THE EFFECTS OF POLLUTION ABATEMENT ON INTERNATIONAL TRADE APRIL 1973 U.S. DEPARTMENT OF COMMERCE K** '* \ <■'; \ **r«of" / Digitized by the Internet Archive in 2012 with funding from LYRASIS Members and Sloan Foundation http://archive.org/details/effectsofpollutiOOunit THE EFFECTS OF POLLUTION ABATEMENT ON INTERNATIONAL TRADE The First Report of the Secretary of Commerce to the President and Congress In Compliance with Section 6 of The Federal Water Pollution Control Act Amendments of 1972 (Public Law 92-500) @ sp a -- ■a o n B *» JJt_ o , A-'i. U.S. DEPARTMENT OF COMMERCE •>**,** / TABLE OF CONTENTS PAGE List of Tables i List of Figures -. ii ENVIRONMENTAL COSTS AND INTERNATIONAL TRADE I . Summary 1 II. Domestic Context of Section 6 A. U.S. Industrial Pollution Abatement Programs 5 B. U.S. Industrial Cost Effects 16 III. Pollution Control in Foreign Countries A. Foreign Industrial Pollution Abatement Programs 20 B. Foreign Pollution Control Costs 25 IV. International Competitive Considerations A. Competitive Advantages as a Result of Pollution Abatement Programs 27 B. Equalization Measures 30 APPENDIX - FOREIGN POLLUTION CONTROL POLICIES AND PROGRAMS A-l Belgium A-2 Canada A- 8 France A-23 Germany A- 3 4 Italy A-42 Japan A- 50 Netherlands A-64 Sweden A- 7 3 United Kingdom A-84 LIST OF TABLES TABLE PAGE A-l Estimated Emissions of Air Pollutants by Weight in France, 1970 A-24 A-2 Estimated Annual Costs for Controlling Industrial Water Pollution (France) A-27 A-3 Pollution Control Expenditures in New Facilities for Period 1971-75 (Germany) A-39 A- 4 Industry Pollution Control Expenditures for the Period 1971-75 (Germany) A-40 A-5 National Consumption of Selected Pollution Control Equipment for the Period 1969-71 (Italy) A-43 A-6 Pollution Control Expenditures for the Periods 1971-75 and 1976-80 (Italy) A-44 A-7 The Total Expenditure in a Percentage Relationship to the Cumulative GNP for the Periods 1971-75 and 1976-80 (Italy) A-45 A-8 Pollution Control Expenditures for the Periods 1971-75 and 1976-80 by Sector (Italy) A-46 A-9 Total Pollution Control Investment, Its Share of Total Investment, and Share of GNP for Years 1971 thru 1975 (Japan) A-56 A-10 Pollution Control Investment Costs for Fiscal Year 1971 (Japan) A-57 A-ll Annual Costs for Pollution Control in the 1970 ' s (Netherlands) A-68 A-12 Sweden-Emission of Air Pollutants in 1970 A-76 A-13 1969 Swedish Public Opinion Poll on Environmental Issues A-ll A-14 Estimated Environmental Protection Investments by Industry Grouping 1971 to 1975 (Sweden) A-78 A-15 Pollution Control Investment as a Percentage of Total Actual and Planned Investment (Sweden) A-7 9 A-16 Total Pollution Control Expenditure (United Kingdom) A-8 8 A-17 Cost of Air Pollution Control for Scheduled Processes 1958-1968 (United Kingdom) A-8 9 i FIGURE LIST OF FIGURES PAGE 1 Federal Environmental Legislation. . . 7 2 Special Depreciation Allowances for Pollution Control Equipment; Selected Foreign Countries and the U.S 29 A-l Canada - Chronology of Selected Federal Pollution Abatement Laws and Regulations A-l 3 A-2 Canada - National Air Quality Objectives A-16 A- 3 Macroeconomic Pollution Abatement Costs (Canada) A-17 A-4 Microeconomic Pollution Abatement Costs (Canada) A-18 A-5 France - Chronology of Selected Pollution Abatement Laws and Regulations A-29 A-6 Air Pollution Law 615 - Structure and Major Figures (Italy) A-47 A- 7 Japan - Chronology of Selected Pollution Abatement Laws and Regulations A-59 A- 8 Netherlands - Chronology of Selected Pollution Abatement Laws and Regulations A-69 A- 9 Sweden - Chronology of Selected Pollution Abatement Laws and Regulations A-80 A-10 United Kingdom - Chronology of Selected Pollution Abatement Laws and Regulations A-9 n I. SUMMARY This is the initial report prepared in accordance with section 6 of Public Law 92-500, the Federal Water Pollution Control Act Amendments of 1972. Under this section, titled "International Trade Study", the Secretary of Commerce is required to report initially to Congress within 6 months of the date of enactment on the potential economic impacts of the evolving pollution control programs in the U.S. and abroad. Subsequent reports are required on at least an annual basis. Specifically, section 6 provides that: "(a) The Secretary of Commerce 3 in cooperation with other interested Federal agencies and with representatives of industry and the public, shall undertake immediately an investigation and study to determine-- (1) the extent to which pollution abatement and control programs will be imposed on 3 or voluntarily undertaken by 3 United S.tates manufacturers in the near future and the probable short- and long-range effects of the costs of such programs (computed to the greatest extent practicable on an industry- by-industry basis) on (A) the production costs of such domestic manufacturers s and (B) the market prices of the goods produced by them; (2) the probable extent to which pollution abatement and control programs will be implemented in foreign industrial nations in the near future and the extent to which the production costs (computed to the greatest extent practicable on an industry-by-industry basis) of foreign manufacturers will be affected by the costs of such programs ; (3) the probable competitive advantage which any article manufactured in a foreign nation will likely have in relation to a comparable article made in the United States if that foreign nation-- (A) does not require its manufacturers to implement pollution abatement and control programs 3 (B) requires a lesser degree of pollution abatement and control in its programs 3 or (C) in any way reimburses or otherwise subsidizes its manufacturers for the costs of such programs ; (4) alternative means by which any competitive advantage accruing to the products of any foreign nation as a result of any factor described in paragraph (3) may be (A) accurately and quickly determined 3 and (B) equalized^ for example 3 by the imposition of a surcharge or duty 3 on a foreign product in an amount necessary to compensate for such advantage; and (5) the impact 3 If any 3 which the imposition of a compensating tariff or other equalizing measure may have in encouraging foreign nations to implement pollution abatement and control programs . (b) The Secretary shall make an initial report to the President and Congress within six months after the date of enactment of this section of the results of the study and investigation carried out pursuant to this section and shall make additional reports thereafter at such times as he deems appropriate taking into account the development of relevant data 3 but not less than once every twelve months." Although P.L. 92-500 is the most extensive U.S. water pollution legislation that has been enacted, section 6 does not specify particular types of pollution for the assessment of the economic implications of abatement costs. Accomplishing the tasks set out in section 6 for a given industry may require aggregation of the direct impact of types of pollution control, combined with the cost impacts passed on by all of its suppliers. These and other complex data collection and methodological problems will have to be resolved, especially with respect to foreign data and analyses, before specific competitive advantages due to pollution abatement programs can be identified. Some attempts have been made to determine industrial costs related to pollution control requirements. In 1971, a series of industry studies on the costs of environmental controls was carried out under the joint sponsorship of the Council on Environmental Quality, the Environmental Protection Agency, and the Department of Commerce. An additional set of industry studies designed to determine the economic impact of anticipated water pollution controls was sponsored by the Environmental Protection Agency in 1972. These two sets of studies covered over 40 industries, including steel, copper, aluminum, inorganic chemicals, foods, energy and automobile manufacturing. The studies have been reviewed in depth as background for this report under section 6. The specific data and findings they contain were based on early projections of pollution control standards. These standards are now largely out of date since most have been superseded by stricter controls. Therefore, the specific data in the reports have not been directly useful for the types of analyses required under Section 6. These studies covered capital investments and direct operating costs related to air or water pollution abatement in the industries surveyed, and they provide a useful base of experience in 3 this regard. However, indirect costs (e.g. those imposed on suppliers) were not covered, so section 6 analyses will have- to start with a new methodology to cover these important factors. The following report identifies and discusses the major considerations related to this and other tasks called for by section 6. To assist in carrying out its responsibilities under section 6, the Department of Commerce would appreciate receiving comments on this report, and any data, analyses, or other materials related to the specific requirements of section 6. Communications should be addressed to Director, Bureau of Competitive Assessment and Business Policy, U.S. Department of Commerce, Washington, D.C. 20230 II. Domestic Context of Section 6 The first assignment in section 6 requires the Secretary of Commerce to "undertake immediately an investigation and study to determine-- (1) the extent to which ■pollution abatement and control programs will be imposed on s or voluntarily undertaken by 3 United States manufacturers in the near future and the probable short- and long-range effects of the costs of such programs (computed to the greatest extent practicable on an industry-by-industry basis) on (A) the production costs of such domestic manu- facturers 3 and (B) the market prices of the goods produced by them. . . " The requirements of this mission are twofold — first , the identification of U.S. industrial pollution abatement programs, and second, the identification of the probable short- and long-range U.S. industrial cost effects of these programs. A. U.S. Industrial Pollution Abatement Programs Federal mandatory pollution abatement programs are now in effect for a wide range of pollutants, including air, water, noise, and radiation. In addition, there are Federal programs for the management of coastal zones and public lands which will impose additional environmental controls. These antipollution laws provide for implementation by regulations that set out standards for industrial compliance. For most of the recent enactments, however, the standards development has only begun. Specific conclusions about cost impacts will have to await further steps in this process The statutory basis for these Federal programs is briefly described in Figure 1 and in the synopsis that follows : CD LO iL£ 3 -o Q. O D o .t: Z— •- E >, UJ ~ _Q -£> Z. X (D — a. en Q < o LU o > LU < LJJ Q LU Z < o < U n >. . \o ^ (U o .- o- -c '^ Q_ •— i a) _ o « ■ - o c lo — ) >- -o o o _ o \J ■— _o ^ ■— ^- __ --»- r. O *+- a> jg °o °'-~° ° Q-LL.- H < LLJ u a r> o CO UJ D£ D Z < ^> _l 5 U < or: _j O CD O r> or Q_ LL CO CO S < or: o o 2 < Or: o o Or: D- 0_ Ul z h- CO o < h- 3= < Q Q _l < O Or: to E^t3 £ 2: 9 E < o -I <*> td in -= £ < LU Q. * r— < O ""O — c > — o < ^ D +- CN — " LI u s^-bIZ -^^ o ~ ■- o 0- o 5 £ <$!. < D- cO O < 3: U Air Pollution Abatement - Air Pollution Act of 1955 (69 Stat. 322) Authorizes research and data collection program by Public Health Service; establishes policy of state and local responsi- bility for air pollution under Federal Government leadership. - Clean Air Act of 1963 (77 Stat. 392) Federal Government authorized to set standards for motor vehicle pollution; expands federal research. Air Quality Act of 1967 (81 Stat. 485) Establishes procedures for issuance of air quality criteria; establishment of atmospheric areas and air quality control regions; provides for setting of standards by states or Federal Government. - Clean Air Amendments of 1970 (84 Stat. 1676) Major provisions are: EPA required to prescribe national standards for each air pollutant with an adverse effect on public health and welfare. States are required to submit plans for implementing and enforcing primary and secondary standards within 9 months after promulgation of a national ambient air quality standard; Administrator must approve within 4 months after submission. Implementation of state plans by not later than 3 years after approval; Administrator may grant a further 2-year extension. EPA to set such plan if not provided by state, or if not acceptable to EPA. EPA to suggest ways of achieving standards. EPA authorized to adopt standards for stationary sources of pollution, and for hazardous air pollutants. Emissions of carbon monoxide and hydro- carbons from new motor vehicles in the 1975 model year must be reduced by 90% from emissions permitted under regula- tions applicable to the 1970 model year; same reduction is mandated for oxides of nitrogen by 1976 as compared with emissions permitted under regulations applicable to the 1971 model year. - Various penalties provided, including fines of up to $25, 000 per day and/or one year imprisonment. 2. Noise Pollution Abatement Noise Control Act of 1972 Establishes mechanism within EPA for control of noise (except aircraft noise). Major provisions are: Within nine months, EPA authorized to develop and publish criteria on noise. Within three months thereafter, EPA must publish information on the levels of environ- mental noise which should be maintained to protect public health and welfare with an adequate margin of safety. Within six months thereafter, EPA must publish reports identifying products that are major sources of noise and techniques for control reflecting "best available tech- nology" as well as cost of complying. By April 28, 1974, initial regulations are to be proposed. By October 28, 1974, final regulations are to be published. Penalties of up to $25, 000 per day are provided. Authorized expenditures are provided of $3 million (fiscal 1973), $6 million (fiscal 1974) and $12 million (fiscal 1975). 3. Public Land Resources Management A number of laws have been enacted to deal with specific areas of land management and in particular with government owned land. Several agencies are authorized to administer federally owned lands: Interior Department (National Park Service; Bureau of Land Management) Department of Agriculture (Forest Service) Department of Defense The following summarizes applicable legislative efforts: - Public Land Law Review Commission Multiple Use-Sustained Yield Act of 1960 (74 Stat. 215) - Wilderness Act of 1964 (78 Stat. 890) Created in 1964 to recom- mend necessary changes in federal laws and regulations; dissolved 12/31/70 pursuant to law of creation. Promotes use of national forests for wildlife, grazing, mining, and recreation as well as to assure timber supplies. Provides protection from ex- ploitation of designated wilder- ness areas. 10 - Watershed Protection and Flood Prevention Act of 1954 (68 Stat. 666) Provides for Federal Govern- ment cooperation with states for the purpose of preventing erosion, floodwater, and sediment damages in U.S. watersheds and of furthering the conservation, development, utilization, and disposal of water. - Flood Control Act of 1954 (68 Stat. 1256) Various works of improvement are enumerated for the benefit of navigation and the control of destructive floodwaters; no modi- fication of any project herein is allowed without a report by the Chief of Engineers, U.S. Army. Mining Law of 1872 (17 Stat. 91) Declares all valuable mineral deposits in public lands to be free and open to exploration and purchase by U.S. citizens; sets out standards for possession and obtaining patents to land. Mineral Lands Leasing Act of 1920 (41 Stat. 437) Provides for granting of leases and prospecting permits to U.S. citizens for exploration and exploitation of various enumerated minerals in public lands; limitations on possessory rights are set forth at length. Coastal Zone Management Act of 1972 (86 Stat. 1280) Provides for establishment of a national policy and development of a national program for management, beneficial use, protection, and devel- opment of the land and water resources of the Nation's coastal zones; grants authorized to be made to coastal states for development and administration of management programs; Secretary of Commerce vested with authority under this Act and authorized to convene a Coast Zone Management Advisory Committee to assist him in his evalu- ation of state programs. 11 4. Radiation Pollution Control - Atomic Energy Act of 1954 (68 Stat. 919) AEC is established and author- ized to control the possession, use, and transfer of licensed material; establish protection standards; require appropriate monitoring devices; criminal penalties are provided. 5. Water Pollution Abatement - Refuse Act of 1899 (30 Stat. 1151) Prohibits discharge of matter into navigable waters except in liquid state from streets and sewers; primarily designed to prohibit impediments to navi- gation; violators subject to $2, 500 and/or 30 days imprison- ment. Public Health Service Act of 1912 (37 Stat. 309) Authorizes investigations of water pollution related to diseases and impairment of man. Oil Pollution Act of 1924 (43 Stat. 604) Controls discharge of oil from vessels in coastal waters which may damage health, aquatic life, harbors, and docks. - Water Pollution Control Act of 1948 (62 Stat. 1155) Recognizes water pollution as national problem; best dealt with at local level with federal govern- ment assistance; authorizes $22.5 million annually (for 5 years) for low interest loans for municipal abatement facilities but limited to lower of one-third of cost or $250, 000. - Amendments of 195 2 (66 Stat. 755) Extends Act to 1956. - Water Pollution Control Act Amendments of 195 6 (70 Stat. 498) Extends and strengthens 1948 law; administered by Surgeon General. 12 Federal Water Pollution Control Act Amendments of 1961 (75 Stat. 204) Designates Secretary of HEW to administer the Act; abatement enforcement extended to intrastate navigable waters; enforcement pro- cedures strengthened; authorizes $100 million annually for construc- tion and $25 million total for research. Reorganization Plan No. 2 of 1966 Transfers FWPCA to Interior Department. - Clean Water Restoration Act of 1966 (80 Stat. 1246) Provides $3. 9 billion for con- struction grants to build sewage plants and for research; removes previous ceiling limits to provide grants for large cities. National Environmental Policy Act of 1969 (83 Stat. 852) Establishes Council on Environ- mental Quality (CEQ) to analyze trends in environment and effect of Federal programs; provides for "impact statements" to precede every federal action which significantly affects the quality of the environ- ment. Reorganization Plan No. 3 of 1970 Consolidates many previous agencies into EPA with responsibility for: 1. establishing and enforcing standards 2. monitoring and analyzing the environment 3. conducting research and demonstrations 4. assisting local and state control programs 5. administering Federal programs dealing with air and water pollution, disposal of solid waste, pesticides regulation, and noise. Executive Order 11574 (12/23/70) Establishes new permit program for industrial discharge under Refuse Act of 1899; administered by Army Corps of Engineers. 13 - Federal Water Pollution Control Replaces previous Acts (1961, Act Amendments of 1972 1965, 1966, and 1970), all of (86 Stat. 816) which were amendments to the original Water Pollution Control Act Amendments of 195 6. Major provisions of the 1972 Amend- ments are: The Act provides a national goal of complete elimination of discharged pollutants into navigable waters by 1985; interim goal of water quality suitable for the protection and propagation of fish and wildlife and for water recreation by 1983. Title I -- EPA authorized to prepare comprehensive programs for preventing and eliminating pollution in navigable and ground waters; authorizes appropriation of funds to assist states in administering programs. Title II -- EPA authorized to make grants to states and local governments of up to 75% of the construction costs of public owned treatment plants. Title III -- EPA to establish effluent limitations: By July 1, 1977 : for all non-public stationary sources employing "the best practicable control technology currently available" By July 1, 198 3 : additional effluent limitations for above sources employing "the best available tech- nology economically achievable" 14 By July 1, 1977 : for publicly owned treatment facilities; all must be operational by June 30, 1978 By July 1, 198 3 : additional effluent limitations for all publicly owned treatment works employing "the best practicable waste treatment technology over the life of the works" EPA to issue new source standards for some 27 designated industries, and for any discharge of toxic pollutants. Penalties provided are up to $10, 000 per day (civil) and $2, 500 to $25, 000 per day or $50, 000 per day (criminal). Title IV -- Requires permit to discharge any pollutant into navigable waters from stationary source (replaces permit program under Refuse Act of 1899). 15 B. U.S. Industrial Cost Effects Taken together, the regulatory requirements outlined above will have significant economic consequences. They have important implications for the future scope and character of business decision-making/ and for the profitability and viability of particular firms and industries. They impose cost burdens that must be accommodated in one manner or another — for example, by resource substitutions in manufacture, by productivity gains, by reduction of profit margins, by price rises, by diminished increases in real wages, or, at worst, by plant shutdown or relocation. The size of the costs to be absorbed or shared depends not only on the technical standards of purity that are adopted but also on such factors as the nature and scale of the production process, the degree of success already achieved in pollution abatement, the age and adaptability of plant and equipment already in place, and the comparative expensiveness of (a) new construction and (b) the installation of antipollution systems in existing facilities. In section 6 of P.L. 92-500, the concern of Congress over the aggregate economic implications of pollution control is directed at the resulting production costs and market prices. The costs of pollution control could be considerable, for at least two reasons. First, stringent pollution controls could involve substantial capital expenditures, compressed into a short span of years, with 16 possible strain on company resources and on capital markets. Second, some firms and industries — and the geographic areas in which they are located — will be less able than others to carry the new economic load imposed by an intensive national antipollution effort. To identify the costs involved, consideration must be given to the combined impact of all types of pollution control requirements on firms, and on their suppliers. While the direct cost impact of any particular pollution control requirement might be modest, the combined impact of all types of pollution controls and the effect of such controls on all suppliers, not just for the end-product industry, could be substantial. Thus, higher prices due to pollution control requirements (in, e.g., the glass, plastics, and steel industries) have to be accumulated at end-product levels (e.g., automobiles and appliances) before the true impact on international markets can be known. Pollution abatement costs in industries which have little or no international trade, such as electric power, are therefore relevant to the requirements of section 6. Development of a consistent methodology for an industry to determine pollution abatement effects on costs and prices will involve simulation of the response of cost accounting and budgeting criteria for additional capital and operating costs associated with compliance. Allocation of these costs on an industry or product basis will require either a knowledge of, or some reasonable 17 assumption concerning, these decision rules. The complexity of this particular calculation is evident from the variety of feasible costing approaches available — e.g., standard, actual, job, or process, each of which may cover either "full" or "variable" costs. The existence of multidivision or multiproduct companies further complicates the determination of actual costs on a product basis. In addition, the proprietary nature of information on production costs and their implications for an industry's competitive position will hamper the direct collection of detailed information from companies. Synthetic or calculated estimates will probably have to be developed for a number of plausible alternative situations, or a set of "representative" costs would have to be adopted, The translation of production costs into actual market prices is equally difficult. It involves assessment of likely incremental financial returns and premises regarding the performance and service standards of the market. The structure of an industry and the quality of competition are major influences on pricing. Estimated probable price increases must take account of customary profit margins, the target return on investment, and the return on equity sought by firms within the particular industry. Furthermore, intercompany and interindustry variations in these criteria will result in a range of prices for the given decision rules. 18 To be complete, the production cost and market price determinations for an industry or product line must include indirect costs. This means that pollution-related material and labor inputs to the industry must be traced throughout the industrial infrastructure. The use of input-output tables may be feasible, but this requires assumptions regarding price elasticity, shifts in markets due to substitutability, and other factors before final prices can be determined. In addition, as price effects are projected through time, the original input-output table becomes outmoded. Consequently, the assumptions underlying the analysis become more tenuous. A tracing of these costs through the industrial structure should be accompanied by statistical analyses of errors arising from the dispersion of the observed data The final result would thus yield a set of average values for cost and price effects, rather than point estimates. These are formidable methodological problems. They will not be solved easily, or soon. However, to some extent, these problems will diminish as the cost effects of pollution control rise with the aggregation of strict regulations for several types of pollution within a given industry. The general level of these cost impacts should thus be easier to identify over time. These opportunities to develop beginning, comprehensive, order- of-magnitude effects will be pursued further in subsequent reports. 19 III. Pollution Control in Foreign Countries The second requirement in section 6 specifies that the Secretary of Commerce "shall undertake immediately an investigation and study to determine. . . (2) the probable extent to which pollution abatement and control programs will be implemented in foreign industrial nations in the near future and the extent to which the production costs (computed to the greatest extent practicable on an industry-by-industry basis) of foreign manufacturers will be affected by the costs of such programs . . . " The requirements of 6(a) (2) are similar to those contained in 6 (a) (1) , namely, the identification of foreign industrial pollution abatement programs and their probable effect on foreign production costs. A. Foreign Industrial Pollution Abatement Programs An initial examination is presented in the Appendix to this report of the pollution control programs of nine other industrialized nations. The countries reviewed are: Belgium Japan Canada Netherlands France Sweden Germany United Kingdom Italy In 1971, 58 percent of total U.S. exports of merchandise went to these countries, and they, in turn, provided 65 percent of total U.S. imports. 20 Within the data limitations cited in connection with the discussion in Chapter II of this report, the country profiles provided in the Appendix summarize each country's pollution problems, environmental awareness, abatement policies and programs, pollution costs, governmental assistance and future programs. The highlights of the environmental policies and programs of these countries concerning air and water pollution only are noted briefly below. While all the countries evidence concern regarding air and water pollution abatement, their performance to date varies from comprehensive to nonexistent controls. Belgium recently has enacted comprehensive laws for dealing with air and water pollution. Water pollution regulations are to be issued in 1973. Air pollution standards for industrial and power generating plants are being developed. After August 5, 1973, all fuel oils produced and used in Belgium for domestic heating must have no more than 1.0 percent sulfur. Canada has comprehensive water resources legislation, which when fully implemented, will rely on regional water resource management agencies to control all aspects of water use, including the setting of environmental water quality and discharge standards. At present, the Canadian Federal Government has set national effluent discharge limits for the pulp and paper industry, and is also developing similar standards for several other industries. Air quality standards are set by the provincial governments, 21 taking into consideration national air quality objectives set by the Federal Government for specified pollutants. At present, the Province of Ontario has strict air pollution regulations, while the less industrialized provinces have done little to curb industrial air pollution. In France , authorities may impose conditions regarding the quality and content of gaseous emissions into the air prior to the construction of an industrial plant. These standards are rigorously enforced in nationalized industries and utilities, generally less so with respect to private firms. France also has established laws for surveying and controlling river pollution and the power of water management agencies is being strengthened. In Germany , the States have the constitutional authority to regulate air and water pollution. . While the Federal Government may recommend emission and discharge standards, it must rely on the States to adopt and to enforce them. As such, standards and enforcement vary widely. Amendments to the German constitution to centralize environmental control authority are now under consideration, as are ambitious federal legislative proposals to control air and water quality. Italy has no water pollution legislation, but does have a 1972 air pollution law which provides for the establishment of emission standards regulating heating installations, industrial plants and motor vehicles. 22 The development and enforcement of standards vary region-by-region, but on the whole there is only minimal control at present. Japan recently has enacted 14 new environmental laws providing, inter alia , for comprehensive controls of air and water pollution. Whether and to what extent these new efforts will be effective in abating Japan's serious pollution problems must await their implementation and enforcement. The Netherlands has a comprehensive water pollution program which includes the prohibition on discharging effluents into surface water without a permit. The permits specify what water quality or discharge standards must be met. Air pollution is controlled through the imposition of emission standards for manufacturing and service plants. To assist in the enforcement of these standards, a national network of 250 monitoring stations and 10 regional measuring centers is under construction and scheduled for completion in 1973. Sweden regulates both industrial air and water pollution through a license procedure required of firms using specified production processes. Emission limits, which follow national recommended standards, and other operating conditions for the protection of the environment, are set forth in the operating license of each firm and are legally enforceable. The terms of each license are negotiated with the Government, taking 23 into consideration the economic ability of the firm to meet the recommended national standards. However, the burden of proof lies with the firm if it believes that it is unable to meet the applicable standards. In the United Kingdom , local and regional authorities set and enforce emission standards on a case-by-case basis, applying a "best practicable means" standard in determining the extent to which a firm is technically and economically capable of meeting the established standards. While enforcement is not consistent, significant progress has been made in abating smoke, grit and dust emissions. All water discharges must be approved by the river authorities. Their responsibility includes conserving, redistributing and augmenting water resources as well as determining effluent standards for new and existing sources. 24 Tracking the levels of control in these and other nations, and their changes over time, amount to major technical efforts. Several international organizations have similar interests in this area, and one or more may become a continuing source for this information on a global basis. B. Foreign Pollution Control Costs In Chapter II of this report, the difficulties that will be encountered in developing good domestic cost data on pollution control were described. This situation is further complicated at the international level by such additional factors as incompatible industrial classifications, differences in cost accounting practices, language barriers, and data verification problems. Some of these difficulties can be overcome by the development and use of standardized methodologies. The likelihood that these developments will occur under one or more international organizations will be examined in subsequent reports. An initial international pollution cost study for a few industries has been carried out by the staff of the 23 nation Organization for Economic Cooperation and Development (OECD) , but the reports are currently restricted by the OECD. The OECD is now in the process of developing plans for several additional cost studies under the auspices of its Environmental Committee. As the results of these efforts become available, they will be reviewed in this series of reports. 25 In addition, the U.S. State Department is currently completing an ad hoc review of the pollution costs in three foreign industries — steel, pulp and paper, and non- ferrous metals. The results of this effort will also be carefully reviewed for future reports under section 6 . 26 IV. International Competitive Considerations The remainder of section 6(a) requires the Secretary of Commerce "shall undertake immediately an investigation and study to determine . . . (S) the probable competitive advantage which any article manufactured in a foreign nation will likely have in relation to a comparable article made in the United States if that foreign nation-- (A) does not require its manufacturers to implement pollution abatement and control programs 3 (B) requires a lesser degree of pollution abatement and control in its programs 3 or (C) in any way reimburses or otherwise subsidizes its manufacturers for the costs of such programs ; (4) alternative means by which any competitive advantage accruing to the products of any foreign nation as a result of any factor described in paragraph (3) may be (A) accurately and quickly determined^ and (B) equalized 3 for example 3 by the imposition of a surcharge or duty 3 on a foreign product in an amount necessary to compensate for such advantage; and (5) the impact 3 if any 3 which the imposition of a compensating tariff or other equalizing measure may have in encouraging foreign nations to implement pollution abatement and control programs . A. Competitive Advantages as a Result of Pollution Abatement Programs The inadequate data and methodology described in previous sections preclude any specific computation at the present time of competitive advantages due to the factors cited in numbered paragraph (3) above. However, since the United States is in the relatively early stages of application of the strict environmental controls enacted in the recent past, it may be some time before the most 27 substantial cost effects reach the international marketplace in the form of higher prices. In water pollution control, for example, the strictest industrial controls will not be applied until the late 1970s and early 1980s. Any foreign competitive advantages will occur as these and other U.S. pollution control programs simultaneously impose costs of domestic manufacturers, and their suppliers. These advantages may be due to lower foreign levels of pollution control, or foreign government actions which subsidize industrial compliance. Each of the nine countries reviewed in this report, and the U.S., are members of the Organization for Economic Cooperation and Development and all have adopted the OECD's "polluter-pays" principle. Some assistance, however, is usually provided by governments to industries for costs imposed by pollution control regulations, as may be seen in the "Government Assistance" sections of each of the country profiles contained in the Appendix. Depreciation allowances on pollution control equipment, for example, are generally more favorable in other countries than in the U.S., as may be seen from Figure 2. 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This attempt will require an identification of those U.S. products which (a) will be impacted most severely by aggregated pollution control requirements, and (b) are involved in substantial trade flows with countries exercising lesser control, or which offer high subsidies for industrial compliance. B. Equalization Measures Provisions of P.L. 92-500 other than section 6 call for Federal action to encourage international harmonization of standards at least to the same extent as required by U.S. laws, and its Declaration of Goals and Policy proposes that the President cooperate with other nations in a quest for this uniformity. Section 101(c), which is part of the Declaration, further provides: ...that the President, acting through the Secretary of State and such national and international organizations as he determines appropriate, shall take such action as may be necessary to insure that to the fullest extent possible all foreign countries shall take meaningful action for the prevention, reduction, and elimination of pollution in their waters and in international waters and for the achievement of goals regarding the elimination of discharge of pollutants and the improvement of water quality to at least the same extent as the United States does under its laws. 30 Section 7 provides for international agreements and for participation in international forums, including the United Nations, on behalf of harmonization: The President shall undertake to enter into international agreements to apply uniform standards of performance for the control of the discharge and emission of pollutants from new sources, uniform controls over the discharge and emission of toxic pollutants, and uniform controls over the discharge of pollutants into the ocean. For this purpose the President shall negotiate multilateral treaties, conventions, resolutions, or other agreements, and formulate, present, or support proposals at the United Nations and other appropriate international forums . Adoption of the "polluter-pays" principle by all 23 members of the Organization for Economic Cooperation and Development (OECD) in May 1972 represents a significant step toward harmonization. This principle is strongly supported by the U.S. Government. Thus, in his 197 3 State of the Union Message on Natural Resources and Environment, President Nixon reaffirmed that "the costs of pollution should be more fully met in the marketplace, not in the Federal budget." A similar view of cost allocation was adopted by OECD to prevent trade distortions that would result if the cost burdens were more or less widely diffused in some countries in the first instance, but imposed directly upon industry in others . 31 Determination of equalization procedures other than harmonization would have to be based on cost comparisons which take account of many complex factors, including abatement techniques, governmental assistance programs, the aggregation of pollution-control costs for products manu- factured from multiple raw material sources, and environ- mental costs associated with energy production. No means are available at present for obtaining and combining this information "accurately and quickly". Accomplishing this requirement of section 6 is one of the most difficult assignments presented in P.L. 92-500. The data and methodological problems discussed throughout this report are involved, at both domestic and foreign levels. A determination of the feasibility and design of approaches to accomplish this task will be a major topic in future reports in this series. 32 APPENDIX FOREIGN POLLUTION CONTROL POLICIES AND PROGRAMS A review of the policies and programs of nine foreign industrial nations is provided in this Appendix. The countries reviewed are: 1. Belgium 6. Japan 2. Canada 7. Netherlands 3. France 8. Sweden 4 . Germany 9 . United Kingdom 5. Italy The summaries seek to provide a perspective on public and private attitudes within each country on environmental issues. This includes a synopsis of government policies and selected legislation to identify the extent to which concern for pollution control has been translated into specific programs. The cost and other data reported here have been collected from previously published sources. They have not been independently verified by the Commerce Department, To the extent that information is available, each country summary examines the following areas: - Pollution Problems Environmental Awareness Pollution Abatement Programs Government Assistance Pollution Costs and Future Programs Chronology of Selected Pollution Abatement Laws and Regulations BELGIUM Pollution Problems With 815 inhabitants per square mile, Belgium is one of the most densely populated countries in the world. A heavily industrialized country, it has been increasingly faced with pollution problems and is now actively studying and adopting corrective measures. A major problem in Belgium is the shortage of pure water for industrial purposes and for general consumption. Potable water shortages have occurred due to critical pollution of many rivers and canals. This is largely due to inadequate effluent treatment facilities and the scarcity of ground waters. As recently as 1968, there were only 60 to 65 water purification plants for all of Belgium. Even today, the national sewage treatment capacity handles only 5 percent of the total polluted effluent discharged. A major source of air pollution in the cities is domestic heating. In winter, it represents 25 - 35 percent of total urban air pollution. Another major source of air pollution is the automobile. At the end of 1971, there were 2.7 million motor vehicles registered in Belgium with heavy density in the cities. Automobile emissions are estimated to account for 50 percent of the country's total urban air pollution. Especially affected by air pollution are the cities of Brussels, Antwerp, Liege, Ghent, and Charleroi. Belgium's dependence on thermal power sources also contributes to serious levels of pollutants such as sulfur oxides. Environmental Awareness An active government policy on environmental protection has emerged only recently. Until 1972, there was no offi- cially designated agency to coordinate environmental activ- ities. The responsibility for antipollution programs was fragmented among several agencies such as the National Science Policy Council and the Ministries of Health, Public Works, Economic Affairs, and Labor. On March 22, 1972, the Premier of Belgium announced the government's environmental program which includes the following measures: A-2 establishing regional water treatment authorities; implementing water protection laws ; completion of a five-year program for water treatment; an d allocation of funds for water treatment plants. Appropriate ministries were requested to propose standards on noise, air, and water pollution to be applied in new industrial plants. Five national working groups were established to develop long-term programs on: research for pollution abatement and standards,- industrial pollution and radioactivity; water pollution; emissions, noise, and other types of pollution; and conservation of nature. The activities of the working groups are being coordinated by a steering committee under the Chairmanship of the Premier . As it has indicated in its report to the United Nations Conference on the Human Environment, the Belgian Government strongly favors international coordination and cooperation in the fields of environmental research and policies . The seriousness of the pollution problem in Belgium has attracted a great deal of public attention. The problem itself, the lack of implementing standards, and lagging enforcement of existing regulations, have received extensive coverage in the press, including trade magazines. In 1972, private Belgian groups and associations involved in various aspects of environmental protection formed a new association to coordinate and reinforce their activities The public, including labor unions, has been calling for a more active environmental policy. Belgian industry, on the other hand, has expressed concern over the level of environment protection expenditures and the impact on prices, economic growth, and distribution of incomes. A- 3 Pollution Abatement Programs Basic legislation has been enacted in the last few years to deal more effectively with environmental problems. On May 1, 1971, two laws were enacted concerning the pro- tection of surface and ground water which replaced earlier and less effective laws of 1950, 1955 and 1956. The first of these new laws established three regional water purifi- cation authorities; one for coastal waters and two for the Meuse and Schelde basins. The law authorizes regional agencies to take over the responsibility for municipal sewage treatment, to control existing and new treatment plants, and to enforce regulations. The law also stipu- lates that industries may be required to share in the cost of public facilities if their water discharge exceeds certain fixed levels and they do not build their own treat- ment facilities. The second law is narrower in scope, and deals with the protection of ground water. Water pollution regulations are to be published in 1973. The basic air pollution control law of December, 1964, authorizes the Executive Branch to take all due measures to control air pollution. After systematic measurements of sulfur dioxide and smoke emissions were carried out at 180 monitoring stations during 1970, an implementing decree was issued on July 26, 1971. It establishes specific protection zones where sulfur oxide concentrations in the ambient air exceed 150 micrograms per cubic meter. A subsequent law of August 5, 1971, requires that after August 5, 1973, all fuel oils produced and used in Belgium for domestic heating contain no more than 1.0 percent of sulfur. The law of July 19, 1971, established motor vehicle emission standards. These standards are identical with those prescribed by the March 20, 1970, directive from the Council of Ministers of the European Communities located in Brussels. This directive limits the carbon monoxide content in the exhaust to 4.5 percent by volume at idle speed, and crankcase emissions to 0.15 percent of fuel consumed. Standards also are expressed in permissible absolute weights of carbon monoxide and crankcase gas emissions, according to the weight of the vehicle. No air pollution standards have been issued to date for industrial or power generating plants. A- 4 Government Assistance Companies making sizable expenditures to avoid or correct air, water, or noise pollution may benefit from government subsidies under the 1970 Economic Expansion Law. The law provides investment incentives for produc- tion facilities in economically backward areas. Such incentives may be in the form of interest subsidies, which can be granted up to a maximum of five years and up to 7 5 percent of the total value of a new investment. If an investment is self-f inanced, a grant may be made in an amount equivalent to the appropriate interest rate subsidy. In addition, assistance can be provided through contractual arrangements with the government which may include: (1) government guarantees, (2) tax incentives, and (3) interest-free loans, to cover, in part, expenses for consultant's fees or research. Although the main purpose of the law is to encourage high technology industries, regional development and employment, the law is being used as a policy tool for promoting pollution abatement. For example, the interest subsidy is greater when planned investments are made to exceed existing pollution standards through the use of advanced environmental protection technology. Industry sources point out however, that assistance under the Economic Expansion Law is largely designed to encourage investment in less developed areas of the country. As a result, the amount of assistance is smaller in the regions of high industry concentration, where the need for pollution control is greater. Finally, industry sources assert that in practice government subsidies under the law do not exceed 15 percent of investment costs. Pollution Costs and Future Plans As part of its priority program for water treatment, the Belgian government has decided to allocate from $32 million to $4 6 million annually over the next 15 years for construction of municipal and industrial water treat- ment plants. Initial expenditures were made in 1972, by the Ministry of Public Health to begin construction of a $57 million water treatment project on the Albert Canal. Precise estimates of Belgian industry's expenditures on pollution abatement are not in hand. Industry sources estimate, however, that the cost of investment in anti- pollution equipment frequently represents a 5 - 10 percent A-5 increase in capital investments, with a similar increase in operating costs. These sources also estimate that the implementation of environmental control measures in Belgium may eventually represent 1 percent of the annual gross national product. A- 6 Bibliography "Anti-pollution Control Association Formed in Brussels." Belgian Trade Review , March, 1972. Commission Interministerielle de la Politique Scientif ique. Monographie de Pays sur des Problems Relatifs a 1 ' Environment , Stockholm: Economic Commission for Europe, 1970. Lemaire, Frans C. "Raisons et Deraisons de la Protection de 1 ' Environment . " Industrie , November, 1972. Schillebeecks , Yves. "Pour une Politique de 1 'Environment . " Industrie , August, 1972. U.S. Department of Commerce. "Market Factors in Belgium." Overseas Business Reports, November, 1962. A-7 CANADA Pollution Problems Canada's pollution problems are closely identified with urban centers in a 200 mile wide east/west strip along the length of its border with the United States. The condition of the environment, the conditions causing its deterioration, and the solutions are very similar in Detroit and Windsor, Cleveland and Toronto, or Seattle and Vancouver. There is also concern about preserving Canada's extensive shore line and Arctic areas, restoring the Great Lakes, and controlling the extraction of natural resources. The pulp and paper industry is generally considered to be Canada's major polluter. Other major polluting industries are mining and metal refining, utilities, chemicals, petroleum and food processing. E nvironmental Awareness Several agencies of the Federal government were reorganized and regrouped under the 1970 Government Organ- ization Act to create the Department of the Environment, which has become known as Environment Canada. The Depart- ment states its general goals as follows: (1) to maintain the capacity to meet historical and statutory responsibil- ities for research and management of air, water, fish, forest and wildlife resources; (2) to clean up and control pollution; (3) to assess and control the environmental impact of major new programs, projects, and developments; (4) to improve the understanding of long-term environmental phenomena; (5) to promote and support international environ- mental initiatives; and (6) to create a better public aware- ness and understanding of environmental issues. Since these goals necessarily involve cooperation and coordination with provincial and local governments, with other federal departments, and occasionally with foreign governments, Environment Canada views itself as a coordinator and catalyzer of diverse programs whose ultimate combined results will improve the Canadian environment. Canadians have become well aware of industrial pollution problems and are increasingly determined that they be effectively resolved. Many active civic groups have A- 8 been set up to work for more comprehensive pollution control by both industry and government. These groups have gained much publicity in Canada recently, mainly by organizing scores of local chapters and publicizing the dangers of pollution. Pollution Abatement Programs Until the beginning of the 1970' s, legal and admin- istrative responsibilities for pollution control in Canada rested almost entirely with the provinces and municipal- ities. With the recent awakening of public interest in the environment, however, the Federal Government has taken a much more active role in establishing national environ- mental policy and in coordinating local governmental efforts to control pollution. This is evidenced by the establishment of a national ministry concerned solely with the environment and by the passage of two significant pieces of legislation, the Canada Water Act of 1970 and the Clean Air Act of 1971 (see Figure A-l) . It will be difficult to assess the true effectiveness of the Clean Water Act for some time because its require- ments have not been fully developed and its enforcement mechanisms have in many cases just been established. The legislation represents a departure from the traditional pollution-prohibition-type laws in that it allows the regional water quality management agencies to establish a system of effluent discharge fees in the operation of their treatment facilities in place of, or in addition to, dis- charge regulations. Environment Canada has established national water standards for certain industries under the Federal Fisheries Act of 1952. Compliance with such standards in the pulp and paper industry are expected to result in a 70 percent reduction in water pollution from old mills and complete elimination of water pollution from new or altered mills, to the extent that this is technically feasible. Regulations have also been issued to control mercury effluents from chlor-alkali plants. Consultations with industry and the provinces are continuing to develop standards for the petroleum, food processing, chemical, mining, and other industries. The work of the International Joint Commission (established under the Boundary Waters Treaty of 1909) led to a major agreement between the United States and Canada on April 15, 1972, to clean up the Great Lakes. A- 9 The agreement specified certain water quality standards (for total coliforms, dissolved oxygen, total dissolved solids, taste and odor, pH, iron, and phosphorus) and established procedures to handle oil spills. To achieve the goals of the agreement, the U.S. cost has been esti- mated at between $2.7 and $3 billion over the next five years. The Canadian cost has not yet been estimated. The provinces have a variety of water pollution laws and mechanisms for enforcing them. The majority of provincial and local environmental legislation deals with sewage and solid waste disposal and public health, but some of the governments impose additional controls on industry. Pursuant to the Clean Air Act of 1971, air quality objectives have been established for four major pollutants: sulfur dioxide, particulate matter, carbon monoxide and total oxidants (Figure A-2) . Air quality objectives are being considered for nitrogen oxides and hydrocarbons. The Clean Air Act calls for three levels of air quality — "desirable", "acceptable" and "tolerable", — although the recently announced objectives cover only the first two levels. Conceptually the Clean Air Act follows similar legislation in the United States; i.e., the maximum "acceptable" level in Canada corresponds to secondary air quality standards in the U.S. The objectives were developed jointly by federal and provincial authorities. Aside from the Clean Air Act, federal legislation to deal with air pollution is very sketchy. As is the case with water pollution, the provinces have varying types of laws concerning air pollution and varying enforcement agencies. Many provinces rely on public health legislation to control air pollution. There is very little federal legislation on solid waste disposal or soil pollution in Canada. Among the laws to which these types of pollution are at least partly relevant are the Criminal Code, the Fisheries Act, the Navigable Waters Protection Act, the National Harbors Board Act, the Animal Contagious Diseases Act, the National Parks Act, and the Migratory Birds Convention Act. Almost all responsibility for industrial solid waste disposal is vested in the provinces and municipalities. Varying degrees of statutory control over radiation, noise, thermal, and other types of pollution are also vested in the provinces and municipalities. A-10 Government Assistance The government of Canada has officially adopted the "polluter pays" principle, which precludes government subsidies, loans, tax concessions and other types of financial relief to industries forced to implement pollu- tion controls. There has been some discussion at the federal level of devising a loan program similar to an existing provincial program administered by the Ontario Development Corporation (ODC) . The ODC administers four different types of term loan programs to assist small Canadian-owned companies engaged in manufacturing or service industries. When such companies apply for loans to install or update pollution control equipment, they must show that they are unable to draw funds from their own sources, provide details of equipment to be purchased, and show that their plans have been approved by pollution control authorities. The maximum loan is $250,000, and repayment terms are set according to the company's ability to repay. Loans may run for terms of up to ten years. Funds are not disbursed until the installed equipment is approved and certified to be in proper working order by pollution control authorities. There are several provisions of Canadian tax law that can be classified as industrial incentives to implement pollution control systems. Under the Income Tax Act, corporations are permitted to accelerate depreciation (full write-off in two years) of structures and equipment purchased in the period April 27, 1965 to December 31, 1973, to prevent water pollution and in the period March 13, 1970 to December 31, 1973, to prevent air pollution. A corporation may also reduce its taxable income by the amount of current operating expenditures for scientific research (which presumably includes research on pollution control technology) and all capital expenditures for property (other than land) for scientific research. A ruling by the Federal Government in 1971, exempts purchases of pollution control equipment used in production from payment of the general sales tax of 12 percent. The exemption applies to "all machinery and apparatus which manufacturers or producers acquire to detect, prevent, remove or reduce pollutants of water, soil or air" (excerpted from budget proposals to Parliament delivered on June 18, 1971). It should be noted, however, that all production machinery and apparatus is exempt from the federal sales tax. The 1971 extension of the exemption to pollution control equipment appears to be merely an explicit ruling that such equipment is included in the broader category of production machinery. A-ll Pollution Costs and Future Plans Canadian cost estimates have been variously compiled by governmental and industry sources. Figures A-3 and A-4 provide a number of cost indicators, both on a macro- economic and microeconomic basis. Details of underlying assumptions are not available. A-12 Figure A-l CANADA Chronology of Selected Federal Pollution Abatement Laws and Regulations Air Pollution Prior to 1971, enacted legislation tended to deal with specific emissions. Examples of these are: Federal Criminal Code - General nuisance provisions. Canada Shipping Act - Regulates air pollution from ships within one mile of land. The Railway Act - Regulations to control emissions from trains in certain municipalities. Clean Air Act of June, 1971 - An extracted summary follows 1. Authorized the Federal Government to: set national air quality objectives (see recently issued objectives in A-2) ; set national emission standards where health or international agreements are involved; set national emission guidelines to assist provinces and local governments in developing uniform regulations ; set specific emission standards for all works or businesses under Federal legislative authority; regulate composition of domestic and imported fuels; and enter into agreements with individual provinces to combat air pollution within a province or in interprovincial areas. 2. Penalties can be assessed up to a total of $200,000 for violating national emission standards and up to $5,000 per day for producing or importing prohibited fuels or violating other parts of the statute. 3. Act is administered by Environment Canada. A-13 Figure A-l (Continued) Water Pollution The Fisheries Act of 1952 Prohibits disposal of solid waste materials in any waters where fishing is carried out on the banks of such waters. Standards have been formulated based on this Act. Regulations , October 1971 Regulations , November 1971 and May 1972 A number of laws deal Examples of these are Canada Shipping Act Navigable Waters Restoration Act Standards to control mercury effluents from chlor-alkali plants . Standards for pulp and paper industry; set maximum discharge levels and schedules of compliance. with specific discharges. Provides levy on transported oil to finance cost of oil spill cleanups. Prohibits disposal of certain wastes in waters. National Harbors Act National Parks Act Migratory Birds Convention Act The Canada Water Act of 1970 An extracted summary follows 1. Authorizes Federal Government to: - designate, in cooperation with the provinces, any body of water having a significant national interest as a water quality management area; - establish programs in above areas' and appoint- ment of agencies to recommend and implement water quality manaaement plans; these agencies set design and operation of effluent treatment facilities as well as user fees; and A-14 Figure A-l (Continued) enter into agreements with provinces to establish inter-governmental committees to advise on research, planning, management and development . 2. Penalties can be assessed up to $5,000 per day for pollution of water quality management areas. 3 . Administered by Environment Canada . Boundary Waters - Set up International Joint Treaty of 1909 Commission between Canada and U.S. Joint Commission - Provides cooperative effort Agreement of April 1972 to clean up Great Lakes; sets water quality standards; sets procedures to handle oil spills . A-15 Figure A-2 CANADA National Air Quality Objectives Maximum Maximum Desirable Ace eptable mg/m3 ppm mg/m3 ppm Sulfur Dioxide 1 hr 450 (0.17) 900 (0.34) 24 hr 150 (0.06) 300 (0.11) 1 yr 30 (0.01) 60 (0.02) Particulates 24 hr 120 1 yr* 60 70 Carbon Monoxide 1 hr 15 (13) 35 (30) 8 hr 6 (5) 15 (13) Total Oxidants 1 hr 100 (0.05) 160 (0.08) 24 hr 30 (0.015) 50 (0.025) 1 yr 30 (0.015) ♦geometric mean Environment Canada, National Air Quality Objectives Announced (news release communique) January 3, 1973 A-16 Figure A- 3 CANADA Macroeconomic Pollution Abatement Costs Category and Source 1. All of Canada (Pollution Control Association of Ontario) 2. Ontario (Pollution Control Association of Ontario) 3. All of Canada - 80% cut in air and water pollution (Andre Reynauld - Economic Council of Canada) NOTE: This represents 2% of GNP in 1971, reducing to 1% of GNP by 1980. Public sector will spend about 2/3 of this amount. Water pollution will require 2/3 of total; air pollution 1/3 of total . 4. Air Pollution in energy sector - all of Canada (J.M. Courtright, The Economics of Clean Air in Canada, 1972) Time Total Period Investment 1973-82 $5.5-6.5 billion 1972 $120 million 1972-80 $1.5 billion annually 1975 $250 per capita A-17 Figure A-4 CANADA Microeconomic Pollution Abatement Costs Industry or Company and Source MINING Mining industry (The Mining Association of Canada, Pollution Control Report Metals mining and industrial materials ( Ibid ) . Copper and nickel ( Ibid ) . (NOTE: 1970 production of copper was valued at $779 million and is expected to increase 30% by 1975; 1970 production of nickel was valued at $830 million and is expected to increase 20-25% by 1975.) Lead and zinc (Ibid) . (NOTE: 1971 production of zinc was valued at $411 million and of lead at $110 million.) Uranium (Ibid) . (NOTE: 1971 uranium production was 8.02 million pounds.) Gold ( Ibid ) . (NOTE: 1971 production of gold was valued at $79 million.) Time Period Total Investment 1971-75 $450-500 million 1971-75 $300 million 1970-75 $200 million 1968-75 $1 million annually up to 1972 $6 million 1972-76 $6 million 1972-75 $2 million A-18 Figure A- 4 (Continued) Industry or Company and Source Molybdenum (Ibid) . (NOTE: 1971 production of molybdenum was valued at $44 million.) Iron ore ( Ibid ) . (NOTE: 1971 production of iron ore was valued at $560 million.) Asbestos ( Ibid ) . (NOTE: 1971 production of asbestos was valued at $210 million. ) Potash (Ibid) . (NOTE: 1971 production of potash was valued at $128 million. ) Dominion Foundries and Steel Ltd. ( Ibid ) . Mining industry (National Advisory Committee on Mining and Metallurgical Research) Nonferrous metals ( Ibid ) . Iron and Steel ( Ibid ) . Hudson Bay Mining and Smelting Co. - to eliminate sulfur dioxide emissions from zinc (Ibid) Time Total Period Investment up to $3 million 1972 1972-75 $.75 million 1970-75 $35 million 1970-75 $20 million Up to $4-5 million 1972 1970-75 $3 million 1969-75 $34 million 1971-75 $500 million 1971-75 $213 million 1971-75 $120 million 1971-73 $2 million A-19 Figure A-4 (Continued) Industry or Company and Source PULP AND PAPER Pulp and paper (Canadian Pulp & Paper Association) Pulp and paper (Canadian Pulp & Paper Association, H.D. Paavila) Pulp and Paper (T.W. Beak, Montreal consultant) Kimberly Clark Pulp & Paper Co. (The Financial Post, Oct. 28. 1972, p.l) , - Thunder Bay, Ontario plant Abitibi Paper Co. ( The Financial Post , Oct. 16, 1971, p . 2) British Columbia Forest Products Ltd. - for a 500-ton-a-day bleached kraft pulp mill in Mackenzie, B. C. ( The Globe an d Mail , May 12, 1971, Toronto) Cariboo Pulp and Paper Co. Ltd. 7 50-ton-a-day kraft pulp mill in Quesnel, B. C. (Ibid). Consolidated - Bathurst, Montreal ( Ibid ) . Crown Zellerbach Canada Ltd. Vancouver ( Ibid ) . Domtar Ltd., Montreal (Ibid). Kimberly-Clark, Ontario (Ibid) . Time Period Total Investment 1960-70 $130 million 1972-80 $650-750 million 8-10% of capital cost of new plants 1965-70 $2.7 million 1971-73 $2.5 million 1962-71 $18 million 1972-73 $8 million not $4.5 million specified not $6 million specified not $20 million specified 1961-71 $1.1 million 1965-68 $7.3 million 1969 $1.5 million 1970-73 $30 million 1971-72 $9 million A-20 Figure A-4 (Continued) Industry or Company and Source MacMillan Bloedel Ltd., Van- couver (Ibid) . Ontario-Minnesota Pulp and Paper Co. Ltd. at Fort Frances, Ontario (Ibid) . Pulp and paper on water pollution (Canadian Pulp and Paper Association - 1972 Annual Report) (NOTE: 1972 value of shipments for pulp and paper industry was $3.1 billion) OTHER Ontario Hydro-electricity ( The Financial Post , October 16, 1972, p. 12) Sulfur Extraction from natural gas in Alberta (Alberta Research Council) Total expenditure estimates per plant: (1) over 1,000 tons per day (2) 100-300 tons per day Ford Motor Co. of Canada - Windsor and Oakville plants ( Toronto Globe and Mail , July 29, 1969) General Motors of Canada Ltd. air and water purification at all plants ( Toronto Globe and Mail, Feb. 25, 1970) Time Period Total Investment - 1969 $15.8 million 1970 $3.5 million 1970-74 $30.5 million not $5.3 million specified (or 11% of total cost of project) 1972 $32 million (or 8.3% of capital outlay) 1950-71 $58 million 1972-74 $34 million $5 million $150,000- 200,000 not $6 million specified 1970-73 $26.2 million A-21 Bibliography AMF, Incorporated. Environmental Report , Worldwide Review, 1972 . New York: AMF, Incorporated, May 1, 1972. Canadian Industries, Ltd. A Digest of Environmental Pollution Legislation in Canada - Air and Soil . Montreal : Canadian Council of Resource Ministers , 1970. Canadian Industries, Ltd. A Digest of Environmental Pollution Legislation in Canada - Water . Montreal: Canadian Council of Resource Ministers, 1970. The Mining Association of Canada. Pollution Control Report . Toronto: The Mining Association of Canada, 1972. "What Environment Minister Plans." Financial Post . October 16, 1971. A-22 FRANCE Pollution Problems Progressive industrialization and urbanization have contributed to increasing pollution problems in France which affect, in varying degrees, the quality of air, water, and other natural resources. Present pollution problems may be further aggravated in the future as a result of continued growth expectations, as follows: 1. industrial production is expected to double during this decade; 2. the number of motor vehicles is projected to increase from 17 million to 25 million by 1986; and 3. total population is expected to increase from 65 million to 75 million, of which 75 percent is expected to be living in metropolitan areas by the end of the century. The. problem of water pollution in the last few years has affected an increasing proportion of water resources. Especially polluted are rivers flowing through heavily industrialized areas: the lower Seine, the Rhine, the Meuse, and the Moselle; and, to a lesser extent, the Rhone and the Loire. A report of the French Economic and Social Council estimates that some 1,6 00 miles of French rivers are contaminated. Of these some 1,250 miles are polluted during low water flows and 350 miles virtually on a per- manent basis. Additional problems of water pollution are found in lakes and along the Mediterranean coast. Air pollution is pronounced in areas where a high concentration of industry and population combines with unfavorable topographical and climatic conditions such as in the cities of Paris, Lyon and Marseille, and the industrial regions in the North and in Lorraine. Table A-l shows estimated emissions of air pollutants bv weight for calendar 1970. A-23 Table A-l Estimated Emissions of Air Pollutants by Weight in France, 1970 (in thousands of metric tons per year) Carbon Sulfur Nitrogen Source Monoxide Dioxide Oxides Particulates Households and Small Business 275 324 78 92 Industry 15 1,195 222 85 Electric Power Generation — 473 189 92 Motor Vehicles 4,845 57 415 108 Total 5,135 2,049 904 377 Source: J. Syrota, "La pollut .ion atmospherique , " Annales des Mines , May/June , 1972, Paris, France , pp. 20-23. Environmental Awareness Interest in the control of pollution problems is evident in both the public and private sectors. The government is publicly committed to the improvement of the quality of the environment and has assumed leadership in directing the country toward this long-term goal. A number of government programs have been undertaken to stimulate the interest and involvement of French citizens. As an example, the "Hundred Measures" campaign was initiated in 1969 to solicit sugges- tions from conservation groups and citizens. These sugges- tions were later incorporated into a comprehensive environ- mental program which included recommended actions for new legislation and research. A separate Ministry for the Environment and Protection of Nature was created in February 1971. Its responsibilities include the following: to provide technical services and coordinate the activities of River Basin Agencies; to foster activities in the fields of air and noise pollution abatement; and to coordinate programs in other Ministries relating to environmental protection. A-24 The French public has become increasingly aware of the global problem of pollution in recent years. Highly publicized incidents such as the Torrey Canyon oil spill, the news of the nearly total pollution of the Rhine, and numerous cases of pollution of French rivers by industrial effluent have made citizens aware of the dangers to the environment. In addition, news media have systematically campaigned to make the public conscious of environmental problems. As a result, current public opinion generally supports strong government action to preserve the national environment and the issue has already emerged in some local elections . French industry is seriously concerned over possible financial and competitive implications of stringent anti- pollution measures. This concern meets with understanding on the part of the government. The government has taken a posture of reconciling its environmental policies with other priorities such as full employment, continued industrialization and further improvement of the competitive position of French goods in international markets. It is believed that each of these objectives could be adversely affected by an environmental policy that is too vigorous. Pollution Abatement Programs France has an array of laws and regulations to enable it to deal with the pollution problem. Although some of the more recent laws have not been fully implemented, they give the government far-reaching authority to issue pertinent regulations. Heavily polluting industrial plants, such as electric power, steel, natural gas, and cement plants, must maintain and operate air pollution monitoring equipment. In addition, plant emissions are checked by government inspectors. There is also a vast network of monitoring stations operated by the central government, local govern- ments and quasi-governmental and private organizations. A synopsis of French pollution control laws is shown in Figure A-5. Considerable emphasis is being placed on air pollution research which is being carried out by a number of govern- ment and private groups. Research is concentrated on measurement methods, pollution prevention technology, and the effects of pollution on health, vegetation and construction materials. A-25 One example of the success of pollution control is that air pollution conditions have markedly improved in Paris since the introduction of special protection measures in 1963, in spite of a 50 percent increase in energy consumption. Additionally, some 1,800 new sewage treatment plants have been added since 19 6 5 compared to a total of 1,500 in operation in the country before that year. Government Assistance Companies investing in effluent treatment facilities can receive subsidies and soft loans (up to 18 years at 4 percent) from government agencies. Combined loans and subsidies from the agencies may cover up to 40-50 percent of capital investments. In addition, loans on favorable terms are available from a government lending institution. Investment in air or water pollution installations also qualifies for accelerated depreciation. Half of the cost of pollution control facilities may be written off in the first fiscal year of their acquisition. This allowance is temporary; however, its expiration has been successively extended to January 1, 1976. The Ministry for Industrial and Scientific Development may aid industry by providing 50 percent of the costs to develop new products and processes destined for pollution abatement. However, the grant is reimbursable if the product or process becomes commercially viable. Many other general French programs for technology enhancement may be applied to research on pollution control. These programs are described in the extensive report, Technology Enhancement Programs in Five Foreign Countries , prepared by the Office of the Assistant Secretary for Science and Technology, U.S. Department of Commerce, published in December 1972. Pollution Costs and Future Programs The government budget for all environmental action amounted to approximately $250 million for 1972, or 0.7 percent of the total government budget. The overall national environmental effort, including expenditures by local govern- ment and private industry, was estimated at $760 million for 1972, or 0.4 percent of the gross national product. While segmented expenditures by industry are not in hand, a leading French bank has estimated that pollution control expenditures for all industries have ranged between 3-4 percent of total investments . A-26 A report of the French Government Commission for Infrastructure and Regional Development estimates expenditures needed to deal with water pollution during the next fifteen years. The report sets two alternative objectives. The minimum objective for 1985 is to avoid a further aggravation of pollution in relation to the present level. The maximum objective is to eliminate 80 percent of gross pollution. The Commission's estimates of annual costs for controlling industrial pollution, which include investment and operating costs, are shown in Table A-2. Table A-2 FRANCE Estimated Annual Costs For Controlling Industrial Water Pollution (millions of dollars) Period Minimum Objective Maximum Objective 1971-1975 53 97 1976-1980 77 130 1981-1985 94 160 Source: Conseil Economique et Social, "Les Problemes de 1 'E au en France," Problemes Economiques , May 6, 1971, p. 8. The Commission concludes that industry will have to bear about two-thirds of these costs. The balance would consist of investment in public sewage facilities financed by River Basin Agencies with revenues from the tax on effluents. However, a report of the French Economic and Social Council notes that plants using public facilities will have to assume additional costs because effluents will require preliminary treatment before being discharged French authorities are expected to tighten control of water pollution regulations in the future. Among the anticipated measures are the following: A-27 setting limits on permissible levels of various pollutants in industrial effluents; banning heavily polluting industries which discharge effluents that are not biodegradable from sites along slow-flowing rivers (such industries will be allowed only at sites close to large and fast-flowing rivers, either down- stream from municipal water intakes or upstream at an appropriate distance from such intakes) ; banning sugar refineries, alcohol distilleries, flour mills and dairies from sites where ground waters require protection; and increasing effluent tax rates to multiply five- fold the revenue and expenditures of River Basin Agencies in order to implement their programs, from about $35 million at present to about $165 million by 1975. Measures in the field of air pollution control will include: issuance of comprehensive regulations concerning emissions; expansion of emission monitoring; and extension of special protection zones to include the cities of Lyon and Marseille. A-28 Figure A- 5 FRANCE Chronology of Selected Pollution Abatement Laws and Regulations GENERAL Law of December 19, 1917 Provides for possible classi- fication of industrial and commercial establishments as dangerous, unhealthful or as a nuisance; also provides authority for the protection of health, safety and well being of the population. AIR POLLUTION Law of August 2, 1961 Decree of September 17, 1963 Decree of April 1, 1964 Decree of August 19, 1964 Provides legislation on atmospheric pollution from domestic heating, industry and automobiles ; permits regulation of emissions, new construction, use of fuels and establishment of specially protected zones; provides for emergency powers to local officials where public health is involved. Deals with abatement of air pollution from heating plants covering Paris metropolitan area . Establishes three categories for industries; first two categories prohibit industries near developed or developing urban areas; local authoriza- tion required for new con- struction and maximum emission levels can be set. Classifies heating plants for environmental protection purposes . A-29 Figure A-5 (Continued) Decree of June 27, 1967 Air pollution regulations are (i.e. Paris metropolitan area) 1. coal 2. light and heavy- fuel oil 3. emissions 4. authorization Decree of February 5, 1969 (and regulation of June 30, 1970) Air emission standards follow: 1. new cars 2. new and used cars 3 . new and used diesel engines Regulates steam generators and other thermal generators provided for designated zones as follows: must not contain volatile matter in excess of 15%. prohibits use in furnaces yielding more than 1,000 thermal units per hour; sulfur content in excess of 2% prohibited. particulates not to exceed 0.6 G/TH or 1.2 G/TH. operating permits required from local authorities. Regulates automobile emissions,- three prototype tests are prescribed for gasoline engine vehicles as well as production control testing. crankcase emissions are not to exceed 0.15% of fuel consumed by weight. carbon monoxide emissions are not to exceed 4.5%. opacity tests are prescribed for exhaust emissions. Because of growing concern about industrial pollution at the new industrial zone and port of Fos near Marseille, the French Government has adopted a series of measures to detect, control and prevent pollution in that area. Industrial plants at Fos will be authorized only if they meet the following conditions: (a) the most modern procedures for pollution control are to be used and (b) there must be agreement to further adapt existing pollution procedures to reflect the latest technology. A-30 Figure A- 5 (Continued) NOISE POLLUTION Circular of November 17, 1966 Highway "ode January, 1964 Sets forth regulations on suppression of noise from various sources. Sets maximum permissible noise levels for motor vehicles. Order of the Minister for Environment May 2, 197 2 Prescribes allowable noise levels for compressors. WATER POLLUTION Law of December 16, 1964 Decrees of September 25, 1970 Basic legislation for water pollution control; provides for establishment of standards and discharge of pollutants; six river basin agencies and parallel river financial agencies were created to coordinate and to provide financial assistance for municipal and industrial pollution control programs; also creates National Committee for Water as advisor to government. Stipulates that the govern- ment may issue decrees pro- hibiting or regulating the dumping of certain products into surface or ground waters as well as the ocean. Prohibits discharge of several categories of detergents (which are not at least 80% biodegradable) into surface and ground waters; provides some limitation on sale of cleaning products. A-31 Figure A-5 (Continued) Other anti-pollution regulations prohibit discharging of toxic and radioactive substances. Discharging of effluent into rivers or lakes is also subject to authorization under the French Rural Code and the River Code. The Public Health Code deals with the quality of water fit for human consump- tion. A circular of the Ministry of Health of January 10, 1969, established uniform water analyses standards. A-32 Bibliography Banque Nationale de Paris. "Le Financement de la Lutte Contre la Pollution en France." Revue Economique de la Banque Nationale de Paris , April, 1972. French Economic and Social Council. Les Problemes de 1 'Eau en France . March 4 , 1971. Ministry for Foreign Affairs. Report to the United Nations Conference on the Human Environment . Paris: Ministry for Foreign Affairs, June, 1972. Rebiere, A. "La Pollution Atmospherique" Annales de Mines g November , 1970. Societe Generale. "The Water Problem in France." Conjoncture , May, 196 9. Syrota, J. "L 1 Industrie et 1 'Environment . " Annales des Mines , October, 1971. Syrota, J. "La Pollution Atmospherique." Annales des Mines , May- June , 1972. United States Environmental Protection Agency. Summaries of Foreign Government Environmental Reports . Washington, D. C. : Environmental Protection Agency, November, 1972. A-33 FEDERAL REPUBLIC OF GERMANY Pollution Problems Urban and industrial concentration has intensified pollution problems in the Federal Republic of Germany as it has in all other industrial countries. The great German cities suffer from cumulative air pollution by industrial plants, domestic heating systems and motor vehicle exhaust gases. Utility and other power plants pour four million tons of sulfur dioxide into the air every year. Greater in total, but more dispersed, is the eight million tons of carbon monoxide thrown off each year by the German transport network, public and private. Nitrogen oxides, metallic fumes and odors add to the problem. Germany's enormous chemical industry is a major water polluter; so is domestic sewage. A 1969 survey showed that 35.6 million cubic meters (9.4 billion gallons) of industrial sewage and 8.5 million cubic meters (2.2 billion gallons) of household sewage were generated daily. About 3 5 percent of Germany's drinking water, it is estimated, now comes from polluted surface sources. With industrial and household demand expected to double in the next 3 years and ground sources fully utilized already, the dimensions of the problem are obvious. Noise pollution, contributed by industry and traffic, has been rising steadily. It is estimated that 2 percent of German industrial workers are subject to noise on the job that endangers their hearing. Solid waste pollution, as elsewhere, follows the rise in the standard of living with more packaging and shorter-lived products. There are few legal restrictions in Germany even on the disposal of sewage sludge. Environmental Awareness German public opinion as a factor in environmental consciousness is largely a phenomenon of the last five years. Problems are seen more clearly and attacked more sharply than ever before. The press, television and radio are strong advocates on the need for protecting the environment. The government has taken part in swaying public opinion towards more respect for the nation's air, land and water resources, to an extent unparalleled in most other countries. A-34 One reason for this is that substantive corrective measures fall, in general, in the jurisdiction of the states rather than the central government. Bonn must persuade where it cannot compel . The central government has formulated four basic principles to be followed in combating pollution: Programs must be inclusive, covering landscape, air, water, noise and animal and plant life. Prevention is better than cure; standards should be applied to head off harmful activities. Social and market forces should be relied upon primarily to halt polluters; governmental action should be held in reserve for use should these fail. Costs of pollution control should be borne by the polluter. The government should support control efforts by tax, budgetary and infra- structure policies. These principles have been advanced in school textbooks, brochures on the environment, exhibitions, pamphlets and even an industrial film prize. Pollution Abatement Programs The Federal government does have authority over industrial emissions that pollute the air; however, enforce- ment of any Federal regulations must be left to the states, which have varying ideas on the importance of air pollution control . The Federal government controls vehicle emissions under the Road Transport Licensing Ordinance, because this is considered part of interstate traffic regulation. Limits have been placed on the emission of carbon monoxide and hydrocarbons. Lead content of gasoline, limited to 0.4 grams per liter beginning in 1972, must be reduced to 0.15 grams per liter from 1976 onward. The goal is a 90 percent decline in harmful emissions from 1974 to 1980. State laws on air pollution vary. Nordrhein-Westfalen has a Law for Protection Against Air Pollution, Noise and Vibration. However, the law lacks specific air quality A-35 standards. Niedersachsen, Saarland and Baden-Wurttemberg have similar statutes. Hamburg repeats Federal standards in its Building Ordinance; Bavaria lists Federal regulations in its State Penalties and Regulatory Decrees. A constitutional amendment has been introduced to provide the central government with the power it now lacks to impose detailed regulations for water supply management. A water hygiene law is being introduced for passage this year. It will codify existing legislation and carry uniform provisions for procurement, purification and quality of drinking water. There are state regulations concerning storage of substances dangerous to water, but these vary. There are uniform requirements for the storage of combustible materials, but these cover only industrial installations, and do not apply to all materials which may pollute water sources. Solid waste pollution was attacked on a broad front in the Federal Waste Disposal Law of 1972, but again the states were left with a great deal of discretion in enforcement. The law provides these safeguards : Waste may only be disposed of in facilities designed, authorized and controlled for that purpose. The states shall draw up regional disposal plans and make them compulsory. Waste disposal shall be the responsibility of rural and urban districts or associations formed for this purpose and designated by the states. Refuse sites no longer used shall be made available for agriculture; mines no longer worked may be used for waste disposal. Waste material may only be imported into Germany if the responsible regional authority approves, upon proof that the waste can be harmlessly disposed of. The Federal Government may limit or forbid the sale of throw-away packages or containers that cannot be harmlessly disposed of. Penalties for transgressing the waste disposal law include fines and prison sentences where life or health is endangered; fines for other violations. A-36 Government Assistance The German Government subscribes to the "polluter pays" principle. In practice, it recognizes that polluters cannot bear all the costs of pollution abatement, nor can all environmental damage be brought home to particular offenders. Both the Federal Government and the states offer relief from some private-sector expenditures, e.g. by- direct outlays, tax relief, and loan guarantees. Tax relief is granted in the form of accelerated depreciation of facilities. In addition to straight-line depreciation, an additional 50 percent of the cost of a pollution-reducing installation can be deducted in five years. Accelerated depreciation of 50 percent on machinery and 30 percent on buildings over the five-year period is allowed, where the machinery or building is acquired or modified to reduce noise and vibration. Borrowing for such investments is encouraged by Federal guarantees of loans. Direct grants are made to universities and research institutions for research into pollution problems. , The government contemplates liberalizing its tax relief policies for future investments. These changes have been put forward: broadening incentives in the field of sewage disposal, air purity, noise abatement, thermal pollution of streams and disposing of solid waste; replacing the cumber- some system of administrative orders for each installation with certification that expenditures are necessary in the public interest; possible tax advantages for relocating an industrial facility. The possibility of direct financial grants for invest- ments wholly designed to protect the environment is also under study. Pollution Costs and Future Programs German pollution control cost estimates are based on the data collected in the preparation of the German Environ- mental policy Program. This program provides the basis for future German environmental policy and legislation. The method of cost estimation is not generally stated in the data. The cost concepts used include investment expenditures and operating costs required to meet the standards for the period 1971-75. The cost factors included in investment expenditures are not specified; it is known that operating costs include interest but not depreciation. A-37 Table A-3 shows the estimated pollution control expenditures to be incorporated in new facilities during the period 1971-75, by types of pollution. Table A-4 shows the same expenditures on a microeconomic basis, industry by industry. It is further estimated that some $9.92 billion will also be required for pollution control programs in plants which were operational prior to 1971. This amount plus the expenditures of $10.36 billion shown in Tables A-3 and A-4 are estimated to be 1.8 percent of the cumulative gross national product during 1971-75. A-38 Table A-3 GERMANY Pollution Control Expenditures in New Facilities for Period 1971-75 (in billions of 1971 dollars) Air Pollution Water Pollution Solid Waste Biocides & Environmental Chemicals Noise Pollution Nature Preservation and Aesthetics Not specified ("Global Geschatzt") TOTAL Operating Investments Costs $ o. "5 $ o ■3 1.12 14 .12 5 4.66 58 1 .15 50 .64 8 .43 19 .40 5 — _ .49 6 - - .69 .06 .60 26 8.06 100 2.30 100 Source: OECD, Survey of Pollution Cost Estimates Made in Member Countries. May 2 5 , 1972 , p. 5 . A-39 Table A-4 GERMANY Industry Pollution Control Expenditures for the Period 1971-75 (in billions of 1971 dollars) Industry Steel & Coal (Montan- industries) Power generation Stone, clay and glass Chemical (comprehensive) Other industries Construction Private traffic Public sector Others Operating Inves tments Costs .60 .09 .14 - .09 .09 1.96 .37 .29 .05 .03 - .32 - 4.40 1.04 .17 .06 Not specified ("Global Geschatzt") .06 .60 TOTAL 8.06 2.30 Source: OECD, " Survey of Pollution Cost Estimates Made in Member Countries," May 25, 1972, p. 6. A-40 Bibliography Bureau of National Affairs. U.S. Business Operations in West Germany . 1968. Federal Republic of Germany Ministry of the Interior. Material ien zum Umweltprogramm der Bundesregierung -- Umweltplanung . ("Background Information on the German Environmental Protection Program.") Bonn: Ministry of the Interior, 1971. Federal Republic of Germany Ministry of the Interior. Umweltprogramm der Bundesregierung . ("Program for the Protection of the Human Environment.") Bonn: Ministry of the Interior, 1972. Federal Republic of Germany Ministry of the Interior. Umweltschutz : Sofortprogramm der Bundesregierung . ("Immediate Action Program to Protect the Environ- ment.") Bonn: Ministry of the Interior, 1970. Harvard University International Program in Taxation. Taxation in the Federal Republic of Germany . Chicago : Commerce Clearing House, 1965 . Organization for Economic Cooperation and Development. Survey of Pollution Cost Estimates Made in Member Countries . Paris: OECD, May, 1972. United States Public Health Service. Profile Study of Air Pollution Control Activities in Foreign Countries Research Triangle Park, North Carolina: U.S. Public Health Service, 1971. A-41 ITALY Pollution Problems Like other industrial nations, Italy suffers from widespread water and air pollution. The coastal waters near Rome are the most heavily polluted. Water areas near port cities, such as Naples, Genoa, Venice, and Trieste, are also badly polluted, as are the lakes in Northern Italy, such as Como and Maggiore . Air pollution is said to be parti- cularly bad in Milan and Turin, the great industrial centers of the North, and in the large metropolitan areas of Rome, Venice, Genoa and Florence. Environmental Awareness Accelerated efforts towards greater industrialization have been and continue to be a major priority, one that outweighs environmental considerations. One result of such priorities has been a lack of funds in the pollution control area. The central government is further impeded due to conflicts of jurisdiction with regional and local authorities. Some recent moves by the government, however, are indicative of increasing concern. A Senate Committee on Ecology has been established to examine the implications of Italy's pollution problem and to recommend solutions. The Transport Ministry has set up laboratories and research centers to study the problems of automobile noise and pollution. The state owned oil and gas agency, Ente Nazionali Idrocarburi (ENI) , established a pollution abatement subsidiary (Tecneco) to work with the Ministry of Scientific Research on a detailed nationwide survey of environmental damage. Their recommen- dations for action are to be prepared for a national conference in June, 1973. Additionally, ENI has set up an $85 million program to control liquid and gaseous effluents over a three to four year period. In the absence of strong and coordinated central government action in pollution control, some local magistrates are initiating legal actions against polluters based on various fishing, hygiene and sanitation laws. These actions, though increasing, are sporadic in the vacuum of national legislation. The Italian public, unaware of the problems until a few years ago, has become sensitized through the efforts of action groups and through the news media. It is estimated that small to medium industries account for over 65 percent of industrial pollution in the country. These firms suffer from a shortage of funds and are less aware of pollution problems. In the industrial sector, the A-42 principal polluting industries are cement, chemicals, metal processing, motor vehicles, oil, pharmaceutical, textiles and clothing, and pulp and paper. Pollution Abatement Programs Water pollution has not been adequately dealt with by legislation. There are some laws for the protection of fish which have' been used sparingly by the courts against pol- luters and some standards have been proposed. Several local authorities have implemented these proposed standards. Air pollution was not regulated by any specific law until recently. As a consequence of a 1964 survey conducted in Milan, an air pollution law was passed in 1966 (Figure A-6) This law provides for the establishment of emission standards for regulating heating installations, industrial plants and motor vehicles. Standards vary depending on the regional zone in which the emission occurs. Government agencies with responsibilities in regard to this law are the Ministries of Health, Interior, Industry, Labor and Transportation. Government Assistance The Italian government does not provide at the present time any special tax treatment on pollution control equipment or any other governmental assistance program. Pollution Costs and Future Plans An indication of past capital investments is shown in Table A- 5. Table A- 5 Italy National Consumption of Selected Pollution Control Equipment for the Period 1969-71 (millions of dollars) Analysis, Monitoring & Control Investments 1969 1970 1971 Air 1.5 1.9 2.3 Water 1^4 1^9 2.4 Total 2.9 3.8 4.7 Treatment Equipment Air Water Total 38.0 50.5 57.5 Source: Theodore Trancu and Associates. The Market for Air and Water Test/Treatment Equipment in Italy . Jan. 24,1972. p. 48 A-43 20.0 26.5 30.5 18.0 24.0 27.0 Estimates of future pollution control costs shown in Table A-6 are based partly on existing laws and partly on hypothetical standards. Specific details on the assumptions employed in developing the data for the periods 19 71-75 and 1976-80 are lacking; but these estimates do consider expected growth of production, consumption, and population. Two expenditure categories are included—capital investment as well as depreciation and operating costs . The latter estimates also include maintenance costs of the pollution control equipment and interest at 8 percent on capital invested. The basis for yearly depreciation varies between the different sectors of the economy. Table A-6 Italy Pollution Control Expenditures for the Periods 1971-75 and 1976-80 (In billions of 1971 dollars) Period 1971-75 Depreciation & Operating Pollution Categoric 5S Investment $ .631 Cost Total 1. Air Pollution $ .773 $1,404 2. Water Pollution 1.261 .230 1.491 3. Solid Waste .065 .032 .097 Total $1,957 $1,035 $2,992 Period 1976-80 1. Air Pollution $1,423 $3,299 $4,722 2. Water Pollution 2.936 2.489 5.425 3. Solid Waste .081 .178 .259 Total $4,440 $5,966 $10,406 Source: OECD.. Survey of Pollution Control Cost Estimates Made in Member Countries May 25, 1972. p. 8 A-44 Aggregate totals for the two periods are also given in a percentage relationship to projected GNP, as follows: Table A- 7 Italy The Total Expenditure in a Percentage Relationship to The Cumulative GNP for the Periods 1971-75 and 1976-80 Period 1971-75 Period 1976-80 Investments 0.4% 0.7% Depreciation & Operating Costs 0.2% 0.9% Total Expenditure 0.6% 1.6% Source: OECD, Survey of Pollution Control Cost Estimates Made in Member Countries . May 25, 1972. p. 8. Italian pollution cost data by industry classification is not in hand. Further detail of Table A- 7 is shown in Table A-8 on a sector basis. A-45 Table A -8 Italy Pollution Control Expenditures For The Periods 1971-75 and 1976-80 by Sector (In billions of 1971 dollars) Period 1971-75 Sector 1. Motor Cars 2. Industry 3. Households 4 . Tankers 5. Not Specified TOTAL Sector 1. Motor Cars 2. Industry 3. Households 4. Tankers 5. Not Specified TOTAL Investment Depreciation Operating Cost & Total $ .065 $ .005 $ .070 1.318 (1) .412 1.730 .186 .550 .736 .016 .003 .019 .372 .065 .437 $1,957 $1,035 $2,992 Period 1976-80 Investment Depreciation Operating Cost Total $ .679 2.588 (1) .267 .016 .890 $4,440 $ .873 3.316 1.262 .014 .501 $5,966 $ 1.552 5.904 1.529 .030 1.391 $10,406 (1) About 60 percent of the investment by industry is expected to be for water pollution control. Source: OECD, Survey of Pollution Control Cost Estimates Made in Member Countries , May 25, 19 72, p. A-46 Figure A- 6 Italy Air Pollution Law 615 Structure and Major Features Approved : Published: Effective : July 13, 1966 August 13, 1966 February 13, 1967 The following summary reviews the seven sections of this law. S.I. Art. 1-7 General S.II Art. 8-10 Heating Plants S.III Fuels Art. 11-14 S.IV Art. 15-19 S.V Art. 20-21 Operation and Control Industries Division of National Territory into Zones; establishment and functions of Central and Regional Commissions; provisions for making surveys of air pollution. Requirements for heating plants; regulations for construction and modification; approval by fire department; appeal procedures and penalties are provided. Fuel types and characteristics permitted in the various zones for various heating plant capacities; provisions for records, appeals and penalties. General operating requirements; licenses for certain plants; provides for regulation of fuels and emissions and penalties, General requirements for emission control for various industry classifications; supervision, penalties, and authority to halt operations are provided; also recognizes implications for town planning. A-4 7 Figure A- 6 (Continued) S.VI Motor Vehicles Designates responsible authorities Art. 22-24 (Auto and Die- and provides for periodic testing sel) and penalties. S.VII Further Provision for detailed regula- Art. 25-27 Arrangements tions and census of heating plants; responsibilities of Fire Departments A-48 Bibliography AMF, Incorporated. Environmental Report , Worldwide Review, 19 72 . New York, AMF, Inc., May, 19 72. "ENI and Environmental Protection in Italy." World Petroleum, June-July, 19 72. Forte, Francisco. "Where There's Money There's a Way." Successo , May, 19 72. London Times . "Italy Cracks Down on Its Polluters," December 4, 1971. Ministry of Foreign Affairs . Italian Government Report to the United Nations Conference on the Human Environment . Rome: Ministry of Foreign Affairs, 19 72. New York Times . "Italian Regions Tackle Pollution," September 10, 19 72. Organization for Economic Cooperation and Development. Survey of Pollution Control Cost Estimates Made in Member Countries. Paris: OECD, May, 19 72. "Pollution Abroad: What Others Are Doing to Clean Up the Environment." Factory , July, 1972. Theodore Francis and Associates. Market Survey on Air and Water Test/Treatment Equipment . Washington: Department of Commerce, January, 19 72. United Nations World Health Organization. World Health Organization Chronicle . Geneva: World Health Organization, February, 196 8. Washington Post. "Chemical 'Fresco 1 : Whiff of the Future?" January 11, 19 73. "Will Italy Blow the Whistle on Pollution?" Chemical Week, May 31, 19 72. A-49 JAPAN Pollution Problems Since World War II, Japan has concentrated its efforts on industrial expansion without consideration for the environ- ment. Along with its rapid industrial growth has come a deterioration in the quality of air, water and land. Few, if any, countries are as heavily polluted as Japan, where 106 million people — about half the number in the United States — live in an area about the size of Montana. Gross national product per square kilometer of level land is 11 times that of the United States and energy consumption is 7.4 times as large. Government statistics disclose that nearly 100 persons have died and more than 6,000 have become ill from pollution related diseases since an official count began in December 1969. Some experts believe the real toll is at least twice as high. School children at play have become unconscious due to smog. Rivers and the best beaches are contaminated and no longer suitable for swimming. Half the commercial fishing grounds in the seas around Japan have been ruined by industrial wastes. A series of major factors are responsible for the increased environmental pollution. Industry and population have been concentrated in the limited available areas. Investments in public sanitation systems and development of necessary techno- logies for preventing environmental pollution have been neglected. City planning and regional development projects have given little consideration to environmental factors. Industrial expansion during the post-war period has been concen- trated in those industries which cause severe damage to the environment. Air pollution problems are attributable to two major sources. The number of automobiles per square kilometer in Japan is eight times that of the United States, contributing to an unmatched degree of air pollution. Tokyo traffic policemen take three minutes off every hour to inhale pure oxygen. Multiplying industrial plants, dependent on high-sulfur content oil as fuel, have increased the air pollution problem in Japan. Worst offenders are petroleum refining, electric power generation, iron and steel mills, and the prosperous ceramic, stone, and earthenware industries. A-50 Areas with severe air pollution problems include Tokyo, Osaka, Kanagawa, and Kyogo Prefectures, and the cities of Yokkaichi, Omuta and Kitakyushu. Air pollution is on the verge of becoming a severe problem in the city of Nagoya, and the area around Ichihara in Chiba Prefec- ture. Industrialization and the disproportionate growth of industry segments that generate the most toxic wastes have contributed to increasing water pollution problems. Pulp and paper, food processing and chemical producers increased their share of industrial water use from 41 percent in 1962 to 61 percent in 1968. Investment in public sewer systems has lagged, adding domestic pollutants. Nearly all major rivers and lakes in Japan, the Environment Agency estimates, are contaminated with such toxic chemicals as phosphorus, cadmium, chromium, arsenic and mercury. Solid waste disposal facilities lag behind need. Incineration plants soon become inundated; landfill sites are scarce and the neighbors oppose their use; the rising use of plastics in packaging contributes to the problem. Government studies show that 70 percent of Japanese companies fail to process any of their wastes, which are piling up at the rate of 58 million tons a year. An estimated 84 percent of the total amount of refuse produced in Japan each year comes from five types of industries: iron and steel, chemicals, electric power, metals, and pulp and paper. Factory noise is a problem of increasing national concern. An average of 5,000 new plants begin operation every year in the Tokyo-Yokohama industrial area, and half of those are of the noisier types: metal processing establishments, print shops, lumber mills and machinery manufacturing plants. Environmental Awareness Available sources of information present conflicting views of the stringency with which the anti-pollution program is applied in Japan. An article in the August 1972 issue of the "Keidanren Review" (a quarterly publication of the Japan Federation of Economic Organizations) , discussed the severity of Japan's pollution problem and the government's efforts to abate environmental pollution. Several factors were outlined as proof that progress is being made: the legislation passed in 196 8 and 19 70, the enforcement of standards on a national scale, and the requirement of industry to bear the cost of pollution control. A-51 There has been some skepticism, on the other hand, by other observers about the severity of the penalties provided for in the legislation, as well as about the enforcement of the regulations. The "U.S. News and World Report" quoted a recent "Japan Times" editorial which reflects this point of view: Is the Government really serious about instituting strict policing measures and enforcing them, regardless of where the chips may fall? Or, in a nation where the Government has consistently been very close to industry, is it going to act the benevolent father again?! In July 1971, an Environmental Agency was created by the Japanese Government for the purpose of centralizing anti- pollution activities. However, the emphasis thus far has been on testing and studying the problem, rather than on cleanup and prevention. Some of the fears of the skeptics may well be allayed under the leadership of the newly elected government which has committed itself to remodeling Japan. The remodeling plan, encompassing social, economic, and environmental changes, would restructure the entire nation and its economy by dispersing factories to the countryside, and by creating new towns linked by massive new transportation systems. One estimate sets the required investment for the remodeling at $1 trillion in public and private funds. The shift in governmental policy on environmental ques- tions has come about to a large extent through increasing public pressure. The frequency of pollution incidents and their impact on the environment are keeping the issue in the spotlight. Communities have become so agitated over the ill effects of "kogai" (the Japanese term for environmental disruption) that many industries find it impossible to over- come public resistance to the building of new plants. Com- plaints about pollution and lawsuits against corporations have risen dramatically in the last few years. The close collaboration of government and industry in Japan makes industry's attitudes important to any discussion of pollution abatement activities. Their position has traditionally been that with industrial growth must come sacrifices, including a certain amount of environmental 1 "If Pollution Seems Bad in the U.S. — , " U.S. News and World Report , May 29, 1972, p. 85. A-52 damage- Pollution is considered a "necessary evil" with- out which economic progress cannot be accomplished. How- ever, the increasing public pressure for a cleaner environ- ment and the new direction of the Tanaka regime toward remodeling Japan will most likely cause a reorientation of industry's view on pollution abatement. It has been said that while the remodeling efforts, are government initiated, the ideas have actually been taking shape for several years within the cohesive government-business establishment. Pollution Abatement Programs Japan pursued industrialization in the post-war era with a singleness of purpose which left little room for environmental considerations. Ecological damage went largely unhindered until the decade of the sixties. In 1967, a model statute was passed, the Basic Law for Environmental Pollution Control, which was designed to protect public health from all types of pollutants. It prescribed anti- pollution measures for air, water, noise, vibration ,, ground subsidence, and offensive odors, and set up the Environ- mental Pollution Control Council. A saving clause, at the insistence of industry, provided that the law's aims should be pursued in "harmony between the protection of the envir- onment and economic development." A special measures law passed in 1969 provided that persons whose health was demonstrably injured by pollution might demand relief from the offending industry, the local or national government, or all three. A sharp spur was applied to Japan's pollution conscious- ness in 1970. A temperature inversion locked Tokyo in a photochemical smog for several days. Hundreds of school children went to hospitals, and several asthma patients died. The public became alarmed and opposition political parties seized on the issue. A special session of the Diet was called and passed 14 environmental statutes dealing with basic pollutants, noise, odors, street traffic, sewage, agricultural chemicals, natural parks, toxic substances, sea water pollutants, solid waste, cost of pollution control, and fines for polluters. The laws passed in 19 70 included provisions for sharing pollution-control costs between the affected industries and the government. They deleted the saving "harmony" clause and set up regulations to govern water, air and noise pollution, control vibration damage, and halt the degradation of farm land. A-53 In 19 71, an Environment Agency, with a Director-General of Cabinet rank, was set up to monitor the anti-pollution laws, to plan and coordinate governmental pollution-related activities, to establish environmental standards, to compile statistics and other data on pollution, and to administer education and training in pollution control. Notwithstanding this broad grant of authority, enforce- ment of pollution control has been largely delegated by the national agency to the prefectures and the cities. All the prefectures have enacted their own pollution controls, many of them more stringent than the national standards. Cities, too, have their own regulations, and there are pollution- control agreements between cities and individual industries. A summary of selected pollution abatement laws and regula- tions is presented in Figure A-7. Government Assistance Government assistance to private industry for pollution control is extended as direct financial aid, in loans and in tax incentives. Assistance is mainly directed towards the purchase of pollution control equipment. The program also includes relocating pollution-causing factories in less populated areas, and shifting production from polluting to nonpolluting processes. Further, funds are provided for research, consulting services, and the like. The national budget for fiscal 1972 provided some $450 million for such support. In addition to government guarantees of bank loans, several direct lending agencies have been established to help finance companies faced with anti-pollution costs. Public Nuisances Prevention Corporation (PNPC) lends money for buildings and equipment, and in addition erects facili- ties and sells them to industrial associations. The Japan Development Bank makes loans, generally to larger companies than those that deal with PNPC. Loans are also available from the Small and Medium Enterprise Corporation and the People's Finance Corporation. Lendable funds in fiscal year 1972 totalled $300 million. Tax incentives are complicated. A long list of plant installations — oil disposal facilities, oil desulfurizers , noiseproof walls, waste incinerators — are eligible for 50 percent depreciation allowances in the first year of instal- lation. Small plants which might get no advantage from such a large sum in depreciation all at once, may spread the allowance over three years. A-54 The national fixed-asset tax is not collected at all on air and water pollution control equipment required by law, or on plastic waste disposal facilities. The tax is reduced by one-third on extremely tall chimneys, oil desul- furizers and noiseproof walls. Corporations recognized by the government as having exceptional anti-pollution expenditures may set aside 0.3 percent of sales as reserves before income tax. Regis- tration licenses for asset transfers with the PNPC are issued without charge. Real estate taxes on lands and buildings acquired to relocate from crowded areas are remit- ted. Certain other corporate costs are declared to be non- taxable expenses rather than capital investments. Total tax abatements in fiscal 1971 are estimated by the Ministry of International Trade and Industry (MITI) to have been $79 million. Pollution Costs and Programs There are several existing pollution-control estimates for Japan covering the next few years . One , by the Japan Economic Research Center, placed pollution control expendi- tures for nongovernment enterprises in mining, manufacturing and public utilities at $29 billion in the period 1971-75 (Table A-9) . In the public sector, expenditures for sanita- tion systems, wastes and refuse disposal and park construc- tion were estimated at $6 billion in the period. A MITI estimate of industry's costs in 1971 alone was $910 million. As a percentage of total investment by the industries con- cerned, this worked out at 9.1 percent for the industries less likely to pollute, and 11.7 percent for industries most often guilty of polluting (Table A-10) . If the good intentions of both government and industry come to fruition, more than 2 percent of Japan's GNP between now and 1975 will be devoted to improving the environment. A-55 Table A- 9 Japan Total Pollution Control Investment, Its Share of Total Investment, and Share of GNP for Years 1971 thru 1975 Share of Share of Pollution Control Total GNP Investment Investment Per Year in Billions of Year 1971 Dollars Percent Percent 1971 $ 3.002 5.9 1.2 1972 4.136 7.0 1.5 1973 5.488 8.0 1.7 1974 7.169 9.0 1.9 1975 9.201 10.0 2.1 TOTAL $28,996 39.9 8.4 Source: OECD . Survey of Pollution Cost Estimates Made in Member Countries . May 25, 1972 . p~. 9~. A-56 Table A- 10 Japan Pollution Control Investment Costs for Fiscal Year 1971 (billions of 1971 dollars) Industry Thermal electric power generation Iron and steel Petroleum refining Petrochemical Mining Non-ferrous metals Pulp and paper Cement Sub-total of high pollution potential industries Pollution Control Investments $ .165 .231 .137 .042 .037 .068 .053 .013 %- of Total Investment of the Industry Concerned 17.7 10.0 14.0 5.1 15.7 12.1 14.2 8.5 .746 11.7 Chemical (excl. petro- chemicals) .063 Machinery .056 Textiles .022 Ceramics (excl. cement) .007 Others .016 Total $ .910 7.6 3.0 6.8 5.8 9.1 Source: OECD. Survey of Pollution Cost Estimates Made in Member Countries. May 25, 1972. p. 10. A-57 Figure A- 7 JAPAN Chronology of Selected Pollution Abatement Laws and Regulations General Basic Law For Environmental Pollu- tion Control (1967) Relief for Victims of Pollution - Special Measures Law of 1969 - Amendments of 1970 (to the Basic Law) Law for Bearing Cost of Public Pollution Control Projects by Enterprises of 1970 Prescribes anti-pollution measures for air, water, noise vibrations, ground subsidence, as well as odors; additionally sets objectives on land use and production of pollution preven- tion equipment; designates special pollution areas; defines responsibilities of central and local governments; establishes Environmental Pollution Con- trol Council; and calls for "harmony between the protection of the environment and economic development. " Provides relief for injury to health by pollution; determines share of responsibility of industry, national and local governments . Deletes compromise clause call- ing for "harmony between the protection of the environment and economic development"; adds soil pollution to six types of pollution specified in former law. Provides measures to require industry to bear all or part of expenses for government anti- pollution projects such as sludge removal from harbors and construction of green belts; cost ratio for industry ranges from 25-100% depending on type of program. a- 5; Figure A- 7 (Continued) - Farm Soil Pollution Prevention Law of 1970 Agricultural Chemical Control Law Amendments of 1970 Controls some pollutants such as cadmium and pesticides; requires monitoring and formu- lation of control projects. Regulations for registration, sale and use of agricultural chemicals . - Poisonous and Dele- terious Substances Control Law Amendments of 1970 - Law for Criminal Pun- ishment of Environmental Disruption Harmful to Human Health of 1970 - Offensive Odor Control Law of 1971 Law on the Establish- ment of Organization for Pollution Control in Specified Factories (1971) No Fault Liability Law for Pollution - Caused Health Damages (1972) Establishment of standards for consumer goods containing harm- ful substances. Provides for up to three years imprisonment and a fine up to $10,000 for intentional crimes; applicable to individuals and corporations . Provides control of odorous emissions; standards presently set for 5 of 13 substances specified for control. Selected plants must designate persons in charge of overall pollution abatement programs. Provides for compensation for health damages by industry to individuals harmed by pollution even if negligence not a fac- tor; cause and effect relation- ship must be established. Air Pollution - Smoke Exhaust Control Law of 1962 - Air Pollution Control Law of 1968 Provides for control of soot and sulfurous gas emissions from boilers and industrial plants . Replaces Smoke Law (broader in scope) ; provides for control of motor vehicle and new industrial plant emissions. A-59 Figure A- 7 (Continued) - Amendment of 19 70 Scope of pollutants covered by the Act expanded; also hydro- carbons and lead in motor vehicle exhausts subject to control; provides for establish- ment of uniform standards in Japan; prefectural governors empowered to require stricter standards if needed as well as to take emergency action. Noise Pollution - Noise Control Law of 1968 - Amendments of 197 Controls noises from industrial plants, manufacturing processes and construction sites; pro- vides standards regionally and according to hours of the day. Automobile noise added. - Road Traffic Law Amendments of 19 70 Prefectural public safety com- missions can prohibit motor vehicle traffic to prevent noise, vibrations and air pol- lution. Water Pollution - Water Pollution Control Law of 1970 Sewage Disposal Law Amendments of 197 - Ocean Pollution Pre- vention Law of 1970 Unified Water Quality Preserva- tion Law and Regulation of Factory Effluent Law (1958) ; provides for establishment of minimum standards for all of Japan; prefecture governors empowered to apply stricter standards or temporarily sus- pend discharged water if stand- ards not yet met; provides penalties of one year imprison- ment and fine (about $650) . Promotes construction of public sewage treatment plants under a river basin sewage system plan. Controls ocean vessel discharges - National Park Law Amendments of 19 7 Provides for permit to discharge into rivers or lakes within forest preserves. A-60 Figure A- 7 (Continued) Solid Waste - Waste Disposal and Requires industry to dispose of Public Cleaning Law waste; waste must be in easily of 1970 disposable form; local authorities administer. A-61 Bibliography American Chamber of Commerce in Japan. "Recent Environ- mental Pollution Problems in Japan" . The Journal of the American Chamber of Commerce in Japan , November 5, 1972, pp. 55-60. Environment Agency, Japan. Air Pollution Control in Japan . Tokyo: Government of Japan Publications Service Center, May, 1972. Environment Agency, Japan. Quality of the Environment in Japan . Tokyo: Government of Japan Publications Service Center, May, 1972. Environment Agency, Japan. Water Pollution Control in Japan . Tokyo : Government of Japan Publications Service Center, May, 1972. Environment Agency, Japan. Pollution Related Diseases and Relief Measures in Japan . Tokyo: Printing Bureau, Ministry of Finance, May, 1972. Fuji Bank. "Japan Fights Environmental Pollution". Fuji Bank Bulletin , March 1971. Japan Chamber of Commerce and Industry. "Approach to Environmental Improvements". Japan Commerce and Industry , No. 1, Vol. 13, 1972, pp. 118-122. Japan Federation of Economic Organizations. "Towards Solving the Environmental Problems: Industrial Pollution and Antipollution Programs in Japan" . Keidanren Review , No. 24, Autumn 1972, pp. 2-7. Japan Information Service. "Japan Enacts 14 Anti-Pollu- tion Laws". Japan Report , Vo.l. XVII, No. 5, March 1, 1971. Japanese External Trade Organization. Trade and Indus- try of Japan , No. 12, Vol. XX, December, 1971 . Kraar, Louis. "Japan Sets Out to Remodel Itself". Fortune , March, 1973. Ministry of Foreign Affairs. Problems of the Human Environment in Japan , Report to the United Nations, March 31, 1971. Ministry of International Trade and Industry. Current Activities Among Japanese Enterprises for Industrial Pollution Control , MITI Information Service, No. 6, February 2, 1972. A-62 Organization for Economic Cooperation and Development. The Industrial Policy of Japan , Paris, 1972. Oriental Economist, Nihonbashi. Japan Economic Yearbook , 1972 . Tokyo: Government of Japan Publications Service Center, May, 1971. United Nations, Food and Agricultural Organization. Legal Systems for Environment Protection: Japan, Sweden, United States, May, 1972. A-63 NETHERLANDS Pollution Problems The most acute environmental problem in the Nether- lands is water pollution. Because of the great density of population and industry, ground and surface waters of the country are constantly exposed to enormous amounts of liquid and solid wastes, both organic and inorganic. Vir- tually all surface waters in the Netherlands are heavily contaminated with mercury, nitrogen, phosphate and other industrial elements. The situation is intensified because waters from the Rhine, the Meuse and the Scheldt rivers flow through some of the heaviest industrial agglomerations in Europe and arrive in the Netherlands with high levels of pollution. Geographic location and climatic conditions offer some protection against air pollution in the Netherlands. The flatness of the country allows the wind to sweep over it, thus cleaning and improving the atmosphere. Heavy rainfall also contributes to enhancing atmospheric con- ditions. Despite these favorable circumstances, urbaniza- tion, industrialization and increasing traffic density have led to severe air pollution in certain regions. The Government has declared the following regions emergency areas in regard to air pollution: the southern part of Rands tad Holland (the Rijnmond area) and the northern part of Randstad Holland (the Ymond area between Amsterdam, the Zaan region and Ymuiden) ; the industrial areas in the Scheldt estuary, (namely those along the canal zone of Zeeland Flanders and those in the Sloe and Scheldt harbor areas near Flushing) ; and the industrial region of South Limbury. Air pollution in the Netherlands arising from industrial and residential concentrations beyond the national frontiers is still considered to be of secondary importance. Noise pollution is becoming an increasing threat to public well-being in the Netherlands. Especially serious at the present time is the noise pollution in the vicinity of air fields, particularly near Schiphol — the nation's largest and busiest airport. Principal air polluters, according to the government, are the chemical industry, oil refineries, power plants, foundries, animal by-product plants, and waste incinerators. Principal water pollution is from the potato starch indus- try which accounts for nearly 50 percent of all such pollu- tion in the Netherlands. A-64 Environmental Awareness The Netherlands is considered by many to be the most pollution conscious country in Europe. Government at all levels appears to be strongly committed to solving the country's environmental problems. The central govern- ment has passed comprehensive legislation for both surface water and air pollution control. Legislation is presently being developed for ground water and noise pollution. Indicative of government's concern, it has been estimated that some $1 billion in industrial investments has been turned away in order to protect the environment. Aside from its legislative activities, the Government is actively involved in research on the environment. Many government services are involved in this area, including the Government Public Health Institute, the Government Institute for Waste Water Purification, the Royal Nether- lands Meteorological Institute, the Government Institute for Nature Conservancy and the Hydrobiological Institute of the Royal Netherlands Academy of Sciences. These agencies are making a growing contribution to applied scientific research in this field, particularly in regard to measure- ment of air pollution, the detection of water pollution and methods of treating water and sewage. In view of the international character of environmental pollution in the Netherlands, the Government is also actively involved in both bilateral and multilateral efforts to solve pollution problems. The Netherlands was instrumental in the establishment of the International Commission for the Protection of the Rhine River against pollution. It is also deeply involved in pollution control efforts through other international organizations. While public awareness of pollution problems is not a recent development in Holland, increasing concern has been expressed in recent years. Government leaders, scientists, the media, action groups and recurring pollution crises have heightened public attention. A public opinion poll in 1971 showed that over two-thirds of those questioned expressed serious concern and willingness to make personal financial sacrifices in order to abate pollution problems. Such public attitudes have also been expressed in elections, as well as in protests against new industrial plants which would have further aggravated pollution problems. Pollution Abatement Programs Prior to 1970, water pollution was regulated under the Public Nuisance Act of 1952, and the Drainage Board Regula- tions. As those reguations became incapable of ensuring A-65 water quality control, Parliament passed the Surface Water Pollution Act, effective December 1, 1970. The focal point was a prohibition on discharging polluting water into sur- face water without a permit. On the permit, conditions regarding the purification measures to be taken can be laid down. While permission may be granted for the discharge of polluting matter, the polluter is charged a fee based on the quantity and concentration of the effluent discharged. In 1971, the fee was about 57 cents per capita equivalent of discharged oxygen- combining matter. A gradual rise in this levy is planned in order to give polluters time to take pollution abatement measures. Income from these fees is to be used for the financing of regional anti-pollution measures. The Physical Planning Act of 1962 prohibits the con- struction of buildings and plants which could pollute presently existing ground water extraction sites for drink- ing water supplies. New legislation for the protection of ground water has also been drafted (Ground Water Protection Act) . The bill would coordinate and improve existing regu- lations and would allow each provincial administration to forbid certain pollutants in designated protection areas. For the control of air pollution, the Public Nuisance Act of 1952 was the principal legal instrument available until recently. This Act proved ineffective in two areas. First, municipal licensing requirements were uneven and necessitated a broader regional control authority. Second, no restrictions were placed on pollution from non-indus- trial sources. As this law became outdated, Parliament passed the Air Pollution Act of 1970 which establishes a distribution of powers between the municipalities, the provinces, and the central government in the granting of licenses for the operation of plants in designated pollution-causing indus- tries. To assist in the enforcement of this legislation, the government has begun construction of a national air pol- lution monitoring network to be completed in 1973 at a cost of about $8 million. The system will consist of some 250 monitoring stations tied in with 9 or 10 regional measuring centers, that will also keep track of cross country move- ments of polluted air caused by winds and unfavorable weather conditions. Eventually the Dutch system is to be linked with similar networks that are being planned in Belgium and West Germany. Several statutes and regulations apply to noise pollution, which vary as to enforcement measures. A num- ber of studies are under way on noise control for aircraft and motor vehicles, as well as possible standards in both A-66 urban and suburban planning. Industrial solid waste has also been recognized as a problem. The Soil Pollution Bill was introduced to Parlia- ment in 1971; as yet, it has not been enacted. A synopsis and chronology of major Dutch pollution con- trol laws and regulations appears in Figure A-8. Government Assistance Information on general government assistance is not in hand. It is known that research and development funds have been provided for such purposes as developing cleaner gaso- line engines and converting water of high starch content into cattle feed. Additionally , intensive glasshouse farm- ing has been assisted with financial 'aid to convert heat- ing from fuel oil to natural gas. Pollution Costs and Future Plans Estimates of pollution control costs, contained in the Central Economic Plan for 197 2, indicate annual expenditures of some $230 million by 1975, or approximately 0.5 percent of the Dutch gross national product by that year. The Royal Institute of Engineers has projected average annual costs (details not provided) for the 1970 's as shown in Table A-ll. These data are considered to be very prelim- inary. A-67 Table A-ll Netherlands Annual Costs for Pollution "Control in the 1970' s (millions of 1971 dollars) Sector Annual Cost Solid Waste Disposal (1) Domestic $ 120 Industry 120 Waste Water Treatment (2) 300 Livestock 50 Air Pollution Control (2) Domestic Heating and Automobiles (3) 90 Industry 120 Other sources of Pollution (4) 200 $1,000 (1) It was assumed that a much larger part of solid waste will be incinerated than is the case now and that the remainder will be disposed of in a controlled way or will be compacted. (2) It was assumed that the pollution of mainly organic nature will be reduced 20 to 25 percent of the present level in the coming decade. (3) Based on the original 1975 standards of the United States . (4) Such as water pollution of different types not yet estimated/ additional costs of drinking water supply, noise abatement costs etc. taken as a minimum esti- mate and including general uncertainties regarding the other items on the table. Source : OECD , " Survey of Pollution Cost Estimates Made in Member Countries," May 25, 1972. p. 12. A-68 Figure A-8 NETHERLANDS Chronology of Selected Pollution Abatement Laws and Regulations Air Pollution - Public Nuisance Act of 1952 - Air Pollution Act of 1970 Required industries to be licensed by municipalities, which could impose special conditions regarding pollution abatement. Distributes authority between municipalities, provinces and central government; requires licensing of industries with approval required from local and regional authorities; based upon "polluter pays" principle with some exceptions; establishes advisory committee; administered by Ministry of Social Affairs and Public Health. Noise Pollution There exist various statutory rules and regulations which combat noise pollution in dwellings, buildings and open spaces, including the Public Nuisance Act , the Physical Planning Act , the Traffic Regulations , the General Police Regulations , and the Municipal Building By-Laws . Water Pollution - Public Nuisance Act of 1952 and Drainage Board Regulations These regulations were incapable in practice of insuring water quality control; general in nature. A-69 Figure A-8 (Continued) - Physical Planning Act Protects ground water drinking of 1962 supplies by limiting building (and amendments and plant construction; also of 1968 ) storage of heating oil and similar products. - Surface Water Pollu- Act became effective tion Act of 1969 December 1, 1970; an extract of provisions follows: - prohibits discharge of polluted matter into surface waters without a permit; - permits specified purification measures to be taken; - if polluting matter is allowed under permit, a fee is charged based on quantity and oxidizing capacity of effluent; - fee is to be gradually increased; Act administered by Ministries of Transport, Water Control and Public Works; and Social Affairs and Public Health; - establishes an advisory committee for research on quality of surface waters and methods of protection; - requires a report every five years on the pro- gress of water pollution abatement and new priorities for subsequent five year plans. A-70 Bibliography "A Clean-up Collides with the GNP . " Business Week . July 10, 1971, p. 35. "Dutch Demonstrators Put Pressure on Polluters." Chemical Week . August 23, 1972, pp. 35-36. "Environmental Protection in the Netherlands." Business Lawyer . April, 1972, pp. 827-833. "The EEC Pushes Pollution Curbs." Business Week . June 3, 1972, p. 52. John Gosch. "Dutch Fight Pollution with National Monitor Net." Electronics . June 5, 1972 pp . 75-76. Ministry of Foreign Affairs . Netherlands Report to the United Nations Conference on the Human Environment . The Hague: Staatsuitgeveri j , 19 72. Ministry of Public Health and Environmental Hygiene. Environmental Health in the Netherlands . The Hague: Staatsuitgeveri j , March 19 72. Organization for Economic Cooperation and Development. Survey of Pollution Cost Estimates Made in Member Countries . Paris: OECD, May, 19 72. United States Department of Commerce. Environmental Control Seminar Proceedings . Washington, D. C. , May 25 - June 4, 1971. A-71 SWEDEN Pollution Problems Sweden's pollution problems grow out of urbanization and industrialization. The 7.5 million Swedes are not distributed evenly over the country's 174,000 square miles. Three- fourths of the population is urban; one-third lives in three metropolitan areas. Air pollution has grown with higher industrial output, more automobiles and increasing demand for power. Indus- try pollutes the air with dust, corrosive or toxic gases, and unpleasant odors. In addition, half the sulfur dioxide in the air is homegrown (Table A-12) ; the other half drifts across its national borders. The chief source of water pollution in Sweden is the vast pulp and paper industry, which accounts for 90 percent of dissolved organic pollutants. Most of the solid pollu- tants such as cellulose fibers and bark also come from the forest products industry; some are contributed by mining. The chemical industry, particularly chlorine-caustic soda plants, is mainly responsible for the discharge of mercury, although some of the metal comes from paper mills. Fish in certain waters were found to be so contaminated by mercury that their sale was forbidden at one time in the sixties . Noise and solid waste as pollutants of the environ- ment have come under scrutiny in recent years. Airport activities, road traffic, and industries such as construc- tion, shipbuilding and machine shops are the principal offenders as regards noise. Solid waste comes largely from more consumption of packaged goods as the national standard of living rises. Domestic, office and commercial waste is calculated at 8 5 percent of the total, with indus- try creating the rest. Environmental Awareness Demands for pollution control first came from an aroused Swedish people in the early sixties. By the end of the decade this pressure had given birth to an ambitious, multifaceted national pollution abatement program. Internationally, Sweden has been a leader in promoting worldwide conferences on environmental issues. Sweden's successful hosting of the U.N. Conference on the Human A-72 Environment in 1972 as well as other international confer- ences dealing with pollution are examples of the country's serious concern about, and efforts towards, environmental protection. A most unusual anti-pollution endeavor for a national government was an education program undertaken in 1969. Under the auspices of the Ministry of Education, 250,000 Swedes were given instructions on the technical and legal aspects of pollution control. Of these 10,000 went on to take two-week government-sponsored training courses. Finally, about 1,000 were chosen as pollution control officers and instructed to organize anti-pollution campaigns at the grass- roots level. The tremendous degree of support for anti-pollution measures in Sweden was brought out in a public opinion survey conducted in 1969 (Table A-13) . Fifty-four percent of all Swedes favored a diminution of the rate of growth in gross national product if such a reduction would improve the environment. Pollution Abatement Programs The Environmental Protection Act of 1969 was the first national enactment in Sweden aimed at curbing pollution, although various ordinances to control specific abuses of the environment were in effect. The Environmental Protection Act contains comprehensive provisions against air, water and noise pollution (Figure A-9) . The act is administered by the National Environment Pro- tection Board (NEPB) and the Swedish Concession Board for the Protection of the Environment, commonly called the National Franchise Board. These two agencies divide the authority to grant operating licenses. The Act establishes a licensing program for 38 types of industrial plants, as well as for any plants that dis- charge effluent into public waters or municipal treatment facilities. The Act — and this is true of- most Swedish environmental protection ordinances — simply designates the types of pollution to be controlled, rather than setting rigid standards. Compulsory standards are imposed by the NEPB, plant by plant, as it issues operating licenses. The NEPB has separate divisions to deal with air, water and noise. While Sweden has lagged in enacting national legis- lation on noise and solid waste pollution control, there is a large volume of case law at the municipal level deal- ing with industrial noise. In the solid waste area the Municipal Cleansing Act of 197 and the Health Services Statute of 1958 are the principal legislative acts. A-73 Government Assistance The government grants some subsidies to industries in order to spur investment in protecting the environment, although in general Sweden adheres to the "polluter pays" principle. The subsidy policy is particularly intended for older industrial plants established before July, 1969, which would otherwise find it economically difficult to make the required investments in pollution control equip- ment. To assist such plants in meeting the stricter standards, the Government has allocated SKr. 250 million ($50 million) over a five-year period to subsidize the necessary improvements. These subsidies will cover up to 2 5 percent of the proposed investment cost, with a maximum contribution of SKr. 2.5 million ($500,000) to any one plant. Requests for such subsidies are reviewed by the NEPB, and are granted only when a company can demonstrate that the improvements are urgently needed for public pro- tection and that the costs cannot be absorbed by the com- pany alone. The subsidization policy will be discontinued after the end of 1975. The national government also provides financing for the construction of municipal sewage treatment plants. The 1968 Royal Ordinance Concerning State Grants to Sewage Purification Plants provides that the amount of the grant will be determined in proportion to the degree of purifica- tion. As an example, municipal plants meeting only mini- mal legal requirements receive no subsidies, while those municipalities installing second and third stage treatment facilities may receive subsidies of 30-50 percent of costs. The Government has allocated SKr 50 million ($10 million) annually for a five-year period for this program. Inasmuch as the waste of some industrial plants is processed by municipal treatment plants, such grants constitute an indirect subsidy to industry. Pollution Costs and Future Programs A survey was conducted by the Swedish Industrial Institute for Economic and Social Research to project the pollution abatement investments planned by local authorities and selected industry groupings for the first half of the 1970's (1971-75). These estimates (Table A-14) were based on the premise that existing laws and regulations would be enforced in accordance with practices prevailing in 1969 and 1970, when the survey was made. The total cost derived by extrapolating the results of the survey was $203 million; the survey was limited, and the figure was necessarily conjectural. A-74 A more recent survey, in fact, estimates that the 1969-70 figure was low by perhaps 35 percent. Using as its base planned pollution-control investments as a percentage of total investments by industrial segments, the new survey comes up with a total closer to $300 million (Table A-15) . A-75 Table A-12 Sweden Emission of Air Pollutants In 1970 (1,000 of tons) Solid Waste Genera- Type Traffic Industry Heating Generation tion Total Carbon Monoxide percentage 850 50 30 12 11 953 42 Sulfur dioxide percentage 6 450 320 55 0.8 812 36 Hydrocarbons percentage 140 30 - - 2.2 172 8 Oxides of nitrogen 40 percentage 50 70 20 0.8 180 8 Particulates percentage 20 80 8 1 2.5 112 5 Others percentage 2 10 - - 1.8 14 1 Total 1; percentage ,058 47 650 29 428 19 88 4 19 1 2,243 100 Source: Sweden's National Report to the U.N. on the Human Environment , Stockholm, 1971. p. 32. A-76 Table A-13 Sweden 1969 Swedish Public Opinion Poll on Environmental Issues (%) Issue For Against Don ' t Know No Answer Put Charges on Polluting Industries 84 8 8 Prohibition Against Non-Returnable Bottles 75 9 12 Higher Local Taxes to Fight Water Pollution 69 21 10 Cut Down GNP Growth Rate to Save Environ- ment 54 17 25 Prohibition Against Synthetic Detergents 45 29 23 Source: Lennart Lundqvist, "Sweden's Environmental Policy, Ambio, Vol. I, No. 3, (June, 1972), p. 92. A-77 Table A-14 Sweden Estimated Environmental Protection Investments By Industry Grouping — 1971-1975* (in millions of 1971 dollars) Air Water Other Total Main- Sectors Pollution pollution i^011U"Cl( 3n XllVfeiS UlltJIlL Mining 1.9 1.9 .2 4.0 2.0 Pulp & Paper 26.9 83.2 3.8 114.1 16.1 Iron & Steel 19.6 11.9 .3 32.0 9.1 Non-Metallic Minerals 4.4 .7 1.0 6.2 1.0 Foods 2.3 14.2 - 16.5 3.5 Chemicals 13.4 15.5 1.0 29.9 5.1 Total 68.5 127.4 6.3 202.7 36.8 * The annual gross investment in the construction, extension and alteration of buildings, etc. and in the procurement and installation of machinery, instruments and the like insofar as investments are undertaken entirely or predominantly with a view to eliminating or reducing discharges to water, air or soil of wastes generated in the production process. Source: Johan Facht, Environmental Control in Sweden During the Seventies , Stockholm, 1971, p. 16. A-7: Table A-15 Sweden Pollution Control Investment as a Percentage of Total Actual and Planned Investment 1971- 1971- Industry 1967 1969 1970 1975 1973 Mining 4.1 2.8 3.1 2.2 1.9 Pulp & Paper 4.7 7.1 5.1 12.1 12.8 Iron & Steel 2.5 3.3 6.3 5.5 5.6 Non-Metallic Minerals 6.1 7.7 5.4 3.3 4.0 Food 6.4 7.7 7.5 7.4 6.4 Chemicals 6.4 5.2 6.3 6.0 6.0 Total 4.7 5.7 5.9 7.7 8.0 Source: Johan Facht , Environmental Control in Sweden During the Seventies , Stockholm, 1971 , p. 15 A-79 Figure A-9 Sweden Chronology of Selected Pollution Abatement Laws and Regulations General - Environmental Protection Provides comprehensive provisions Act of July, 1969 dealing with water, air and noise pollution; incorporates previous legislation in these areas. Segments of this Act follow: - Requires licenses covering 38 types of installations including operations in mining, refineries, pulp and paper, and chemicals; also required if sewage is discharged into public waters or public treatment facilities; other types of plants require local licensing. ~ Requires use of recent technically and economically feasible measures for pollution abatement. - Licensing under the Act applies to new or modified facilities and plants. ~ Types of pollution to be controlled are generally specified in the Act. Standards are set under individual licenses and become the basis of legal enforcement . - Act administered by National Environmental Protection Board and National Franchise Board. Air Pollution - Royal Ordinance Restricts sulfur content in fuel of 1968 oil burning to 2.5% by weight to be gradually reduced to 1% by 1980. Solid Waste - Health Service Provides regulations concerning Statute of 1958 sewage, dumping and industrial plant wastes. A-80 Figure A- 9 (Continued) - Municipal Cleansing Act of 1970 Provides authority to local governments to control solid waste disposal. Water Pollution - Water Act of 1911 This Act and numerous amendments account for much of water pollu- tion control legislation in Sweden; provisions include water regulations, building activities in water and shallow water quarrying. Additional Legislation : - Public Waterworks and Sewage Act of 1955; amended 197 - Act and Ordinance Measures Against Water Pollution From Ships of 1956 and 1958 - Act on the Prohibition of Waste Dumping in Water of 1971 A-81 Bibliography Facht, Johan. Environmental Control in Sweden During the Seventies . Stockholm: Industrial Institute for Economic and Social Research, 19 71. GATT . Industrial Pollution Control and International Trade. Geneva: GATT, July 19 71. Jamison, Andrew. "How Sweden Tackles Pollution." New Scientist and Science Journal , February 4, 19 71, pp. 234-36. Lundqvist, Lennart. "Sweden 's Environmental Policy." Ambio , I, No. 3 (June 1972) pp. 90-101. Ministry for Foreign Affairs. Sweden's National Report to the United Nations on the Human Environment . Stockholm: Ministry for Foreign Affairs, 19 71. Ministry for Foreign Affairs. Sweden's Reply to the United Nations Enquiry in Connection with the Preparations for the United Nations Conference on the Human Environ- ment . Stockholm: Ministry for Foreign Affairs , 19 70 . National Environmental Protection Board. Air Pollution Problems at Stationary Sources in Sweden. Stockholm: National Environmental Protection Board, December, 1971. Organization for Economic Cooperation and Development. Survey of Pollution Cost Estimates Made in Member Countries^ Paris: OECD, May, 19 72. Reuss, Henry S. "Saving the Environment: The Swedish Way." Columbia Journal of World Business , V, No. 6 (November-December, 1970), 15-22. "The Swedes Come Clean." The Economist , September 5, 19 70, p. 40. United Nations Economic Commission for Europe. Country Monograph on Problems Relating to Environment: Sweden . Stockholm: Economic Commission for Europe, June 10, 19 70. Sand, Peter. Legal Systems for Environment Protection: Japan, Sweden, United States . Rome, U.N. Food and Agriculture Organization, May, 1972. A-82 United States EnvironmentalProtection Agency. An Assess- ment of Noise Concern in Other Countries . Vol. I Washington, D. C. , U.S. Government Printing Office, 1971 United States Public Health Service. Profile Study of Air Pollution Control Activities in Foreign Countries First-Year Report. Research Triangle Park, North Carolina: U.S. Public Health Service, 19 70. A-83 UNITED KINGDOM Pollution Problems Concern over the problems of pollution and pollution abatement dates back several centuries in the United Kingdom. Environmental factors, as well as industrial- ization and population movements/ have combined to produce a history of air, water and land pollution. These prob- lems are seen in their most acute form in the urban areas of central Scotland, in parts of Northern Ireland around Belfast, the coastlands and valleys of South Wales, and in various industrial districts of England. One of the most damaging forms of air pollution in the United Kingdom has traditionally been smoke from domes- tic coal-burning fires. This problem has been abated to some extent through restrictions on the burning or sale of smoke producing fuels. Sulfur dioxide, however, con- tinues to be a problem. Major air pollution industries are lime burning plants, certain ceramic plants, electrical generation works, gas works, metallurgical processing plants and the iron and steel industries. Water pollution problems are largely concentrated in the industrialized and densely populated areas of the South and East. They are complicated by the number of sewer sys- tems that are out-of-date and overloaded. Sewage plants in England and Wales process some 3.2 billion gallons per day with nearly all of the 1.7 billion gallons per day from domestic sources treated in this manner. Approximately half of the 3.1 billion gallons per day used by industry is discharged to sewers with the rest going to surface water- ways and the ocean. Noise pollution has only recently become a source of concern in the United Kingdom. As in the case of air pol- lution, the major sources of noise pollution are non- industrial, such as aircraft and automobiles. Throughout the 19th and early 20th centuries, indus- trialization and the extractive industries caused severe damage to the land. Over 250,000 acres of land now require rehabilitation. The problem of land dereliction is closely tied to solid waste disposal. More than 15.4 million short tons of domestic and trade refuse are collected each year by local authorities in the United Kindgom, while an addi- tional 22 million short tons, excluding mining wastes and power station ash, are produced by commerce and industry. Approximately 1 percent or less is considered indisputably A-84 hazardous, although little information is available. Indus- trial solid wastes, like household wastes, are largely dis- posed of on land dumps. The remainder is generally disposed of by separation, incineration, pulverization or composting. Environmental Awareness The modern British approach to pollution abatement is characterized by the following three principles: (1) the application of the "best practicable means" standard (i.e. technically and economically possible for a particular firm) ; (2) the application of pollution abatement standards on a regional or local basis; and (3) a preference for persuasion rather than prosecution. Over the years, the U.K. government has established numerous councils, committees, and commissions to study pol- lution problems and to advise those who make the laws and establish the standards. One of the best known is the Beaver Commission, appointed following the London Smog of 1952 in which some 4,000 people are estimated to have died. The Commission's recommendation led to the Clean Air Act of 1956. The permanent Royal Commission on Environmental Pol- lution advises on all aspects of national conservation activity and the Central Advisory Water Committee advises the Ministry of Housing and local government on the reorga- nization of water and sewage facilities. Other govern- ment groups involved in studying pollution and pollution abatement include the Wilson Committee, created in 1963 to study the problem of noise in contemporary society, and the Noise Advisory Council, appointed in 1970 to carry on the work of the Wilson Committee. Research on pollution abatement is carried out by a number of organizations including government departments, universities, and public and private industry. Much of the government's work is supported through the Ministry of Technology; the Department of Environment; the Ministry of Agriculture, Fisheries, and Food; the Department of Agriculture and Fisheries for Scotland; and the Department of Education and Science. The number of non-profit organizations concerned with the protection and conservation of the urban and natural environment is reported to be in the hundreds, possibly thousands. Most have a local geographical interest or a sectional interest in a particular type of pollution. Those of national prominence include the National Society for Clean Air, the Civic Trust, the Council for the Preservation of Rural England, and the National Trust. Pollution Abatement Programs In the United Kingdom, each of the four nations A-85 (England, Northern Ireland, Scotland and Wales) has its lawmaking and administrative machinery for pollution con- trol. In practice, they conform closely with each other and, therefore, will be discussed here as one (a legisla- tive summary is provided in Figure A-10) . Pollution abatement legislation in the United Kingdom establishes principles to be followed. Specific require- ments or restrictions are set forth in regulations and directives established under each act by either a Ministry, local authorities, or an Inspectorate. No single act of Parliament covers all aspects of pollution abatement. Legislative efforts to control pollution began some 600 years ago. Modern air pollution legislation dates from the Alkali and Works Regulation Act of 1863, later modified by the Alkali Acts of 1906 and 1966. Under these Acts, specified industrial processes ("Scheduled Processes", of which there are approximately 3,000) must register annually and satisfy authorities that the best technical and economic means of treating air emissions are in practice. These Acts are administered by the Alkali Inspectorate. The Clean Air Acts of 1956 and 1968 cover processes not included in the Alkali Acts, as well as emissions from domestic and commercial furnaces. Under several acts, all water discharges must be ap- proved by the river authorities , which may attach conditions to their approval . The conditions may vary according to the amount of dilution provided by natural water as well as the downstream use of the water. This applies to both new and existing sources. Interest in noise pollution seems to be a recent phenomenon in the United Kingdom. The legislation presently in force, the Noise Abatement Act of 1960, pertains only to noise limitations for automobiles and aircraft and not to industrial plants. In an attempt to cope with industrial noise pollution, a government committee recently established a code of prac- tice for reducing noise in industry. It has threatened to bring legislation into force unless industry begins to com- ply. It is believed, however, that even if legislation is passed the requirements will be relatively flexible, using a "maximum acceptable levels" (as opposed to "desirable levels") standard and a "reasonable practicable" standard. The solid waste problem received little attention un- til 194 7 when the Town and Country Planning Act was enacted. It provides local officials with the authority to control A-86 all new developments, including surface workings and land used for dumping. Until the last few years, little pro- gress has been made in clearing past land dereliction as its high cost was prohibitive for many local authorities. Recently, the government has provided increased assistance for land restoration, giving local authorities added incen- tives . Solid waste disposal also is controlled under the Deposit of Poisonous Wastes Act of 1972. This Act prohi- bits the depositing on land of hazardous waste that is poisonous, noxious or polluting, with penalties entailing unlimited fines and up to five years imprisonment. Special dumping sites are expected to be established to accommodate the new regulations. Government Assistance Costs of pollution control in the United Kingdom fall almost entirely on the polluters, with limited exceptions. However, if it is not technically and economically feasible for a company to meet the required standards, the require- ments may be adjusted or waived (under the "best prac- ticable means" standard) . For individual households local authorities may make a grant towards the cost of converting to appliances suitable for smokeless use. The authority may recover a part of the grant from the central Exchequer. Normally, the cost of conversion will be borne as follows: owner or occupier-30 percent; local authority-30 percent; Exchequer-40 percent. In 1964-65, public expenditures in Great Britain for this type of control were $5.4 million. In 1969-70, they increased to $12.5 million. Another type of grant is that approved in 1966 for soundproofing houses near Heathrow Airport. In addition to such grants, the government is also sharing the cost of municipal sewage treatment plants and the cost of pollution equipment. Many nationalized industries receive long term financing to assist in capital investment programs. Additionally, assistance can be made available for operating costs. These governmental programs are broadly applied, and investments and costs for pollution abatement are applicable. Pollution Costs and Future Programs Few estimates of pollution abatement costs for future periods have been made. Statistical data on prior costs, taken from official publications, are shown in Table A-16 and A-17. A-87 Table &-16 United Kingdom Total Pollution Control Expenditure (figures refer partly to the calendar year of 1968 and partly to the fiscal year 1968-69) (Millions of Category 1971 Dollars) Total public sector expenditure on $ 968.0 water, sewage, and refuse disposal (1968) Working costs of air pollution con- 95.3 trol for processes scheduled under the Alkali etc. Works Regulation Act 1906 (1968) Approximate costs of grant-aided 17.1 domestic appliance conversion to smokeless fuel (1968-69) Cost protection, flood and river 14.7 pollution prevention by local authorities , England and Wales only (1968-69) Others 2.4 Total Expenditures $1,097.5 These total expenditures, which are only part of the costs of pollution control, represent about 1 percent of the gross national product. In addition, the total public sector expenditure on water, sewage, and refuse disposal has increased as follows during the late 1960's . Year Millions of 1971 Dollars 1966 $ 736 1967 850 1968 968 1969 1,051 1970 1,193 Source: OECD, Survey of Pollution Cost Estim ates Made in Member Countries - May 25, 1972. P- 16. A-88 Table A -17 United Kingdom Cost of Air Pollution Control for Scheduled Processes, 1958-1968 (millions of 1971 dollars) Working Latest Year's Class of Works Capital R&D Costs Working Costs Electricity 185.0 2.2 309.7 37.4 Cement 15.2 .7 15.6 2.4 Petroleum 16.6 1.2 28.6 4.4 Gas 6.8 - 11.0 .9 Coke Ovens 7.1 .5 14.9 1.7 Lime 2.4 - 1.7 .3 Ceramics 5.1 .2 7.3 1.0 Iron and Steel 64.5 2.9 228.3 25.4 Non-Ferrous Metals 14.2 1.7 40.1 5.6 Chemical 50.1 2.4 135.7 16.6 Total 367.0 11.8 792.9 95.7 Notes : (1) Where new plants have been built with better overall economics and superior air pollution control charac- teristics, somewhat arbitrary decisions have had to be made as to the actual cost expended on control measures . (2) R&D costs are incomplete, in that they only include expenditures, by research associations, nationalized bodies and scheduled works, and exclude money spent by plant manufacturers. (3) Working costs include R&D, amortization of capital, direct operating and maintenance costs , and overhead Source: The Protection of the Environment - The Fight Against Pollution , Her Majesty's Stationery Office, London, May, 1970. p. 10. A-89 Figure A-10 UNITED KINGDOM Chronology of Selected Pollution Abatement Laws and Regulations General - Public Health Ac t of 1936 (and amendments of 1961 and 1969) General nuisance and hygiene law covering both air and water; grants local authorities rights to prosecute; responsibility delegated to local authorities for sewage treatment and levy of charges . Air Pollution - Alkali and Works Regulations of 18 63 (as amended by the Alkali Act of 1906 and the Alkali and Works Order of 1966) - Clean Air Act of 1956 Clean Air Act of 1968 Establishes monitoring process and standards setting controls for sulfur dioxide, smoke, dust, lead and nitrogen oxides emissions; standards applicable to "scheduled processes" which include chemical, metal, fuel and other industries emitting smoke; industries must use "best practicable means" (i.e. where practicable means exist to reduce the pollution concentration in an emission without prohibitive cost) . Provides emission regulations of smoke from power generation and industrial plants as well as domes- tic furnaces; covers industries not included in Alkali Acts; permits local authorities to set chimney height standards and to establish smoke control areas; also establishes Clean Air Councils for England, Scotland and Wales; "best practi- cable means" standard applied. Provides stricter standards than 1956 Act; also includes oil and gas fueled furnaces; prior approval for new plants required from local authorities; central government inter- venes if local authorities are not A-90 Figure A-10 (Continued) - Clean Air Ac t of 1968 (Continued) exercising their powers; provides penal- ties for use of unauthorized fuel in smoke control areas; regulations effective for new installations in November, 1971, and for exist- ing ones after January, 197 8. - Other Air Pollution Legislation Housing Act of 1964 Building Regulations of 1956 Motor Vehicles Regulations of 1969 Noise Pollution Noise Abatement Act Provides for control of noise from of 1960 aircraft and motor vehicles. Solid Waste Town and Country Planning Act of 1947 Deposit of Poisonous Wastes Act of 1972 Authorizes local authorities to con- trol all new developments and land used for solid waste disposal. General prohibition on dumping hazardous waste (solid, semi-solid or liquid) which are poisonous, noxious or polluting; penalties include unlimited fines and up to five years' imprisonment. Water Pollution The present system of water pollution statutes began with the Harbours Act of 1814. Other early water pollution legislation included the Rivers Pollution Prevention Act of 1876, and the Drainage of Trade Premises Act of 1937, which emphasized the need to handle industrial effluents at local sewage works . Further steps were taken to pro- tect natural waters in 1948 with the creation of 32 river boards covering England and Wales. These river boards were responsible for pollution control and land drainage. - Water Act of 1945 Statutory water suppliers may establish protection by-laws for water within their responsibility; A-91 Figure A~10 (Continued) - Rivers Prevention of Pollution Act of 1951 (as strengthened and amended by Clean Riv- ers Estuary and Title Waters Act of 1960, and Rivers Prevention of Pollution Act of 1961) - Water Resources Act of 1963 (as amended in 1968) may require construction of treatment facilities; expenses paid by water suppliers; may also acquire land to protect ground water. Provides that all discharges must have consent from river authorities which may include special conditions depending on downstream use and dilutive effect of natural water; authority extends to new as well as existing points of discharge; includes discharge into estuaries. Added responsibilities to river authorities for conserving, redis- tributing and augmenting water resources; requires establishment of a national water policy and Water Resources Board to advise river authorities; 29 river autho- rities established in England and Wales which can determine effluent quality standards. - Other Water Legislation Gas Act Salmon and Freshwater Fisheries Acts of 1925 and 1935 Oil in Navigable Waters Act of 1955 Coast Protection Act of 1949 A-92 Bibliography AMF, Incorporated. Environmental Report , Worldwide Review, 19 72 . New York: AMF, Incorporated, May 19 72. British Institute of International and Comparative Law. "A Periodic Survey of Foreign, Commonwealth, and International Comparative Law." Bulletin of Legal Events , February 20, 1971. Haarhoff, Frank E. "Pollution Abroad: What Others Are Doing to Clean Up the Environment." Factory . July, 19 72. Her Majesty's Foreign and Commonwealth Office. Report to the United Nations Conference on the Human Environ- ment . London: Her Majesty's Stationery Office, 19 72. Her Majesty's Stationery Office. Britain 1972 — An Official Handbook . London: Her Majesty's Stationery Office, 1972. Johnson, D. "Air Pollution Practice in the U.K. Steelmaking Industry." Iron and Steel . December, 1971. Juergensmeyer, Julian Conrad, "A Comparative Review of the Legal Aspects of Pollution Control." Suffolk University Law Review . V (Spring 1971). Organization for Economic Cooperation and Development. Survey of Pollution Control Cost Estimates Made in Member Countries 1972. "Pollution Control Legislation in the United Kingdom." Iron and Steel . December, 1971. Sanders, W. James. "Environmental Protection in the United Kingdom." The Business Lawyer, April, 19 72. Shaw, F. M. "Iron Foundries and the Requirements of Clean Air Legislation." Iron and Steel , June 1971. Secretary of State for Local Government and Regional Planning. The Protection of the Environment - the Fight Against Pollution . London: Her Majesty's Stationery Office, May 19 70. A- 9 3 United Kingdom Department of Trade and Industry. An Economic and Technical Appraisal of Air Pollution in the United Kingdom . London: Her Majesty's Stationery Office, 1972. United Kingdom Scientific Mission to the United States. Solid Waste Management in the United Kingdom . Washington, D. C. : British Embassy, July 25, 1972. United States Public Health Service. Profile Study of Air Pollution Control Activities in Foreign Countries Washington, D. C. : U.S. Government Printing Office, August, 19 71. 6 U. S. GOVERNMENT PRINTING OFFICE : 1973.-511-326/271 A-94 I PE T.?J', A .Tli!. NIVERSITYLIBR AR'ES lllllllllllillllllll A0Q0Q7mm3b3