Risk aversion and compliance in markets for pollution control

This paper examines the effects of risk aversion on compliance choices in markets for pollution control. A firm's decision to be compliant or not is independent of its manager's risk preference. However, non-compliant firms with risk-averse managers will have lower violations than otherwise identical firms with risk-neutral managers. The violations of non-compliant firms with risk-averse managers are independent of differences in their profit functions and their initial allocations of permits if and only if their managers' utility functions exhibit constant absolute risk aversion. However, firm-level characteristics do impact violation choices when managers have coefficients of absolute risk aversion that are increasing or decreasing in profit levels. Finally, in the equilibrium of a market for emissions rights with widespread non-compliance, risk aversion is associated with higher permit prices, better environmental quality, and lower aggregate violations.     

Comparative analysis of air pollution emissions by electric utilities: Public policy implications

One of the objectives of US environmental regulations was to reduce industrial air pollution emissions, especially from the electric utility industry, the major industrial air polluter. In this study, a comparative analysis of air pollution emissions from fossil-fuel-burning electric utility plants is conducted. The analysis focuses on a 12-yr period from 1975 to 1987 for three air pollutants: particulates, surfur dioxide, and nitrogen oxides. The results indicate that particulate emissions have been significantly reduced but that sulfur dioxide and nitrogen oxides are still major problems for a number of plants. Furthermore, the disparity in the performance by plants indicates that by using current technology, the industry as a whole could greatly reduce these emissions. These results have policy implication for future environmental legislation.     

Modeling flow and nitrate fate at catchment scale in Brittany (France)

In the intensive pig-farming (Sus scrofa) area of Brittany (western France), many surface and subsurface water resources are contaminated by nitrate (NO3) with concentrations that chronically exceed the European Community 50 mg L(-1) drinking standard. To ensure sustainable water supply, the fate of NO3 must be considered in both surface water and ground water. The fate of N was investigated in a Britain catchment, the Co?t-Dan watershed, with an integrated management tool: the hydrological SWAT model coupled with the ground water model MODFLOW, and its companion contaminant and solute transport model MT3DMS. The model was validated with respect to water quantity during a 6-yr period and for the NO3 concentration during a 44-mo period, at two gauging stations in the catchment. The coupled models reproduced accurately the measurements. At the basin outlet, the Nash-Sutcliffe coefficients were 0.88 for monthly flow for the entire period and 0.87 for monthly N load. Alternative scenarios were simulated and showed potential benefits of decreasing manure application from 210 to 170 kg N ha(-1) as required by the European Commission Nitrates Directive.     

Leaching of carbonated air pollution control residues using compliance leaching tests

The leaching characteristics of air pollution control (APC) residues collected in Shanghai, China, were compared by performing three compliance leaching tests. These were the standard Chinese method for determining the leaching toxicity of solid waste (GB 5086.1-1997), the USEPA's Toxicity Characteristic Leaching Procedure (TCLP), and the new European shake test (EN 12457-3). In particular, behaviors of raw samples and samples that had been subjected to natural aging were compared. Both the leaching tests and natural aging substantially affected the leaching results concerning the APC residue samples. Most importantly, EN and GB tests classified the raw APC residues as hazardous, but the residues passed the TCLP test as nonhazardous. After it had been naturally aged for 720 h, however, the aged sample was classified as hazardous by the TCLP and EN tests, but as nonhazardous by the GB test. Metals that are thought to have been immobilized by carbonation were released at pH 6.3. Model calculations based on the geochemical thermodynamic equilibrium model MINTEQA2 revealed that the formation of metal carbonates did not correspond to the noted change in the leaching behaviors in the three leaching tests. Rather, the partial neutralization of alkaline ash by dissolved CO2 changing the final pH of the leachate dominated the leaching characteristics. The leaching results showed a change in leachate pH.     

Investigation of trace element atmospheric pollution by nuclear analytical techniques at a global scale: harmonized approaches supported by the IAEA

In the framework of the IAEA programmes, Member States involved in air pollution studies using nuclear analytical techniques have harmonized their methodologies. Participants characterising chemical composition of size fractionated airborne particulate matter based their methodology on a common type of air sampler, centralised data collection and evaluation, and the same kind of data processing. Institutions involved in biomonitoring air pollution identified appropriate organisms to be applied at a regional scale, and harmonized procedures for sample preparation and analysis, as well as data processing and presentation. Both metrology approaches have been validated and disseminated in many Member States.     

Land use planning,pollution control and environmental assessment in the E.C. environment policy

The Environmental Council of the European Communities is giving consideration to a procedure to provide a common basis for the assessment and control of potentially polluting development. This discusses the rationale and theory underlying the use of land use planning procedures to control potentially polluting development, and the need for harmonisation of procedures within the European Communities in order to avoid the emergence of pollution havens. It goes on to discuss the proposed Directive on environmental assessment, and the implications of its adoption and incorporation into the planning procedures of the U.K. and other member states.     

Application of modeling and simulation tools in costs and pollution monitoring

This paper presents the development and application of process modeling and simulation tools to aid in the monitoring and measuring of pollution from industry, and investigate a plant's overall performance. A case study of a generic reduction plant is investigated, taking into account the underlying principles that determine the amount of fluoride emissions released from the plant's processes. The simulation study includes the investigation of the gas cleaning system within the plant, such as the system's operating relationships between the scrubbing efficiency, wear of the scrubber filter bags, maintenance costs and its response to the change of scrubbing circulation. Two sets of simulation runs are performed to seek a balance for the plant's overall system performance, taking into account environmental issues (fluoride emissions) and cost. The final simulation result demonstrates that cost savings can be achieved when the plant operates in a cleaner manner.     

Graphical effluent quality control for compliance monitoring: What is a violation?

Demonstration of compliance with discharge (effluent) requirements suffers because Discharge Monitoring Reports (DMRs) give neither the discharger nor the regulator information on the process mean which ensures compliance. To obtain this information, a simple graphical method is presented which takes into account process variability. This technique provides quality control specifications for the monitoring data and the process itself.     

Mineral sector technologies: policy implications for developing countries

Over the past 20 years the mining industry has been a leader in the conception and application of advanced technologies. New thinking about earth tectonics as well as advances in geophysics, geochemistry, remote sensing, data processing and communications permit more effective and accurate geological exploration. Mechanization, more durable materials and more powerful explosives, as well as computer aided mine design and management have led to substantial gains in productivity. Minerals processing has similarly seen significant technological advances including solvent extraction, electro-winning of metal ores, bath smelting techniques, cyanide leach to produce gold, and bioleaching of sulphide and refractory ores. New technologies have dramatically improved mine health and safety as well as making possible control of water and air pollution. Improved communication and transport have stimulated competition and fostered the internationalization of mineral commodity prices. As these technologies are essentially market driven, developing countries should continue current efforts towards economic liberalization. Promoting investment in mining entails lifting many of the restrictions and taxes that can hinder efficient exploration and development. We examine some developments that have greatly increased the efficiency of exploration, mining and marketing. To obtain maximum benefit from many of these technologies requires governments to adopt a wide range of new policies which are examined in some detail.     

The challenges and implications of collaborative management on a river basin scale

Collaboration has rapidly become the dominant paradigm in natural resource management, but there are many dilemmas about how it is applied effectively. In southwest Oregon, agencies, watershed councils and other stakeholders are developing a river basin approach to assess ecological health and set priorities for restoration. An analysis of this process reveals considerable progress in this innovative effort and it reveals several implications for collaboration at a regional scale, including: tensions between technical complexity and open participation, difficulties with information exchange for joint management, the relationships between technical issues and policy issues, the role of regional policy in supporting collaborative efforts, and the importance of institutional arrangements.     

Agricultural water pollution control: An interdisciplinary approach

Regulation and control of agricultural water pollution is unique and difficult to accomplish. Water quality standards are often proposed without adequate consideration of the overall economic impact on agricultural production. This article illustrates how economists and physical scientists can cooperate to develop appropriate control strategies for agricultural water pollution. Data provided by physical scientists and economists are used in a linear programming model to describe salt discharge as a function of water management, production levels, and an associated effluent charge. Four water management activities were chosen on the basis of different costs of production (including a parametrically varied effluent charge), water requirements, alfalfa yields, and levels of salt discharge. Results indicate that when the effluent charge is low (<$0.20/metric ton salt discharged), maximum production with maximum salt discharge is most profitable. As the effluent charge is increased ($0.20–$0.40/metric ton salt discharged), it becomes progressively less profitable to produce alfalfa at maximum levels of pollutant discharge. When the effluent charge is >$0.40/metric ton salt discharged, alfalfa production is no longer economically feasible. An important aspect of this approach is that it permits policy makers to identify explicitly the relationship between the environmental standard and the effect on agricultural production.     

Reducing the healthcare costs of urban air pollution: the South African experience

Air pollutants often have adverse effects on human health. This paper investigates and ranks a set of policy and technological interventions intended to reduce such health costs in the high population density areas of South Africa. It initially uses a simple benefit-cost rule, later extended to capture sectoral employment impacts. Although the focus of state air quality legislation is on industrial pollutants, the most efficient interventions were found to be at household level. These included such low-cost interventions as training householders to place kindling above rather than below the coal in a fireplace and insulating roofs. The first non-household policies to emerge involved vehicle fuels and technologies. Most proposed industrial interventions failed a simple cost-benefit test. The paper's policy messages are that interventions should begin with households and that further industry controls are not yet justifiable in their present forms as these relate to the health care costs of such interventions.     

The meaning of BATNEEC: interpreting excessive costs in UK industrial pollution regulation

The paper examines how the concept of ‘excessive costs’ has been interpreted in the implementation of industrial pollution control in the UK. Since 1984, industrial air pollution regulation in the EU has been guided by the framework concept of Best Available Technology Not Entailing Excessive Costs (BATNEEC). With the introduction of the Integrated Pollution Prevention and Control (IPPC) Directive in 1996, this has been replaced by the concept of Best Available Techniques (BAT). Despite the absence of the NEEC qualification, IPPC BAT includes excessive costs in its definition of ‘available’. Both concepts require interpretation and both devolve potentially controversial decisions to the level of the individual site regulator. A central issue in interpreting ‘excessive costs’ is the relative importance of environmental cost–benefit analysis versus the ability of a sector to ‘afford’ environmental improvements. Also important is how such concepts can be operationalized by regulators who lack resources and depend upon industry for information. The paper provides a historical account of how these issues have been dealt with in the UK and argues that the key difficulties are far from being resolved. The paper concludes by assessing the implications for the future implementation of IPPC. Copyright © 2002 John Wiley & Sons, Ltd.     

Particulate and lead air pollution control in Cairo: benefits valuation and cost-effective control strategies

Recent research has suggested that health damage from air pollution—most notably from inhalable particulate matter and lead—is a serious concern in many cities in developing countries. A comparative risk assessment conducted in Cairo in 1994 found these two pollutants to be especially worrisome, and an analysis of the potential economic benefits associated with controlling these pollutants suggests that their economic damage is significant. Control strategies to reduce ambient pollutant levels are under development, with point source controls on major industrial facilities—especially in the secondary lead smelling industry—a cost-effective initial step.     

Groundwater risk assessment at a heavily industrialised catchment and the associated impacts on a peri-urban wetland

Industrial and agricultural activities often impose significant pressures to the groundwater quality and consequently degrade wetland ecosystems that depend mostly on subsurface water flow. Groundwater vulnerability and risk mapping is a widely used approach to assess the natural protection of aquifers and the associated pollution potential from human activities. In the particular study, the relatively new Pan-European methodology (COP method) has been applied in a highly industrialized peri-urban wetland catchment, located close to Athens city, to map the intrinsic vulnerability of the aquifer and evaluate the risk potential originating from local land uses. Groundwater analysis results for various parameters, including Phenols, PCBs and nutrients, have been used to validate the vulnerability and risk estimations while a biological assessment occurred to associate the mapping results with the wetland's ecological status. The results indicated that even though the natural protection of the aquifer is relatively high due to the dominant hydrogeologic and geomorphologic conditions, the groundwater pollution risk is considerable, mainly because of the existing hazardous land uses. The water quality of the groundwater accredited these findings and the ecological status of this peri-urban wetland also indicated significant impacts from industrial effluents.     

Environmental sustainability: Balancing pollution control with economic growth

This article will discuss in some detail how prescribed command-and-control pollution abatement and economic growth must work together rather than in opposition. How a balanced environment can and must tolerate acceptable levels of pollution and how economic growth from added value pollution prevention in unity with pollution control technology can and does work.© 1999 John Wiley & Sons, Inc.     

Using a choice experiment to measure the environmental costs of air pollution impacts in Seoul

Air pollution, a by-product of economic growth, has been incurring extensive environmental costs in Seoul, Korea. Unfortunately, air pollution impacts are not treated as a commercial item, and thus it is difficult to measure the environmental costs arising from air pollution. There is an imminent need to find a way to measure air pollution impacts so that appropriate actions can be taken to control air pollution. Therefore, this study attempts to apply a choice experiment to quantifying the environmental costs of four air pollution impacts (mortality, morbidity, soiling damage, and poor visibility), using a specific case study of Seoul. We consider the trade-offs between price and attributes of air pollution impacts for selecting a preferred alternative and derive the marginal willingness to pay (WTP) estimate for each attribute. According to the results, the households' monthly WTP for a 10% reduction in the concentrations of major pollutants in Seoul was found to be approximately 5494 Korean won (USD 4.6) and the total annual WTP for the entire population of Seoul was about 203.4 billion Korean won (USD 169.5 million). This study is expected to provide policy-makers with useful information for evaluating and planning environmental policies relating specifically to air pollution.     

Approximating pollution abatement costs via alternative specifications of a multi-output production technology: a case of the US electric utility industry

Using a panel of observations from the US electric utility industry, we analyze the output set frontiers that are produced by modeling the technology with different functional forms. Our specifications rely on a series of mapping regimes, based on the paths in which the outputs are scaled toward the frontier, and their outcomes are assessed against the general axiomatic framework of the production model. We demonstrate that different parameterization methodologies produce different empirical analogues of the output set and, as a consequence, can generate rather different estimates of the shadow prices of socially undesirable outputs, or 'bads,' as well. We benchmark our results by assessing the shadow price estimates, often interpreted as the opportunity cost of pollution reduction, against the market prices of pollution permits. The outcomes of our analysis suggest that the estimate of the output set boundary varies with the choice of a parameterization technique, which provides a possible explanation for the sizeable differences between the shadow prices of bads reported in the literature. We also demonstrate that among a variety of existing parametric methodologies no single technique is superior to all others.