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A legislative proposal giving both charge-setting authority and a significant por- 

 tion of the revenue generated to EPA may be criticized for what some commenta- 

 tors have called a danger of "revenue addiction". This concern is based on the belief 

 that the charge system will be perverted if the institution that sets the fee also re- 

 ceives a percentage of the revenue it generates. This may not be a significant prob- 

 lem, however, in the context of ocean dumping. If in trying to maximize its income 

 EPA made the cost of ocean dumping more expensive than alternative disposal 

 methods, dumpers would stop clean dumping and EPA's income would decline. 



Second, who should be charged? Laist year there was a ocean dumping fee propos- 

 al before this subcommittee, for instance, which proposed to levy a fee against in- 

 dustrial and municipal waste dumpers but not against federal agencies. This bill 

 therefore excluded the largest volume of ocean dumping — dredge spoils. The current 

 Corps of Engineers policy requires local sponsors of dredging projects to provide the 

 property and easements for land disposal of dredge material or pay the cost for 

 these facilities. In other words, the costs of land based disposal of dredge material 

 are borne by the local sponsors of navigation projects. It seems entirely reasonable, 

 therefore, to pass the costs Eissociated with ocean disposal to these local sponsors. 

 This would create a parallel responsibility and minimize the Corp's bias toward 

 ocean dumping. 



Third, how should the charge be structured? This question involves determina- 

 tions such as whether the charge is fixed, in other words uniform, or variable, and 

 how often the charge should be adjusted. Uniform charges, such as a dollar per 

 pound fee, are attractive because they are easy to establish and administer. A vari- 

 able fee, however, could be designed to accomplish a number of significant objectives 

 not attainable with a fixed charge. The benefits of a variable charge should be 

 weighed against the increased administrative cost of such a system compared to a 

 uniform fee structure. 



A dumping charge could vary according to a variety of different factors such as 

 contaminant concentrations in the waste and the assimilative capacity of the dump- 

 site. A dumping charge scaled to the presence of difference types of contaminants in 

 the waste as well as to the concentrations of these contaminants acknowledges that 

 different substances affect the environment in different ways. Ocean dumping a 

 pound of mercury, for instance, could cause significant acute and chronic effects 

 whereas a pound of acidic waste would likely cause no detectable effects. Basing the 

 charge on the presence and concentration of contaminants in the waste would en- 

 courage dumpers to reduce contaminant levels. This would, for instance, create an 

 incentive for municipalities to establish industrial pretreatment requirements. 

 Higher dumping charges for substances which pose more serious threats to the 

 marine environment also reflects the higher administrative costs for dumping these 

 substances because of the need for more extensive environmental monitoring. The 

 charge could also be varied according to the assimilative capacity of the dumpsite as 

 a means of minimizing the environmental damage caused by dumping without re- 

 ducing the amount of waste dumped. France, for instance, has a pollution charge 

 system which varies according to the geographical location of the discharge. 



While a dumping charge which varies according to the chemical constituents in 

 the waste and the characteristics of the receiving waters can be a sensitive regula- 

 tory tool, the basis for variable charges must not be too complex. The Organization 

 for Economic Cooperation and Development, an organization which has closely 

 watched the use of pollution charges in Europe, has suggested that one of the essen- 

 tial elements of any charge system is simplicity. The dumpers must be able to un- 

 derstand why the particular parameters have been selected to determine the charge. 

 This simplicity not only facilitates administration of the charge but will also mini- 

 mize lengthy legal disputes over the charge. 



The argument that a detailed system of charges would require major administra- 

 tive expenditures is not supported by the experiences with similar systems. Excise 

 taxes, for instance, are often based on a complex set of parameters. An EPA study 

 which looked at costs of administering several complex federal excise tax programs 

 concluded that the administrative costs were, on the average, less than one percent 

 of the revenue collected. The administrative costs of managing the pollution charge 

 system in France, a relatively complex system based on a number of parameters, 

 has been estimated to be less than five percent of the revenue generated. 



An ocean dumping charge would be easier to administer than an effluent charge 

 since dumping is a discrete event while effluents are usually discharged continuous- 

 ly. Moreover, because the chemical constituency of wastes to be ocean dumped is 

 already assessed under the existing permitting procedure, calculating a dumping 

 charge based on chemical parameters will not require extensive additional adminis- 

 trative expenditures. 



