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How Efficient Are EPA's Regulations?

October 1990

Citation: ELR 10419

Author: Lyman H. Clark and Ralph A. Luken

In the 1970s, the newly created U.S. Environmental Protection Agency (EPA) embarked on three different regulatory approaches for reducing pollution. First, the Clean Air Act1 mandated that EPA set ambient-based standards that protect human health and welfare. These standards require existing industrial sources of air pollution to install pollution control equipment only to the extent necessary to meet ambient standards. Second, the Clean Air Act mandated that EPA in some circumstances set benefits-based2 standards that trade off risks to society with the costs of risk reduction. These standards require existing industrial sources to install pollution control equipment only to the extent that there would be a reasonable balance between the benefits of pollution reduction and the costs of pollution control technology. Third, the Clean Water Act3 mandated that EPA set technology-based standards that reflect the availability and affordability of pollution control technology. These standards require existing industrial and municipal sources to meet uniform discharge limitations, even if the pollutants discharged did not result in violations of ambient standards.

In the debate over how best to regulate the environment, each of the three approaches is championed by its own school of thought. The utilitarian school, which reflects the concern of the public health profession, supports the use of ambient-based standards as a scientific and reasonable way to protect health and welfare.4 The absolutist school, which reflects the interests of the environmental rights-oriented movement, supports the use of technology-based standards as a necessary and practical approach.5 The rationalist school, which reflects the economist's view of environmental management, supports the use of benefits-based standards.6

Dr. Luken is Senior Environmental Advisor to the United Nations Industrial Development Organization (UNIDO) in Vienna, Austria. He is on leave from the U.S. EPA, where he was Chief of the Economic Analysis and Research Branch of the Office of Policy, Planning and Evaluation (OPPE). Mr. Clark is President of Environmental Economics Associates of Traverse City, Michigan. He was formerly chief of EPA's Cost and Economic Impact Analysis Branch in OPPE. The views expressed are those of the authors and do not represent the views of the U.S. Environmental Protection Agency.

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