21. How to Sell Pollution for Profit
Sources: Multinational Monitor, PO Box 19405 Washington, DC 20036,
Date: June 1992, Title: "Selling Pollution," Author: Holley
Knaus; Associated Press, 50 Rockefeller Plaza, New York, NY 10020, Date:
November 5, 1992, Title: "L.A. Incentives to Clean Air; Credits
Traded for Less Pollution"; Santa Rosa (CA) Press Democrat
SSU Censored Researcher: Kenneth Lang
SYNOPSIS: In early May 1992, the Wisconsin Power and Light company
sold "pollution credits" to the Tennessee Valley Authority
(TVA) for about $3 million. In effect, this deal gave TVA permission
to spew into the air an additional 10,000 tons of sulfur dioxide, the
primary source of acid rain.
The sale, the first to be implemented under the pollution credit trading
system, authorized by the misnamed 1990 "Clean Air Act," was
hyped by the media as an example of using market forces to control pollution.
Outside of environmental groups, few questioned the dangerous precedent
set by this deal.
The act sets ceilings on the amount of sulfur that polluters will be
allowed to emit after 1995; then, incredibly, if a plant reduces its
emissions more than required, it can sell its "extra" emissions
reductions to another plant that fails to reduce its emissions to the
Critics say the pollution credit program is based on the fundamentally
flawed premise that a certain level of pollution is acceptable. "Clean
air should be protected, not traded and sold like a used car,"
says Chris Blythe of Wisconsin's Citizens Utility Board.
Pollution credits serve the interest of polluters, at the expense of
consumers, the environment and public health, in several ways:
1. Pollution credits undermine positive effects of straight regulation;
under this system, instead of buying smoke scrubbers, companies buy
the right to pollute.
2. Since allowances are based on past fuel use and emission rates,
companies that polluted excessively received the biggest allowances.
It is thus possible for these companies to profit the most by selling
3. Since the right to emit pollution has been turned into a commodity,
the federal government, in effect, has handed over valuable assets
4. The system allows companies who are doing well financially to
buy the right to pollute indefinitely, forcing the public to keep
breathing the toxic fumes.
Unfortunately, the idea is spreading. Canada is considering pollution
trading for air and water emissions, and the United Nations has considered
a global market for greenhouse gas credits to be bought and sold. And
in November, Southern California officials announced. they were considering
the incentive program for the nation's smoggiest region-a four-county
area (Los Angeles, Orange, Riverside and parts of San Bernardino) involving
more than 2,000 pollution sources.
As the Multinational Monitor points out, "The value of human health
and the environment cannot be determined by market forces.... U.S. citizens
should demand strict limits on polluting sources, much stronger emphasis
on pollution prevention, moves toward a total elimination of emissions
and the abandonment of a system that turns harmful sulfur fumes into
However, the citizens will not know what to demand if the media don't
explain to them that creating a market in pollution, such as the "clean
air act" has done, will never clean the air.
COMMENTS: The concept of issuing pollution credits to promote
clean air -- allowing polluters to buy and sell pollution -- is one
you could expect only from an administration that believed a "trickle-down"
theory of economics would work. The only aspect less credible was the
media's failure to explain this environmental outrage to the public.
Investigative author Holley Knaus says, "While the subject was
covered in the mainstream press, most of the reporting was uncritical
of the concept of 'pollution credits' and failed to express the views
of those opposed to the idea. The implications behind the idea of pollution
markets went unexplored. I am also unaware of any editorial in the mass
media that argued against pollution credits.
"The public receives far too little information on benefits given
to corporations at the expense of the environment and human health.
"Pollution credits undermine the efforts of those environmentalists
working for pollution prevention and emission reductions -- critical
reporting on this issue should make clear the opposition of most of
the environmental community to this idea pushed by the Environmental
Defense Fund. Exposure to the arguments against pollution credits would
inform citizens' responses to the idea."
Knaus also points out that utilities particularly those that are buying
credits rather than cleaning up their pollution are the ones who benefit
from the flawed "pollution credits" concept and the limited
coverage given it by the press.