How Not To Reduce Diesel Emissions:
L.A. ports use environmental protection to reduce competition
16 Apr 2007 in Regulatory Economics, Regulatory Policy
The Los Angeles Times reported on April 14 that the ports of Los Angeles and Long Beach "are proposing an 'unprecedented' overhaul of dockside trucking that officials say would slash diesel pollution from trucks by 80% in five years while improving domestic security and working conditions for drivers." Based on the Times report, the plan is light on environmental protection and rich with measures that protect large companies and unionized labor from competition.
From the report by Times staff writers Janet Wilson and Ronald D. White:
[A]ll 16,000 short-haul trucks that move goods from the wharves to nearby rail yards or warehouses would be scrapped or retrofitted, starting next year, at a cost of $1.8 billion. Their drivers — mostly low-paid independent contractors — would be employed by companies that would bid on port concession contracts containing stiff environmental, equipment maintenance and workplace requirements.
The justification for this plan is the need to control excess diesel emissions:
Numerous studies have shown elevated levels of diesel particulates and other harmful air pollutants on docks and in neighborhoods near truck-laden highways and freight rail yards. An efficient air pollution control policy compels those who emit air pollution to bear the full social costs of their actions.
The plan proposed by the ports would not do this. Instead, it would tax each truck trip irrespective of a truck's diesel emissions and tax cargo that doesn't have any emissions at all: The cost of replacing the current, aging trucks would be funded largely by per-trip fees of $34 to $54 assessed on the licensed firms, with some matching state bonds and taxpayer money. A second portion of the plan would impose a $26 fee on every container of goods moved through the ports to help fund rail and highway improvements.
Despite its inefficiency as an environmental protection scheme, there is support for the plan:
Environmental, labor and community groups that fought more than a year for the plan praised it.
"It's a huge, huge step forward in our quest for clean air," said Melissa Lin Perella of the Natural Resources Defense Council.
The effect of the plan on air quality is unclear because its targets are only proxies for air quality. A predictable effect of the plan is to restrict competition and increase profits for the firms that remain. Small, non-unionized trucking firms and independent truckers would be driven out of the market. This is self-evident from the support the plan has received from organized labor on grounds entirely unrelated to environmental protection:"It's a huge, huge step forward in our quest for clean air," said Melissa Lin Perella of the Natural Resources Defense Council.
"Usually governments just nibble around the edges of a major social problem," said Barry Broad, a state director for the Teamsters union. "This is an example of not one but two governments coming together … to solve a problem in a truly comprehensive way."
The Teamsters desire to remove non-union firms and truckers from the market:
Broad of the Teamsters ... [said] the current shipping companies were "bottom of the swamp" operations that moved in 25 years ago after port trucking was deregulated, firing drivers overnight to avoid paying decent wages or insurance and relying on poorly paid immigrant labor using decades-old, dangerous trucks.
Independent truckers, regardless of their contribution to diesel emissions, can keep their jobs only by becoming employees of the large, unionized companies that remain. But because they own their rigs, they would have three options:
- Abandon their capital investments, accepting a significant uncompensated financial loss
- Sell their trucks to the companies that would become their new employers
- Leave the ports and seek business elsewhere
A plan to efficiently reduce diesel emissions at the port is easy to devise. Truck emissions can be measured at the tailpipe and extrapolated based on odometer readings. These data can be used to calculate an emissions tax. Payment of the tax can be made a condition for doing business at the port. Trucks that have high emissions would be penalized, and owners would choose to pay the tax, retire the trucks from port service, or retrofit them to reduce emissions and thereby pay lower taxes.
If the true goal is to reduce diesel emissions, this approach has significant advantages. It deals directly with the environmental problem. It is not diluted by unrelated issues such as the contest between union and nonunion trucking. It preserves competition among trucking companies in the ports. And it clearly avoids any hint of trespassing on the interstate commerce clause of the Constitution.
To the extent that the ports have proposed a plan that lacks these advantages, it's reasonable to infer that they have other objectives besides environmental protection.
