21. How to Sell Pollution for Profit

by Project Censored
Published: Updated:

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 required level.

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 credits.

3. Since the right to emit pollution has been turned into a commodity, the federal government, in effect, has handed over valuable assets to polluters.

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 valuable assets.”

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.