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Deals in Smoke-Filled Rooms Could Help Clear the Region's Air

November 09, 1994|JAMES FLANIGAN

Editor's note: Starting today, James Flanigan's Wednesday columns will focus on business and economic trends and issues in Southern California.

Now that the election is mercifully over, we can turn to really urgent matters facing the Southern California economy. No, not immigration or nannies or campaign spending, but a regional clean air plan that must be augmented and approved by Gov. Pete Wilson and the California Air Resources Board and sent to Washington by Tuesday.

There the Sacramento plan must be accepted quickly by the federal government as meeting the requirements of the Clean Air Act. Deadlines are tight and the consequences for missing them potentially severe. They include a withering of the Port of Los Angeles-Long Beach, loss of tens of thousands of jobs and a decidedly gloomier future for the five-county economy of Southern California. And that's no overstatement.

But for the moment, disaster has been averted. The region is dodging a bullet thanks to unprecedented cooperation among politicians, air quality overseers and environmental and industry officials who came up with a compromise response to a court-ordered regimen that would have crippled commerce.

Indeed the cooperation is the most promising development to come out of a comedy of errors and omissions that began with a 1988 lawsuit by environmentalists challenging the region's compliance with anti-pollution laws. The lawsuit persisted, like a tale from Dickens, through one court after another and came back last February to bite Los Angeles, Orange, San Bernardino, Riverside and Ventura counties.

The U.S. Supreme Court ruled in effect that the federal Environmental Protection Agency must draw up a plan to clean Southern California's air because local government and industry had not done so or could not. The resulting federal implementation plan, or FIP, focused particularly on emissions from trucks, ships and planes, which operate in interstate and international commerce and had been beyond the authority of the local Air Quality Management District.

The proposed regulations were jolting. They imposed heavy taxes on emissions by shipping companies and airlines and required trucking companies to replace diesel engines. "If those rules were in effect right now, ships would have to steam 100 miles offshore and shippers would have to pay $300 million a year in extra fees," says Gordon Palmer, manager of planning for the Long Beach section of the Port. Freight would shift to the ports of San Francisco-Oakland or Seattle or Ensenada, Mexico.

Under the FIP, Los Angeles and its region would fade as a crossroads for trade with Asia and Latin America. The Alameda Corridor--the proposed rail and truck route through the city--would not be built "because the volume of freight would be inadequate to sustain it," Palmer says.

In trucking, smaller firms would go out of business and trucks coming from out of state would be restricted to a single stop in Southern California. Some airlines, notably TWA, would have to stop flying into Los Angeles because they couldn't afford new planes.

Sadly, the region's initial reaction to such baleful prospects was argument and name-calling. Business was "crying wolf"; environmentalists were "anti-jobs." But EPA saved the day by asking for specific analyses of the regulations' economic consequences, says Patricia O'Toole, an environmental partner in the Los Angeles law firm Lamb & O'Toole.

The Port, airport and local industries supplied analyses that sobered the discussion. The total tab would be $5.4 billion a year in new costs imposed on business in a regional economy struggling to emerge from recession.

"The FIP regulations would not have been the most cost-effective way to clean the air," says Jane Hall, an economist at California State University, Fullerton.

The threat was so stark that it softened resistance by environmentalists and regulators and allowed Mayor Richard Riordan's office to produce a compromise solution, one that essentially meets present federal requirements but allows a little more time to meet 1997 standards for soot-like particulate pollutants and for the nitrous oxides in ozone. The compromise allows more leeway for transporters to operate while anti-pollution technology is developing.

The politically correct stance for all parties was to work on the compromise and support the economy. "We are after a prosperous economy like everybody else," says Denny Zane, head of the Coalition for Clean Air, one of the organizations that brought the original 1988 lawsuit.

"We worked to save industry," says Norton Younglove, a Riverside County supervisor and governor of the South Coast AQMD.

Peace is wonderful, but are they compromising the public health? Southern California's air problem is extreme, with 27% more lung-scarring ozone than Houston and 51% more than New York City. Ventura County has lower ozone, but its air also is below the requirements of the Clean Air Act.

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