Published Tuesday, August 6, 2002, in the Contra Contra Times

Contra Costa paying price for cleaner Bay Area air

A program that allows industries to earn credits for reducing
emissions has increased local pollution levels

By Mike Taugher

A Bay Area clean air program that allows companies to buy and sell the
right to pollute has fostered a shift in industrial air pollution to
Contra Costa County, a Times investigation has found.

While the plan has reduced emissions from refineries, power plants and
factories across the Bay Area's nine counties, 87 percent of pollution
credits earned as part of the plan have been used in a single county,
Contra Costa.

The findings reinforce complaints by environmentalists that
increasingly popular pollution trading programs lead to higher
concentrations of industrial pollution or "toxic hot-spots."

They also confirm the observation that Contra Costa County has seen
disproportionately more construction and expansion of power plants and
refineries.

Told of the Times' findings, Contra Costa representatives to the Bay
Area Air Quality Management District called for reviews or changes to
the way the district's air bank is run.

"It may be time for us to look ... at phasing that out," said Mark
Ross, a Martinez city councilman who also is one of the 21 members of
the air district's board of directors. "It's shifting responsibility
to areas that are already impacted, and those areas have had enough."

The Times' analysis of information from the district's databases found
that while Contra Costa's biggest polluters deposited 61 percent of
the pollution credits used by Bay Area industries, they have used 87
percent of those credits.

That adds up to roughly 700 tons of additional pollution each year in
Contra Costa County, the equivalent to building a few new power
plants. Solano County was the only other county that recorded a net
increase in pollution through the bank, about 100 tons.

The Times did not look at actual pollution readings or emissions
estimates, which have generally improved due to separate pollution
reduction efforts, but instead tracked how pollution credits are
bought and sold throughout the region.

The results show the extent to which the county has not shared in
regional air quality improvements because of industrial pollution
trading, says one air board member.

"It's all relative. We've made great strides in Contra Costa, but
we've made great strides throughout the Bay Area and statewide," said
Mark DeSaulnier, a Contra Costa County supervisor and air board
member. "For those who live and breathe in Contra Costa County, we
want to make sure we have the cleanest air possible."

DeSaulnier said he agrees with so-called environmental justice
advocates who contend pollution trading banks, while helping to reduce
pollution over broad areas, tend to increase pollution in
already-industrialized areas.

"The (environmental justice) folks are right," DeSaulnier said. "I
just don't think it (pollution trading) works very effectively. It
tends to penalize people who have been penalized historically."

Steve Hill, who manages the program that oversees the air pollution
bank at the air district, said that despite the trading patterns,
separate regulations targeting heavy industrial sources have reduced
pollution from refineries and power plants in Contra Costa
County. District officials could not immediately provide
county-specific information.

Industrial air pollution should be viewed on a regional level, he
said.

"The big, tall stack impacts are regional in nature," he
said. "They're not local in nature."

Others disagreed.

"The people who live here have the same right to breathe clean air as
high-income areas," said Jim MacDonald, a Pittsburg Unified School
District trustee and auto mechanic.

Last year, MacDonald filed a complaint with the U.S. Environmental
Protection Agency over how Pittsburg power plants were permitted to
use pollution offsets from outside the area. That complaint is subject
to EPA-sponsored mediation among the Pittsburg school district, state
regulators, the air district and others.

"What's happening is they're cleaning up the high income areas and
moving it to low-income, minority areas," he said.

The Bay Area air emissions bank opened for business in 1991. Companies
that reduce emissions of nitrogen oxides, volatile organic compounds
and other pollutants can deposit credits into that bank.

Then, companies seeking to expand or build new industrial plants must
buy enough credits from the bank to offset the new pollution they
would add to the air.

The result is a gradually falling cap on industrial pollution
throughout the Bay Area.

In the region last year, companies paid anywhere from about $7,000 to
$43,000 per ton for the most common types of pollution credits.

Although supporters of pollution trading regimes say pollution banks
create an incentive for companies to reduce pollution voluntarily,
many of the credits that go into these banks come from factories or
other sources that shut down.

In the Bay Area, those credits re-emerge along the Contra Costa
waterfront.

"The decreases are so widely dispersed, it's certainly not going to
help the folks who live in Pittsburg," said Richard Drury, a San
Francisco attorney for Communities for a Better Environment who
chaired an EPA working group on pollution trading during the Clinton
Administration.

"What's happening to Contra Costa is it's getting dumped on," he said.

Last week, the Bush administration proposed to Congress its Clear
Skies initiative, which would create a nationwide air pollution
trading bank.

The national bank's purpose would be slightly different from the Bay
Area bank, but environmentalists said it would lead to more highly
concentrated pollution sources throughout the country.

The Times obtained from the air district a list of transactions of
pollution credits that have been used, and a computer file showing
where those credits originated. Credits still in the bank were
ignored, because it is impossible to say where they will be
applied. Also ignored were credits that were bought and used at the
same location, although some of those transactions were included in
cases of ownership changes.

The results showed that of the 2,773 tons of annual pollution credits
used in the Bay Area, 2,426 tons have been used in Contra Costa.

Contra Costa industries got 1,676 tons of those credits from other
sources within the county and 723 tons from outside the county, most
of which came from Santa Clara County.

The bulk of the credits were applied to refineries and power plants in
Martinez, Pittsburg and Antioch.

A change in policy several years ago made it easier to ship those
credits in from other areas.

At one time, the Bay Area air district adjusted how many credits a
company needed based on where the credits came from. If a Contra Costa
company wanted to expand its power plant or refinery, it would need
more credits if they came from San Jose, and fewer credits if they
came from a neighboring industry.

But the district did away with that policy several years ago.

"It was determined that method of accounting was too simplistic," said
Hill. "A better way of looking at it was looking at the whole air
basin."


Mike Taugher covers the environment and energy. Reach him at
925-943-8257 or mtaugher@...