Environmental Concerns Call for Early Planning ANALYSIS

Article excerpt

RECENT developments involving pollution and natural resources - including the early retirement of an Oregon nuclear power plant, the oil spill in the Shetland Islands, the federal report on "secondhand" tobacco smoke - illustrate one of the most fundamental issues in determining the worthiness of government policy protecting the environment.

Experts call this "externality," the environmental impact of production and consumption essentially ignored in the process of making economic decisions.

* Because of safety problems, the Trojan plant along the Columbia River in Oregon is being shut down less than halfway through its 40-year design life. Decommissioning will cost at least $500 million, which is more than 10 times what the company had set aside for that purpose. The same thing has happened at other nuclear power plants. Cheap electricity is not as cheap as originally believed.

* The Shetland Islands spill could be twice as bad as that of the Exxon Valdez in Alaska. Would the clean-up cost or the loss to commercial fisheries and wildlife been so high if the tanker owner had built a double-hulled ship - as is now required of United States tankers or foreign tankers operating in US waters - and passed along the real oil cost to customers?

* "Secondhand" smoke, the Environmental Protection Agency reported last week, kills some 3,000 US nonsmokers each year and affects thousands more. Would this be true, and the resulting health-care costs be so high, if the government stopped subsidizing the tobacco industry?

Prices and costs are fundamental determinants in consumption and production decisions. It is acknowledged that this affects the environment. "But the information traditionally used to make and describe such choices has seldom captured environmental impacts," a White House Council on Environmental Quality report states.

"In unrestricted markets, environmental problems arise when individuals and businesses fail to take fully into account the environmental consequences of their decisions," the report continues. …

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