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Much of the attack on environmental problems must be made at the federal level, and indeed, the federal government has been very active in this area.

The U.S. commitment to environmental quality, as indicated by pollution-control expenditures, has grown substantially since the passage of the National Environmental Policy Act (NEPA). For 1972, pollution- control expenditures were estimated at about $44 billion in 2004 dollars.4 Pollution-control expenditures by 2004 were estimated at $200 to $250 billion, approximately 2 percent of the gross domestic product, and have undoubtedly risen considerably since then.

The figures include both direct public expenditures and expenditures by firms to comply with environmental regulations. The costs appear in the form of higher taxes and higher prices and, in that sense, represent a reduction in living standards. However, and more importantly, they also represent a contribution to our living standards by improving the air we breathe, the water we drink, and the environment in which we live. In a populous, industrialized society, environmental quality does not come cheap.

Despite the complexities noted before, considerable environmental progress has been achieved in many areas. Figure 15-2 shows trends in the emissions of six major air pollutants from 1960 to 2000 (the data series from which the chart comes were discontinued shortly after 2000). The figures should be viewed in the light of changes in the United States since 1960. Specifically, from 1960 to 2000 the U.S. population grew by 57 percent, U.S. gross domestic product (GDP) by 288 percent, and motor vehicle registrations by 200 percent. Had we made no effort at environmental regulation, we would see a picture of sharply increased pollution rather than the picture of stabilization and decline shown in Figure 15-2.

In many cases, the imposition of uniform national standards is absolutely necessary. If different standards prevailed, polluting activities would simply be shifted from places with tight standards to places with loose standards.

Progress is often most rapid when there are a few sources that can be clearly identified and a substitute product or technology introduced. Note that the most striking reduction shown in Figure 15-2 is that for air borne lead, a pollutant that can contribute to, among other maladies, mental retardation and developmental problems in young children. The primary source was leaded gasoline. When Congress required automobile manufacturers to market only cars that ran on unleaded gasoline, the problem was on the way to an almost total solution.

When the pollutant has multiple sources, when substitute technology is not available, or when the problem is global rather than local, solutions are much more difficult.

Much pollution is, one way or another, a result of the production and use of energy—for example, toxic runoff from mining or the release of sulfur dioxide from coal burned to produce electricity. Between 1980 and 2010 the amount of energy used to produce a given amount of real GDP (gross domestic product) declined by about 55 percent.5 That drop represents a major environmental improvement. Much of it represents the effects of technological improvement motivated by increases in energy costs, and some was the direct result of regulation.

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