Tradable Pollution Discharge Permitting for Industrial Users
Welcome to the Tradable Pollution Discharge Permitting web site.
General Statement of Problem Area
The problem to be examined involves the cost effectiveness of metals removal processes for industry in particular and society in general. Responsibility for control of metals wastewater discharge is shared between private polluting industrial firms and the government control authority (Pretreatment Facility Inspection/USEPA).
Research Purpose
Currently, metals pollution is partially controlled at the source by requiring private firms to comply with technology based effluent standards (TBES). The remaining pollution in the ambient sewer system is controlled by the POTW. This policy of command-and-control at the private firm level is flawed in two key areas (Environmental Economics: B. Field). First, TBES do not always produce the desired water quality outcomes. Second, this “one-size-fits-all” approach leads to economic inefficiencies. Because all firms do not have the same control technologies and thus, have different marginal control costs, it is difficult to gain the maximum pollution reduction for the least cost to the industry.
The primary reason for doing this research is to determine the feasibility of developing an alternative metals pollution control policy for industrial users, ie. the Tradable Discharge Permits For Industrial Users... (click this title/page next) By connecting the “theory” of policy-making with the actual implementation of policy in the “real-world” we can develop an incentive-based alternative to existing command-and-control regulatory methods being used in wastewater pollution management today. This research data collected in cooperation with the Industrial Pretreatment Program for metals pollution control in the Broward County North Regional Wastewater Treatment Plant System, will allow development of an economic model to characterize the optimal distribution of pollution control between IUs and the POTW. Using this model, the study will then evaluate the feasibility of implementing an incentive-based pollution control program.
The incentive-based policy alternative being considered for the analysis is commonly referred to as a Tradable Discharge Permitting (TDP) system. The basic theory behind the TDP system in pollution control is that permit trading will result in the most cost-effective reduction of emissions; in other words, the social costs of pollution will be minimized (Environmental Economics: B. Field).
Significance of the Study
The study is significant for three important reasons. First, TDP system research under the pretreatment approach has been limited; as a result, empirical examples of incentive-based systems for control of metals pollution in the wastewater treatment industry are few. There is however, one notable example, “Assessing the Viability of Marketable Permit Systems: An Application in Hazardous Waste Management” published in Land Management Economics (August 1985) by Opaluch and Kashmanian. Along with the study by Opaluch and Kashmanian, our study will contribute important information in an area where information is lacking. Second, the results of this study will show that benefits to society can be increased through the utilization of the incentive-based alternative being proposed. Finally, the research being done in this area will provide an important piece in the puzzle of sustainable development. The incentive-based approach offers firms the ability to realize gains from trade by promoting industrial growth. At the same time, it increases the control authorities ability to reduce industrial pollution - thus increasing sustainability of both the water and associated biological resources.
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