proper way of paying for by-gones. These questions are important, but are not advantageously posed by an economist. The tone of the paper is that we economists do not have a great deal to offer.

I shall now try and outline the main thrusts of the paper. The paper consists of three sections. The first section deals with the question: How does economics help to understand the causes of the problems of pollution, particularly of persistent pollutants? The first section is about causes and cures. The second section deals with what are the likely forms of the cure for pollution. The third section deals with the question that was on the program: what can economists say about past mistakes?

On causes and cures, Dr. Scott identifies three essential problems in discussing persistent pollutants. The first is the problem of common property. As you all know, the essential cause of the problem of pollution is that the restless media are restless. They are.difficult to own i.ndividually and must be owned collectively, or in effect, nobody owns them and hence there is very little incentive for individual users to curtail their abuse of the system. So then, the first major cause is common property.

The second dimension of the problem, as Dr. Scott emphasizes it, is that the pollution problem is what is known in economics as a public good problem. Not only do the abusers have very little incentive not to abuse the system, but those who benefit from non-abuse have very little opportunity to register their protest [against the abusers]. The reason is that we must all participate in the Great Lakes roughly to the same extent. The benefits of the Lakes do not come in small chunks, but in large-scale operations and there is no way I, as an individual consumer of the good "environment", can register my particular demand for those properties. So those, then, are the two classic dimensions of the problem of pollution: common property and public good. What Dr. Scott adds is the idea that in persistent pollution there is a third dimension, namely the intertemporal allocation that must take place. That is to say, we are not simply deciding on a level of pollution for the Lakes at a point in time. We must decide on a profile of pollutants over time. Scott introduces here a rather ingenious analogy. He suggests that we can think of the Great Lakes System as a mine. A mine has a certain amount of ore, the good that is desirable. Of course, the ore must eventually run out, and the really interesting question from the economics of mining is at what rate do you get rid of the ore? At what rate do you extract it? The analogy Scott draws of the Great Lakes is that you can think of the Lakes as an absorbtive system that has a certain amount of capacity to absorb abuse. [That capacity] is the ore of the Lakes. The interesting question is at what rate do we use up this capacity to absorb abuse? Assuming that we are going to put the persistent pollutants into the Lakes, the system has a limited capacity to absorb those pollutants. The really interesting question Scott puts to us is the sequence. In what optimal sequence do we, in fact, abuse the Lakes?

Essentially what the paper deals with on these three issues is a discussion of the potential cures or solutions to these problems. Not surprisingly, Dr. Scott recalls the general favour of the economists for simulating a market for allocating the scarce absorbtive capacity of the Lakes, and essentially he discusses the many alternative arrangements such as taxes, subsidies, etc. that we have heard discussed at the various seminars.

What Dr. Scott points out is that with the Great Lakes there are two essential dimensions to the implicit price - the value.of using up this absorptive capacity - to which one has to address oneself. The first one is that if there is a finite amount of absorbtive capacity, then you can only throw so much junk into the system. If we are throwing additional junk this year, we have to ask ourselves the question, could not somebody else make better use of that capacity sometime in the future? One can think that there are going to be occasional runoff problems, heavy flooding, etc. We are almost certainly going to be adding persistent pollutants in such times in the future. Perhaps we should be reserving the capacity of the system for precisely such contingencies. That is the first dimension, then, that we have to keep asking ourselves: not how much we can put in now, but if we put it in now, what is the cost in foregone earnings to prevent somebody else from putting it in later?

The second argument Scott puts forward is that because pollution is a public good; that is, we all have to participate roughly to the same degree of risk in these persistent pollutants and in evaluating the costs and damages, we have to consider the entire intertemporal sequence of these pollutants: What does it cost today, tomorrow and the next day? Essentially, Scott says that this makes it necessary for each community to make value judgments about the distribution of the benefits of the right to pollute between generations - between this year, next year and the future years. That, then, is the first part of the paper. Using this analogy of the mine, Dr. Scott then addresses himself to the kind of predictions an economist would make about the desirable extent of abuse, supposing that people were going to solve this problem of the optimal utilization of abuse. What kinds of predictions would economists make, without any details and from a theory point-of-view, about the levels of abuse and the pattern overtime when it comes to the following conclusions? The first conclusion is that tolerable levels of pollutants, starting from initial situation, would roughly converge to the same level of damage that would be allowed by the community for a non-persistent pollutant. [In other words, if we had a pollutant that was coming in and out of the system very fast, and we decided that we could not completely cure or clean it up, then we must allow some level of it in the system, some level of damage]. He suggests that theory would indicate that the level of damage due to persistent pollutants could never exceed that level that you would allow for temporary pollutants and in fact, that you would approach that level asymtoticly over time, gradually. So the level is roughly the same as renewable pollutants.

The second proposition that comes out of that is that the rate at which we throw PCBs and that sort of thing into the system declines over time. We may have a lot this year, somewhat less next year, and so on, gradually converging to the allowable level of damage.

The third proposition is that if this is the case, then the implicit value or price that we place on pollutionwould be rising roughly at the rate of interest. If we had the numbers, it would be a very easy and quick test to determine whether we are polluting at the right rate for persistent pollutants. [If people are buying the right to do permanent damage, then we ask if the price they pay each year is rising at the rate of interest.] Those of you who are familiar with mineral economics recognize that the optimal rate of utilizing a finite resource, such as oil, requires that the price of oil should be rising over time at the rate of interest. That is the optimum pattern according to economists. Dr. Scott emphasizes that as an economist your main message is going to be that we must allow some pollution, not an infinite amount, but some amount in the middle where the extra benefit is just equal. to the extra cost.

I have not taken you through the analogies Dr. Scott uses in his paper in these sections. He tells a little story of three different lakes and tries to show why the problems of both common property or public good and this intertemporal dimension add to the complexity of the problem. He concludes with the theme that to fine-tune a persistent pollution lake might be extraordinarily difficult and extraordinarily complex. I now want to address myself to the last section of the paper. Suppose mistakes had been made - whether in good faith or bad faith, whether we did not know, we did not care, or we did not have the regulatory agencies what can an economist say about such past mistakes? The essential message is that in the capacity of an economist we can say very, very little. One of the basic messages of introductory economics courses is that by-gones are by-gones. What caused you to be where you are today is of no consequence to what you should do in the future. Who did the polluting, why they did it, etc. does not matter. All that matters are the state we are in today and best possible utilization of the resources given the existing dollars. So the economists say we can say very little.

Dr. Scott addresses himself to three questions here. The first question is the question of restitution. He characterizes people's positions on these past mistakes under three headings. One is what he calls the avengers - those who want to go off and find who was responsible for the mistakes and make them pay. He says the economist can say nothing about that whatsoever. That is a value judgment on whether people who made the mistakes should pay. As professional economists, we should say nothing about the implicit value judgments, the distributional issues that we are not qualified to talk about.

Scott does, however, make three interesting points, I think, about restitution. The first is that one should not presume that because someone abused the system in the past that there now exists a capacity of surplus profits from which resitution can be extracted. One should not presume, for example, that a pulp and paper industry which has been abusing its privileges and polluting has necessarily stored up the profit levels within it to be able to pay for past mistakes. Indeed, you can make two propositions: first, if that industry was reasonably competitive, it will have no unusual capacity to pay for past mistakes; and second, even if it does have some capacity, there will never be sufficient capacity by the abusers who made a mistake to more that compensate for the errors. We know from economics that there just cannot be that amount of profit from abuse. Dr. Scott suggests that economists would not recommend going back to find individual transgressors, but perhaps they would try to get some idea of the total size of the mistakes in the past, primarily to guide policy about what is worth doing in the future.

The second alternative approach to past mistakes is simply what Dr. Scott calls the "purist" approach of trying to restore the system to its previous level of purity. There are two strategies here: one is to restore the system itself to its pristine state; the alternative strategy is to pay for adjustments so those who have been damaged, those who have been hurt by the past mistakes, can adjust themselves - relocate industries, homes, and that sort of thing. Here Dr. Scott points out that again the past has no necessary significance. The fact that we were once pure does not mean we should return to purity at all, or that we should necessarily make these expenditures or adjustments.

The paper ends with a statement [given these strategies: to make restitution through making the damagers pay; restoring the lakes, or alternatively making the adjustments;]: some combination of the three is what is probably going to be the least expensive for society to try in its attempt to make up for past errors. PANEL PRESENTATIONS

MARY GARNER :

In his paper, Dr. Seitz makes a significant point about the physical nature of the problem: the agricultural non-point source problem is quite different from the standard pollution problem in that it involves not only the immediate concern for control or prevention of a pollution problem but also the long term social concern for maintaining the nation's productive soils resource. Another unique characteristic of this problem worth mentioning is that the passing on of costs of preventive measures is more complex for the farmer than it is for the developer of a subdivision or for other construction activities.

In discussing policy alternatives, Dr. Seitz enumerated five components for consideration: (1) sediment control instruments, (2) performance indicators, (3) erosion control techniques, (4) compliance measures; and (5) temporary penalties. He suggests that a varying combination of these components might be needed and might be achieved by the combination of federal, state, and local policies. As further illustration of this, we found in a recent study that such combinations of components and state-local participation was provided for in erosion and sediment control laws of 14 states and the Virgin Islands. (See Table 1). Some of the laws, unfortunately, exempt agriculture.

I would like to clarify a few points about existing soil conservation institutions. The Soil Conservation Service (SCS) channels its technical assistance through local soil and water districts pursuant to a memorandum of understanding, and other Federal agencies have various cooperative arrangements with the districts, but this in no sense affects their status as creatures of state law. Although the districts laws were originally enacted for the purpose of providing locally governed public entities through which farmers and ranchers could participate in the federal erosion control program under the Soil Conservation Act of 1935, there has been an evolution of the districts over the years into governmental entities having much broader responsibilities and purposes. The authorized activities of most districts now include not only soil and water conservation but also flood control, drainage, irrigation, recreation, and water supply; many also have been specifically directed to carry out sediment and pollution control activities. In a number of states the expertise of districts has been recognized by laws requiring them to review and approve erosion and sediment control plans before earth moving activities will be permitted. I think these characteristics of districts are important in considering the role that districts are equipped to play in the prevention and control of agriculture related and other non-point source pollution. SUMMARY OF PRINCIPAL PROVISIONS OF STATE LAWS PROVIDING FOR

EROSION AND SEDIMENT CONTROL

(A reference to the particular law will be essential for complete explanation of provisions. )

PROVISIONS

TYPE OF STATE LAW Erosion and sediment control xx X~ x x xxxx Conservation districts x x x x Water qua1 ity and stream control x

METHODS OF CONTROL Approved erosion and sediment control plan required for land disturbance x xxxxxx x2 x 26 x x Establishment of soil loss 1imits x x Permits on basis of an approved plan x x 23 xx27xx RESOURCES COVERED

EXEMPTIONS FROM LAW

STATE CONTROL AGENCY Participating agencies:

Note: An "x" indicates that the respective law contains the provision 1isted. Numbers refer to footnotes SUMMARY OF PRINCIPAL PROVISIONS OF STATE LAWS PROVIDING FOR

EROSION AND SEDIMENT CONTROL

, OR TOWNSHIP RESPONSIBILITIES

1-Authorities contained in laws and 16-Establ ished by law regulations 17-And other resources 2-Acceptable plan required at site of 18-Department of Health activity 19-Persons engaged in agricultural practices 3-Erosion control practices may not be required who have agreement with a soil conser- on lands used for such purposes only vation district, will not be subject to 4-Exempte from permit requirements on1y any site plans, land use plans, or per- 5-Except as to grading, excavating, or filling mi ts required under the law, but will 6-Except in Cal vert County be subject to enforcement procedures 7-Within city limits after July 1, 1979. 8-Department of Fish and Game 20-Department of Agriculture 9-Department of ~nvironmentalResources 21 -Secretary of Agriculture and Commissioner 10-May include permits, inspection, complaints, of Environmental Protection viol ation procedures, fines, other legal 22-May assist with grants actions 23-Certif ication 11-In municipalities not within a district 24-Emergency repairs 12-Special provisions for emergency actions 25-Agricultural land as described in the law 13-Environmental Protection Agency 26-Required where district determines that 14-Air and other resources an agricultural land-distribing activity 15-Division of Environmental Protection of is violating adopted standards the Dept. of Natural Resources 27-Permit issuing authorities must require compliance with district standards 28-Department of Public Works 29-North Carol ina Sediment Control Commission There is a point on the governance of districts that I wish to clarify. The districts are governed entirely by the local board of supervisors (or directors as they are sometimes called) who are elected or appointed. Most boards are composed of three elected and two appointed members. However, there is a trend toward requiring the election of the entire board. ~lso,there is a trend toward requiring representation of other than farm interests on the board.

1; more than half of the states, districts have authority to issue land use regulations, but such authority has not been used to any great extent. This is partly because of the large favorable vote (75 percent) required for enactment of such regulations [and partly because the voluntary program took the bulk of the technical personnel aid and money]. Dr. Seitz noted that the drafters of the Model Law, upon which most of the districts' laws were modelled, considered this authority vitally important, and it appears that they were indeed farsighted in that they recognized the ultimate need for regulatory powers. It seems that the districts are giving a new look at this old authority. The Camden County Soil Conservation District in New Jersey enacted an erosion and sediment control regulation in 1974 which, although super- seded by the State Erosion and Sediment Control Act of 1975, is an illustration of the use of such authority. In Wisconsin, the Vernon County Soil and Water Conservation District has proposed an erosion and sediment control regulation which I understand is to come up for a vote early this year. In fact, Wisconsin has developed a model ordinance for use in adopting land use regulations for sediment control.

Dr. Seitz' discussion of acceptance of policy alternatives considers three aspects of problem solving:

(1) Awareness of problem, wherein it is recommended that a concerted effort by the Extension Service with the cooperation of the SCS may be the most viable general educational approach. I suggest that emphasis might also be given to seeking the cooperation and support of the state conservation and water quality agencies, as well as the local conservation districts in this effort.

(2) Solution development, .wherein it is suggested that the SCS, working under the guidance of local conservation districts and with individual farmers, would be most acceptable to farm operators, and that funding might be by a fee charged by SCS for technical service, which fee could be deducted from income tax. This would, I am afraid, be unpopular with landowners and would not encourage the voluntary effort. It would also add new administrative costs. Since it is recognized that financial assistance such as cost sharing and low interest loans is necessary in the public interest, it would seem better for the federal government to determine just how much it can provide for this purpose and make assistance available in the most direct and least complex manner. (3) Solution implementation, wherein the use of mandatory programs is discussed and a suggestion made that there might be some sort of federal mandatory controls. This would, of course, gets us into the very controversial issue of federal land use regulation. The alternative suggestion of controls at the state level would be more acceptable. In fact, as already brought out, more than half the states now have certain regulatory authority, and the fifteen laws dealing with erosion and sediment control, to which I referred, provide various types of enforcement procedures. Several of these laws provide for a combination of enforcement, through such means as fines and imprisonment, to be carried out by counties or other local general purpose authorities, with technical and monitoring functions to be carried out by conservation districts. This might well be the most acceptable approach.

The survey Dr. Seitz did relative to farmer attitudes found that 38.9 percent of those having a conservation plan considered as unfair a requirement for implementation of the plan. Dr. Seitz states that this suggests some serious reservation among those who had adopted a plan about requiring others to do so as well. I think that those who res- ponded to this question might have made a great distinction between the adoption of a plan and the required implementation of the plan. Most farmers who would welcome the development of a conservation plan might well be opposed to requirements as to its implementation, which involves the availability of both funds and technical assistance.

Those who are responsible for developing policy in this area would do well to keep in mind Dr. Seitz' findings that (a) there is an almost infinite number of policy alternative available; (b) it should be possible to set a national policy that does not have severe adverse impacts on most farmers; (c) there are several institutions in existence that could be used to carry out an effective policy; and (d) there are sufficient unknowns that it will not be possible to develop a "perfect" policy.

[Now I will make three points regarding Mr. Gordon's paper].

First, in urban non-point source pollution prevention and control, it appears that, as in the case of agriculture related pollution, a combination of control and prevention methods will probably be the most effective. These methods include land use controls such as zoning and subdivision regulations, land acquisition, and performance and structural controls.

Second, Mr. Gordon states that most of the suggested controls are enabled under the general police power of local governments by state governments. It is true that as a general rule most local governments, such as municipalities and counties, ilo have adequate authority to adopt the needed ordinances or regulations. However, there are some state constitutions which limit the general powers of the local governments. In those cases, state legislation might be indicated. In fact in the interest of meeting the water quality deadline, enactment of state legislation, such as the erosion and sediment control laws I have discussed in connection with agricultural related pollution, might be desirable. Third, I share Mr. ‚ or don's concern that the burden of bearing the costs not fall on certain groups to provide something that is essentially a public benefit.

[Finally, to Mr. Scott's paper].

I read with much interest his discussion of the economic aspects of pollutants, particularly that part dealing with restitution and restoration and his findings that: "It is not necessary to reallocate real inputs to look after victims; redistribution through a restitution scheme may belbetter. In general, it will be best to blend them, letting by-gones be by-gones, using nature, land, capital and labour to produce whatever goods and environmental quality are feasible and demanded, and using some of the social product of such a programme as a source of restitution to meritorious, innocent or poor victims of past errors".

I find this recommendation a reasonable one.

DOUGLAS HOFFMAN:

I would like to add just a little bit to the papers that you have already heard, mainly because in Canada we seem to have some rather different approaches--certainly different political approaches--than you have in the United States.

We find that Professor Gordon, for example, suggested three main sets of regulations: land use controls, land acquisition, and performance controls. I would like to point out that Ontario has used those controls too, with perhaps somewhat different results than you might have expected. First of all, zoning controls of various kinds are set by the municipality. There is no state or provincial government that becomes involved in these things. As a matter of fact, if you read the more recent reports of the Ontario Government, particularly the one that came out on Thursday (February 17, 1977) dealing with agricultural land use, you will see that the tendency is to get provincial government out of government--out of governing, if you like. They said they want to pass more and more responsibility to the municipality when it comes to land allocation. It means, then, that municipal government will be responsible for any kind of erosion controls, any kind of pollution controls that you might have in mind, and in all likelihood they are going to do this through the two things that we have at our disposal. You use them in the United States. That is the Official Plan and the Zoning By-Law.

One of the difficulties we face, of course, and I imagine we do this on both sides of the border, is that we often have zoning by-laws that first of all are not enforceable, and secondly are not enforced. So we find that pollution control becomes somewhat less than complete. Land acquisition has also been used. We use this in many instances in our municipalities to get rid of the waste we do not want anymore. We have a waste-disposal programme, but it does not really work out often as well as you might expect. Sometimes there haven't been very happy results. A municipality has often said, "Hey, there's a nice big swamp there, it's got a big hole, let's fill it up with waste." So we find that a municipality will use a sensitive area to fill with garbage, and since the water table is at the surface, we run into pollution problems.

Performance controls and structural controls, on the other hand, are usually set by the Provincial Government. In Ontario, for example, hazard lands are protected by the Conservation Authority's Act, and this is administered through our Ministry of Natural Resources. On the other hand, septic tank systems and controls are the responsibility of the Ministry of Health. Now these controls have been successful to some degree, but there is a great tendency on the part of the Quebec Govern- ment and the Ontario Government to rush pollutants into the Great Lakes and out into the ocean as fast as possible rather than prevent pollutants at the source. All you have to do is look at some of the kinds of things that have happened to see how quickly we do this. For example, we find that the soils with the highest rating for waste disposal by septic system are those that are coarse and open, the sands and the gravels, those that have a rather low water-holding capacity. If they happen to be adjacent to open bodies of water, it takes no time at all for the effluent to reach the streams, and then the Great Lakes.

I guess what I am really saying is that the controls that have been suggested in Dr. Gordon's paper are of great value. What we really need to do is to discover new ways of implementing them. What is our action programme?

I would like to take some time to talk about what happened in Canada during the period Dr. Seitz spoke about in the United States. First of all, we find in Canada that the conservation idea got under way in 1908 when the Federal Government appointed a Commission of Conser- vation. This was an advisory group, and they talked about everything from forest fires to wildlife to soils. Adams was the name of the planner they brought over from England in 1914, and when he got here one of the things he said was that all the roads must be 66 feet wide to give everybody lots of fresh air. By 1923 this advisory group had become so powerful that many of the ministers in the federal government did not like it anymore. So they got rid of it, and they got rid of Adams. This was the beginning.

Ontario really did not get going on the conservation ethic until 1944. At that time we had a conservation branch of something called the Ministry or Department of Planning Development. We had a great flurry of activity dealing with conservation in this province: farmers making farm plans; [all sorts of contour tillage; new drainage projects, conservation authorities; erosion plots, etc.]. As I say, a great deal of activity. All those things have disappeared. I only know of two farms in this whole province that still use contour tillage. Two farms! There may be more; I just know of two. Now we have three acts: the Environ- mental Protection Act, the Conservation Authority's Act, and the Environ- mental Assessment Act - all passed since 1973. The Assessment Act was passed in 1975.

None of those, however, no matter how good they are, has any direct bearing on the agricultural industry. We exempt the agricultural industry. Instead, we have something called a Code of Practice. This essentially sets guidelines for the prevention of soil and air pollution at the farm level. We are mostly concerned about manure, odours, other kinds of things. The Code does not do a thing for us in terms of erosion or sedimentation. We do not have interest in setting up some of the kindsof things Dr. Seitz talked about. Good ideas, but we do not have, for example, green belts running along the edges of streams to prevent sedimentation.

I would like to suggest that in Dr. Seitz' talk the corn belt model appears rather regional in its application. Although we have had a great increase in corn growingin both Ontario and Quebec, we are still a livestock producing pair of provinces. Our major problem is not erosion because people are running their fields down to the edges of the streams and other open bodies of water. That is a problem all right, but our problem is because the livestock all go down to the water to drink and theyknock down the paths by the sides of the streams, causing stream-bank erosion. This could be a real problem, and it is a question of whether we should have more work done in that area, and whether we could modify the corn belt model to fit this kind of problem.

We have other kinds of things that are going on; the nutrients transferred from the land by open tile drainage. We find in the model that soil type was not considered.

There are two things I would like to mention about Tony Scott's paper. I would like to have seen him introduce the role of property rights in much more detail than he did. John Dales of the University of Toronto has done this. [How we view our own property rights as individuals and the role we think those rights play, the economic role they play, is very important in any kind of control.] I would recommend John Dales' paper in the Canadian Journal of Economics, November 1975 issue. One more opinion [before I close], I feel that letting by-gones be by-gones is a cop-out. It is a cop-out on the part of economists if they say that cannot do anything.

JOHN R. ADAMS:

Dr. Scott's analysis does present an interesting format for the review of water pollution problems as we have,experienced them in Northwest Ohio. Essentially he sets a framework for assessing the costs of pollution, and who will pay those costs, and who will benefit from the expenditure of funds. Although his analysis, I think, could best be applied to point sources of pollution, point source related discharges, the application of that analysis to non-point sources in the Great Lakes, principally Lake Erie, may help to simplify the debate over who will pay the cost of restoring Lake Erie to levels of quality which have been unknown for nearly fifty years.

It has been fairly well established that phosphorus is the principal culprit in the accelerated eutrophication of Lake Erie, and that for Lake Erie nearly 50 percent of the total phosphorus loading originates from non-point sources. In the Maumee River, the largest of all the Great Lakes tributary streams, nearly 80 percent of the total phosphorus loading can only be attributed to non-point source pollutants.

There has been considerable debate recently over just how effective any level of control programmes will be in reducing phosphorus loading to a point where any improvements that are made will produce measurable improvements in water quality in the bulk of Lake Erie. Some of the limnologists have recently told us .that there is currently a sufficient quantity of phosphorus in the bottom sediments of Lake Erie to supply its continued eutrophication for many, many years. That is, the stock of phosphorus in Lake Erie may already have reached the saturation point, and, since the continued eutrophication will finally spell the death of the Lake, then phosphorus can only be considered to be a persistent toxic pollutant.

I do not mean to be overly pessimistic, but we do face some very serious decision-making about the control of non-point source pollution in the Great Lakes. Rather, I prefer to be optimistic and say that we have not yet passed the point of no return. I hope that substantial decreases in total lake loading of both point and non-point source phosphorus will result in substantial improvements in Great Lakes water quality. How can we obtain these adequate decreases? What kinds of programmes and laws are necessary to achieve the necessary reductions, and who will pay the costs of obtaining those reductions? I think that these are basically the questions that Dr. Scott asked in his paper.

Dr. Seitz and Dr. Gordon have presented us with something of a framework for answering these questions. Their analyses are, I think, technical analyses of the non-point source pollution problem, rather than economic analyses.

One of the figures in Dr. Seitz' paper presents a schematic for development of public policy for control of erosion and sedimentation. I make the assumption that erosion control of soils bears a direct relationship with phosphorus control. My own work indicates that erosion control will be approximately 75% efficient with phosphorus control. Dr. Seitz' schematic is essentially a shopping list for the development of a non-point source pollution control programme. The five categories represent all of the major elements we believe a programme must include.

Sediment Control Instruments are the tools which an implementation agency will use in establishing the application-of controls on the land. It is here also that it must be decided who will pay for the costs of pollution control. Although persuasion and education play a very important role in the future of non-point source control, and my own experience is that farmers will adopt practices which control pollution and do not decrease yields or cost them too much to apply, I think that the only hope for achieving control at an acceptably early date will rely heavily on economic incentives to accelerate the installation of practices. In Ohio a new bill, the Ohio Agricultural and Urban Sediment Pollution Abatement Bill, will be introduced for the second year in a row. This bill requires a 75 percent cost share for all permanent sediment abatement structures which do not have a direct and measureable benefit for the farmer. The bill also requires technical assistance and education for farmers. The bill mandates sediment pollution abatement where there is a direct and measureable causal relationship between erosion and water quality. This is done in a regulatory sense, and requires that cost sharing and technical assistance be available before enforcement can take place.

Performance Indicators are devices which the regulatory agency will use in measuring the success of its programmes in achieving levels of pollution abatement which are required. This aspect of the programme will be fraught with difficulties if it is intended that such monitoring be applied to the individual farm drainage as an enforcement device. I hesitate to dream of the monitoring network which is implied.

The Ohio Bill provides that a farmer who is operating within the guidance of an approved conservation plan will be assumed to be in compliance. I believe that this provision, in conjunction with adequate cost sharing, education and technical assistance will be adequate. Certainly it will be necessary to establish much better water quality monitoring programmes than currently exist to accurately measure total watershed mass transport and to assess the success of the programme, but it will never be possible to place an individual farmer under a pollutant discharge permit.

Erosion Control Techniques are the list of measures or practices which a farmer can apply to his land to reduce erosion. Each one of the many possible practices adds an increment of pollution abatement in a complete system of adequately treated land. During the course of our 208 programme, I attempted to estimate the impact of some of these possible practices.

Modification of tillage practices appears to have some of the greatest possibilities for pollution abatement in the intensively agricultural lands of Northwest Ohio. The tillage systems I have dealt with are no tillage, where the seeds.are planted directly into the residue of the previous year's crop, and reduced tillage, which I define as the use of a chisel plough in the fall of.the year rather than the use of the conventional mold board plough. I estimate that if these practices are employed on 100 percent of all land where each is applicable without any economically detrimental impact on crop yield, we will have a reduction of approximately 43 percent in watershed sediment yield and a 27 percent reduction in total phosphorus yield. These are the practices which I believe will form the bulk of the reduction of sediment yield that we can obtain in watershed mass transport.

This reduction must be contrasted with a 57 percent reduction in non-point source phosphorus, which the United States Army Corps of Engineers Lake Erie Waste Water Management Study estimates will be necessary to obtain mesotrophic conditions in the Central and Western Basin of Lake Erie. I am talking about a 27 percent reduction which I think will come from the bulk of the practices we can apply in the Lake Erie drainage, as opposed to a 57 percent reduction which is necessary. So we are not quite half-way there with the major practices that will be applied to control non-point source pollution.

We have come a long way toward solving the problems of non-point source pollution by identifying the sources and impacts of these pollutants. It yet remains for us to fully identify all of the possible techniques that can be used in the control of agricultural non-point source pollution, to determine what sorts of legal mechanisms will be necessary to implement them, and to decide who will pay the cost of implementing those controls. It remains for us to reduce this pollution sufficiently to maintain water quality. I have several ideas along those lines: continued research on sources and impacts is necessary; the public must express an interest in paying for the controls; new methods and techniques of control must be found; legislation must be passed to institutionalize non-point source controls and research and education programs must be established to spread the technology necessary for control.

MARY LEE,STRANG :

I think maybe it rnight be useful for you to try to put yourselves in the shoes of somebody who lives in a very heavily concentrated, urbanized area, with the biggest and the best and the worst and the crookedest - in Chicago.

Something I found in the paper last night may help. It is a little article by one of the Chicago columnists, and I quote "This is the time of the year when a disproportionate amount of time of police and public servants is turned over to citizens irate about dog problems. Anger over dogs far outweighs citizens' militancy over transportation, taxes, public health, education, muggings, burglary and trash collection. Every day in Chicago dogs deposit approximately 175 tons of excrkment in and on parkways, sidewalks, gutters, lawns, alleys, driveways, and parks". If you like statistics, that adds up to 62,875 tons of excrement a year in Chicago. I will leave it for somebody else to figure out the depths of the spread over the whole city. Again I quote: "This is the crisis season in Chicago, dog-wise, because a substantial tonnage in that daily deposit ends up on the shoes of men, women and children. Examining and scraping shoes at the doorway is a standard ritual in homes in heavily populated areas". [So that gives you an idea of one urban problem.]

Mr. Gordon in his paper said that controlling urban runoff is very expensive, that it is probably too expensive, and he gives an estimated figure for Chicago of 1.3 billion dollars. Let me bring you up to date. To start out with we have the Metropolitan Sanitary District (MSD) that covers the Chicago metropolitan area. That is most of Cook County: Chicago plus 121 other communities - about four million people, plus. MSD developed a plan called the Tunnel and Reservoir Plan (TARP). It calls for sinking deep tunnels in many spots throughout the MSD area for the storm water to run down into and carry to three or four massive reservoirs to be dug down in the limestone way under the city. Now, that is expensive. MSD figures that once the storm water gets down there it can be held for a while, and then when the storm is over it can be pumped up and treated. As it is now, when we get one of those 100- year floods, we are in trouble. The waterways cannot stand it. Chicago is built on the flood plain--our basements are the flood plain. If twice a year you have to muck out your basement, and for all practical purposes your basement is unusable for the things you would like to have in it--a recreation room or a furnace--you have got to do something, [and you will pay to do it].

The most current estimate, as of December 1976 from the Army Corps, right now stands at $4.9 billion for a start. Add to that somewhere around $600 million to $1.3 billion for the local part. The local municipalities own their own little plants and they own their own little sewer pipes. A lot of that needs to be updated, and that is a lot of money there. Add to that approximately $56 million a year for operation and maintenance of the programme. Above and beyond the $97 million it already takes them to operate what they have now, you are talking somewhere between $5 and $7 billion to control urban storm water runoff. That breaks down to between $200 and $300 extra per year per household.

In Chicago, because of the way the city is built and because of the fact. that the Chicago River flow is turned around, usually once or twice a year MSD has to open the gates and let all the stuff go out into the lake--a significant amount of stuff and it is awful. The decision is not made lightly, and it is against the law. The law says that Chicago, Illinois, cannot discharge into Lake Michigan. Now, if we were kind enough to return our sewage effluent all the time to Lake Michigan, then it would be no problem at all. But we are stuck with this law, stuck with engineering decisions made one hundred years ago, and this is what MSD has come up with after going through many--some fifty--plans and propositions, and the digging is under way.

Now here is how MSD is going to break down the cost. This always amazes me. The Metropolitan Sanitary District will bear $2.3 billion with 75 percent U.S. funding. Now in all honesty, MSD gets 60 percent funding because it still sticks with an ad valorem tax base instead of a user charge. They cannot adopt a user charge because there are 300,000 unmetred dwellings in the City of Chicago. The buildings are too old and it costs too much to go back and try to get those on metres. In the newer buildings, in all new buildings, the water is metred. So, $2.3 billion will come from MSD, the rest of it, $2.6 billion, is supposed to come from the Corps. This amount is no problem. The Corps amount was approved in ,the last Water Resources Development Bill. It has not been funded yet, but it probably will be when the Corps gets around to digging.

They are going to dig; MSD is digging tunnels, they are improving their plants, they are adding plants, introducing aeration--all sorts of things. The newest plant built is called the John Egan Water Reclamation Plant, which gives you an idea of the direction they are going. The Corps is to build one section of the tunnels and all the reservoirs. The question remains, what is going to happen with all the rock, and at this point nobody really knows.

The Corps estimates the costlbenefit ratio at 1:6. The MSD area should save about $400 million in flood damage and $340 million in improved water quality each year. That is the value the Corps has put on these benefits. There is some difficulty in figuring out what share is funded by what, because it is partially flood control and partially improved water quality. ,

This then is where they are, and those are the updated figures. These are 1985 figures based on an interest rate of 6 5/8 percent. Who knows what inflation will do to those figures.

In Chicago we have a regional planning agency called the Northeastern Illinois Planning Commission, NIPC. It is for the 6-county metropolitan area, Cook County and what are called the 5 collar counties around it: about seven million people. NIPC is the agency that is supposed to develop the 208 Regional Wastewater ~reatmentPlan.

I have some old notes that that I took the first of December 1975. This is what NIPC people said they were going to do. They were going to get a good fix on all storm water, all agricultural runoff, all leachates from landfill areas, and all atmospherically transported pollutants into Lake Michigan. They knew that certain types of information were inadequate, so they contracted to set up a computer model to make what they called a hydrologic and water quality simulator. They got a lot of very expensive gauges-several hundred little gauges-that were finally put in place after much arguing about rights of way and how you haul in the extension cord, and "I don't want you on my land measuring what I'm discharging". In one year they figured to measure 89,000 different analyses on storm water runoff alone tofeed into the model. Guess what? It has not rained. What are they going to do? Their whole concept is based on the simulator - if you putit in here, what's going to happen there? They are going to have to build in a lot of what they call surrogate figures, what I call bugger factors. [What I am saying is that computer modelling is useful and productive, but hedge on the side of caution if you use them. ]

Coments from Mrs. Strang's prepared remarks, but unstated during the pane2 presentation follow.

[I have one more comment relating to the Gordon paper]. Use of non-structural controls seems most applicable in newly developing areas. Land use controls, land acquisition, acquisition of development rights, performance and building controls, compensatory water storage, etc. are all legitimate means. In shoreline areas of Great Lakes (USA) these could easily be coordinated into a comprehensive management program under CZM program.

[I have some questions prompted by Dr. Seitz' paper]. The type of matrix analysis used to measure farmer reaction to various proposals is most interesting. Eventually, could one be able to develop various policies and recommendations that will lead to a win-win-win situation? Farmer, society, environment?

Rural attitudes toward increased governmental controls are often mistrustful. They do, however, work together for their perceived common good. Hence, the success of SCS, extension services ....using "gentle persuasion". Could environmental considerations, rules and regulations be incorporated within these existing structures in their ongoing programs?

The very nature of agriculture calls for continuing change and policies. Are farmers who were "over-sold" on the use of pesticides, fertilizers, etc. reluctant to go along with current thinking? Once bitten, twice shy?

[I would like to mention the League of Women Voters' position on] effluent discharge standards vis-2-vis effluent charges. First, the League has always maintained that the polluter must bear the cost and ultimate responsibility for cleaning up his operation. Granted, we as consumers "pay" that cost in the form of higher-priced merchandise, but it is necessary for industry to determine the true costs of doing business - including cost of keeping environment clean and healthy. Second, the League feels that either effluent standards or effluent charges can be effective devices, providing:

1. effluent charges are so severe that they absolutely force a change in practicesr

2. effluent charges do, indeed, shorten the endless judicial maneuverings;

3. enforcement officials are not overwhelmed with 'cries of wolf' by affected industries; these threats are seldom for real, and the cost of pollution control alone is almost never the cause of closing an entire plant; and

4. that whether one goes with effluent standards or effluent charges, three items are tended to: the possibility of reprocessing wastewater for continual reuse; the possibility of reclaiming valuable materials from previously discarded wastes; the absolute necessity for accurate, continual monitoring ...to LWV, it seems logical that the costs of this monitoring (regardless of who does it) should be borne by the industry as a legitimate cost of doing business.

One of the things the League does, and is doing more of all the time, is becoming involved in the process of citizen participation. It was interesting to read a memo that was recently brought down by OMB (U.S. Office of Management and Budget) just before President Ford went out of office. In effect it stated that every significant federal programme had to have some component of citizenship participation in it. Now that is sort of like saying vegetables are good for you. You like the idea, but try to get your kid to each spinach. It is very much like agencies; they do not know what to do about it. Well, I am not saying that we do either, but Leaguers are more willing to give it a crack than a lot of agency people are, and they have, perhaps, in local communities built up a credibility in the community. I would urge you to use the League members that you have around you, whether an area-wide group, a state-wide group, the national league, or local leagues, realizing of course that there are quantum leaps in types of League members. If you find the right ones, they will do you a world of good. NON-PO INT SOURCES HIGHLIGHTS-MORIVING GENERAL DISCUSSION

RICHARD ROBBINS: The panel spoke both about low-till and no-till agriculture and about resulting reductions in phosphorus runoff. I am wondering what the increases might be in the runoff from herbicides and other chemicals used in agricultural production, how would that affect water quality?

WESLEY SEITZ: Most often when you go to a reduced tillage system, or certainly a zero tillage system, you tend to increase somewhat the use of pesticides. Emphasize "somewhat", because a very high portion of farmers, at least in Illinoisi are already using pesticides, and so it is not going from a zero pesticides use to a pesticide system. They are already being used anyway. You have' to keep in mind that if you use a zero till or a minimum till operation, you reduce the amount of water that runs off the soil. While you put more pesticides on and there is more available to be lost, you reduce the amount of water that is leaving, and you are going to reduce the proportion of pesticides that are leaving. I really am not sure that the net impact on pesticides getting into a waterway will really be increased. I am not sure, but it is not immediately clear to me that we really will be increasing significantly the amount of pesticides in the water as a result of these practices.

.GEORGE WATKINS: It is my impression that we are now spending several hundred million dollars in the United States in a planning programme referred to as 208. One of the major targets, goals or anticipated results in the plan that is supposed to be produced is the control of urban pollution. Would you say that we are wasting our time in our 208 programme?

JOHN ADAMS: In our own 208 programme we have determined as well that complete control of all urban storm water, water quality related problems cannot be solved in a cost-effective fashion. However, there are certain things which we can do which will give us significant improvements in water quality in a cost-beneficial manner. I mean things like repair regulators in combined sewer systems that discharge to small tributary streams in our urban areas. We can begin to develop comprehensive urban storm water management programmes that in time will improve the storm water quality problems. There are numerous things we can do that are cost-effective, but complete treatment-say for example, secondary treatment of all combined and/or storm water runoff problems-is not cost-effective; we just cannot do that within the kind of money that is available for water quality management in this country. We cannot correct old problems. HENRY HART: One of the striking things that your [Dr. Seitz] survey told me from the standpoint of what policies to use to control agricultural non-point pollution is that farmers have less sense of unfairness if you mandate specific physical practices like contoured terracing, or even [if you specify] an amount of soil loss per acre which they are required to keep below than they do if you tell them that they have to engage in individual farm planning, which [to me] would seem to permit much more leeway. I want to know what you speculate might be the reasons for this difference.

WESLEY SEITZ: I agree with you that this is one of the most interesting things [to come out in the study]. Of the farmers that had adopted soil conservation plans, or had developed soil conservation plans, over 39 percent said that they felt it would be very unfair to adopt a policy that would require all farmers to adopt such plans. The number of farmers that had not adopted plans, that reacted to them as being very unfair, was much lower than that. One of the things that Mary Garner pointed out in her remarks is that there is a difference between requiring a farmer to develop a plan and [requiring him] to implement that plan. There are, obviously, educational benefits from having just simply developed a plan. The farmer is aware of how much soil loss is occurring and what can be done to correct it. When we put that question in the questionnaire, we specifically put it in as a requirement for implementation because we felt that this is one way to achieve Soil Conservation Service tolerance limits, which seems to be a reasonable objective. It is possible that some of the old plans are on the shelf, that the farmers do not feel that the Conservation Service has given them enough alternative ways of meeting those tolerance limits. I do not know. Perhaps Norm Berg or Mary would like to discuss these kinds of issues a bit more.

NORMAN BERG: I worked with people over a period of up to ten years to get them to the point where they looked at their total farm and ranch resource. We have since had experience in the Great Plains area, where now we have roughly 50,000 farmers and ranchers who have used what we would call a pretty comprehensive plan to tie together all the help they need - the technical assistance, the cost sharing. It is on a kind of guaranteed basis--if you will do your thing, we will do ours. We set the money aside, and we stay up with the costs, and we get pretty good acceptance. In history, we have roughly 2 million of these people on the books as co-operators with all the conservation districts with a conservation plan. In most cases plans are probably out of date within a year, so it requires a great deal of follow-up. I think, increasingly, we are finding that what we are going to have to do is recognize what the real world is out there that these people have to deal with. WESLEY SEITZ: Some of the things we need to do in the real world... First, I think we need somehow to make the implementation of a plan, or at least the achievement of, let us say, soil conservation tolerance limits --a mandatory thing. We have to turn [the system] around from a completely archaic programme.. We have to put a stick out there [not just the carrot].

One of the interesting things that will happen if you do that is that the Soil Conservation Service will become a way of helping the farmer achieve what he has to do. It seems to me that that will then free district and SCS people from the requirement of going out and working as they have for 42 years. They still do not have my dad signed up as a co-operator in Ohio, and if somebody says, "Hey, you have to do it" then maybe he will walk in and say, "O.K., you know I need help, I can't do this myself". So we have to give them control.

Another thing I think we need to do is eliminate the $2500 per year per farm restriction on the amount of cost sharing that can be given, because in many cases you need practices that cost more than that. A third thing I would suggest is that we need to set up requirements in a way that the local soil and water conservation district, working with watershed management people, can identify those areas where there are, in fact, serious problems, and begin to work on those, rather than as we do now, work on any farmer that wants to cooperate. My guess is that often we end up working with farmers who do not have serious problems because they can come into compliance relatively easily. Those farmers that have more serious problems do not move into compliance.

LEONARD DWORSKY: [Two comments ...I Those nonsense words that were said about ten years ago that the Great Lakes are dead and dying - at least I thought were nonsense words at that time -- today, I think we might use fairly because, from the standpoint of their biological utility, the Great Lakes are dead. We have to say it to ourselves and recognize what those words mean. The Great Lakes are dead from the standpoint of biological utility.

[A reminder about this afternoon's discussions]. When we talk about the things to do this afternoon, just recall that we are not starting with a new survey, and a new report, and a new series of policy options [to control nonpoint pollution]. All those policy options have been there, are in being, but have not been able to be applied.

CLIVE SOUTHY: If it is true the Great Lakes are dead, then what are we doing here? The message of Tony Scott's paper is that if it is dead, it is dead, and let us use it for depositing all our garbage, let us save six billion dollars, and let us get on with it, why waste our time? That is what the paper was trying to say. If it is dead, it is dead, and let us start up with that premise. Let us not try to restore it if it is not possible, perhaps not even desirable, and of course if it is dead, and we are wasting our time here and the taxpayers' money. [Consequently] such projects as the very sophisticated study, very competent study, just being discussed here, also become redundant. An economist will tell you that the only reason for telling a farmer to restore his land is precisely the arguement that there is a social externality involved, namely the pollution in this case. If a farmer chooses to run down his land, [for him] it probably makes good economic sense to run down his land. It makes good economic sense in many situations to deplete the soil, just as it makes good economic sense to deplete a mine. There is no point in keeping a mine in the ground for the future days. These are hard realities you are getting. I am a little concerned with this discussion of this conservation programme, it is a hidden rationalization for forcing farmers to conserve soil:

WESLEY SEITZ : On what basis do we, as a society, decide what is good and what our ethical responsibilities are? One thing you can do is to say that the discounting procedure does not make sense, and that we have the responsibility to provide productive resources for future generations. That moves us away from the tradional economist's stance of saying you make decisions on the basis of economic efficiency, but I think it is a worthwhile basis on which to consider the problem of soil loss. I think an ethical basis - the conservation ethic - is an almost religious thing, and we do have some responsibility to provide a soil resource that is available for future generations.

MAXWELL COHEN: I have two comments. One, listening tothe economist, that grim discipline gets more and more grim, when they can discount the whole environmental rationale for which we are all here. I must say that I am a little puzzled at the way one looks at soil as something that is expendable over time and to be depreciated by an accountant's device as you would the machinery in a factory. I suspect there is another rationale here that ought to be looked at with a good deal more sympathy. In fact, I would like to see the economists go back to becoming political economists again. They have been destroyed by models and by arithmetic. Indeed, their political acceptability is on the decline because they have lost the word "political".

My other comment is to raise the question, "What doesSDworsky mean the lakes are biologically dead?"

LEONARD DWORSKY: I tried to be relatively concise by using the term "biologically dead" in the sense that the fish are no longer useful to man. The fish are there; the fish are alive, but they are not useful to man. I said that from the standpoint of the biological utility to man the Great Lakes are dead. The charge is that we cannot fish them, we cannot eat the fish, we cannot use them, we cannot even grind them up for fertilizer. DR. DONALD MOUNT: I rebel very much at this statement that the Great Lakes are biologically dead. I think this flies in the face of everything that we know and plays on emotionalism again--which we have all too much of already--and I do not think that Leonard really means that: All right, the biological utility is dead. I would point out to you first of all that when I asked my son who is sixteen years old what he wanted to do for his vacation this summer, he said, "Dad, ,let's go to Lake Erie for two weeks of white bass fishing". I eat those fish and it does not seem to have bothered me any.

The point I would like to make which is more scientific, is that a recent study of mothers' milk showed that something like 90 percent plus of the samples had between fTve and ten parts per million of PCBs in it. Now I would offer the question to you, is that mother or that child biologically dead because they carry residues? I think not.

Experience on Lake Michigan shows that the very first year after the ban on DDT went into effect in the Basin, the residues dropped by some 30 percent and it continued that [downward trend] year after year. There is absolutely no scientific basis to think that these residues will not go down if we treat the Lakes with some reasonable respect.

JACK VALLENTYNE: My question is has there been just a straightforward economic analysis, and then translating that in terms of the indirect effects to water pollution, of the rate and the way in which we use road salt?

BLAIR BOWER: Three points I would like to convey, first in answer to the question of whether a study has been done in terms of the benefits and cost of salt application to roads, the answer is yes. In connection with the Natural Hazards Project, basically under Gil White at Colorado, and along with some of his colleagues - Cliff Russell, and some others - they did specifically look at that problem. What are you gaining and what are you losing by different rates of application; what are your options?

The second point relates to the question concerning alternatives to the use of pesticides for controlling pests. I would argue that we have a fair amount of information to say that some programmes of integrated pest control, and in a few cases programmes using biological controls alone, will perform at a high level of efficiency in terms of controlling pests.

One of the problems with respect to pesticides has been product specifications, particularly in the United States, in terms of grade labelling. Now when I was a kid, when you got an ear of corn, you expected to find one or two worms on the end. If you bought a fresh tomato, you expected to have a bruise or two. [Now the United States Department of Agriculture (U.S.D.A.)] grading requirements say that a Grade 1 tomato cannot have any blemishes, cannot have any bruises: an ear of corn cannot have one worm. The farmers' response to these kinds of grading provisions is to throw a lot of pesticides on the crops. .This is sort of an insurance plan stemming from the products specifications. It is clear - at least I think the evidence is clear - that if you did not do anything else, if you did not go to biological controls or go to integrated pest control, you could reduce the total application of. pesticides by a substantial margin if you did not have to meet these kinds of grade standards.

The third point is the intergenerational problem. To what extent and by what decision criteria do we make decisions in terms of allocating certain kinds of scarce resources over time between generations? Economics, including political economy, has been based primarily on the present. We have talked primarily in terms of allocation efficiency within a relatively short time frame, twenty or thirty years - one generation. Nobody has yet come up with specific kinds of formulae, computer models, or anything else by which you can decide how much of those resources you want to allocate to the next generation as against this generation. That becomes, basically, .a socio-political question, and the economists or the engineers or the political economists or anybody else can do no more than say, "Here are some options in terms of the time streams of costs and outputs which will result from alternative strategies and alternative policies. You have to make the judgement of how much you want to give up now in order to provide for the future."

There is also an important point, which I think Clive and Tony Scott point out very well, and that is that we have to remember the production unit in the case of agriculture or in the case of forestry. Individuals have a time horizon which is relatively short, and it does make sense, for the individual, in many cases, to mine [exploit]. There is just no question about it. We have to recognize when we are trying to develop management strategies that we face that kind of objective function for those individuals.

A firm is different. Weyerhouser is basically using the same kind of discount rate as the United States Government and it is a long time horizon because [that firm is] going to be in existence, at least they think, into perpetuity. So you have very close coicidence in terms of management policies between that private entity and what you would do in a social sense. But it is not true for the small woodland plot owner, or the farmer of even a fairly sizeable farm. He is going to mine because it is a rational economic thing for him to do, and we are being ridiculous if we do not face that as a basic condition when we try to develop management strate.gies.

I would argue that the economic criterion, or some set of economic criteria, where these involve economic efficiency and distributional effects, [are only a few] of the criteria by which one makes a decision on a management strategy. There are various other criteria, which I think any economist, including Tony Scott, would r'eadily admit. We are often accused of ignoring these other things [however], if you go back to some of the early writings of John Krutilla, for example, he says very clearly that economics is not a substitute for the political process. Economists can tell you certain things, and these then become inputs into that decision process, so that you can set up a number of criteria - some political, some administrative and some economic. How you give weights to these criteria is a major problem. The weighting is done in the political process either explicitly or implicitly. I think probably one of the basic outputs from a lot of the Resources for the Future work by John and his colleagues has been to give us a. better handle on some of what are considered to be non-quantifiable [outputs from natural systems which in many cases are quantifiable in economic terms]. His work on wilderness areas, his work in ell's Canyon, and so on, in fact demonstrates that there are ways to get at not all of the benefits, but certainly some. The point I would stress is that economics will always remain only one of the criteria by which we are going to make these decisions in any kind of political structure.

JONATHAN ELA: Yesterday a number of people made the point that if you are talking about effectiveness in cleaning up water pollution in municipal and industrial systems, our principal effort perhaps should not be sticking toys at the ends of pipes, but rather controlling inputs of what goes into the system, and that materials management schemes of various kinds may be more effective if there is a limit to how much we can accomplish simply through the engineering of treatment plants. I wonder if the same may not be at least as true when we are talking about non-point sources of pollution, particularly rural. There is a very fundamental limit to how much we can accomplish through such things as soil conservation if our agricultural technology keeps becoming more intensive in terms of the use of chemicals,, whether we are talking about insecticides, or herbicides, or fertilizers that create nitrate leaching problems and runoff problems into the Great Lakes. Maybe the most fundamental question in terms of rural non-point pollution is what do we put on the land, rather than what kind of toys do we stick at the end of the pipe.

WESLEY SEITZ: What we have to keep in mind, I suppose, is that most of what we are losing from agriculture are not waste products which is the case most often in municipal or the industrial sense - but what are, in fact, productive inputs: either the soil itself or things that were added to the soil in order to produce products, so that they are, in fact, positive elements of production. What we are asking is how much money we are willing to spend in order to prevent Mother Nature from hoarding some of that off the land? There is a bit of difference, I think, from the industrial case. Second, to some extent, I think, when you have a farmer that puts on three-hundred pounds of nitrogen per acre because he wants to see if he can have the highest corn yield in the county in a given year, you probably have excess applications. Some farmers willnot go to integrated pest management systems for the corn root worm because to do that they have to walk through the cornfield in August. Then the corn is about ten feet tall, full of spider webs and pollen that runs across your face and down your back; plus, there is a problem if you have a hundred-acre cornfield, [you can] go in and get lost and not get out for several days. Such farmers are highly hesitant about using integrated pest management which tells them whether they need a pesticide or not, so they put pesticides on as a preventative kind of thing.

The third thing is that there are a few "organic farms" in operation in the corn belt. It depends on who you talk to what you think the remedies are. Some laugh at them and say that it is absurd; you can never go back to that kind of thing; you have to use a traditional agricultural or commercial agricultural system with lots of inputs of a commercial nature. Others say that those farms are, in fact, as profitable as others, and there are other benefits, etc., so that we can go back to that. I really do not have a firm opinion in my mind as to , whether or not those [organic farms] are viable competing operations.

JONATHON ELA: There was some discussion earlier that maybe the voluntarism of the traditional approach toward planning and soil conservation is not going to be effective enough in the future and that there will have to be some niandatory kinds of controls. I do not see why the same philosophy cannot be applied to'what you put on the land as well. To me our voluntary approach toward letting farmers use essentially whatever kinds of inputs--including energy, I might add--into crop production has proven unsatisfactory and we are going to have much tougher imposed standards on what our farm economy is trending toward in the future.

WELSEY SEITZ: I think a soil loss plan would, in effect, end up with a farmer choosing different conservation practices, for example, or tillage practices, which will in a sense change what goes on the land, certainly change the amount of energy that is used, etc., so that there will be some impact.

NORMAN BERG: I think the whole problem related to non-point sources [contributions] coming from farm and ranch lands, primarily--and it could include areas that were in pretty good protective measures that are now being urbanized or even are building a highway or transmission lines--the whole thing has to be approached on the basis of as much prevention as possible. We are certainly not going to build treatment plants to deal with the nonpoint,source problem, so we are going to have to do as much as we can back at the source. We start with the basic problem of [convincing the land owner] that the land and water are most valuable to him. We may have developed agricultural technology to the point in the U.S. that makes it difficult to turn back. Energy costs may help. Barry Commoner has been running some experiments going back to basic organic farming. Five years ago it was not cost effective on a 125,000 acre feedlot operation to haul manure, their own by product, across the back forty rather than use commercial fertilizer. Today ....?

DICK ROBBINS: Many of us in the United States see the 208 program as the primary way in which we will stop non-point sources and protect our waters from non-point sources. I know that, at least I understand that, Toledo has finished its plan ...and that there were some severe problems in developing the plan. I am wondering if you can enlighten us, for the purpose of this afternoon's program, about what you have learned in developing your plan so that we might avoid similar pitfalls in the future. Second, and I think the really critical issue, what do you think the potential is for implementation of the land use control structures that will probably come out of it? What will get your plan off the shelves and out there working? Is there any possibility whatsoever of that happening?

JOHN ADAMS: I'm afraid that the myth that you have espoused--the idea that 208 is going to be the be-all, end-all solution of non-point source pollution--is just that, a myth. We of the Toledo Metropolitan Area Council of Governments felt that way when we read the Act. Section 208 of Public Law 92-500 says that 208 Agencles will propose solutions to a22 sources of pollution.

That is quite a broad spectrum of problems. We did go down through the list of all possible sources of pollution in our program. We did identify six particular areas that are significant water quality problems in our region. We have studied the institutional arrangements dealing with all of those problems specifically, and with the technical problems and possible alternative solutions to all of those problems. We have now got a plan, weighing 40 pounds, that documents all of the possible alternatives, and institutional, technical, economic,,etc. solutions to all of the water quality problems. Whether or not any of what we have ever done ever gets implemented is a very, very big question.

CLIVE SOUTHY: [In response to a complex comment and question regarding the Anthony Scott paper]. Basically, I think that Anthony Scott's position is that just because the pulp and paper industry [or any other industry] might have been the past cause of specific pollution, does not mean that you have to take money from the pulp and paper industry. There is no logical deduction between those two propositions, and knowing who polluted does not tell you how to cure it or who should pay for curing it from an economist's point of view. You might feel morally that the polluter should pay, but that is up to you. NON-POINT SOURCES WORKSHOPS

On February 22, five discussion groups were formed to suggest economic, legal, procedural and institutional mechanisms and policies in the following topic areas: 1. urban non-point sources controls, 2. rural non-point sources controls, 3. urban future strategies, 4. rural future strategies, and 5. chemical and metal residues. The Nominal Group process (explained on pages 286 through 292) was used by all groups.

Each group was made up of 16 to 20 persons. At least one lawyer, one economist, one person representing each level of government in the United States and Canada, one citizen activist, one planner and one person involved with the non-point source area under discussion were members of each group. A leader with experience in the area under discussion and a recorder were also group members.

The lists produced during the workshop sessions were cryptic. Those who participated were sent the list(s) from the workshops they attended and were asked to restate any of the policies and suggestions which they thought required clarification. From those responses, the lists on the following pages were rewritten so that readers of these proceedings would have a clearer idea of the meaning of the suggestions.

Participants' ideas are presented in random order on the next few pages. To the left of the listing, the top five priority alternatives are indicated in Roman numerals. URBAN NON-PO I NT -- CONTROLS PRIORITY

I 1. Improve co-ordination of assistance agencies by greater integration of federal, state, regional and local programs.

2. Conduct an information campaign to increase public awareness of urban non-point problems and solutions to them and to develop public pressure to support the solutions.

3. Require dog-owners to clean up after their pets.

4. Require that property owners be responsible for proper storage of their refuse and cleaning of their streets.

I1 5. Develop and fund new or improved techniques for solid and liquid waste disposal, particularly sewage sludge disposal.

IV 6. Inform contractors and developers as to the advantages of environmentally desirable construction techniques.

V 7. Develop and require use of substitutes for rock salt in winter snow removal to reduce chlorides contribution in runoff.

I11 8. Require that development in flood plains be restricted to nonstructural changes and public uses.

9. Require costlbenefit studies before sewer and storm water runoff projects can be undertaken.

10. Build ponds in flat urban areas to achieve some degree of sedimentation and reduce runoff peaks.

11. Determine whether studies have already been completed by public agencies before hiring a consultant to undertake the study.

12. Enforce existing laws concerning pollution abatement and storm water runoff to a greater extent.

13. Regulate land development actions by requiring: a. submission and approval of sediment control plans prior to development, b. performance bonds, and c. soil erosion and sedimentation permits for land change activities. Develop innovative and cost-effective strategies for storm water treatment.

Establish and enforce adequate air pollution standards.

Establish and enhance comprehensive urban water resource programs.

Promote mass transit.

Design with nature by taking natural conditions into consideration.

Make federal and state fundslgrants contingent on meeting water quality objectives of the Great Lakes Water Quality Agreement.

Adopt zero pollutant discharge goal for new developments.

Institute collection and disposal service for toxic waste products.

Control sale of pesticides by merchants and co-operatives to insure informed use.

Impose progressively higher charges on water, increasing as the level of treatment and use increase.

Develop land use plans and legislatively require their implementation.

Design ports to minimize shore erosion.

Control sale and distribution of known toxic substances.

Tax outlying developments for full incremental costs of providing services in order to prevent "leap-frogging".

Require less use of impervious surfaces to increase infiltration.

Impose higher tax on leaded gasoline to eventually remove lead from gasoline.

Zone to stimulate close-in development.

Reform existing justice systems to allow citizens to file class action suits and to streamline judicial processes.

Study potential for using dual water systems which utilize water treated to different levels for different uses. mmx UbaJ 2$Gc aJ -rl m 5 E 0 rd E b U605 b 0 U u m aJw0z U 0 -d 5 U aard aJrdu bO1C 2 z i .d 0 u Zma, OaJb .d s UUC rdUrd d .d d 5aa bO aJma3 bmo rd h( aJ b UbOU rd c bOaJaJ dbE -d aJ Z5d 0 w 22H2 mem mmm RURAL NON-POINT -- CONTROLS

PRIORITY

Establish direct mandatory controls over farming practices and penalties for practices known to degrade water quality.

Eliminate the $2,500.00 per farm per year upper limit restriction on United States federal cost-sharing of implementing soil erosion control practices.

I-II 3. Shift regulatory powers to soil and water conservation districts and enforcement to counties.

Set crop quotas in terms of weight or volume of product, not by acres.

I-II 5. Adopt agricultural and urban sediment pollution abatement legislation at the state or provincial levels.

Retain best agricultural land for agricultural purposes.

Provide tax credits to farmers for pollution-control investments.

Provide state and federal sharing of cost of anti-pollution work which is not of direct benefit to farmers.

Prevent any new reclamation of arid and wet lands.

Preserve stream-side green belts to reduce runoff of sediments and stabilize stream banks.

Streamline soil conservation assistance to farmers.

Subsidize voluntary non-use of fertilizers and pesticides.

Establish workable feed-lot runoff controls.

De-regulate natural gas prices so that the cost of nitrogen fertilizers will increase and their excessive use will decrease.

Conduct research into the relationship between cropping and dairy practices and water quality.

Provide additional funding to hire more soil conservationists to work with local districts.

Establish baseline to distinguish between natural and man-made effects of nutrient and sediment runoff. Assess environmental impacts of large-scale versus small-scale farms.

Implement programs on most erosible areas first.

Require that farmers meet water quality performance standards, but leave them free to adopt techniques to achieve the standards.

Provide funds for departments of agronomy to train more soil conservationists.

Clarify taxation bureaus' instruction language so that farmers can take advantage of exemptions for pollution control equipment and practices.

Establish, through regional water quality management authority (208?, an agricultural land management committee to co-ordinate conservation districts and form associations of conservation districts on a regional or watershed basis for education and technical assistance.

Get soil surveys out quickly for use by farmers and builders.

Develop an integrated pest management system through:

a. limiting volume of fertilizer and pesticides in critical areas, b. accelerating research and implementation of biological pest control, and c. lowering product-grading standards to discourage pesticide use and prohibiting pesticide advertising. URBAN -- FUTURE STRATEGIES

PRIORITY

I 1. Build implementation programs into official or master plans by:

a. tying plans to objectives of the Great Lakes Water Quality Agreement, b. requiring public involvement and public acceptance of plans, (perhaps by elective mechanisms), c. co-ordinating regional planning with air and water management planning, and d. discouraging zoning or plan changes.

2. Introduce party system into municipal government.

3. Require all new shopping areas to utilize pervious pavement to allow percolation and reduce runoff.

I1 4. Regulate and phase sub-division development through: a. requiring environmental performance bonds on construction projects, b. requiring use of grassed waterways with retention ponds, and c. discouraging construction in high risk or steep slope areas.

IV 5. Improve storm water management by accelerating the development of and funding for correction of storm and combined sewer problems, and by developing federal and/or state sewer separation projects that are labor intensive.

I11 6. Provide financial and technical assistance to municipalities to aid in toxic chemical disposal and in developing waste destruction facilities.

V 7. Increase penalties for contravention of existing pollution abatement laws.

8. Develop model communities with full funding providing all services, yet retaining the natural environment.

9. Reduce minimum wage for labor intensive sewer projects so that more people can be employed and more work can be done.

10. Establish dog relief areas with disposal facilities in cities.

11. , Study the costs and benefits of road salt application and its alternatives. 12. Control sale and distribution of lubricating oil and provide facilities to recycle used oil.

13. Implement policies to reduce pollution.

14. Place a tax on phosphate detergents instead of banning them.

15. Eliminate provincial (Ontario) government subsidies to municipalities for installing storm drains along roads.

16. Raise street catchment basins one-half an inch to reduce the amount of water entering sewers during rain storms.

17. Zone or acquire to protect environmentally sensitive areas. RURAL -- FUTURE STRATEGIES

PRIORITY

1. Use authority under existing laws to enforce land use regulations to protect the environment.

Impose graduated user fees for recreational facilities; higher fees for intensive or damaging uses.

Give river basin agencies broad responsibilities and powers to upgrade and maintain river systems.

Limit fertilizer applications to soil needs determined by soil tests in order to reduce nutrient runoff and associated problems.

Undertake research for weather modification.

Provide financial assistance to encourage use of best management practices by farmers.

Impose tax penalties for poor conservation practices which cause soil erosion or increase runoff.

Shift responsibility for forest management, including reforestation, back to industry. (Canada)

Eliminate exemptions to agriculture in environmental acts.

Levy effluent charges on discharges from agricultural lands.

Establish permissable soil loss limits for agricultural lands.

Develop and require use of biological or ecological alternatives to chemicals for pest control.

Conduct thorough examination of all regulations and laws concerning pollution to eliminate unnecessary ones.

Develop new uses and techniques for using biological wastes from agriculture.

Increase the cost of using virgin materials and energy relative to secondary material and energy by: a. removing subsidies on virgin materials, b. incorporating the costs of waste disposal into producer- and consumert ljrrre costs, and c. taxing virgin materials or subsidizing secondary materials.

Place the responsibility for defining environmental quality objectives for agricultural areas with environmental agencies, follow with agricultural agencies advising farmers how to comply voluntarily and, if necessary, with enforcement by environmental agencies. 17. Study and investigate potential to establish common transportation/utility corridors.

Expand education activities of river basin authorities to inform the public of problems and solutions to diffuse source pollution.

Provide cost-sharing of conservation measures for benefit of public.

Eliminate government overlaps in responsibilities among agencies and jurisdictions.

Legally authorize citizen suits to compel or question discretionary administrative decisions.

Legislate mandatory reforestation by government and/or industry to insure renewal of the resource and reduce pollution from erosion.

Regulate or subsidize ecological design for the construction of roads, both public and private.

Conduct research to determine total residual loadings for diffuse sources; e.g. septic tanks, fertilizer applications, etc., in order to determine the relative importance of point source and non-point source loadings.

Develop more efficient techniques and mechanisms for the separation and handling of secondary materials.

Abolish all subsidies for conservation practices.

Acquire lands sensitive to erosion or environmental degradation for the public and designate for uses such as recreation, wildlife or open space.

Require strict screening of biocides and provide economic incentives for development and use of short-lived biocides.

Reduce existing grading standards for fruits and vegetables so that fewer chemicals are used to produce "blemish-free1' products currently required.

Establish permit system to allow pesticide usage over specified minimum amounts of pesticides and certain acreages.

Require filing of an approved erosion and sediment control plan before earth-moving activities begin. CHEMICAL AND METAL RESIDUES

PRIORITY

Plant and harvest maximum numbers of forage and predator fish biomass and liberalize taking of fish.

Achieve greater control over toxic chemicals and the general flow of chemicals into the environment by: a. requiring premarket testing, b. prohibiting pesticides, c. prohibiting the importation of injurious chemicals, and d. requiring development and use of alternatives to chemicals.

Require and implement complete containment of all dredged spoil whether classified as polluted or unpolluted by EPA; have separate sites for the two classifications of spoils.

Study and control air pollution of water including the long-range airborne transport of SO2 in order to reduce the acidification of lakes.

Require harmless ultimate disposal of chemical and metal residues and identify and require use of on-land sites for safe disposal.

Promote conserver society attitudes to reduce use of chemicals and metals.

Fund adequate health research programs to establish human tolerance limits for toxics.

Regulate transportation and storage of waste materials, especially hazardous wastes, more closely.

Control storm water runoff.

Develop techniques for removing or de-toxifying toxic chemicals.

Provide financial incentives for development of "un'derwater plough" in order to bury contaminated sediments.

Establish greenbelt areas around lakes or along streams to prevent access except at controlled access points.

Prohibit point and non-point discharges associated with mining activities.

Develop structure - activity correlation techniques as a screening process for toxic chemicals. JLIRISDICTION WORKSHOPS

After the first series of five non-point sources oriented workshops, participants attended jurisdictional sessions: Canada-Federal, Province/ Municipalities, United States-Federal, and States/~unicipalities. These four groups were given all of th'e prioritized lists produced during the topic discussions. Participants were asked to examine the top five items chosen for each topic and to determine individually whether they agreed that from the standpoint of implementability the top five mechanisms would be best for their jurisdictions.

Each group produced five mechanisms lists ranked on the basis of practicality. Items are listed in random order with rankings indicated in Roman numerals. Pages 245 to 256 show the results. CANADA - FEDERAL

PRIORITY

Urban Non-Point Controls

Coordinate urban operational environmental planning by: a. requiring minimum levels of property maintenance such as: 1) street cleaning 2) responsible trash management, and 3) responsible dog ownership; b. requiring non use or use of substitute for salt on streets; and c. requiring increased infiltration and less impervious surfaces in new or changed land areas. Require submission of sediment control plans for land change activities by regulation. Develop land use plans and legislate their implementation. Require soil erosion and sedimentation plans on land change activities. Conduct public awareness campaign. Adopt zero pollutant discharge goal for new developments. Encourage federal construction based on environmental zoning. Make public funds and grants contingent on meeting water quality objectives. Promote mass transit. Tax leaded gas. Develop and require substitute for salt on streets. Require greater and more effective integration of government programs. Continue flood damage reduction program. Develop residuals management.

Rural Non-Point Controls

Develop integrated pest management system to include: a. limiting volume of fertilizer and pesticides in critical areas, b. accelerating research and implementation of biological pest control, c. lowering product grading standards enabling less use of pesticides, and d. prohibiting pesticide advertising. Assign regulatory powers to Soil and Water Conservation Districts and enforcement to counties. Adopt agricultural and urban sediment pollution abatement legislation at provincial level. Retain best agricultural land for agricultural purposes. Provide tax credits for pollution control investments. Provide federal/provincial cost sharing of anti-pollution work not benefitting farmers. PRIORITY

Prevent new reclamation of wet or arid lands. Deregulate natural gas prices. Conduct random unannounced inspections of agricultural lands . Preserve streamside greenbelts. Establish workable feedlot runoff controls. Accelerate research and implementation of biological pest control. Establish baseline information to facilitate distinguishing between natural and manmade effects.

Urban Future Strategies

Build implementation into plans. Regulate and phase development. Develop waste destruction facilities for toxic chemicals. Accelerate funding for correction of storm and combined sewer problems. Increase penalties for contravention of existing laws. ~etermine/studysalt application costlbenef it. Reduce minimum wage for labor intensive cleanup. Zone or acquire environmentally sensitive lands. Promote increased unit price of water (the more you use, the higher the price). Eliminate provincial (Ontario) government subsidies to municipalities for installing storm drains along roads. Promote mass transit.

Rural Future Strategies

Establish graduated user fees for recreational facilities. Give environmental agencies responsibility to define performance requirements with agriculture and forestry advice and support. Perform thorough examination of all regulations and laws on pollution to eliminate unnecessary ones. Increase private cost of using virgin materials and energy. Provide economic incentives for best management practices in agriculture. Eliminate government overlaps. Eliminate exemptions, to agriculture under environmental acts. Pass mandatory reforestation act. Modify grading of fruits and vegetables. ~tudylinvestigateuse of common transportation/utility corridors. Limit fertilizer applications to soils' needs. Acquire sensitive lands (by and for public). Provide federal support to public interest groups. PRIORITY

Chemical and Metal Residues

Require harmless ultimate disposal and identify on land disposal sites. Regulate to reduce chemicals use by: a. requiring pre-market testing of new chemicals, b. prohibiting pesticides, and Study and control air pollution of water in order to reduce long range transport of pollutants including SO2 (to reduce acidification of lakes). Regulate transport of wastes. Fund adequate health research program to enable establishment of tolerance limits. Impose effluent charges on air pollution emissions. Develop structure-activity correlations technique. Provide financial incentives for development of an underwater plough. Require complete containment of dredge spoils. Impose production charges on toxic substances which are not banned. Develop a Canadal~nitedStates treaty on Great Lakes related atmospheric pollution. UNITED STATES - FEDERAL

PRIORITY

Urban Non-Point Controls

I 1. Impose operational environmental planning restrictions by: a. regulating to reduce contaminants in urban runoff, b. requiring minimum levels of property maintenance, including street cleaning and trash control, c. zoning to stimulate close-in development, d. requiring substitutes for street salting, and e. enforcing dog owner responsibility by-laws. Improve coordination of assistance agencies. Reduce reliance on consultants. Adopt zero pollutant discharge and zero rate of runoff increase goals for new developments. Enforce existing laws. Implement Section 208 recommendations through existing institutional arrangements. Use non-structural alternatives to solve water management problems. Develop land use plans and legislate their implementation. Regulate requirement for sediment control plans prior to development. Require soil erosion and sedimentation permits for land change activities. Adopt zero pollutant discharge goal for new developments. Conduct public awareness campaign. Enhance comprehensive urban water resources programs, including stormwater treatment strategies studies. Provide and increase federal guidance for land use planning.

Rural Non-Point Controls

Establish an integrated pest management system by: a. accelerating research and implementation of biological pest control, b. limiting the volumes of fertilizer and pesticide which can be applied, c. prohibiting pesticide advertising, and d. lowering product grading standards to encourage less pesticides use. Assign regulatory powers to the Soil and Water Conservation Districts with enforcement performed by counties. Retain the best agricultural land for agricultural purposes. Give tax credits for pollution control investments. Provide state and federal cost sharing of anti pollution work not benefitting farmer. Adopt agricultural and urban sediment pollution abatement legislation at the state level. Prevent reclamation of arid and wet lands. Assess environmental impact of large-vs-small scale farms. PRIORITY

9. Establish workable feedlot runoff controls. 10. Establish through Section 208 agencies agricultural land management committees to coordinate conservation districts activities, particularly the education and technical assistance. 11. Preserve streamside greanbelts. 12. Establish baseline to distinguish between natural and man- made effects. 13. Get soil surveys out quickly.

Urban Future Strategies

I 1. Build implementation into plans and tie plans to the water quality objectives under the 1972 Agreement. I1 2. Impose land change regulations which: a. regulate and phase subdivision development, b. require environmental performance bonds on construction projects, c. require maintenance or addition of grassed waterways and retention ponds, and d. discourage construction in high risk (high slope) areas. I11 3. Provide assistance in disposal of and develop waste distruction facilities for toxic chemicals. IV 4. Accelerate the development of and funding for correction of storm and combined sewer problems; include labor intensive sewer separation projects. V 5. Increase penalties for contravening present pollution control laws.

Rural Future Strategies

Give river basin agencies broad powers and responsibilities. Provide economic incentives for best management practices in agriculture. Increase the private cost of using virgin materials and energy. Preserve prime agricultural land for agirucltural use. Perform a thorough examination of all regulations and laws concerning pollution to eliminate unnecessary ones. Impose graduated user fees for recreational facilities. Eliminate government programs and responsibilities overlap. Require reforestation. Regulate or subsidize ecological design and construction of roads. Acquire sensitive lands such as wetlands. Penalize poor agricultural practices by taxing. Make environmental agencies responsible for defining performance requirements, with the advice and support of forestry and agriculture agencies. Require conservation plan for earth moving activities. PRIORITY

Chemical and Metal Residues

Require ultimate harmless disposal and identify on-land sites. Improve toxic substance management by: a. prohibiting pesticides, b. prohibiting import of injurious chemicals, c. requiring alternatives be used instead of chemicals, and d. requiring pre- and post- market testing of new chemicals. Study and control air pollution of water, including the long range airborne transport of SO2, in order to reduce acidification of lakes. Regulate transport of wastes. Develop a health research program to establish tolerance limits. Plant and harvest maximum number of forage and predator fish and liberalize taking of fish. Use impingement and ambient control strategies when granting permits Control storm runoff. Develop technique for removing or deactivating toxicity. Require greenbelts. Develop structure activity correlations. PROVINCES - MUNICIPALITIES

PRIORITY

Urban Non-Point Controls

Impose source control and maintenance requirements including: a. using substitutes for salt on streets, b. enforcing dog owner responsibility, c. legislating certain minimum levels of maintenance for property owners, and d. imposing street cleaning operation controls. Regulate land development actions including: a. requiring submission of sediment control plans prior to development, b. requiring performance bonds, c. adopting zero pollutant discharge goals for new developments, and d. requiring soil erosion and sediment permits for all land change activities. Develop land use plans and legislate their implementation through reference to objectives of the Great Lakes Water Quality Agreement. Amend building codes to achieve storm water runoff controls. Conduct public awareness campaign about urban non-point problems and solutions. Speed improvement of solid and liquid waste disposal and recovery technology and provide collection service for waste products. Impose storm water controls which: a. require costlbenefit studies before sewer and storm water runoff separation projects are undertaken, and improve storm water treatment strategies. Enforce existing laws. Allow citizen suits for discretionary administrative decisions. Provide adequate air pollution standards and enforce them.

Rural Non-Point Controls

Implement integrated pest and fertilizer management through: a. accelerating research into and implementation of biological pest control, b. limiting volumes of fertilizers and pesticides in critical areas, c. lowering product grading standards to discourage pesticide use, and d. developing guidelines for pesticide advertising. Let conservation authorities assume regulatory powers with enforcement by municipalities. Adopt agricultural and urban sedimentation pollution abatement legislation at state/provincial levels. PRIORITY

Retain best agricultural land for agricultural purposes. Provide tax credits for pollution control investments. Provide federal/provincial cost sharing of anti-pollution work not of benefit to farmers. Bar new projects to reclaim arid land or wetlands areas. Authorize citizen suits for discretionary decisions. Preserve stream-side green belts. Establish direct mandatory controls over and action programs for a. tillage requirements, and b. workable feedlot runoff controls. Require waste utilization.

Urban Non-Point - Future Strategies

I 1. Build implementation into plans by: a. tying to water quality objectives of Great Lakes Water Quality Agreement, b. requiring public involvement in planning and public acceptance of plans, c. co-ordinating regional planning with air and water management planning, and d. discouraging "official" plan changes. I1 2. Regulate and phase subdivision development by: a. requiring environmental performance bonds on construction projects, b. requiring use of grassed waterways with retention ponds, and c. discouraging construction in high-risk (steep slope) areas. I11 3. Improve management of toxic wastes by: a. developing waste detention facilities, and b. providing assistance to industry in toxic chemicals disposal. IV 4. Improve stormwater management by: a. accelerating development of funding for correction of storm and combined sewer problems, and b. developing federal/provincial sewer separation projects that are labor intensive. V 5. Increase penalties for contravening existingpollution control laws. 6. Zone or acquire environmentally sensitive areas. 7. Eliminate provincial (Ontario) government subsidies to municipalities for installing storm drains along roads.

Rural Non-Point - Future Strategies

1. Impose graduated user fees for recreational facilities. IV 2. Require definition of environmental performance requirements by environmental agencies with agriculture and forestry agencies' and interests' advice and support. PRIORITY

Eliminate unnecessary pollution control laws and regulations after thorough examination of all current ones. Increase private cost of using virgin materials and related energy use. Encourage conservation practices by: a. providing economic incentives for use of best management practices in agriculture, b. provide cost sharing for conservation measures. Eliminate exemptions of agriculture from pollution control acts. Establish soil loss limits. Require use of alternatives to chemical pest control and require permits for use of pesticides in excess of established maximum levels. Limit fertilizer application to determined soil needs. Authorize citizen suits for discretionary actions. Preserve or acquire sensitive lands. Establish mandatory reforestation requirements. Use existing authority to enforce air, water and land use regulations. Investigate use of common transportation/utility corridors. Increase public education about air and water management and relate it to the water quality objectives under the Great Lakes Water Quality Agreement. Develop biological waste utilization programs.

Chemical and Metal Residues

Require harmless disposal through: a. identifying safe disposal sites on land, and b. developing techniques to render harmless. Require pre-market testing of all chemicals and prohibit any which are injurious. Develop and implement air management programs which: a. reduce long-range airborne transport of toxic chemicals and sulphur dioxide, to reduce acidification of lakes; b. study and control air pollution of water. Regulate transport of wastes. Establish maximum acceptable tolerance limits for humans through health research programs. Establish comprehensive victim compensation law to include: a. burden of proof on polluters (to show blameless), and b. joint and severable liability clause. Require complete containment of contaminated dredge spoil. Require performance bonds on development of new waste disposal sites. Provide tax credits for reclamation. Require water quality objectives of Great Lakes Water Quality Agreement be incorporated in land use planning. Develop structure activity correlation techniques. STATES - MUNICIPALITIES

PRIORITY

Urban Non-Point Controls

I 1. Impose operational environmental planning restrictions by: a. regulating to reduce contaminants in urban runoff, b. requiring minimum levels of property maintenance. (including trash control), c. zoning to stimulate close-in development, d. requiring substitutes for street salting, and e. enforcing dog owner responsibility by-laws. Establish sediment controls by: a. requiring soil erosion and sedimentation permits for land change activities, and b. regulating requirement for sediment control plans prior to development. Develop land use plans and legislate their implementation. Adopt zero pollutant discharge and zero rate of runoff increase goals for new developments. Increase public knowledge of urban non-point pollution problems by : a. conducting a public awareness campaign, and b. increasing contractors and developers knowledge of the problems. Enhance comprehensive urban water resources programs, including stormwater treatment strategies studies. Require performance bonds on development. Promote mass transit. Promote and require greater integration of all government programs. Devise and publish a non-point pollutants index. Impose a tax on phosphate detergents.

Rural Non-Point Controls

Establish an integrated pest management system by: a. accelerating research and implementation of biological pest control, b. limiting the volumes of fertilizer and pesticide which can be applied, c. prohibiting pesticide advertising, and d. lowering product grading standards to encourage less pesticides use. Assign regulatory powers to the Soil and Water Conservation Districts with enforcement performed by counties. Adopt agricultural and urban sediment pollution abatement legislation at the state level. Retain the best agricultural land for agricultural purposes. Give tax credits for pollution control investments. PRIORITY

Provide state and federal cost sharing of anti-pollution work not benefitting farmer. Prevent reclamation of additional arid and wet lands. Eliminate property tax exemption for any owner who is not in compliance with pollution abatement regulations. Provide economic incentives for best management practices. Preserve streamside greenbelts. Provide additional funding to hire more soil conservationists to work with local districts.

Urban Future Strategies

Improve planning by: a. building implementation into plans, b. tying plans into water quality objectives in Great Lakes Agreement, c. requiring public input to plans, d. coordinating regional planning with air and water management planning, and e. creating disincentives for zoning or plan changes. Impose land change regulations which: a. regulate and phase subdivision development, b. require environmental performance bonds on construction projects, c. require maintenance or addition of grassed waterways and retention ponds, and d. discourage construction in high risk (high slope) areas. Provide assistance in disposal of and develop waste distruction facilities for toxic chemicals. Accelerate the development of and funding for correction of storm and combined sewer problems; include labor intensive sewer separation projects. Increase penalties for contravening present pollution control laws. Develop source reduction control. Zone or acquire sensitive areas. Require all new shopping areas, particularly the parking lots, to have pervious pavement. Develop model area with full funding.

Rural Future Strategies

Impose graduated user fees for recreational facilities. Make environmental agencies responsible for defining performance requirements, with the advice and support of forestry and agriculture agencies. Perform a thorough examination of all regulations and laws concerning pollution to eliminate unnecessary ones and to eliminate overlap of responsibilities in various government agencies. Increase the private cost of using virgin materials and energy. PRIORITY

Provide economic incentives for best management practices in agriculture. Acquire sensitive lands. Give river basin agencies broad powers and responsibilities. Provide pesticide controls by: a.' Requiring permits for pesticides usage over prescribed minimums, b. requiring strict screening of biocides, and c. providing tax benefits for biocide products with short lives. Authorize citizen suits for discretionary administrative decisions. Create mandatory insurance fund for compensation for damages and clean up 'of pesticides. Provide cost sharing for conservation measures which benefit the public. Use existing authority at all levels to enforce land use regulations. Develop regulations to require or a system of subsidies to encourage ecological design and construction of roads. Eliminate exemption of agriculture from environmental laws, guidelines and regulations.

Chemical and Metal Residues

Require ultimate harmless disposal and identify on-land sites. Provide toxic substances management by: a. prohibiting pesticides, b. prohibiting import of injurious chemicals, c. requiring alternatives be used instead of chemicals, and d. requiring pre- and post- market testing of new chemicals. Study and control air pollution of water, including the long range airborne transport of SOz, in order to reduce acidification of lakes. Regulate transport of wastes. Develop a health research program to establish tolerance limits. Develop technique for removing or deactivating toxicity. Require and document controls from a toxic or hazardous chemicalrs origin to its ultimate disposal. Create mandatory insurance fund for compensation for damages and cleanup of spills and residues. Create incentives to reduce wastes through recycling and substitutions.

A FRAMEWORK FOR EVALUATION

Jack A. Donnan*

ENVIRONMENTAL POLICY ANALYSIS

Just what is meant by "Environmental Policy"? How do we choose particular policy options from among the many that might be available? Some thoughts on these questions will be presented below. While this brief paper in no way purports to be the last word on the subject, some ideas are presented to help authors and workshop participants make their evaluations of environmental policies consistant and comparable.

ENVIRONMENTAL POLICY INSTRUMENTS

Governments seldom have a single, coherent and definable "environmental policy". Instead, there is in most jurisdictions a bewildering assortment of laws, regulations, judicial precedents, administrative procedures, unstated rules and programs, all relating in one way or another to environmental problems and issues.

Environmental policy instruments may be usefully classified into two broad categories. First, there are instruments aimed at directly achieving environmental objectives. This category may be subdivided further into those instruments intended to protect the environment from the impacts of future developments and those instruments which are intended to alter the behaviour of existing polluters. The second broad category of environmental policy instrument includes those aimed at offsetting the financial burden of pollution abatement costs. Examples of each type of instrument are presented in Table 1.

It is essential that new policy instruments be viewed in the context of the total package of legislation and policies. In and of itself, a particular instrument may appear to be rather ineffective. Subsidies and tax concessions are often criticized as failing to induce the expected or desired amount of pollution abatement. Taken by themselves, this may be true. However, the provision of a financial assistance program will offset the cost burdens of pollution abatement. With such assistance, the application of other, more punitive measures which provide the real incentive for pollution abatement could become more acceptable.

CRITERIA FOR EVALUATING ENVIRONMENTAL POLICIES

An economist would argue that the "optimal" level of pollution abatement would be the point at which the additional costs of- pollution abatement are just equal to the additional benefits gained from these

* Mr. Donnan is an economist with the Ontario Ministry of the Environment, Environmental Approvals Branch. TABLE 1

ENVIRONMENTAL POLICY INSTRUMENTS

A. Instruments intended to achieve Environmental Objectives

1. Instruments intended to change the current behavior of polluters.

a. Persuasion - negotiations - voluntary compliance

b. Coercion - control orders - permits - prosecution and fines

c. Economic Incentive - effluent charges

2. Instruments intended to guard against future damages.

a. Environmental Impact Assessment b. Approval Powers c. Land Use planning

B. Instruments intended to offset undue social and economic impacts.

1. Tax Concessions.

2. Loans - at market interest rates - at subsidized interest rates

3. Grants and Rebates. efforts. It follows, therefore, that one would need information on the environmental benefits to be gained from a particular policy approach as well as the financial and other costs that.would be incurred as a result of the policy. Consequently, a systematic enumeration of the benefits and the costs that would result from the policy instrument or program is an obvious requirement for an evaluation. Where benefits or costs cannot be expressed in market prices, attempts should be made to quantify them in physical units to aid in comparisons.

Lacking information and data about benefits, environmental objectives can be specified and the financial costs of achieving these objectives may be determined by various means. , The approach that achieves the objectives at least cost would be the most "cost effective".

The incidence or the distribution of the costs and the benefits of pollution is often ignored in discussions of the economic efficiency of alternative approaches to pollution abatement. These considerations cannot, however, be ignored in real world situations. The least cost approach or method of abatement could well imply widely divergent cost burdens on polluters and/or victims of pollution. On the other hand, attempts to equalize the cost burdens of pollution abatement over an area or an industry could result in higher overall costs of abatement or even a failure to achieve environmental objectives.

Monitoring and surveillance are essential components of nearly all abatement policy approaches. The costs of these activities can be considerable and should, therefore, be considered along with other costs of the program.

The promotion of technological progress is another significant feature. Does the policy instrument or program induce a search for more effective, less expensive methods or technologies of abatement? Does the pollution control agency itself have any inherent incentives or constraints to finding and implementing new technical or administrative approaches to abatement?

Implications for employment always seem to be an important issue. Some employment effects are quite subtle. For example, accelerated depreciation of pollution control equipment biases a firm's decision toward capital intensive rather than labour intensive abatement processes. On the other hand, studies have show that enforcement of pollution abatement can result in a net increase in employment by supplier firms in the short run.

One of the major deficiencies in most environmental policy instruments is the failure to consider the impact of the instrument on a polluter's economic incentive structure. Either the policy instrument provides insufficient incentives or it results in incentives to do the wrong thing. A clear recognition of how the economic incentives facing a polluter are affected should be one objective of policy analysis.

The objectives and criteria discussed in the preceeding paragraphs are summarized in Table 2. Some consideration of each of these factors, where appropriate, might be considered a minimum requirement for any environmental policy analysis. TABLE 2

POSSIBLE CRITERIA FOR ENVIRONMENTAL

POLICY EVALUATION

In£ormat ion Possible Criteria Needed Quantifiers

Environmental - Effluents - new uses resulting Benefits - Uses of water bodies from abatement - Relationships between wastes and uses - Mixing zone interactions - Identification and rat if icat ion of environmental objectives

Financial and Other - Abatement - capital costs Economic Costs of technology - annual costs Abatement - Costs of abatement - employment

Costs of Monitoring - Monitoring Systems - Capital and and Surveillance installat ion costs - operating costs

Distribution of - Identification - dollars Costs and of llactorslr - qualitative Benefits - Assignment of units costs and benefits to different actors

Administrative Feasibility

Technological Advancement

Conflicts THE UNITED STATES FEDERAL FRAMEWORK

Reinhold Thieme*

THE UNITED STATES CONSTITUTION

The Bicentennial year is a most appropriate time to reflect on our ability to adapt to changing needs within the framework of legal structure created by our founding fathers. One of the challenging areas of change today is that of environmental management and certainly the writers of the Constitution did not and could not foresee the scope of the environmental pollution problem which would face our modern society.

The cornerstone of our government is the Constitution which became operative on March 4, 1789. This document prescribes that authority which is to be exercised by the Federal Government and thereby identifies those functions and authority that is preserved to the States.

The relationship of the Federal Government to the States is set forth in three different areas of the Constitution. Article I, Section 10 places certain specific limitations on the States so as to provide centralized authority in the Federal Government. On the basis of Clause 3 of Section 10 of this article, States may not enter into compacts with each other without the approval of Congress. Article VI, Section 2 provides that the treaties and statutes of the United States are the supreme law of the land and may not be disregarded by the judicial officers of the States.

Another provision that potentially impacts environmental management is contained in Article IVY Section 3 wherein Congress has the authority to dispose of and to make all needful rules and regulations respecting the territories and other property belonging to the United States. The President also has such powers vested in him and the Executive Branch by national laws.

By Executive Order 11507, "Prevention, Control and Abatement of Air and Water Pollution at Federal Facilities" (under the Clean Air Act, the Federal Water Pollution Control Act, and the National Environmental Policy Act), the President declared it to be the policy "that the Federal Govern- ment in the design, operation, and maintenance of its facilities shall provide leadership in the nationwide effort to protect and enhance the quality of our air and water resources." The Office of Federal Activities in the Environmental Protection Agency has the coordinating responsibility for the achievement of this objective.

* Mr. Thieme is the engineer with the Office of Audit, EPA, consulting in the national grants program under Public Law 92-500. Under Article I, Section 8, Congress is authorized to provide for the general defense, welfare, and to regulate commerce with foreign nations, among the states and with Indian Tribes. On the basis of this clause and the provisions of Article VI, Section 2, various states laws which attempt to control commerce - such as those limiting the use of detergents within the City of Chicago - have been held to be unconstitutional. The states, however, have a residiurn of authority to act on the basis of the 10th Amendment to the Constitution which provides that the powers not delegated to the United States by the Constitution nor prohibited by the statutes are reserved to the States respectively or to the people.

International Applicability

Still another section that has substantial significance to environmental management of the Great Lakes is Section 2 of Article I1 that provides that the President has the power, with the advice and consent of Senate, to make treaties on behalf of the United States. It is on the basis of this authority, confirmed by advice and consent of the Senate, that the International Joint Comission was formed pursuant to Article 12 of the United States - Canada Boundary Waters Treaty of 1909. Brendon F. Brown points out that this treaty is in essence only a contract between two states, based on their respective interests, without reference to the ultimate consequences of damage as a result of polluting waters. He further points out that IJC has only recommendatory powers. 1

A part of the charge given the IJC is pollution control, as generally stated in Article IV of the Treaty that states, in part: "It is further agreed that the waters herein defined as boundary waters and waters flowing across the boundary shall not be polluted on either side to the injury of health or property on the other."

However, the vehicle of international review has been used in connection with joint investigations concerning the control of pollution of the Great Lakes, including the 1965 Agreement as to water quality objectives for the Rainy River agreed upon by the two Governments in December 1965, and the authorization for general investigation of Lake Erie, Lake Ontario, and the International portion of the St. Lawrence River in 1964 with recommendations being made in 1966. There was no specific federal legislation implementing either these studies or for that matter, the Treaty. Nonetheless, PL 89-753, as passed in 1966 amending the Federal Water Pollution Control Act, did provide for the special hearing board to consider problems relating to alleged water pollution occurring in the United States that would endanger the health or welfare of persons in a foreign country. No hearings were ever held under this section of the Act prior to its amendment in 1972.

PL 92-500, cited as a Federal Water Pollution Control Act Amendments of 1972, provided for a modified type of hearing whenever international pollution is believed to be occurring. Under this new statute, the EPA Administrator is required to convene a hearing board upon the request of the Secretary of

(1) Brown, Brendon F., "International Environmental Law and the Natural ~aw"Loyola Law Review, 1971-1972, Vol. XVIII (No. 3), pp. 679. State, and the board, upon the completion of its hearing-, must make findings of fact as to whether or not such pollution is occurring and, if appropriate, make recommendations concerning the abatement of such pollution. The board itself has no authority beyond moral suasion to require correction of pollution that endangers the health or welfare of persons in Canada or. any other foreign country. Section 310(f) does provide that the Administrator of EPA shall request that litigation be commenced to require that the recommendations of the hearing board be followed. This amendment has likewise not be utilized.

The keystone in the current Federal battle with water pollution is the Federal Water Pollution Control Act Amendments of 1972, identified above in relation to enforcement of international pollution. This statute, an amazingly comprehensive and complex one, sets forth among its provisions: the national goal that the discharge of pollutants into navigable waters be eliminated by 1985; the policy that Congress recognizes, preserves and protects the primary responsibility and rights of the states to prevent, reduce and eliminate pollution; grants-in-aid to assist states in administering their water pollution control programs; grants-in-aid to states and municipalities for the construction of publicly owned treatment works; grants and contracts to support research, development and manpower training; a review and approval authority over the setting of water quality standards for the waters of the United States; and the establishment of a national permit program to regulate and control the discharge of pollutants from point sources into the waters of the United States. It also provides the mechanisms for the development of standards of performance for treatment facilities and for federal enforcement actions that may be taken against violators.

The national permit program is an innovative concept that was made workable by the Federal Water Pollution Control Act. This program provides for a variable degree of control; i.e., treatment must meet technology-based effluent limits for existing industrial and municipal plants or more stringent requirements, if required, to comply with established water quality standards. It also provides a base level of treatment for new sources of pollution (new construction) and gives authority to control the discharge of those pollutants which are determined by the Administrator of EPA to be toxic pollutants.

Perhaps more importantly, the Act changed the thrust of enforcement action from one of proof by the regulatory body that in-stream water quality was being violated to one of simple violation of a stated permit condition. The impact of this change is a greatly expanded enforcement effort.

.The statute specifically authorizes the transfer of the permitting process (except as relates to federal installations) to the states upon their showing that they are capable of running such a program. At this time, a majority of the states in the Great Lakes Basin have been granted this authority by the Administrator of EPA. Even in the situation where the state itself is not issuing a permit, the statute provides that a federally issued permit is to be subject to such conditions as are certified by the state to be requirements under state law. Such requirements shall become conditions on any federal permit issued. Other federal limitations for the control of pollution or the effects of pollution are contained in the oil and hazardous substances section of the 1972 Act Amendments that provide for penalties and/or imprisonment for the discharge of oil or hazardous materials "in harmful quantities" within the territorial waters of the United States and the section that sets forth requirements for the use of marine sanitation devices on vessels to prevent the discharge of untreated or inadequately treated sewage into or upon navigable waters.

OTHER FEDERAL LAWS

Several federal laws in addition to PL 92-500 also impact the pollution abatement effort. To mention but a few, there are the Oil Pollution Act of 1961, as amended (PL 87-167); the Marine Protection, Research and Sanctuaries Act of 1972 (PL 92-532); and the Safe Drinking Water Act, PL 93-523. The Oil Pollution Act as amended, limits the discharge of oil on the high seas by ships of American registry. The ocean dumping provisions of 92-532 prohibit the discharge of certain specified pollutants by persons from vessels leaving the United States for the purpose of dumping wastes and provide a permit system for authorizing the discharge of other pollutants. The Safe Drinking Water Act provides for the control of the quality of drinking water from public sources through the use of a program setting minimum requirements for water being distributed to system users. This program would be administered by the states meeting certain minimum provisions. Another provision is control of the discharge of pollutants into the groundwater through under- ground injection where such programs are deemed necessary.

STATE

The states themselves operate their pollution control program on the basis of what is commonly known as the "police power," their power to protect the common interest. These powers have been exercised by the states over a long period of time, in terms of abatement of public nuisances. The states in turn, are authorized to control the exercise of police power by the creatures of state, i.e., their counties, cities, and other subordinate political subdivisions.

SUMMARY

The framers of the United States Constitution created a legal framework that is flexible enough to adapt to the varying conditions brought on by the passing of time and yet strong enough to endure. A SURVEY OF STATE WATER POLLUTION CONTROL LAW

by William M. Eichbaum*

INTRODUCTION

The purpose of this paper is to provide general background information regarding water pollution control laws in those states which border the Great Lakes.' The purpose is not to provide a detailed legal analysis of each of the various statutes, but rather to discuss, primarily for the benefit of 'the non-lawyer, the generalized legal framework within which these laws operate and the approach to water pollution abatement which is mandated by them. In addition, a limited analysis is made of the administrative procedures followed in each state.

THE FEDERAL POWERS

Before turning to an analysis of the state laws, it is well to survey briefly the impact which federal water pollution control law has upon the state programs. Other presentors at the upcoming conference treat federal law in greater detail; however, a summary is necessary in order to properly understand the context within which state law operates. Under general principles of constitutional law, the federal government may not enact legislation or implement programs except in those areas where it is expressly empowered to so do by the Federal Constitution. The authorization for all environmental pollution control programs at a federal level is primarily derived from the commerce clause of the Federal Constitution, found in Article I, section 8, which authorizes the Congress "[tlo regulate Commerce ...among the several states...." Under this section of the Constitution, it is generally held that the federal government may regulate activity affecting all of the surface waters of the United States for, at least, the purposes of pollution control. The major federal legislation directed to this goal is known as the Federal Water Pollution Control Act Amendments of 1972 (FWPCA). From the perspective of the states, and notwithstanding existing state legislation, these amendments have four significant impacts:

1. The FWPCA provided for a system of grants which are available for the actual conduct of a water pollution program by a state government, and a system of grants for the construction of municipal wastewater treatment systems.

* Mr. Eichbaum is Deputy Secretary for Enforcement, Pennsylvania Department of Environmental Resources.

(1) Those states are Minnesota, Wisconsin, Michigan, Illinois, Indiana, Ohio, Pennsylvania, and New York.

(2) Because this paper is not a formal legal review, the usual details of case and statute citation have been omitted. 2. The FWPCA mandates, that states on a statewide and regional basis conduct extensive planning for the purpose of identifying future.wastewater management problems and their solutions.

3. The FWPCA established a federal permit system known as the National Pollutant Discharge Elimination System which duplicates any existing state permit system unless a state shall meet certain minimum qualifications in which case the permit system is delegated to the state.

4. The FWPCA establishes certain minimum levels of treatment which must be'achieved by fixed dates, as follows: (a) best practicable technology must be installed by 1977, and (b) best available technology must be installed by 1983. As a result of this approach, the numbers which are contained in an NPDES permit, whether issued by the federal government or a state, are effluent limitations derived from considerations of best practicable and best available technology. In the event that an existing state water quality derived standard is more stringent, then that number must be contained in the applicable permit and must be achieved by 1977.

The net impact of the federal program is to enhance all state programs by at least providing additional monies and mandating a stronger planning process with respect to water pollution control. On the other hand, some commentators have observed that the Federal Water Pollution Control Act Amendments of 1972 have had a negative impact of substantially increasing administrative costs of the program and introducing a note of uncertainty because of the physical impossibility in some cases of obtaining the appropriate level of treatment by the fixed dates of 1977 and 1983. Nonetheless, a substantial impact of the Federal Water Pollution Control Act Amendments of 1972 will be, over time, to impose a higher degree of uniformity, if not in the conduct of state programs, at least in the results which are actually obtained by them.

THE STATES' POWERS

Just as the Federal Constitution in Article I, Section 8 provides the legal authority for federal involvement in water pollution control programs, it also preserves the right of the states to exercise similar power. The tenth amendment of the Federal Constitution provides that "the powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved for the states respectively, or to the people." The Supreme Court of the United States has determined that pursuant to this amendment, the states retain, inter alia, plenary jurisdiction to enact legislation in exercise of the police power of

(3) Of the eight Great Lake states, only Illinois and Pennsylvania have not received delegation of the NPDES permit system. government. This power exists because the original colonies were each vested with the general powers of a sovereign government at the time they signed the Constitution. Sovereignty includes the authority to exercise the police power. Legislation which regulat,es human activity in a fashion reasonably necessary for the protection of the public health, safety and welfare is considered to be a valid exercise of police power and, therefore, an appropriate exercise of legislative responsibility by state government. If a state is to regulate water pollution, it can lawfully do so only as an exercise of its police powers.

It is important to note that the definition of police power varies from state to state and is a function of either specific directives set forth in i particular state's constitution and/or judicial decisions. For example, the Constitution of the Commonwealth of ~enns~lvaniadoes not address the question of what is a valid exercise of the police power and, until 1971, did not specifically address the responsibility of the state with respect to pollution control. Nonetheless, the Clean Streams Law, which was originally enacted in 1937 and which is a comprehensive water pollution control statute, has been found by the courts to be a proper exercise of legislative authority. At the other extreme, the Constitution of the State of Michigan provides at Section 52 of Article IV that "the conservation and development of the natural resources of the state are hereby declared to be of paramount public concern in the interests of the health, safety, and general welfare of the people. The legislature shall provide for the protection of the air, water and other natural resources of the state from pollution, impairment and destruction." Thus the State of Michigan elected to insure that environmental protection statutes are specifically defined, as a matter of constitutuional law, to be valid exercises of the police power. Regardless of the course chosen, it is safe to conclude that the routine regulation of polluting discharges to the waters of any state is well within the constitutional powers of state government. 4

There are, however, extremely important federal and state constitutional or statutory restrictions upon the exercise of that police power by states. The most important constitutional restraint which universally appears is that no state may take private property without just compensation. Pursuant to numerous judicial decisions, it is clear, however, that the exercise of the police power may severly restrict the use of private property without requiring c~mpensation.~ ,

In addition, at either constitutional or statutory levels, restrictions are found relating to such matters as debt limitation, inter-governmental agreement, local government authority, and land use controls. Each

(4) The basic elements of state water pollution control programs are set forth later in this paper, and it is these several elements which are clearly within the constitutional authority.

(5) The line between valid regulation of the use of property pursuant to the police power and regulations so severe as to be taking is a dynamic one and is subject to the niceties of judicial interpretation as to perceptions of public necessity and need. The issue is beyond the scope of this paper. of these limitations can be extremely important in determining the design and direction of a comprehensive water pollution control program and must be analyzed on a state by state basis before the full power and authority of state government can be clearly und'erstood. Such an examination requires detailed analysis of state law and is not appropriate to the subject matter of this paper.

Great Lakes States - Water Pollution Control

The several states bordering the Great Lakes have enacted widely varying statutes in order to establish water pollution control programs. Some statutes are directed solely at the problem of controlling water pollution; other statutes create comprehensive programs for managing both quality and quantity of water resources within the state and even a few regulate wide areas of environmental concern such as air pollution and solid waste problems in addition to water pollution problems. Addition- ally, a few not only establish the substantive law with respect to pollution control, but also establish the regulatory agencies which are responsible for implementing the provisions of the law. Notwithstanding this wide ranging approach to water pollution legislation, several common themes respecting the substantive issue of water pollution abatement are found in each of these statutes. These themes are as follows:

1. Purpose - The statutes recite in various language that their overall purpose is to restore and maintain the waters of the state in an unpolluted condition in order to enhance and protect the public power in the area of water pollution control. Frequently the statutes also define in very general terms the breadth of regulatory activity which can be undertaken by the administrative agency responsible for implementation.

2. Standards - The statutes invariable provide a mechanism whereby the regulatory agency may adopt a variety of regulations respecting both procedural and substantive implementation of the law. Most important among the authorized regulations are those which establish water qualityandlor effluent limitations. It is these specific standards which establish in a precise fashion the actual duty which those' regulated by the statute must meet. An examination of these numbers will give one quick indication asto the rigor of a particular program and the extent of activity and types of pollutants which it attempts to regulate.

3. permits - The permit is universally the vehicle whereby the generalized and specific requirements of statute and regulation are made specifically applicable by the regulatory agency to a particular entity. Permits may, under various statutes, regulate the manner in which a particular activity is conducted; the construction, maintenance or operation of a particular facility, or simply the discharge of an effluent into the waters of the state. Again, the extent of activity requiring a permit is a further indication as to the breadth of the water pollution control program. Some states have elected to require permits only in those cases where the'Federa1 Water Pollution Control Act Amendments of 1972 so do; that is, point sources. Other states have elected to require permits for some non-point source activities such as earth moving or maintenance of lagoons and thus can be assumed to have a somewhat more comprehensive program with respect to water quality problems.

4. Planning - The planning process may or may not be explicitly mandated by state law; however, it is clearly well within the legal authority of state government. As has been indicated, it is a necessary component of the state program in the event that a state wishes to qualify for funds and programs under the Federal Water Pollution Control Act Amendments of 1972. Obviously, the planning process is of central importance because it gives an indication of not only future problems which the existing program will have to resolve but also defines entirely new directions in which the existing program must eventually move.

5. Enforcement - All of the state statutes provide a variety of enforcement mechanisms to insure compliance with the substantive procedural requirements of the statute. The most typical enforcement mechanism has been the administrative order of the pollution control agency which is essentially a unilateral defining by government of a particular entity's responsibility under the law. .In addition to the administrative order, civil and criminal penalties as well as the use of the equity lawsuit are becoming increasingly important enforcement mechanisms.

Although the above are the common and, I believe, essential concepts in various state statutes respecting water pollution control, there are certain other matters which are occasionally addressed. A number of statutes specifically address a particular type of water pollution problem because it is of significant environmental and/or public concern in a particular jurisdiction. For example, in Pennsylvania, the problems associated with acid mine drainage from coal mines are specifically addressed. More commonly among the Great Lake states, either in the organic water pollution control law or in a separate act, the pollution problems associated with recreational water craft discharges are specifically addressed. Additionally, state water pollution control statutes also frequently address in great detail the organizational and financial approach to abatement of municipal wastewater problems. Finally, extensive attention may be devoted to detail- ing the administrative procedures applicable to implementation of substantive provisions of the law.

SUMMARY

In conclusion, all of the statutes of the states bordering on the Great Lakes are sufficiently well drafted to permit effective abatement of industrial and municipal point source discharges. There are, however, certain inherent limitations in some or all of the statutes which will become increasingly important in limiting the effectiveness of the various state programs as the technical complexities with respect to abatement of water pollution control become more apparent. A major limitation is found in the fact that in many states, responsibility for water pollution abatement is divided among several different independent entities. It is not impossible to find situations in which the planning process, the permitting process, the standards setting process and the enforcement process are each in a separate agency and, therefore, very difficult to coordinate. For the sake of governmental efficiency and, in addition, for more intelligent addressing of complex problems, some effort should be made to streamline the governmental bureaucracy which may exist in some jurisdictions.

In some situations, it would appear that existing legislation is drafted so narrowly that some important problems simply may not be addressed. This is particularly true with reference to non-point sour,ce discharges and potential water pollution problems. In addition, in some jurisdictions, the statutory authority needed to compel adequate wastewater management by municipal government is not as strong as it might be. Notwithstanding the legal inadequacies with respect to municipal wastewater problems, the overriding concern in this area remains the unavailability of the financial resources necessary to build treatment facilities.

Finally it seems apparent that, in the future, a major problem which must be addressed in order to assure adequate water quality protection is that of land use. Various land uses, through a variety of direct and indirect impacts, can severely affect water quality. In most states, this problem has not been addressed by any of the existing legislation. This is a major gap, and it is essential that thought be given to filling it before one can conclude that the state or federal efforts with respect to water quality improvement will effectuate a substantial, long-term improvement in the waters of the Great Lakes. CANADIAN POLLUTION CONTROL LAW - THE GREAT LAKES

J. Neil Mulvaney*

INTRODUCTION

By an accident of history and geography it is not too difficult for an American to get some understanding of the pollution control laws affecting the Canadian waters of the Great Lakes. Only two primary jurisdictions are involved, Canada and the Province of Ontario. The municipalities are creatures of the province and derive what jurisdiction they have related to the environment from provincial law. Another simplifying factor is that a violation of a federal statute or of provincial statue or indeed a provincial by-law will be prosecuted in the provincial court. The procedure followed is much the same in all cases since the summary conviction procedure in the federal Criminal Code is incorporated by reference into provincial law.

The division between federal and provincial jurisdiction was initially determined at Confederation in 1867, in The British North America Act, and later defined by court rulings. Both Canada and Ontario claim jurisdiction over aspects of pollution control in the Great Lakes. Although some limits to this jurisdiction are already apparent, some important questions of jurisdiction have yet to be finally resolved by the courts. Most federal jurisdiction derives from Section 91 of The British North America Act and most provincial jurisdiction from Section 92 of the same Act. In neither of these sections is there explicit reference to protection of water quality. Instead, the federal jurisdiction stems from its authority over such subjects as navigation and shipping, seacoast and inland fisheries, and the criminal law. Important too is the exclusive federal power related to the making and performing of treaty obligations. A heavy participation of the federal government derives from the Boundary Waters Treaty and the International Joint Commission set up under it. A further possible support for federal legislation is the general power conferred to pass laws for the peace, order and good government of Canada. Whether by direct reference in the Act or by inference from general powers, an important range of facilities are also seen to be within exclusive federal jurisdiction including railways, harbours and nuclear facilities.

The provincial government also has a broad authority relating to pollution control and thus far statutes having wide ranging application have withstood challenges in the courts. The provincial jurisdiction derives from such heads as property and civil rights, the management of public lands belonging to the province, municipal institutions and generally all matters of a merely local or private nature in the province. One decision in the Supreme Court of Ontario held constitutional a

*Mr. Mulvaney is the Director of the Legal Services Branch of the Ontario Ministry of the Environment. provision in a provincial statute making it an offence to emit a contaminant "which causesor is likely to cause impairment of the quality of the natural environment for any use that can be made of it". Even facilities within exclusive federal jurisdiction are not immune from provincial law, although they will not be held to apply-so as to prevent or sterilize the establishment or operation of some essential or integral part of such facilities. ,

Finally, where provincial legislation clashes with valid federal legislation, the doctrine of paramountcy holds that the federal legislation must prevail.

FEDERAL FRAMEWORK

At the federal level the most comprehensive piece of legislation is The Canada Water Act which was passed in 1970. This legislation is an Act to provide for the management of the water resources of Canada, including research and the planning the implementation of programs relating to the conservation, development and utilization of water resources. The primary offence section of the Act prohibits the deposit of waste of any type in any waters comprising a water quality management area, except in quantities and under conditions prescribed, including the payment of any effluent discharge fee prescribed.

Under the Act, an area could be designated a water quality management area by virtue of an agreement between the federal government and a provincial government, or in certain circumstances the federal government could make the declaration unilaterally. No such agreements have been reached and no unilateral action has been taken by the federal government. From an enforcement point of view, therefore, this provision of the Act has no immediate practical consequence.

The Act is being used as a framework for carrying out research, and regulations under it have been passed controlling the amount of phosphates which can be used in detergents on a national basis. The Act has also enabled the federal government to enter into a number of basin planning and implementation agreements with the Provinces. One such agreement with Ontario provides a mechanism within Canada for implementing the provisions of the Canada-U.S. Agreement on Great Lakes Water Quality.

The Environmental Contaminants Act received Royal Assent in December of 1975. The Act, which is jointly administered by the Department of Fisheries and the Environment, and Health and Welfare Canada, requires that industry provide informaticn required by the government and conduct tests on hazardous chemicals in order to evaluate their potential hazards. Under the terms of the Act, the federal government may provide for the control of chemicals which may be disseminated in the environment, are persistent, and which are harmful to human health and the environment. These controls may restrict the release, use or incorporation of such chemicals in domestic or commercial products. The Act is designed to complement existing legislation and to provide a residual federal power. Penalties for contravention of the Act are fines of up to $100,000 or imprisonment for up to two years.

The Fisheries Act is an important federal statute which applies to most waters in Canada including the Great Lakes. The main offence section of the Act concerning pollution in Section 33. The section, which has stood the test of enforcement in the courts, holds that no person shall deposit or permit * ' the deposit of a deleterious substance of any type in water frequented by fish or in any place where such substance may enter such water. The term "deleterious substance" is broadly defined to include any substance that would degrade or form part of a process of degradation of the quality of the water so that it is rendered deleterious to fish or to the use by man of fish that frequent the water.

The general prohibition does not apply to deposits in a quantity and under conditions authorized by regulations made under the Act. The Chlor-Alkali Mercury Regulations limit the amount of mercury in the liquid effluent from certain plants which may be deposited in waters frequented by fish so that the quantity deposited by a plant in any one day does not exceed .005 pound per ton of chlorine produced by the plant in that day. The Pulp and Paper Effluent Regulations apply to new and altered mills after November 24, 1971, and limit the quantities of total suspended solids and decomposable organic matter which may be discharged from such mills. The Petroleum Refinery Liquid Effluent Regulations under the Fisheries Act apply to new refineries and authorize limited deposits of oil and grease, phenols, sulphides and other substances.

Since these regulations under The Fisheries Act are exceptions to the general prohibition in the Act and take the form of an authorized deposit, it may be that there is a potential clash with any provincial legislation which lays down a more rigid standard.

Offences under Section 33 must be proven beyond a reasonable doubt and this standard applies to the enforcement of all offence-creating sections in the courts. There is a defense available to a defendent where the discharge has been cominitted by an employee or agent, but only where it was done without the knowledge or consent of the defendant and only where he can show that he has exercised all due diligence to prevent the commission of the offence. The Act provides for fines up to $5,000 and also empowers the court to order the person convicted "to refrain from committing any further such offence or to cease to carry on any activity specified in the order the carrying on of which, in the opinion of the court, will or is likely to result in the committing of any further such offence".

Control of pollution from ships is dealt with under The Canada Shipping Act, a federal statute. The Act is administered by the Federal Department of Transport. Part XX of the Act deals with pollution from ships and provides a comprehensive regulation-making power. Regulations may be made prohibiting the discharge from ships of any pollutants specified in the regulations, except as thereby authorized. Where ships have discharged a po.llutant or are in danger of discharging a pollutant dealt with in the regulations, the master of the ship must report forthwith to a pollution prevention officer. Where a ship is in distress and discharges or is likely to discharge a pollutant into waters, the Minister of Transport is given broad powers which include authorization of the destruction or removal of the ship or its cargo. Pollution.prevention officers are given powers of boarding ships and access to information required for the administration of the Act and are given broad powers over the movements of such ships to ensure compliance with the regulations and to prevent the discharge of pollutants. Under the civil liability provisions of the Act, both the owner of the ship and the owner of the pollutant it carries are jointly and severally liable for the costs and expenses incidental to the taking of any action authorized to repair or remedy any condition which results from the discharge of a pollutant and are also liable for the actual loss or damage incurred by anyone or by the Crown resulting from the discharge of a pollutant. A Maritime Pollution Claims Fund is established from contributions based on tonnage shipped which is available when the particular ship that caused the discharge of a pollutant cannot be identified. The Oil Pollution Prevention Regulations prohibit the discharge of oil except in emergencies. The offence is one of strict liability. Where oil is discharged, it must be reported forthwith to a pollution prevention officer. The Garbage Pollution Prevention Regulations under The Act prohibit the discharge of garbage into Canadian waters. The Pollutant Substances Regulations prohibit the discharge of a number of pollutants such as lead, mercury and phosphorus.

Ships in harbours may also be subject to by-laws passed by harbour commissioners. This derives from federal legislation applying to particular harbours such as Toronto.

PROVINCIAL LEGISLATION

At the provincial level, the workhorse statute dealing with water pollution in Ontario since 1957 has been The Ontario Water Resources Act, now administered by the Minister of the Environment. It confers on the Minister "the supervision of all surface waters and ground waters in Ontario". The Act contains provisions dealing with the protection of water quality and water quantity and also provides the legislative base for the construction, financing and operation of municipal sewage and water treatment facilities.

Water quantity is controlled by a permit system affecting taking of surface or ground water in excess of 10,000 gallons in a day, except for domestic or farm purposes or for fire-fighting. The provision applies 'where the taking occurs by means of a well, inlet, work or structure or a combination of these. The section also provides that a Director may, by notice, prohibit anyone from taking water where this would interfere "with any public or private interest in any water". Decisions of the Director under the above provisions are subject to review by the Environmental Appeal Board on appeal.

The main offence section of the Act provides that no one may discharge any material that may impair the quality of the water of any lake, river, stream, etc. The offence of discharging has been treated by the courts as one of strict liability, while the offence of permitting a discharge has been seen as a separate offence which requires some degree of knowledge or wilful1 blindness on the part of the defendant. With respect to the concept of impairing, the courts have interpreted the provision in a manner similar to the interpretation given by courts in the United States to a somewhat similar provision in The Refuse Act. Courts have tended to interpret the term "impair" in a way which does not require the prosecution to establish that the lake or river has, in fact, been impaired, but rather that the material deposited has the capacity to make worse the quality of the water even for a short period of time and over a small area. The provision, however, does not apply where the discharge issues from sewage works constructed and operated in accordance with approvals given under the Act or predecessor legislation. This provision is a source of potential serious difficulty for enforcement.

he Act also confers powers on Directors of the Ministry of the Environment, subject to appeal, to order industrial or commercial enterprises to install, construct or arrange proper facilities for the collection, transmission, treatment or disposal of their sewage. The term "sewage1' is defined so as to include commercial and industrial wastes. A corresponding power enables orders to be given to municipalities to establish, maintain, operate, improve, etc., its water works or sewage works.

Provisions of the Act also require Ministry approval of sewage or water works before they are established, extended or changed.

Although up to now The Ontario Water Resources Act has been the primary enforcement vehicle with respect to water pollution offences, The Environmental Protection Act of 1971 also has important applications to questions related to water quality. In the first place the general prohibitions under the Act apply to impairment of water as well as of land and of the air. Also, the powers under the Act for Ministry Directors to issue control orders limiting or controlling the rate of discharge of contaminants apply to water pollution and enable the issuance of a comprehensive order to deal with the air, water and land pollution problems of a company in an integrated way.

The Act also provides the legal framework for waste management, including the establishment and operation of waste disposal sites. Hearings are mandatory prior to the establishment of any such sites dealing with hazardous waste or hauled liquid industrial waste or any other waste that the Director ascertains is at least the equivalent of the domestic waste of not less than 1,500 persons. Offences are provided for the operation of sites without the required certificate of approval and powers are conferred on the Directors to order clean up of illegal deposits.

Conditions may be imposed on the certificates of approval for waste disposal sites in the same way as they are imposed on sewage and water treatment facilites under The Ontario Water Resources Act subject, of course, to appeal.

The Environmental Protection Act contains an important provision related to the remedy or clean up of discharges already occurred. The section provides that where any person has caused the discharge of a contaminant that injures land, water, property or plant life, the Minister, where he is of the opinion that it is in the public interest so to do, may order such person to do all things and take all steps necessary to repair the injury or damage. Although the section has been used primarily to deal with oil spills, it is significant in that it does address itself to the remedy of past discharges. The cornerstone of the Ontario legislation as related to the control of new projects is The Environmental Assessment Act of 1975. The Act provides that the proponent of an undertaking to which the Act applies shall submit to the Minister an environmental assessment of the undertaking and may not proceed with the undertaking until the approval of the Minister is received. The Minister is required on receipt of an environmental assessment to cause a review of it to be carried out and to make public both the assessment itself and the review. A public hearing can be initiated by anyone and will be proceeded with unless the Minister makes a determination that such a hearing is frivolous, or vexatious, or unnecessary, or may cause undue delay. Broad powers are conferred on the Minister to impose terms and conditions with respect to the undertaking. Hearings under the Act are held by the Environmental Assessment Board and the decision of the Board shall be deemed to be the decision of the Minister and final.unless it is, within twenty-eight days, varied by the Minister with the approval of the Cabinet.

The Act is about to be proclaimed so as to apply to undertakings carried out by the Crown and its agencies. In the second phase the Act will be made to apply to undertakings carried out by municipalities and ultimately will apply to projects carried out by the private sector.

In general, the Canadian legislation differs from the American approach in allowing a high degree of administrative discretion to regulatory agencies. For example, regulations on water quality standards have not been established by Ontario; instead the Ministry employs guidelines and criteria to meet local conditions. Such guidelines do not have legal status in the sense that a contravention of them could result in a prosecution, although they are likely to be given effect to by administrative tribunals dealing with appeals from decisions of Directors issuing orders or imposing conditions or refusals.

COOPERATION

Since both the federal and provincial government have important responsibilities with respect to protection of the environment, a variety of intragovernmental mechanisms have emerged to achieve the necessary cooperation. One of these is the Canada-Ontario Accord and another is the Canada-Ontario Great Lakes Water Quality Agreement. The Accord seeks to provide a broad understanding for integrated action in pollution control matters and the Agreement sets out the action to be taken by each jurisdiction to implement the international agreement on water quality. NON-POINT POLLUTION PROBLEMS - GREAT LAKES BASIN

Garth E. Bangay*

INTRODUCTION , The growing realization over the last decade that the control of point sources of water pollution would not provide the ultimate solution to the improvement in water quality of the Great Lakes has caused,investigators to look to other areas where man's activity has induced an imbalance with the natural environment. In the Great Lakes Basin these investigators have been supported by a variety of institutions and intergovernmental agreements, including: the 108 and 208 programs under U.S. Public Law 92-500; the Corps of Engineers, Lake Erie Wastewater Management Study; the Canadal~ntarioAgreement on Great Lakes Water Quality investigations of urban drainage and sewage sludge disposal, and the International Joint Commision's Pollution from Land Use Activities Reference Group.

DEFINITION

All of these programs are in one way or another addressing what has been termed the non-point or diffuse source pollution problem. Non-point or diffuse source pollution is usually defined as including all those sources of pollutant inputs to surface and groundwater, with the exception of discharges from industry and municipal sewage treatment plants (point source pollution). The importance of non-point sources of water pollution to the Great Lakes System has recently been emphasized by the preliminary findings of the Corps of Engineers Lake Erie Wastewater Management Study. The Corps indicated that approximately 44% of the tributary phosphorus loading to Lake Erie could be attributed to diffuse or non-point sources of pollution.' Therefore, despite the allocation of significant levels of funding to improve municipal sewage treatment facilities in the Lake Erie Basin, the Lake Erie study objectives for phosphorus will not be met without a significant alteration to the present non-point loading.