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Economic Incentives for Pollution Control: By Table of Contents

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DISCLAIMER
EXECUTIVE SUMMARY
FOREWORD
Hide details for 1. INTRODUCTION1. INTRODUCTION
1.1. PURPOSE OF REPORT
1.2. DEFINITIONS
1.3. ORGANIZATION OF REPORT
1.4. SCOPE OF REPORT
Hide details for 2. GOVERNMENT POLICIES ON ECONOMIC INCENTIVES2. GOVERNMENT POLICIES ON ECONOMIC INCENTIVES
Hide details for 2.1.  SOME RECENT POLICY DEVELOPMENTS2.1. SOME RECENT POLICY DEVELOPMENTS
2.1.1. Reinventing Environmental Regulation
2.1.2. Economic Report of the President
2.1.3. Council on Sustainable Development
2.1.4. Vice-Presidential National Performance Review
2.1.5. Executive Order 12866 and Related OMB Guidance
Hide details for 2.2.  SOME SIGNIFICANT EARLIER POLICY DEVELOPMENTS2.2. SOME SIGNIFICANT EARLIER POLICY DEVELOPMENTS
2.2.1. Economic Incentives: Options for Environmental Protection
2.2.2. 1990 Clean Air Act Amendments
2.2.3. The Project 88 Report
2.2.4. Executive Order 12291 and EPA Guidelines for Performing Regulatory Impact Analysis
2.3. CONCLUSIONS
Hide details for 3. THE ECONOMIC EFFICIENCY AND ENVIRONMENTAL EFFECTS OF INCENTIVE SYSTEMS3. THE ECONOMIC EFFICIENCY AND ENVIRONMENTAL EFFECTS OF INCENTIVE SYSTEMS
3.1. BACKGROUND
3.2. COMMAND AND CONTROL
Hide details for 3.3.  INCENTIVE-BASED MECHANISMS3.3. INCENTIVE-BASED MECHANISMS
3.3.1. Pollution Taxes, Fees, and Charges
3.3.2. Subsidies
3.3.3. Trading Systems
3.3.4. Deposit-Refund Systems
3.3.5. Information Programs
3.3.6. Liability for Health and Environmental Harm
3.4. RELATIVE ECONOMIC EFFICIENCY
3.5. ECONOMIC INSTRUMENTS AND TECHNOLOGICAL CHANGE
3.6. IMPACTS ON ENVIRONMENTAL QUALITY
3.7. FINDING THE RIGHT INSTRUMENT FOR THE PROBLEM
Hide details for 4. FEES, CHARGES, AND TAXES4. FEES, CHARGES, AND TAXES
4.1. INTRODUCTION
Hide details for 4.2.  WATER FEES4.2. WATER FEES
4.2.1. Indirect Discharge and User Fees
4.2.2. Direct Discharge Fees
4.2.3. Examples of State Effluent Fees: Louisiana, California, and Wisconsin
4.2.4. Stormwater Runoff Fees
Hide details for 4.3.  AIR FEES4.3. AIR FEES
Hide details for 4.3.1.  Permit Fees4.3.1. Permit Fees
4.3.1.1. Air Emission Permit Fees in Maine
4.3.1.2. Air Emission Permit Fees in the South Coast Air Quality Management District
4.3.1.3. California "Hot Spots" Fees
4.3.2. Ozone Non-Attainment Area Fees
Hide details for 4.4.  WASTE FEES4.4. WASTE FEES
4.4.1. Variable Pricing Program
4.4.2. Landfill Taxes
4.4.3. Hazardous Waste Taxes
Hide details for 4.5.  PRODUCT CHARGES4.5. PRODUCT CHARGES
Hide details for 4.5.1.  Federal Product Charges4.5.1. Federal Product Charges
4.5.1.1. Superfund Taxes
4.5.1.2. Taxes on Fuel-Inefficient Automobiles
4.5.1.3. Ozone-depleting Chemicals
Hide details for 4.5.2.  State Product Charges4.5.2. State Product Charges
4.5.2.1. Tire Charges
4.5.2.2. Fertilizer Charges
4.5.2.3. Rhode Island Hard-to-Dispose Material Tax
4.5.2.4. Florida ADF
4.5.2.5. North Carolina ADF
4.5.2.6. Texas Clean Fuel Incentive Surcharge
4.6. ROAD USER FEES
4.7. WETLAND COMPENSATION FEES
4.8. GRAZING FEES
4.9. MINNESOTA CONTAMINATION TAX
Hide details for 5. DEPOSIT-REFUND SYSTEMS5. DEPOSIT-REFUND SYSTEMS
5.1. INTRODUCTION
Hide details for 5.2.  BEVERAGE CONTAINERS5.2. BEVERAGE CONTAINERS
5.2.1. Maine Bottle Bill
5.2.2. California Beverage Container Recycling Program
5.3. LEAD-ACID BATTERIES
5.4. MAINE PESTICIDE CONTAINER DEPOSIT SYSTEM
5.5. OTHER PRODUCTS
5.6. VOLUNTARY DEPOSIT SCHEMES
5.7. PERFORMANCE BONDS
Hide details for 6. TRADING SYSTEMS6. TRADING SYSTEMS
Hide details for 6.1.  TRADING OF AIR EMISSIONS6.1. TRADING OF AIR EMISSIONS
Hide details for 6.1.1.  EPA's Air Emission Trading Program6.1.1. EPA's Air Emission Trading Program
6.1.1.1. Offset Program
6.1.1.2. Bubble Program
6.1.1.3. Banking
6.1.1.4. Netting
6.1.1.5. Evaluation of Emissions Trading Program
6.1.2. RECLAIM
Hide details for 6.1.3.  Other State Air Emission Trading Programs6.1.3. Other State Air Emission Trading Programs
6.1.3.1. Illinois
6.1.3.2. Delaware
6.1.3.3. Massachusetts
6.1.3.4. Michigan
6.1.3.5. New Jersey
6.1.3.6. Texas
6.1.3.7. Wisconsin
6.1.4. NESCAUM/MARAMA Demonstration Project
6.1.5. OTC/OTAG Regional NOx Reduction Program
6.1.6. Open Market Trading
6.1.7. Acid Rain Allowance Trading
6.1.8. Chlorofluorocarbon Production Allowance Trading
6.1.9. Lead Credit Trading
6.1.10. Gasoline Constituents
6.1.11. Heavy Duty Truck Engine Emissions
Hide details for 6.1.12.  Hazardous Air Pollutants6.1.12. Hazardous Air Pollutants
6.1.12.1. Early Reduction Program
6.1.12.2. Petroleum Industry NESHAPS
6.1.12.3. Hazardous Organic Chemical NESHAP
6.1.13. Corporate Average Fuel Economy Standards (CAFE)
6.1.14. Wood Stove and Fireplace Permit Trading
6.1.15. Grass Burning Permit Trading
Hide details for 6.2.  TRADING OF WATER EFFLUENTS6.2. TRADING OF WATER EFFLUENTS
6.2.1. Effluent Bubble
6.2.2. Effluent Trading (point-point)
Hide details for 6.2.3.  Effluent Trading (Point-nonpoint)6.2.3. Effluent Trading (Point-nonpoint)
6.2.3.1. Dillon Reservoir
6.2.3.2. Cherry Creek
6.2.3.3. Tar-Pamlico Basin
6.2.3.4. Other Point-Nonpoint Trading Proposals
Hide details for 6.3.  LAND PROTECTION TRADING6.3. LAND PROTECTION TRADING
6.3.1. Wetland Mitigation Banking
Hide details for 6.3.2.  Transferable Development Rights6.3.2. Transferable Development Rights
6.3.2.1. Montgomery County, Maryland
6.3.2.2. Talbot County, Maryland
6.3.2.3. Maryland Purchase of Development Right (PDR) Program
6.3.2.4. The Pinelands, New Jersey
6.3.2.5. Palm Beach County, Florida
Hide details for 6.4.  INTERNATIONAL TRADING ACTIVITIES INVOLVING US GOVERNMENT6.4. INTERNATIONAL TRADING ACTIVITIES INVOLVING US GOVERNMENT
6.4.1. Joint Implementation
6.4.2. Proposed Cross-Border Trading Program: El Paso Region
Hide details for 7. SUBSIDIES7. SUBSIDIES
7.1. INTRODUCTION
Hide details for 7.2.  POLLUTION PREVENTION AND CONTROL7.2. POLLUTION PREVENTION AND CONTROL
7.2.1. Tax Benefits
7.2.2. Louisiana Environmental Scorecard
7.2.3. Supplemental Environmental Projects
7.2.4. Loans and Tax-exempt Bonds
Hide details for 7.3.  BROWNFIELDS PROGRAMS7.3. BROWNFIELDS PROGRAMS
7.3.1. EPA Pilot Project Grants
7.3.2. Tax Incentives and Loans
Hide details for 7.4.  FARMING AND LAND PRESERVATION7.4. FARMING AND LAND PRESERVATION
7.4.1. Conservation Reserve Program
7.4.2. Wetlands Reserve Program
7.4.3. Agricultural Conservation Program
7.4.4. Compliance Provisions
7.4.5. Highly Erodible Land Conservation Compliance and "Sodbuster"
7.4.6. Swampbuster Program
7.4.7. Acreage Reduction Program
Hide details for 7.4.8.  Subsidy Programs Created under 1996 Farm Bill7.4.8. Subsidy Programs Created under 1996 Farm Bill
7.4.8.1. Environmental Quality Incentive Program
7.4.8.2. Farmland Protection Program
7.4.8.3. Conservation Farm Option
7.4.8.4. Wildlife Habitat Incentives Program
7.4.9. State Initiatives
7.4.10. Purchase of Development Rights
Hide details for 7.5.  CONSUMER PRODUCT WASTE MANAGEMENT7.5. CONSUMER PRODUCT WASTE MANAGEMENT
7.5.1. Advance Disposal Fee Systems
7.5.2. Deposit Handling Fees
7.5.3. Recycling Loans and Grants
7.5.4. Tax Incentives
7.5.5. Preferential Procurement of Recycled Products
7.5.6. Recycled Content Policies
7.6. NEW JERSEY INFORMATION AWARDS PROGRAM
Hide details for 7.7.  ALTERNATIVE FUELS AND LOW-EMITTING VEHICLES7.7. ALTERNATIVE FUELS AND LOW-EMITTING VEHICLES
7.7.1. Federal Subsidies
7.7.2. State Subsidies
7.7.3. Car Buyback Schemes
7.8. RENEWABLE ENERGY AND CONSERVATION
7.9. MUNICIPAL SEWAGE TREATMENT PLANT CONSTRUCTION
Hide details for 7.10.  ENVIRONMENTALLY HARMFUL SUBSIDIES7.10. ENVIRONMENTALLY HARMFUL SUBSIDIES
7.10.1. Subsidies for Timber, Minerals, and Water Extraction
7.10.2. Agriculture
7.10.3. Mortgage Interest Tax Deduction
Hide details for 8. LIABILITY APPROACHES8. LIABILITY APPROACHES
8.1. LIABILITY FOR CLEANUP COSTS
8.2. LIABILITY FOR DAMAGE TO NATURAL RESOURCES
Hide details for 8.3.  CIVIL AND CRIMINAL LIABILITY8.3. CIVIL AND CRIMINAL LIABILITY
8.3.1. Resource Conservation and Recovery Act (RCRA)
8.3.2. Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)
8.3.3. Clean Water Act (CWA)
8.3.4. Clean Air Act (CAA)
8.4. TORT LIABILITY
Hide details for 9. INFORMATION APPROACHES9. INFORMATION APPROACHES
9.1. INTRODUCTION
Hide details for 9.2.  EMERGENCY PLANNING AND COMMUNITY RIGHT-TO-KNOW ACT (EPCRA)9.2. EMERGENCY PLANNING AND COMMUNITY RIGHT-TO-KNOW ACT (EPCRA)
9.2.1. Trends in Toxics Release Inventory (TRI) Data
9.2.2. Incentive Effect of the Toxics Release Inventory (TRI)
Hide details for 9.3.  STATE EMERGENCY PLANNING AND COMMUNITY RIGHT-TO-KNOW ACT (EPCRA) PROGRAMS9.3. STATE EMERGENCY PLANNING AND COMMUNITY RIGHT-TO-KNOW ACT (EPCRA) PROGRAMS
9.3.1. Massachusetts Toxics Use Reduction Act
9.3.2. New Jersey Reporting Requirements
9.4. PROPOSITION 65
9.5. HOT SPOTS ACT
9.6. ENVIRONMENTAL POLICY ACTS
Hide details for 9.7.  LABELING SCHEMES9.7. LABELING SCHEMES
9.7.1. Federal Trade Commission Guidelines for Environmental Marketing Claims
9.7.2. Green Seal and Other Seals of Approval
9.7.3. Single-Attribute Seals of Approval
9.7.4. Report Cards and Information Disclosure
9.7.5. Energy-Efficiency Labeling
9.7.6. Hazard Labels
9.8. ENVIRONMENTAL PERFORMANCE AWARDS
9.9. SECURITIES AND EXCHANGE COMMISSION (SEC) DISCLOSURE REQUIREMENTS
9.10. RADON AND LEAD PAINT DISCLOSURE REQUIREMENTS
Hide details for 10. VOLUNTARY PROGRAMS10. VOLUNTARY PROGRAMS
10.1. GREEN LIGHTS AND ENERGY STAR
10.2. WASTEWI$E
10.3. 33/50 PROGRAM
10.4. PROJECT XL
10.5. ENVIRONMENTAL LEADERSHIP PROGRAM (ELP)
10.6. WAVE
10.7. CLIMATE WISE
10.8. METHANE RECOVERY PROGRAMS
Hide details for 10.9.  STATE PROGRAMS10.9. STATE PROGRAMS
10.9.1. Massachusetts Recycled Newsprint Program
10.9.2. Texas Clean Industries 2000
10.9.3. Adopt-a-Highway
Hide details for 11. FOREIGN EXPERIENCES WITH INCENTIVE SYSTEMS11. FOREIGN EXPERIENCES WITH INCENTIVE SYSTEMS
Hide details for 11.1.  FEES, CHARGES, AND TAXES11.1. FEES, CHARGES, AND TAXES
11.1.1. Waste
Hide details for 11.1.2.  Air11.1.2. Air
11.1.2.1. Sweden's Nitrogen Oxide Charge
11.1.2.2. Charges in Less Industrialized Countries
Hide details for 11.1.3.  Water11.1.3. Water
11.1.3.1. User fees
11.1.3.2. Effluent Charges
11.1.3.3. Effluent Charges in Germany
11.1.3.4. Effluent Charges in the Netherlands
11.1.3.5. Effluent Charges in France
11.1.3.6. Effluent Charges in Less Industrialized Countries
11.1.4. Noise
Hide details for 11.1.5.  Charges on Environmentally Damaging Products and Activities11.1.5. Charges on Environmentally Damaging Products and Activities
11.1.5.1. Charges on Agricultural Inputs
11.1.5.2. Energy/carbon Taxes
11.1.5.3. Preferential Taxation of Environmentally Friendly
Products
11.1.5.4. Road User Fees
11.1.5.5. Singapore Road and Vehicle Taxation
11.1.5.6. Other Measures to Curb Congestion
11.2. DEPOSIT-REFUND MECHANISMS
Hide details for 11.3.  MARKETABLE PERMIT SYSTEMS11.3. MARKETABLE PERMIT SYSTEMS
11.3.1. Air Pollution
11.3.2. Water Pollution
11.3.3. Water Use Rights
11.3.4. Water-energy Trading
Hide details for 11.4.  SUBSIDIES11.4. SUBSIDIES
11.4.1. Subsidies for Environmentally Friendly Agriculture and Land Management
11.4.2. Subsidies to Reduce Vehicle Emissions
11.4.3. Subsidies for Resource Conservation
11.4.4. Environmentally Harmful Subsidies
11.5. PRODUCT LABELING
11.6. INFORMATION DISCLOSURE REQUIREMENTS
11.7. VOLUNTARY PROGRAMS
11.8. DEBT-FOR-NATURE SWAPS AND JOINT IMPLEMENTATION
11.9. TREND OF INCREASING USE OF ECONOMIC INSTRUMENTS IN FOREIGN COUNTRIES
11.10. CONCLUSIONS
12. CONCLUSIONS
APPENDIX 1. BIBLIOGRAPHY
FIGURE 1. FIGURE 3-1: INCREMENTAL DAMAGES AND COSTS OF CONTROLLING POLLUTION
FIGURE 2. FIGURE 3-2: CONTROL OPTIONS FOR A SOURCE
FIGURE 3. FIGURE 3-3: MARGINAL DAMAGES AND COSTS FOR TAX PER UNIT OF EMISSIONS APPROACH TO POLLUTION CONTROL
FIGURE 4. FIGURE 3-4: COSTS FOR EMISSIONS CONTROL FOR FIRMS UNDER EMISSIONS TAX AND COMMAND AND CONTROL APPROACHES
FIGURE 5. FIGURE 4-1: 1994 WATER CHARGE STRUCTURES
FIGURE 6. FIGURE 4-2: MONTHLY WATER AND WASTEWATER CHARGES
FIGURE 7. FIGURE 4-3: HOUSEHOLD WASTE LANDFILLING AND RECYCLING IN SAN JOSE
FIGURE 8. FIGURE 4-4: GRAZING FEES UNDER THE PUBLIC RANGELANDS IMPROVEMENT ACT
FIGURE 9. FIGURE 5-1: U.S. MARKET SHARE OF REFILLABLE BOTTLES
FIGURE 10. FIGURE 5-2: ESTIMATED DISTRIBUTOR COSTS OF MAINE DEPOSIT SCHEMES
FIGURE 11. FIGURE 5-3: BATTERY LEAD RECYCLING AND LEAD SCRAP PRICES IN THE U.S.
FIGURE 12. FIGURE 6-1: PHASE I SO2 EMISSION
FIGURE 13. FIGURE 7-1: WISCONSIN NEWSPAPER RECYCLING AND RECYCLED CONTENT REQUIREMENTS
FIGURE 14. FIGURE 7-2: STATE REVOLVING FUND INVESTMENT FY 1988-95
FIGURE 15. FIGURE 7-3: U.S. POPULATION SERVED BY MODERN SEWAGE TREATMENT FACILITIES
FIGURE 16. FIGURE 9-1: MASSACHUSETTS TOXICS USE AND BYPRODUCTS
FIGURE 17. FIGURE 10-1: ENERGY SAVINGS IN SHOWCASE BUILDING
FIGURE 18. FIGURE 10-2: RELEASES AND TRANSFERS OF 33/50 PROGRAM CHEMICALS
FIGURE 19. FIGURE 11-1: ANNUAL CHARGE PAYMENTS FOR HYPOTHETICAL INDUSTRIAL DISCHARGE
FIGURE 20. FIGURE 11-2: POINT SOURCE EFFLUENT CHARGES IN GERMANY
FIGURE 21. FIGURE 11-3: EFFLUENT CHARGES IN THE NETHERLANDS
FIGURE 22. FIGURE 11-4: EFFLUENT CHARGE REVENUES IN THE NETHERLANDS
FIGURE 23. FIGURE 11-5: FERTILIZER CHARGES AND USE IN SWEDEN
FIGURE 24. FIGURE 11-6: SALES OF DIFFERENT CLASSES OF DIESEL FUEL IN SWEDEN
FIGURE 25. FIGURE 11-7: SINGAPORE ANNUAL ROAD TAX
FIGURE 26. FIGURE 11-8: PRIVATE CARS ENTERING SINGAPORE CENTRAL BUSINESS DISTRICT
FIGURE 27. FIGURE 11-9: MODES OF TRANSPORTATION IN SINGAPORE
FIGURE 28. FIGURE 11-10: ALUMINUM CAN RECYCLING RATES
FIGURE 29. FIGURE 11-11: CARS SOLD AND SCRAPPED IN SWEDEN
FIGURE 30. FIGURE 11-12: PET BOTTLE RECYCLING RATE IN TAIWAN
FIGURE 31. FIGURE 11-13: ELECTRIC POWER PRICES, 1988
TABLE 1. TABLE 3-1: QUANTITATIVE STUDIES OF POTENTIAL SAVINGS FROM USING ECONOMIC INCENTIVES TO CONTROL AIR POLLUTION
TABLE 2. TABLE 3-2: QUANTITATIVE STUDIES OF POTENTIAL SAVINGS FROM USING ECONOMIC INCENTIVES TO CONTROL WATER POLLUTION
TABLE 3. TABLE 3-3: QUANTITATIVE STUDIES OF POTENTIAL SAVINGS FROM USING ECONOMIC INCENTIVES TO REDUCE SOLID WASTE
TABLE 4. TABLE 3-4: QUANTITATIVE STUDIES OF POTENTIAL SAVINGS FROM USING ECONOMIC INCENTIVES FROM OTHER POLLUTION-RELATED ACTIONS
TABLE 5. TABLE 3-5: USES OF ECONOMIC INSTRUMENTS
TABLE 6. TABLE 4-1: OVERVIEW OF FEES, CHARGES, AND TAXES IN ENVIRONMENTAL POLICY
TABLE 7. TABLE 4-2: STATE EFFLUENT FEES AS OF DECEMBER 1993
TABLE 8. TABLE 4-3: AIR EMISSIONS PERMIT FEES IN MAINE
TABLE 9. TABLE 4-4: EMISSION FEES IN SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT
TABLE 10. TABLE 4-5: AIR TOXICS AND OZONE-DEPLETING CHEMICALS FEES IN SCAQMD
($ PER POUND)
TABLE 11. TABLE 4-6: VARIABLE RATE STRUCTURES IN SELECTED COMMUNITIES
TABLE 12. TABLE 4-7: CHANGES IN WASTE DISPOSAL IN RESPONSE TO VARIABLE RATE PRICING PROGRAMS
TABLE 13. TABLE 4-8: HAZARDOUS WASTE LAND DISPOSAL FEES IN CALIFORNIA, FY 1996
TABLE 14. TABLE 4-9: HAZARDOUS WASTE GENERATION FEES IN CALIFORNIA, CY 1996


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