John,

You failed or never took public finance right? There are two ways of
looking at this problem. One is a bargaining situation between two
entities (two firms, two individuals, a firm and a group of
individuals acting as som sort of organization, etc.) In this, case
if the goal is to reduce the effects of a negative externality,
property rights are well defined, and transactions costs are very
small or non-existent, then who pays is not really important since in
either situation both parties are made better off (or at least no
worse off).

If you are talking about levying taxes on an industry that pollutes
then it again does not matter who the tax is levied on since both the
firm and the consumer will end up paying part of the tax. Ideally,
the tax should be a per unit tax so that there will be an impact on
the firm's and consumers' marginal decisions and the reduction in
pollution takes place.

Steve





---John Foster wrote:
>
> I would still maintain the polluter pays. And so does the legal
owner of the
> firm that polluted in the first place pays. If the insurance company
that
> insures a chemical company does not realize this, then sooner rather
than
> later the insurance company will pay too. No insurance company has
> infinitely deep pockets. Anyway most of the money ends up paying for
the
> USEPA and contractors costs, and does not go to the owners of the
homes. Why
> because the USEPA has the power to collect from those that can pay.
The
> lesson is obvious.
>
> At 10:48 AM 11/6/1998 -0800, you wrote:
> >---John Foster <[log in to unmask]> wrote:
> >>
> >> I agree with Steve B. There are no good reasons why polluting pays.
> >The
> >> polluter pay principle has turned out to be true, time and time
again.
>
> Steve retorts @ recursive
> >
> >Well Ronald Coase would probably disagree. If it is final outcomes
> >that you are concerned about then there really is no difference
> >between who pays (the polluter or the one suffering from pollution)
> >given some rather heroic assumptions (e.g. no transactions costs and
> >property rights being well defined).
>
> Exactly and even more important is the principle of "who can pay".
Love
> Canal is a perfect example.
> Occidental Chemicals bought the Hooker Chemical, who owned the
property,
> that contaminated Love Canal in the first place. In this case Hooker
did not
> pay for the damages that the people living there asked for. Occidental
> purchased the companies assets. And in 1997 the people of Love Canal
won
> around $330,250,000.00 [330 million] dollars in costs that were
awarded to
> them on the basis of a suit regarding the legal owner. No legal firm
in
> North America would worry over who actually pays, but who legally
has to
> pay. When Occidental purchased the assets of of Hooker they also
purchased
> the liabilities. Obviously Hooker would still be worried now if it
was still
> in business. Maybe it is? Any comments! I quess insurance companies
will be
> very concerned about this, which is no precedent. The total bill for
clean
> up was around 1 billion [US].
>
> Love Canal Settlement
>
> ( Morning Edition (NPR) )
>
> ALEX CHADWICK, HOST: One of the nation's longest
running
> environmental legal disputes is settled.
Occidental
> Chemical Corporation
> says it will pay the city of Niagara Falls, New
York for
> the costs incurred
> in evacuating residents from the contaminated
> neighborhood of Love
> Canal 21 years ago. The settlement ends a legal
battle
> that was important
> to the modern environmental movement.
>
> NPR's Madeleine Brand reports.
>
> MADELEINE BRAND, NPR REPORTER: Twenty years ago,
Love
> Canal was a suburban neighborhood like any
other. But
> after residents
> discovered they were living on top of 20,000
tons of
> toxic waste, Love
> Canal was transformed into a national symbol, a
symbol
> of environmental
> degradation and the huge costs associated with it.
>
> Hooker (ph) Chemicals dumped the waste in the
1940s and
> '50s.
>
> Occidental bought out Hooker and then was stuck
with the
> legal bills.
>
> Thirty million dollars was paid to Love Canal
residents,
> $300 million to
> New York State and the federal government, and now
> they've agreed to
> settle the last suit with Niagara Falls for
$250,000.
>
> Attorney Earl Bridges (ph) represented the city.
>
> EARL BRIDGES, ATTORNEY FOR NIAGARA FALLS, NEW
> YORK IN LAWSUIT AGAINST OCCIDENTAL CHEMICAL
> CORPORATION: I feel very relieved. I think it' s
gonna
> hit me more the
> next couple of days. It's been with me every
night and
> day, it's been
> literally night and day for 20 years. So I'm very
> pleased and very happy,
> very content.
>
> BRAND: Earl Bridges is relieved because he and
the city
> were afraid of a
> counter suit Occidental had filed against
Niagara Falls,
> claiming the city
> was partly responsible for the clean-up.
Occidental
> dropped that suit as
> part of the settlement.
>
> The company, too, says it is relieved that 20
years of
> suits and counter
> suits are over. A spokesman called it the end of
an era.
>
> LOIS GIBBS (PH), ENVIRONMENTAL ACTIVIST, FORMER
> LOVE CANAL RESIDENT: No, it's not the end.
>
> BRAND: Environmental activist Lois Gibbs.
>
> GIBBS: I mean, the thing with Love Canal is that
Love
> Canal doesn' t
> ever end.
>
> BRAND: As a Love Canal housewife, Lois Gibbs led
the
> community
> revolt 20 years ago against the state and
Occidental
> after her frightened
> neighbors discovered chemicals oozing into their
> basements and front
> lawns. Now a well known activist, Gibbs travels
around
> the country
> advising residents how they, too, can fight
toxic dumping.
>
> She's dismayed that people are moving back to
Love Canal.
>
> GIBBS: If you were to walk down the road at Love
Canal,
> to your right
> would be a grassy field, then a mound, a huge
mound
> that's encircled by a
> 10-foot green chain link fence. Under that mound
is
> 20,000 tons of
> chemicals.
>
> Now, if you were to turn and face the other way,
you
> would see little white
> houses with flower boxes, manicured lawns. How
could
> people believe
> that somehow the chemicals stop at the fence, at
the road?
>
> BRAND: But the residents moving in know much
more about
> their
> neighborhood than the original residents did,
and that's
> part of Love
> Canal's legacy: a heightened environmental
awareness,
> not just in Niagara
> Falls, but across the country, says Barry Boyer
(ph),
> the dean of the
> SUNY-Buffalo law school.
>
> BARRY BOYER, DEAN, SUNY-BUFFALO LAW SCHOOL: People
> are not only more sensitized to environmental
issues,
> but they're much
> more defensive of the community. They organize
to fight
> proposed land
> fills, toxic waste dumps, industrial facilities
in ways
> that they never would
> have thought of 20 years ago.
>
> BRAND: Boyer says Love Canal spawned the
grassroots
> environmental
> movement, along with a new industry for lawyers
and
> regulators. Federally,
> the Superfund law was signed. It has provided
millions
> of dollars to clean
> up toxic waste sites across the country, with
mixed results.
>
> Love Canal's legal battles may now be a part of
history, but
> environmental activists hope that the Niagara
Falls
> neighborhood will
> remain a living lesson.
>
> Madeleine Brand, NPR News, Washington.
>
> This is a rush transcript. This copy may not be
in its
> final form and may be
> updated.
>
> Transcribed by Federal Document Clearing House,
Inc.
> under license from
> National Public Radio, Inc. Formatting copyright
(c)
> 1998 Federal
> Document Clearing House, Inc. All rights
reserved. No
> quotes from the
> materials contained herein may be used in any
media
> without attribution to
> National Public Radio, Inc. This transcript may
not be
> reproduced in
> whole or in part without prior written
permission. For
> further information
> please contact NPR's Business Affairs at (202)
414-2954
>
>
>
>
> Content and Programming copyright (c) 1998
National
> Public Radio, Inc.
> All rights reserved.
>
> Madeline Brand, Alex Chadwick, Love Canal
Settlement.,
> Morning
> Edition (NPR), 04-29-1998.
>
>
>
>
>
>
>
>
>
>
> >
> > There
> >> are at least three ways the polluter pays: regulatory, contingent
> >liability
> >> based on common law, and competitive markets. Polluters have
control
> >[albeit
> >> limited over the first way, and very little over the last two ways.
> >I dont
> >> see any less regulation in the future but more importantly,
Endocrine
> >> Disruption, Groundwater Contamination, Climate Change, etc., are
all
> >more
> >> recent reasons why there will be more regulations for the polluter.
> >At the
> >> end are some more comments on Total Cost Assessments. Indidividuals
> >are
> >> owners of organizations that pollute, and ultimately the share
> >holder and
> >> the voter will agree on the ethical treatment of polluters. That is
> >they
> >
> >Wow, now who is being wildly optimistic and perhaps even naive? I
> >don't think I want to trust the voters with determining ethics.
> >
> >> will agree to cirmcumvent polluters by imprisonment, fines and
> >orders to
> >> comply. The Movie "fire down below"
> >
> >"Fire Down Below"...hey wasn't that a Steven Seagal movie <g>?
> >
> ><big snip>
> >
> >> There are many accounting measures that firms use to account for
> >future
> >> costs. One of the most common ones is total cost accounting. This
> >method of
> >> accounting is used by firms, along with activity based
accounting, to
> >> determine where there are production costs, any kind of output that
> >has no
> >> market value and is considered as "waste" is actually viewed as an
> >economic
> >> opportunity. This is based on the knowledge at the very basic
> >engineering
> >> level that all outputs have a cost in terms of capital and labour,
> >and as
> >> such are veiwed as a loss of revenue. Even dioxins can be veiwed
as an
> >> opportunity rather than as a waste product, not because any one
> >would want
> >> to buy a picogram of dioxin, but because it took energy and
> >materials to
> >
> >Another problem with accounting in general is that it only takes into
> >account monetary costs and does not include opportunity costs, not to
> >mention the problem with externalities.
> >
> >Steve
> >_________________________________________________________
> >DO YOU YAHOO!?
> >Get your free @yahoo.com address at http://mail.yahoo.com
> >
> >
> >
>
>
>

_________________________________________________________
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Get your free @yahoo.com address at http://mail.yahoo.com



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