Economic Multipliers (82)

Do you know what these are?

They help CREATE wealth in systems.

Pollution is not an economic multiplier.


Here are some seemingly disconnected statements:

    • Product prices are too low.

    • China and India have about a billion people apiece.

    • Coal can contain mercury and other heavy metals.

    • The United States needs help. (Don’t tell any American that I wrote that though!)

    • Trading one bad thing for another bad thing means you still have two bad things.

For good or bad, I have cultural biases. Likewise, I’m going to pick on the two nations that have approximately one billion people each and I apologize. My biases: When talented people from India show up in the United States, I usually expect them to be doctors and computer programmers. When talented people from China show up in the United States, I usually expect them to be doctors and engineers. Sorry about that.

I noted that I believe that the United States needs help. Today, energy companies charge Americans extra for energy because they are buying, selling and trading pieces of paper that allow them to create pollution. Likewise, American environmentalists (who probably live very ‘energy intensive’ lives in comparison to most people in the rest of the world) do not like burning coal due to the ‘residuals.’ Since I expect that people will keep burning coal … particularly China … I am going to argue that product prices are just a bit too low.

I say that because Superfund, a massive environmental cleanup program that the United States set up in the 1980’s, has not yet been dismantled. That means that even after 30+ years, a lot of things are not yet done and China and India are most likely now in need of their own ‘Superfund’ programs, if they do not already have them.

When products are ‘produced’ and ‘sold’ without accounting for the total cost of their production and use, someone somewhere has to pay for something sometime later.

People hate taxes but I believe that EVERY nation that produces products that have a waste stream or any kind of environmental cost needs an ‘environmental tax’ on those products (See P.S.) … something small … like 0.001 percent of the material costs (with energy … even if it’s renewable … and water … even if it seems free … included as materials). Some would argue that companies would be providing ‘proprietary’ data if they had to provide the information necessary to calculate their tax liability and, particularly with regard to energy, they shouldn’t get ‘nicked’ if they are using renewables … BUT the USE of any kind of energy comes with some cost.

If material costs didn’t seem like a good option, an environmental export tax might fit the bill: Americans or any other citizen in the world shouldn’t be able to buy extraordinarily inexpensive products because companies in other parts of the world don’t have to keep the water, soil and air clean in the areas where they do manufacturing. Likewise, we shouldn’t expect products to cost almost nothing at the expense of any other citizen’s health or the environment they live in. (It’s not like we haven’t known this for years.)

So what’s all this about needing China and India’s help?:

    • We still don’t know how to INexpensively process a lot of different types of waste streams,

    • lower cost solutions are an industry that would benefit the developing parts of the world far more than the developed parts of the world (and also open up new markets everywhere) and

    • if two billion people might have some ideas, I’d sure like to hear them.

I’m the ‘lousy chemistry student.’ I got a good grade but studying hard is different than ‘unique insights’ based on how all those molecules fit together. Since many American environmentalists want to ‘shutter’ coal plants that release insoluble mercury (along with other things) into the air (when it comes in contact with ozone in smog-filled cities, it turns into a soluble form that can end up all sorts of places you don’t want it), I wonder whether viable (lower cost) but overlooked options exist.

I’m the kind of ‘dummy’ that thinks that since ozone is easy to create (even laser printers and air purifiers manufacture it … with energy of course which automatically starts the process moving away from ‘low cost’), there should be an inexpensive way to take the mercury out of the waste stream before it exited any plant. But then if there was, plant operators would need a market for the mercury (more work … handling of a concentrated toxin … and not in their industry). Likewise, wouldn’t someone have already thought about how to do it ‘cheaply’ if there was any possible way? (Note, if you ever start doing some ‘informal’ research on toxins, get the information you need to keep yourself safe: Many ‘early researchers’ globally managed to inadvertently kill themselves as they learned about materials).

People who solve problems like these have to get their heads around:

    • a LOT of emissions and other possible waste streams just at one facility (power plants and many industrial facilities operate 24/7),

    • LOTS of facilities,

    • very small (for air particularly, in comparison) waste residuals and

    • a desire by operators to have NO costs or EXTRA work beyond ‘burn coal (or other fuels) ’ or ‘do anything’ … to get ‘energy’ or ‘anything.’

For air pollution, people have already studied ‘massive cleaners’ that could run at street level and some companies sell the miniest of mini air filters that blow filtered air past the face of a person that is just breathing (originally designed, I believe, for travelers). When you compare these options to just breathing air, they are very expensive.

If China and India used most of the money developed from an environmental tax to initially just identify problems and develop products that would take care of the problems in a cost effective manner, they could use a larger percentage at a later date to take care of environmental ‘hotspots’ using less money.

I always thought the United States got everything backward: The government told companies to take care of problems without telling them how to do so in a cost effective manner while making them clean up a lot of old problems with very expensive at the time technology that they couldn’t afford.

Since the industry practices that created the problems were legal at the time and many of the companies had no way to charge customers for past problems, money and resources that should have gone into developing lots of inexpensive technologies for keeping things clean and cleanup were ‘diverted’ … into litigation, moving plants offshore and even bankruptcies. If those same companies had paid a small ‘new product’ tax to fund research and to systematically clean up ‘old’ problems at designated sites when the costs of cleanup for specific types of problems had come down, the nation could have gotten more ‘bang for its buck’ and more problems would already be ‘fixed.’

Americans seem to love lawsuits and that itself is always a problem: Superfund legislation was set up so most of the early money went to lawyers as they sorted out ‘responsible parties.’ Even today, companies spend time in court arguing over who is going to pay for cleaning up industry problems created years ago by men like my grandfathers who were born in the late 1800’s and early 1900’s (well, mine probably would have created some if they had been in the ‘right industries’).

Imagine what might have happened if Congress had assessed a new product tax on an industry with designated percentages going to:

    • ‘past problems,’ and ‘current problems’ … with a collaboration of the industry, government and universities working on those and

    • ‘future research’ … with a collaboration of the universities and industry associations working on that.

Companies don’t normally want to create problems ‘on purpose’ and if there is an easy path not to, they will take it … as long as they can see the ‘profit’ in it.

When any part of the environment gets polluted, you always have to ask if the ‘dumping’ going on was technically legal (morality is quite another thing). People hate regulations but I never believe that people will automatically act in OTHER people’s best interests UNLESS those actions are also in their own best interests.

China and India today have an advantage that the United States did not have when Superfund was established: Thirty plus years of doing things wrong AND right has generated a LOT of data. Because this is so, I am hoping they will do two things (and help us out):

    1. Glean our data (and that of the rest of the world).

    2. Ignore our environmental processes: Develop something MUCH more efficient and useful.

Glean Existing Data

Lots of treatment options have been tested and many sites have been cleaned up: Data is available.

Since companies are willing to pay money to ‘not have problems’ that reduce their ‘profits,’ we need more (inexpensive) treatment options (with funding mechanisms and incentives so they will be used).

It would be great if all the environmental organizations who kept the world posted on ‘problems’ also kept the world posted on the current products and the approximate installation and operating costs for the things that are helping solve those problems … perhaps through the equivalent of an environmental Wikipedia that summarizes the best of the best technology: Solutions are irrelevant if you can’t afford them. Likewise, the easier it is for companies to find solutions and know their costs, the more likely that they’ll take the initiative to implement those solutions … and when companies develop ‘products’ inhouse that could be used industrywide, they’d know the immediate marketable value.

Years ago, as an example, during an environmental audit of a wheel casting plant, a proud Superior Industries employee showed me a paint filter that they had designed themselves so they could meet southern California’s tough air quality standards. I don’t know if they ever patented and marketed their filter. Although the plant has since shut down, it was innovations like that that made southern California much more livable.

Ignore Our Environmental Processes

I don’t actually think China and India should ignore our environmental processes because so much has gone right but I do believe costs have got to come down.

When Superfund started, a lot of the environmental work was ‘new’ and computer interfaces and the Internet as we know it did not yet exist. As a result, contracted environmental companies wasted a LOT of time and energy doing the ‘same things.’ I remember lacking manuals for a number of pieces of equipment and having to put together instruction sheets and even calculate out flow rates for things like flumes.

Today, I’d expect to pull a PDF file off the Internet for any piece of equipment along with a spreadsheet for data collection and would probably be able to find a photo or video presentation not only on use but on how to troubleshoot the equipment.

If the contract was a government contract, I’d expect today to find an EPA site where I could post PDF’s of the manuals for the equipment being used (if they weren’t already posted) along with data collection apps along with apps for data and site analysis. If taxpayers pay for cleanups, the work should be as easy as possible and cost as little as possible: Likewise, when information like this has already been paid for once by taxpayers and is made easily available to private contractors for private sites, it’s more likely that they’ll do things right … tax dollars helping drive good environmental decisions.

Today you can find instructions online for building a VERY inexpensive spectrometer out of an old VHS videotape case … a crude design perhaps but if you wanted to do preliminary screening of water quality, air quality, roof runoff, etc., it’s a good place to start: Imagine sending high school and college students out into communities to gather baseline data and do some ‘rough’ analysis in their communities (as part of their coursework) … recognizing of course that their ‘responsibility’ would be to help their communities and nation solve their environmental problems … not complain about them.

Universities that have the budgets for laboratory class mass spectrometers can also today easily purchase inexpensive digital microscopes. Some of this equipment has gotten so inexpensive that I expect many parents will buy it for their science-minded children just like they might buy a television or a computer.

Our U.S. federal legislation today still includes a possible up to $25,000 per day fine for violators who pollute: Unfortunately, a billion dollar corporation might think the fine is cheaper than losing their profits while a mom-and-pop business could be bankrupt in one day. And, to my knowledge, the fine has never been inflation adjusted which means the number is rather ‘random.’

I am not an advocate of ‘punishing’ businesses. I believe it is almost always better to help a company (and the industry that it is in) figure out ways to resolve any environmental problems they have while helping them figure out ways to pay for any cleanup and damage that have already been done than to try to ‘fine’ them (unless of course, the fines are applied so money is available to help the company ‘resolve’ the problems (an environmental escrow account of sorts that a regulatory agency would help them spend) … sometimes individuals who run businesses cannot find any other good incentive to work on the problems).

If You Think Things Are Easy:

    • Any time you ask a business or anyone to take on increased work or costs, you change how they see you because you have made something harder for them.

    • Many times there is no clear incentive to change anything because change represents (initially) reduced profits.

    • That is why nations pass laws to protect their environment: They know that the value of profits and jobs rarely covers the cost of cleanup expenses when businesses want to cut corners and something goes very wrong.

But, environmental regulations set aside, if you can convince anyone that it’s in their best interest to ‘do what’s right’ because ultimately it’s much more ‘profitable’ for them both now and in the future, as a society, you come out ‘way ahead.’


P.S. If I accurately remember those supply, demand, product price and who bears the cost charts (Economics 101), when a tax is applied to any product, the producer bears part of the cost (resulting in possible lost profits) and the buyer bears the other part (resulting in a slightly higher overall cost). What those elementary charts don’t tell you is that IF the money spent on an environmental tax helps improve efficiencies in production and reduces environmental problems which normally create community health problems (including lowered productivity), both the producer and the buyer (if the tax helps keep THEIR environment clean) come out ahead.

Simple things like elevated lead levels can make it harder to learn (people who shoot guns a lot sometimes have these); volatile organics can wreak havoc with the nervous system; particulates can harm the lungs, etc. Even too much clean water or stress can kill you so it’s good to remember when you’re resolving problems that things are getting better and life is about ‘balance.’

The difficulties always are:

    • in seeing the end result when you’re trying to figure out how to come up with upfront money,

    • in making sure every company that is competing in your industry in your country is bearing ‘an equivalent’ upfront tax cost while

    • making sure that everyone benefits from any of the work that is being done.

P.S.P.S. When people retire, they are under no obligation to volunteer for anything and if they do, what they volunteer for should be their choice. But if the retired individuals who worked on many of the government funded historical site cleanups found a way to ‘summarize’ the best of the best through Wikipedia or an EPA designated summary site or through publishing the ‘most insightful’ materials through Project Gutenberg, etc., I do believe the whole world would benefit.

A lot of knowledge can get buried in reports. It seems unfair to make it harder for future generations to take care of problems that were and still are being created throughout the world … especially when the purchase of any product today from an overseas corporation (or even one in the United States) might mean that even more are being created.