WSP00913

• File Number: 8272.600.60
• Description: Colorado River Basin Salinity Control Program - Basin Member State Info - Utah
• Basin: Colorado Mainstem
• Water Division: 5
• Date: 3/7/1975
• Title: Colorado Regional Assessment Study - Phase One Report for the National Commission on Water Quality - Part 2 of 2 -- Chapter VI - end
• Water Supply Pro - Doc Type: Report/Study

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programs fall into this category, they should be tried only
after all others have been found unworkable.
Thus, first consideration ought to be given to control
schemes under the second and third categories.
Many of the specific schemes under these two categor-
ies are undesirable in that they involve charges or payments
for the wrong thing. If it is desired to reduce air pollution,
then the charge 101' payment should depend on the amount of
pollutants discharged and not on an activity that is directly
or indirectly related to the discharge of pollutants. For
example, an excise tax on coal is less desirable than a tax
on the discharge of pollutants resulting from burning coal
because the former distorts resource use in favor of other
fuels and against devices to remove pollutants from stack
gases after burning coal. As a second example, a payment
to firms for decreasing the discharge of pollutants is better
than a tax credit for investment in pollution-control devices
because the latter introduces a bias against other means of
reducing the discharge of pollutants, such as the burning of
nonpolluting fuels. Thus, many control schemes can be eli-
minated on the principle that more efficient control can
normally be obtained by incentives that depend on the variable
it is desired to influence rather than by incentives that depend
on a related variable.
Many of the specific schemes under Payments can be
eliminated on the grounds that they propose to subsidize the
purchase of devices that neither add to revenues nor reduce
costs. Thus, if a pollution-control device neither helps to
produce salable products nor reduces production costs, a
firm really receives very little incentive to buy the device
even if the government offers to pay half the cost. All that
such subsidy schemes accomplish is to reduce somewhat the
resistance to direct controls. Of course, some control de-
vices may help to recover wastes that can be made into sal-
able products. Although there are isolated examples of the
recovery of valuable wastes in the process of air-pollution
control, it is hard to know whether such possibilities are ex-
tensive. A careful survey of this subject would be interesting.
However, the key point is that, to the extent that waste recov-
ery is desirable, firms receive the appropriate incentive to
recover wastes by the use of fees or payments that are related
to the discharge of effluents. Therefore, even the possibility
of waste recovery does not justify subsidization of devices to
recover wastes.
The foregoing analysis creates a presumption in favor
of schemes under which either payments are made for reducing

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