Environmental Issues of the 1980s

Early this year Allen V. Kneese and Robert Cameron Mitchell, senior fellows at RFF, appeared on one of the programs in the FOCUS radio series sponsored by RFF and six other nonprofit organizations. Joining them on the program was Paul R. Portney, former RFF staff member, who is now the senior staff economist of the White House Council on Environmental Quality. The following article is taken from the transcript. The moderator was Harry B. Ellis of the Christian Science Monitor Washington Bureau.

ELLIS: Gentlemen, ten years ago, Earth Day 1970 dramatized what was to become a mounting national concern—the damage that had been done and the potential damage that would be done to the American environment through unbridled economic growth. Earth Day, in a sense symbolizing this concern, gave way to a mounting legislative record as Congress passed laws to protect the air, the water, and the land. Now, ten years later, let's assess what has been accomplished in the last decade, what has not been, and what the environmental agenda will be for the decade of the eighties.

Mr. Portney, how would you summarize the record of the 1970s?

PORTNEY: Well, it's always easier to characterize what we've accomplished legislatively than it is to identify measurable improvements in environmental quality. But looking at the former for a moment, we have in the last decade enacted a very impressive corpus of legislation. This began in 1970 with the Clean Air Act and was followed by the amendments to the Federal Water Pollution Control Act in 1972. Both of these were amended in 1977. In 1974 Congress passed the Safe Drinking Water Act.

In 1976 the Toxic Substances Control Act was passed, as was the Resource Conservation and Recovery Act. The latter was a law to govern the disposal of hazardous wastes, which I think people now realize is an important piece of legislation given what we've seen in both Love Canal and in the Valley of the Drums in Kentucky, where hazardous wastes were improperly disposed of. Therefore, with respect to air, land, and water, there were passed very impressive pieces of legislation. During this same decade, we enacted laws governing exposure to hazardous substances in the workplace—the OSHA [Occupational Safety and Health Administration] law. We also saw the passage of laws to control possible carcinogenic substances in consumer products—the Consumer Products Safety Commission was created. So it's very easy to point to legislation that controls problems that we had no control over before.

That's the legislative side. It's always easier to pass laws than it is to solve the problems; the passage of a law is only the first step. In trying to determine what effect these laws have had, we have to expect that the record will be a little more mixed—it will indicate a slower record of progress than some would like. But in certain areas there are pleasant surprises.

For example, with respect to air quality, two of the so-called "criteria pollutants" about which there is much concern are sulfur dioxide and total suspended particulates. There are indications that concentrations of these two pollutants have been reduced by about 20 percent on a national level since 1970.

With respect to carbon monoxide, ozone, and nitrogen oxides—which, by the way are pollutants that are associated, at least in part, with automobile usage—our record of improvement has been less marked. Certain areas have improved dramatically; others remain problem areas. The Los Angeles Basin, of course, is the most obvious example of a place where problems remain, but there are problems with some of these pollutants in New York and in other major industrial areas.

In water pollution control we have a similarly mixed record. Everybody knows about rivers and lakes that have supposedly come back from the dead. The Cuyahoga River, which feeds into Lake Erie, at one point burst into flame because of the high levels of chemical contamination in it, and if I'm not mistaken, there's been a dramatic improvement not only there but in the condition of Lake Erie as well.

I'm originally from Detroit, so I know that the Detroit River is also one of those that is again able to support sport fishing. So, speaking overall, it's fair to say that the record is mixed, and it's everyone's hope that the legislation that was put into effect in this last decade will lead to even further improvements in environmental quality in the decades to come.

ELLIS: Mr. Mitchell, before we go on to the next decade, could one say on the basis of what Mr. Portney has been telling us that the laws are largely in place, that what we now have to focus on is implementation? The implementation process, I assume, has become more difficult because during the decade of the seventies we had the energy crunch, which spills over into the drive to create synthetic fuels and so on. We also saw inflation mounting rapidly, and protection of the environment is expensive.

MITCHELL: Well, my own research has, in part, involved a careful review of public opinion polls on environmental matters, and I've been particularly interested in this question of tradeoffs—of how the public has reacted to the energy crunch and to economic problems. Has their concern about these problems, including the cost of controlling pollution, led them to withdraw their support for environmental protection? Everything that I've seen so far indicates in a very strong way that in fact the public has not withdrawn its support for environmental protection.

In 1978 I conducted a national poll that repeated a number of tradeoff questions which have been asked in other national surveys. Later, when I briefed various groups in Washington, including environmentalists and policymakers, I found that my results were uniformly surprising to all these people. They had assumed—because of Proposition 13 and the rising concern with inflation—that, if given a choice between paying higher prices to protect the environment or paying lower prices and having somewhat more pollution, the public's preference would probably shift to wanting to pay lower prices and having more pollution.

But, in fact, in that particular question 62 percent of those polled chose the option of paying higher prices to protect the environment.

Now, this kind of question is a sort of Rorschach test. It gives people a chance to respond to choices—such as prices versus the environment—and so far, as best as we can measure it, the public support for environmental protection has held up remarkably well over the course of a decade.

ELLIS: All right, Mr. Kneese, let's look a little farther ahead. President Carter, in his recent energy message to the nation, stressed the creation of a vast synthetic fuels industry, and, if I understand correctly, the technologies for extracting oil from shale, for extracting oil and gas from coal, and the like could cause a great deal of damage to the environment. Congress has greatly scaled back the president's original proposals, but some kind of synthetic fuels industry obviously is going to emerge in time. Faced with the need to reduce U.S. reliance on imported oil, on the one hand, and to produce more energy domestically despite some damage to the environment—will the public then weaken the support of which Mr. Mitchell has spoken?

KNEESE: Mr. Mitchell is the expert on public opinion, but with respect to the potential for environmental damage, it is perfectly enormous. The impact would be regional, primarily in the Appalachian region—already substantially damaged—in the mountain West, and in the high plains of the United States. These synthetic fuel processes emit most of the same pollutants, for example, that a large power plant would.

In addition, there are possibly more toxic materials which come from coal-gasification processes.

Perhaps the most promising technology for using the shale oil reserves, which are vast but also very difficult to exploit, is what the experts refer to as in situ technology. That simply means that instead of mining all the shale and processing it above ground, you start a fire underground and draw off some of the gases and liquids that are formed.

This process ought to be less damaging to the environment, but we know very little about its long-term effects, particularly on water. Most of the formations that contain shale are also aquifers, that is, water-bearing structures. Once the pumping stops that has driven the water out so that fuels can be exploited, the aquifers will refill again, and will probably be contaminated by ash, heavy metals, and hydrocarbons of a carcinogenic character. This contamination could cause serious problems in the long-run.

I feel that we are not yet in the position to launch an enormous synfuels campaign from the point of view of environmental protection, and I am very dubious of it from the point of view of economics.

ELLIS: Then let's go back for a moment to the tradeoff between environmental protection and cost. Is there any way of measuring how much the Protection of the environment required by law has added to industrial costs that then have been passed on to consumers?

PORTNEY: The Council on Environmental Quality [CEQ] prepares annual estimates of the cost of complying with most federal environmental regulations. While the estimates for this next year are not out yet, I can think back to last year's estimates in which CEQ, I believe, estimated that the total cost of complying with federal regulations in 1977 was about $19 billion. That $19 billion works out to about 1 percent of the GNP in 1977. We should keep in mind that there are also certain state and local regulations and that private industry—even prior to the federal air, water, and other pollution legislation in the seventies—was doing some spending on pollution control on its own. So the figure I cite to you is that necessitated only by the federal legislation.

ELLIS: To follow that up, not too long ago I was in Europe making a comparative study of productivity in several European countries and in the United States. A number of the European experts themselves pointed out to me that the United States has plowed a good deal more money into environmental protection in the industrial process which does not show up as a gain in productivity, and that is one reason why our productivity figures were lower than those in Europe. Does that seem a valid point?

PORTNEY: The point that environmental improvement does not show up on the GNP figures, and hence is not included in measures of productivity, is indeed a valid one, and it's an extremely important one for listeners to understand.

When, for example, we ask electric utilities to install scrubbers to control particulate and sulfur dioxide emissions, this may mean that they're able to generate less electricity with a given amount of money than they would have been able to had they poured all of that money into new generating capacity.

At the same time, however, it does mean that people living in the vicinity of the power plants will be healthier, if not immediately, then over the course of their lifetimes. There will also be less materials damage, less loss to agricultural products that may have been affected by the pollution from smokestacks, and less acid rain both in the United States and in other countries. Yet these benefits of regulation, the positive effects of cleaning up sulfur emissions, for example, don't show up in the national income accounts. Hence, when you look at how much was produced by each laborer, according to the GNP accounts, it looks as though we're producing less. But that's only because those same accounts are ignoring improvements in environmental quality that, as Mr. Mitchell's statistics indicate, most Americans feel are very, very important.

So regulation may be one reason for the downtrend in measured productivity, although as Allen Kneese would indicate, there are a number of other reasons that economists have identified for the apparent slowdown in the rate of productivity growth.

ELLIS: Well, Mr. Kneese, to seize on one point raised by Mr. Portney—acid rain is a new term to most Americans, but we are hearing more about the threat to our waterways and to the fish life and plant life within those waterways through acid rain. First, what is it? And, second, is it an ominous new threat?

KNEESE: The answer to the second question is an emphatic yes; it is an ominous new threat. As for the meaning of the term, acid rain really covers a variety of phenomena. It includes actual rain out from the atmosphere, as well as other processes of deposition of materials, often over long distances.

Our traditional approach has been to try to keep ground level concentrations low by putting extremely high stacks on the power plants. Of course, it's hard to imagine a better device for propelling materials into the atmosphere than a hot furnace that drives gases out of a tall stack.

So, some of this material, particularly the sulfur and the nitrogen materials, wind up high in the atmosphere and are carried great distances—for example, from Amsterdam to Sweden, or from the southwestern United States to the Middle West.

This is an important and difficult problem because many of the creatures that support life in streams and lakes cannot live in a highly acid environment. In some places, rain has been measured with an acidity approximating that of vinegar, and when this happens the various life forms gradually die out, and the lake becomes a dead body of water. This has happened already to a considerable extent in several countries, including our own and Canada.

The process is hard to reverse because it will be difficult to cut down on the discharge of sulfur and nitrogen materials while at the same time converting to coal. Here's where it is really necessary to be imaginative about new technologies. For example, some have suggested that coal be turned into a low-quality gas before it's burned in the power plants. This would help. There's a relatively new process for burning called fluidized-bed combustion—that would help a great deal.

We cannot really come to grips with the acid rain problem effectively with our current technologies. Different approaches in the use of our massive coal resources will be required.

ELLIS: Is it fair to say that an industrial community might be in compliance with the Clean Air Act partly because it builds very high smokestacks which carry the effluvia away to other communities?

KNEESE: Absolutely. Absolutely. Yes, all the measurements and standards now pertain to ground level and one way to reduce that measurement is to have a higher stack.

ELLIS: Mr. Mitchell?

MITCHELL: This raises, I think, an important issue facing the public, namely, the kinds of choices that we make in the eighties to deal with problems like this. As Allen has pointed out, one of our routes might be to devise better technologies that would use coal more efficiently and produce less of these side effects that are so deleterious.

Another approach might be to use less coal—to cut down our consumption in some way—to go the route that some have called the "soft energy" path. And this would be a much more drastic route for the United States in the sense that it's not the way of doing things that we're accustomed to. Yet it's a route, at least as I read public opinion, for which there is potential public support.

This is not to say that the public is willing to cut down on its use of energy easily and automatically; it is to say that many people are attracted to an approach that emphasizes conservation—especially if it is seen as a viable alternative to nuclear power, which makes many people uneasy. If our political leaders were to develop new ways of doing things that would reduce our consumption of coal and other resources and would therefore produce less pollution, these new ways would have a potentially large constituency.

ELLIS: And yet, Mr. Portney, right now the Department of Energy is in the process of ordering and otherwise persuading public utilities and, where possible, industrial plants to switch from oil to coal. Aren't we finding that two critical national interests are clashing here?

PORTNEY: Well, unfortunately that's the case. First, let me amend your statement by saying that while the Energy Department is trying over the long haul to get utilities to switch from oil to coal, there is a brief period during which they are encouraging the use of natural gas. After that they then want utilities to switch from oil and natural gas back to coal. Yes, as a matter of fact, there are very difficult choices ahead of us.

Second, I would like to pick up on something that Robert Mitchell said. This conflict between energy and the environment is one of the things that makes conservation such an attractive alternative. We reduce the need for new energy sources to the extent that we can insulate our houses, make our buildings more energy efficient, and capture the advantages of passive solar heat by facing buildings to the south. I think that conservation is certainly the most environmentally benign new energy source, if we can think of it that way. Robert is right in saying that Americans tend to think of the classy, spectacular technological fix as a way out of difficult dilemmas like the energy crisis—and we can think of synthetic fuels as an example of such a technological fix. But the sooner Americans realize that conservation is nothing more than good economic sense, the better off all of us will be. It makes sense to spend ten or fifteen dollars per week in insulating your home if that saves you twenty or twenty-five dollars a week in heating costs. As soon as we realize that conservation is not a perverse form of self-denial, we'll begin to see much more of it, and it will alleviate the pressure to come up with new energy sources as quickly as we would have to in the absence of conservation maneuvers.

ELLIS: Mr. Mitchell?

MITCHELL: The American's love affair with technology may be undergoing a shift. Recently a survey by Yankelovich, Skelly, and White showed that only 52 percent of those surveyed believed "that technology will find a way of solving the problems of shortages and natural resources."

But more important, the survey found that age is an important factor: the younger people are, the weaker their belief that technology can find solutions to our problems. There was an enormous gap between the very youngest people in the survey, people in their twenties, and people in their fifties and sixties.

If our reliance on technology is shifting, we are more likely to consider other alternatives.

ELLIS: Again, Mr. Kneese, one word stands out in what has just been said, and that is conservation. We know that public attitudes, as Mr. Mitchell says, are changing. Also, I believe that in the opinion of the experts an increase in the price of gasoline in the United States would in itself not reduce demand by very much. But we are finding that with a relatively modest increase in the price of gasoline—at least modest compared with what Europeans pay for gasoline—that demand for gasoline or consumption of it has been reduced nearly 10 percent against a year ago.

So I would like to ask you whether, as the environmental problems of the eighties come more into focus at the same time that the energy crunch is upon us, do you sense either in public attitudes or in the government any effort to upgrade spending and attention to conservation, solar research applications, and so on.

KNEESE: Well, certainly there is quite a bit of spending on alternative technologies and conservation measures, and it's quite a recent development. We are still living with the legacy of our earlier commitments to various technologies. For a long time, for example, spending on the liquid metal fast breeder reactor used up nearly the entire energy research budget. We are now looking at more diverse possibilities, and that is hopeful. I believe that the only thing that will get us through the eighties in reasonably good condition, both environmentally and economically, is a great diversity of approaches, a willingness to look at new technologies, and a willingness to attack the situation broadly.

Certainly we need to make sure that the real costs of different ways of doing things are reflected in market prices so that people pay for them. For a long time we have not done that. Thus, to some extent, the measured economic growth that we have talked about was kind of a fake because it did not take account of social costs. Actually, without realizing it, people were paying taxes in the form of a degraded environment.

So I believe that the eighties will see some genuine trials with the use of economic incentive mechanisms. By that, I don't mean subsidies, I mean ways of reflecting total social costs in the prices of products. Making progress will be hard. I hope, with Paul Portney, that the legislation we have on the books will help in the eighties, and to some extent it will. On the other hand, we've been speaking mostly about air quality problems. We might look at the water quality problems for just a minute. Virtually our entire effort in the seventies was centered on so-called point sources of pollution—that is, well-defined sources, such as a pipe out of which the sewage or the industrial waste falls.

We have built a lot of sewage treatment plants, and industry has put in a lot of facilities, but the main problem in the eighties is not likely to be the point outfalls but rather the non point sources of pollution—runoff from the general countryside and from the cities, containing sediments, pesticides, organic materials, and various kinds of toxic substances. If that is in fact the case, then we'll have to rethink our approach to the problem. Building additional capital facilities of a conventional kind won't help. We will have to consider issues in land use and land use planning and things we're far from being able to do now. \

ELLIS: On the question of economic cost and social costs, Mr. Portney, we long have heard that the Europeans and the Japanese have passed the economic cost of energy on to their people through high gasoline taxes. Is it fair to say, though, that perhaps the United States is ahead of other industrial powers in passing along the social costs of controlling pollution?

PORTNEY: Well, it's true that the legislation which we have been discussing does in fact mean that costs which industries and municipalities had been able to push off on somebody else through careless discharge of air or water effluents will now be passed on to consumers in the form of higher product prices and higher taxes. While this is unpleasant for consumers, they should recognize that we are not fiddling with a market that was working perfectly in the past. Rather we are attempting to correct a market that was giving the wrong signals in the past. We are, I hope, moving to a period where people are beginning to pay the full social costs of the products they buy and use, and this will act as an incentive to search for less polluting means of production.

ELLIS: Less polluting means of production. All right, Mr. Mitchell, is the American public perhaps ahead of the government? You have spoken about public support for protection of the environment to a surprising degree, and you have said that despite the changes in inflation, the energy problem, and so on, that support still stands up. Now, would the public be out in front enough to support the president if he and the Congress were so to propose and legislate a major new direction in the United States toward less polluting forms of energy, even though some of these technologies now may seem on the fringe?

MITCHELL: I think definitely the public probably is in advance of the president and Congress in wanting a greater effort to find less polluting forms of energy. Naturally, it's very difficult for the public to understand the consequences of the synfuels programs, as Allen has described them. But, if such a program were developed, and those consequences became apparent, everything that I have seen in public opinion surveys would suggest that there will be great resistance.

As for going in another direction—striking out in a way that would ask people to make adjustments in their life-styles, to participate fully in a program of conservation, of efficiency—if people thought that it would be an equitable program and if they were convinced it was needed, then leadership could definitely bring us in that direction. The public would be quite willing to follow that kind of leadership.

ELLIS: Mr. Kneese, you already have spoken to some extent about changing types of problems. Now, because our time is almost up, I'd like to have you look down the road as far as you can and to summarize for us what are the changes in the environmental demands upon us.

Is it primarily shoring up what has been achieved legislatively and implemented, or is fresh research required into problems that are now only emerging?

KNEESE: I think it's more the latter than the former. If I were to draw a distinction between the sets of problems of the seventies and of the eighties, I would say that the problems of the eighties are much more subtle. We started the seventies concerned because a lot of material was being discharged to our water courses and because there were virtually no controls on the discharges from automobiles. These were clear-cut problems that one could attack with the hope of bringing about some environmental improvement. Sometimes it has occurred and sometimes it has not.

We are not by any means out of the smog. Even though it is getting better in some places, it is getting worse in others—especially in places where there are large increases in population, which overwhelm the emissions controls that have been put in place.

An interesting new phenomenon took place this winter in two or three cities I'm familiar with. Woodburning stoves and fireplaces contributed massively to the smog. That, I wouldn't say, is such a subtle problem, but it may be a side effect that a lot of people didn't have in mind when they switched.

But I think we have to get to the point where we understand much better the large natural systems that we are working with. This includes the processes whereby the materials that come from coal conversion are transported to other areas and the kinds of interventions in the process that would be most successful in avoiding pollution.

It means understanding that even with high levels of control of the point sources, waterways probably won't get much better, simply because there are so many other nonpoint sources. We're going to have to consider how to get further improvements if, indeed, they turn out to be worth it. Maybe they're not.

We have to look at natural systems in a much more meaningful way so that we come to understand the ecology, to understand the meteorology, and to understand the chemistry of the rivers.

The seventies was an age of know-nothingism in this regard. The idea was to develop technology, to apply it, and to ignore what it does to the environmental systems. I don't think that approach will work anymore.