What the Pollution Fight Will Cost Business

The first round in the fight for a clean environment has been largely won in the U.S., with practically all sides--business, government and consumers--committed to taking some kind of action to control pollution. The second round promises to be longer and far more tedious. It is a vast numbers game involving specific standards of cleanliness, the time limits before they become effective and, most important, the cost of attaining them. Last week, at a hearing held by Senator Edmund Muskie's air-and-water pollution subcommittee, a few answers began to emerge to the question of "Who will pay?"

Union Holdouts. One group that will be forced to pay consists of workers at plants forced out of business by antipollution standards that the owners cannot meet economically. The first major corporation to raise that specter was Union Carbide, which threatened last fall to lay off 625 employees at its plant in Marietta, Ohio, in order to meet air-emission standards. The company has since reversed its decision, but several other marginal plants, including three West Coast sulfite pulp mills owned by Crown-Zellerbach, have been closed down. A group of District 50 Allied and Technical Union members sent Muskie a list of 50 companies whose employment is expected to be cut because of pollution controls. Ralph Nader, who testified at the hearing, introduced an ominous new term: the "environmentally unemployed."

Some union leaders have reacted to the prospect of environmental layoffs by becoming at least as anti control as the staunchest holdouts among businessmen. The paperworkers union submitted a statement declaring that "the lives and well-being of our fellow citizens do not depend upon an immediate program of radical steps to eliminate all nonhazardous paper-industry pollutants." Others, like the United Steelworkers union, have hired specialists to study the issue of job displacements. Nader proposed that Congress force companies that lay off workers because of environmental pressures to continue paying their wages for six months.

Surprisingly Close. Whether or not it must bear that expense, U.S. industry will certainly pick up a major share of the antipollution bill. Increasingly, factories are being equipped with antipollution gear, ranging from costly precipitators and scrubbers to simple fish tanks, whose occupants serve as living testers of contaminants. Though corporations are often criticized for not doing enough, one recent estimate shows their outlay surprisingly high. McGraw-Hill economists calculate that U.S. industry's investment in antipollution work will be $3.64 billion this year, or just short of what it must spend annually for the next five years to meet current standards. By their reckoning the cost of doing that will come to $18.2 billion between now and 1976.

They warn, however, that if these requirements become more stringent in the years just ahead, the costs could rise much higher. Indeed, the Federal Government's latest estimates show that the private sector should budget at least $23.6 billion for the next five years. Even if the lower figure is correct, U.S. industry must sink amounts equal to about 5% of its pre-tax profits over the next half-decade into antipollution research and equipment.

For individual firms, the costs can be substantially greater. To meet new antipollution standards, some oil companies estimate that they must invest amounts equal to 10% of their pre-tax profits. Last week at General Motors' annual meeting, Chairman James Roche announced that the corporation will spend $214 million to combat pollution in 1971. Despite these outlays, environmentalists charge that major polluters often stall for time during lengthy negotiation periods provided for in many state and local laws, then begin work in earnest only when court action is threatened. In replying to this criticism, industry executives note that there are still no nationwide standards for many kinds of pollution control. If federal laws become tougher than local ones, they note, much of their early investment could be wasted. Says Crown-Zellerbach President C.R. Dahl: "Standards have a way of changing on us, so we never really know where we will be tomorrow."

Environmental Recession. Round 3 in the fight could well make ecology an issue in international trade. The U.S. obviously has an interest in a clean environment in other countries simply because air and water pollution do not recognize international boundaries, and thus threaten progress made at home. Beyond that, businessmen legitimately complain that their products, already at a disadvantage on the international market because of high domestic costs, will become even more expensive as a result of the new pollution controls. The U.S. could start to exert pressure on other industrial nations to set stricter standards for their own automakers and steel producers, for example, just as it currently requires imported cars to carry safety equipment that is mandatory for Detroit's models. Otherwise, Nader may be able to use another new term--environmental recession.

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