Superfund Tax Needed For Polluter Pays -- But They Don't

Posted on June 28, 2010 by Chuck Becker

In a letter to Congress, EPA has requested the reinstatement of the Superfund “polluter pays” tax.  Superfund is the federal law that deals with the nation’s most polluted sites and, if reinstated, the tax would aid funding the investigation and remediation of orphan sites – contaminated sites where a responsible party cannot be found or the party is bankrupt.

The original Superfund tax expired on December 31, 1995, under a Republican-controlled Congress.  The fund peaked in 1996 at $3.8 billion and ran out of money in 2003.  Since then, clean up at orphan sites has been paid out of general funds – that is, tax revenues – to the tune of $1.2 billion per year for the past 4 years.

While the tax existed, the source of the funds was primarily a tax on the chemical industry.  Specifically, there was a tax on crude oil and imported petroleum products at the rate of $9.70 per barrel, hazardous chemicals at varying rates of $0.22 to $4.87 per ton and a charge for imported substances that use hazardous materials in their production.  When an orphan site was identified, the fund could be tapped for the costs.

The request to Congress would reinstate the tax for 10 years (2011 – 2021) and would cause manufacturers of hazardous chemicals to pay into the fund for use at the sites that find pollution that includes hazardous chemicals and for which no one else can be found to pay for the release.

In support of the legislation, Mathy Stanislaus, Assistant Administrator for EPA’s Office of Solid Waste and Energy Response, said:

Since the beginning of this administration we have made it clear that we support the reinstatement of the polluter pays system for the Superfund program.

If Mr. Stanislaus really means what he says, the administration should be adamantly opposed to the Superfund tax because this does nothing to "support the reinstatement of the polluter pays system."

That's not to say that the Superfund tax is necessarily a bad idea.  It adds a few cents to every gallon of (legal) hazardous substances sold so that there will be a pool of money readily available to clean up toluene, for example, identified at a site for which a responsible party cannot be found.  By doing so, it spreads the risk of contamination out over the universe of those who benefit from the sale of a hazardous substance.

But it is time to stop saying that this, in any way, supports the concept of “polluter pays.” It doesn’t. If the Recreational Toluene Company pays $50,000 into the fund in a given year and the fund pays out $50,000 to a contaminated site, it doesn’t mean that Recreational Toluene's toluene was identified at the site, so it was not the polluter. Even if it was somehow determined that Recreational’s toluene was actually at the site, it doesn’t mean that Recreational was the polluter. It means that someone who was sloppy used Recreational’s legal product in an illegal manner. Recreational was not the polluter, but it paid. Call it the “innocent manufacturer pays” tax, or the “someone-other-than-the-general-public-pays” tax, but not the “polluter pays” tax, because they don’t and it isn’t.  If that’s what our elected officials want to do in the case of the environment, that’s fine.  Just don’t pretend it's something that it's not.
 

RELATED POSTS:  Putting The Fund Back In Superfund

                                    City Superfund Liability Goes Down The Drain

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Environmental Innovation: Flower Power

Posted on June 8, 2010 by Chuck Becker

I recently saw a speech given by Richard Sears, a visiting scientist at MIT who was formerly a geophysicist and executive at Shell Oil Company. He said something that is important to understand regarding the environment, environmental laws and sustainability. To paraphrase Mr. Sears:

We didn’t come out of the Stone Age because we ran out of stones: we didn’t come out of the Iron Age because we ran out of iron; and we’re not going to come out of the Oil Age because we’ll run out of oil. Rather, we’ve come out of each of the Ages because of ideas, innovation and technology.

Mr. Sears pointed out that we have plenty of oil and we will have plenty of oil for a long time to come but, as has occurred in the past, we will find a new way to create energy because the history of mankind is to come up with new ideas and innovations and to create new technology to solve our problems. 

I think he’s right and I think it’s worth watching. The trick will be to support the innovators and we can't do that unless we know about them.  For that reason, I am going to periodically post about new ideas and new technologies that affect the environment.  Some of the ideas will be simple and others a bit far out, but hopefully they will make you think about where we might be going.

Let me start with one that plays off of one of the great methods of motivating behavorial change: competition.  More particularly, if you make a game out of anything, people tend to want to play.  That is a large part of the reason for the success of the Prius effect.  Along that same line, welcome the Flower Lamp.

Many people have heard of smart meters, which monitor how much electricity the appliances in your home are using.  For example, you can keep track of how much you’re using (and therefore paying) for air conditioning, the refrigerator and the real energy hog, the digital picture frame. 

The Flower Lamp takes the smart meter one step further.  It visually represents the use of electricity in your home.  When you are being very good, it unfolds and the bulb shines bright. When your children have left every light on in the house and the air condition is running with most of the windows open, the Flower Lamp shuts as tight as a clam.

We all know that we should be shutting off lights and appliances that we aren't using.  We know that, but does it change us?  It doesn't appear to.  But when you add a visual element -- something you can actually look at and alter based on your actions -- it changes everything.  People start wanting to beat the game.  It's almost incidental that it saves money and energy.  It is behavior modification at its finest.

Is this a big innovation?  I don't know, but I think it (and other similar devices) could be.  Like so many great inventions, it's the multiplier effect that makes it worthwhile.  One or two Flower Lamps won't save the world, but put one in even 10% of the 115,000,000 U.S. homes, and it will make a dent.  And that is innovation.

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