Environmental Valuation & Cost-Benefit News

New tough emissions standards will slash pollution from locomotive and marine diesel engines by up to 90 percent, helping Americans to breathe cleaner air as soon as this year.

When fully implemented, these new standards will reduce soot or particulate matter (PM) by 90 percent or 27,000 tons and reduce nitrogen oxides emissions (NOx) by 80 percent or nearly 800,000 tons. Nationwide this regulation will help prevent 1,400 premature deaths, and 120,000 lost workdays annually in 2030. The estimated annual health benefits are valued between $8.4 billion and $12 billion. When these older locomotive and marine engines reach the end of their useful life, and new engines enter into the nation's diesel fleet, the benefits of today's action will increase.

For the first time ever, this rule requires remanufacturing standards for marine engines, reductions in engine idling, and the use of after treatment technology that will further reduce diesel emissions. Phasing in tighter long-term standards for PM and NOx will begin in 2014 for marine diesel engines and in 2015 for locomotive engines. Advanced after-treatment technology will apply to both types of engines. The effective dates for NOx will be two years earlier from last year's proposal, bringing cleaner air sooner.

Today's action is another achievement in EPA's efforts to reduce pollution from diesel engines. This new rule complements the Clean Air Nonroad Diesel Rule and the Clean Air Diesel Truck and Bus Rule, currently underway nationwide.

For more information about this action visit:
Clean Diesel Locomotive: epa.gov/otaq/locomotv.htm
Clean Diesel Marine: epa.gov/otaq/marine.htm
For more information about the heavy-duty diesel trucks and bus program visit: epa.gov/otaq/hd-hwy.htm

U.S. Environmental Protection Agency (EPA) www.EPA.gov
http://yosemite.epa.gov/opa/admpress.nsf/d0cf6618525a9efb85257359003fb69d/2f8d4b77c0bbad3f8525740c0057376e!OpenDocument

W.R. Grace, a global supplier of specialty chemicals, has agreed to pay $250 million, the highest sum in the history of the Superfund program, to reimburse the federal government for the costs of the investigation and cleanup of asbestos contamination in Libby, Mont., the Justice Department and Environmental Protection Agency (EPA) announced today.

The action settles a bankruptcy claim brought by the federal government to recover money for past and future costs of cleanup of contaminated schools, homes and businesses in Libby.

The EPA has been removing asbestos-contaminated soils and other materials in and near Libby since May 2000. The federal government filed suit against W.R. Grace in March 2001 to recover its investigation and cleanup costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly known as the “Superfund” law. The lawsuit also named Kootenai Development Corporation—a W.R. Grace subsidiary—as a defendant due to its ownership of three contaminated properties in Libby.

In 2003, the federal district court in Montana awarded EPA over $54 million for cleanup costs incurred by EPA through Dec. 31, 2001. That award has not been paid due to W.R. Grace’s bankruptcy. Today’s settlement resolves the 2003 judgment as well as continuing cleanup costs EPA has incurred since Dec. 31, 2001 and will incur in the future. EPA will place the settlement proceeds into a special account within the Superfund that will be used to finance future cleanup work at the site.

W.R. Grace owned and operated a vermiculite mine and vermiculite processing facilities in and near Libby from 1963 to 1990. The vermiculite ore was contaminated with asbestos. Vermiculite and asbestos have been found in various locations in and around Libby.

Asbestos, a recognized human carcinogen, is known to cause lung cancer and mesothelioma, a lethal tumor of the lining of the chest and abdominal cavities. Exposure to asbestos can also cause asbestosis, a disease characterized by scarring of the lung.

W.R. Grace and 61 affiliated companies filed for bankruptcy in April 2001. In March 2003, EPA filed a bankruptcy claim against the company to recover past and future cleanup costs. W.R. Grace has corporate headquarters in Columbia, Md., and employees in nearly 40 countries. The company manufactures construction chemicals, building materials and chemical additives, among other things.

The settlement requires W.R. Grace to pay the $250 million within 30 days of bankruptcy court approval. The settlement agreement will be lodged in the U.S. Bankruptcy Court for the District of Delaware and is subject to court approval after a 30-day public comment period. A copy of the settlement agreement is available on the Justice Department Web site at: http://www.usdoj.gov/enrd/Consent_Decrees/WR_GRACE/r_W.%20R._Grace-Libby_Settlement_AgreementFinal.pdf

U.S. Environmental Protection Agency (EPA) www.EPA.gov
http://yosemite.epa.gov/opa/admpress.nsf/d0cf6618525a9efb85257359003fb69d/dd5a3135c5515a998525740a005990dd!OpenDocument
Press Release Dated March 11, 2008

Abstract: In the valuation of the effect of improved air quality through the estimation of hedonic models of house prices, the potential “errors in variables” aspect of the interpolated air pollution measures is often ignored. In this paper, Luc Anselin and Nancy Lozano-Gracia assess the extent to which this may affect the resulting empirical estimates for marginal willingness to pay (MWTP), using an extensive sample of over 100,000 individual house sales for 1999 in the South Coast Air Quality Management District of Southern California. The authors take an explicit spatial econometric perspective and account for spatial dependence and endogeneity using recently developed Spatial 2SLS estimation methods. They also account for both spatial autocorrelation and heteroskedasticity in the error terms, using the Kelejian–Prucha HAC estimator. Our results are consistent across different spatial weights matrices and different kernel functions and suggest that the bias from ignoring the endogeneity in interpolated values may be substantial.

Keywords: Spatial econometrics, Hedonic models, HAC estimation, Endogeneity, Air quality, valuation, Real estate markets

by Luc Anselin 1 and Nancy Lozano-Gracia 1 and 2
1. School of Geographical Sciences, Arizona State University, Tempe, AZ 85287-0104, USA; Email: luc.anselin@asu.edu
2. Spatial Analysis Laboratory (SAL) and Department of Agricultural and Consumer Economics, University of Illinois, Urbana-Champaign, Urbana, IL 61801, USA; Email: lozano@uiuc.edu

Empirical Economics via Physica Verlag, An Imprint of Springer-Verlag GmbH www.SpringerLink.com
Volume 34, Number 1; February, 2008; Pages 5-34
DOI: 10.1007/s00181-007-0152-3
http://www.springerlink.com/content/5289x15u2263102u/

Abstract: The competitive price effect of Wal-Mart Supercenters on national brand and private label grocery prices in New England is examined. We use primary price data collected on several identical products from six Supercenters in Massachusetts, Connecticut, and Rhode Island and from conventional supermarkets. Taking into account demographics, store characteristics, and market conditions, we show that Wal-Mart decreases prices by 6 to 7% for national brand goods and by 3 to 8% for private label goods. Price decreases are most significant in the dry grocery and dairy departments. Moreover, Wal-Mart sets grocery prices significantly lower than its competitors.

by Richard J. Volpe III 1 and Nathalie Lavoie 2
1.Ph.D. student, Department of Agricultural and Resource Economics, University of California, Davis. and
2. Assistant Professor, Department of Resource Economics, University of Massachusetts, Amherst.

Review of Agricultural Economics via Blackwell Publishing www.Blackwell-Synergy.com
Volume 30, Issue 1; Spring, 2008; Pages 4-26
doi:10.1111/j.1467-9353.2007.00389.x
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9353.2007.00389.x

LATER this year, Massachusetts and other Northeastern states will hold the nation’s first auction of greenhouse gas emissions permits. Congress should take note: this market-based, technology-neutral auction is a model for how to encourage power generators to limit their emissions. And it could provide the foundation for a federal-state partnership to revolutionize energy use.

Auctions make sense. When Europe first tried regulating greenhouse gases under a cap-and-trade program, in 2005, it gave away, or “grandfathered,” emissions permits to its power generators, which made modest changes in their operations and then sold the permits to others at a premium. The result: windfall profits for the power companies. Europe is now switching to emissions auctions and plans to finance programs promoting climate protection, economic growth and energy security with the proceeds.
...
Here in Massachusetts, we have cut the annual growth in electricity demand by nearly one-third. Through rebates, incentives and low-interest loans, we’ve helped business and residential customers reduce their energy consumption and save money at the same time. As a result, Massachusetts has one of the highest gross state products per unit of energy used in the country.

By Ian Bowles, secretary of energy and environmental affairs for Massachusetts.
FOR FULL OP-ED GO TO:
The New York Times www.NYTimes.com
Op-Ed published March 15, 2008
http://www.nytimes.com/2008/03/15/opinion/15bowles.html?th&emc=th