Proposal on Air Pollution in Michigan

PRE-PROPOSAL 1. Media Artifact

Link to your media artifact(s) giving background on the issue:

Michigan Air Pollution Website      2. Persona and POV statement Persona:

Persona name: Chris Hendricks Age: 7 School/occupation: Current 1st grader at Ridge Wood Elementary School. Location: Wayne County   Quote: “I go to school to learn and be with my friends”   About:
  • Chris has suffered from Asthma since he was born
  • His mom works in Southfield at a law office and his dad works in Detroit at the Mayor’s office. 
  • Chris has many friends at school and is embarrassed when he struggles with asthma (typically on winter days when the air quality is poor)
Goals:
  • Eventually be accepted to the University of Michigan, where both his parents attended.
  • Chris wants to breathe better and rely less on his inhaler at school and home
  • Run around with friends without the fear of an asthma attack
POV Statement:
  • User 

Chris, an energetic and active young student...

  • Need 

…who needs a way to feel more comfortable during activities, reducing the risk of an asthma attack…

  • Insight 

…because he is in an influential time in his life and wants to feel comfortable with his friends and enjoy his childhood.

3. Potential Solutions:

Describe three reasonable, feasible potential solutions or approaches that would help address this problem.

SOLUTION 1: Cap and Trade: place limit on pollutants in state and allocate to businesses to trade. 

First and foremost, a cap and trade system will lower carbon and other harmful gas output. While this is the most import outcome from the solution, there are other benefits. Emissions trading is better able to respond to the economic demands of the market and allows companies to effectively manage their priorities. This trading also incentivizes positive innovation to help the environment because credits carry economic value. Additionally, in certain areas in the EU as well as California, cap and trade solutions have proven to be effective while minimizing government intrusion. 

SOLUTION 2: Incentive tax credit system: offer tax credits to businesses who lower their carbon output below predetermined level.

Tax incentives to businesses for lowering their carbon output would motivate businesses to innovate and decrease their footprint. This solution is less intrusive than taxation because it gives businesses and opportunity to continue at their current position. However, it also will lead businesses to benefit the environment because they will receive credits.

SOLUTION 3: Education: make environmental education mandatory in schools (focusing on air quality)

As a solution with long term benefits, education could assist in lowering Michigan’s carbon output by educating future leaders on the harms of the emissions. While this solution has a long time frame, certain initiatives can expedite the process. For example, this education can take place outside the classroom and be taught to individuals already in the business world, currently making impactful decision. Therefore, education has the long term possibility of lowering outputs at minimal government cost. 

 

BACKGROUND AND RESEARCH PROCESS Context

Reference to a current Michigan bill or law that relates in some way to your proposal:

1994 PA 451 (MCL 324.5501 & 324.5522)

Why this proposal will make a difference in the lives of students of all ages across Michigan, or a significant subgroup (by age, background, economic status, and/or region, etc.) of students in Michigan:

The proposal on curbing air pollution has broad impacts and lasting effects. However, the bill is significantly aimed towards today’s youth and the future generation’ health. This proposal will make a significant impact on the lives of students across the state for two primary reasons:

 

First, A better regulated system of air pollution within the state will promote a new norm of environmental awareness and pollution activities. With the youth of the state being the future generations of law makers, business leaders, and world inhabitants, it is important to identify air pollution as an important problem. Thus, as they group up, they will see the significance and take necessary measures to improve the earth. With the future generation focusing on improving the earth with better air quality, the state of Michigan will see better air for breathing, declining climate change rates, and a healthier ecosystem for all species.

 

Secondly, this bill is aimed specifically to improve current air quality conditions. As seen in the media artifact, currently students across the state struggle with insufficient air quality at home and in school. Students often struggle with air quality in the region, as the persona exemplifies. These problems often arise from large particle pollution created by burning natural recourses. The proposal offers a concrete solution for eliminating these air quality concerns by stemming the pollution at one of its biggest sources: business emissions. 

 

At the moment, air pollution concerns have taken a back seat to economics. However, a cap and trade system has the potential to improve the lives of the youth, guide them into future habits and behaviors, while still proposing the lowest economic cost possibly. It is important to remember that the Michigan youth are being left with both, our economy and our environment. A proposal of cap and trade regulation goes to benefit both environmental factors as well as assure economic safety through achieving minimal business cost.

How and where did you learn about the issues underlying your proposal?

 

One of the important things to consider and that I looked at carefully when distinguishing a problem for solutions, is the broad understanding of the issue at hand. Air pollution and environmental quality are not benign subjects. Too often, people address these concerns as major problems but fail to bring up and feasible solutions, fearing this is a zero-sum game. Therefore, this was a problem that did not take much research to discover; however, it does take a lot of work to distinguish a solution, which represents a workable change and minimal business cost blowback.

 

The problem arose, within the context the bill attempts to tackle it, through the Michigan Student Caucus discussions. When one of the coordinators offered air pollution as a problem, I started to research its specific effects on the metro-Detroit and greater Michigan areas. One point that continued to come up was the poor air quality around the state and specifically how many schools are affected by local emissions. For decades, residents from the City of Detroit and nearby downriver neighborhoods have been affected by a number of heavy industrial operations in their communities. The Michigan Department of Community Health has deemed this area the “Epicenter of Asthma Burden,” due to the health consequences these local families face. 92 Schools in Wayne country are in areas where the air is unsafe to breathe."

 

Coming back to the original point that this problem is well known but consistently solutions see backlash, this is because business’s affected by regulation have quantifiable costs. However, it is hard to quantity the benefit that the environment sees. Additionally, these benefits are often seen as far into the future and thus are less salient in decision making processes. Therefore, I decided to look at this problem through a different lens. The benefits are far more quantifiable when they are considered in the terms of: the number of students breathing clean air. This view of the problem is why my persona is a child in need of clean breathing air and this view reflects why I believe a cap and trade system which attacks harmful breathing particles has potential. 

How has your service activity influenced your thinking about this proposal?

As my service project, I have been collecting food primarily in the Ann Arbor area then have brought it to Temple Israel in Best-Bloomfield as well as bringing the collections to the Washtenaw County Jewish Family Services. While this project may initially seem unrelated to air pollution problems, I have used it as a forum to ask residents I have been collecting from about the proposal. When talking about Education 362 and the process I am going through, I often bring up different questions, which help guided me towards the cap and trade solution. One question that I often ask is: “Does something need to be done about air pollution/quality and its effects on breathing and environmental standards?” The resounding answer, with only two exceptions that come to mind, was: yes. However, when followed up with: “What if this change would lead to negative economic ramifications?”, people were far more mixed. There was a general feeling that the economy is the most important consideration in their political opinions. I took these responses seriously when considering what solutions would also have minimal impacts on the economy and gave businesses flexibility with even potential profitability.     

Link to your media artifact(s) giving background on the issue:

Michigan Air Pollution Website 

Consultations

Talk directly with at least 3 real live people who have special knowledge about this topic or the impact your proposal would have, and summarize their comments. These may include people appearing in your media artifact (video, podcast, etc.).

CONSULTATION 1: Mitchell Dudley (Professor, Environmental Economics)

Professor Dudley is an Economics professor with a focus in environmental economics. I originally started the research project by going through the University of Michigan’s website and professor databases to see who may have keen input on the subject. I knew that the University of Michigan offers fantastic recourses and connections for expertise in many subjects. My proposal boarders two separate fields: economics and environmental science. This is why I was very pleased to come across professor Dudley who has done his research in these subjects specifically. 

I originally talked to him asking for specifics of the economic push backs of the government taking environmental actions. He first spoke to straight taxation of pollutants. He said “There are clear business costs associated with taxes. Many businesses are not economically set up now to combat these costs and any tax would be pushed right to consumers.” We went on to speak about other solutions, and that is when he brought up a cap and trade system. I had already known this as a possible solution but professor Dudley labeled a cap and trade solutions as: “The most cost effective wat, minimizing the cost of the goal.”

I asked professor Dudley to expand on cap and trade and he explained the background saying, “The general theory is to choke the output, put a cap on the output you’re willing to have and distribute the rights to produce that output however you see fit.” He went on to say, “The real benefit is it’s the economically cheapest way out there to get it done, businesses are paying in to reduce pollution.” With this in mind I started to think of the different formats a cap and trade system could be introduced. I asked him for the appropriate geographical level that this regulation could be enforced which he then responded to by stating, “The biggest problem is that cap and trade needs to geographically specific. If it is enforced on the entire state, polluters that can afford it and are unable to adapt at low costs will buy permits from areas which are already low in pollution, where companies have low costs to lower pollution. This will lead to one place to be smoggy and dark while another is green and pollutant free.” While professor Dudley did not have a specific way to assign geographical regions, he offered his opinion that, “This is one place where economics has a perfect solution which would be to limit the geographical size infinitely to only a few producers per region, but politics pushes back on that. It just isn’t feasible to regulate at such a small level.”

Professor Dudley and I concluded our conversation by talking about the necessity of change. I asked him, “How necessary is regulation on air pollution and how pressing are the issues?” Professor Dudley took a second a responded. “We live in a country at the forefront of many things we do. We are also one of the richest counties in the world and we pride ourselves on innovation. When it comes to air pollution and environmental protection, we are underperforming in this capacity… it’s appalling.” He left me knowing this was a problem worth tackling and that cap and trade could be the feasible solution we need. 

CONSULTATION 2: Adam Stevenson (Economics Professor)

After speaking with professor Dudley, I started to focus in on the possibility of a cap and trade solution when curbing air pollution. I remembered that I had learned about cap and trade solutions more broadly during my economics 102 class during the winter of 2017. For this class, professor Adam Stevenson had taught me about cap and trade. While it was only briefly mentioned in class, I wanted to go back to him to get a broader economic lens on this system.

When I talked to professor Stevenson he wanted to preface our conversation by saying he is not an environmental expert but is happy to share his research on cap and trade and its micro/marco economic impacts. He first spoke to the shortfalls of cap and trade. He said, “The drawbacks are pretty clear, they are political. Polluter don’t like it because if they could have innovated and produced less emissions cheaply in the past, they already would have.” This got me to question whether or not he saw this policy would being worthwhile. He said, “I think it could bring good change and progress but it’s tough. It’s anti-business.”

I went on to ask about how hard he sees it to implements a system like this. He responded by talking about the unfavorable economics behind introducing this regulation. He said that while the benefits are there, they are widely dispersed, and people will be less willing to argue for them than businesses will be to argue against it. This fact is because businesses are directly hurt and have higher costs to implement than any one person would benefit from the change. Therefore, businesses will be more willing to spend on arguing against the regulation and often have the money and power to do so. For these reasons, economically, this is hard politics to pass.

This led me to ask about potential ways to lower these costs, to which he offered the solution of subsidies. Subsidies led us into speaking about how this regulation could actually be introduced. He recommended starting the cap above current preset emission levels and scheduling future points where the cap is lowered, possibly annually. He said to lower the cost of implementing this regulation on businesses, during the period before the cap becomes binding, the government should offer subsidies for businesses to implement technologies that lower their pollution output. He said while this would be a cost to the government, this would an equitable split of the costs of regulation. 

He went on to say that the government has a lot of potential for creating revenue from this regulation. In the first place, they can auction off the permits to pollute. While this is expensive for businesses, it is the most efficient way to implement the policy as the firms with the highest willingness to pay, which typically aligns with the highest cost to innovate, will be the ones to buy the permits at auction. These proceeds go straight to the government. Professor Steven ended by speaking about how this regulation represents the opportunity for a double dividend. By selling permits to businesses, the government is influencing businesses to pollute less while raising funds, two positives for the government. 

CONSULTATION 3:  Allison Steiner (Ph.D., Atmospheric Science, Georgia Institute of Technology, B.S., Chemical Engineering, Johns Hopkins University)

Allison’s specializations and research Interests, Biosphere-atmosphere interactions, Regional climate modeling, Chemistry-climate interactions, Atmospheric aerosols, Biogenic trace gas emissions, Boundary layer meteorology. We are meeting this week to discuss direct impact of Cap and Trade system on environmental well-being, future climate change, and air quality. While, unfortunately she has had to push back the meeting until Nov 7th, over email she has expressed her support for a cap and trade system. 

CONSULTATION 4:  Ashley Salcido (Internal Audit Coordinator, Sundown Foods: Fontana, CA)

When first digging into my research regarding the potential for cap and trade as a solution to the environmental and air quality issues in Michigan, I came across California’s similar program. The Regional Clean Air Incentives Market (RECLAIM) program was adopted by the South Coast Air Quality Management District (SCAQMD) in October 1993. It set an emissions cap and declining balance for many of the largest facilities emitting nitrogen oxides (NOx) and sulfur oxides (SOx) in the South Coast Air Basin. RECLAIM includes over 350 participants in its NOx market and about 40 participants in its SOx market. RECLAIM has the longest history and practical experience of any locally designed and implemented air emissions cap and trade (CAT) program. RECLAIM allows participating facilities to trade air pollution while meeting clean air goals.

 

The program I have considered in my proposal closely reflects the RECLAIM program in California. Therefore, I took the opportunity to speak to a business professional who specializes in accounting and managing new costs. I asked her about the effects that she sees and feels as a result of RECLAIM. She said that she has been doing what she does (an accountant) for many years and has seen the effects of the changing prices. She pointed to the late 90s and early 2000s as when the prices began to jump for any type of energy. This line up with the RECLAIM program because although the program started in 1993, it was not until the end of the decade that the cap was lowered to a binding rate. Consequently, at the same time, large energy companies also went through a period of deregulation. At this point, energy companies no longer found it profitable to serve clients and rolling blackouts began to persist throughout the state. While this was one of the negative side effects that Ashley pointed out, there were many factors which led to the widespread rolling blackouts.

 

Ashley continued to talk about effects she noted during her job and personal life as a result of the cap and trade in southern California. She said, that while she cannot speak to specific costs, associated with the change, that were inflicted on the business she works for, but said they were significant. At the same time, however, the costs did not lead the business to peruse change. She was specific to say that, within her personal life, costs began to increase. Energy companies would charge more, and gas prices rose significantly. She stated that, “prices must have gone up at least a quarter per gallon.” This was a significant rise in prices that she said people all over the area felt.  

Reaction or advice from a Topic Coordinator:

You must solicit a critique from a topic coordinator, and explain the impact that advice has had on the final draft of this proposal.

For critique of my proposal from a topic coordinator, I met with Austin Gould to speak about the feasibility and writing process of my proposal. The main topics we discussed were ensuring that the proposal meets the need of my persona: Chris as well as how to prepare a quality document for this purpose. Austin made sure to have Chris in the back of my mind as I go throughout the stages. After my first expert consultation, Austin recommended that I see what an expert thinks about a cap and trade solution as part of my proposal for Chris.

I took the advice to heart as I met with professor Dudley who said that there could be real beneficial results in terms of air quality from a cap and trade system. This helped me narrow down the types of particulates I wanted to regulate. I settled on focusing on large particle emissions after talking to Austin about ensuring that I am specific with my suggestions. This had a large impact on my proposal as it helped me be specific in my research as well as with the experts I consulted who could then speak to details they know.

Beyond Austin helping me to focus on my persona in my research, he helped with the writing process and formulating the proposal itself. Him having the experience of writing one last year and presenting to the state senate was a very valuable recourse in helping me articulate my ideas. I think in the long-run this will be beneficial as we get closer to the end of the proposal writing process and I have been thinking of the correct ways to express my thoughts for weeks before. Austin has truly helped me identify the necessities of a quality proposal and express them in a way that benefits not only my persona but also other youth in Michigan. 

Research process:

Describe your research process — indicate who you talked to (including but not limited to consultants), what you read, what your thinking was, how it changed over time, and how your consultants changed your thinking. This description of your research process definitely could include “dead ends,” or ideas you had that didn’t ultimately bear fruit.  In short, we want to know what you did and how it led to your legislation, and we also want you to give us a window into your thought process.

I decided to take on the topic of air pollution for a few reasons. While I haven’t always found myself especially drawn into this topic, as I started to research in one of the discussion groups relating to pollution, I found more and more about its pertinence in Michigan. This grew my interest and led me research the subject. I hadn’t noticed how wide spread the problem was in Michigan as well as the types of people it affects. Learning more about who it affects, specifically the youth struggling with the air quality, is one reason why I chose to propose a solution on this subject.  I knew I wanted to take on a topic with large ramifications and this subject certainly met my expectations. The other main reason I wanted to tackle this topic was the fact that is such a widely known problem with people, almost unanimously, stating that something needs to change. While basically everyone agrees that something needs to be done, few people offer concrete ways a government can intervene. 

Michigan is, without a doubt, one of the most beautiful state in American and relies heavily on this beauty for tourist revenue. I pointed out the economic benefits of the environment to Michigan in the discussion to highlight the positive effects of government regulation on pollution. On top of environmental and economic benefits, through my research, I discovered the effects air pollution has on air quality in Michigan. With the problem of breathing quality, I began to build my media artifact and persona, focusing in on how youth struggle with air quality in the metro-Detroit area.

My research into a solution started in the group discussion. There were many posts in the group, most stating that the government should introduce some sort of tax on pollution I was vocal about offering downfalls of taxation on big business in Michigan for air pollution. I knew I wanted to find a solution that could benefit the state in terms of curbing the air pollution problem but not harm businesses too greatly. This is where I started to hit road blocks. I noticed that any government regulation on air pollution that was suggested in the group before me would raise a business tax and had the potential to harm the economy of the state.

I kept this problem in mind as I continued to search for alternatives to taxation on pollution. Through the research I came across California’s RECLAIM program, which has been successful. While companies have had slightly higher prices, the EPA has said the program is working and businesses are still operating effectively. I researched into what the underlying economics was behind this program and first came across cap and trade as a solution. I wrote this in the discussion as a result to a post and it was generally regarded well. It took me realizing that to solve this problem, there will need to be costs, we should just ensure that these costs are as minimal as possible. To do this, we should let the market decide. Companies that find it too expensive to innovate to lower their emissions will buy permits while those who can cheaply reduce their pollution can sell their permits and benefit.

At this point I knew I wanted to focus in on a solution for air pollution and had considered the strong possibility of a cap and trade system. However, I wanted to ensure this was feasible through an expert consultation. I went and spoke to Mitchell Dudley to discover his opinions about government intervention in air pollution. After speaking for a bit about the downfalls of taxation, he also brought up the cap and trade solution, spoke about it extensively, and displayed his support for a program like this, staking it is: “The most cost effective wat, minimizing the cost of the goal.” I knew this was the type of solution I was looking for: political, environmental, and economical. 

Following my meeting with Mitchell Dudley I dug deeper into cap and trade. I knew I had learned about it once in an economics class here at Michigan, so I set up a meeting with that professor, Adam Stevenson. I spoke to professor Stevenson about the economics behind a cap and trade system. We focused in large part on the downfalls of a system like this. He brought up a few points which left me wondering about the viability of my proposal. He offered the point that businesses are going to fight this and they have the incentive to continue to fight it. He led me to think of solutions to this problem. I came up with a system, similar to the RECLAIM program in California, where the cap starts above a binding level and lowers steadily. However, to avoid the problems California face, I proposed that the Michigan government subsidizes the innovation into greener technologies during this period before the cap is binding. While this brings the government costs, it splits the outlays equitably between the state and the businesses.

I went on to investigate California’s program and spoke to a few people there who are knowledgeable on the personal effects RECLAIM had on them. Additionally, I spoke to Ashley who is an accountant for a company that faced these costs. She exemplified that even though companies and citizens may face slight price increases, these are not worth while enough to offset the good a cap and trade system provides. After learning more about the program and noticing its positive effect, I concluded that a cap and trade system is necessary, actionable, and equitable. 

Author contributions:

Please delineate--in detail--who made what contributions to the process and to the finished proposal? Who took on which responsibilities in researching ideas, drafting language, etc.?

I took on this proposal alone and have done on the work associated with it. 

FORMAL PROPOSAL

The sections below should comprise your final proposal language, submitted for consideration by your peers and potential inclusion in the MSC Platform.

Preambulatory clauses

These set up the PROBLEM, but not the solution.

WHEREAS.... 92 Schools in Wayne country are in areas where the air is unsafe to breathe.

WHEREAS.... In Michigan, 11.5 percent of adults and 9.2 percent of kids have asthma – about 25 percent above the national average

WHEREAS.... The Detroit-Warren-Ann Arbor area ranked 40th worst for high ozone days out of the 227 metropolitan areas. It ranked 46th out of 201 for particle 24-hour pollution and 14 out of 187 for annual particle pollution.

WHEREAS.... Wayne, Macomb, Oakland, and Washtenaw counties all were graded “F” for their smog ratings

WHEREAS.... Michigan has fallen behind for environmental innovation and requires changes

(Add more "Whereas" clauses if necessary.)

Operative clauses

These describe in detail, the solution you are proposing (not the problem itself; those should go in the "Whereas" clauses above).

THEREFORE BE IT RESOLVED....

1. Implement a cap and trade system for limiting air pollution emissions (focusing on ozone – carbon dioxide, nitrogen dioxide, sulphur dioxide, and PM2·5) 

2. Start the cap above current levels with annual cap reductions as a percentage of the previous year

3. The cap and trade should be set at current levels, with each county designated a certain level of pollution each year

4. Subsidize investment on innovation for the purpose of reducing emissions during the period before the cap becomes binding

5. In the event the government sees it fit to allow more pollution, hold auctions and sell additional permits for pollution to businesses

6. Companies who sell/trade more that 5% of their permits should be reduced a full 5% in their allotments for the following year. 

(Add more "Resolved" clauses if necessary.)

Counter-arguments:

What are three reasonable arguments against this proposal?

1. This is anti-business, will drive away companies from the state and raise prices for consumers 

2. A cap and trade system is inequitable for businesses as only some will be able to afford the pollution permits.

3. Michigan’s pollution and air quality levels are “fine” at the moment

Costs and funding:

What will your proposal cost (in direct expenses, lost tax revenue, lost economic opportunity, and/or non-monetary costs)? How will you pay for your proposed legislation? Where will/could the funding for your proposal come from?  Who might object to dedicating resources to your proposal (competing interests)?  

I see there being two major costs arising from this bill. One being the government’s cost to subsidies the innovation in energy efficient and low emissions technology. While this subsidy may be expensive, it can also be offered in the form of tax write-offs or additional future pollution permits. For the most part, this cost will be upfront and need to be funded by tax dollars; however, this is a one-time price and can be paid back in the future. This payment will come from the auction where the government can sell additional pollution permits to the companies who are unable to reduce their emissions or acquire additional permits.

The other major cost will be a business cost, for the firms who are unable to adapt, innovate, and reduce their emissions to the levels they are allotted, they will be forced to buy from other firms. Additionally, with the cap becoming lower and lower each year, this market will get tighter and the price of these additional permits will increase. Yet, some businesses will profit off of this system as they will find it cheaper to reduce their emissions outputs and find themselves as net sellers of permits, bringing in extra revenue.

Some people may originally object to the government dedicating funds to these subsidies, but I believe this proposal will find support. Businesses will certainly give push back, especially those who know they will not be able to cut their emissions production cheaply. This push back is expected because this regulation aims to change their behavior. 

References:

These can include websites or other information you have found about the issue.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4465283/

https://www.michigan.gov/deq/0,4561,7-135-3310---,00.html

https://www.epa.gov/particle-pollution-designations

https://www.edf.org/climate/how-cap-and-trade-works

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