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ArrowArrow issues to consider... > air quality

Air Quality
Clouded Thinking Overcomes Clear Skies
Partisanship and bureaucracy retard real environmental improvement.

by Kenneth W. Chilton, Ph.D.

More than two years after the Bush Administration proposed its new multi-pollutant approach to reduce emissions from electric power plants, “Clear Skies” was overcome by clouded thinking. Senator James Inhofe (R-OK), Chairman of the Senate Environment and Public Works Committee, attempted to move the bill (S131) forward in February and early March but the proposal couldn’t even make it out of Inhofe’s committee.

To the economic-minded, the basic premise of Clear Skies looks like a win-win proposition – air quality improves and costs to reach environmental objectives are substantially reduced. What’s not to like?

The Administration’s proposal would have reduced emissions of sulfur dioxide, nitrogen oxides, and mercury significantly over the next 13 years. Sulfur dioxide and nitrogen oxides contribute to acid rain and to respiratory ills. Mercury is of concern for its possible effects on the neurological development of fetuses and young children. Emission cuts would come in two phases but by 2018 sulfur dioxide emissions from power plants would decrease 73%, nitrogen oxides would decline 67%, and mercury emissions would drop 69%.

Environmental activist organizations like the Sierra Club countered that other, more narrowly focused rules being promulgated under the existing Clean Air Act would produce greater reductions sooner. The Sierra Club website intoned, “Who stands to benefit from placing communities at risk, particularly children and the elderly who are significantly threatened by air pollution?” The implication is clear, the usual enemy of the people and the environment, “big business” is who stands to gain – power companies in this case. But must profitable companies always be demonized to bring about environmental improvement?

There are two major flaws with the claims of mainstream environmental activists. First of all, it is presumed that existing legislation will translate into effective regulations in a short time period. The reality is that each regulation becomes a new battleground that may be fought over in courts for as much as a decade before taking effect.

Secondly, and most importantly, Clear Skies is “results-oriented,” not “punishment-oriented.” General Patton once said, “Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.” The current command-and-control method leaves nothing to “surprise.” It is predictably high-cost.

Clear Skies utilizes a “cap and trade” system that would have warmed the cockles of General Patton’s heart. The “cap” assures that emissions will meet a specified objective. Power generation plants would be allowed to “trade” (sell or buy) permits to emit a particular pollutant. Those facilities that can reduce emissions at lower costs may over-control and make profits by selling permits to plants facing high costs. Thus, we are able to reach environmental goals with better balanced economic costs. 

The resources saved can then be utilized elsewhere in the economy to benefit health care, education, national defense, or whatever else you and I might value. Simply put, our electric bills are lower if pollution control is achieved at reduced cost and we can spend those savings however we wish.

The Clear Skies Act was no panacea but it represented a more effective approach to protecting the environment (and at lower economic cost). Unfortunately, the clouded thinking prevailed on March 9, leaving America to muddle on with the current wasteful approach to environmental regulation.  And we are all the worse for it.

Kenneth W. Chilton, Ph.D. is Director of the Institute for Study of Economics and the Environment and Associate Professor of Management at Lindenwood University in St. Charles, Missouri.

Originally published on, March 2005

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