Letting Polluters Pay

Letting Polluters Pay

The recent EPA standard on VOC limits in architectural coatings includes a provision that may represent the wave of the future in environmental policy and regulation. Although limits are established on allowable levels of VOCs in various coatings, the agency has chosen to allow manufacturers to exceed these limits by paying an “exceedance fee” of $2,500 per ton of excess VOCs emitted. With this clause, manufacturers can produce, and consumers can use, any coating they wish, as long as they compensate society for the harm they’re imposing on our collective well-being.

This approach makes sense because it takes the government away from the role of creating absolute bans on products. Instead the government is playing a more appropriate role of setting policies that look out for the well-being of the public, while allowing companies freedom to make choices in an economic context that recognizes the broader impacts of those choices. This new exceedance fee is one small example of the sort of “pollution tax” or green tax that might work to harness the power of business to create win-win solutions to environmental problems.

— Nadav Malin