Environmental Economics and Management: Theory, Policy, and Applications, 6th Edition
by Janet M. Thomas and Scott J. Callan
by Janet M. Thomas and Scott J. Callan
Contents
MODULE 1 MODELING ENVIRONMENTAL PROBLEMS 1
CHAPTER 1 THE ROLE OF ECONOMICS IN ENVIRONMENTAL MANAGEMENT 2
Economics and the Environment 3
Circular Flow Model 3 • Materials Balance Model 4
Application 1.1: BMW Group’s Sustainable Decisions and Design for Recycling 6
Understanding Environmental Damage 7
Causes of Environmental Damage 7 • Sources of Environmental Damage 8 •
Scope of Environmental Damage 8
Application 1.2: The Gulf Oil Spill of 2010 11
Identifying Environmental Objectives 12
Environmental Quality 12 • Sustainable Development 13 • Biodiversity 13
Application 1.3: The High Price of China’s Economic Advance 14
Application 1.4: Environmental-Economic Accounting and GDP: A Worldwide
Initiative 15
Environmental Policy Planning: An Overview 17
Policy Planning in the United States 17 • Risk Assessment 18 • Risk Management 18
Conclusions 21 • Summary 23 • Review Questions 23 • Additional Readings 24
CHAPTER 2 MODELING THE MARKET PROCESS: A REVIEW OF THE BASICS 26
Market Models: The Fundamentals 26
Defining the Relevant Market 26 • Specifying the Market Model 27
Modeling Supply and Demand: An Overview 27
Purpose of the Model 27 • Building a Basic Model: Competitive
Markets for Private Goods 28
Market Demand 28
Application 2.1: Environmentally Driven Demand: A 20-Year Look Back 29
Law of Demand 30 • Modeling Individual Demand 30 • Deriving
Market Demand From Individual Demand Data 31
Market Supply 33
Law of Supply 34
Application 2.2: International and Domestic Firms Discover Profit in
Environmentalism 34
Modeling Individual Supply 35 • Deriving Market Supply From Individual
Supply Data 35
Market Equilibrium 38
Equilibrium Price and Quantity 38 • Market Adjustment to Disequilibrium 39
Efficiency Criteria 40
Allocative Efficiency 40 • Technical Efficiency 44
Welfare Measures 44
Consumer Surplus 44 • Producer Surplus 46 • Society’s Welfare: Sum of
Consumer and Producer Surplus 47 • Measuring Welfare Changes 47
Conclusions 49 • Summary 50 • Review Questions 50 • Additional Readings 51
CHAPTER 3 MODELING MARKET FAILURE 52
Environmental Problems: A Market Failure 53
Environmental Quality: A Public Good 53
Characteristics of Public Goods 53
Modeling a Public Goods Market for Environmental Quality 54
Allocative Efficiency in a Public Goods Market 55 • What Are the
Implications? 59 • Understanding the Market Failure of Public Goods Markets 59
Application 3.1: An Update on Boston Harbor: Restoring an
Environmental Public Good 60
The Solution: Government Intervention 61
Environmental Problems: Externalities 61
Basics of Externality Theory 61 • Environmental Externalities 62
Application 3.2: Responding to a Negative Externality: From the CD Long Box
to the Carbon-Neutral Digipak™ 63
Relationship Between Public Goods and Externalities 63
Modeling Environmental Damage as a Negative Externality 64
Defining the Relevant Market 64 • Modeling the Private Market for Refined
Petroleum 64 • Inefficiency of the Competitive Equilibrium 65 • Modeling the
External Costs 66 • Modeling the Marginal Social Costs and Marginal Social
Benefits 66 • Efficient Equilibrium 66 • Measuring the Welfare Gain to Society 67 •
Market Failure Analysis 68
The Absence of Property Rights 69
Application 3.3: Undefined Property Rights to China’s Pearl River Delta (PRD) Region
Leads to Environmental Damage 70
The Coase Theorem 71 • Bargaining When Property Rights Belong to the
Refineries 71 • Bargaining When Property Rights Belong to the Recreational
Users 73 • Limitations of the Coase Theorem 74 • Common Property Resources 74 •
The Solution: Government Intervention 75
Conclusions 75 • Summary 76 • Review Questions 76 • Additional Readings 77
CHAPTER 1 THE ROLE OF ECONOMICS IN ENVIRONMENTAL MANAGEMENT 2
Economics and the Environment 3
Circular Flow Model 3 • Materials Balance Model 4
Application 1.1: BMW Group’s Sustainable Decisions and Design for Recycling 6
Understanding Environmental Damage 7
Causes of Environmental Damage 7 • Sources of Environmental Damage 8 •
Scope of Environmental Damage 8
Application 1.2: The Gulf Oil Spill of 2010 11
Identifying Environmental Objectives 12
Environmental Quality 12 • Sustainable Development 13 • Biodiversity 13
Application 1.3: The High Price of China’s Economic Advance 14
Application 1.4: Environmental-Economic Accounting and GDP: A Worldwide
Initiative 15
Environmental Policy Planning: An Overview 17
Policy Planning in the United States 17 • Risk Assessment 18 • Risk Management 18
Conclusions 21 • Summary 23 • Review Questions 23 • Additional Readings 24
CHAPTER 2 MODELING THE MARKET PROCESS: A REVIEW OF THE BASICS 26
Market Models: The Fundamentals 26
Defining the Relevant Market 26 • Specifying the Market Model 27
Modeling Supply and Demand: An Overview 27
Purpose of the Model 27 • Building a Basic Model: Competitive
Markets for Private Goods 28
Market Demand 28
Application 2.1: Environmentally Driven Demand: A 20-Year Look Back 29
Law of Demand 30 • Modeling Individual Demand 30 • Deriving
Market Demand From Individual Demand Data 31
Market Supply 33
Law of Supply 34
Application 2.2: International and Domestic Firms Discover Profit in
Environmentalism 34
Modeling Individual Supply 35 • Deriving Market Supply From Individual
Supply Data 35
Market Equilibrium 38
Equilibrium Price and Quantity 38 • Market Adjustment to Disequilibrium 39
Efficiency Criteria 40
Allocative Efficiency 40 • Technical Efficiency 44
Welfare Measures 44
Consumer Surplus 44 • Producer Surplus 46 • Society’s Welfare: Sum of
Consumer and Producer Surplus 47 • Measuring Welfare Changes 47
Conclusions 49 • Summary 50 • Review Questions 50 • Additional Readings 51
CHAPTER 3 MODELING MARKET FAILURE 52
Environmental Problems: A Market Failure 53
Environmental Quality: A Public Good 53
Characteristics of Public Goods 53
Modeling a Public Goods Market for Environmental Quality 54
Allocative Efficiency in a Public Goods Market 55 • What Are the
Implications? 59 • Understanding the Market Failure of Public Goods Markets 59
Application 3.1: An Update on Boston Harbor: Restoring an
Environmental Public Good 60
The Solution: Government Intervention 61
Environmental Problems: Externalities 61
Basics of Externality Theory 61 • Environmental Externalities 62
Application 3.2: Responding to a Negative Externality: From the CD Long Box
to the Carbon-Neutral Digipak™ 63
Relationship Between Public Goods and Externalities 63
Modeling Environmental Damage as a Negative Externality 64
Defining the Relevant Market 64 • Modeling the Private Market for Refined
Petroleum 64 • Inefficiency of the Competitive Equilibrium 65 • Modeling the
External Costs 66 • Modeling the Marginal Social Costs and Marginal Social
Benefits 66 • Efficient Equilibrium 66 • Measuring the Welfare Gain to Society 67 •
Market Failure Analysis 68
The Absence of Property Rights 69
Application 3.3: Undefined Property Rights to China’s Pearl River Delta (PRD) Region
Leads to Environmental Damage 70
The Coase Theorem 71 • Bargaining When Property Rights Belong to the
Refineries 71 • Bargaining When Property Rights Belong to the Recreational
Users 73 • Limitations of the Coase Theorem 74 • Common Property Resources 74 •
The Solution: Government Intervention 75
Conclusions 75 • Summary 76 • Review Questions 76 • Additional Readings 77
MODULE 2 MODELING SOLUTIONS TO ENVIRONMENTAL PROBLEMS 79
CHAPTER 4 CONVENTIONAL SOLUTIONS TO ENVIRONMENTAL PROBLEMS:
THE COMMAND-AND-CONTROL APPROACH 80
Using Standards in Environmental Policy 81
Types of Environmental Standards 81 • Economic Implications of Using
Standards 82
Are Environmental Standards Allocatively Efficient? 82
Marginal Social Benefit of Abatement 82
Application 4.1: Catano, Puerto Rico: Reducing the Damages of Industrial Pollution 83
Marginal Social Cost of Abatement 83
Application 4.2: Costs of Remediating Hazardous Waste and Oil Spills 85
Are Abatement Standards Set Efficiently? 87
General Approaches to Implementing Environmental Policy 90
Application 4.3: Command-and-Control Under Fire: Will New Environmental
Regulations Hurt the Economic Recovery? 91
Is the Command-and-Control Approach Cost-Effective? 92
Cost-Ineffectiveness of Technology-Based Standards 92 • Cost-Ineffectiveness of
Uniform Standards 92
Conclusions 95 • Summary 96 • Review Questions 96 • Additional Readings 97
CHAPTER 5 ECONOMIC SOLUTIONS TO ENVIRONMENTAL PROBLEMS:
THE MARKET APPROACH 98
Descriptive Overview 99
Types of Market Instruments 99
Pollution Charges 100
Modeling a Product Charge as a Per-Unit Tax 100 • Modeling an Emission
Charge: Single-Polluter Case 101 • Modeling an Emission Charge: Multiple-Polluters
Case 103 • Pollution Charges in Practice 105
Application 5.1: Taxing Gasoline Consumption: An International Comparison 106
Environmental Subsidies 107
Modeling an Abatement Equipment Subsidy 107 • Modeling a Per-Unit Subsidy
on Pollution Reduction 108 • Environmental Subsidies in Practice 109
Deposit/Refund Systems 109
Economics of Deposit/Refund Systems 110 • Modeling a Deposit/Refund
System 111 • Deposit/Refund Systems in Practice 112
Pollution Permit Trading Systems 114
Structure of a Pollution Permit Trading System 115 • Modeling a Pollution Permit System
for Multiple Polluters 116 • Pollution Permit Trading Systems in Practice 119
Application 5.2: Fighting Acid Rain With Pollution Rights: The First Annual Auction 120
Conclusions 120 • Summary 122 • Review Questions 122 • Additional Readings 123
MODULE 3 ANALYTICAL TOOLS FOR ENVIRONMENTAL PLANNING 125
CHAPTER 6 ENVIRONMENTAL RISK ANALYSIS 126
Concept of Risk 127
Classifying Risk: Voluntary and Involuntary Risk 127 • Defining Environmental Risk 128
Application 6.1: EPA Declares Secondhand Smoke a Carcinogen 129
Risk Assessment 129
Human Health Risk Assessment 130 • Ecological Risk Assessment 134
Application 6.2: Climate Change: Assessing Ecological Risk by International Region 135
Risk Management 136
Tasks of Risk Management 137 • Risk Management Strategies 137
Application 6.3: Using Comparative Risks to Communicate the Dangers of Radon 138
Conclusions 142 • Summary 143 • Review Questions 144 • Additional Readings 144
CHAPTER 7 ASSESSING BENEFITS FOR ENVIRONMENTAL DECISION MAKING 146
Environmental Benefits: Conceptual Issues 147
Identifying Incremental Benefits 147 • Conceptually Valuing Environmental Benefits 147
Application 7.1: Incremental Benefits of the European Union’s Climate Change
Initiatives 148
User Versus Existence Value 151
Application 7.2: The Endangered Species Act 153
Approaches to Measuring Environmental Benefits: An Overview 153
Physical Linkage Approach 154 • Behavioral Linkage Approach 155
Estimation Under the Physical Linkage Approach 155
Damage Function Method 155
Application 7.3: Valuing Agricultural Benefits: The Case of Tropospheric Ozone
Reductions 158
Direct Estimation Methods Under the Behavioral Linkage Approach 158
Contingent Valuation Method (CVM) 158
Indirect Estimation Methods Under the Behavioral Linkage Approach 160
Averting Expenditure Method (AEM): An Approach Using Substitutes 160 •
Travel Cost Method (TCM): An Approach Using Complements 163 •
Hedonic Price Method (HPM): An Approach Using Product Attributes 165
Conclusions 166 • Summary 167 • Review Questions 167 • Additional Readings 168
CHAPTER 8 ASSESSING COSTS FOR ENVIRONMENTAL DECISION MAKING 170
Environmental Costs: Conceptual Issues 171
Identifying Incremental Costs 171 • Explicit Environmental Costs 171
Application 8.1: Incremental Environmental Costs of the September 11, 2001,
Terrorist Attacks 172
Implicit Environmental Costs 173 • Conceptually Valuing Environmental Costs 173
Estimation Methods for Measuring Explicit Costs 177
Engineering Approach 177 • Survey Approach 177
Cost Classifications in Practice 178
Cost Classifications by Economic Sector 178 • Cost Classifications by Environmental
Media 180
Application 8.2: Abatement Costs for the Global Auto Industry: Reducing Carbon
Emissions 182
Conclusions 183 • Summary 184 • Review Questions 184 • Additional Readings 185
CHAPTER 9 BENEFIT-COST ANALYSIS IN ENVIRONMENTAL DECISION MAKING 186
Time Adjustments to Environmental Benefits and Costs 187
Present Value Determination 187 • Inflation Correction 188 • Summary of Deriving
Time-Adjusted Benefits and Costs 189 • Example: Time-Adjusted Incremental Benefits 189
The Final Analysis: Comparing Environmental Benefits and Costs 191
Step One: Determining Feasibility 191
Application 9.1: A Benefit-Cost Analysis of the UK’s Climate Change Act 2008 192
Step Two: Selecting Among Feasible Options 194
Reservations About Benefit-Cost Analysis 195
Measurement Problems 195 • Equity Issues 195
U.S. Government Support of Benefit-Cost Analysis 196
Executive Order 12291: Regulatory Impact Analysis (RIA) 197 • Executive Order 12866:
Economic Analysis (EA) 197 • Executive Order 13422: Economic Analysis (EA) 198 •
Executive Order 13563: Economic Analysis (EA) 198
Reducing Lead in Gasoline: A Real-World Example 198
Application 9.2: Benefit-Cost Analysis in Practice: The RIA for Reducing
Lead in Gasoline 199
Conclusions 200 • Summary 201 • Review Questions 201 • Additional Readings 203
MODULE 4 THE CASE OF AIR 205
CHAPTER 10 DEFINING AIR QUALITY: THE STANDARD-SETTING PROCESS 206
An Overview of U.S. Air Quality Legislation 207
In the Beginning 207 • Current U.S. Policy 207
Application 10.1: A Look Back at California Smog and the Automobile Industry 208
Defining the Objectives of Air Quality Control 210
Identifying Major Air Pollutants 210
Setting Standards to Define Air Quality 212
Standards for Criteria Air Pollutants 212
Application 10.2: Defining Air Quality Standards in the United Kingdom 213
Standards for Hazardous Air Pollutants 214 • Standards for Greenhouse
Gas (GHG) Pollutants 216
Implementing the Standards 216
State Implementation Plans (SIPs) 216 • Air Quality Control Regions (AQCRs) 216 •
Monitoring Air Quality Across Regions 218
Analysis of U.S. Air Quality Policy 219
Environmental Justice: An Equity Criterion 219
Application 10.3: Clean School Bus USA: Air Quality and Environmental Justice 220
Allocative Efficiency: An Economic Criterion 220
Benefit-Cost Analysis of the Clean Air Act 221
Independent Benefit-Cost Analysis of the 1990 Amendments 221 • EPA Benefit-Cost
Analysis of the 1990 Amendments 224
Application 10.4: Benefit-Cost Analysis of the Clean Air Act
Amendments (CAAA): The Second Prospective Study 225
Benefit-Cost Analysis of the Air Quality Standards 227
Absence of Cost Considerations in the Standard-Setting Process 227 • Uniformity
of the National Ambient Air Quality Standards (NAAQS) 227
Conclusions 230 • Summary 232 • Review Questions 233 • Additional
Readings 233 • A Reference to Acronyms and Terms Used in Air Quality Control
Policy 235
CHAPTER 11 IMPROVING AIR QUALITY: CONTROLLING MOBILE SOURCES 236
Urban Air Pollution 237
Measuring U.S. Urban Air Quality 237 • Urban Smog 239
Application 11.1: China’s Automobile Demand Still a Force Even in Economic Slowdown 240
Controlling Mobile Sources 240
U.S. Controls on Motor Vehicles and Fuels 242 • Reducing Greenhouse Gas (GHG)
Emissions 245
Economic Analysis of Mobile Source Controls 246
Absence of Benefit-Cost Analysis: An Inefficient Decision Rule 247 • Uniformity of Auto
Emissions Standards 248 • Inherent Bias Against New Versus Used Automobiles 250
Application 11.2: Hybrids and Plug-In Hybrid Electrics 251
Application 11.3: The Car Allowance Rebate System (CARS): Cash for Clunkers
Revisited 253
Implications of Clean Fuel and Clean Fuel Vehicle Alternatives 254 • Market
Assessment of the GHG Emission Controls 255
Conclusions 256 • Summary 257 • Review Questions 257 • Additional
Readings 258 • A Reference to Acronyms and Terms Used in Mobile
Source Control Policy 259
CHAPTER 12 IMPROVING AIR QUALITY: CONTROLLING STATIONARY SOURCES 260
Acidic Deposition 261
Understanding Acidic Deposition 261
Application 12.1: China’s Power Plants and Acid Rain 263
Controlling Stationary Sources 263
Technology-Based Standards 264 • Reducing Greenhouse Gas (GHG)
Emissions 266 • Emissions Trading 267 • Acid Rain Program (ARP) and New
Rules 268 • Ozone Control: NOX Trading Programs and New Rules 270
Application 12.2: The Cross-State Air Pollution Rule (CSAPR): Successor to the CAIR 271
State-Level Trading Plans 272
Economic Analysis of Stationary Source Controls 273
Relative Cost of Using Command-and-Control Instruments 273 • Uniform Technology-Based
NSPS 274 • Dual-Control Approach and the New Source Bias 276
Application 12.3: The New Source Review Standards Come Under Fire 277
Economics of Market-Based Trading Programs 278
Conclusions 283 • Summary 284 • Review Questions 285 • Additional
Readings 286 • A Reference to Acronyms and Terms Used
in Stationary Source Control Policy 287
CHAPTER 13 GLOBAL AIR QUALITY: POLICIES FOR OZONE DEPLETION AND CLIMATE CHANGE 288
Ozone Depletion 288
Searching for the Causes of Ozone Depletion 289
Controlling Ozone Depletion 291
International Agreements to Control Ozone Depletion 291 • U.S. Policy to Control
Ozone Depletion 293
Economic Analysis of Ozone Depletion Policy 295
Regulatory Impact Analysis (RIA) of the Phaseout 296 • Assessing Cost-
Effectiveness 296 • Price Changes 297 • Incentives and Disincentives to Develop CFC
Substitutes 298
Climate Change 299
Understanding the Potential Problem of Global Warming 299 • Predicting the Potential
Effects 302
Application 13.1: What Is a Carbon Footprint? Some Firms Are Finding Out 303
Policy Response to Climate Change 304
International Response 305
Application 13.2: Why the United States Is Not Participating in the Kyoto Protocol 307
U.S. National Response 310
Application 13.3: The Energy Star® Program 311
U.S. Regional Response 314
Economic Analysis of Climate Change Policies 315
Estimating the Benefits 315 • Economic Model of the Market Failure 316 • Evaluating
Market-Based Policy Instruments 318
Application 13.4: Renewable Energy Certificates (RECs): Currency for Renewable
Energy Markets 319
Conclusions 322 • Summary 323 • Review Questions 324 • Additional
Readings 325 • A Reference to Acronyms and Terms in Global Air Quality
Control Policy 327
MODULE 5 THE CASE OF WATER 329
CHAPTER 14 DEFINING WATER QUALITY: THE STANDARD-SETTING PROCESS 330
Understanding Water Resources 331
Water Resources and Their Interdependence 331 • Targeting Water Quality Policy 332
Application 14.1: Saving the Chesapeake Bay: A Renewed Effort 333
Overview of U.S. Water Quality Legislation 334
In the Beginning 335 • Current U.S. Policy 335
Policy Objectives 337
Zero Discharge Goal 337 • Fishable-Swimmable Goal 337 • No Toxics in Toxic Amounts
Goal 337 • Identifying Water Pollutants 338
Application 14.2: Oil Tanker Spills Around the Globe: The Ecological and Economic
Effects 338
Setting Standards to Define Water Quality 339
Use Designation 339 • Water Quality Criteria 341
Analysis of Receiving Water Quality Standards 341
Absence of Benefit-Cost Analysis 341 • Lack of Consistency With the Technology-Based
Effluent Limitations 341
Application 14.3: Abating the Deepwater Horizon Blowout: Benefits and Costs 342
Benefit-Cost Analysis of the Clean Water Act 343
Benefit Estimates 343 • Cost Estimates 345 • Benefit-Cost Comparison 345
Conclusions 348 • Summary 349 • Review Questions 349 • Additional
Readings 350 • A Reference to Acronyms and Terms in Water
Quality Control Policy 351
CHAPTER 15 IMPROVING WATER QUALITY: CONTROLLING POINT AND
NONPOINT SOURCES 352
Controlling Point Sources 352
Technology-Based Effluent Limitations 352 • Permit System 353
Analysis of the Effluent Limitations 354
Imprecise Statutory Definitions 354 • Meeting the Zero Discharge Goal 354 • Lack of an
Efficiency Criterion 355 • Cost-Ineffective Decision Making 355
The POTW Funding Program 356
Federal Grant Program 356 • Clean Water State Revolving Fund (CWSRF) Program 357
Analysis of the POTW Funding Program 358
Identifying Accomplishments Attributable to Federal Subsidies 358 • Inefficiencies in the
Grant Program 358 • Equity Implications 359
Controlling Nonpoint Sources 360
Nonpoint Source Management Program 360
Application 15.1: Mercury Contamination and Fish Advisories 361
Analysis of Nonpoint Source Controls 361
Delegating Control to the States: The Pros 362 • Delegating Control to the States:
The Cons 362 • Assessing the Federal Role 362
Market-Based Solutions 363
Pollution Charges 364
Application 15.2: Germany’s Effluent Charge System 366
Tradeable Effluent Permit Markets 367
Watershed Management 369
A Watershed Approach 369 • Watershed Funding 370 • Key Policy Instruments 371
Application 15.3: Creating Environmental Markets in the Chesapeake Bay Watershed 372
Conclusions 373 • Summary 374 • Review Questions 374 • Additional
Readings 375 • A Reference to Acronyms and Terms in Water Quality Control Policy 377
CHAPTER 16 PROTECTING SAFE DRINKING WATER 378
Overview of U.S. Drinking Water Legislation 379
In the Beginning 379 • Current U.S. Policy 380 • Relating the SDWA to Other Laws 381
Application 16.1: Worldwide Demand for Bottled Water: Is It Safer Than Tap Water? 382
Pollutants Controlled Under the SDWA 383
Setting Standards to Define Safe Drinking Water 383
Establishing National Primary Drinking Water Regulations (NPDWRs) 383
Application 16.2: The Aircraft Drinking Water Rule (ADWR): Ensuring Safe
Drinking Water on Aircraft 385
Establishing National Secondary Drinking Water Regulations (NSDWRs) 387
Economic Analysis of Safe Drinking Water Policy 387
Standard Setting and Efficiency 387 • An Economic Analysis (EA) for an NPDWR 388
Economic Principles in Pricing Water Supplies 390
An International Comparison 391 • Pricing Practices of U.S. Water Utilities 391
Conclusions 394 • Summary 396 • Review Questions 396 • Additional
Readings 397 • A Reference to Acronyms and Terms in Drinking Water Control
Policy 398
MODULE 6 THE CASE OF SOLID WASTES AND TOXIC SUBSTANCES 399
CHAPTER 17 MANAGING HAZARDOUS SOLID WASTE AND WASTE SITES 400
Characterizing the Hazardous Waste Problem 401
Magnitude and Source of the Problem 402
Application 17.1: The Hazardous Waste Site Called Love Canal 403
Overview of U.S. Hazardous Waste Policy 403
In the Beginning 404 • Current U.S. Policy 406
Controlling Hazardous Wastes: RCRA 406
“Cradle-to-Grave” Management Approach 406 • Moving Toward Pollution Prevention 408
Analysis of U.S. Hazardous Waste Policy 409
Risk-Based Uniform Rules of Identification 409 • Benefit-Based Uniform
Standards 410 • Failures of the Manifest System 410 • Market Implications
of the Land Restrictions 411 • Market-Based Policy 413
Overview of U.S. Hazardous Waste Site Policy 414
In the Beginning 414
Application 17.2: Using the Market to Control Hazardous Wastes: An International
Approach 415
Current U.S. Policy 415
Managing Uncontrolled Hazardous Waste Sites: Superfund 417
Response and Cleanup 418 • Compensation, Liability, and Enforcement 420 • Emergency
Planning 420
Analysis of Superfund 420
Assessing Superfund’s Performance 421
Application 17.3: GE Dredges the Hudson River: Will the Benefits Justify the Costs? 422
What’s Wrong With Superfund? 423
Conclusions 424 • Summary 426 • Review Questions 427 • Additional
Readings 428 • A Reference to Acronyms and Terms in Hazardous Waste Control
Policy 429
CHAPTER 18 MANAGING MUNICIPAL SOLID WASTE 430
Characterizing Municipal Solid Waste 431
Observing a Trend 431 • Composition of MSW in the United States 432
Application 18.1: Consumer Electronics and the Growth of e-Waste 434
International Comparisons 435
Application 18.2: The Facts on Recycling Plastics 436
Policy Response 438
Federal Responsibilities 438 • State Responsibilities 439
Application 18.3: The Green Dot Program in Europe 440
The Market for MSW Management Services 440
Supply of MSW Services 441 • Demand for MSW Services 442 • Resource
Misallocation 442
Market Approaches to MSW Policy 445
Back-End or Waste-End Charges 445
Application 18.4: Pay-As-You-Throw (PAYT) Pricing Programs 447
Front-End or Retail Disposal Charges 447 • Deposit/Refund Systems 449
Conclusions 451 • Summary 452 • Review Questions 452 • Additional
Readings 453 • A Reference to Acronyms and Terms in Municipal Solid Waste Policy 455
CHAPTER 19 CONTROLLING PESTICIDES AND TOXIC CHEMICALS 456
Overview of U.S. Pesticide Controls 457
Legislating Pesticide Use 457 • Legislating Pesticide Residues 457
Application 19.1: Solving the Delaney Clause Dilemma 458
Controlling Pesticide Use 459
Registration of New Pesticides 459 • Reregistration of Existing Pesticides 459 • New Policy
Direction 460
Analysis of FIFRA 460
Risk-Benefit Analysis 461 • Problems in Risk Assessment 462 • Problems in Benefit
Assessment 463
Overview of U.S. Legislation on Toxic Chemicals 464
Policy Response to Chemical Risks 464 • Coordination With Other Agencies and
Initiatives 466
Controlling Chemical Use 467
New Chemicals 467 • Existing Chemicals 467 • New Policy Direction 468
Analysis of TSCA 468
Application 19.2: The Responsible Care® Program: A Global Initiative 470
Risk-Benefit Analysis 471 • Problems in Risk Assessment 471 • Problems in Benefit
Assessment 472 • Bias Against New Chemical Introductions 472
Economic Analysis and Market-Based Policy 473
Modeling the Negative Externality 473 • Market-Based Solution: Product Charge 473
Conclusions 474 • Summary 476 • Review Questions 477 • Additional
Readings 477 • A Reference to Acronyms and Terms in Toxic Substances Control
Policy 478
MODULE 7 GLOBAL ENVIRONMENTAL MANAGEMENT 479
CHAPTER 20 SUSTAINABLE DEVELOPMENT: INTERNATIONAL ENVIRONMENTAL
AGREEMENTS AND INTERNATIONAL TRADE 480
Sustainable Development as a Global Objective 481
Redefining Environmental Objectives 481 • Implications of Growth on the Environment 482
Application 20.1: The Environmental Kuznets Curve 484
Global Framework for Sustainable Development 485
United Nations Conference on Environment and Development (UNCED) 485 • World
Summit on Sustainable Development (WSSD): Johannesburg 2002 486 • Rio+20—United
Nations Conference on Sustainable Development 486
International Agreements to Control Transboundary Pollution 487
Montreal Protocol and Amendments 488 • U.N. Framework Convention on Climate Change
(UNFCCC) 489 • London Convention 1972 (LC72) and the 1996 Protocol 490 •
United States–Canada Air Quality Agreement 491
Application 20.2: An International Treaty on Ocean Dumping 491
U.S.–Mexico Border 2012 Program and U.S.–Mexico Border 2020 Program 493
International Trade and Environmental Protection 494
Overview of the Controversy: Free Trade Versus Protectionism 494 • International Trade
and Environmental Objectives 495 • International Trade Agreements and the
Environment 495
Conclusions 498 • Summary 500 • Review Questions 501 • Additional Readings 502
CHAPTER 21 SUSTAINABLE APPROACHES: INDUSTRIAL ECOLOGY AND POLLUTION
PREVENTION 504
Industrial Ecology 505
What Is Industrial Ecology? 505 • Revisiting the Materials Balance Model 505 • Linear or
Open Materials Flow: Cradle to Grave 506 • Cyclical or Closed Materials Flow: Cradle to
Cradle 507 • Industrial Ecosystems 509
Application 21.1: ISO 14000 International Standards on Environmental
Management 510
Pollution Prevention 510
Application 21.2: Kalundborg Symbiosis in the Twenty-First Century 511
What Is Pollution Prevention? 511 • Comparing Pollution Prevention to Industrial
Ecology 512 • P2 Objectives and Strategies 512 • Domestic and International
Legislation 513 • Corporate P2 and Sustainability Initiatives 516 • Using Economic
Analysis to Implement Pollution Prevention 520
Strategic Initiatives and Programs 521
Extended Product Responsibility (EPR) 522 • Design for the Environment (DfE) 522
Application 21.3: An Update on Remanufacturing: A Lucrative Approach to Pollution
Prevention 523
Green Chemistry Program 524 • Disseminating Information and Technology on a Global
Scale 525
Conclusions 526 • Summary 527 • Review Questions 527 • Additional Readings 528
REFERENCES 530
GLOSSARY 553
INDEX 560