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-~Economic Analysis in the
Public Sector
Hogs and Heavy Industry
Industrial facilities in North Carolina's Tar-Pamlico river basin knew they had a costly
problem on their hands a few years ago. State environmentalofficials had discovered high
levels of water pollutants flowing into a nearby estuary. Industrial plants would have to
cut their pollution discharges significantly, the officials said. New regulations would be
forthcoming.
There wasjust one snag in this plan: most of the pollutants weren't
coming from industrial plants. They were coming from local farms.
The Tar-Pamlico Basin's economy had a large agricultural component,
including many hog and chicken farms. These farms were contributing
substantial quantities of water pollutants in the form of runoff from
manure, fertilizer, and pesticides.
So why didn't the environmental regulators go after the farmers?
Simple: They weren't covered by the Clean Water Act, and the factories
were.
The region's manufacturershad been heavilyregulated for years and
had already reduced their pollutants well below required levels. Trying
to extract the last trace of pollutants from factory effluents would be
extremely costly and would not have done much to help the environment
in any case. When regulators ran the required cost analysis on their
proposed regulations, they found that manufacturers would have to pay
as much as $500 to eliminate one kilogram of targeted pollutants.
By contrast, farmers could cut pollutants significantly,at about one-
tenth the cost to manufacturers, simply by instituting practices such as
constructing retention ponds, which would help keep pollutants from
running off their property into waterways.