The Polluter Pays Principle

 Do people in the fiberglass or printing industries expect to get raw materials and parts for free?  Do they expect their employees to work for free?  I doubt it.  But based on some public testimony at a workshop hosted by the South Coast Air Quality Management District (the "District") last Friday, some of them expect to continue to use our air as a public sewer, for free.  

Here's the context.  The South Coast Air Basin has failed to meet federal clean air standards for ozone (otherwise known as smog), even though major polluters that spew out tons of ozone-forming substances daily such as volatile organic compounds ("VOCs") have permits to emit pollutants under Title V of the federal Clean Air Act.  What that shows me is that the Title V system isn't working, at least for Southern California.  Luckily, Congress had the foresight to provide for programs to kick in when regions have trouble meeting federal smog standards.  For example, Congress created a provision in the Clean Air Act that requires local agencies such as the District to collect funds from the largest sources of pollution in the region (e.g. refineries and power plants) who don't reduce their emissions by 20% compared to a base year - even if those polluters already have a Title V permit.  As we come close to blowing a smog standard in 2010, this program will help gets us back on track to meeting these public health-based federal clean air standards.  

While last week's hearing featured a lot of testimony from industry lobbyists about how the amount of the federally-required fees would drive local companies out of business, or drive manufacturing to other states or to Mexico, the fee will actually create a pot of funding for clean air programs in Southern California.  The myopic view taken from representatives from the most heavily polluting industries in the regions fails to take into account that the funds collected will go back into the region (perhaps even at these major polluting facilities), and will clean the air and create jobs.  Representatives of the fiberglass and printing industries, both big emitters of VOCs, were very vocal about this.  Not surprisingly, none of them addressed the fact that their companies' emissions of VOCs have been, and are, hurting people who breathe them.  They also failed to mention the immense consequences of this harm, including children missing school due to asthma attacks and people dying prematurely. 

Unlike the industry lobbyists at the meeting, my focus is on protecting the health of the millions of residents in Southern California who are breathing unhealthy air.  Thus, it may come as no surprise that many in the room did not agree with me that we should enact a program like this to help us clean up our filthy skies.   But the reality is that some of our local industries are still making people sick, and federal law requires us to do something about it.  In Econ 101 terms, the public health costs associated with their products are externalities; through the Clean Air Act, Congress required us to take a step towards internalizing those costs - that is, making the polluters provide funds to clean up their harmful pollution.  I do my part in complying with smog check and other requirements aimed at reducing my smog footprint, and I don't see anything wrong with making sure some of LA's filthiest industries do their fair share too.