The Environmental Protection Agency yesterday embraced and expanded a "free market" approach to cleaning up the air that allows companies to shop around for the cheapest way to reduce emissions.
"It's a good news-good news situation," said EPA Administrator Anne M. Gorsuch. "It's sound for the environment and sound for the economy."
Some environmentalists disagreed. "What is good in it is not new, and what is new is not good," said David Doniger, an attorney for the Natural Resources Defense Council.
The EPA policy spells out in detail how to treat clean air as a marketable commodity, and EPA officials talked optimistically about large-scale trading, banking and brokering of a new currency called ERCs (emission reduction credits).
The result of the trades, Gorsuch said, must be a net reduction in pollution beyond state and federal requirements, but critics of the policy said it actually will freeze air quality at current levels in badly polluted areas.
Making the "emissions trading" market operate more easily could reduce the cost of cleaning up the air by more than $1 billion in 1982, Gorsuch said. The methods she described have been around since the Carter administration but have been little used.
One method is the "bubble concept," under which clear air standards would be applied to a plant or an area, rather than to component parts, such as each smokestack. Depending on what pollutant is the target of control, the imaginary "bubble" might cover an area as large as a city. The idea is that the air under the bubble must meet an overall standard, though some components might be in violation of the standard.
Under the new EPA policy, depending upon the pollutant and how widely it travels, a company facing an expensive cleanup bill for its emissions might be able to pay for emission control at a plant across town--perhaps one whose pollution is less costly to control--and be credited with the cleanup.
Another concept, called "netting out," will allow plants to expand or modernize without waiting for a year-long review if a company can demonstrate that it can achieve a net reduction in emissions by reducing pollution from old sources.
Still another concept will allow new plants to move into areas where air does not meet federal standards and where new sources of pollution normally would not be allowed. Companies would be permitted to pay an existing plant to reduce its emissions enough to let a new plant operate without further deterioration of the air.
The EPA policy also spelled out in more detail how credits might be banked for future use, sale or leasing. The banking of emissions control credits already exists in Louisville, Seattle and San Francisco.
Christopher DeMuth, executive director of the Presidential Task Force on Regulatory Relief, hailed the policy statement as "a major landmark in the evolution of environmental regulation--from the highly centralized and inflexible approach of earlier laws and policies to a more decentralized and socially productive process."
Emissions trading "did not begin with this administration, but we have taken it more seriously and advanced it further than our predecessors," he said. "Mrs. Gorsuch has moved the approach from the wings to the center stage of environmental policy."
Gorsuch said the policy would speed up compliance with clean air standards by providing an economic incentive to reduce emissions.
Much of the criticism of the policy focused on its expansion of the bubble concept to allow it to be used in "nonattainment" areas such as Los Angeles and Chicago, where minimum standards for air quality have not been met. "Any pollution reduction that can be identified should be applied to making progress toward the standard" rather than be traded for increased emissions elsewhere, Doniger said.