Pollution costs

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.

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]

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.

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.

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.

With oil transported across the seas trebling every ten years, interest in the long term sub-lethal effects of oil pollution has increased. Dr Max Blumer in the United States and Dr J. D. George in the United Kingdom have pointed to its very serious nature. It is possible that in the next decades the accumulated effects of oil pollution will become very costly in terms of fish resources.

The levels of pesticides in marine organisms, birds and surprisingly enough in our rainwater is also on the increase - not surprisingly as pesticides in the United States are a $450 million business, and in the United Kingdom £20 million worth are sold, a sum that is increasing at 6 percent per annum. [7] It must be but a question of time before these levels are no longer tolerated and start taking their toll in human lives.

I think that one can take it as axiomatic that governments and businesses will spend as little on pollution control as they can possibly get away with. Conservationist pressure can force their hand to a certain extent. Political and economic necessity, however, must be the ultimate determinant of the amount of money spent on pollution control.

Thus DDT was banned for 2 years in Sweden only when herrings were found to contain higher than permissible levels of this poison, which rendered them unsaleable. In Britain the Clean Air Act was passed only after 3,000 people had died from the effects of smog in the winter of 1952.

In Northern Italy businesses are spending a lot of money on water-pollution control equipment, and advertising the fact in the popular press to show just how socially responsible they are. The fact is that they are running out of usable water and their choice is clear cut: either to spend the money or close down.

Situations of this sort are likely to occur more and more. For instance, in Japan, pollution is so bad that in certain industrial areas, further expansion is simply no longer viable. Manufacturers are getting round this by setting up manufacturing facilities in other countries, mainly in South-East Asia, though Toyota is apparently looking around for a suitable site in Europe.

We have here a totally new phenomenon, ‘Industrial Nomadism'. Manufacturers pollute an area until it is incapable of supporting further industrial growth and then move off to another one.

The trouble is that growing social and ecological problems will tend to make economic imperialism ever less easy. As problems multiply, foreigners are bound to be singled out as responsible for a country's growing ills and discriminated against, as nationalism grows. In the next few decades one can undoubtedly expect more and more foreign firms to be nationalized in developing countries, and more and more protectionist legislation proposed.

Japan and other industrial countries that will soon find themselves in a similar plight will thereby be forced to spend ever greater sums on pollution control to permit economic growth and eventually simply to maintain existing output.

One of the beneficial effects of the growing shortage of raw materials must be the increased profitability of recycling waste. Take the example of sulphur dioxide. Monsanto has developed a means of recycling it and providing sulphur at £30 a ton which is just about twice the world price. A shortage will clearly make this recycling possible.

In the United States approximately 23 million tons of sulphur dioxide are discarded into the air each year; in the United Kingdom approximately 6 million tons. This could provide 5 million tons of sulphur or 15 million tons of sulphuric acid in the United States and about a quarter of this in the United Kingdom. It will soon be impossible to waste this precious material, and when that day comes, the huge cost to plants, animals, human health and buildings will be avoided simply because it will be profitable to do so.

The development of ever more efficient recycling methods will tend to have a similar effect. Also, as Sanford Rose writes,

"Once society, by one means or another, begins charging rent for use of the environment's capacity to absorb wastes, engineers will have to think about pollution control as an integral part of plant design rather than as an afterthought. A lot more research funds will be allocated to pollution control, and costs may go down faster thin anyone expects."

Recycling will have to be resorted to more and more for other reasons. At the moment much of the money spent on pollution control is aimed at shifting pollution from one place to another rather than suppressing it. Thus high chimneys are built to keep smoke out of urban areas. Clean air is achieved in cities at the cost of causing hideous pollution to the Welsh valleys where the Phurnacite or smokeless fuel is made. [8]

Even the sophisticated after-burners used to cut down exhaust suffer from the same deficiency. According to Bio-Science they simply break up the exhaust into minute particles which stay in the air longer because of their small size. A single motor car will emit about 100 billion such particles per second. Instead of forming condensation centres for raindrops, they form centres for tiny ice crystals, or mist droplets, that tend to remain in the air or descend very slowly. As Professor Wayne Davis comments, "The result is that in regions far from the pollution centres, we now have developing misty covers, which can cut down the amount of sunlight reaching the earth."

It is clear that as pollution becomes more and more a global problem, the devices used to combat it must become correspondingly more sophisticated. Effective recycling must tend to replace less sophisticated systems and costs must increase proportionately.

The amount spent on pollution control must also increase as scientific research reveals the ever greater damage done by different pollutants to biological organisms and in particular to human health.

Things considered harmless are slowly becoming incriminated as research progresses. It is in fact gradually being revealed to scientists, who should already know, that man has developed phylogenetically as an adaptive response to much more specific environmental conditions than we think, and that any undue modification of these conditions will affect him adversely.

Take sulphur dioxide; there is as yet no legislation calling for its control. Yet we know of its adverse effects on plant growth and we learn from Dr. Robert Shapiro that it has a significant mutagenic effect, and can thereby cause infant malformations and probably cancer. It seems probable, Shapiro writes that sulphur dioxide constitutes a genetic hazard to living organisms. [9]

Research on the effect of radioactivity of biological organisms is constantly leading to further reductions in permissible levels. Recently, Doctors Tamplin and Goffman of the AEC have provided evidence to show that the effects of low level radiation are much more dangerous than previously thought. [10] It was pointed out that if their recommendations were to be adopted, the effect on the nuclear power industry would be disastrous.

One reaction was that it would simply put America out of business.

Clearly, as research continues to reveal more and more adverse effects of pollution, so standards of pollution controls will have to be increased as will the costs involved. It is also essential to realize that a large amount of pollution can only be controlled by cutting down on economic activity. How else, for instance, can heat from the combustion of fossil fuels be reduced? Clearly, only by cutting down on power consumption.

How can the damage done by agricultural chemicals be controlled? Only by closing down the factories that produce them or persuading them to produce something else, and at the same time returning to sounder methods of husbandry that do not require them. This must mean reducing economic activity, which implies more costs to our economy.

How are these likely to be met? The reasonable thing to do would be to cut down on less important expenditures, notably those on superfluous consumer products. We can do without electric toothbrushes and plastic buckets but not without air to breathe and water to drink.

Also the government should cut down on other expenditures that are clearly not so urgent, such as many aspects of welfare and education, defence, etc. It is unlikely, however, that their sense of priorities is likely to undergo so violent a transformation as to render such acts conceivable, though a typical Conservative government is likely to go quite a long way towards reducing the costs of that vast cumbersome bureaucracy set up by its opponents.

Social disintegration will require ever greater expenditure on police, prisons, de-alcoholisation centres, psychiatric hospitals and every type of welfare for an ever less adaptive population. Growing unemployment will call for still more welfare and will also contribute to further social disintegration. The declining health of urban man will mean still more expenditure on our health service and the ever-increasing demand for education will further increase costs in this direction.

Governments will undoubtedly try to make business pay as much of the bill as possible. However, there is a limit to the extra costs they can absorb without increasing prices.

The government will thus have to finance much of the anti-pollution programme by inflation. This, of course, will lead to a measure of social chaos. The public will obviously clamour for higher wages to maintain their standard of living, which will simply lead to further inflation.

As ecological principles begin to be understood and concern with the environment increases, so we can expect people to become more willing to accept some reduction in their standard of living to finance pollution control. In the United States a national survey by the Information Research Centre showed that 57 percent of adults interviewed would accept taxation increases if it were the only way to keep town and country clean and pleasant to live in. A survey in Sweden showed a similar result.

In the long run as industrial production is ever more seriously handicapped both by pollution and by the cost of its control, living standards calculated terms of consumption of manufactured goods must inevitably fall whether by consent or by sheer social and ecological necessity.

The only scientific attempt to predict the effect of pollution control on the US economy that I have come across confirmed these conclusions.

Economist Robert Anderson built an effective model of the US economy which was used to predict changes in 1962-4 with reasonable accuracy. [1] He altered some investment and price inputs to reflect stringent air-pollution control measures. For instance, he assumed that manufacturing industries would increase investment on air-pollution devices at an annual rate of $1-2 billion. Public utilities, he assumed, would increase their expenditure at an annual rate of $320 million and new car prices would rise by 1 percent so as to meet new air-pollution standards.

He then reran the model for the same period (1962-4). As expected, the GNP went down to $617 billion, whereas without the assumed pollution controls it would have been $625 billion. Unemployment was up to 5.3 percent instead of 4.8 percent. Prices also rose by about 1.2 percent.

This model, as Sanford Rose points out, did not take into account the effect of improved technology. This may be so, but all forms of technology, as we have been at pains to point out in this book, are subject to diminishing returns, and these are already beginning to manifest themselves and are likely to do so more and more in the next few decades. Anderson's model clearly points out the basic trends associated with the sort of massive pollution-control programme that must inevitably be adopted in industrial nations. Indeed, as Professor Commoner said at an AAAS meeting in the summer of 1970,

"We, the prosperous, will have to give up big automobiles, big defence projects and big man-in-space programmes to pay the required ecological and social bills."

References