Envtl Law Outline
Saturday, November 28, 2009
1. Modeling & Classic POVs
1. World3 Model Variables
c. Natural Resources
d. Industrial output
2. Models: Two primary uses
a. To derive limits – run the model backwards to figure out the allowable polluting to meet a health/effects based std
b. To demonstrate compliance w/ limits
i. Don’t let pltrs choose their own models b/c models are highly subject to manipulation
ii. Unique models → incomparable results
3. Modeling concerns
a. Structural Defects – selection of compartments & flows
i. Aggregation error
b. Parameter uncertainty – selection of parameter values for flow rates
i. Erroneous assignment of parameter values
ii. Picking the highest values (Heidelberg Rpt) would
1. Set the bar so high above what is realistically possible
2. Commit to avoiding a false negative
3. Could damage econ & industry
c. Manupulatability – Selection of input values
i. Exclusion bias – only monitoring certain pollutants
ii. Pick & choose monitoring sources (some left unmonitored & fugitive emissions)
iii. Faulty monitoring equip
d. Bottom Line: Must be simple enough to use, but not so simple that its full of substantial errors.
4. Minimize consequences of error
a. Consume improvidently (Grasshopper), OR
b. Conserve unnecessarily (Ants) FALSE ALARM.
5. Orphals/Boyan on “Process Politics”
a. Muddling through → genuine scarcity → politics of scarcity → greater socio-econ inequality → revolution
b. BUT if we enact the Club of Rome recommendations, that will lead to artificial scarcity, leading to the same things as above
c. So, do not enact the Club of Rome report b/c it will just get us to revolution faster.
d. Instead, let’s hope the environmental optimists are right.
6. Classic NR conflict
a. Ecologist cites envtl imperative: sharply curtail growth as the price of biological survival. Growth for the sake of growth is the ideology of the cancer cell.
b. Economist cites socioeconomic imperative: we must continue growth as the price of social survival (“Drill, Baby. Drill.”)
1. Aluminum Factory Example
a. Private cost (e.g. price of aluminum)
b. Social cost (e.g. opportunity cost of workers in the aluminum plant versus farming the fields)
c. External costs – social costs that don’t show up on the companies books
d. External costs → misallocation of resources
a. Pigou’s Solution is to force companies to internalize the costs → strict liability for pollution
b. Potential Versailles damages solution:
i. Co has never made a profit
ii. Internalizing the cost would probably cause them to shut down
iii. BUT perhaps they should close if the true cost of mining coal is insufficient to show a profit → better allocation of resources
c. Emission Fees
i. Fees similar to taxes
1. Fee is better than performance std command b/c pltrs will discover their own MCC in order to reach econ optimal controls.
2. Pltr will implement controls up to the point where paying the fee is cheaper than implementing controls
3. Internalize externality of pollutant harm
4. Fees encourage pltrs to reduce control costs
1. Regulators don’t know Marginal Control Costs (MCC)
2. this is a license to pollute (equivalent of a license to steal). Sometimes crime does pay. BUT under a command approach, the permit allowance is also a license to pollute.
iv. A mixed system of fees and commands might be good. Why do we not have emission fees on top of the command sys in CAA?
1. Utilities with a monopoly might just pass the fee on to the consumer.
2. Important entities that can’t afford the fee would probably be given a waiver. (e.g. hospitals).
3. Emissions fees are arbitrary prices set by the gov’t. Gov’t is probably not capable to set these prices at an efficient level.
4. Can’t charge fees unless you have continuous reliable monitoring. (e.g. A lot of ppl don’t pay all their income taxes).
v. Two ways to set the fee
1. If we set the emission fee to the envtl harm. It would slope down from left to right and vary over time and place to compensate for temporal and geographic conditions. Ruff.
2. Set the fee according to the AAQ goal. Brookings Inst.
a. Coase Theorem – The proper level of pollution control is the [single] level of control that the parties would agree on if they were able to bargain in a perfect market entailing no transaction costs.
i. Reciprocal Thesis – “Fairness”
1. Pltr causes harm to Rcptr
2. BUT Rcptr must consider econ harm to Pltr due to an injunction or additional controls
3. Shouldn’t make a normative jdgmt about which side is bad and force them to internalize the cost.
ii. Invariance Thesis – “Solves for itself”
1. it doesn’t matter who is assigned the rights
2. BUT assignment is necessary for negotiation to take place.
3. “In a perfect (costless) mkt, the same level of pollu
fits are known and harms are uncertain, BUT the harms on radon release were well known.
6. HR 9 would’ve taken advantage of the practical problems of econ → paralysis by analysis
a. Would req cost-benefit analysis for all envtl reg
b. Incorrectly assumes no gov’t action is better than some gov’t action
1. Transferable Rights as Alternative to Command & Control
i. We represent UofI
ii. Worried about PM coming out of electricity facility
iii. Assume the AAQ goal for PM has been set
iv. 1 Right = 1ton/yr BUT Problem w/ yr period b/c we have no control over rate
v. 1 Right = 100lbs/day
vi. Only hand out enough rights so that we never violate AAQS → engaging in massive overcontrol on days where atmosphere could accept much higher concentrations → tf, should make right variable accd’g to atmospheric conditions → too complex?
vii. Currently polluting 500lbs/day & need to reduce to 0
viii. Auction time
1. IF rights are free → Give me 5 Rights
2. IF $1000/Right → Need to know MCC. Pltr will adopt controls along MCC until it becomes less expensive to purchase rights.
b. HYPO 2
i. Now assume we are building a new power plant. New source will emit 500lbs/day.
ii. We have an old cement facility in Cedar Rapids that emits 500lbs/day.
iii. We convince the CR facility to shut down and retire their emissions.
iv. CR and Iowa City are not in the same areas so won’t be net benefit to the Iowa City nonattainment area.
v. If sources were in same area,
1. concentration might not be the same if the stacks emitted at different heights.
2. Quality might not be the same b/c health effects of coal and cement PM are not identical. PM is not fungible b/c it aggregates varying qualities.
c. HYPO 3
i. Assume a bubble
ii. Facility makes a counterproposal of cheaper pollution controls elsewhere in the facility with same reduction amount
iii. Is the counterproposal:
1. Envtl equivalent effection?
A. Same Concentration