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Ohio Sea Grant College Program
and Stone Laboratory

Ohio Sea Grant and Stone Laboratory

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Policy Instruments for the Virtual Elimination of Persistent Toxics in Great Lakes Industries

Project Number: R/SP-004, Completion Report

Start Date: 9/1/1994

Completion Date: 8/31/1996

Revision Date: 10/28/1998

Principal Investigator(s)1.Alan J. Randall, *
Co-Principal Investigator(s)2.Leroy J. Hushak, Agricultural Economics and Rural Sciences The Ohio State University*
This shows the current affiliation and may not match affiliation at time of participation. *

Rationale

The legislative mandate for virtual elimination of persistent toxics has the potential to impose substantial costs on Great Lakes industries while generating environmental benefits. Exactly how virtual elimination is achieved -- what kinds of regulatory and/or incentive-based instruments are used and how they are applied -- will have major influence on the competitive position of plants, industries, communities, and, ultimately, the Great Lakes region. Incentive-based (or "economic") policy instruments have major advantages over command-and-control instruments, in encouraging cost-effective abatement of pollutants, innovation, reallocation of resources, and economic expansion. Prosperity in the Great Lakes region may well depend on implementing a virtual elimination strategy that is cost-effective and allocatively efficient.

Methodology

    1. Dynamic optimization models will be used to explore the issues of the abatement target and the abatement time-path. Due to limited information, it is unlikely that the benefits and costs of abatement in various industries can be fully characterized. However, it should be possible to characterize the first and second derivatives of the benefit curve and the abatement cost curve. We will develop Fortran simulation models and perform computer simulations with a variety of plausible functional relationships.
    2. Recent theoretical advances suggest the possibility of linking abatement, monitoring, and enforcement in a general framework addressed to incentives for efficient pollution control. Models will be developed along these lines to identify resource-cost-minimizing instruments.
    3. The competitive position of Great Lakes industries is of great interest; the welfare of particular industries and regions is not always advanced by policy innovations that are efficient in a more general context. We will modify the models developed above to identify pollution control instruments that minimize adverse impacts on the viability of Great Lakes industries.
  2. The existing policy process, which uses interagency task forces with broad representation of interests and public participation, will be utilized to ensure wide communication of research findings.