In 1984, the Texas Legislature funded a four-university, interdisciplinary effort to identify feasible sites for location of a very high-energy physics lab in Texas and to evaluate the comparative advantages of one site versus another. Six feasible sites were identified and a comparative site analysis was made by applying Data Envelopment Analysis (DEA), incorporating project cost, user time delay, and environmental impact data. In addition, for the efficient sites, the price weights for user time delay and environmental impact, given normalization on project cost, were analyzed and arguments were developed to bracket these pairs of price weights into an “assurance region” for the preferred site(s). The South Dallas site was found to be preferred for a wide range of conditions, while the North Houston site was sensitive to the method of indexing the impact of the environment. The method appears to be applicable to a wide range of siting problems faced by not only government, but also industry.

An economic evaluation was made of the effects of increasingly restrictive waste water effluent standards and higher costs of water withdrawals on resource use, waste discharges, and costs of producing chlorine and caustic. Both mercury cell ahd diaphragm cell methods of production were studied for large modern plants at the design stage. Zero discharges of total solids in diaphragm cell plants increased production costs 5.6%; zero discharges of total solids in mercury cell plants increased production costs 12.1%. Zero-discharge restrictions of mercury may only be accomplished by use of diaphragm cells. Similar results were obtained for assumed Houston and Saginaw locations. A linear economic model of a representative chlor-alkali plant was developed to evaluate the economic effects of increasingly restrictive waste water effluent standards and higher costs of water withdrawals on production costs, effluent taxes, water use, and solid waste discharges in chlorine and caustic production. The model provides a basis for assisting industry, the Environmental Protection Agency, and state water quality agencies in establishing industrial effluent guidelines for the chlor-alkali industry. The representative plant model is an analytical description of a chlor-alkali plant at the design stage. Production processes, energy system processes, water use and waste water treatment processes, and disposal processes for solid wastes and brine are included in the model. The least-cost combination of processes is determined for each specification of waste water effluent standards and water withdrawal costs. Each combina-

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This study develops an economic model of a newly designed ethylene plant to evaluate the effects o! increasingly restrictive waste water treatment requirements on the costs of producing ethylene, feedstock choice, and the marginal costs of treating major pollutants. Zero discharge of pollutants to the water is attained in the model plant at a production cost increase of 6.9%. Secondary treatment of organic pollutants increases production costs 0.79% with once-through cooling and 5.15% with recycle cooling. The controlling organic pollutants at each treatment level are identified, and estimates are made of the potential savings in waste treatment from redesign of the production facilities to reduce the raw waste loads ot each pollutant.

With the methodology recommended by Baumol and Oates, comparable estimates of wastewater treatment costs and industry outlays are developed for effluent standard and effluent tax instruments for pollution abatement in five hypothetical organic petrochemicals (olefins) plants. The computational method uses a nonlinear simulation model for wastewater treatment to estimate the system state inputs for linear programming cost estimation, following a practice developed in a National Science Foundation (Research Applied to National Needs) study at the University of Houston and used to estimate Houston Ship Channel pollution abatement costs for the National Commission on Water Quality. Focusing on best practical and best available technology standards, with effluent taxes adjusted to give nearly equal pollution discharges, shows that average daily treatment costs (and the confidence intervals for treatment cost) would always be less for the effluent tax than for the effluent standard approach. However, industry's total outlay for these treatment costs, plus effluent taxes, would always be greater for the effluent tax approach than the total treatment costs would be for the effluent standard approach. Thus the practical necessity of showing smaller outlays as a prerequisite for a policy change toward efficiency dictates the need to link the economics at the microlevel with that at the macrolevel. Aggregation of the plants into a programming modeling basis for individual sectors and for the economy would provide a sound basis for effective policy reform, because the opportunity costs of the salient regulatory policies would be captured. Then, the government's policymakers would have the informational insights necessary to legislate more efficient environmental policies in light of the wealth distribution effects. The weak and all too slowly growing empirical foundation clearly cannot support the proliferating superstructure of pure, or should I say, speculative economic theory.--W. Leontief, Presidential Address, "Theoretical Assumptions and Nonobserved Facts," 85th Meeting of the American Economics Association, Detroit, Michigan, December 29, 1970. [1972], "The bulk of the economic literature, from Kneese onwards, advocates on efficiency grounds the principle that the polluter must pay." However, as Coddington [1972] pointed out, "The major deficiency of this theory is its failure to take account of the fact that the various instruments for achieving such internalization will themselves involve social costs of one kind or another." It is noted that Coddington is using social costs in the sense of distributional costs, not the usual economist's notion of efficiency costs. INTRODUCTION As stated by MuraroStarting with the Federal Water Pollution Control Act amendments (FWPCA) of 1972, the United States Congress legislated best practical technology (BPT) and best available technology (BAT) standards for industrial pollution abatement. As is well known, these standards do not minimize the total treatment costs of achieving a ...