Working Paper

A Public Choice Exploration of the Surface Mining Control and Reclamation Act

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  • American Institute for Economic Research
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Article
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Surface mining of coal and subsequent reclamation represent the dominant land use change in the central Appalachian Plateau (CAP) region of the United States. Hydrologic impacts of surface mining have been studied at the plot scale, but effects at broader scales have not been explored adequately. Broad-scale classification of reclaimed sites is difficult because standing vegetation makes them nearly indistinguishable from alternate land uses. We used a land cover data set that accurately maps surface mines for a 187-km² watershed within the CAP. These land cover data, as well as plot-level data from within the watershed, are used with HSPF (Hydrologic Simulation Program-Fortran) to estimate changes in flood response as a function of increased mining. Results show that the rate at which flood magnitude increases due to increased mining is linear, with greater rates observed for less frequent return intervals. These findings indicate that mine reclamation leaves the landscape in a condition more similar to urban areas rather than does simple deforestation, and call into question the effectiveness of reclamation in terms of returning mined areas to the hydrological state that existed before mining.
Article
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Two hundred years of coal mining in Ohio have degraded land and water resources, imposing social costs on its citizens. An interdisciplinary approach employing hydrology, geographic information systems, and a recreation visitation function model, is used to estimate the damages from upstream coal mining to lakes in Ohio. The estimated recreational damages to five of the coal-mining-impacted lakes, using dissolved sulfate as coal-mining-impact indicator, amount to $21 Million per year. Post-reclamation recreational benefits from reducing sulfate concentrations by 6.5% and 15% in the five impacted lakes were estimated to range from $1.89 to $4.92 Million per year, with a net present value ranging from $14.56 Million to $37.79 Million. A benefit costs analysis (BCA) of recreational benefits and coal mine reclamation costs provides some evidence for potential Pareto improvement by investing limited resources in reclamation projects.
Article
The Surface Mining Control and Reclamation Act (SMCRA) of 1977 created a framework for a national regulatory program to prevent significant environmental damage from surface coal mining. The significant regional variations in the impacts of surface mining made federal-state partnership necessary. The major political issue throughout these years has been the appropriate role of the federal and state governments in regulating surface coal mining. The conflicting interests and intense battles of the coal industry, states, environmentalists, and federal officials are discussed and presented. The paper argues that fundamental conflicts of interest, such as, in this case, the substantial adverse economic impact of the Act on the coal industry vs. the deeply held environmental ethics of environmentalists vs. the states' interest in autonomy, are not likely to be settled by a policy enactment. Conflicts in federal-state relations arise as the battle over more fundamental economic and ideological conflicts among surface mining interests is fought. -Author
Article
A basic moral hazard problem has potential to avoid socially beneficial development of natural resources. Various financial assurance mechanisms have evolved to satisfy regulatory requirements for credible environmental protection. But recent macroeconomic and financial market developments have increased the cost of financial assurance. In addition, traditional methods of financial assurance may be inappropriate for addressing long-term risks to water quality, an issue of growing concern. Revised collateral requirements along with explicit capital safety standards can reduce the cost of long-term financial assurance for environmental protection and reclamation by enabling resource developers to exploit the benefits of portfolio diversification. These policy proposals may be particularly beneficial in less-developed institutional regimes, where enforcement is less effective and costly regulation is more likely to result in unsanctioned exploitation.
Article
In his forward in Night Comes to the Cumberlands, former Secretary of the Interior Stewart Udall observed that Caudill`s constructive proposals for rehabilitation of the coal counties {open_quotes}will take deep concern by people in Washington and Frankfort to bring them to fruition.{close_quotes} Deep concern for the impacts that poorly regulated surface coal mining were having on the human and natural environment animated a decade-long struggle to establish national policy for surface coal mining. The result was the Surface Mining Control and Reclamation Act of 1977, P.L. 95-97 (SMCRA). Enacted to implement a national framework for regulating the environmental effects of surface coal mining, the law established a national program for controlling environmental impacts and ensuring the reclamation of lands affected by surface mining activity. From the perspective of nearly two decades, most observers would conclude that SMCRA is an example of successful policy implementation. Few national environmental laws have succeeded as well in terms of on-the-ground results: coal production has increased dramatically and industry has made significant gains in productivity while incorporating environmental and reclamation requirements in its daily operations, lowering the cost of reclamation and environmental protection. This article discusses and evaluates the SMCRA and its effect on surface coal mining. 2 tabs.
Article
The Surface Mining Control and Reclamation Act of 1977 focuses on ensuring reclamation of the land after mining by restoring land affected to a condition capable of supporting prior uses and sets up a program for reclaiming abandoned mined land to be financed by a tax on coal produced. This article discusses the landmark legal decisions which represent major efforts to limit the federal role in the Surface Mining Control and Reclamation Act of 1977 through the Commerce Clause, the Tenth Amendment, and statutory interpretation.
Article
Environmental problems that characterize surface mining techniques are surveyed. The Surface Mining Control and Reclamation Act of 1977 was designed to alleviate these problems while allowing a continually increasing reliance on coal instead of oil. The act strengthens the standards of most state surface mining programs, creates a program for reclaiming previously mined and inadequately reclaimed land, provides a mechanism for delineating unsuitable land areas for surface mining, and encourages mining and reclamation research. Sections of the act describing these and other goals are reviewed. Enforcement and implementation provisions of the act are modeled after other environmental legislation and may encounter many of the same problems other acts encountered, particularly since a complex system of joint federal-state responsibility is involved. The inspection system and the performance bond provision are enforcement mechanisms that will be vital to the Act's success. (numerous references)
Article
This article examines the bonding system designed by the Surface Mining Control and Reclamation Act of 1977 (SMCRA) and some alternatives developed by several states in their regulatory programs. As well, it evaluates the systems for their potential to provide economic incentives for coal operators to engage in environmentally sound mining techniques throughout the duration of the mining activities. The first section of this article briefly reviews the SMCRA. The second section outlines the specific reclamation bonding provisions of the act. The third section analyzes economic incentives and their application to coal mining, and the fourth section more particularly evaluates the reclamation bonding provisions of the act as market based incentives. Finally, the article assesses the design of reclamation bonds and suggests modifications intended to provide greater incentives for coal producers to protect the environment. 132 references.
Article
This study has attempted to assess the aggregate costs and benefits of Surface Mining Control and Reclamation ACt of 1977 (SMCRA). This has required a model of the US coal market, as well as disaggregated estimates of the costs of satisfying SMCRA's standards and the values of the environmental amenities yielded by coal-bearing land areas. Both the costs and benefits of strip mining regulation increase as policy moves from the West through the Midwest to Appalachia. SMCRA is least cost-effective in Appalachia, where stringent regulatory requirements produce a high level of environmental benefits at an even higher level of costs. SMCRA performs better relative to economic criteria of efficient resource use in the Midwest and West, although it apparently fails the overall national cost-benefit test and imposes aggregate dead-weight losses on the nation's economy in the range of $100 million per year. It does this while transferring significant amounts of income from coal consumers ($400 million per year) and surface coal producers ($980 million per year) to underground coal producers ($130 million per year) and the consumers of environmental amentities ($1.1 billion per year).
Article
The Surface Mining Control and Reclamation Act of 1977 establishes environmental performance standards for all coal mining operations and a permitting program to control environmental impacts. The authors review the legislative history behind the Act and discuss the major areas of legal debate over the bonding provisions which have left many unsettled issues. Among the issues are those of bond adequacy, scope, and duration of liability, which have resulted in an environment of business uncertainty. They blame the Reagan-Watt era for intensifying the uncertainty through policies of confrontational politics.
Article
This controversial book examines environmental regulation of coal mining in the United States over the 1979-1989 period. The Surface Mining Control and Reclamation Act of 1977 (SMCRA) established federal regulation of the environmental effects of coal mining. The permanent regulatory program implementing SMCRA was initiated in 1979. This book looks at the first ten years of SMCRA, seeking to draw lessons from experience that will improve regulation, so that the objectives of the law may be achieved in SMCRA`s second decade.
Article
The results of a hydrological analysis that was conducted as part of a larger, multifaceted, collaborative effort to quantify ecosystem functions in watersheds subjected to land-use and land-cover change are presented. The primary goal of the study was to determine whether a small watershed in the Appalachian region (USA) that was recently subjected to surface mining and reclamation practices produces stormflow responses to rain events that are different from those produced by a nearby reference watershed covered by young, second-growth forest. Water balances indicated that runoff yields did not vary significantly between the two watersheds on an annual basis. Statistically significant differences (p⩽0·05) in runoff responses were observed on an event basis, however, with the mined/reclaimed watershed producing, on average (a) higher storm runoff coefficients (2·5×), (b) greater total storm runoff (3×), and (c) higher peak hourly runoff rates (2×) when compared with the reference watershed. Results of a unit hydrograph analysis also showed, unexpectedly, that the modelled unit responses of the two watersheds to effective rainfall pulses were similar, despite the noted differences in land cover. Differences in stormflow responses were thus largely explained by dramatic reductions in cumulative rates of rainfall abstraction (measured using infiltrometers) attributable to soil compaction during land reclamation. Additional field hydrological measurements on other mined watersheds will be needed to generalize our results, as well as to understand and predict the cumulative hydrological impacts of widespread surface mining in larger watersheds and river basins. Copyright © 2006 John Wiley & Sons, Ltd.
Article
Regulation may inhibit or stimulate technological change. The relationship depends on the technology of regulation—the design and instrument choice of regulatory policy. This essay examines the history of economic and social regulations over the last three decades, the explanatory power of theories of regulatory politics, the choice of regulatory instruments, the assessment of regulatory impacts, and the influence of each of these on the innovation and diffusion of technology (and of regulation). It concludes with recommendations for the future of regulation and technology.
Article
Abandoned mine land (AML) is one of the legacies of historic mining activities, causing a wide range of environmental problems worldwide. A stream monitoring study was conducted for a period of 7 years to evaluate the water quality trend in a Mid-Appalachian watershed, which was heavily impacted by past coal mining and subsequently reclaimed by reforestation and revegetation. GIS tools and multivariate statistical analyses were applied to characterize land cover, to assess temporal trends of the stream conditions, and to examine the linkages between water quality and land cover. In the entire watershed, 15.8% of the land was designated as AML reclaimed by reforestation (4.9%) and revegetation (10.8%). Statistic analysis revealed sub-watersheds with similar land cover (i.e. percentage of reclaimed AML) had similar water quality and all tested water quality variables were significantly related to land cover. Based on the assessment of water quality, acid mine drainage was still the dominant factor leading to the overall poor water quality (low pH, high sulfate and metals) in the watershed after reclamation was completed more than 20 years ago. Nevertheless, statistically significant improvement trends were observed for the mine drainage-related water quality variables (except pH) in the reclaimed AML watershed. The lack of pH improvement in the watershed might be related to metal precipitation and poor buffering capacity of the impacted streams. Furthermore, water quality improvement was more evident in the sub-watersheds which were heavily impacted by past mining activities and reclaimed by reforestation, indicating good reclamation practice had positive impact on water quality over time.
Article
Harold Lasswell (1936) defined politics as the exploration of "who gets what, when, and how." As such, one of the central concerns of democratic governance is the role that affected interests play not only in politics, but in the implementation of adopted policies as well. In this dissertation, I use both comparative method case studies, as well as pooled-time series statistical techniques, to examine the effects of political, economic and market forces, and competition between the affected interests on implementation of the Surface Mining Control and Reclamation Act of 1977. The findings of this, as well as previous, research shows that state-level implementing agencies have some discretion in enforcement activities; however, closer examination shows that this discretion is rarely used. This lack of use of regulatory discretion by the state-level implementing agencies suggests that in most states, there is either sufficient competition between the affected interests to neutralize the excessive use of discretion in enforcement activity, or that there is insufficient pressure placed on the implementing agencies by the affected interests to warrant the use of discretion.
Article
This brief is divided into four parts. Part one provides a basic description of the agricultural production process as a dynamic flow, producing not only commodities but environmental goods and "bads"(damages). Part two discusses the research agendas that have influenced this production process, and the conflicts between traditional commodity oriented research and the newer environmental research agenda. Part three takes up the common ground uniting these two agendas: a concern for the uses of land and the effects of this use on both commodity and environmental flows. Part four offers some specific recommendations for reforms in land policy and targeting at the national level, the farm level, and the implications of these reforms for agricultural research systems.
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