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ACID RAIN
ECONOMIC ASSESSMENT
ENVIRONMENT AL SCIENCE RESEARCH
Editorial Board
Alexander Hollaender
Council for Research Planning
in Biological Sciences, Inc.
Washington, D.C.
Ronald F. Probstein
Massachusetts Institute of Technology
Cambridge, Massachusetts
Bruce L. Welch
Environmental Biomedicine Research, Inc.
and
The Johns Hopkins University School of Medicine
Baltimore, Maryland
Recent Volumes in this Series
Volume 27-SHORT-TERM BIOASSAYS IN THE ANALYSIS OF COMPLEX
ENVIRONMENTAL MIXTURES III
Edited by Michael D. Waters, Shah beg S. Sandhu,
loellen Lewtas, Larry Claxton, Neil Chernoff,
and Stephen Nesnow
Volume 28-UTILIZATION OF MAMMALIAN SPECIFIC LOCUS STUDIES
IN HAZARD EVALUATION AND ESTIMATION OF GENETIC RISK
Edited by Frederick 1. de Serres and William Sheridan
Volume 29-APPLICATION OF BIOLOGICAL MARKERS TO
CARCINOGEN TESTING
Edited by Harry A. Milman and Stewart Sell
Volume 3D-INDIVIDUAL SUSCEPTIBILITY TO GENOTOXIC AGENTS IN THE
HUMAN POPULATION
Edited by Frederick 1. de Serres and Ronald W. Pero
Volume 31-MUTATION, CANCER, AND MALFORMATION
Edited by Ernest H. Y. Chu and Walderico M. Generoso
Volume 32-SHORT-TERM BIOASSAYS IN THE ANALYSIS OF COMPLEX
ENVIRONMENTAL MIXTURES IV
Edited by Michael D. Waters, Shahbeg S. Sandhu, loellen Lewtas,
Larry Claxton, Gary Strauss, and Stephen Nesnow
Volume 33-ACID RAIN: Economic Assessment
Edited by Paulette Mandelbaum
A Continuation Order Plan is available for this series. A continuation order will bring delivery of each
new volume immediately upon publication. Volumes are billed only upon actual shipment. For further
information please contact the publisher.
ACID RAIN
ECONOMIC ASSESSMENT
Edited by
Paulette Mandelbaum
Chemical Engineering and Policy Analyses (CEPA)
Rochester, New York
Technical Editor
Carole Beal
Acid Rain Information Clearinghouse
Rochester, New York
PLENUM P·RESS • NEW YORK AND LONDON
Library of Congress Cataloging in Publication Data
Conference on Acid Rain (1984: Washington, D.C.)
Acid rain.
(Environmental science research; v. 33)
"Proceedings of a Conference on Acid Rain sponsored by the Acid Rain Information
Oearinghouse, a project of the Center for Environmental Information, held December
4-6,1984, in Washington, D.C."-T.p. verso.
Bibliography: p.
Includes index.
1. Acid rain-Economic aspects-United States-Congresses. 2. Acid rain-Govern
ment policy - United States - Congresses. I. Mandelbaum, Paulette A. II. Acid Rain
Information Clearinghouse. (Washington, D.C.) Ill. Title. IV. Series.
TDI96.A25C66 1984 363.7'386 85-17021
ISBN-13 :978-1-4615-8355-4 e-ISBN-13:978-1-4615-8353-0
IX)I: 10.1007/978-1-4615-8353-0
Proceedings of a conference on Acid Rain sponsored by the Acid Rain
Information Clearinghouse, a project of the Center for Environmental Information,
held December 4-6, 1984, in Washington, D.C.
The Center for Environmental Information Inc. gratefully acknowledges funding
provided by the following sources in support of the publication of these proceedings:
Association for the Protection of the Adirondacks
Edison Electric Institute
Federal Government of Canada
National Acid Precipitation Assessment Program
United States Environmental Protection Agency
© 1985 Plenum Press, New York
Softcoverreprint of the hardcover 1st edition 1985
A Division of Plenum Publishing Corporation
233 Spring Street, New York, N.Y. 10013
All rights reserved
No part of this book may be reproduced, stored in a retrieval system, or transmitted,
in any form or by any means, electronic, mechanical, photocopying, microfilming
recording, or otherwise, without written permission from the Publisher
ABOUT THE CENTER FOR ENVIRONMENTAL INFORMATION
The Acid Rain Information Clearinghouse is a project of the Center for Environmental Infor
mation Inc., 33 South Washington Street, Rochester, New York 14608. CEI, a private, non
profit organization established in 1974, provides information through its publications, access
to computerized information sources, educational programs, conferences and library. As a
matter of policy, CEI does not take positions on environmental issues.
CONFERENCE ADVISORY COMMITTEE
Richard Chastain Lester B. Lave, Ph.D.
Southern Company Services Graduate School of Industrial
Thomas D. Crocker, Ph.D. Administration, Carnegie-Mellon
Department of Economics, University
University of Wyoming Paul W. MacAvoy, Ph.D.
William Hogan, Ph.D. Graduate School of Management,
Energy and Environmental Policy University of Rochester
Center, Harvard University Paul Stolpman
Steve Howard United States Environmental
National Wildlife Federation Protection Agency
Jay S. Jacobson, Ph.D. Greg Wetstone
Boyce Thompson Institute for Health and Environment
Plant Research Subcommittee, House of
Representatives, United States
Congress
CONFERENCE MODERATORS
William Hogan, Ph.D. Paul A. Miller, Ph.D.
Energy and Environmental Department of Science and
Policy Center, Harvard University Humanities, Rochester Institute of
Technology
PREFACE
This volume, Proceedings of the Conference ACID RAIN: Economic Assessment,
is meant to present the areas of agreement which economists have established and
the uncertainties which they have discovered in their attempts to use the
methodology of economics to better understand the nature of the acid rain issue.
Scientific articles about acid rain initially appeared in 1972. The public turned its
attention to the issue in the mid-1970s. In April 1979, the first acid rain bill was
introduced in the Senate, authored by New York's Senator Daniel P. Moynihan. The
bill sought to establish a federal research program dedicated to filling the gaps in
understanding of the phenomena of long-range transport of air pollutants and their
environmental, health and economic impacts. 'The bill was passed into law in 1980.
Since then, tens of bills have been proposed to control emissions of S02 and NOx,
thought to be the precursors of acid rain. And yet, in contrast with the pattern set by
the majority of environmental issues, where legislation followed very quickly on the
heels of public anxiety and involvement, by July 1985 not a single federal acid rain
control bill had been passed. The reasons for the logjam in Congress and the federal
government have been analyzed in great detail, but add up to a single fact: the
traditional coalitions which delivered national congressional majorities for pro
environmental laws, and in particular for the Clean Air Act of 1977, had dissolved
because some members of the coalition, such as the northeastern states, stood to gain
a great deal from acid rain control bills, while others such as the coal industry and
coal miners of the Midwest, stood to lose a great deal. The politics of acid rain were
further complicated in spring of 1983, when efforts were undertaken to win
midwestern support by levying a tax across the nation. At that juncture, the western
states and Hawaii were brought into the foray and generally took stands opposing the
tax.
Quite apart from the questions of regionalism and fragmentation of the
traditional clean air lobby, there was a firm feeling from mid-1981 in the Office of
Management and Budget and the White House, that the costs of acid rain controls
would add up to billions of dollars although at the same time, the benefits were
showing up as millions of dollars. The Reagan Administration would commit funds to
research, but would take no steps toward initiating an acid rain control strategy.
By early 1984, while the congressional politics of acid rain were caught in a
stalemate, there was a realization at the Acid Rain Information Clearinghouse that as
the scientific community slowly generated results and developed a more complete
understanding of the causes and effects of acid deposition, a need could arise to make
decisions in the absence of scientific certainty, based on some sort of socio-economic
analysis.
vii
viii Preface
It was to create a forum for discussion of what decision makers, constrained by the
political economy of the acid rain issue, could do with the uncertain scientific
information as it emerged, that ARIC's December conference was held. Two sorts of
questions were asked of the economists invited to speak. One was methodological,
and concerned the economist's ability to assess or estimate factors as complex as the
national or regional costs and benefits of acid rain controls. The other touched on
societal values, and asked economists to address the question frequently raised by the
environmental community, that is, whether or not efficiency ought to playa decisive
role in environmental debate. Because of the great uncertainties which accompany
current understanding of the physics and chemistry of acid rain and the effects of acid
deposition, as weIl as uncertainties associated with some components of the economic
analysis, decision-theorists were asked to discuss methods of risk assessment and
decision making in the absence of scientific certainty.
The first three sessions of the conference, and the guest addresses by the DEC D's
Ian Torrens and the United Mine Workers' President Richard Trumka, dealt with the
economic problems noted above. One conference session and the guest addresses by
New York's Commissioner of Environmental Conservation, Henry Williams, and
EPA's Assistant Administrator for Air and Radiation, Charles Elkins, dealt with
modes of decisionmaking in the face of uncertainty. In addition, because scientists,
economists and policy analysts are all working on acid rain problems, and because
each group is impatiently awaiting results or analysis from one or another of the
fields, a session was built around discussion of the difficulties which scientists,
economists, policy analysts and decision makers encounter, both in communicating
their needs to one another and in attempting to obtain the research results of which
they are in need. AIlen Kneese, a leading environmental economist and Senior
FeIlow at Resources for the Future, reviewed each of the papers before the conference.
In concluding remarks, he assessed the state of the art in economic methodologies and
its application to the acid rain issue.
The publication of these Proceedings is the result of the cooperation of a great
number of people. Thanks are due to the 26 speakers and respondents, who provided
us with their articles in time and were willing to foIlow tedious requests to review
their papers as we moved from one format to another. We are indebted to Ronald
Dwight and the Carnegie Endowment for International Peace, for co-sponsoring Ian
Torrens' keynote address to the conference in their Face-to-Face series. The talk and
the informal discussion which foIlowed set a tone of exceIlence and openness for the
conference.
Warmest thanks are due to A. Lee Nesslage, of the Center for Environmental
Information, who coordinated the conference arrangements and was always willing to
make changes in her weIl thought-out plans in order to accommodate the needs of the
program, and to Frederick W. Stoss, Manager of Information Services at the Acid
Rain Information Clearinghouse, for providing general background information and
documentation for the conference.
We are grateful to a number of people who assisted in the preparation of the
manuscript. Thanks are due to William R. Wagner, Manager of Communications of
the Center for Environmental Information, for his work in arranging the figures and
tables in the book, to Mrs. William H. Wagner, for faithfully transcribing the talks
which were presented and the discussions which took place at the conference, to Steve
Preface ix
Berendt of COMPUTYPE, who typed the bulk of the manuscript in. record time and
with true proficiency, and to Shelley Gordon and Eileen Williams of the Manuscript
Division at the University of Rochester Computer Center, for their willingness to
experiment with the transfer of the manuscript from one format to another, and for
turning the manuscript into camera-ready copy. Great thanks are due to Ann Held,
Dianne Piccirilli and Wanda Versprille, of Chemical Engineering and Policy
Analyses (CEPA) of Rochester, New York, who over the past year and one-half have
canvassed the speakers and coordinated materials at each juncture of the preparation
of the conference and proceedings.
Finally, we are most thankful to Carole Beal of the Center for Environmental
Information, who shepherded the manuscript from the first to the third and final
draft, spending countless hours to produce a consistent and error-free text, and who
carefully indexed the entire book.
Paulette Mandelbaum
June 30,1985
Editor
CONTENTS
Welcoming Remarks 1
Elizabeth Thorndike
ACID RAIN: AN INTERNATIONAL PERSPECTIVE
Keynote Address 5
Ian M. Torrens
ACID RAIN SCIENCE: STATE OF THE ART
Synopsis of Scientific Understanding of Acid Deposition and Its Effects 21
J. Christopher Bernabo
CONFRONTING THE ASSUMPTIONS
AND UNCERTAINTIES: ASSESSING COSTS
Cost and Coal Market Effects of Alternative Approaches for Reducing Electric 37
Utility Sulfur Dioxide Emissions
C. Hoff Stauffer, Jr.
Response 49
Larry B. Parker
Response 59
Robed W. Crandall
Response 63
Frederick C. Dunbar
CONFRONTING THE ASSUMPTIONS AND
UNCERTAINTIES: ASSESSING BENEFITS
Estimates of Acid Deposition Control Benefits: A Bayesian Perspective 77
Thomas D. Crocker
Response 95
A. Myrick Freeman III
xi
