VOLUME 3 #4 * SAMPLE NEWSLETTER * APRIL 1996
WATER * Cleaning Long Island Sound * Drought Management Plan Costs and Benefits * Saving Water in NYC * EPA Support for Watershed Effluent Trading * More Valdez Payments * Combining Discrete Choice & Conventional Demand Models to Value Angling
GENERAL * Comparing Model Multipliers<* Efforts to Roll Back Regulation Failing * Council on Sustainable Development * Lead Found to Raise Aggression & Delinquency * Significance of Substitues in Contingent Valuation LAND * Waste Reduction Savings * Cigna Split Moving Ahead* Damages From Brookhaven National Lab
AIR * Mexico City Air Crisis * Clean Air Act Shifting on OTHER NEWS * $10 Device Can Save $1 Billion/Year

CLEANING LONG ISLAND SOUND

Albert Appleton, senior fellow at the Regional Plan Association, former NYC Commissioner of Environmental Protection, and member of the Long Island Sound Estuary Management Committee claims that environmentally Long Island Sound continues to deteriorate despite a decade of public and private anti©pollution efforts. He adds that the central proposal of environmental advocates©©to spend billions of dollars on new treatment facilities©©"isn't taking". "It is frightfully expensive, most communities would get little benefit from the facilities they would pay enormous sums for, and treatment facilities can solve only some of the Sound's problems". The expenditures could also "trigger an explosive anti©environmental backlash," according to Appleton.

He argues that "ecosystems are designed by nature to be self cleansing and self©renewing. Thus, they can do much of the work of environmental cleanup for free, . . . while providing open space and wildlife habitat as well". He illustrates the potential of this approach to estuary management through two projects undertaken by New York City in the early 1990s. On southern Staten Island the city solved storm flooding problems by purchasing and creating 11 wetland stream corridors to provide natural storm drainage. The city saved $50 million in storm sewer construction costs, while providing an outdoor amenity that greatly enhanced the neighborhood. In 1993, the city shifted its strategy for cleaning up Jamaica Bay from a facility construction focus to emphasis on wetland restoration and establishing the historic depth contours of the Bay, cutting the projected cost of meeting clean water goals in Jamaica Bay from $2.3 billion to $1.2 billion. Separately, at a symposium entitled "CriticalÀ3
ÀIssues Confronting the LI Sound and Coastal Management©©aÔ for the Future" Mark Tedesco, technical director for the LI Sound Office of the US Environmental Protection Agency, reported that technological advances have reduced the estimated potential cost of upgrading sewage treatment plants in New York and Connecticut from $8 billion to $2.5 billion. Rather than completely rebuild existing sewage plants, officials are choosing to retrofit them with new nitrogen©removing equipment, eliminating the main cause of hypoxia (lack of dissolved oxygen), which is thought to be the major cause of decline in the estuary's marine life.

The Long Island Sound generates $5.5 billion annually for the regional economy from swimming, boating, fishing, cargo shipping, ferry transportation and tourism.

Albert Appleton "..develop ecosystem improvement program for Sound..." Letter to Long Island Business News, January 8, 1996 page 5

Glenn Jochum "LI Sound Forecast: Coast Will Cost Less" Letter to Long Island Business News, February 5, 1996 page 3

DROUGHT MANAGEMENT PLAN COSTS AND BENEFITS

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ÀThrough a computer model of the East Bay Municipal Utility District near San Francisco, Anthony Fisher, David Fullerton, Nile Hatch and Peter Reinels found that a combination of "conjunctive use" and water marketing is a much more cost effective means to treat drought than the traditional alternative of constructing new storage capacity. "Conjunctive©use" programs involve reductions in surface water deliveries which are compensated by pumping extra groundwater. The program also utilizes a banking mechanism whereby water is stored in wet years and withdrawn during dry periods. The savings result from the intermittent nature of the transfer, which corresponds to intermittent demand. Conjunctive use/water marketing passes a benefit cost test while construction of new storage does not.

The system studied has two reservoirs which serve 350,000 households or 1.1 million people. A third reservoir has been proposed. The computer program is a "mass balance" model, allocating water flowing down the Mokelumne River to downstream releases, storage, transport, or consumption. In each run a constant average use model is subjected to a sequence of variable runoff patterns. Key physical parameters include seepage losses in the river and evaporation from the reservoirs. The authors calculate the effective unit cost of water. For a 39% acceptable reduction, an 80©year lifetime, a 4% real interest rate and 210 mgd demand, the cost per acre foot for a 145 kaf reservoir at Buckhorn Canyon is $8,265.83. At demand of 300 mgd it falls to $1,195.12. Capital costs for a 145 kaf reservoir are $160 million, initial fill costs $18 million, and estimated annual operating and maintenance costs $0.794 million.

Unit costs for conjunctive use or water exchange options are two or three orders of magnitude lower than reservoir costs. For a 39% acceptable reduction, a 4% interest rate, and a 210 mgd demand, the cost per acre foot ranges from $5.73 to $105.75 per acre foot. The higher estimates result from lower demand and additional construction. These options assume that underground water banks are used.

An alternative approach is to raise water prices. Based upon previous studies, estimates of welfare losses arising from higher prices sufficient to cause a 25% cutback in water use range from $40.22 per acre foot to $179.97 per acre foot. Construction of new storage thus does not pass a benefit/cost test, but introduction of conjunctive use and water marketing does.

Anthony Fisher, David Fullerton, Nile Hatch and Peter ReinelsÀ3
À"Alternatives for Managing Drought: A Comparative Cost Analysis" Journal of Environmental Economics and Management 29 (1995) pages 304©320

SAVING WATER IN NYC

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À In March 1994 New York City initiated a $251 million toilet©rebate program to cut the nearly 1.5 billion gallons of waste water that goes into the city sewers on an average day. As of February 14th, 1995 applications for 1,231,287 new toilets have been approved by the NYC Department of EnvironmentalÔ Steven F. Ostrega, Deputy Commissioner of Water and Energy Conservation, estimated the savings would amount to 90 million gallons a day. Currently the savings attributable to the program are about 35 million gallons a day.

Under the program, a residential property owner is entitled to a rebate of up to $240 for the first toilet replaced in a house or apartment, and $150 for each additional replacement. In multiple dwellings, at least 70 percent of the toilets in the building must be replaced for the building to qualify. Commercial buildings of all types are reimbursed $150 per toilet.

The city estimates that each new toilet saves about $50 a year for every man, woman and child who lives in a building. When water saving toilets are used in conjunction with water restrictors on faucets, property owners can cut their water and sewer bills by as much as 40 percent. Most contractors will replace a toilet for the amount of the rebate, resulting in no cost to an owner.

To date more than 678,000 toilets have been installed. However, one plumbing contractor estimated that only 100,000 more toilet bowls can be replaced with available funds. Jay Romano "Saving Water in Toilets" New York Times February 25, 1996

EPA SUPPORT FOR WATERSHED EFFLUENT TRADING

On January 18th a policy statement signed by top EPA officials, including Robert Perciasepe (assistant administrator for water), Steven Herman (assistant administrator for enforcement and compliance assurance), and Jonathon Cannor (the general counsel) proclaimed that effluent trading within watersheds offer a means of achieving water quality objectives. The statement was issued in response to President Clinton's regulatory invention initiative unveiled in March 1995. The declaration noted thatÔ should cut costs and allow dischargers to benefit from economies of scale. The statement included lists of trading projects and approaches.

"Effluent Trading Within Watersheds Touted in Policy Statement Signed by EPA" Environmental Reporter, Bureau of National Affairs, Inc. Washington DC, January 26, 1996 page 1808

MORE VALDEZ PAYMENTS

Exxon will pay $3.5 million to a number of shrimp and shellfish interests, landowners and other parties to cover claims from the 1989 Exxon Valdez oil spill (In re Exxon Valdez, DC Alaska, No. A©89©0095©CV, 1/12/96). This settlement was part of the fourth phase of the civil case regarding losses to shrimping, crabbing, personal property, and the value of fishing equipment and boats. The first phase found Exxon negligent. The second phase awarded the fishing industry $286 million in compensatory damages. The third phase dealt with punitive damages. Exxon is appealing theÀ3
Àpunitive and compensatory awards. See the Fall 1994 Issue of EDV&CBN for more details regarding the Exxon Valdez.

"Exxon Will Pay $3.5 Million to Settle Claims in Fourth Phase of 'Valdez' Case" Environmental Reporter, Bureau of National Affairs, Inc. Washington DC, January 26, 1996 page 1799COMBINING

COMBINING DISCRETE CHOICE AND CONVENTIONAL DEMAND MODELS TO ESTIMATE VALUE OF ANGLING

Ô Hellerstein, and Tomasi note that existing "discrete choice" models generate welfare measures resulting from environmental quality changes on a per trip basis, instead of a longer, more policy relevant, time period. These models thus answer the question "where to go" but answer less well "how much to go".

Current discrete choice models generally measure seasonal or annual welfare impacts by multiplying the number of forecasted trips by the per trip welfare measure. These estimates assume that increases in quality raise participation. The authors present an alternative method linking the discrete choice model to a demand model. Recreation trips are treated as market goods in a utility maximization problem. The utility of trip consumption is maximized subject to time and income constraints in order to arrive at trip demand equations. Participation levels are influenced by trip prices and levels of environmental quality. Their model also specifies the value of leisure time more formally. Currently, leisure time is valued at some proportion of an individual's wage rate.

The model is applied to data from a survey of angling activitiesÀ3
Àin Minnesota conducted by the Minnesota Center for Survey Research, and combined with data on lake area, maximum depth, percentage of acres near the shoreline, and water clarity. Observed annual participation was 5.93 angling trips per individual.

The authors evaluate the effects of changes in water clarity for lakes with below©average clarity. Lakes having below the mean clarity of 1.88 feet in the southern region and 2.95 feet in the northern region were improved to the mean clarity. This affects 57.9% of the 712 lakes in the southern region and 50.9% of the 937 lakes in the northern regions.

Their model predicts average increases in participation of 11.7% in the south and 1.6% in the north, whereas the older discrete choice model predicted changes of 0.25% and 0.07%. The Feather, Hellerstein and Tomasi model forecasted overall changes in consumer surplus of $7.68 in the north, and $54.38 in the south from an average initial consumer surplus of $465.20. The standard model predicted changes of $1.04 in the north and $6.62 in the south. The authors claim that their model is more reasonable given that the initial average expected trip cost was $72.84.

Peter Feather, Daniel Hellerstein, and Theodore Tomasi (1995) "A Discrete©Count Model of Recreational Demand" Journal of Environmental Economics and Management 29 pages 214©217 Ô

COMPARING MODEL MULTIPLIERS

Rickman and Schwer compare multipliers between two major economic impact models©©IMPLAN (1940 South Greeley Street, Suite 201,À3
À Stillwater, Minnesota 55082) and REMI (Regional Economic Models Inc., 306 Lincoln Avenue, Amherst, Massachusetts 01002). Both models have been used to analyze the economic impacts of various regional projects and environmental issues.

The multipliers were derived from data in Clark County, Nevada. Comparison is difficult due to problems in benchmarking or standardizing the models. This problem has been compounded by releases of new versions, and undocumented or poorly documented changes in vendor default values. After benchmarking the models Rickman and Schwer find evidence of stability. Multipliers produced by IMPLAN are generally higher. The cost of IMPLAN is much lower.

Selected employment multipliers are presented below for versions of the models which separate the changes in vendor default procedures:

 Employment


Industry                           Multipliers
                                REMI92A   IMPLAN85A
Amusements and recreation        1.62       1.86
Construction                     2.24       2.25
Eating and drinking              1.34       1.75
Hotel                            1.67       1.84
Medical                          2.04       1.85
Misc. Business services          1.31       1.78
Misc. Professional services      1.67       1.91
Other retail                     1.52       1.85
Real Estate                      2.35       2.04

Illustrative output multipliers also show the similarities and
differences between the models.


                      Output


Industry                           Multipliers                               
Amusements and recreation        1.88      1.85
Construction                     1.62      1.85
Eating and drinking              1.71      2.20
Hotel                            2.14      2.07
Misc. Business services          1.53      2.09
Misc. Professional services      2.62      2.05
Other retail                     1.83      2.20
Real Estate                      1.66      1.62

D S Rickman and R K Schwer "Multiplier Comparisons of the IMPLAN and REMI Models Across Versions: Illuminating Black Boxes" Environment and Planning A 1995 volume 27 pages 143©151

EFFORTS TO ROLL BACK ENVIRONMENTAL REGULATION FAILING

According to The New York Times leading business groups are now urging allies in Congress to scale back proposals in order to pass stalled legislation restricting Federal regulatory powers. Many measures intended to reduce environmental regulations were passed in the House but died in the Senate. Jerry Jasinowski, the president of the National Association of Manufacturers (NAM) was quoted as saying "we have certainly trimmed our sails" and his group was urging more modest changes that could garner bipartisan support. Minutes from a December 12th meeting of the American Petroleum Institute (API) noted that "Industry lost the battle and regulatory reform has become a political football. . . It may not be addressed again until 1997, if ever."

The Times reports that the adoption of the principals embodied in an executive order on regulatory practices that was issued in 1993 by President Clinton is gaining support. The order instructed agencies to balance costs and benefits when writing rules to carry out laws like the Clean Air and Clean Water Acts, but did not provide industry with any grounds for legalÀ3
Àchallenges. Fred Webber, the head of the Chemical Manufacturers Association was quoted as saying "that executive order was prettyÔ in a news conference held in early February.

Furthermore, exit polls showed that Republican efforts to undermine environmental laws played a critical role in Democrat Ron Wyden's upset victory for Bob Packwood's Senate seat in Oregon. Linda DiVall, a Republican polltaker, whose clients include Senator Phil Gramm and House Speaker Newt Gingrich, warned in early February that on environmental issues "our party is out of sync with mainstream American opinion" ©© including a "disturbingly" large number of Republicans. The Clinton campaign is gearing up to make the environment a major issue in the upcoming presidential campaign.

In addition, the entire New Jersey delegation©©Democrats and Republicans©©in the House called on the Republican leadership to restore full funding for the EPA's Superfund program. Thirty Republican moderates wrote to Speaker Gingrich in early February to complain that the party had "taken a beating this year over missteps in environmental policy" and urged him to set a new course. Gingrich reportedly agreed with the delegation.

A nationwide poll of 1,000 adults conducted by the Wirthlin Group last summer found that 72 percent of the respondents said the environment should be protected regardless of the cost.

John H. Cushman Jr. "New Jersey Lawmakers in Support of Superfund" New York Times January 18, 1996
Editorial "The Environmental Counterattack" New York Times February 5, 1996
John H. Cushman Jr. "Businesses Scaling Back Plans To Defang Federal Regulations" New York Times February 3, 1996 pages 1,12

PRESIDENT'S BIPARTISAN COUNCIL ON SUSTAINABLE DEVELOPMENT FOR MODERATION

Ô 1993 President Clinton appointed the Council on Sustainable Development, which was co©chaired by a vice president of Dow Chemical and the president of the World Resources Institute. The 23 member council included representatives from leading companies in the oil, paper and chemical industries (including the Georgia©Pacific Enron, Chevron and Dow Chemical Corporations, all of which have supported Republican proposals for regulatory relief), major environmental groups (including the Natural Resources Defense Council, the Sierra Club, and the Environmental Defense Fund), several cabinet level officers, leaders of labor unions, representatives of minority groups, and Vice President Al Gore. The Council was charged with meeting the call of the 1987 Brundtland Commission for "sustainable development"©©development that meets the needs of the present without imperiling the ability of future generations to meet their needs.

On February 11th the bipartisan Council concluded that the existing regulatory system can be improved, but it must not be weakened. The panel asked for a new regulatory framework, one which would give businesses more flexibility in preventing pollution©©but only if firms can perform better than is required under the current system of strict safeguards. The current system of standards, deadlines, permits and inspections should be modified, but retained as a safety net. The document supported financial incentives instead of dictates, and called for an emphasis on results. It noted that regulations which "specify performance standards based on strong protection of health and the environment©©but without mandating the means of compliance©©give companies and communities flexibility to find the most cost effective way to achieve environmental goals." But, the flexibility must be coupled with accountability and enforcement to insure that public health and the environment are safeguarded. The report called for giving agencies authority to move away from "one size fits all" regulations. The authors warned that needed pilot programs and demonstration projects could result in larger EPA budgets.

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ÀThe Presidential Panel also called for a comprehensive review of taxes and subsidies, with the aim of increasing taxes on pollution and consumption©©balanced by cuts in income taxes. It suggested long range steps to stabilize population, including more Federal money for family©planning and contraceptive research. The Council further advocated that the United States lead the world in combating global warming and similar threats, "even in the face of scientific uncertainty".

The panel spent three years touring the country and debating how to balance economic growth and environmental protection. The report is binding upon no one. The document avoided detailed prescriptions for new programs, but cited innovative projects currently getting results. It called for collaboration and consensus.

The document begins with 16 core beliefs about the need for environmental, economic and social progress and ways to achieveÔ The core beliefs include:
integrated approaches are needed to avoid the unintended consequences of more piecemeal policy making
economic, environmental and social goals are often complementary
regulation needs to become more performance based, and should be supplemented by greater levels of responsibility. the US needs a new more inclusive, collaborative and "place based" decision making process that reflects local as well as national interests. Cooperative efforts to improve communities through education, incentives, investments, and changes in development patterns are critical.

Michael A. Toman and Joel Darmstadter of Resources for the Future believe that the strengths of the report include recognition of interactions among environmental, social and economic goals; the emphasis upon performance based standards; the support for economic incentives to reduce the cost of environmental improvement and resource protection; the stress placed upon improved scientific knowledge and public understanding; the significance attached to investments in technical advances and human skills; and the consideration given to balancing local andÀ3
Ànational goals and enhancing cooperation.

Weaknesses of the document include its support for strengthening environmental standards, which may be more costly than the panel recognizes; insufficient attention devoted to the need for continued government support of basic science and R&D which help make new technologies available; and the emphasis upon voluntary measures based on shifts in social values, which are less likely to be effective. Toman and Darmstadter are also skeptical about the potential for achieving consensus across various jurisdictions.

The report concluded on an obvious note, stating that "pollution is waste, waste is inefficient, and inefficiency is expensive."

The President's Council on Sustainable Development Sustainable America: A New Consensus for Prosperity, Opportunity and a Healthy Environment for the Future (Washington: Government Printing Office, February, 1996 186 pages $15

Michael A. Toman and Joel Darmstadter Grading 'Sustainable America'" Resources, Resources For The Future, Spring, 1996 Issue 123 1616 P Street NW, Washington DC 20036©1400 Phone: (202) 328©5000, Fax: (202) 939©3460 E©Mail info@rff.org, http://www.rff.orgÔ

LEAD FOUND TO PROMOTE AGGRESSIVE AND DELINQUENT BEHAVIOR

A study of 800 boys attending public schools in Pittsburgh showed that those with relatively high levels of lead in their bones were more likely to engage in aggressive acts and delinquentÀ3
Àbehavior. Although none of the children were found to have lead poisoning, the researchers detected a direct relationship between the amount of lead in leg bones and reports by parents, teachers and the children of such behavior, even after other predictors of delinquency, such as socioeconomic status, maternal intelligence, number of children in the family, number of parents in the home, race, medical history, etc. are taken into account. Such acts in childhood have been shown to be strong predictors of behavior later in life.

Most previous studies have focused upon the consequences of lead with respect to intelligence scores and/or physical growth, and relied on levels of lead in blood rather than in bones to measure effects. The level of lead in bones may be a better indicator of long term exposure.

More than 50 years ago, Dr. Randy K. Buers, a child neurologist at Boston Children's Hospital linked acute lead poisoning in children to later violent behavior. Another study of 987 African American children from birth to the age of 22 found that having had lead poisoning was the strongest predictor of disciplinary problems in junior high school boys, and the third strongest predictor of both juvenile and adult offenses. See previous issues of EDV&CBN for other stories on lead, as well as the costs of crime.

Jane E. Brody "Aggressiveness and Delinquency In Boys Is Linked to Lead in Bones" New York Times February 7, 1996
Dr. Herbert L. Needleman, et. al. The Journal of the American Medical Association February 7, 1996Ô

SIGNIFICANCE OF BUDGETARY SUBSTITUTES IN CONTINGENT VALUATIONÀ3
ÀSURVEYS

Surveys which value environmental goods through the "Contingent Valuation Method" may produce unrealistically large benefits when individuals fail to think of the many environmental projects or policies they might be asked to support. A 1993 report by a National Oceanic and Atmospheric Administration panel stated
we emphasize the urgency of studying the sensitivity of willingness to pay responses to the number and extent of budgetary substitutes mentioned in survey instruments. In such research it would be helpful to study the sensitivity of stated intentions to buy ordinary market goods to reminders of alternative users of those resources.

Kahneman and Knetsch (1992) have argued that values for any one environmental good may be embedded in the value of a more inclusive good.

Helen Neil uses three contexts to test the above proposition. In one, subjects are asked their maximum willingness to pay for a good without discussions of possible budgetary substitutes. In another, subjects have eight public goods described to them and are asked to report their maximum willingness to pay for one of them. In a third context, subjects are asked to report their willingness to pay for all eight goods.

The eight goods are 1) preventing the extinction of the Colorado Squawfish, 2) increasing the flow of the River Grande River along stretches that pass through Albuquerque, 3) reducing mercury concentrations in New Mexico's lakes and streams to safe levels, 4) eliminating groundwater contamination in Albuquerque, 5) reducing the volume of wastes in Albuquerque's landfills, 6) eliminating the threat to health and safety from radon gas in Albuquerque's buildings by rerouting the transportation ofÔ chemicals around the city, and 8) reducing air pollution locally. Results using non©parametric Kolmogov©Smirnov tests suggest that reminding subjects of alternatives does not affect the distribution of specific goods, but values are affected when subjects simultaneously value alternatives.

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ÀThe results are presented below

Questionnaire                       Mean $    Median $

Single good                         $44.30    $10.00
Value single good with reminders    $26.00    $5.00
Value all 8 goods                   $14.60    $1.00

Helen R. Neil (1995) "The Context for Substitutes in CVM Studies: Some Empirical Observations" Journal of Environmental Economics and Management 29 pages 393©397
Daniel Kahneman and Jack Knetsch (1992) "Valuing public goods: The purchase of moral satisfaction" Journal of Environmental Economics and Management 22 pages 57©70
Daniel Kahneman and Jack Knetsch (1992) "Contingent Valuation and the value of public goods: Reply" Journal of Environmental Economics and Management 22 pages 90©94
National Oceanic and Atmospheric Administration (1993) "Natural resource damage assessments under the Oil Pollution Act of 1990" Federal Register 58 4601©4614

LAND WASTE REDUCTION SAVINGS

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À In just one year Target Stores, a national department store chain with more than 600 outlets, eliminated approximately 1.5 millionÔ of waste and saved an estimated $4.5 million in labor costs by initiating a packaging reduction program for soft goods such as clothing and shoes. When Target approached vendors about reducing unnecessary packaging, it learned that vendor packaging choices were based upon what these companies thought Target wanted. Target has established a goal of becoming trashless in softlines by 1996.

The team found that a great deal of labor was expended tearing apart packaging. For example, 20 sweaters were individually wrapped. But, they were quickly unwrapped for display purposes. Vendors saved an estimated $3 million.

"Target Waste Reduction Program Hits the Mark" Waste Wise Update, May 1995, U.S. Environmental Protection Agency (5306W) Washington, D.C. 20460 Administration EPA530©N©95©004 pages 4©5

McDonalds cut costs by approximately $5 million in 1994 through:
reducing the raised designs on napkins, which allowed 23 percent more napkins to fit into a shipping container, and eliminated 294,000 pounds of corrugated packing boxes as well as 150 truckloads
redesigning the company's shake and sundae shipment boxes, achieving a 4 percent reduction in corrugated packing
Decreasing the thickness of trash can liners, reducing plastic waste by 2.1 million pounds
Converting brown containers from paperboard cartons to paper bags, saving 2.9 million pounds of packaging
Redesigning french fry cartons to reduce the weight of paperboard packaging by 13%

"McDonalds Gives Paper Packaging a Break Today" Waste Wise Update, May 1995, U.S. Environmental Protection Agency (5306W) Washington, D.C. 20460 Administration EPA530©N©95©004 page 12

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ÀPerkin Elmer Corporation saved $95,000 and reused 62 tons of corrugated and foam packaging material by enabling customers to return packing materials to the company for reuse. Perkin Elmer offers free return shipping and donates $1 to environmental and wildlife organizations for each package received. The program has achieved a 28 percent return rate. The company spent $100,000 for return shipping and $15,000 for refurbishing some boxes. New packaging would have cost $210,000.

"Perkin©Elmer Packs Savings in Return Program" Waste Wise Update, September 1995, U.S. Environmental Protection Agency (5306W) Washington, D.C. 20460 Administration EPA530©N©95©006 page 4Ô

In 1994 BankAmerica conserved 750,000 pounds of paper and saved more than $1 million through three paper reduction initiatives. First, the Bank encouraged employees to make double side copies, to carefully format documents, and to pare down distribution lists. To calculate the difference in paper purchases between 1993 and 1994, Bank America examined its own warehouse distribution records for past paper requests from company departments. The company discovered that photocopy and computer paper supply requests declined by 13 percent and 18 percent, respectively, from 1993 to 1994©©a total reduction of 40,000 reams, 200,000 pounds, or 20 million sheets. Secondly, the bank discovered that by eliminating company procedure manuals in branch offices it conserved 25 million sheets of paper in one year. Instead of distributing paper copies, the company set up a centralized reference library and a telephone support center to provide information. Finally, the Bank began printed the account reconciliation section of customer checking account statements on two sides, cutting paper needs by 300,000 pounds.

"Waste Reduction Pays Dividends" Waste Wise Update, September 1995, U.S. Environmental Protection Agency (5306W) Washington, D.C. 20460 Administration EPA530©N©95©006 page 6

AT&T Paradyne created the Office Supply Depot©©a convenient place for employees to exchange and reuse office supplies. The company estimates savings of $28,000.

"AT&T Paradyne Turns Employee Ideas Into Actions" WasteWi$e Update January 1996, U.S. Environmental Protection Agency (5306W)À3
ÀWashington, D.C. 20460 Administration EPA530©N©96©001 page 5

Northern States Power Company of Minneapolis cut waste by 1,250 tons in 1994, or 35%, through training sessions, newsletters and posters, saving $783,000 through avoided costs and the sale of recyclables.

"Waste Reduction Data Motivate NSP Employees" WasteWi$e Update January 1996, U.S. Environmental Protection Agency (5306W) Washington, D.C. 20460 Administration EPA530©N©96©001 page 8

Toyota USA reportedly reduced its freight cost by more than $3 million annually through the replacement of single use shipping containers with reusables. In addition, containers designed for multiple haulings are more protective of their contents, easier to handle and more readily stored.

Ô Inc. "Delivering the Goods: Benefits of Reusable Shipping" 120 Wall Street, 16th Floor New York New York 10005 (212) 361©2400 Fax (212) 361©2412

CIGNA SPLIT MOVING AHEAD

On February 12th regulators in seven states (PA, CA, TX, IL, IN, OH, NJ, and CT) approved a proposal by the Cigna Corporation to split its domestic property and casualty business. Under the plan, one unit would keep the most profitable policies,À3
Àand the other would phase out coverage on policies with the largest claims arising from the presence of asbestos and contaminated soil. The business was divided to allow the more profitable units to gain higher ratings, which will improve their ability to sell insurance, as some customers only buy from highly rated insurers.

However, a group of insurers and other corporations, led by American International Group and including Dow Chemical and Textron, are fighting the proposal. On February 13th they lost an appeal to stay the reorganization. The critics contend that it could allow Cigna to avoid paying claims related to asbestos and environmental cleanups.

To win approval Cigna agreed to cover losses in excess of $800 million at the unit with the large claims, up from the previously announced figure of $500 million. In addition, Cigna said that by 2001 it would add $500 million in new capital and financial support to the unit holding its discontinued businesses. In the third quarter of 1995 the company added $1.2 billion before taxes to its reserves set aside for the payment of asbestos and pollution cleanup claims.

Later that same day (after the close of stock trading) Cigna announced that fourth quarter earnings rose 51 percent, exceeding analysts' expectations, due to profits from the property and casualty unit. The price of Cigna stock closed unchanged the day of the announcement regarding regulatory approval. The followingÔ shares of Cigna closed $3 higher at $121.625.

Bloomberg Business News February 13, 1996
Kenneth N. Gilpin "Cigna's Plan To Split Units Is Approved" New York Times February 13, 1996

DAMAGES FROM BROOKHAVEN NATIONAL LAB

Fifteen homeowners near Brookhaven National Laboratory in Long Island New York have filed a lawsuit seeking more than $1 billion in damages©© claiming that leaking chemicals from the lab contaminated their well water, soil and air, and caused severe health problems as well as plummeting property values. The suit claims the lab was negligent in its handling and disposal of trichloroethane, tritium and strontium©90, all known to potentially cause cancer and other health problems. The plaintiffs lawyers said they will prove that residents suffered from a high incidence of cancer and thyroid ailments as a result of contamination. The suit also seeks the establishment of a medical trust fund to monitor injuries and detect future medical problems suffered by anyone who lives or works within 10 miles of the lab.

Brookhaven Laboratory is situated in a deep water recharge area over Long Island's sole source aquifer. It routinely discharges very small amounts of radiation into the air and water. It consists of 350 buildings on 5,300 acres in Upton, Long Island. Founded in 1947, on the site of a former military base, it is a center for scientific research in physics, medicine, chemistry, biology, and environmental sciences. Two nuclear reactors are located on site. Some research is defense related and much involves radioactive substances.

Lab officials have acknowledged that, in the past, chemicals could have contaminated groundwater. In 1989 the lab was declared to be a superfund site with contamination that merited a federally funded cleanup, and federal officials have offeredÔ the opportunity to utilize the county's water system.

A lab spokeswoman said that Suffolk County had tested the water within the past three or four months at 315 homes in the area with private wells, and found levels of trichloroethane that exceeded the state standard of 5 parts per billion in five homes. But she said the contamination found in the homes was shallow, whereas pollution emanating from the lab was believed to be very deep. Suffolk water quality officials have linked the trichloroethane contamination to a town industrial site that hasÀ3
Àsince closed. Another chemical formerly used by Brookhaven, carbon tetrachloride, has been found in a different underground plume.

Lawyers for the plaintiffs said the class could include at least 30 to 50 residents and that ultimately thousands were affected.

Dr. Jay Gould, an epidemiologist, has said that laboratory emissions of radioactivity, including strontium 90, were the cause of breast©cancer rates within a 15©mile radius of the laboratory that were the highest in the county. The Suffolk County rate is among the highest in the state.

In November 1993 the lab announced a $27 million cleanup that included capping landfills and extensive water monitoring. The Energy Department has said that a cleanup at Brookhaven would cost $460 million and take until 2030. Removing radioactive and other contamination at all of its weapons plants and research labs may cost $230 billion and take 75 years.

Robin Topping "Neighbors Sue Brookhaven Lab for $1B" Newsday February 8, 1996
Neighbors Confront Brookhaven Lab Over Water Contamination" The New York Times January 28, 1996

MEXICO CITY AIR CRISIS

In mid©January officials in Mexico City declared a three©day air pollution emergency barring half the cars in the city from driving one weekend, and ordering industries to cut production 40 percent. The national Health Secretary, Ramon de la Fuente, reported that nearly 5 million people had suffered throat, lung or eye illnesses on the emergency's first day. In 1995, pollution levels exceeded Mexican standards of acceptability on 324 days. According to United States rules Mexico's levels should not be surpassed more than one day in three years.

A five year old program requires all cars to stay off the streets one day a week. A 1995 study, however, questioned the usefulness of the program, finding that it increased overall gas consumption by inspiring individuals to purchase a second vehicle. The city has also received $75 million from the World Bank for low pollution public buses, but past programs to modernize the bus fleet failed when local unions insisted on purchasing inefficient minibuses which increased exhaust fumes.

Julia Preston "The City That Can't Fix the Air" New York Times February 4, 1996

CLEAN AIR ACT SHIFTING COAL PRODUCTION

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ÀEven though coal production is headed for a record 1.05 billion tons in the United States, approximately 1,000 of 3,500 coal mines have closed since 1990 according to the National Coal Association.

Production east of the Mississippi will have fallen 14 percent from 1990 to a projected 542 million tons in 1996. The United Mine Workers of America says coal mine employment in Illinois,Indiana, Ohio, Pennsylvania, western Kentucky and northern West Virginia has fallen more than 30 percent in that time to 25,906 workers. Approximately half of the decline in employment is attributable to automation. However, in the west, output will have jumped 26 percent to 504 million tons. Employment in Colorado and Wyoming has risen 2 percent to 5,514.

The Clean Air Act of 1990 is largely responsible for the shifts. Under the Act, power plants are required to cut SO2 emissions by 1/2 as of January 1995, and further by 2000. Most of the coal mines shut and workers eliminated used the high sulfur variety east of the Mississippi. Utilities could install scrubbers to filter the pollutants, but the scrubbers cost $100 million or more. Few utilities chose to install scrubbers as it is cheaper to blend high and low sulfur coal. The economic effects arising from the loss of well paid mining jobs have multiplied, as many stores closed.

Peter T. Kilborn "East's Coal Towns Wither In the Name of Cleaner Air" The New York Times February 15, 1996 pages A1, A16

$10 DEVICE CAN SAVE $1 BILLION/YEAR

Dr. Ciro V. Sumaya, head of the Health Resources and Services Administration said the Lower Extremity Amputation Prevention Program, which encourages the use of "monofilaments", $10 devices, could eliminate 80% to 90% of the 54,000 foot amputations performed on diabetics each year. Because amputations cost up to $40,000 each, more than $1 billion may be saved every year, not to mention the pain and suffering of the amputees. The American Diabetes Association says that 16 million Americans have diabetes, but only 7 million have been diagnosed. Information is available at (703) 821©8955.

Warren E. Leary "A $10 Device Seen as Help To Diabetics: Tests Could Detect Limb Problems Early" The New York Times November 5, 1995 [HOME PAGE] [ TOP]

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EDITOR & PUBLISHER:       KEN ACKS

ASSOCIATE EDITOR:         CINDY GRANT

ASSIST. EDITOR:		  ANTHONY BENANTI

ASSIST. EDITOR:		  JEAN SANCHEZ