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The Boston Globe OnlineBoston.com Boston Globe Online / Metro | Region February 8, 1998

The politics of pollution

Donald Busco collects a sample at Watershed No. 6., in New Hampshire. (Globe Staff Photo / Lane Turner)

Midwestern power plants are dramatically cleaner than they were a decade ago, thanks to the Clean Air Act of 1990. But, for the most part, rainfall in the Northeast is as acidic as ever.

By Michael Kranish, Globe Staff

Donald Buso steers the snowmobile up a twisting path deep in New Hampshire's White Mountains. Higher and higher, Buso climbs, thundering into a government preserve, then clicking off the engine as he approaches a cascading stream. In the distance, a parade of peaks forms a majestic curtain around Waterville Valley and Sandwich Notch. Nearby, a waterfall beats steadily, the only sound breaking the silence in this snowy white, seemingly pure landscape.

For 23 years, this has been Buso's world, since the day he answered a terse ad on a college bulletin board: ``Technician - Remote - New Hampshire.''

Buso hops off his two-person snowmobile and stands beside a stream that the government prosaically calls Watershed No. 6. Here, Hubbard Brook filters through a contraption that looks like a cross between a snowplow and a rusting sculpture. The heated V-shaped device measures water flow, allowing scientists to sample the water once a week, every week, along what may be the most studied stream in North America.

After a recent winter storm, Buso and his colleagues sampled water from the stream, as usual. This time, the findings were extraordinary. Back in the lab, which is set on a knoll overlooking the White Mountains, Buso found that the level of acidity in the precipitation was one of the lowest recorded during his 23 years of work here - an astounding 200 times lower than the worst measurement during the same period.

``This is just pure water,'' Buso marvels again and again, as if such purity is an impossibility.

Buso's discovery, it seems, is a payoff of the 1990 Clean Air Act, a much-debated piece of legislation that - like so many bills passed by Congress - generated enormous controversy for a few months and then disappeared from the headlines. Nowadays, acid rain gets relatively little publicity compared with global warming. But the scientists who trek weekly to Watershed No. 6 to study acid rain see reason for both hope and continued concern.

Acid rain in New England is caused largely by the burning of coal at Midwestern power plants, creating three major gases. Sulfur dioxide, which is mostly soot, and nitrogen oxide, which is soot and smoke, are the preeminent contributors to acidity in rain and snow. Environmentalists say that this acidic combination of soot and smoke has resulted in the death of trees, rivers, and lakes in New England. The third gas, carbon dioxide, doesn't cause acid rain but is a substantial contributor to global warming.

The Clean Air Act has performed astoundingly well in controlling sulfur emissions, which have been cut by more than 25 percent in the last three years. But it has done little to control nitrogen and carbon dioxide emissions.

Under the act, one of the most ambitious environmental initiatives ever passed, Congress ordered that sulfur emissions be cut to 50 percent of 1980 levels. But Congress didn't simply mandate pollution reductions. Instead, it set an overall cap and then allowed the power companies to make deals among themselves to reduce emissions. The result is a market of ``pollution credits'' that are traded on Wall Street, a program that has created so many efficiencies that it has cost about one-10th as much as expected. The market system works so well, in fact, that President Clinton touts it as the way to tackle global warming.

But while Congress was tough on sulfur, it required only a modest reduction of - and no cap on - emissions of nitrogen oxide. As a result, increases in nitrogen in regions such as New England often cancel out sulfur decreases.

Thus, on average, the acidic content of rainfall in the Northeast is just about as bad as it was 10 years ago, with far fewer findings of relatively pure water in Watershed No. 6 than might have been possible if nitrogen emissions had been controlled, too.

Still, Buso and others are heartened at proof that the reduction of sulfur from distant Midwestern power plants can be detected in the high peaks of New Hampshire. Applying the lessons learned in Watershed No. 6 could make the difference between success and failure in the much larger attempt to stop global warming.

The effort to control acid rain might never have begun without the New Hampshire presidential primary. Governor Jeanne Shaheen, who in 1984 ran then-senator Gary Hart's New Hampshire campaign, vividly recalls hiking with Hart on Mount Washington to demonstrate the Colorado Democrat's concern about acid rain.

Shaheen believes that Hart's opponent John Glenn, of Ohio, fared poorly in the state's primary because the emissions from power plants in Senator Glenn's home state were seen as largely responsible for the acid rain falling in New Hampshire.

Four years later, Republican George Bush showed that he had learned a lesson from the acid rain debate in 1984. Running for president against Democrat Michael Dukakis in 1988, Bush was eager to portray himself as an environmentalist. Bush scored political points by riding in a boat around Boston Harbor while blaming the Massachusetts governor for the harbor's pollution.

In New Hampshire, Bush had begun to chart a course for what would become one of the legacies of his presidency, the Clean Air Act. As Bush traveled around the first primary state, he said he sympathized with New Hampshire's concerns about acid rain. Even the state's conservative governor, John Sununu, backed efforts to stop the emissions. As a result, Bush vowed to be the ``environmental president,'' and high on his agenda was a proposal to reduce and control acid rain. Later, as Bush's chief of staff, Sununu continued to push for acid rain controls.

But while the Republican White House embraced the acid rain proposal, a number of prominent Democrats tried to kill it. Senator Robert Byrd, of West Virginia, feared that the measure would threaten the mining of high-sulfur coal in his state. Midwestern senators objected that the bill put too much burden on power plants in their states.

But Bush, who campaigned on the slogan ``polluters pay,'' had bipartisan support in the Northeast, which stood to benefit the most from the bill. And Bush had a secret weapon in Senator Alan Simpson, of Wyoming, then the second-ranking Republican leader. Simpson's home state expected the bill to be a bonanza, because Wyoming produces coal that is very low in sulfur. Simpson figured - correctly, as it turned out - that his state's coal would become a major factor in stopping acid rain.

Simpson, who faced pressure from some fellow senators as well as industry lobbyists for backing the bill, now says the predictions of economic devastation seem ludicrous. ``For all the horror stories,'' he says, ``it has worked.''

As Congress debated the Clean Air Act during 1990, many legislators assumed that cutting sulfur dioxide emissions would translate into a proportional cut in the acidity of the rain.

Far less attention was paid to another emission, nitrogen oxide. Congress required power companies to reduce nitrogen by 2 million tons per year by the year 2000. While that annual reduction will then be required indefinitely, Congress put no overall cap on emissions from all sources, meaning nitrogen emissions can actually increase.

``We all knew it was a problem,'' Simpson says, referring to the failure to cap nitrogen emissions. But it was a problem that went unmentioned when, on November 15, 1990, President Bush stood with Democratic congressional leaders at a bill-signing ceremony at the White House and celebrated the agreement to curtail acid rain.

``Virtually every American in every city will enjoy its benefits,'' Bush proclaimed. The president was particularly enamored of an idea proposed by a coalition of environmentalists and free-marketers that allowed companies to trade pollution credits on Wall Street. He would be the first president, he said, to prove that the marketplace - not the government - could provide the most cost-effective way to control pollution.

A telephone chirps in a quiet corner of the sprawling 101st floor of the World Trade Center, in New York. Carlton Bartels, a broker in the powerful Cantor Fitzgerald company, puts on his headset as he stares out the window at a plane soaring into the haze-filled sky.

``The market has been down a bit,'' Bartels says, schmoozing a hot prospect. ``I think it's a buying opportunity.''

Bartels sounds like any Wall Street trader. He could be dealing in stocks, bonds, or even hog futures. But he is far from typical. Bartels is one of only a handful of brokers who trade a most unusual commodity: the right to pollute.

To be precise, Bartels sells the right to emit sulfur dioxide.

On this day, Bartels represents a client who offers to sell a power company the right to emit extra tons of sulfur dioxide into the air for $112 a ton. A typical trade might result in the sale of 10,000 tons of pollution. For this transaction, Bartels makes a tidy commission. Speculative buyers and sellers, including some who concede that they could not care less about the environment, trade pollution rights in hopes of squeezing a dollar or two in profit out of the deal.

The result is environmental capitalism, encouraging polluters to find more efficient ways to clean up their mess. For example, the competition to find cheaper ways to reduce emissions led to lower prices for coal and anti-pollution equipment, which in turn reduced the price of the pollution credits bought and sold on Wall Street.

Bartels and his fellow brokers, while clearly in this game for the profit, are reminded of the environmental side of the equation every day. They have one of the grandest vantage points in the world, high above Manhattan, near the top of the World Trade Center. Yet, on many days, due to smog created by some of the same gases that contribute to acid rain, Bartels cannot see uptown beyond the Empire State Building. He likes to think that his business is helping to clear the air.

As Bartels looks out the window this day, the skies are particularly murky. ``It looks like a beautiful day to sell pollution,'' he says.

In the river town of Cheshire, Ohio, a smokestack at the General John M. Gavin power plant rises 1,103 feet into the air, higher than the tallest Boston skyscraper, the 788-foot John Hancock Tower. Until recently, the Gavin plant was the single largest source of the emissions that cause acid rain in the United States. The elevation of the smokestack was intended to keep emissions far from Cheshire, but the result has been that winds carried them to New England.

The plant is owned by the American Electric Power company, which for years was one of the fiercest opponents of the Clean Air Act. When the Globe highlighted Gavin's role in the acid rain problem in a series of articles in 1990, company officials predicted that passage of the act would devastate the Ohio economy, close coal mines, increase electric rates, and put thousands of people out of work.

In fact, none of those predictions have come true. There has been little impact on the state's economy, relatively few people have lost their jobs, and electric rates in Ohio are still way below those in most other areas of those in most other areas of the country.

Moreover, in one of the great success stories of the environmental movement, Gavin is relatively clean and green. In 1990, when the Clean Air Act was passed, Gavin spewed 384,000 tons of sulfur dioxide a year, most of it falling as acid rain on New England. By 1996, Gavin emitted only 68,000 tons a year. This is one reason why the level of sulfur deposited in New England has dropped dramatically.

Gavin is cleaner because its owners installed giant scrubbers that wash away most of the sulfur dioxide before it can be emitted into the air. The company spent $650 million to buy and install the scrubbers, which appears to be the single largest expense incurred by any company under the Clean Air Act.

But the company got more than just clean air in return for its investment. It actually made Gavin cleaner than required, and the company received pollution credits from the government for the extra purity. These are the same types of credits that Bartels deals at the World Trade Center.

The plan works like this: Let's say a company is emitting more sulfur dioxide than the government allows. It can pay to install scrubbers, which might cost $500 for each ton of sulfur dioxide removed; it can buy low-sulfur coal, which might cost more than high-sulfur coal; or, the company can buy credits from another company that has reduced pollution more than required.

Originally, power-plant operators predicted that it would cost $1,000 to buy a single credit. Environmentalists said it would cost $500. But the price has turned out to be closer to $100.

``In general, the cost of just about everything we have done for compliance is less than we expected,'' says John McManus, American Electric Power's manager of environmental strategy and planning. McManus, like other industry officials interviewed for this article, declined to reopen the debate over whether acid rain is a serious environmental problem, saying that the company prefers to highlight its compliance with the law. ``We think we have been very successful.''

The reason for this success, McManus and others say, is that pollution control is now dictated by the marketplace. Instead of requiring that every power company put scrubbers on its smokestacks, the government told companies that they could reduce pollution in any way that worked. This forced the companies that build scrubbers to become more competitive. It prompted many power companies to switch to low-sulfur coal, bought largely from Wyoming. The choice of pollution-control strategies lowered prices and pushed down the cost of buying pollution credits on Wall Street.

But the focus on sulfur ignored the effects of nitrogen oxide. In many cases, the scrubbers wash away only sulfur, not nitrogen. The low-sulfur coal has just as much nitrogen as high-sulfur coal. And the purchase of pollution credits does nothing to stop nitrogen. Some observers believe that had it not been for the novel idea of selling pollution credits, power companies might have scrapped many old coal-fired plants by now and replaced them with units that emit much less nitrogen oxide. But the Clean Air Act has encouraged some companies to keep their old plants in operation because of the ability to ``clean'' them with pollution credits.

Some legislators now say that they didn't know enough about nitrogen in 1990 to warrant capping its emissions, or that dealing with nitrogen was too expensive and too politically complicated. But others say Congress knew all along that nitrogen needed to be capped but didn't have the political will to do more about it.

Joseph Goffman, an Environmental Defense Fund attorney who played a key role in passage of the Clean Air Act, puts it this way: ``In retrospect, it was insane of Congress and people in the policy community not to insist on a nitrogen oxide cap as a companion to the sulfur dioxide program. People were just not paying attention.''

In New Hampshire's White Mountains, the woods seem to be thriving. But at the government's Hubbard Brook Experimental Forest, scientists have found that the total amount of living matter around Watershed No. 6 has remained about the same since 1982. Just last summer, scientists and students measured all 7,500 trees with a circumference greater than 4 inches in the 30-acre area near the brook, cataloged the girth and height of every specimen, and verified the conclusion.

They found that some trees grow larger and others die, with the overall biomass remaining constant at about 80 years of growth. That is much less than would normally be expected.

``It is as if you are 4 feet tall, while your parents were 5 feet,'' Buso says, standing amid woods that look healthy to the untrained eye. ``You stopped growing. That is what happened here. Individual trees are growing. But the total amount of life here is not increasing.''

Buso works at the US Forest Service's experimental forest, but he and several other analysts there are employed by a private research facility, the Institute for Ecosystem Studies. The institute is run by Dr. Gene Likens, who has studied the impact of sulfur emissions at this site since 1963 and is often referred to - against his wishes - as the ``father of acid rain.''

Likens says the reason for the stunted growth is that decades of acidification have leached plant nutrients such as calcium from the soil. Just as a person takes Tums for an acid stomach, Likens says, ``Sensitive forest regions need the buffering quality of calcium compounds to neutralize acid rain.''

Even if the air were pure from now on, Likens says, ``so much calcium has been lost that it will take a very long time to recover.'' He believes the situation will worsen unless sulfur and nitrogen emissions are further reduced.

``We still have a very major problem of acid rain,'' Likens says. ``That is scientific fact. In that regard, the 1990 [Clean Air Act] amendments have not worked very well.''

Not surprisingly, environmentalists are pushing for a major rewrite of the act so that nitrogen emissions are controlled and traded just as sulfur emissions are. White House officials say that some states and the US Environmental Protection Agency are already using administrative authority to reduce nitrogen. Some in Congress, such as Senator Daniel Patrick Moynihan, of New York, want to go further, backing legislation that would require deeper sulfur and nitrogen reductions. Some power companies are lining up to oppose the move, saying it would be far more difficult to control nitrogen than sulfur and noting that large amounts of nitrogen come from automobiles.

A much larger fight looms over the third gas emitted by coal-burning plants, carbon dioxide, the prime culprit in global warming. The Clinton administration has seized upon Bush's idea of trading pollution credits as a way to develop a worldwide program to reduce the emission of gases that cause global warming. As Bill Clinton sees it, a US power company that must reduce carbon dioxide could either install expensive pollution-control equipment or buy credits from companies throughout the world that have already reduced the emissions more than would be required.

For example, it might be expensive for a US power company to reduce carbon dioxide emissions from a power plant that is already relatively efficient. It would be much cheaper for the company to help pay for the reductions at a much less efficient power plant in China that has few pollution controls. That could be accomplished either through direct payments or by buying equipment to retrofit the Chinese power company and earning extra credits.

This approach, however, is far more complicated than the acid rain credit-trading plan. It has been relatively easy for the government to monitor the trading of sulfur emissions produced by about 800 power plants in the United States.

Indeed, the program has a 100 percent compliance rate. It would be much more difficult - some say impossible - to monitor carbon dioxide emissions from countless thousands of sources around the world.

At the very least, understanding the pluses and minuses of the acid rain program seems vital as the world prepares to deal with global warming. First, the plan shows what happens when a key emission such as nitrogen is left uncapped. Already, some nations have proposed regulating only some of the gases that cause global warming. For example, European nations initially proposed targeting three gases, while the United States says the problem is caused by six.

Second, the warnings from many polluters that the global-warming program will wreck the economy should be viewed with a healthy skepticism. The cost of the acid rain program was far less than anyone predicted, because the marketplace helped provide more cost-effective solutions.

But the biggest lesson is that the marketplace of capitalism, which expected to loathe environmental regulation, suddenly finds that regulation can be attractive. The acid rain emission market is worth $900 million a year. At the Wall Street firm where pollution credits are brokered, the anticipation is that a similar plan for global warming could be a bonanza.

Carlton Bartels, the acid rain pollution broker, calculates that the market value of global-warming emissions could be as much as $500 billion a year.

That is not just a lot of pollution. It is a lot of potential profit. ``This could be big,'' Bartels says. ``This could be one of the largest commodity markets in the world.''

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