ELI to Carry Out Study of Economic Incentives and Waste Oil Control

This past summer the Environmental Law Institute and the Environmental Protection Agency contracted for a year-long research project entitled "Legal Aspects of Incentive Approaches to Pollution Control." The contract calls for a survey and analysis of federal environmental statutes to determine what flexibility they may allow for the adoption of incentive mechanisms at the federal, state or local level; and for an intensive case study of the legal aspects of alternative policies for controlling the disposal of used lubricating oils.

Section 104(m)(1) of the Federal Water Pollution Control Act Amendments of 1972 (see 2 ELR 41103) requires the Administrator of the Environmental Protection Agency, "in an effort to prevent degradation of the environment from the disposal of waste oil," to conduct a study of

(A) The generation of used engine, machine,cooling, and similar waste oil, including quantities generated, the nature and quality of such oil, present collecting methods and disposal practices, and alternate uses of such oil; (B) the long-term, chronic biological effects of the disposal of such waste oil; and (C) the potential market for such oils, including the economic and legal factors relating to the sale of products made from such oils, the level of subsidy, if any, needed to encourage the purchase by public and private nonprofit agencies of products from such oil, and the practicability of Federal procurement, on a priority basis, of products made from such oil.

The preliminary results of this study were reported to the Congress in April 1973,¹ and the final report to Congress is due in April 1974, 18 months after the enactment of the provision. The reports are the responsibility of EPA's Office of Research, which heads a task force appointed for their preparation.

The preliminary report emphasized the information called for under § 104(m)(1)(A), but provided a list of 10 working principles which EPA is using as a framework for its research on the legal and economic aspects of waste oil policy. Three of those principles are specifically associated with the research which ELI will perform:

(1) The experience of other industrialized nations in dealing with waste oil problems offers valuable insights. The contract calls for a comparative analysis of the waste oil policies of several countries in Europe and elsewhere.

(2) In considering waste oil policy options, it should be recognized that state and local governments may have special legal or administrative capabilities or their own approaches to the problems of proper disposal of used oil. The Institute will make an effort to compile and evaluate all existing laws, regulations or administrative programs relating to waste oil.

(3) Waste oil policy should be examined as a component of total environmental policy and should be compatible with laws concerning disposal of hazardous materials, prevention of oil spills, etc. The Institute's search for relevant legal materials will include these areas and draw on them for useful analogies.

The purpose of the waste oil case study is to identify and evaluate alternative legal approaches to waste oil problems, to specify what the federal-state-local relations would be under each approach, to consider the advantages and disadvantages of each, and to discuss what form of legislation would be most appropriate for each. The EPA is searching for "a suitable combination of economic incentives and legal regulatory instruments which would adequately deal with the waste oil problem and similar pollution problems confronted by the agency."

The survey and analysis of federal environmental statutes to appraise their amenability to the introduction of supplementary economic incentive mechanisms will be preceded by a compilation of the local, state and federal laws and regulations — environmental and other — which contain incentive mechanisms. Based on the analysis and the information, a list of feasible incentive mechanisms — including effluent charges, emission fees, and marketable discharge permits — will be evaluated for legal and administrative feasibility, potential effectiveness in controlling pollution, record-keeping burdens, and general economic impact. The incentive mechanisms evaluated will be compared with those used by other industrialized nations for pollution control.

The Institute has added two members to staff the project. Will A. Irwin, a graduate of the University of Michigan Law School and member of the Vermont bar, is responsible for directing the project. Mr. Irwin was formerly the Executive Secretary of the Vermont Water Resources Board, the agency responsible among other things, for adopting the rules to implement the pollution charges provision of Vermont's water pollution control statute. His report to the Council on Law-Related Studies on European systems for charging for the discharge of wastewater will soon be issued as the Environmental Law Institute's second monograph, and his article on West Germany's waste oil law of 1968 was published in the Ecology Law Quarterly in 1971. Mr. Irwin's associate is Richard A. Liroff, most recently a research fellow at the Brookings Institution, whose article on the Council on Environmental Quality appeared in the August 1973 issue of the Environmental Law Reporter (3 ELR 50051). Mr. Liroff, a Ph.D. candidate in political science at Northwestern University, has also published an article entitled "Administrative, Judicial and Natural Systems: Agency Response to the National Environmental Policy Act of 1969," in the winter 1972 issue of the Loyola University [3 ELR 10159] Law Journal.

Mr. Irwin and Mr. Liroff would genuinely welcome and appreciate information about waste oil programs or effective economic incentive mechanisms known to the readers of the Reporter. Please address them at the Environmental Law Institute.

1. Waste Oil Study, Preliminary Report to the Congress, April, 1973, United States Environmental Protection Agency, Washington, D.C. 20460.