April 29, 2017

Pollution costs

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This is Chapter 17 of the book Can Britain Survive?, published by Tom Stacey, London, 1971, and Sphere Books, London, 1971 (paperback).

In what way does pollution affect the country as a whole? What is its total cost to us? This is difficult to answer as no one has really defined the term ‘cost’. It normally refers to ‘economic’ cost, i.e. to cost that can be measured in terms of the units of measurement used by economists. But are these the right units of measurement? One cannot, for instance, measure social and ecological costs in these terms; at least, not until they begin to affect economic life. This, of course, they must do in the long run, and perhaps one can take them into account by referring to them as ‘delayed economic costs’.

Thus, for over 150 years, industrial waste has been poured into the air, rivers and seas, without any apparent adverse effect on our economy, so much so that it is assumed by many people that the world’s capacity for absorbing waste products is infinite. Unfortunately, this is not so. The environment can absorb a finite amount of different wastes; beyond that these tend to accumulate so that even if the annual amount disposed of was constant, which as we know is not the case, the total amount in the environment would be increasing more or less exponentially, depending on their persistence.

Also there must be thresholds beyond which levels for different pollutants become lethal. Before these thresholds are reached, the effects are not easily observable. This does not mean that biological damage is not being done and that ecological costs are not being incurred, but that they will only be translated into economic costs once they have led to a reduction in economic activity.

The reason why there has been this sudden interest in pollution is that many of these thresholds are now being reached and pollution is beginning to affect our economy.

There appear to be few satisfactory studies of the cost of pollution to our society. However, in the United States, Lester B. Lave and Eugene Seskin [1] of the Carnegie-Mellon University estimate that roughly 25 percent of all respiratory disease is associated with air pollution. This means that the cost of air pollution to health in the United States was about $2 billion in 1963, the last year for which usable data is available.

Ailing shrubbery

Professor Thomas D. Crocker, of the University of Wisconsin, and Professor Robert J, Anderson Junior, of the University of Purdue, [1] have estimated that an increase in air pollution of from 5 to 1.5 percent, reflected in off-colour paint, ailing shrubbery, sooty surfaces and unpleasant odours, takes $300 – $700 off the value of a house. On this basis air pollution in 1965 was costing America $621 million in reduced property values.

The Beaver Committee Report put the cost of air pollution in Britain on our health and property at £350 million. This was 16 years ago, and it was probably even then a conservative estimate (see Albone, Chapter 14).

Gerald H. Michael, Assistant Surgeon General, has calculated that the 173 million tons of contaminants ejected annually into the atmosphere in the United States costs Americans $10-$20 billion a year in medical bills and cleaning bills.

According to the National Air Pollution Control Administration, the figure is between $14 and $18 million. [2]

The harm done by sulphur dioxide alone to crops in the United States has been estimated at more than $500 million a year. The damage done by the countless poisons we pour into rivers and seas in terms of reduced fish catches must also be colossal, and can only go on increasing. Mercury alone has been considered responsible for an annual 1 billion’s-worth of damage world-wide.

Representative James Murphy of Staten Island, member of the Merchant Marine and Fisheries Committee, asserts that pollution in general costs the United States more than $30 billion a year and predicts that this figure will rise to $60 billion by 1980.

From these terrifying figures, it must be apparent that pollution control is not the luxury many people think it is. To refuse, for economic or political reasons, to install pollution control equipment is not to save money, again as many people think but simply to pay the cost of pollution in a different currency: in reduced plant yields, in larger cleaning bills, in higher medical costs, etc.

Also the amount of money spent on pollution control has up till now been but a minute fraction of total pollution costs. In Britain the £32 million spent on air pollution control is less than an eleventh of total cost as estimated by the Beaver Committee. In the United States the $10 billion that President Nixon proposes to spend before 1975 (assuming that it is in fact spent, which is by no means sure) is also but a fraction of what it will really cost to clean up that country’s polluted environment. Let us briefly examine this.

The cost of eliminating water pollution depends primarily on the degree of cleanliness we seek to achieve.

As urbanization progresses, the amount of sewage requiring secondary treatment must increase, In the United States by 1973, according to the Federal Water Pollution Control Agency, 90 percent of the urban population will need secondary sewage systems. [2]

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Water treatment

According to the Federal Water Pollution Control Administration this would require over $8 billion in water treatment plants (exclusive of land costs) and over $6 billion in sewers. Secondary treatment of industrial wastes will cost another $5 billion in construction. To separate storm and household sewers could cost anywhere from $10 billion to $48 billion and to control thermal pollution will cost yet another $2 billion. In addition, operating costs for all these facilities would be almost $2 billion for the municipal plants, $3-5 billion for the industrial plants and about $1 billion for the thermal processes. [2]

If America really wants clean water and decides to build tertiary treatment plants, then the construction costs would jump from $31 billion to about $90 billion. This figure is not far off Professor Barry Commoner’s estimate of $100 billion to clean up US rivers.

The Federal Water Pollution Control Administration estimates that between $26 and $29 billion will have to be spent between 1969 and 1973. [2] A National Survey in July estimated that between $33 and $37 billion will have to be spent within the next 6 years.

In Britain, there are few estimates of the cost of fighting water pollution. We have 20,000 miles of rivers, of which 5,000 are polluted and 2,000 grossly polluted. According to Mr Anthony Crossland, in a speech at the Guildhall, January 1970, it would cost £30 million to clean up 4 miles of the River Tyne, but this is a particularly bad stretch. The Jeger Report estimates that the GLC must spend £100 million on cleaning up the Thames Estuary.

Teesside Borough Council has calculated that £22 million are needed just to clean up the River Tees over 10-12 years. £500 million has been estimated as the sum required to bring 1,000 miles of grossly polluted British rivers just to tolerable standards. Once more, the cost of control must depend on the degree of cleanliness we require, and this can only go up as we depend more and more on our rivers for drinking water.

According to the Jeger Report, 3,000 of our 5,000 sewage works are at the moment overloaded and produce effluent below the quality associated with secondary treatment. Mr Craig Sinclair of Sussex University estimates that £260 billion a year must be spent on sewage works, which is twice what is spent at the moment.

Estimates of the cost of controlling air pollution are even more difficult. According to Professor Goldman, they range in the United States from $300 million to $3 billion a year simply for construction costs. In the latter case, this would mean capital expenditure of a little less than $100 billion by the year 2000. This only covers emissions from stationary sources. Air pollution from motor cars is an even more serious problem and in many US cities, motor vehicles are responsible for as much as 80 percent of it. According to Profeesor Goldman, controlling air pollution from cars might add up to another $2-$3 billion a year. A recent survey suggests a figure of $400 per car or a total of $40 billion.

Dr Ernest Starkman, Chairman of the Technical Advisory Committee of the California Air Resources Board, asserts that, if air pollution were to be cut down to “levels that would keep the atmosphere clean”, one would have to expend an extra $1,000 per motor car or approximately $100 billion, if every one of the cars at present in use in the United States were appropriately equipped.

The actual cost clearly depends on what percentage of total pollution one wishes to eliminate. It is important to realize that we can never get rid of all of it. As Professor Goldman writes, “Institution of $100 billion worth of air quality controls would not mean the elimination of all air pollution nor of the costs that arise from it”, but it would considerably reduce the cost of air pollution in terms of medical bills and cleaning bills and help defray the costs of operating expenses.

In Britain, up till now there has been practically no legislation to reduce pollution from motor-cars as it has been considered too expensive. The recent report of the Royal College of Physicians on air pollution and health, has revealed that the savings are largely illusory. Nevertheless, in order to justify the government’s short-sightedness, the government’s official position has been that there is no evidence that air pollution is bad for people, at least at existing levels.

Recently, there seems to have been a radical change of policy as Mr Peter Walker announced very firmly on 1 December 1970, that the government intends to introduce very strict measures to control pollution from the exhausts of motor cars.

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Measures to reduce lead

One can also expect in the United States, and eventually here, measures to reduce lead pollution of the air which we know to have a very serious effect on human health. The cost of tetraethyl additives from petrol which will be responsible for much of this pollution is likely to be particularly expensive. According to the Ethyl Corporation, these additives save the United States 215 million barrels of oil each year. The cost of this extra oil consumption would amount to at least $3 billion for the public to pay each year and $6 billion to be met by the oil companies. If octane ratings are to be maintained, then further changes are required which will probably give rise to other forms of pollution and hence require further costly controls. [4]

In the United Kingdom Lord Rothschild, head of the government’s new Capability Unit recently said that the exhaust from cars could be purified at a cost of an extra £50-£100 per car, while £5-£10 would be required to get rid of the lead.

According to Geoffrey Charles, Americans have already spent $10 billion on anti-pollution devices for their cars and it is estimated that they will have to spend another $15 billion. [5] Businesses must undoubtedly foot a considerable part of the bill, as the principle that businesses must pay for the disposal of their own waste is rapidly becoming accepted both by government and industry.

In the United States businesses spent an estimated $1-5 billion to control air and water pollution created by them, which is an increase of 40 percent over the previous year. The National Industrial Conference Board estimates that investment to control air and water pollution rose from 2 percent of manufacturer’s capital outlay in 1967 to close to 4 percent in 1968. A good number of companies questioned by Fortune report that they are spending 10 percent of capital outlays, and in extreme cases the figure was 30 percent . [6]

In Japan where public awareness of pollution is of recent origin, already 5 percent of capital expenditure, according to a recent Ministry of International Trade and Industry report, is devoted to pollution control equipment, while in the chemical industry, the figure is closer to 12 percent. These figures are increasing every year and must continue to do so at an ever greater rate.

The chemical industry is among those most affected by pollution control problems. It is producing an ever-wider range of chemicals which are ending up in our rivers and hence in our water supply. The Institute of Water Engineers warned that, as a result, our water supply is in a precarious position. Many of the chemicals cannot be identified, let alone filtered out. Clearly very tight controls will have to be imposed. Pollution of water supplies with detergents, insecticides and artificial fertilizers is also becoming a matter of national concern and it is but a matter of time before controls are adopted that will seriously reduce the profitability of the industries producing them. In the meantime the major chemical companies are planning large increases in their expenditure on pollution control.

In the United States Du Pont has made a cumulative investment of $125 million in air and water pollution control. Its yearly operating costs for this purpose run to over $25 million. [6]

In the United Kingdom ICI plans to spend £60 million over the next 10 years on equipment to control its effluents.

The paper industry is also likely to be severely affected. According to Professor Barry Commoner, $300 million a year would have to be spent in this industry just to meet current US pollution standards. This would apparently reduce the industry’s profits by one third.

Macmillan Bloedel has announced that in addition to the $19 million it has already spent on pollution control, it proposes to spend another $30 million in the next 5 years. Meanwhile in the United States an ever-increasing number of paper mills unable to meet pollution standards have been forced to close down.

The steel industry is also vulnerable. In the United States it is estimated to use 8 billion gallons of water per day for cooling and other purposes, and causes extremely serious pollution to waterways. It is already spending considerable sums. US Steel has invested $235 million up to date.

Bethlehem Steel plans to raise annual capital expenditure of 6 percent per annum to 11 percent.

Armco Steel spent $74 million from 1966 to 1969. The American Iron and Steel Institute states that reporting members are spending $325 million per year for pollution control.

In the United Kingdom British Steel is currently spending £5 ½ million a year on construction costs. Of this, £4 million are spent on air pollution control and £1.5 million on water-treatment plant. Operating costs are £1.2 million for the former and £750,000 for the latter. Expenditure is expected to increase by 50 percent over the next 5 years.

The cost of controlling pollution from power stations must also increase very radically. In New York, Mayor Lindsay is faced with the serious dilemma of whether to allow Consolidated Edison to build more power stations, thereby increasing the already serious levels of air pollution in the city of New York or else face an ever-worsening chronic power shortage. The solution adopted will clearly be to build more power stations but to impose over more drastic pollution control standards.

New York Consolidated Edison has already spent $16 million on pollution control equipment including $10 million on a precipitator to curb smoke pollution.

The Illinois Commerce Commission is forcing Commonwealth Edison to spend more than $30 million a year in the next 6 years. A 4.5 percent price increase will provide this company with $16 million a year of this money. The rest must come out of profits. The Boston Edison Company announced recently that new air pollution regulations would cost their customers $22 million more a year. This is mainly the result of being forced to use low sulphur fuel oil. They calculate that it will add 7 percent to the cost of domestic lighting bills, 8 percent to the bills of commercial users and 14 percent to industrial bills.

The cost of eliminating noise pollution is also exorbitant. For instance, to fit the entire commercial aircraft fleet in the United States so as to reduce noise to acceptable levels is estimated at $500-$750 million according to the Secretary of Transportation, James E. Beggs. A more dramatic programme to ‘retrofit’ the whole us airline fleet with engine silencers would cost $2 billion. If supersonic transports are banned from binding in US airfields which is a definite possibility, then the cost in terms of money wasted on research will be colossal. More than £800 million have already been spent in Britain on the Concorde, and the French must also have incurred very high costs on this absurd project.

The cost of controlling pollution of the seas may be highest of all. Practically all our waste products end up in the seas, and they cannot absorb it all indefinitely. Strict measures will undoubtedly soon have to be taken to curb oil pollution by tankers. Nuclear power stations will have to find ways of reducing levels of radioactive waste at present ejected into the seas. Pesticide levels will have to be reduced which simply means that farmers will have to use less of these poisons, though this may in the long run represent a saving both in expenditure and crop yields.

There will also have to be a limit to the amount of solid waste indiscriminately tipped into the sea. At present the cost of collecting solid waste in the United States including 7 million cars, 100 billion tyres, 2 million tons of paper, 20 billion bottles and 48 billion cans adds up to about $2-8 billion. Much of this ends up in the seas. More sophisticated means of disposal are clearly required, and this must radically increase expenditure.

The total cost of controlling all different types of pollution, has I am sure never been calculated. Senator Gaylord Nelson estimates that in the United States it will be between $25 and $30 billion a year. “No administration has understood the size of the issue. It is much more important than space programmes, weapons systems or the money we are wasting in Vietnam.”

Professor Goldman estimates that the cost of controlling air and water and solid waste pollution will be between $130 and $180 billion in construction costs, and will involve between $12 and $17 billion in annual operating costs. These amount to approximately 1-2 percent of the annual Gross National Product (GNP) and to 4-7 percent of the value of industrial, agricultural, mining and transportation output. This only includes the cost of secondary sewage plants. If tertiary sewage plants are installed, then construction costs go up to $200 billion. [2]

This figure does not include construction costs involved in reducing pollution from motor cars or aeroplanes, nor any undertaken to reduce noise pollution or pollution of the seas, save by improving the quality of effluent to our rivers. Estimates for a more comprehensive programme of pollution control would thus be considerably higher.

How important is it that this money should be spent? There are two ways of looking at it. Firstly, pollution control must tend not only to reduce the short term economic costs but also long term or delayed economic ones, i.e. long term social and ecological costs. From this point of view money spent on pollution control will have a far more beneficial effect than might be supposed. Also, pollution control can also be regarded as maintaining or restoring those conditions that will permit further demographic and economic growth.

As such, it is too a means of suppressing some of the more noxious symptoms of these processes which can only serve to render them more tolerable and contribute thereby to their perpetuation. In this way pollution control will favour the continued depletion of our natural resources, the disintegration of society and other calamities brought about by continued growth.

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No technological solution

Pollution control in other words cannot by itself provide a solution to the environmental crisis. It is but a short term expedient, a useful, indeed a necessary one so long as we realize that it is basically only a means of gaining time and can only be of long term usefulness if this time is used for what are the only really effective measures, i.e. reducing demographic and economic growth. Meanwhile, let us try to predict how the cost of pollution will be affected by developments in the next few decades.

Firstly, one must realise that pollutants over and above that level that can be absorbed by our environment tend to accumulate. This means that even if they are being generated at a constant rate, the total amount in the environment will increase by something approaching compound interest depending on their persistence. Unfortunately, since the amount generated is roughly a function of economic activity, so a growing economy will mean a still greater rate of pollutant accumulation.

As already mentioned, it is important to realize that the effect of pollutants on biological organisms is unlikely to be linear. There are likely to be thresholds below which concentrations have only sub-lethal long term effects, but above which serious biological damage becomes apparent. When these thresholds are reached, observable and measurable damage to crops, wild life and humans will start soaring.

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