Environmental Costs Paid by the Polluter or the Beneficiary? The Case of CERCLA and Superfund

Don Fullerton () and Seng-Su Tsang

No 4418, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980 follows the "polluter pays" principle by placing retroactive liability on responsible firms. Yet this cost is borne by current shareholders who did not benefit from past low-cost waste management. This paper introduces a "beneficiary pays" principle that burdens consumers who benefited from lower prices. An input-output model is developed to calculate the effects of alternative tax rules on output prices. We find: (1) that the increase in commodity prices contributed by current Superfund taxes is only a small fraction of the price increase that would have fully covered the cost of controlling hazardous waste; and (2) current Superfund taxes do not raise the prices of goods associated with the most pollution.

JEL-codes: H23 Q2 (search for similar items in EconPapers)
Date: 1993-08
Note: PE
References: View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published as "Should Enviormental Costs Be Paid by the Polluter or the Benefeciary? Theof CERCLA and Superfund," Public Economics Review, vol.1, no.1,(June1996),pp.85-127.

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