Make all polluters pay

January 05, 2004|By Jeffrey Michael

WHATEVER HAPPENED to the principle of the polluter pays?

This bedrock belief of environmentalism appears to have been abandoned by the Chesapeake Bay Foundation and other environmental groups pushing for expensive, mandatory sewage treatment plant upgrades to improve water quality in the bay. Agricultural sources generate more than double the nutrient pollution than sewage treatment plants, but the bay foundation only advocates voluntary reductions from farms.

In many ways, the focus on sewage treatment plants is pragmatic. Existing technology can be used, compliance is easy to monitor and it may even be cost-effective. In the bay foundation's plan under consideration by Gov. Robert L. Ehrlich Jr., funding for the upgrades would come from federal tax revenues and a surcharge to sewer bills, which opponents call a "flush tax." Is this fair? Who should pay?

Agriculture makes up less than 0.4 percent of Maryland's $200 billion economy and supports less than 0.2 percent of the state's jobs. The tiny agriculture sector is directly responsible for more than 40 percent of the nutrient pollution in the Chesapeake Bay, while only 20 percent of nutrient pollution comes from the millions of residents using municipal sewage systems. It seems clear that farms bear a larger responsibility for the bay's water quality than households.

To be fair, we should recognize that farmers already have large burdens related to the bay cleanup. Consider what it would be like if the state regulated nutrient pollution from households similar to farms. Every year, we would be required to complete forms detailing how much each family went to the bathroom and how much they planned to go next year. We would write lawn fertilization and pet feces disposal plans. We would give state regulators the right to enter our homes without notice to inspect our garden sheds, diet, pets and toilet flushing practices to see if we complied with our plans. If we didn't, there would be no consequences, since abiding by the plan would be voluntary.

The state would hire people to help us complete the complicated paperwork, monitor our progress and educate us about best practices in vegetable peeling and toilet paper use. This program might make a small dent in pollution, but it would be costly to the state and a large nuisance for individuals burdened with forms and invasions of their privacy.

In other words, it would be just as ineffective as the current approach to agricultural pollution.

Another way to be fair is to treat farmers the same way the bay foundation proposes to treat households - tax their pollution to generate funds for better pollution control technology. A small tax could be applied on each chicken and other livestock, each ton of fertilizer and phosphorus containing feed additives. If it makes people feel better, we could call it a user fee for the bay instead of a tax.

Farmers would respond by reducing fertilizer use or chicken production, and the money could be used to subsidize less-polluting agricultural practices or to buy conservation easements as stream buffers.

Given their relative contributions to bay pollution, it would also be fair to use some of the funds to offset the flush tax and invest in municipal sewage treatment plants. Farmers would see some increase in their production costs, but we could help them by eliminating the paperwork burden and privacy invasion of current policy.

Taxes are a cost-effective pollution policy that is consistent with the polluter-pays principle, but it isn't fair or cost-effective unless it is equally applied to all sources and proportional with use, unlike the flat surcharge proposed in the flush tax. Maryland legislators and environmental groups such as the bay foundation should not support the flush tax unless it is combined with similar taxes on agriculture.

Jeffrey Michael is assistant professor of economics at Towson University, where he specializes in environmental and natural resource economics and policy.

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