UNESCO - EOLSS SAMPLE CHAPTER

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1 ECOLOGICAL AND ENVIRONMENTAL CHANGE Mohamed A. Serageldin Office of Air Quality Planning and Standards, US Environmental Protection Agency, Research Triangle Park, North Carolina, USA Disclaimer - The views expressed in this chapter are those of the author, and do not necessarily reflect those of his affiliation. Keywords: Air quality standards, ecological indicators, economic incentives, emission standards, emissions trading, environmental controls, environmental pollutants, environmental regulations, public participation, risk assessment, Contents 1. Introduction 2. Legislative History 3. Sources of Pollutant Emissions and Emission Controls 4. Implementation and Enforcement 5. Protection of Ecology 6. Tools for Decision-Making 7. Concluding Remarks Glossary Bibliography Biographical Sketch To cite this chapter Summary Environmental pollution is on the rise across the world, especially in urban growth centers, and there is much evidence that human and nonhuman resources are being inefficiently utilized in the process of creating wealth. This is a problem that both the developed and developing nations are responsible for, one that could cause irreversible harm to the environment, both locally and globally. Hence there is a need for a balanced outlook in creating wealth; one that will not diminish the opportunities of future generations and that will consider the rights of the disadvantaged. In that context, it should be recognized that environmental damage might be caused by factors other than local development activities: certain pollutants are transboundary (can travel from one region or state to another). These pollutants include oxides of nitrogen, sulfur dioxide, and VOCs, which can negatively impact human health and the ecology. Another group of pollutants is called greenhouse gases; these include carbon dioxide. They are believed to be responsible for an unpredictable climatic change, which can cause losses in assets and life. This article provides an overview of the programs of the United States and the European Union, aimed at protecting human health and the ecology and mitigating environmental changes. These two economic blocks have produced gains in many areas, and are also responsible for a disproportionate amount of pollution on a per capita basis. They have progressively reassessed their environmental protection strategies to include new approaches for encouraging technological innovations that lower costs. Some of

2 these strategies and some of the programs and policies in support of implementation and enforcement of regulations are discussed. The role of risk assessment and economic valuation in decision making is acknowledged. 1. Introduction Anthropogenic (i.e., human) activities due to industrialization, urbanization, and growth result in formation and release of pollutants (stressors), which have the potential to impact the physical environment (e.g., affecting a temperature change), biological environment (e.g., altering habitat consumption), and chemical environment (e.g., resulting in increased risk of cancer). The effect of such changes will impact both human and ecological health and welfare, as illustrated in the Environmental Protection Agency (EPA) report to the US Congress that describes the benefits and costs of the Clean Air Act for the period 1990 to The richer nations, which are a significant contributor to anthropogenic pollution, are more able to deal with the economic impacts than the poorer nations, which have low per capita wealth. Governments in many countries have set up environmental agencies whose declared mission is to protect human health and to safeguard the natural environment air, water, and land, upon which life depends. How this is achieved will be influenced by the country s environmental history, the values of its citizens, its political system, and available financial resources. Two progressive systems of regulations are discussed those of the United States of America (the US), and of the European Union Nation States (the EU). They have a different history of legislative development, which explains why differences exist in the principles adopted, and in the types of decisionmaking tools used by these two economic blocs, for controlling and preventing humanmade pollution. These differences are reflected in the extent to which risk assessment is used, the tools for cost and economic valuation, and the manner in which societal considerations play a role in the management of the environment. These industrialized (or developed) countries represent regulatory systems that have evolved over more than two decades. Also, the success of their combined programs will have great impact on the health and welfare of the world. 2. Legislative History This section provides information on some essential legislative and regulatory aspects that invariably influence the environmental planning process and the actions taken by the US and the EU. 2.1 The United States The US National Environmental Policy Act (NEPA) of 1969 has been the primary guidance document in that country since it was enacted by the legislators. It called for the establishment of a Council of Environmental Quality. The Council, which is part of the Executive Office of the President of the United States, was assigned the task of implementing the newly declared national policy. The broad objectives of NEPA were: [to] encourage productive and enjoyable harmony between man and his environment; to promote efforts which will eliminate damage to the environment and biosphere and

3 stimulate the health and welfare of man; to enrich the understanding of the ecological systems and natural resources important to the nation... The US Environmental Protection Agency (US EPA) was established in 1970, and is headed by the Administrator, who reports to the US President. A number of functions related to the environment and human health carried out by other government departments were transferred to the US EPA, which was given the task of overseeing the implementation of the newly enacted Clean Air Act (CAA) in the 50 US states. The US CAA has been amended twice since it was enacted by the US Congress in 1970, the last time being in It is divided for convenience into several broad sections referred to as Titles, and includes titles dealing with the following topics: National ambient air quality standards; Mobile sources; Air toxics; Acid deposition controls; Operating permits; Stratospheric Ozone protection (this includes provisions from the Montreal Protocol); and Enforcement. 2.2 The European Union Unlike the US, which is a Federation made up of 50 states, the EU represents an economic bloc, presently made up of 25 Nation-States, which are bound by treaties (this total does not include the countries short listed to join the EU). The main focus of the EU, for many years, was setting up a framework for economic cooperation, often at the expense of the environment. However, this began to change with the enactment of the Single European Act in This treaty which established the European Community provided a legal framework for measures that relate to the environment. The EU treaty of November 1993 was an important milestone as it upgraded the environment to a Community policy, and not just an action of the Community. It also amended several articles that let to inconsistent interpretation of the regulations of the 1987 Single European Act. For example, Article 1 30s that relates to environmental procedures and decision was replaced with Article 175. Also, Article 95, which dealt with an approximation of laws for the internal market replaced Article l00a. The EU treaty of 1993 promoted the concept of sustainable growth and the need to respect the environment within the EU Community. Also, the precautionary principle became one of the pillars of the EU environmental policy. The treaty of Amsterdam, which was signed by the member states in October 1997, dealt with some more of the inconsistencies related to previous environmental policies, and streamlined some of the procedures. It also required that the EU Commission prepare an impact assessment for any project that may have significant environmental impacts. 2.3 A Comparison of the US and the EU Both the US and the EU have adopted what is referred to as traditional regulations. As in most other industrialized nations, a regulation may specify emission limits, equipment standards, and work practice standards thus defining how much pollution is allowed. The regulations also specify the criteria for determining compliance with the standards to streamline the enforcement phase. In their efforts to deal with the most obvious threats, the focus for many years has been on large emitting facilities or sources. First, the facilities (plants or factories) that produced highly visible pollution those with smoking stacks, were targeted. This was later followed by industrial

4 categories that produced emissions above a certain minimum threshold, or based on some other criterion. The decision to target a certain industry, or manufacturing process, involved prioritizing specific threats. This exercise was often influenced by the input of those persons (individuals and communities) that were effective in lobbying the political and legal system. To deal with environmental priorities the US and EU set short-term objectives, and plans to achieve those objectives, and scheduled periodic evaluations for measuring and quantifying accomplishment. The US CAA Amendments of 1990 (US CAA 1990) supplemented these traditional tools with provisions for economic incentives, emission caps to reduce SO 2 emissions, and several provisions aimed at promoting flexibility and streamlining requirements. At about the same time, the EU introduced its own brand of economic incentive tool, which relied more on taxes for modifying consumer behavior. The EU employs different terms for their laws. They have directives, regulations, and decisions. It is important to recognize the differences when aligning (transposing) national laws, regulations, or procedures of a Member State with those of the EU. The EU regulations are written with fixed requirements that apply directly to all Member States. They are not transposed into national law. On the other hand, the EU directives are means of harmonizing compliance with environmental legislation of the individual countries in the Union. Hence, they may be transposed into national law. An EU directive provides information such as emission limits, extent of emission reduction, and general cost information. However, a directive contains less guidance than, for example, a US Control Techniques Guidelines (CTG) document); hence, a Member State appears to have more discretion in how it meets the limits and other requirements specified in a directive. Directives are published in the EU Official Journal. The Official Journal is used to present updates, opinions, and written questions. It can be seen to serve both the function in the US of the Federal Register (where regulations and other actions are published for public comment and review and the Code of Federal Regulations, which is published annually and includes any changes made to a US regulation. However, the structure and the type of information presented in EU and US regulatory documents are quite different. 2.4 Dissemination of Information The US has a legal system that is different from that of the EU in respect of information dissemination. Through citizen suits, lobbying the US Congress, and the ability to obtain data and other information using the authority of the Freedom of Information Act, US organized interest groups have the ability to create pressure on the US Environmental Protection Agency. Citizen suits are also used by nongovernmental organizations (NGO5) to change industrial practices. This kind of empowerment is not available in the EU countries through legislation. However, EU directives promote citizen participation and the sharing of information. Nongovernmental organizations are active in EU countries, and have to work within the local Member State laws. Regulators in the EU have greater

5 discretion in deciding whom to involve during the regulation development process. Also, citizen suits are often restricted to those persons that are likely to be affected by the problems resulting from the pollution. This should be seen as a reflection of existing policies in many Member States. 3. Sources of Pollutant Emissions and Emission Controls Emissions are generated from several sectors; these include the energy, transportation, agricultural, and industrial sectors. A source in any of these sectors often generates more than one class of pollutants. Several of the classes of pollutants that are generated from these sectors, which are subject to regulation in both the US and in the EU, are described below for illustration: Energy related activities in both the US and the EU are responsible for a large percentage of greenhouse gases. The most abundant greenhouse gas is carbon dioxide. It is mostly a product from burning fossil fuels for energy, and from transportation activities. Methane is the second most important greenhouse gas, and results mostly from the digestive processes of livestock, and to a lesser extent from landfills, and the energy production process. Nitrous oxide (N 2 O) is produced during the manufacturing of nitric acid, and from the use of fertilizers. Other human-made (anthropogenic) greenhouse gases are ozone depleters; these include gases such as chlorofluorocarbons (CFCs), hydrofluorocarbons (HCFCs), and halons (brominated compounds). Although, gases such as HFCs (used as an alternative to the CFCs banned by Montreal Protocol), PFCs (a byproduct of aluminum smelting processes), and SF6 (used in high voltage equipment) are greenhouse gases, they are not ozone depleters. According to the US air emissions inventories for 1998 (US EPA 2000): the industrial end-use sectors (e.g., manufacturing, construction, agricultural) accounted for about one third of the carbon dioxide (CO 2 ) released; the transportation end-use sector accounted for about 30% (mostly from gasoline and diesel highway vehicles); and the residential and commercial end-use sectors caused about 20% of CO 2 emissions from fossil combustion (comprising activities such as heating, lighting, and air condition processes). Electric utilities were by far the highest consumers of coal, followed by the industrial sector; the industrial sector was the highest consumer of natural gas followed by the residential and commercial sectors; and the transportation sector was by far the highest user of petroleum fuels. Several compounds are emitted during fossil fuel combustion in stationary sources. They include methane (CH 4 ) and (NO x ); criteria pollutants such as oxides of nitrogen (NO x ), carbon monoxide (CO), non-methane volatile organic comport s (NMVOCs) or VOCs; and particulate matter (PM). Similar pollutants are also emitted during the operation of mobile sources (e.g., motor cars and lawn mowers). Fifty three percent of the US 1998 national NO x emission inventory is from on- road and non-road engines and vehicles, and 25% from fuel combustion and electric utilities; 67% of sulfur dioxide (SO 2 ) emissions resulted from fuel combustion in electric utilities (mostly coal), and 25% from industrial fuel combustion; particulate matter from smaller sources and on-road and non-road engines and vehicles comprised about 58% of the emissions. Atmospheric pollutants such as SO 2 and, NO x are converted in the atmosphere to sulfates and nitrates. The airborne particulates can be transported beyond the source of generation, impacting urban and other communities located hundreds of kilometers away. Both SO 2 and NO x are referred to as acid rain pollutants because they

6 convert to sulfuric acid and nitric acid in the atmosphere. Ozone is another pollutant that is formed in the atmosphere, but this time from the reaction of VOCs and NO x. Most of the VOCs result from the use of organic solvents, and from storage and transport (onroad and non-road) activities. Agricultural activities are responsible for a large percentage of the ammonia (NH 3 ) released into the atmosphere. Many of the air pollutant emissions also enter water, and soil. Therefore, their potential impacts are not limited to the air media into which they are first released. Several policies have been developed to regulate such pollutants generated from the different sectors. In the US, the policies mainly reflect US EPA s statutory mandates, which drive strategic planning efforts, while in the EU, the policies reflect broad guidelines in the Fifth Environmental Action Plan, and are also shaped by existing national programs. The programs adopted in the US and EU since 1990 include, to various extent, requirements for: regulating sources that emit pollutants from the energy, transportation, agricultural, and industrial sectors; reducing demand (e.g., promoting car pooling, strengthening public transportation and infrastructure, or imposing effective taxes on the use of certain products); promoting the use of cleaner products (such as low sulfur fuels, oxygenated fuels, hybrid vehicles); creating markets for recycled products such as paper (this will help to reduce air emissions and solid waste, and will result in ecological benefits); increasing the knowledge base, by performing life-cycle studies that provide information on the social cost of, for instance, energy consumption and production related activities; and supporting research to develop new, environmentally cleaner technologies. These programs require coordination among Federal (or EU Commission), state, or local agencies responsible for energy, commerce, and the environment. They also require effective participation by various stakeholders such as industry, NGOs, and universities. To protect human health, the US has national ambient air quality standards (AQS) for ozone, PM10 and, and CO. There are also today standards for particles 2.5 micrometers or smaller (PM2.5). Prior to the US CAA amendment of 1990, the states in the US placed greater emphasis on regulating a number of VOC-emitting stationary source categories (industrial sectors). Today, as part of the non-attainment program, tighter emission standards from transportation sources (such as motor vehicles) are imposed, which will lead to greater reductions in lead, CO, VOCs, and NO x. The higher standards to reduce emissions from motor vehicles will impact manufacturers of motor vehicles and petroleum refineries. To accelerate the reduction of SO2, mainly from coal-fired power plants, the US operates a market-based emissions allowance program, which includes 111 of the largest utility units, in Phase I. However, these sources can still adopt other control options, such as scrubbers, to reduce their SO 2 emissions to the levels required. On the other hand, the US CAA requires that the NO emission reduction target of 2 million US tons, be achieved by setting technology-based standards that

7 would be achievable using low-no burners. However, trading of NO x by utility units is also permitted, but on a case-by-case basis. The reduction of SO 2 can be achieved by burning low sulfur fuels. However, that is not the case for NO x, as the amount generated is more a function of the reaction temperature and oxygen concentration in a combustor. The 1994 Protocol on sulfur emissions of the Long-Range Transboundary Air Pollution Convention (LRTAP) establishes annual caps on total SO 2 emissions across the EU, and allows countries to implement their obligations jointly. Hence, both the US and the EU have adopted a policy that sets a cap (limit) on the amount of SO 2 that can be emitted per year within their respective environmental spaces. However, to meet the ozone and acidification interim or subobjectives, the EU has adopted measures to minimize the overall costs for the Community: To apportion responsibility for taking action, the socioeconomic impact on a particular Member States or sectors will be one of the factors considered. The Member States in the EU have controlled a number of VOC emitting stationary sources. They have proposed a directive to reduce emissions of SO 2 from burning certain types of fuels, and another directive that establishes an overall national emission ceiling strategy for acidifying pollutants and for O 3 which applies individually for each Member State. Because of the transboundary nature of these pollutants, the EU has designated areas that would have to integrate their strategies, in the same way that the designated ozone transport areas in the US have to cooperate. Until recently the policy for reducing agricultural pollution in the US and the EU was often driven by health threat occurrences that caught public attention, resulting, e.g., from runoff of manure, fertilizers, pesticides, and other farm releases. Also, environmental policy aimed towards pollution control and asset protection resulted in paying farmers for undertaking activities that would result in the protection of biodiversity, and for reducing air pollution. 4. Implementation and Enforcement This section will focus on the actions that are undertaken to meet the requirements (legislative, governmental, or other) for achieving the objectives and targets discussed above. In support of these activities, implementation plans are developed. These are management plans that are later used as a basis for evaluating and enforcing commitments made at the state level, or for developing a permit (license) for a facility. In support of the implementation of policy objectives, several tools/measures are undertaken. These include instituting enforceable emission limitations, and providing economic incentives, such as fees, marketable permits, and auctions of emission rights. They also include setting up voluntary programs to achieve early reductions in pollution, programs that promote pollution prevention (source reduction), and a schedule for complying with the requirements in a regulation. A few aspects are discussed below: 4.1 Air Quality Management US Air Quality Management

8 The US CAA requires that each of the 50 states submit to the US EPA a State Implementation Plan (SIP), which provides for implementation, maintenance, and enforcement of primary national air quality standards in each area of the State that is not showing attainment with the standards. For ozone non-attainment the US CAA provides the following non-attainment 1- hour ozone classifications: marginal, moderate, serious, severe 15, severe 17, and extreme. There are also nonattainment area classifications for the 8-hour ozone primary standard, which will eventually phase out and replace the 1- hour primary ozone standard (health based) to protects against longer exposure periods. There are two classifications for CO (moderate and serious), and two for PM10 (moderate and serious). There are as yet non-attainment classifications for PM-2.5. For those areas that do not now meet air quality standards, the US CAA allows the use of any control measures, means or techniques, including emission limits, fees, and economic incentives, provided that they are enforceable. The Agency also publishes guideline documents that usually define Reasonably Available Control Technology (and in certain cases Best Available Controls), to help the states develop regulations that are consistent, nationwide. However, a state may adopt a level of control that is more stringent than that described in a guideline, in order to meet its national commitment. When the area is serious, severe, or extreme in non-attainment with respect to an ozone air quality standard, the US CAA now requires that a state include in a SIP for an urban area with an ozone monitor which is showing a violation of the ozone standard, the whole Metropolitan Statistical Area. It is the state (or tribal) agency that monitors the air quality (criteria pollutants) in both attainment and non-attainment areas, and in oversees implementation of the federal regulations. However, the US EPA has oversight authority, which enables it to take action to bring a source in a state into compliance. The US EPA created in 1994 several new policies to encourage compliance with the different federal environment regulations. It has: outlined a self-audit policy that in certain cases allows facilities to report their violations; set up a sector facility indexing project to help facilities compare their environmental performances and to identify highly polluting sectors; developed sector notebooks in plain language to help facilities comply with the regulatory requirements; and issued environmental alerts to promote compliance with environmental laws. Details about these programs are available on the US EPA Web site, under enforcement EU Air Quality Management In the EU, the principle of subsidiarity will be the way the Community objectives and targets would be achieved. That means that each Member State will be allowed to use national or local efforts and initiatives, taking into account the cost-effectiveness of the various actions. However, since there is a shared responsibility between the Community and Member States, there is no attempt to define the lines of responsibility (division of competence) clearly, although there is language that indicates that if the objectives cannot be met by a Nation State because of the scales or effects of a proposed action, the Community can take over in the spirit of shared responsibility. The

9 EU has realized that there is a need for stricter compliance checking and enforcement. At the present time the implementation and enforcement of regulations vary across the EU Community, due to the different national level policies for reducing air pollution. Hence, the EU setup the European Union Network for the implementation and enforcement of environmental law (IMPEL). This informal network is made up of persons from the national authorities and the EU Commission; and an environmental policy review group, which may include Member State representatives at the Directorate level. At the present time, the implementation and enforcement of regulations vary across the EU Community. To build consensus before complex policy decisions are made, the European Commission set up consultative forums, such as the European Energy and Transportation Forum. This is a consultative committee composed of high level representatives from a large range of sectors and activism, e.g., industry, academia, trade unions, and NGOs. 4.2 Economic Incentives The US and the EU, like most industrialized nations, charge air emission fees that are based on the amount of pollutants released. The fees are mainly to finance the permit program rather than to modify the behavior of the polluter. These environmental taxes are not based on the actual environmental damage to the environment. Hence, such fees or taxes are not economically efficient. Also, the values charged for a unit of pollution vary from one country to another, and they are calculated by a permitting agency, based on local considerations. Considering that the cost of enforcing regulations is not small, that the budgets are shrinking, and that goals are expanding beyond the allocated resources, new approaches are being used in addition to the more traditional forms of regulations. The purpose is to reduce the emission obligations at the facility, region, and the country levels. One of the new approaches implemented is the SO 2 trade and cap (an emission ceiling) program, presently adopted in the US. It allows the unused emission allowance units issued by the US EPA to be carried over (banked). The number of allowance units allocated to a source (utility) affected by the regulation for a specified calendar year, a utility would be allowed under these rules of trading, to use these allowances for any of its affected units in one facility or sell them to any other facility within the US. Therefore, a facility is required to hold enough allowances to cover the level of its expected emission releases for that year. The SO 2 trading program involves the averaging of emissions from different facilities. It was adopted to reduce the emissions of SO 2 from power plants, at a lower cost than the more traditional controls. Market incentives are also used in the US for reducing VOCs, in addition to SO 2 and NO x. A trading scheme was also proposed to reduce the amount of greenhouse gases, one of the elements of the Kyoto protocol, which was signed by about 160 nation-states in 1997 to mitigate the impacts of climatic changes. The Kyoto Protocol sets emission targets for developed nations, mainly OECD countries, Japan and Russia, and the US. The targets are aimed at reducing greenhouse emissions below 1990 levels, within a five-year budget period ( ). Within that period, the US (when it ratifies the agreement) is expected to have reduced its emissions by 7% and the EU Member States by 8%. These emission limits are believed to be achievable through an emission trading

10 scheme involving CO 2, CH 4, N 2 O, and three ozone substitutes for CF 3 (an ozone depleting chemical); emission offsets based on activities such as planting certain trees that absorb carbon (i.e., sinks); joint implementation among developed countries with binding emission targets; and joint implementation for emission credits in developing countries (the Clean Development Mechanism). There are as yet unresolved issues regarding the rules and other aspects of trading in greenhouse gases. These pertain to the level of transparency and consistency in the methods that would need to be used for measuring green house gas emissions; and whether the trading entities, in an emissions market, would be required to adopt a standardized procedure for emissions accounting and calculation of emissions reduction. The extent trading rules and agreements are implemented and enforced, and the approach used for certifying carbon credits will determine the net environmental benefits from the trading scheme. 4.3 Pollution Prevention (P2) The way people interpret the meaning of a term or a statement will influence the way a regulation is implemented and enforced. It is often the case that an important environmental term has more than one meaning. The term pollution prevention is a good example. It was used in the US Pollution Prevention Act (US PPA) of 1990 to convey the sense that pollution should be prevented or reduced at the source (of pollution). Hence, the most desirable approach includes measures such as the reduction (or elimination) of emissions of pollutants through operational changes, total production (process) changes, and material substitution. However, actions that reduce the volume of the pollutants through the use of abatement equipment are not considered pollution prevention (P2) according to the PPA. Therefore, the reductions in pollution would need to occur as a result of proactive actions done to the source that is generating the pollution, rather than due to actions done to deal with the problem after the fact. This one requirement makes the term pollution prevention different from waste minimization in the US. The EU countries issued a pollution prevention directive in 1996, which also requires that pollution be reduced at the source. The Directive did not exclude the use of abatement (add-on control) equipment from the definition of pollution prevention. This implies that the boundary of the emission source is more broadly defined in the EU directive than in the US PPA. The International Standards Organization (ISO) uses the term prevention of pollution for pollution reduction actions that include the use of pollution control (abatement) equipment in its Environmental management - vocabulary. Hence, the terms pollution prevention and prevention of pollution do not mean the same thing. That explains why there were many actions by waste generators that were not in reality P 2. However, there are many successful instances of P 2 (source reduction) applications see for example the US EPA 33/50 program. Part of the problem is that there is no standardized method for collecting and communicating environmental data. 4.4 Permits and Licenses The US has a new operating permit program that consolidates all air pollution requirements for major source facilities, into a single permit for air emissions. Although

11 each state and tribal agency can tailor its program to its individual needs, the permit sets the minimum requirements that states and tribal agencies should include in a permit. Permits are required by all major (significant) stationary source facilities. The criteria that will need to be met before a facility qualifies as a major source will depend on the type of pollutants that are being regulated (e.g., VOC or toxic) and the mass of annual emissions. The EU also requires that the significant air polluters obtain licenses that set the level of pollution. Only general requirements of what a permit should hold are generally defined. This allows more flexibility, but also more variability across the EU Member States. 4.5 Eco-Industrial Parks In an attempt to use resources more efficiently, thus reducing emissions and waste, new concepts are being conceived so that future industrial developments are planned to promote business and environmental excellence. The key is to build new, single enterprises that can interact as part of a complex business ecology. Such enterprises would be interdependent, or networked, so that energy is shared and industrial waste from one production process can be used as feed in another. Industrial enterprises designed according to such concepts of efficiency evolved in the 1970s in Denmark to meet regulatory requirements, but they also reduced costs and the amount of waste disposed. In the US demonstration areas were set up a few years later in Baltimore and in Texas to minimize the net waste generated a more limited objective. 5. Protection of Ecology Several aspects related to ecological protection will be briefly discussed, to provide a broad picture of some of the issues, accomplishments, and areas that are still being developed. 5.1 Cost Considerations Both the US and EU governments have declared the protection of both human health and welfare as a primary objective. Protecting the natural environment (including the ecosystem), therefore, becomes necessary to prevent the depletion and/or degradation of natural resources on which the welfare of their citizens depends. However, the report to the US Congress on the cost-benefit of the CAA Amendments of 1990, for the period 1990 to 2010, mentions that the ecological benefits of pollution control have not been well represented in comparison with the human health benefits, because of the lower priority given to ecology relative to human health. The cost of pollution controls has also been a factor that the EU Commission considered in 1990 when it set the proposed limits for the short-term and long-term objectives, for the protection of sensitive ecological regions from acidification, eutrophication, and ozone effects. The short-term objectives for 2010 represent 50% of the target values, and are a compromise driven by cost and other considerations. A target value is defined

12 as an air quality level to be attained by a region as far as possible within a given period. 5.2 Effect of Air Pollution Although there was evidence that atmospheric deposition of pollutants contributes to the exposure of water and soil to toxics, the contribution of the major pollutants has not well been quantified in the US or the EU up to early 1990, mainly because of incomplete inventories at the national level. Therefore, the effect of environmental regulations could not be easily observed, except in a few cases. For example, the reduction in lead concentration in freshwater fish in the US was attributable to the reduction in lead emissions from mobile sources. (Automotive fuels now used in the US are mostly unleaded.). In most of the EU, emissions from leaded gasoline have been considerably reduced since the 1980s. Due to recent advances in the sciences, and the availability of more complete databases, it has become possible to quantify the effects of air pollution on certain ecosystems categories. The categories evaluated include: the acidification of freshwater bodies associated with airborne nitrogen and sulfur deposition; the eutrophication of estuaries associated with airborne nitrogen deposition; and the accumulation of toxics in fresh water fisheries. By focusing on specific ecosystems, the economic benefits of emission controls can be estimated, and the effects of specific classes of pollutants and their ecological impacts can be reasonably estimated. 5.3 The State of the Ecosystem An ecosystem is composed of a variety of living components (biotic) and associated nonliving (abiotic) components that interact at different levels contributing to the food cycle (food web). The system components must not be disrupted by significantly depleting the biodiversity of plants, animals or nutrients. Natural ecosystems may be able to adjust to infrequent or low-level stress produced by natural occurrences such as floods or fires. Certain human activities on the other hand result in numerous forms of stresses that negatively affect natural habitats around the world. They include: physical stressors, disturbances that lead to erosion of the topsoil; biological stressors, such as organisms or microorganisms that can multiply and are often difficult to control; and chemical stressors, which result from the introduction of pollutants into the environment. Hence, human population increase, patterns of consumption, and environmental degradation, have resulted in the extinction of many species around the world, causing important changes in various ecosystems or parts of ecosystems. One of the problems facing ecologists and other technical persons evaluating the conditions of an ecosystem is that there are no standard procedures for measuring and reporting the overall condition of an ecosystem. Several efforts are now directed toward developing a standard way of reporting such information. The Heinz Center in the US, working with other organizations, identified 12 key properties, or goods and services that society derives from an ecosystem. They grouped them under the following

13 three categories: system dimension, human use, and ecosystem condition; here an ecosystem represents various communities and organisms and the complex system of interactions with its physical environment. This type of grouping provides an overall assessment of ecologically integrated regions of forests, coasts and oceans, and croplands, rather than an assessment of place and ecosystems such as the Great Lakes and Chesapeake Bay watershed types of studies. In the case of watersheds, the investigations are being performed to in order to understand the impacts on specific ecosystems or portions of an ecosystem. For example, a study of an aquatic ecosystem such as Chesapeake Bay may involve the investigation of the biology of any number of the nearly 2700 living species in that ecosystem. It would include an investigation of the chemical components, geological characteristics, and the way the different parts of the ecosystem interact. Since life in an aquatic ecosystem is dependent on the water environment for nutrients (e.g., nitrogen and phosphorus) and shelter, it is important to protect against excess nutrients, which can cause a decline in underwater grasses and a lowering of the dissolved oxygen levels. Chemical contaminants, mostly from atmospheric depositions and urban storm water runoff, can potentially affect aquatic organisms in a habitat. The release of synthetic toxic substances can enter the food chain and be transferred through it to accumulate in the fat of certain organs of animals, or contaminate the tissues of finfish and shellfish. This occurs when toxic comport s do not degrade over time, or degrade at a very slow rate. 5.4 Ecological Indicators To help understand the effects of a group of pollutants on the ecosystem, there is a need to characterize the stressors and the accompanying effects on organisms, populations (involving multiple species), and communities where patterns of growth affect community integrity. Ecological indicators (or reference points) are being used to evaluate potential impacts to the environment and for sustainable development, focusing on the most critical parameter of concern. Hence, an indicator has to be relevant to the purpose of the assessment (e.g., ecological resource at risk). Before an indicator is approved for use, the feasibility of implementation should be evaluated, the uncertainties will need to be well documented, and the expected results regarding ecological conditions will need to be stated, so that a decision-maker or stakeholder can understand the issues. 6. Tools for Decision-Making The level of risk to humans exposed to a chemical substance, and economic considerations, are two factors that will influence regulatory and policy decisions. Several important aspects are discussed below. 6.1 Risk Assessment This technique is often used to help make decisions that support implementation of environmental statutes and environmental standards. For example, risk analysis is used in the US to classify sources for regulation. This involves toxicity assessment and exposure assessment (risk assessment).the US CAA requires the EPA to evaluate source categories that are implementing technology-based standards for residual health

14 risks to the population around each facility (plant). Risk assessment may also be used to exempt source categories from regulation or to delist a chemical that is listed as a hazardous (toxic) air pollutant. In this case, the petitioner has to provide supporting evidence that the risk associated from that source category or from that pollutant is below the level of concern. The risk assessment process is lengthy and involved. For example, many assumptions are made during the process to compensate for the limited abilities available for predicting how atmospheric dispersion of hazardous air pollutants negatively affects humans. Since the point at which a pollutant is a source of concern to an individual s health is not easily determined, the range of probabilities of a risk is usually reported. In this way, a decision-maker or risk manager can make a decision on the basis of whether a specific threshold level is expected to be exceeded or not. Various phases are involved in an ecological assessment of risk; these include development of environmental values, agreeing on the assessment questions, and identifying useful indicators. Because of competing interests when environmental resources are concerned, it is important to make the risk assessment procedure a transparent one. An indicator must not only be relevant to an assessment question relating to a specific management problem, it must also be useful for measuring the ecological condition. Adequate documentation of the evaluation phases must also be maintained to show the strengths or weaknesses of an indicator, and should be discussed in a way that would be understood by a reviewer. That is why the US EPA recently published a guideline to assist state, local, and tribal agencies in the US. Up to now, ecological risk assessment and human risk assessment have been evaluated separately. As a result, the methodologies are not the same, and the results are not based on the same spatial and temporal basis or level of conservatism. Integrating risk assessment, so that the impacts of a particular stressor are evaluated on both human and nonhuman organisms, populations, and ecosystems simultaneously, will provide a more unified expression of the assessment. An integrated approach makes sense considering that humans depend on products and services provided by nature. Also, nonhuman organisms (e.g., fish) may act as indicators of sources of human hazards. 6.2 Cost and Economic Valuation Economic parameters or indicators are used help make decisions about regulatory options and for evaluating the willingness of society to pay for environmental protection. Two parameters are discussed below Cost-Effectiveness To meet an air quality standard, or a certain level of protection, cost- effectiveness analysis is often used to evaluate various options, or to arrive at the least cost option standard. This economic indicator is often expressed as a ratio of cost per unit of pollutant(s) reduced. Hence, it can be used to compare the incremental cost of an action of equal cost and duration, or to arrive at the least cost option for the same level of emission reduction. However, the basis for comparison must not be different. Before setting pollution control levels such as Reasonably Available Control Technology in the US or Best Available Techniques in the EU, the cost effectiveness of the option or requirement is evaluated.

15 6.2.2 Cost-Benefit Analysis When the benefits of a regulation can be identified in monetary terms, a benefits- tocosts ratio is a useful parameter for choosing between alternative options. When costbenefit analysis is used, the maximization of the net benefit is sought. If the marginal costs are increasing and the marginal benefits are decreasing, that surplus point or least costly method of achieving a goal needs to be located. It is not enough that the benefits are higher than the costs the most economically efficient outcome is sought. Costbenefit analysis has been used in the US for valuation of projects and major regulations, to various extents, for nearly 20 years. The tool has also been used for pricing policies (e.g., access and maintenance of natural resources). This is not generally the case in Europe, where polluters are more often charged directly by means of environmental taxes. However, these taxes are not calculated on the basis of the monetary value of the unit of pollution or the damage caused. For greater efficiency, environmental taxes would need to be designed to reflect more the polluter pays principle, rather than, for instance, political considerations Statutory Requirements The use of economic analysis during rule making in the US is program specific. For example, the US CAA precludes the use of cost-benefit analysis for setting AQS to protect human health or for setting the Maximum Achievable Control Technology level for toxics. There are also a number of Executive Orders and laws. For example, a Regulatory Flexibility Analysis may need to be performed to arrive at options that are aimed at mitigating significant adverse effects of a regulation on a substantial number of small entities (small businesses or governments). Major regulations ($100 million or more annually), or those that raise significant public concerns, require that a Regulatory Impact Analysis be performed, which involves a lengthy and costly economic analysis. 7. Concluding Remarks Five main steps can be defined that a country works through before allocating its economic and human capital and technological resources, it will: (1) first try to understand and then formulate the problem for the public to understand; (2) set goals and targets; (3) provide the means and tools for implementation and enforcement; (4) review and assess the accomplishments; and (5) revise, as appropriate the short-term and long-term plans. Both the US and the EU have to set environmental priorities and make choices regarding which problems need to be addressed first. In the process, they set goals and achievable short-term objectives and subobjectives aimed at satisfying existing environmental statutes (US), or directives (EU), with the ultimate goal of protecting their citizens. They use risk analysis, economic considerations, and social considerations for making environment management decisions. They have supplemented the more traditional control requirements such as emission standards, equipment standards, and facility-wide emission caps, with market-based programs and environmental taxes. The objective of trying new approaches is to manage pollution more cost effectively, and to provide companies with continuous inducements to make reductions in environmental pollution.

16 An economic incentives program can provide an effective and economically efficient way of achieving the desired pollution reductions that are expected from implementing the more traditional programs. On a local or country basis, such programs provide an opportunity for economic growth in highly polluted areas, where more traditional regulations may not have allowed that. Economic incentives under a true market condition will set the price of emissions. Hence, under appropriate conditions, the use of economic incentives has the potential to assign monetary values indirectly to environmental services (e.g., clean air) and assets (e.g., national forests). However, the success of an incentive program, such as emissions trading, requires that there be in place a system of verification, reporting, and accountability, comparable to that of a more traditional program. It will also depend on the willingness of the regulated industry in a country to participate in the trade. Some issues regarding the fairness associated with market incentives were presented in a 1977 study on the design and use of marketable permits by the Organization of Economic Co-operation and Development (OECD). The study concluded that if adequate provisions are in place, anti-competitive strategic behavior (e.g., one person purchasing most of the emission allowances) would be contained, and that as long as society as a whole is paying less to achieve a regional environmental goal, the fact that some companies may as a result of trading scheme emit beyond it existing obligations (limitations due to a regulation), should not be of great concern. However, the study did make the point that there were instances where policy goals may not be satisfied by a market-based system, as in the case of marketable permits for water rights. There may also be possible cultural or labor impacts, where the affected parties may not have the necessary resources to compete in the market system. In this case some form of intervention is recommended, especially when the stakes are high such as in the protection of wetlands, or when market distribution results in unfair distribution of a negative impact. A good idea does not guarantee acceptability. The US PPA of 1990 promotes a logical concept, which states that pollution should be reduced at the source (source reduction), when possible. But, it has taken many years of education and outreach effort by the US EPA, to alleviate the many concerns that were voiced at the time and to promote consistency in implementation across the US. For example, some in the regulated community feared that they would be required to capitalize on new facilities when the ones they operated were still operational. The impact of pollution prevention driven regulations on conventional pollution control regulation, which are mostly based on abatement equipment, was not at first generally understood at the state and local agency levels. There are also industries that exist because of waste generated by other segments of the industry, which were concerned about the implications of the 1990 Amendments to the US CAA. Since the sales of environmental abatement equipment are in the order of billions of dollars, it is understandable why many stakeholders in the US were at first concerned about the possible impact of this important environmental Act. It is also understandable why the term pollution prevention in the EU did not explicitly exclude the use of abatement equipment in the definition for pollution prevention in the 1996 Directive. This is an example where an environmental policy could have wider implications. A policy that could have led to a net reduction in the sale of abatement equipment, would have impacted the gross national product (GNP) value of nations, since the GNP presently measures total flow of goods and services in an economy (but does not factor in the damage to the environmental assets).