Bay Journal

Are cleanup costs merely subsidies for more growth?

Anticipated influx of people expected to offset progress in fighting pollution.

  • By Tom Horton on January 01, 2013
Even modest amounts of paving around a stream degrades its water quality. The public is stuck with the cleanup bills, and in many cases, the loss of fishing. (Dave Harp) Research has shown that faster growth does benefit some interests — mainly developers, real estate agents, home builders and the banks that finance them  — but the balance of the community seems to suffer. (Dave Harp)

"So now we're going to tax rainwater?"

The incredulous speaker was Maryland Sen. E. J. Pipkin, rebelling at the estimated billions of public dollars that must be raised to control stormwater, the fastest growing polluter of the Chesapeake as development paves more open space.

And that is just one of many areas, from sewage to agriculture, where citizens across the six-state Bay watershed will be paying bigger bills for water quality, as the "pollution diet" mandated by EPA pushes jurisdictions to restore water quality.

Lost in the debates over how much this will cost and how to pay for it is a deeper issue: What exactly are we paying for?

Ostensibly we are paying to restore the Chesapeake, whose health has been deemed worth it by a majority of residents, and by federal and state policy.

But another way to look at it is that we are paying in large part to support and subsidize continued growth—a perpetually expanding economy and ever larger population that drives pollution and environmental degradation.

Growth is widely, and without much analysis, assumed to be good, or at least essential; at worst inevitable. Even those who oppose growth to save this creek, or that farm, usually are just hoping to deflect it elsewhere.

Typical of how we accept growth's environmental costs is the excellent list of stormwater cleanup measures from the Potomac Conservancy's sixth annual report on the nation's river (which it gives a "D" for water quality after around 40 years of cleanup).

After acknowledging that another 2 million people moving into the D.C. region by 2032 is "one of the biggest barriers" to regaining Potomac health, the conservancy says:

"As this area is developed to accommodate the growing population, we must take steps...to mimic a natural, pre-development hydrology."

Continuing to "accommodate" growth, to assume environmental impacts of the coming millions will somehow be offset, has obvious flaws, such as its failure for decades to remove the Chesapeake and most of its rivers from the EPA's "impaired waters" list.

And increasingly, the pollution technologies we rely on are reaching areas of diminishing returns. The latest upgrades for Blue Plains, the giant plant treating metro Washington's sewage, will remove a tenth as much polluting nitrogen as upgrades a decade before; and will cost 10 times as much.

That translates into spending 100 times as much per pound of pollution removed.

No wonder Baltimore's mayor Stephanie Rawlings-Blake told Congress in 2012 that rate payers in her metro region could not manage the current, $2.2 billion sewage upgrade without a federal subsidy.

And while the mammoth sewage treatment upgrades under way throughout the watershed should meet the EPA's interim water quality deadlines set for 2017, population growth will already be eroding them.

The Patuxent River, draining fast-growing central Maryland, affords an advanced look at how growth offsets cleanup. The same pollution problems, and actions to solve them, that are now common Baywide began earlier there.

Based on information from the Maryland Department of Environment, spending on further sewage upgrades will reduce nitrogen in the river slightly by the 2017 EPA deadline; but by 2025, when the Bay is supposed to be restored, growth will have pushed nitrogen from the river's major sewage plants back up to substantially more than it is now.

Phosphorus, another major pollutant from sewage, will decrease about 8 percent on the Patuxent by 2017, then rise until in 2025 it is slightly more than when the latest upgrades began.

For the Potomac, the Bay's second biggest river, it's a similar story of spending hundreds of millions simply to see its benefits swallowed in a decade or two by the relentless pursuit of growth.

The MDE puts a different spin on this: "The more we grow, the greater the benefit to our (sewage) upgrades," the agency's website says. What they mean is each new person pollutes the Bay less with better sewage treatment. But the Bay itself will not notice less sewage per capita, only more sewage.

Baywide, sewage upgrades will decrease nitrogen and phosphorus through 2025, and perhaps for several years beyond that, environmental officials say. But they acknowledge the pollution curve from sewage will eventually turn back up almost everywhere, driven by growth.

The costs of growth extend far beyond the Bay. Maryland's pressing transportation needs, for example, include at least $649 million to alleviate traffic congestion caused by the influx of new residents from to the military Base Realignment and Closing, or BRAC as it is known. Other priority needs in the Baltimore and Washington regions amount to more than $10 billion, according to TRIP, a nonprofit research group sponsored by highway unions and industries.

Of course, if unending growth really is essential or inevitable, then the fact it simultaneously drives and negates so much spending on environmental quality might simply be the cost of doing business, like spending on heat when winter comes, paying the rent or taxes.

But recent research, discussed here later, casts doubt on whether continued growth has positive effects on per capita income, unemployment or poverty rates. If indeed "economic growth has become uneconomic growth" in the words of economist Herman Daly, then our current spending to offset the impacts of growth begins to look more like subsidies to the relative few who do benefit.

Growth can look like a better deal than it is because of what economists call "externalities," essentially removing the costs of whatever you do from your balance sheet. Pollution is a classic example.

When a federal appeals court in August rejected tougher EPA air quality rules, power companies eager to expand cheered that it would save their consumers $2.8 billion in energy costs.

But the rules would have saved, according to the EPA, 40 times that much in human health impacts and would also have reduced cleanup costs to the Chesapeake, where dirty air falling on the watershed makes up more than a quarter of the nitrogen pollution.

Externalities also play a role in agriculture, the largest source of Bay pollution. For example, the states deliberately establish rules that allow excessive pollution from manure, out of fear farmers would otherwise have a tough time disposing of it.

Meanwhile poultry companies, which control virtually every other aspect of a farmers' chicken production, bequeath the manure to the farmer, avoiding responsibility. The Bay and the public bear the costs of water pollution.

Similarly, developers have never had to fully reckon in their costs of doing business that even modest amounts of paving around a stream degrades its water quality. The public is stuck with the cleanup bills, and in many cases, the loss of fishing.

When energy companies crow about the cheaper prices of natural gas extracted by fracking in Pennsylvania and New York portions of the Bay watershed, they do not have to account fully for setbacks to Chesapeake restoration goals from the deforestation caused by new roads, well sites or pipelines.

Similarly, federal subsidies to farms to grow more corn to produce ethanol to offset our growing energy use do not account for the increased pollution to the Bay from more, heavily fertilized, crop acreage.

Marylanders are justifiably proud of their Program Open Space, funded by a tax they pay whenever real estate changes hands. It has raised billions to protect farms and forests from development.

But to what extent has it been, in effect, a public subsidy to make up for the fact that the majority of Maryland counties have deplorable zoning regulations to protect those same lands?

Subsidies for sprawl and growth can be as small as in Howard County, in Maryland, which is paying $9 million to bury water tanks to help fight fires in rural areas or as large as the estimated $1 trillion dollars annually in federal tax breaks to homeowners, many of which directly reward bigger homes that consume more energy and open space.

Coastal development in storm-prone areas like the Delaware, Maryland and Virginia beaches is underwritten by taxpayer-subsidized federal flood insurance, as well as by federal subsidies for about two-thirds of the costs of replenishing beaches as they erode. Costs can average as much as a million dollars a year per mile of beach.

While most agree that growth has downsides, conventional wisdom holds that the public benefits, overall, outweigh them. But there has been curiously little research on that, writes Eben Fodor in the August 2012 issue of Economic Development Quarterly.

Fodor is a native of the metro Washington, DC, region, a nationally known land use expert, author of "Better Not Bigger—How to take control of urban growth and improve your community" (New Society Publisher, British Columbia, 2001). He finds our failure to analyze the links between prosperity and growth "remarkable…given the degree of public investment in growth and the level of controversy often surrounding local growth issues."

For example, state and local governments in 2009 spent $289 billion on schools, roads, water and sewer systems and other infrastructure, "all mostly built to support more growth," he wrote.

Fodor's ongoing research defines "prosperity" as a combination of rising per capita income, lower unemployment and less poverty. He has looked at how faster growth promotes these in the 100 metropolitan regions across the country that hold two-thirds of U.S. population—and has found scant support for continued growth.

Virtually across the board, Fodor showed, faster growth rates from 2000–2009 were associated with lower per capita income and greater income declines in recessions.

Poverty and unemployment rates also tend to be higher in faster growing regions, although statistically this is not as conclusive as with income levels. The correlation gets stronger when Fodor looked at a 20-year period, indicating fast growth has long-term negative impacts.

He also compared the 25 fastest growing metro areas with the 25 slowest growing. The former were growing on average 27 times faster than the latter, whose populations overall were nearly stable.

The slow-growing regions significantly outperformed the boom growth regions in every measure of prosperity, "suggesting a need to re-evaluate our thinking about growth," Fodor wrote. These trends were even stronger when he looked at a 20-year period versus 2000–2009.

"There is clearly more to the economic development equation than growth, and growth may not even be a contributing factor," Fodor found.

Then what are the factors in a region's prosperity? The author writes that everything from geographic location to immigration patterns, to labor industry power relations are important.

He also said that he thinks growth a few decades ago might have had more and broader benefits than now, when we outsource more good jobs and have record income inequality.

Unemployment does not respond much to fast growth, he said, because the bulk of new jobs usually go to people who move into the booming region.

And, he wrote that faster growth does benefit some interests, mainly developers, real estate agents, home builders and the banks that finance them; "but the balance of the community seems to suffer."

Another look at growth and well-being comes from urban theorist and noted author writer Richard Florida in the April 2011 issue of The Atlantic. He argued that it is the growth of productivity — fueled by invention, innovation and increased skills and education — that drives prosperity. His research found little correlation between such productivity increases and population growth across the nation. (California was an exception, although it's not clear if population growth had anything to do with rising productivity.)

An examination of poverty rates and unemployment in Maryland and Virginia since 1980 also shows little connection between the growth of the economies or populations. Both have increased hugely during that time while poverty and unemployment have moved up and down in a much more stable range.

The Chesapeake Bay Total Maximum Daily Load, "or pollution diet" embraced by the EPA requires the six watershed states to not only reduce pollution to healthy levels, but develop and implement plans that offset the impact of new growth, no matter how many more people come.

Of course, that applies only to nitrogen, phosphorus and sediment, hardly the full range of humans' impacts on the environment; and how this will even happen might most charitably be called a work in progress.

Many of our best laws and programs, applying to forest protection, smart growth, septic tanks and other areas, are merely slowing the rate of degradation, or rate of pollution as growth occurs — not reversing it.

The strategy most governments are pinning their hopes on to offset future growth in pollution is "nutrient trading." A big sewage treatment plant bumping against limits of growth could, in theory, pay farms to reduce pollution relatively cheaply and by an even larger amount than the treatment plant could.

The concept is attractive. Agriculture is a big pollution source and not as subject to cleaning up through regulation as other sources.

But pitfalls abound. Verification and long-term tracking of pollution reductions across millions of acres is a huge question mark. And fairness would require farmers to first assure they had met some level of cleanup before trading, lest it give an incentive to start with a "dirty" farm to get the biggest trade value.

Trades would have to ensure they did not result in some places simply buying their way to a more polluted status locally, never mind that overall their trading might result in a cleaner Bay.

Already, agricultural leaders in both Maryland and Pennsylvania have summarily rejected the easiest way to document and verify trade — converting a farm, or part of it, to forests. Their reasoning appears a mix of not wanting to take land out of production, and fears that developers might buy up farms and cash in on both home sales and nutrient credits for the open space they retained.

On a broader scale, economists talk about technological advances enabling the nation to "decouple" growth from pollution.

Energy generation, with major impacts on both climate change from its release of carbon dioxide, and on the Bay via nitrogen oxides, is an area where some have high hopes.

Indeed, U.S. industry produces a dollar of economic output for a third less energy than it did 30 years ago. But even with more renewable sources like wind and solar on the way, it is hard to see any scenario of continued growth where we could do more than get worse more slowly, wrote ecological economist Peter Victor in his book, "Managing Without Growth."

And it is likely a similar story for growth and nitrogen pollution, said James Galloway, a University of Virginia researcher who has shown that a relatively modest shift in the U.S. diet to less meat could dramatically reduce nitrogen runoff from farms to places like the Bay.

"In theory, we could decouple nitrogen from population growth, but in reality, no. Wherever you have high population density you're going to have a problem with nitrogen in water and air and it will almost certainly be food and energy-related," he said.

Until recently, it seemed that ending our uncritical infatuation with growth was a choice we should consider, a debate needing to happen. But what if it has moved beyond that, to where the choices are more about how to cope with an end to growth: to recognize and manage it, or reel from crisis to crisis?

More voices are arguing that the Great Recession of 2008 was not the normal one from which the economy bounces back eventually to resume expanding at about 3 percent a year, which means doubling in size roughly every quarter century.

"The U.S. (economic) growth rate that we have become accustomed to for over 100 years is not just hiding behind temporary setbacks. It is gone forever," said Jeremy Grantham, whose investment firm, GMO, manages nearly $100 billion in assets. Grantham sees long-term U.S. growth in the range of 0.4 to 0.9 percent a year, an economy doubling in size every century or two.

The reasons he and others cite are detailed in environmental researcher Robert Heinberg's "The End of Growth — Adapting to our new economic reality" (New Society publishers, 2011).

Heinberg cited a number of reasons for his dire title. Our current high-growth economy "needs debt like a car needs gas," and with the possible exception (for a while) of the U.S. government, all other sectors of our economy, including consumers, appear at or near the limits of taking on more debt.

Natural resources from coal and oil, to rare earth elements used in electronics, to water and phosphate fertilizer for agriculture have all peaked in abundance or will soon, which means they are getting more expensive, fast.

Simultaneously the world's "sinks" for pollution, such as the atmosphere for CO2, and coastal waters like the Bay for nitrogen, are full, overfull or quickly filling up.

Climate change will likely make most of the above worse. Increased sea-level rise on the Chesapeake seems destined, for example, to overcome tens of thousands acres of our wetlands, releasing sediment, keeping the water murky.

"Declining oxygen levels, acidifying oceans, disappearing species and changing climate — when considering changes of this magnitude it may seem the end of economic growth is hardly the worst of humanity's problems," Heinberg wrote.

"However, we are counting on growth to enable us to solve or respond to all these crises (to create) surplus money to protect rainforests, save endangered species, clean up after environmental disasters."

Heinberg said that some sort of massive debt forgiveness may be essential to jump-starting the economy. This has plenty of historical precedent. From ancient Greece and the Book of Leviticus to the Q'ran, there is a record of periodic debt forgiveness, sometimes called a jubilee.

Any economy to emerge from this must have some core principles, he stated: stable populations and consumption rates, renewable resources consumed below nature's ability to replenish them.

More efficiency in technology must be balanced by fostering more resilience in natural and human communities: more diversity, interconnectedness, adaptability and redundancy — backups if one system fails.

He concluded that we are at a "fifth great turning point in human history," the first four being fire, language, agriculture and the industrial revolution.

The fifth: "moving toward a sustainable, renewable, resilient and stable society."

Tom Horton covered the Bay for the Baltimore Sun and is author of six books about the Chesapeake.

Concern about growth's effect on Bay not new

Not all of the costs of growth are reckoned in dollars. Respected Bay scientist Christopher D'Elia wrote nearly two decades ago that around the Chesapeake:

"Human population growth and uncontrolled development have disrupted our natural systems to the point where increasingly draconian controls will be necessary to mitigate what humans do," foreshadowing Senator Pipkin's 'taxing rainwater' lament.

"If we do not check our rate of growth...we will have to pre-empt our own freedom," D'Elia wrote, adding: "I am truly amazed that political elements who ostensibly cherish individual freedom so greatly have such a difficult time coming to grips with the effect population growth is having on individual freedom by promoting more stringent regulations."

D'Elia's insights were expressed three decades earlier by President Richard M. Nixon's bipartisan Commission on Population and the American Future:

"Population growth forces upon us slow but irreversible changes in life style. Imbedded in our traditions as to what constitutes the American Way of life is freedom from public regulation, virtually free use of water, access to uncongested roadways, freedom to do as we please with what we own, freedom from permits, licenses, fees, red tape and bureaucrats…to fish, swim and camp where and when we will.

"We do not live that way now," the commission wrote in 1972, "but the population of 2020 may look back with envy on our relatively unfettered way of life."

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About Tom Horton

Tom Horton covered the Bay for 33 years for The Sun in Baltimore, and is author of six books about the Chesapeake. He is a freelance writer, splitting his time between Baltimore and Maryland’s Eastern Shore.

Read more articles by Tom Horton

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