Economic Incentives for Pollution Control: By Table of Contents

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	DISCLAIMER
	EXECUTIVE SUMMARY
	FOREWORD
	1. INTRODUCTION
	1.1. PURPOSE OF REPORT
	1.2. DEFINITIONS
	1.3. ORGANIZATION OF REPORT
	1.4. SCOPE OF REPORT
	2. GOVERNMENT POLICIES ON ECONOMIC INCENTIVES
	2.1. 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
	2.2. 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
	3. THE ECONOMIC EFFICIENCY AND ENVIRONMENTAL EFFECTS OF INCENTIVE SYSTEMS
	3.1. BACKGROUND
	3.2. COMMAND AND CONTROL
	3.3. 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
	4. FEES, CHARGES, AND TAXES
	4.1. INTRODUCTION
	4.2. 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
	4.3. AIR FEES
	4.3.1. 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
	4.4. WASTE FEES
	4.4.1. Variable Pricing Program
	4.4.2. Landfill Taxes
	4.4.3. Hazardous Waste Taxes
	4.5. PRODUCT CHARGES
	4.5.1. 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
	4.5.2. 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
	5. DEPOSIT-REFUND SYSTEMS
	5.1. INTRODUCTION
	5.2. 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
	6. TRADING SYSTEMS
	6.1. TRADING OF AIR EMISSIONS
	6.1.1. 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
	6.1.3. 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
	6.1.12. 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
	6.2. TRADING OF WATER EFFLUENTS
	6.2.1. Effluent Bubble
	6.2.2. Effluent Trading (point-point)
	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
	6.3. LAND PROTECTION TRADING
	6.3.1. Wetland Mitigation Banking
	6.3.2. 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
	6.4. INTERNATIONAL TRADING ACTIVITIES INVOLVING US GOVERNMENT
	6.4.1. Joint Implementation
	6.4.2. Proposed Cross-Border Trading Program: El Paso Region
	7. SUBSIDIES
	7.1. INTRODUCTION
	7.2. 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
	7.3. BROWNFIELDS PROGRAMS
	7.3.1. EPA Pilot Project Grants
	7.3.2. Tax Incentives and Loans
	7.4. 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
	7.4.8. 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
	7.5. 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
	7.7. 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
	7.10. ENVIRONMENTALLY HARMFUL SUBSIDIES
	7.10.1. Subsidies for Timber, Minerals, and Water Extraction
	7.10.2. Agriculture
	7.10.3. Mortgage Interest Tax Deduction
	8. LIABILITY APPROACHES
	8.1. LIABILITY FOR CLEANUP COSTS
	8.2. LIABILITY FOR DAMAGE TO NATURAL RESOURCES
	8.3. 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
	9. INFORMATION APPROACHES
	9.1. INTRODUCTION
	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)
	9.3. 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
	9.7. 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
	10. 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
	10.9. STATE PROGRAMS
	10.9.1. Massachusetts Recycled Newsprint Program
	10.9.2. Texas Clean Industries 2000
	10.9.3. Adopt-a-Highway
	11. FOREIGN EXPERIENCES WITH INCENTIVE SYSTEMS
	11.1. FEES, CHARGES, AND TAXES
	11.1.1. Waste
	11.1.2. Air
	11.1.2.1. Sweden's Nitrogen Oxide Charge
	11.1.2.2. Charges in Less Industrialized Countries
	11.1.3. 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
	11.1.5. 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
	11.3. 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
	11.4. 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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