Political Pollution
Clean Coal/Dirty Air, by Bruce A. Ackerman and William T. Hassler, New Haven: Yale University Press, 1981, 193 pp., $5.95 paper.
In 1970, the Environmental Protection Agency (EPA) was created to administer all important federal environmental programs. The event was applauded by most individuals who value a clean environment. While it is true that the EPA had no internal mechanism that would force it to look at the costs and benefits of its actions—so that it would then support only those proposals where benefits exceeded costs—it was believed that its actions would at least enhance the quality of the environment. The one thing we would not expect is that the EPA would intentionally propose regulations that would not only be costly but would also lead to an increase in pollution.
In fact, this is precisely what the EPA has done in its regulation of coal-fired power plants. This sorry episode in the administration of environmental law is elegantly detailed in an excellent book, Clean Coal/Dirty Air. Written by a law professor and a former law student at Yale University, the book paints a picture of blatant regional protectionism and an agency so oblivious to reality that it treated pollution regulation as an engineering problem, completely ignoring both the costs and the environmental effects of its actions.
The story centers on Section 111 of the 1970 Clean Air Act, amended in 1977, which is aimed at controlling sulfur dioxide (SO2) emissions from new sources. In addition to instructing the EPA to set maximum emission levels of SO2, Section 111 requires the establishment of the "best available technology" to achieve these standards.
There are three technically acceptable ways to reduce SO2 emissions from coal-burning power plants. The first is simply to burn coal with a lower sulfur content. The second is to crush the coal and wash it before it is burned, a rather primitive technique that reduces SO2 emissions by, at most, 40 percent. The third method is gas scrubbing, which involves attaching a 70-foot test tube to the smokestack of the offending plant. This technique produces a chemical reaction that reduces SO2 emissions by as much as 90 percent. Scrubbing, however, is very expensive and requires constant monitoring by highly trained personnel. Even though scrubbing is the most costly method of limiting the pollution emitted from coal-fired plants, the EPA decided to require scrubbers on all new power plants.
Given the opportunity to choose their own methods for meeting the EPA's emission control standards, many plants would switch from high-sulfur to somewhat more expensive low-sulfur coal. Some might decide to wash the coal, although this method used alone only cuts emissions by 40 percent. Few, however, would install a scrubber, which costs an average of $56 million, thereby increasing construction costs by 15 percent. Given the relative costs and operating efficiency of each method, then, it is likely that plants would opt for a combination of low-sulfur coal and washing—a relatively low-cost method that guarantees adequate emission control.
Examining political considerations is the only way to make sense of EPA's decision to deny individual plants the freedom to choose the most cost-efficient method for meeting the emission standards. Central to such an examination is the realization that almost all low-sulfur coal is found west of the Mississippi and most of the high-sulfur coal is found in the East. Given that the Senate Democratic leader and the chairmen of both the Senate and the House committees that authorize EPA's funding are from West Virginia, a leading high-sulfur coal producing state, and that the United Mine Workers (UMW) organize almost exclusively in the East, it is not surprising that mandatory scrubbing gained strong support. Support also came from environmental groups, who saw it as a way to get power plants in the West—which already burned low-sulfur coal—to reduce their emissions even further.
That the EPA has instituted an economically costly program is not surprising. What is startling is that the agency is supporting a program that will actually lead to an increase in SO2 emissions in some of the dirtiest parts of the country. As Bruce Ackerman and William Hassler point out, since the stringent regulations apply only to new power plants, utilities will keep their old plants operating longer and delay building new, environmentally safe—but incredibly expensive—ones. The Clean Air Act allows the old plants to maintain far higher emission levels than new plants. So, as the old plants continue to operate in an economically rational but environmentally hazardous manner, SO2 emissions will actually increase. What we have, then, is environmental legislation that causes an increase in pollution!
Clean Coal/Dirty Air is a well-written and well-documented examination of one of the most environmentally destructive bureaucratic travesties of the last 10 years. It also reminds us that putting environmental controls in the hands of the federal government is not always best for society. Except for chapter 7, which examines agency-forcing legislation and the courts, the book can be easily understood by the nonspecialist.
We can only hope that episodes as blatant as this one do not happen again. In the absence of significant institutional change, however, we cannot be so optimistic.
David T. Fractor is a research assistant at the Center for Political Economy and Natural Resources at Montana State University.