Chapter 4: Protecting the Encironment

Environmental protection programs are a very large area of government regulation and a major reason for growth of public-sector involvement in private decision making. This growth has coincided with substantial improvement in the quality of the environment. The polluter received private benefits (easy disposal of wastes), but social costs ("externalities") in the form of dirtier air and water resulted.

The basic assumption is that people pollute, not because they enjjoy spoiling the environment, but because polluting is cheaper or easier than not polluting. The idea behind pollution fees is not to punish polluters but to get them to change their ways as high-polluting products become more expensive than low-polluting products. The basic idea is that the price of a product should reflect its costs to , or burden on, the environment.
The Toxic Substances Control Act (TSCA) gives the EPA substantial power over the chemical industry, including the following:

• Authority to require testing of new and existing chemical compounds.
• Mandates for premanufacturing notices 90 days prior to the production of any new chemial or significant new use of an existing chemical.
• Power to control the manufacturing, processing, distribution, use, and disposal of any chemical substance.
• Required reporting, which covers each chemical produced by every chemical manufacturer.

The Development of Environmental policies. In the United States, the EPA is the main federal organization operating in this area, and it focuses on issuing rules, approving permits, and enforcing its regulations.
The Range of national Environmental Regulation. Activities of the EPA center on setting and enforcing standards relating to environmental concerns. The EPA has several means of enforcement. Upon finding a violation, it may seek voluntary compliance. If that fails, it can order compliance and take violators to court. Four major environmental statutes cover hazardous and toxic substance; they are usually referred to by their acronyms: TSCA, RCRA, FIFRA, and CERCLA or Superfund.
The costs of compliance with environmental laws is quite uneven. A proportionately greater burden is borne by small factories because of the economies of scale incolced in regulatory compliance.

Source:Business and Government in the Global Marketplace (seventh edition Murray L. Weidenbaum)