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Valuing Clean Air The Epa and The Economics of Environmental Protection Halvorson Ebook Full Chapter
Valuing Clean Air The Epa and The Economics of Environmental Protection Halvorson Ebook Full Chapter
Valuing Clean Air The Epa and The Economics of Environmental Protection Halvorson Ebook Full Chapter
C HA R L E S HA LVO R S O N
1
3
Oxford University Press is a department of the University of Oxford. It furthers
the University’s objective of excellence in research, scholarship, and education
by publishing worldwide. Oxford is a registered trade mark of Oxford University
Press in the UK and certain other countries.
DOI: 10.1093/oso/9780197538845.001.0001
1 3 5 7 9 8 6 4 2
Printed by Integrated Books International, United States of America
For Emma
Contents
Acknowledgments ix
Abbreviations xiii
Notes 201
Bibliography 263
Index 277
Acknowledgments
Jeremy Toynbee and the other editors at Newgen who prepared this book
and the two anonymous reviewers who provided incisive critiques and gen-
erous advice for how to improve the argument and writing.
My research took me to archives across the country, where I was invar-
iably met by able and patient staff who helped me find the material that
this project is based on. Archivists at the National Archives and Records
Administration in College Park, Boston, and San Bruno helped me find and
pull hundreds of boxes of EPA files. Archivists at the Richard Nixon, Gerald
Ford, Jimmy Carter, Ronald Reagan, and George H. W. Bush presiden-
tial libraries helped me navigate the idiosyncrasies of recordkeeping across
those administrations. Archivists at Bates College, Stony Brook University,
and Yale University assisted in my exploration of environmental advocates.
Librarians at the Arthur W. Diamond Law Library at Columbia Law School
retrieved countless issues of Environment Reporter from basement stacks,
expressing only good humor as I slowly made my way through the many
binders. The librarians of Butler Library evinced similar patience throughout
six years of requests, including annual reports that occupied entire carts.
Before she retired, Mary Cargill provided invaluable help in finding congres-
sional material.
I had the great fortune to interview two dozen former EPA officials and
other policymakers for this project. I am particularly indebted to Mike Levin,
who sat with me for multiple interviews and shared his personal papers from
his time as chief of the EPA’s Regulatory Reform Staff. Thank you to Alan
Loeb, the keeper of those papers and a historian himself, who ferried dozens
of Mike’s boxes to and from storage.
Many institutions made this project possible. The Graduate School of Arts
and Sciences at Columbia University supported my graduate training and much
of my research and writing. The Department of History sponsored research
trips and conference papers, and bestowed upon me the honor of the Bancroft
Dissertation Award, which helped to make possible the publication of this
book. The Gerald R. Ford Presidential Library supported my research on the
Ford administration and the American presidency with a substantial research
grant and the generous Dissertation Award in Honor of Robert M. Teeter. The
Miller Center of Public Affairs sponsored me as a National Fellow. The American
Council of Learned Societies and the Mellon Foundation furnished a year that
allowed me to complete my dissertation free of teaching responsibilities.
I have had the great fortune of superb colleagues at every stage of this pro-
ject. At Columbia, Jason Resnikoff, Allison Powers Useche, Mookie Kideckel,
xii Acknowledgments
In January 1982, the Doonesbury comic strip brought its readers to a window
ledge high above the headquarters of the Environmental Protection Agency
(EPA), where a demoralized enforcement attorney was contemplating sui-
cide. As the popular political cartoon explained, the career EPA employee’s
desperation owed to the devastation unleashed by EPA administrator Anne
Gorsuch and her boss, President Ronald Reagan. “Are you going or not?”
taunted the cartoon Gorsuch, whose real-life counterpart was in the midst
of deep budget and staffing cuts. Out on the ledge, the attorney explained
to an anxious friend that Gorsuch and Reagan threatened to destroy eve-
rything the EPA had accomplished since its creation in 1970. Central to
these accomplishments was a dramatic reduction in air pollution, which
Doonesbury’s beleaguered enforcement attorney underscored by declaring
that he could read the license plates of the cars far down below his perch. “It’s
the end of the dream,” the attorney warned his friend and readers across the
country.1
The Doonesbury series was the dark comedy of a media blitz put together
by an organization called Save EPA. A volunteer network of former EPA
employees and their allies, Save EPA came together in 1981 to defend the
agency against the Reagan administration. With Gorsuch at the EPA’s helm,
the Reagan administration was in the midst of severely reducing the agency’s
capacity to govern. Making this threat more pernicious, Reagan and Gorsuch
were waging this attack on the agency behind the scenes, through reorgani-
zation plans, budgetary maneuvers, and various other tactics that were hard
for the general public to perceive. Recognizing that he did not have pop-
ular support to dismantle the agency outright, Reagan was betting that he
could bleed the EPA to death before anyone realized what was happening.
To counter this pernicious attack, Save EPA’s volunteers set themselves up as
a clearinghouse for information—leaking budget proposals, meeting notes,
and anything else its volunteers and allies could lay hands on, and offering
Valuing Clean Air. Charles Halvorson, Oxford University Press (2021). © Oxford University Press.
DOI: 10.1093/oso/9780197538845.003.0001
2 Valuing Clean Air
were also problems associated with its control, as companies diverted capital
from productivity-enhancing investments or shut down in the face of un-
tenable mandates, cutting off the wages and spending that fueled America’s
economy. According to the business community, controlling pollution
needed to be carefully weighed against other social priorities. Empowering
the federal government to “command-and-control,” as critics of strength-
ened regulation pejoratively described the EPA’s direct mandate model,
risked economic ruin.
As Valuing Clean Air shows, the contest over environmental protection
came to orbit around the EPA. Charged with implementing much of the
sweeping environmental legislation of the early 1970s, the EPA became the
central space where thorny questions about public welfare were adjudicated.
In setting and enforcing technical standards, the EPA determined what en-
vironmental protection looked like, how much it cost, and even how it felt,
as the agency’s rules literally changed the composition of the air across much
of the country. While most Americans gave little thought to the intricacies
of public policy when they took a breath, regulated industry, environmental
advocates, presidential administrations, congressional representatives, and
a host of other parties wasted little time in cutting channels into the EPA’s
policymaking.
The EPA’s story and the contest over environmental protection unfolded as
part of the convulsions that shook American politics in the second half of the
twentieth century. From the early twentieth century, government regulation
had been an important tenet of the liberal belief that private industry needed
to be governed by an active state to protect the public from the excesses of
capitalism. That philosophy gained widespread support in the wake of the
Great Depression, informing the many commissions and other regulatory
institutions that guided much of the country’s economy through the postwar
period.2 In many industries, especially new ones such as nuclear power,
regulators and the companies they oversaw built close working relationships.
So close, in fact, that critics on both the left and the right eventually came
to see regulatory governance as posing risks to the public welfare—from
the left, by limiting accountability, and from the right, by stifling competi-
tion.3 By the 1960s, neoclassical economic critiques of the supposed ineffi-
ciency of government regulation swirled in political discourse alongside
libertarian philosophical arguments about the supposed risks of regulation
to individual freedom and other cherished values, with regulated industry
buoying both lines of challenge.4 In demanding new federal intervention
4 Valuing Clean Air
but also new powers of citizen oversight of that intervention, the environ-
mental movement of the 1960s reflected this critical inflection point in lib-
eral governance.5 By the time of the EPA’s formation, any consensus about
the proper role of the state had disappeared and the growing contest over
liberalism would shape the EPA—and vice versa, as environmental policy
became a generative space for a shift away from direct mandate interventions
to market-based models in public policy.
Central to this story is the emergence of economics as the chief arbiter of
value in public policymaking. The same period that saw the EPA’s creation
also witnessed the rise of economics as the “language of public policy,” as one
new study puts it.6 While that rise may seem inevitable from our contempo-
rary vantage point, it was not a foregone conclusion in the 1970s. The notion
that the value of the environment could be expressed monetarily cut to the
core of popular understandings of public welfare and expectations for the
state, and it was resisted accordingly. The ascent of economics in determining
the value of clean air was long and not at all straightforward, driven by var-
ious forces for what were often antithetical reasons, as this book explores. In
addition to challenging the inevitability of the triumph of economics, this
history of the protection of clean air serves as a reminder that that triumph is
in fact incomplete, with other understandings of value continuing to animate
public policy into the present.
In connecting changing ideas about environmental value to the major
political struggles of the last fifty years, this book partakes in a turn toward
regulatory policy as a critical space in the evolution of the American state.
Political scientists have led much of this turn, finding in regulation fruitful
ground for the study of American political development.7 Historians too
have turned their attention to regulation, adding a richer understanding of
how environmental standards and other interventions have textured ordi-
nary life.8 Some of the best of this scholarship has explored the EPA as a crit-
ical site where popular ideas about the environment were transformed into
public policy.9 But a more sustained examination of the EPA is needed to
fully comprehend the politics of environmental value. While there are many
excellent accounts of the environmental movement and the seismic shifts in
law and culture that it produced, more is needed about what came next, when
that starburst of environmental concern intersected with the convulsions of
the liberal state. Historians have elsewhere shown the 1970s and 1980s to
have been a pivotal period in the ascendance of a neoliberal politics that puts
its faith in markets over expert governance when it comes to public welfare.10
Introduction 5
Tom Crocker let his imagination run wild as he walked to work through the
sticky Florida summer. A PhD candidate in economics at the University of
Missouri, Crocker had been dispatched to central Florida in 1964 to study
air pollution. In the rich agricultural country east of Tampa, ranchers and
farmers were incensed about a rash of dead cattle and citrus trees, which
they blamed on rising emissions from the local phosphate industry. Worried
that the pollution might also threaten human health and finding local and
state governments unequal to the challenge, these local complainants had
managed to draw national attention to the problem, including the young
Crocker, who arrived on a grant from the Public Health Service. All across
the country, environmental activism was on the rise and would soon coalesce
in a national environmental movement that eventually spurred Congress
and the president to create national standards for clean air and a new agency
to enforce them. But as Crocker walked back and forth from work, he was
envisioning not new regulations but new markets.1
Rather than forcing phosphate producers to install expensive pollution
controls or shut down, as seemed to be where public policy was headed,
Crocker wondered if the flourishing industry could buy the right to pollute
the air around their processing plants. The agriculturalists could move else-
where and buy their own rights to keep that air free from pollutants. Such
ideas were out of step with the vast regulatory expansion then getting under
way at the state and federal level—an expansion that his own federal patron
was helping to drive through the research that Crocker had been sent to do
on the monetary damages of the air pollution. But the economist’s ideas
contained the seeds of something important to come.
The environmental movement spurred a legal revolution, institution-
alizing the idea that the public had inalienable rights in the natural world.
Environmental activists came from different backgrounds and responded to
a range of factors that came together in the 1960s, including the unprece-
dented prosperity of the postwar period, the new threats of a nuclear and
synthetic age, the successful modeling of federal intervention in the civil
Valuing Clean Air. Charles Halvorson, Oxford University Press (2021). © Oxford University Press.
DOI: 10.1093/oso/9780197538845.003.0002
10 Valuing Clean Air
rights movement and the Great Society, newly responsive courts, and a
growing understanding of ecology. Republican and Democratic lawmakers
responded with a flurry of legislation, including landmark protections for
clean air and water. These laws laid out an expansive idea of the public in-
terest, creating new regulatory agencies to protect the public from the poten-
tial dangers of the private sector and giving citizen groups a seat at the table
from which to hold those new administrative bodies accountable.
A simultaneous environmental turn occurred among economists. Long
attuned to the social costs of private enterprise, economists in the 1950s grew
increasingly concerned that environmental degradation posed a significant
threat to present and future prosperity. As economists tallied the monetary
cost of various environmental problems, such as the rising health care costs
associated with an increase of dangerous pollutants in the air, they offered
alarming tabulations of the costs of unchecked pollution. By the 1960s, this
environmental economics was paralleling the environmental movement in
calling for federal intervention, albeit under the logic of addressing the ineffi-
ciencies that private enterprise had created.
While economists and environmental activists both called for the fed-
eral government to act to address pollution, they tended to have different
understandings of what this response should look like. These differences
were the result of fundamentally different approaches to the question of en-
vironmental value. Economists saw monetary costs and benefits as the best
arbiters of value and approached pollution as an economic cost to society.
Environmental activists, by contrast, valued clean air as a natural right. With
a liberal faith in the government’s capacity to direct private enterprise still
dominant in the 1960s, economists were marginal to the national conver-
sation about pollution and so the distance between their logic of costs and
benefits and the activist notion of natural rights did not much matter. But ec-
onomic upheaval in the 1970s would open a fervent debate about the mone-
tary costs of protecting a natural right to clean air—a debate that economists
eagerly stepped into.
Recasting the familiar history of the modern environmental movement,
this chapter weaves together the creation of a national air pollution regime
with the story of the economists who helped to establish the social costs of
pollution. These economists were a diverse group, not least when it came to
the question of the ideal role of the government in addressing pollution. Some
of these economists, including the young Tom Crocker, saw growing public
concerns about the environment as an opportunity to prove the efficiency of
The Costs of Pollution 11
markets in allocating valuable goods, even air. Other economists held that
there were critical aspects of the environment that could never be transacted
for, blocked by physical realities that even the most inventive advocates of
market approaches could not transcend. Yet in describing the underlying
pollution problem and its mitigation in terms of costs and benefits, the
economic profession as a whole put forward a monetary framing of envi-
ronmental quality that implicitly challenged notions of inalienable environ-
mental rights and eventually came to serve as a key logic for contesting the
articulation of such rights in public policy.
At first, air pollution was a local problem. In the nineteenth century, the ex-
plosion of coal-powered manufacturing in cities like Pittsburgh and Chicago
generated thick clouds of particulate matter that darkened the sky, choked
lungs, blackened textiles, and blanketed cities in dust. Smog, a portman-
teau of smoke and fog first used in London around the turn of the twentieth
century, gave a name to this industrial atmosphere. Despite the obvious
problems, puffing smokestacks signaled rising prosperity, and local leaders
were hesitant to take aggressive measures to curtail air pollution, which
posed the sort of acute health risks that had led to aggressive government
responses to water pollution. But a rising middle class, especially the middle-
class women who drove much of the activism of the Progressive Era, recast
lingering coal smoke as part of the dirt and disorder of the industrial city.
Black smoke and the resulting smog, were taken up in the larger Progressive
campaign for cleanliness and order.2 Building on the authority of local
governments to regulate nuisances—the use of private property in ways that
injured others—these reformers spurred the passage of preemptive laws that
empowered local health officials to prohibit businesses from generating nox-
ious smoke. But this authority proved difficult to enforce as the courts tended
to reject blanket bans on pollution and accept polluters’ arguments that they
had made investments in more efficient boilers or other tweaks, even as
they continued to emit dark smoke. Reformers pressed on, persuading state
legislatures to grant new authority to regulate pollution.3
Economic estimates of the monetary damages caused by dirty smoke
aided reformers in framing air pollution as a social cost. In Pittsburgh, where
12 Valuing Clean Air
coal smoke was so dense that the city was forced to use streetlights during
the day, the Mellon Institute of Industrial Research conducted a study in
1913 that estimated the annual cost of air pollution to the city to be nearly
$10 million.4 In addition to the costs of coping with the smoke—including
all that artificial lighting—the Mellon study argued that smoke was retarding
the development of a more diverse economy, as textile manufacturers and
other businesses stayed clear of Pittsburgh. Studies in Cleveland and other
cities found similar damages, lending ammunition to Progressive reformers
in pushing local governments to act.5 A theoretical understanding of the
problem came in 1920, when English economist Alfred Pigou coined the
term “externality” to describe the noxious byproducts that industrial produ-
cers freely dumped into rivers and air, to the detriment of the public welfare.
Pigou recommended that polluting firms pay compensatory taxes according
to the costs their externalities imposed on society.6
By the time of Pigou’s writing, air pollution had largely become the do-
main of engineers, whose focus on the technical efficiency of individual sys-
tems pushed the larger critiques of Progressive reformers to the margins. In
response to the implementation of local ordinances, businesses had hired
engineers to study how pollution abatement might be achieved. By the 1910s,
engineers across industry shared a consensus that large reductions in pol-
lution were possible and that reducing pollution would be accomplished by
improving the efficiency with which coal was burned, generating signifi-
cant savings for industry in the process. As engineers established themselves
more broadly in society as an expert class and as the technical discussion of
pollution control grew too complicated for reformers to follow, Progressives
found themselves increasingly sidelined in the control of air pollution.
Conversations about pollution that had once orbited around the smokestack
and its implications for the public welfare instead focused on the efficiency
of each company’s industrial boiler. Like economists, engineers were con-
cerned about the monetary costs of pollution, but their interests lay in how
pollution affected the balance sheets of the polluters.7
Air quality gradually improved in the 1920s and 1930s, although the prin-
cipal reason for this success was not the efficiency gains made by industrial
engineers but rather the adoption of cleaner energy sources. The expansion
of oil and natural gas as well as the electrification of industrial manufacturing
together dissipated the smoke in eastern industrial cities and allowed newer
cities such as Los Angeles to grow without darkening their skies. Coal still
powered eastern cities, but it was a smaller part of the fuel mix and was
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