From the Web Page for Tradeable Personal Pollution
Allowances
http://pages.csam.montclair.edu/~barrettki/personal-pollution-allowances/
Personal
Pollution Allowance Proposal:
An
Open Letter to Massachusetts Gov. William Weld
by
Kirk R. Barrett, PhD, PE; email kirkrbarrett@yahoo.com
November,
l995
(Originally
published in the Fall 1995 Newsletter of Earthworks Projects, a nonprofit
organization based in Boston, MA)
Dear Governor Weld:
Two of your administration's proposed programs to address
air pollution in
First, let me point out the problems with these two
programs. The EV mandate looks like another top-down,
“command and control” "government knows best” program which are criticized
so harshly by conservatives and libertarians, including yourself.
Furthermore, the mandate places the responsibility on the automobile industry
rather than on the car drivers who actually do the polluting. The I/M program is burdened with these same problems. It is
intrusive government ordering car owners to pay for repairs, regardless of how
much they drive their car or how much it costs. Neither of these programs uses
the creativity of the market in determining the best way to reduce emissions. Let
me suggest a bold, innovative plan for a program that addresses these shortcomings.
The program is based on principles that conservatives, libertarians AND environmentalists
should endorse:
1. No one has an inalienable or
unlimited right to harm others through polluting the air.
2. Individuals who harm others through
excessively pollution should compensate (via an
pollution impact fee) for the harm they do.
3. Individuals should be allowed and
encouraged to figure out for themselves the best way to reduce the harm (i. e., pollution) they cause.
The program implements these principles through a personal
pollution allowance trading program for automobile pollution- You are probably already
familiar with the existing polluting allowance trading scheme for sulfur
dioxide emission by industries. This program would work much the same way, but
on an individual basis. Let me lay out the program for you, but first let me
emphasize there are many opportunities for modifying and fine tuning it. In
short,
In the most rigorous method, the Massachusetts Department of
Environmental Protection would determine the amount of various pollutants
presently emitted by automobiles in the Commonwealth. A single pollutant could
be focused on (for example, VOCs) or several pollutants
could be treated separately.
The DEP would then estimate the
cost of the damage caused by automobile pollution to health (both treatment
costs and lost productivity), crops, buildings and ecosystems. There is no way
to calculate an exact figure, but estimates are possible, and have been calculated.
Charles Komanoff, an energy consultant formerly with
Transportation Alternatives in
The damage cost per pound of pollution could then be
calculated. An individual would then be required to pay a pollution impact fee
equal to the damage they caused by the number of pounds of pollution they
emitted.
Alternatively, the Commonwealth could to establish a price per
pound based demand elasticity approach (that is, by trying to answer the
question "How much must it cost to pollute before individuals adjust their
behavior to reduce pollution by a desired amount?").
However, rather assessing the fee directly, a personal pollution
allowance would be granted to every adult resident of the Commonwealth. An
allowance of $250 per person per year (which would cover a corresponding amount
of pollutant emissions) could form the baseline for the allowance trading
program. That is, each resident would be granted a personal air pollution
allowance (a PAPA!), granting them the right to emit $250 worth of pollution
per year, issued, say, in 10 certificates worth $25 each.
(While this concept of the "right to pollute"
might be abhorrent to some, the counter argument is that, presently,
individuals have an unlimited "right" to pollute, and pay nothing for
the damage they cause!)
The Commonwealth would then require individuals pay their pollution
impact fee in cash or PAPA certificates. If a person emits less than $250 worth
of pollution during a year, he/she would be allowed to sell their remaining
certificates on the open market. Conversely, if a person emits more than $250
worth, he/she would be required to pay the extra amount in cash, or in pollution
allowances purchased. on the open market. Brokers to
buy and sell allowances would soon spring up. Few if any people would pay in
cash, since the certificates will certainly sell at a discount since they could
only be used to pay the pollution fee. However, the cash-payment option alleviative
the nightmare scenario in which there are no pollution allowances available for
folks who must buy them.
This makes the plan immune to criticism as a tax increase. Almost
no money would go to the state. Instead, money would transfer from people who
cause a lot of pollution damage to people who cause a little. Over time, the allowance
amount or the per-pound fee could be adjusted to encourage overall reductions
in emissions (which is mandated to
If the total amount
of allowances does not cover the total cost of pollution, the state will. collect
some money. Reasonably, that money should be used to mitigate air pollution
damage. It could be used for health research and treatment of air pollution
disease, to clean the air (e. g., by planting trees which remove Pollutants),
and/or to fund alternative transportation facilities (buses, trains, bicycles
and walking) to give polluters an alternative to driving. The state spends a lot
on such programs already. The new funds could increase funding in these areas,
or allow other funds to be diverted to other areas.
If a person feel’s their pollution fee is too high, they
shouldn't go whining to their legislator-- they have the freedom to decide what
to do about it. They could repair their car's pollution control equipment, get
a less polluting car, or drive less (my preferred solution).
Of course, the real trick to the successful implementation
of this plan is to calculate the amount of pollution a person emits. The
simplest way to do this is to correlate it with the amount of miles driven. The
US EPA already has tabulated data listing, by automobile year and model, gas
mileage and pollution emission per mile traveled. Every year, when a automobile
owner renews their automobile registration (or gets a safety inspection), they
would report the odometer reading, from which the number of miles driven in the
past year could be calculated. Using this value, and knowing the year and model
of car and the emission rate, the amount of pollution emitted by this car could
be calculated. Then, using the cost per pound of pollution, the pollution
damage fee could be calculated. This method is attractive because it is simple
and requires almost zero hassle for the public.
A more elaborate method could involve using the results from
an emission test for an automobile. Forwarding the emission per mile results
and the odometer reading to the Commonwealth, the pollution damage fee could be
calculated. If a car owner repairs their pollution-control. system, they could get
the car retested and their pollution-damage fee would be lowered.
A major effort would be needed to discourage and uncover
fraud in underreporting miles traveled. When a car is sold, traded or junk, the
new and old owners must report the odometer reading to the state. The reading
would be checked against previous reports, and a large fine would be issued to
liars. Laws should be strengthened which make it illegal to tamper with or
disconnect an odometer, or to drive with a non-functional odometer. A random
auditing system could check on people with suspicious reports (i . e., very low
mileage cars) .
This program would give the car owner to freedom to decide
how to deal with their pollution problem-- repair the car, drive less, or pay
the pollution fee. It also lessens the regressivity of the traditional emission
test and mandatory repair program. Poor people generally drive older, more
polluting cars, but also tend to drive them less, so their total emission
(which is what really matters) may be less than the pollution allowance.
Using gasoline expenditures as a surrogate for miles driven,
US Bureau of Labor statistics show that the top income households spend much
more on gasoline than lower income households. Furthermore, over 35% of
households in the lowest income decile had no spending on gasoline. Presumably,
many of these people are city-dwellers who can rely on public transportation.
In conclusion, I think this is a superior plan because of
its reliance on market forces and individual responsibility. People need to be
confronted with and pay for the damage they cause. I think this could cause an
entire change in mindset when an individual receives a report of the damage
his/her driving caused and a bill for the damage.
Thanks for your attention and please give serious
consideration to the plan, then let me know what you think. I stand ready to
serve in anyway possible to implement this plan.