環境保護規範手段之研究--以空氣污染為對象

隨著經濟及工業的發展，環境問題，特別是空氣污染，也愈趨嚴重。因此，如何在發展經濟及工業的同時，又能避免空氣品質的惡化，在今日全球化的社會，這樣的挑戰是我們必須加以面對及解決的。1992年里約宣言即提到:「為了達到永續發展，環境保護亦係構成發展過程中之一部分，而非視為無關之因素。」
甚者，這樣的問題不只是影響我們這一世代，更是影響到我們的下一代。因此，在眾多規範手段中，要又如何選擇出真的有效率、可以有效兼顧經濟及環保的需要，便是一項關鍵性的要素。
除了提升民眾的環保意識、深化環保教育，最有效、也是最直接達到環境保護的目的，仍是在於直接規範污染源之污染排放。而基本的規範手段包括有傳統的命令與控制，以及新興的經濟誘因制度。這兩個基本制度皆為美國清潔空氣法所採用。其中又以市場導向的規範方式為其他國家--包括台灣、以及國際條約所爭相效仿學習的對象。 本篇論文主要的目的在於探討美國的經驗，並參酌了台灣本身所具備的法律文化特性，提出相關思考，來幫助台灣可以更有效、完善地控制空氣污染。特別是台灣正面對下一階段之環保規範措施--以市場為導向--實施之際，相關制度的優缺點討論，以及實證經驗上的探討，應是當務之急。

I. INTRODUCTION
A. Purpose of the Thesis
As a consequence of economic and industrial development, environmental problems, particularly air pollution, are getting more serious today. Learning how to promote the development of the economy and industry, while preventing the deterioration of the quality of the air in the globalized society, is a huge challenge in front of us. “In order to achieve sustainable development, environmental protection shall constitute an integral part of the development process and cannot be considered in isolation from it”.[1]
Moreover, both developed countries like United States and developing countries like Taiwan face the predicament of balancing the two interests of economic development and environmental protection. Environmental problems not only affect our generation, but also remain a threat to the future generation.[2] Therefore, selecting a truly effective and workable approach to harmonize out the economic and environmental needs is a crucial issue.
The main purpose of this paper is to analyze U.S. experience in dealing with air pollution control and use that knowledge to devise a better air pollution control system in Taiwan, especially as Taiwan is standing the crossroad for considering next step to protect the environment.
Also, as a developing country toward the developed country, the studying from Taiwan’s experience will be a good lesson for the countries in the Asia Pacific.
B. Regulating Measures--the NSR and the CAT
Basically, there are two approaches to control pollution. One is the traditional way, the command-and-control approach (CAC); the other is the relatively new Economic Incentive System (EIS), where market-based mechanisms are used to manage the emissions of pollutants. In fact, these are two different types of regulation of sources of pollution. According the Coase theorem, using economic regulation offers an alternative to traditional "command and control" schemes and makes the legal culture reconsider the political nature.[3] Market-based regulation does not focus on how the permitted levels of emissions should be done externally to the market, but on how they are allocated among polluters. Both are employed in the Clean Air Act (CAA) of the U.S.
C. Context
I will discuss air pollution control in Taiwan, including the background of economic and politics development, and Taiwan’s environmental policy and law. Also, I will present the dilemma Taiwan is encountering in environmental protection.
Further, I will summarize the current situation of the U.S.’s environmental law. I will evaluate advantages and disadvantages of each different approach to control air pollution, and discuss what kind of issues each approach is facing. Moreover, I will propose an optimal legal model to coordinate these approaches.
Finally, I will try to present how the U.S. ideas might be included into Taiwan’s legal system, based on Taiwan’s own legal culture, which will advance the air pollution control in Taiwan.
II. AIR POLLUTION CONTROL IN TAIWAN
A. Framework of Environmental Law and Policy
1. The Background
a. The Geographical and Physical Situation
As a small island, the high density of the population and factory causes heavy environmental loading.
Compared with the population and vehicle densities of other countries, these densities are about 1.8 times those of Japan, 2.6 times those of Germany and the UK, and 22 times those of the US. In addition, the factory density ranged 2.4 to 69.5 times, and the amount of the consumed energy per square kilometer was about 1.7 to 10.2 times that of the mentioned countries.[4] With the heavy environmental loading, the air quality improvement tasks to attain the same air quality level as that of the advanced countries is getting harder to pursue.
b. The Development of Economics and Politics
Also, because of rapid industrialization, the environment is getting serious deterioration today.
Rapid industrialization during the latter half of the twentieth century resulted in large amounts of unmanaged industrial pollution in Taiwan. The contemporaneous increase in per capita income and domestic consumption resulted in dramatic increases in air pollution.
In Taiwan, environmental policy (mainly pollution abatement) has commonly been regarded as a part of the nation's economic policy, and therefore has been greatly influenced by economic development needs.[5]
On the other hand, Taiwan has undergone a tremendous transition toward democracy in the last two decades. On July 15, 1987 the "martial law," imposed since 1949, was lifted. As Taiwan is approaching developed-nation status, the Taiwanese people are demanding a higher quality of life commensurate with Taiwan's elevated level of economic development. Also the people have more opportunities to claim and demand and even participate in implementing the environmental protection efforts.
As Taiwan moved from governance by martial law to a representative democracy, the central government increased efforts to incorporate effective pollution regulation across industry sectors, first in response to domestic demand, and later in response to international pressure.[6] In its determination to make the island green again without losing economic stability, the Taiwanese government started thinking about how to balance and harmonize these two conflicting interests.
2. Trend of Environmental Law and Policy
a. Tenth Amendment of Constitution and the Basic Environmental Act
The 1999 constitutional revision added a provision entitled Section 2, Article 10 of the Additional Articles of the Constitution, providing that "[e]nvironmental and ecological protection shall be given equal consideration with economic and technological development."[7] Although whether the Tenth Amendment of the Taiwanese Constitution effectively promotes environmental protection remains to be proved, it at least presents a national goal as a superior guidance to direct the government, including the legislative, administrative, and judicial branches.
The Basic Environmental Act, as a fundamental environmental protection law, was passed in November 2002. According to article III：
“[e]conomic, technological and social development shall equally emphasize environmental protection based on long-term national interests. However, in the event that economic, technological or social development has a seriously negative impact on the environment or there is concern of endangering the environment, the protection of the environment shall prevail.”
Not only amending the constitutional law but also enacting the fundamental environmental law, these laws give environmental protection precedence over economic development when the two come into conflict.[8]
These advances may help to mitigate the general lack of coordination among development departments and environmental protection departments at the central level, as well as a general disconnect between central economic planning and local environmental realities.[9]
b. The Influence of International Environmental Law
Because of its ambiguous international political status as a developing country that needs assistance from other developed countries, Taiwan has to comply with various obligations from several international agreements and treaties although Taiwan is not a member of those international institutions.
Taiwan does not want to find itself behind the current global standards in pollution enforcement because this would prevent it from participating in international organizations such as the World Trade Organization.[10] Hence, due to this practical and significant influence, Taiwan makes efforts to reflect those international treaties and agreements in domestic law and policies.
B. The Air Pollution Control Law
The Air Pollution Control Act (APCA) was passed in 1975. These statutes were fairly unsophisticated and depended on the Bureau of Environmental Protection, precursor to TEPA, and then on the weak TEPA, formed in 1987, to create and enforce effluent limits, which it often failed to do.[11] However, through the political development and constitutional reform and a series environmental movements,[12] the people and government realized the importance of environmental protection and then started paying attention and making a lot of efforts to achieve the goal of environmental protection.
The measures of implementing environmental policy include the command-and-control approach, the economic incentives or market-based instruments, and the so-called social tools such as offering information, communication, and education.[13] When facing the dilemma of economic development and environmental protection, the TEPA would like to establish diverse regulatory systems to achieve environmental protection.
Basically, Taiwan also adopts two basic approaches to regulate and control air pollution. As a traditional approach of command-and-control, Taiwan has established a substantive and integral legal system. But for the market-based system, the Cap-and-Trade program which was enacted in 1992, because it is very complicated and there are many prerequisites for its operation, this approach is still on the preparing stage today.
1. The Command-and-Control (CAC) Approach
The TEPA continues primarily on the command-and-control regulatory approach. Basically, administrative controls of the APCA legal structure are essentially classified into three categories: (1) ever- increasing emission standards for both stationary and mobile sources, (2) clean fuel criteria, and (3) monitoring and inspection systems.[14]
The CAC approach embraces enacting the standards of environmental quality and emissions, issuing the emissions allowance, inspection and monitoring, and the adequate punishment.[15] These measures include administrative regulation, rule, order, guidance, plan, and inspecting and monitoring.
Currently, the TEPA focuses on establishing the air quality monitoring networks of the entire country of Taiwan. The TEPA conducts environmental monitoring so that the information of the ambient environmental quality can be accessible to the general public. The air quality in each area in Taiwan is under the surveillance of the network of air quality monitoring stations.[16]
2. A New Approach--Economic Incentive System (EIS)
To meet the public demand for a better air quality and balance the needs of development and protection, the TEPA has initiated an economic incentive plan to supplement the current administrative controls. The economic incentive policy was adopted in the Air Pollution Control Act Amendment in 1992, which is called the CAT program. The Air Pollution Control Act employs the trading permit (§ 24), offset and banking (§§ 8, 9, 12), bubble (§ 27) and uses the principle of polluter pay to levy pollution fee and found the Air Pollution Control Fund (§§ 16, 18, 19).
However, the TEPA is still struggling to set the proper total limitations, which is a political question, and relative and detailed regulations that include how to enforce the permit system, offset, bank, and trading methods.[17]
In order to successfully enforce this new approach, the TEPA also sets the Cap-and-Trade Strategies as the policy guidance for the agency to develop and enact regulations. In the CAP Strategies of the CAT, the TEPA is to establish the air quality standards and the air quality monitoring station network, classify the air quality areas and promulgate the CAP areas, stipulate and implement the CAP plan and the air pollution control plan, classify the air quality areas into the attainment and nonattainment areas, proceed with emission reduction in the nonattainment areas, and promote the economic-incentive emission banking, offsetting, and trading regulations.[18]
However, many critics doubt this program can be successfully enforced because this system is very complicated and there are many prerequisites for its operation.
The Cap-and-Trade program which Taiwan copies from the U.S. legal system and experience is still on the initial stage.[19] Therefore, this is a good time to rethink and re-evaluate whether Taiwan should enforce it and how to work it out in Taiwan by using the research discussed infra.
C. Conclusion- The Dilemma Taiwan Confronts
The Air Pollution Control Act was first promulgated in 1975 and the last revision was passed in 2006. As a result, the air pollution problems in Taiwan have been gradually improved after the implementation of the Act for more than 20 years.[20]
Following the development of economics and politics and increased public awareness about environmental issues, the government is trying to implement some other new approach to balance the need of each aspect. Taiwan's shift from adopting only command-and-control regulation to a multi-faceted approach--including market incentives, industry group self-regulation, management-based approaches, voluntary disclosure schemes, and audit requirements designed to increase transparency and accountability of industry and regulators--reflects a progression of pollution laws similar to those in countries that industrialized ahead of Taiwan.[21]
In light of these different incentive policies, Taiwan needs to adopt its own policy to fit its unique culture. As discussed supra, Taiwan hopes the competitive ability of economic development can be maintained without deteriorating environmental protection. However, as many scholars do, the Taiwanese government seems to put too much weight on the trading program.
Is the trading program really efficient and effective? Can the trading program really achieve the goal of balancing development and protection? Is Taiwan ready to implement this complicated and expensive legal system? Does the trading program conform to Taiwan’s legal and political culture? And the big challenge for Taiwan will be how to decide the target total emission limitation. The Cap-and-Trade program itself cannot give us the answer to that question. We need to keep all of these questions in mind.
III. AMERICAN’S EXPERIENCE
The federal Air Pollution Prevention and Control Act commonly known as the Clean Air Act (CAA), is a confusing statutory scheme that resulted from a multitude of enactments dating back to 1955. Significant amendments were made in 1970, 1977, and 1990. Today’s CAA is the outcome of hard-fought legislative battles and compromises over the types of pollution control strategies to adopt and the degree of regulation to impose upon sources emitting air pollution, from automobiles to manufacturing facilities.[22]
The attempt to balance these different and sometimes conflicting goals has led to a complicated regulatory system with an uncertain and changing balance among environmental protection, economic growth, and energy needs. In order to address this diversity, the Clean Air Act seeks to protect air quality through a system of health-based standards and technology-based standards.[23] The Clean Air Act has been described as "one of the most complicated statutes yet produced by a modern industrial state."[24]
A. Overview of the NSR
1. The New Source Review (NSR)
The primary purpose of CAA is to “protect and enhance the quality of the Nation’s air resources so as to promote the public health and welfare.”[25] To achieve this goal, Congress delegated to the EPA the authority to promulgate the National Ambient Air Quality Standards (NAAQS).[26] The EPA listed pollutants that are found in the ambient air from sources and “cause or continue to air pollution which may reasonably be anticipated to endanger public health or welfare.”[27]
Then, the EPA developed two standards for each of these listed pollutants. The primary standard must be at a level that "protects the public health" while "allowing an adequate margin of safety."[28] The secondary standard must be at a level "requisite to protect the public welfare from any known or anticipated adverse effects associated with the presence of such air pollutant in the ambient air."[29]
The EPA has identified SO2, NOx, particulate matter (PM), carbon monoxide (CO), lead, and ozone as criteria pollutants that may reasonably be found to endanger public health or welfare.[30] Also, the structure of the CAA mandates that each state should set up a State Implementation Plan (SIP) that specifies the manner and means by which the state would achieve and maintain NAQQS.[31]
The 1970 Amendments required the EPA to set emission standards--the New Source Performance Standards (NSPS)--for new or modified stationary sources that emit the pollutants identified under the NAAQS.[32] The NSPS complements the NAAQS system and represents Congress’ effort to require steady improvement of air quality over time as new sources came into operation. Congress expected that air quality would improve as old sources were replaced by sources subject to the NSPS.[33]
In 1977, Congress added Part C of subchapter Ⅰ, “Prevention of Significant Deterioration of Air Quality”, and Part D, “Plan Requirements for Nonattainment Areas.”[34] These two sections divide the country’s air resources into two categories, attainment areas and nonattainment areas, and contain the primary requirements of the NSR program.[35] In other words, the NSR is comprised of two programs: (1) the nonattainment program, aimed at major stationary sources in nonattainment areas, and (2) the PSD program, aimed at major stationary sources in attainment areas.[36] An attainment area is "any area that meets the national primary or secondary ambient air quality standard for the pollutant."[37] A nonattainment area is "any area that does not meet the national primary or secondary ambient air quality standard for the pollutant."[38]
a. The Goal and Legislature Intent of the NSR
Congress enacted the NSR with the belief that new and existing major sources of air pollution should utilize modern pollution control equipment; therefore, Congress thought it would be easier, cheaper, and more efficient to install the equipment during the construction of a new major source or modification of an existing major source.[39]
Moreover, Congress believed that the "grandfathered" power plants would eventually need to be upgraded, which would trigger the NSR or cause the owners or operators of the older plants to retire them from service.
In other words, major sources in attainment areas are subject to the visibility program within the PSD review.[40] And, in the nonattainment area the NSR requires new and modified major stationary sources to obtain permits prior to construction or modification.[41] Further, in order to obtain a preconstruction permit, the facility must prove to the agency that it would not cause a violation of the NAAQS or any applicable the PSD regulations or regulations of the nonattainment program in compliance with the NAAQS.[42]
According to Michael Settineri’s analysis on these Parts, their legislative history, and subsequent case law, the amendments have three primary goals: (1) to assure that attainment areas will not be downgraded to nonattainment areas; (2) to achieve the NAAQS in nonattainment areas; and (3) to "allow for continued economic growth in both attainment and nonattainment areas."[43] Therefore, to reach these goals, Parts C and D place numerous requirements on "major"[44] stationary sources.[45]
b. Technology-Based Standards
In its attempt to balance the development of economics, energy needs, and environmental protection, the CAA seeks to protect air quality by using a system of health-based standards and technology-based standards.[46]
Section 111 also requires EPA to set the maximum emission rate for any air pollutant that each listed category of new or modified stationary sources could release.[47] The emission standards for each category are based on "the best system of emission reduction considering cost, energy, and any non-air quality impacts on health or the environment which . . . has been adequately demonstrated."[48]
In sum, the source proposing the construction must demonstrate that it is equipped with qualified instruments and that the benefit of the proposed source significantly outweighs the environmental and social costs imposed as a result of its location, construction, or modification.[49]
c. Pre-construction process and the trigger threshold
The NSR is implemented by requiring a source to obtain a permit prior to construction or major modification. The permit establishes and requires various actions that the sources must undertake to control their emissions of air pollutants. However, the NSR only applies when the construction project will emit air pollution that exceeds threshold levels established in the NSR regulations.
For a new source, the NSR is triggered only when the potential emissions qualify as major. For an existing major source making a modification, the NSR is only triggered when the modification will result in a significant net increase in emissions.[50]
2. Criticism of the NSR-- Evaluation-Advantages and Disadvantages
a. The Benefits of the NSR
1. Fairness--same standards
Because the NSR requires similar sources in the same area to install the same technology meeting the same standards, it can offer fairness to the regulated community.[51]
2. Feasibility and Innovation--technical requirement and driver
Proponents also believe that the NSR achieves the highest feasible environmental protection available because it requires all new or modified facilities to install at least the minimum required equipment.[52] Furthermore, the NSR also expedites the restoration of air quality in nonattainment areas by requiring the strict standard for new and modified sources.
Also, the NSR supporters claim that the program drives industry to develop new, environmentally sound technologies. As a technology-based standard, supporters aver that the NSR entices companies to strive to innovate new technologies and to integrate control technology from one type of facility to another.[53] The proponents maintain that if companies do develop feasible technologies, then other programs would require implementation of those technologies across the industry.[54]
b. The Drawbacks of the NSR
The attempt to balance those conflicting interests of environmental protection and economic and energy needs has resulted in a highly complicated regulatory regime that is often criticized as burdensome, complex, time-consuming, costly, and inflexible.[55] And it is not surprising that industries have an incentive to avoid triggering the NSR by taking advantage of the loopholes in the NSR program.[56] Recent commentators have been very critical of the New Source Review program's ability to achieve its general goals.[57]
1. Some argue that the NSR is unfair because it applies different standards for the same pollutant to different industries.[58] Because states often determine BACT "on a case-by-case basis, taking into account . . . other costs," even the same type of facilities may be subject to different standards for the same pollutant.[59]
2. These standards do not provide actual incentives, economic or otherwise, for industry to develop technologies that reduce emissions below that standard.[60] Because there are large cost of advancement increases associated with modernization, facilities do not have the incentive to update and improve units.[61]
3. Also, industries do not capitalize on the opportunities to develop technologies because of the uncertainty that accompanies them. If an industry develops a new technology that is economically feasible in one state, it may not be feasible in another because the states independently choose what "other costs" to take into account. This broad discretion produces uncertainty, which in turn eliminates the incentive for industry to develop new technology.[62]
4. The NSR imposes excessive costs and burdens "on sources, administrative agencies, and society."[63] The NSR "is not cost-effective because it normally requires all industries to comply with the same pollution limits even though one industry may be able to reduce its pollution more cheaply than another."[64]
Furthermore, critics argue that complying with the NSR is more expensive and time-consuming than other means of regulation.[65] The determination of whether a facility is subject to the NSR is costly. For example, the actual-to-projected-actual test for modification can require extensive monitoring and reporting.[66]
B. Overview of the Cap-and-Trade Program
Before the 1990 Amendments, the CAA relied mainly on the traditional command-and-control regulatory scheme. However, many critics assert that this system limited utilities’ production options in complying with emission caps, thereby causing that those polluters could not meet these requirements in a cost-effective way and even decreasing incentives to reduce their emissions.[67]
Therefore, scholars, legislators, and the industry proposed the alternative acid rain control as the 1990 Amendments of the CAA, which even obtained support from environmental groups.
Allowance Trading:
The Acid Rain Program represents a dramatic departure from traditional command-and-control regulatory methods which establish specific, inflexible emissions limitations with which all affected sources must comply. Instead, the Acid Rain Program introduces an allowance trading system that harnesses the incentives of the free market to reduce pollution.[68] Affected utility units were allocated allowances based on their historical fuel consumption and a specific emission rate. Each allowance permits a unit to emit 1 ton of SO2 during or after a specified year. In a given year, one allowance will be retired and cannot be used again.[69]
Allowances may be bought, sold, or banked. Regardless of the number of allowances a source holds, it cannot emit at a level that would violate federal or state limits set under Title I of the CAA to protect public health.
Emissions Monitoring and Reporting:
Each unit must continuously measure and record its emissions (continuous emission monitoring system, CEM). The emissions monitoring and reporting systems are critical to the program.[70] Therefore, the accurate information from CEM and feasibility of the monitoring technology will be prerequisites for the success of this system.
Excess Emission:
Units must pay a penalty if annual emissions exceed the number of allowance. In addition, violating utilities must offset the excess SO2 emissions with allowance in an amount equivalent to the excess.[71]
1. The Cap-and-Trade program--for sulfur dioxide (SO2)
Setting a cap and getting a trade
The framework used in each phase is a cap-and-trade (emissions trading) system. Under this system the cap is set at the maximum amount of SO2 emissions allowed. And then, Congress allocates the emissions, or allowances, to the utilities. Each utility is responsible for assuring that their actual SO2 emissions do not exceed their allowances.[72]
Once a utility obtains its allowances, it chooses the means by which it will comply. Some utilities may choose to install pollution control, some may change the fuel source, and others may employ an alternate means of compliance.[73] In any event, each utility has the flexibility to determine its own compliance method. To certify that facilities comply with their allowances, each unit must install continuous emission monitoring systems (CEM) and report its emissions on a quarterly basis.[74]
Over-compliance with less cost?
In practice, results from 1995 show that due to incentives in the program, utilities have overcomplied by emitting 40 percent less SO2 than the program‘s emission cap allows. They achieved these reductions at about one-half the cost they would have incurred through a more conventional approach.[75] Plus, there has been virtually 100 percent compliance in its first year with little enforcement action, and proponents assert that the program has fostered significant innovation, reduced litigation, and required only a very small regulatory staff to manage it.[76]
2. Evaluation
a. Advantages and Disadvantages
i. The Benefits of the Cap-and-Trade Program
1. The primary technological advantage is that the cap-and-trade system is "continuous drivers" of "innovation," "improvement," and "investment."[77]
The cap-and-trade system accomplishes this by establishing a market for those methods and "technologies that achieve emissions reductions at a cost lower than the market price for credits."[78] For example, by authorizing facilities to sell surplus emission permits, the market allows them to "capture the gains of successful research and development" and provides them a "profit-making opportunity" to achieve emissions reductions below their allotment.[79]
About innovation, following passage of this program, the rail industry implemented a number of innovations and improvements to meet increased demand for low-sulfur western coal. These include double and triple tracking, increasing size of car fleets, using new and more powerful locomotives, improving car design, and developing coal tipping technology that increase car dump speed. There has also been a dramatic increase in investment in rail infrastructure resulting from the robust competition in rail transport.[80] Innovation has taken place in the use of existing plant and equipment as well. Blending technology has been found to reduce the originally supposed detrimental effects of using low-sulfur coal. Also, the scrubber technology has been improved.[81]
2. The scheme provides an economically efficient form of environmental regulation for industry, government, and society.
First, this system is efficient for industries because it minimizes the overall transaction costs of compliance.[82] Second, this system is also efficient for the government because it provides only one standard to enforce. And, because the trading establishes actual market prices for environmental goals, policymakers are more informed regarding the cost of their decisions and thus they can give less consideration to the "wildly disparate claims that are a staple of today's environmental debates."[83]
Third, this system is efficient for society because it sets a single standard, and the cap-and-trade eliminates the grandfathering of old, dirty facilities because every unit, old and new, must comply with its allowances. [84] Having a direct cost to pollution may simplify the complexity between the goals of legislation, environmental protection, and the actual legislative requirements, the cost of achieving those goals. Therefore, by understanding legislation, society can make more informed decisions regarding its support for pollution control.[85]
ii. The Drawbacks of the Cap-and-Trade Program
1. Preference to Existing Sources
Because the allowances are allocated to existing sources freely, this will result in an unfair competition between new and existing sources, and will even prevent new sources from accessing the market.[86]
Further, according to the behavioral theory, companies that hold pollution rights are likely to overvalue them and be reluctant to part with them. As a result, a market-based approach may actually lead to an over-all inefficient scheme because the allocated right will tend to stay with the initial holder longer than is optimal.[87]
2. Costly and Infeasible
An emission cap and allowance trading program requires a strict monitoring system--continuous emission monitors (CEM) which is the requisite for the success of the system. However, this requirement is costly and unfeasible.[88]
Moreover, because in all trading programs the prices actually paid for pollution are secret, so there is no way to test the proposition that the trading reduces control costs.[89] Further, most studies focus exclusively on compliance costs, ignoring implementation and monitoring costs. In fact, the costs of instituting pure market-based incentives for pollution control (without any elements of administrative commands or controls) can be prohibitively high, despite their theoretical efficiency advantages.[90] Therefore, this system is truly a complicated and expensive structure and the market must be big enough for its successful operation.[91]
3. The Political Issues
Existing Polluters (including organized labor) may all favor a command-and-control regulation that serves to favor or disfavor certain pollution sources because strategic lobbying can provide competitive advantages that tradable permits may obviate. And, the CAC frequently imposes more stringent requirements on new sources.[92]
Environmental groups have also objected to the permit trading, arguing that such permits represent a "license to pollute".[93] Additionally, environmental groups can easily require agencies to enact certain regulations controlling emission sources through the process of the CAC, and they can use citizen suit to oversee the implementation of environmental law under the traditional CAC.[94] In short, because they can even legally lobby policy-maker, existing polluter will prefer the traditional approach.
Legislators may similarly be wary of uncertain outcomes resulting from market-based systems, finding command-and-control regulatory approaches more familiar to their legal training.[95]
Agency Personnel is also more familiar with the CAC. And, the trading program does not need the same kinds of technical expertise and will imply a scaled-down role for the agency by shifting decision making from the agency to private sector.[96]
For the public, the trading undercuts the health-based underpinnings of the Clean Air Act and seriously impedes the ability of the public to determine how much pollution is emitted and what threats are posed to the men, women and children who live not only near but distant from sources. In sum, the public lose the opportunity to participate the process in the market system.[97]
4. Ethical Issues
According to economic theory the “hot spot” will most likely occur in “low-income communities",[98] this system may beget environmental injustices. Furthermore, opponents also assert that the trading is to take lives to save money.[99]
b. Is the system really efficient and effective to truly achieve its goal of emissions reduction and really an incentive for innovation?
Saving from “Cap”, not “Trade”
What creates the “saving” is not trading, but the “cap”.[100] Trading allowance is from “Cap” that Congress or the EPA set for limiting pollution emission. Hence, the trading has to be consistent with limitation of “cap” and the trading cannot achieve the saving by itself.
Examples in practice
There is some evidence that the Acid Rain program is ineffective and inefficient. For example, Germany reduced power plant emissions by 90 percent within 6 years. But the U.S. will have reduced emissions by about one-third over a 30-year period. Leaded gas phaseout in the U.S. took 23 years but 3 years in China. Also, leaded gasoline was eliminated in the U.S. only by Congressional ban, not through the trading.[101]
Innovation?
In the Acid Rain program, polluters actually are burning lower sulfur coal rather than adopting new technologies or renewable forms of energy or conservation. This means that the trading program has not stimulated any innovation that has led to the development of environmentally superior technologies like “integrated gasification-combined cycle”, and “wind turbines”.[102]
Over-compliance or worsening in the future!
Furthermore, because the electric power industry's "over compliance" at the beginning of phase I resulted in the banking of over nine million allowances by 2002, some utility companies are now using the bank to comply with the more stringent phase II requirements. The use of banked allowances to comply these requirements retards the "achievement of an annual emission reduction target", even worsens the air quality, and permits some power plants to continue to legally pollute the air without taking adequate short-term steps to alleviate the problem.[103]
In sum, because pollution permits can be "banked" (saved for the future), emissions in the future may be greater than the number of permits made available in the future.
As demonstrated above, in practice and in theory, command-and-control mechanisms have reduced air pollution, and they have done so (for the most part) efficiently. Moreover, market-based solutions are not well-suited for all institutional and technological contexts, particularly where monitoring costs are exorbitant.[104] In this circumstance, command-and-control regulations may be both more effective and more efficient.
IV. HOW MIGHT U.S. IDEAS BE INCLUDED INTO TAIWAN’S LEGAL SYSTEM
The experience of U.S. in implementing the NSR program provides good lessons for Taiwan. The U.S. system not only offers a practical legal structure that can help Taiwan establish a positive system of controlling air pollution but also presents some failures that Taiwan needs to avoid.
A. Establishing the NSR in Taiwan
1. An effective and coherent environmental policy
First of all, an effective and coherent environmental policy is needed.[105] Pursuant to the Basic Environmental Act, even though there is a conflict between economic and industrial development that has a serious impact on the environment and pollution control, we shall prefer the protection of environment.
2. Detailed and complete regulations
The regulation should be made more detailed and complete. It should design different standards for different areas.[106] The detailed and complete regulation can offer the agency good guidance for enforcement and can offer the people more information and opportunities for participating in its implementation. Further, this will help the Judicial Review to make a good adjudication.[107]
3. Public participation, Transparent process, and Citizen Enforcement
Finally, traditional requirements of administrative law included into the NSR, such as public participation, transparent process, and accountability through citizen suits through the judicial system, which is called citizen enforcement,[108] also contribute to the whole environmental regime because all of these can help people to claim their right and interest and push government to fulfill its obligation. Hence, making sure that these administrative requirements can be achieved is also required for setting Taiwan’s own the “NSR” program.
B. Assuring the CAT Is Practicable
If government still wants to adopt the new program of the CAT, here are my suggestions:
1. Assuring Every Prerequisites is Achieved: monitoring technology, accurate and aboundant information, and integral and stable market
The most important factor to achieve the efficient and effective implementation of and compliance with the CAT and to truly achieve its goal is to consider the many prerequisites needed for the successful operation of this system. As discussed supra, the monitoring technology, accurate and abundant data and information, and a big enough trading market[109] all are crucial for enacting the trading program in Taiwan. Although the economic theory strongly supports the trading program, these prerequisites might be costly and infeasible.
2. Avoiding the CAT Drawbacks
Governmental control
Theoretically, the government can not interfere with the competitiveness of the industry and put different burdens on every new and existing source that may constitute unfair treatment. However, by adopting the CAT program, this means that the government will lose its control on the “free market”, which might cause a serious negative impact, rather than greater success, on environment.
In short, in the CAT regime you might maintain current status of environmental quality, that will still be highly polluted, and it will be hard to improve it because there is no incentive to facilities to make further progress.
Public Participation
Public participation is a basic requirement for making administrative decisions. However, in the trading program it will be difficult for people to participate in the process of market operation. There will be no instrument to protect the public interest. Especially after deregulation, the government leaves the market running alone.
In sum, as we see, first, the costs of the CAT are not less than the costs of the NSR. The costs include losing governmental control and the public participation, and imposing huge burden on industries to install expensive monitoring equipments. Second, the CAT is not a better approach to achieve fairness and innovation than the NSR. Third, the technology-based standard is simpler and easier to enforce, really the same as the U.S. Congress’ belief.
Therefore, in order to assure that the CAT can be practicable, the Taiwanese government must remember the failed experiences from the U.S. Further, this system has to offer the opportunity to the public to participate, at least in the enactment of the standards that would regulate those allowances.
V. Conclusion
The lesson for Taiwan
The Taiwanese legal culture is much less adversarial and more cooperative than the U.S. legal culture, which might cause the trading program to work out easily. But this does not mean that Taiwan is ready to implement the trading program. As discussed above, the most important requirement for achieving successful regulation is that the policy shall be fair and easily implemented and the current trading program still seems unqualified.
Additionally, the abatement cost in Taiwan is relative high because Taiwan has depended on industrialization without considering environmental protection for a long time, which has been causing a pollution overload in the environment. Also, the monitoring cost is still quite high. Therefore, because of the high costs of abatement and monitoring, and because the techniques for monitoring and inspecting air pollutants (quantity and concentration) are currently under development,[110] the agency should seriously consider the effect of emission on environmental damages when making decisions, rather than solely focus on the economic development.
Moreover, because the Taiwanese government usually thinks of the environmental policy as only a part of economic policy, especially after the dramatic economic progress in the 80s and 90s, and the subsequent serious deterioration of the environment, if the trading program is in effect, the government might worsen his control on protection and people can not make any claim to the market.
This thesis does not negate the possible usefulness of the trading program. I would rather say that the purpose of this paper hopes to induce Taiwan to seriously consider the possible and practical problems of the trading program because this program is not the only way to achieve balancing environmental protection and economic development.
The lesson for countries in the Asia Pacific
As presented in the very beginning, “In order to achieve sustainable development, environmental protection shall constitute an integral part of the development process and cannot be considered in isolation from it”.[111]
In addition to advancing awareness on and knowledge of environmental protection to the public, the most useful and direct way to protect the environment from air pollution is to regulate those pollution sources and control their emissions. The basic measures are the command-and-control approach and the economic incentive system. Both have their own advantages and disadvantages.
The flexible market-based program is expected to be a model for pollution control efforts in the United States and other countries. According to EPA’s report, using Economic Incentives to control air pollution is successful in U.S. Even in international level, many countries, and many international agreements (e.g., the Kyoto Protocol), would like to adopt U.S. experience to control and resolve their own air pollution.[112]
However, because every country has its own unique legal and political culture, the command-and-control standards will be easier to enforce and implement. Contrarily, the trading program does not fit every different situation in Asia countries, and its requisites are complicated, expensive, and infeasible.
In sum, expanding that concept of market-based approach to nations lacking the rule of law and firm property right, and with little environmental experience, is inviting chaos.[113] Therefore, Taiwan’s experience, requiring the fair and easily implemented policy, and adopting the technology-based command-and-control approach, including instituting independent regulation and enforcement with capacity and skills, and assuring more reliable compliance, monitoring and implementation, will be a good lesson for those countries in the Asia Pacific.
Hence, government should be cautious when taking its next step in order to achieve double wins of economic and environmental sustainable development.