Regulating pollution

Providing sufficient regulations against pollution
Changes in the amount of pollution that is emitted into the atmosphere annually is the net effect of many factors, including shifts in the nation's economic and industrial activity, technology, consumption of fuels, traffic, and other activities. Pollution regulations and emission controls can also cause emissions to change over time.

A new model of regulation should relegate the regulators to their proper place in the larger scheme of things. The environmental performance of factories is determined by the interactions of multiple agents, with multiple incentives. Although the State can and should have a continuing role in the regulation of pollution externalities, the importance of the Community and the Market must also be recognized.

Within the classic paradigm for analyzing pollution control issues the state holds centre stage with two principal agents; regulators and the law -- expected to set and enforce rules of environmental behavior. The regulator determines 'optimum pollution' and seeks to attain it by using command-and-control (mandating factories not to pollute above a determined level) or market-based instruments (setting a pollution charge, or allowing factories to trade pollution permits within the determined limits). In this respect, pollution charges and tradable pollution permits can be effective regulatory instruments under the right conditions.

Regulatory approaches often encounter the following problems: (1) Information; monitoring quality is frequently so poor that compliance with regulations is difficult to assess. Fragmentary data on factory emissions and ambient quality are often non-computerized, and closely held by separate agency units charged with different responsibilities. Information on abatement costs is almost never available. (2) Bureaucracy; the air and water quality monitoring units frequently don't talk to each other, nor do they share information with those monitoring air and water emissions. (3) Human and technical resources; agencies generally have little capacity for assessing the net benefits of alternative programs and using the results to establish priorities for allocation of scarce resources. Few trained inspectors are available, and it is impossible to monitor more than a modest fraction of polluting factories. And (4) Political support; serious enforcement frequently encounters potent political resistance.
Counter Claim:
(1) Traditional regulation has been plagued by an important principal-agent problem: Regulators need good data about firms' performance, but firms have clear incentives to withhold such information.

(2) Strengthening central regulatory agencies should not empower them to impose uniform standards on heterogeneous communities under the guise of 'administrative efficiency.' Much local variation in regulation is legitimate, and should be recognized as such.

Type Classification:
G: Very Specific strategies