Printer Friendly

Pollution abatement and control expenditures; revised estimates for 1972-83; estimates for 1984.

Pollution Abatement and Control Expenditures

REAL expenditures for pollution abatement and control (PAC) increased 7.6 percent in 1984, the largest real increase since 1975 (tables 1 and 2). Real expenditures had increased 3.3 percent in 1983, following declines from 1980 through 1982 and steady increases from 1972 through 1979. Pollution abatement (PA) expenditures, which account for most of PAC expenditures, increased 8.2 percent in 1984. Spending for regulation and monitoring declined 3.3 percent; spending for research and development declined 2.8 percent.

This article presents revised estimates of PAC expenditures for 1972-83 and extends the estimates 1 year (tables 9 and 10). Revisions in current-dollar estimates primarily stem from revisions in estimates for operation of motor vehicle emission abatement devices, operation of facilities for air and water PA, and new plant and equipment expenditures for PA. Revised constant-dollar estimates incorporate a shift in the base period from 1972 to 1982.

The revision in estimates for 1972-83 do not substantially alter the overall picture of PAC spending throughout the economy (chart 6).

* Revised current-dollar PAC spending increased at an average annual rate of 11.8 percent from 1972 to 1983, as in the previously published series.

* Revised constant-dollar PAC spending increased at an average annual rate of 3.0 percent from 1972 to 1983, compared with 2.9 percent in the previously published series.

* Revised prices for PAC goods and services, as measured by the fixed-weighted price index for PAC, increased at an average annual rate of 8.3 percent from 1972 to 1983, compared with 8.9 percent.

The first section of this article discusses estimates for 1984 and the limited data available for 1985. The second and third sections discuss the size and significance of the revisions and describe trends in revised estimates for PAC expenditures, respectively. The final section discusses sources used in preparing the estimates.

Estimates for recent years

Real PAC spending in 1984. --Total PAC spending increased $4.6 billion in 1984 to $64.1 billion. Spending in each of the three major categories--air PAC, water PAC, and solid waste collection and disposal--increased more in 1984 than in any year since 1978. Air PAC spending increased $2.1 billion to $29.8 billion. Water PAC spending increased $1.7 billion to $23.9 billion. Spending for solid waste collection and disposal increased $1.0 billion to $10.9 billion.

Of the $4.6 billion total increase in 1984, $2.9 billion was in business PA spending, $1.0 billion was in government PA spending, and $0.8 billion was in personal consumption PA spending.

Business PAC spending, excluding research and development, increased 7.9 percent in 1984 to $39.4 billion. A 33.8-percent increase in spending to purchase motor vehicle emission abatement devices on fleet cars and trucks accounted for about one-half of the increase in business PA spending. Most of the remainder of the increase was due to a 6.7-percent increase in spending to operate plant and equipment for PA. Spending for new plant and equipment for PA increased slightly, 3.6 percent.

Government PAC spending, excluding research and development as well as regulation and monitoring, increased 9.9 percent in 1984 to $11.2 billion. Most of the increase was due to a 14.4-percent increase in public sewer system construction, the largest single component of government PA spending.

Personal consumption spending for PA, all of which is for the purchase and operation of motor vehicle emission abatement devices, increased 7.8 percent in 1984 to $10.5 billion. The increase, all for the purchase of devices, was mainly due to continued strong sales of motor vehicles in 1984. Spending to operate emission abatement devices declined slightly.

Regulation and monitoring spending for PAC (exclusively by government, as defined for PAC) declined 3.3 percent to $1.3 billion. Spending at all levels of government--Federal, State, and local--declined.

Research and development spending for PAC declined 2.8 percent in 1984 to $1.8 billion. Government spending declined; private spending increased slightly.

Prices in 1984. --Prices of PAC goods and services, as measured by the fixed-weighted price index for PAC, increased 3.7 percent. For comparison, the increase was about one-half a percentage point less than the increase in the GNP fixed-weighted price index. Solid waste collection and disposal prices increased most, air PAC prices increased least, and water PAC prices increased at about the same rate as that for total PAC.

Real PAC spending in 1985. --An increase smaller than that in 1984 is indicated for 1985 by the data available as of mid-July. The increase is mainly for motor vehicle emission abatement and public sewer system construction. The increase in motor vehicle emission abatement spending is indicated by increased unit sales of motor vehicles in 1985, according to information from the Motor Vehicle Manufacturers Association. Governments increased their spending for construction of public sewer systems according to Bureau of the Census construction statistics for 1985. Industrial spending is estimated by BEA on a very preliminary basis to have increased slightly, mainly for solid waste collection and disposal.

Size and significance of revisions

Revisions in PAC spending are statistical in origin; definitions, concepts, and coverage were not revised. Revisions in current-dollar estimates were to improve estimating methods and to incorporate revised data from regularly used sources--data available less often than annually and data available annually, but with a substantial delay. Revisions in constant-dollar estimates were mainly due to the shift in the base period from 1972 to 1982. Other revisions in constant-dollar estimates were due to revised current-dollar estimates and minor simplification of methods used in their deflation.

Current-dollar revisions. --Because the selection of new source data and the development of improved estimating methods often go hand in hand, selections of new source data are, for the most part, described here as changes in methods. Data revisions are due to using revised data inputs in existing methods.

Revisions in current-dollar estimates were downward in all years, mainly reflecting improvements in methods (table 3). The largest revision, $1.8 billion, was in 1980. The smallest, $0.2 billion, was in 1973. Revisions in source data were downward except for 1973 and 1981-83.

Revisions due to improved methods were mainly for estimating spending to operate motor vehicle emission abatement devices and to operate air and water PA facilities owned by non-manufacturing establishments other than electric utilities. Revised estimates of spending to operate emission abatement devices incorporate recent research findings on motor vehicle miles-per-gallon and other operating characteristics. Previous estimates were based on less accurate estimation procedures or were taken from infrequently updated Environmental Protection Agency reports. The findings led to improved selections of input data and improved consistency of assumptions. Detailed estimates for motor vehicle emission abatement spending--devices as well as their operation--have been published separately along with a discussion of methods.

Revisions in methods used to estimate spending to operate air and water PA facilities by nonmanufacturing establishments other than electric utilities were due to an improved procedure for converting company-based stock data to an establishment basis. The improvement resulted in new ratios of operating spending to stocks of facilities operated.

Data revisions had less of an effect on the size of the total revision in PAC spending but, unlike method revisions, affected most component estimates. Data revisions for spending to operate motor vehicle emission abatement devices were mainly due to revised factors from the national income and product accounts for allocating spending between consumers and business. Data revisions in spending to operate facilities by non-manufacturing establishments other than electric utilities were due to revised stock data. Data revisions for new plant and equipment spending for air and water PA were due to incorporation of updated sample information and revised total plant and equipment spending, used to derive revised PA estimates.

Other data revisions were for business solid waste collection and disposal, private research and development, government PAC (all components for recent years), purchase of motor vehicle emission abatement devices, and septic system cleaning. Data revisions for solid waste incorporated data from the 1980 demographic and 1982 economic censuses and revised new plant and equipment spending.

Constant-dollar revisions. --Revisions in constant-dollar estimates were upward in all years. The shift in the base period changes the units in which constant-dollar estimates are measured, and the difference in level between the previously published and revised series primarily reflects the difference in the unit of measurement. The difference in level also reflects revised current-dollar estimates and deflation methods.

On the whole, the revised constant-dollar estimates do not appear to have substantially altered the view of PAC spending throughout the economy (table 4). Revised PAC spending grew steadily through 1979, declined from 1979 through 1982, and increased in 1983, the same pattern as in the previously published estimates. During 1972-83, PAC spending increased at an average annual rate of 3.0 percent, compared with 2.9 percent previously published. For component PAC spending, revised average annual rates of change are similar to those for previously published estimates, except for consumer nondurables where method revisions in spending to operate motor vehicle emission abatement devices had a substantial effect.

Annual changes in total PAC spending mainly reflect the pattern of annual changes by business, which account for 63.3 percent of PAC spending in 1983, compared with 60.8 percent previously published (table 5). Revised and previously published business PAC spending generally increased through 1979 and declined thereafter. Government PAC spending accounted for 20.4 percent of PAC spending in 1983, compared with 21.8 percent previously published. Revised and previously published government spending increased each year through 1978 (except 1977) and declined from 1978 through 1983. Personal consumption spending accounted for 16.3 percent of total PAC spending in 1983, compared with 17.4 percent previously published. Revised personal consumption spending increased in each year except 1979; previously published estimates increased every year.

Trends in real PAC spending, 1972-84

Total PAC spending increased at an average annual rate of 3.4 percent during 1972-84. Spending varied from 1.6 percent of real GNP in 1972 to 2.0 percent for 1975-79 and 1.8 percent in 1984.

Real spending by sector. --During 1972-84, real PAC spending increased $21.1 billion (table 6). PAC spending increased $20.3 billion through 1979, declined $5.6 billion from 1979 through 1982, then increased $6.4 billion from 1982 through 1984. Business spending accounted for $12.5 billion of the increase from 1972 through 1984. Government spending accounted for $1.4 billion, and personal consumption spending accounted for $7.2 billion.

Business spending for PAC increased $11.9 billion through 1979, declined $3.1 billion from 1979 through 1982, and increased $3.8 billion from 1982 through 1984. Most of the increase from 1972 through 1984 was in current-account spending, the largest portion of business spending. Overall increases through 1979 in spending to operate industrial facilities and, secondarily, to operate public sewer systems moderated the effect of declines in spending for new plant and equipment from 1975 through 1978. Large declines in 1980 and 1981 in spending for new plant and equipment, combined with declines in investment in septic systems and connectors to public sewers, overshadowed smaller increases in spending on current account and to purchase motor vehicle emission abatement devices. Continued declines in 1982 in capital spending, coupled with large declines in current-account spending, resulted in the largest decline in total PAC spending since the series began. The upturn in business spending in 1983 was due to increases in spending in all components except for new plant and equipment.

Government spending for PAC increased $4.9 billion through 1978 (with a moderate decline in 1977), declined $4.4 billion from 1978 through 1983, then increased $0.9 billion in 1984. This pattern mainly reflects changes in spending for sewer system construction, the largest single component of government PAC spending. Large declines in 1980 and 1981 contributed to the large declines in total PAC spending in those years. Spending for sewer system construction, heavily influenced by the Federal program of grants-in-aid, declined to a 1984 level that was lower than that in 1972.

Personal consumption spending for PA increased $7.2 billion through 1984, with a moderate decline in 1979. Spending to purchase motor vehicle emission control devices, less than one-half of spending to operate these devices in 1972, increased to almost double operating spending in 1984. Operating spending increased overall, but less than purchases.

Real spending by type. --Table 7 organizes estimates of PAC spending according to subjects emphasized by PAC legislation. For air PA, the Clean Air Act classifies sources of pollutants as mobile (e.g., cars) or stationary (e.g., factories). For water PA, the Federal Water Pollution Control Act classifies sources as point (e.g., factories) or nonpoint (e.g., highway construction projects).

Air PA spending increased $13.8 billion through 1984, with a small decline in 1982. Almost all of the increase was in spending to abate pollutant emissions from mobile sources. Mobile source spending, one-third of total air PA spending in 1972, increased to two-thirds by 1984. The increase was mainly due to steady increases in purchases for motor vehicle emission abatement devices. Spending to operate these devices generally increased through 1984, but less than purchases.

Stationary source spending, the other component of air PA spending, generally increased through 1980, declined from 1980 through 1983, then increased slightly in 1984. This pattern mainly reflects spending for the operation of industrial facilities. Large declines in capital spending for industrial facilities after 1975, resulting in 1984 spending for facilities that was lower than 1972 spending, dampened the overall increase in air PA spending.

Water PA spending, almost all to abate pollutant emissions from point sources, increased $7.0 billion through 1978, declined $5.4 billion from 1978 through 1982, then increased $2.0 billion from 1982 through 1984. This pattern reflects the general pattern of capital spending for facilities. Reduced spending for industrial facilities after 1976, combined with reduced spending for construction of public sewer systems after 1978, left 1984 capital spending for point-source facilities less than 1972 spending. Over the period, increases in spending to operate facilities moderated declines in capital spending for facilities. Spending estimates for nonpoint sources are of limited coverage but indicate that spending generally declined during 1972-84.

Solid waste collection and disposal spending increased $3.6 billion through 1981, declined $1.1 billion from 1981 through 1982, then increased $1.1 billion from 1982 through 1984. This pattern mainly reflects changes in industrial spending, which account for about one-half of total solid waste spending. Other spending by State and local governments generally increased during 1972-84.

Regulation and monitoring spending and research and development spending are noteworthy for their relatively small size throughout the period. Regulation and monitoring increased through 1980 and declined thereafter. Research and development spending generally increased through 1978, then generally declined through 1984. Over the whole period, regulation and monitoring increased while research and development declined slightly.

Sources of estimates

Estimates of PAC expenditures are based directly or indirectly on surveys. Approximately three-fifths of the 1984 estimate of PAC is based directly on surveys of PAC spending. The remainder is based on more general survey information and assumptions necessary to utilize this information. BEA collects data on capital spending for pollution abatement by companies and on Federal agency funding for PAC. Other surveys are by other government agencies--including the Bureau of the Census and the Department of Energy--and private organizations. Table 8 shows the percentage of PAC spending by type of estimate.
COPYRIGHT 1986 U.S. Government Printing Office
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1986 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Author:Farber, Kit D.; Rutledge, Gary L.
Publication:Survey of Current Business
Date:Jul 1, 1986
Words:2595
Previous Article:The U.S. National Income and Products Accounts: revised estimates 1983-1985 first quarter 1986.
Next Article:The business situation.
Topics:


Related Articles
The business situation.
State and local government fiscal position in 1984.
The cyclically adjusted federal budget and federal debt: revised and updated estimates.
National income and products accounts tables.
The U.S. National Income and Products Accounts: revised estimates 1983-1985 first quarter 1986.
Receipts and expenditures of state governments and of local governments: revised and updated estimates, 1983-86.
The business situation.
Pollution abatement and control expenditures, 1983-86.
Receipts and expenditures of state governments and of local governments: revised and updated estimates, 1984-87.
Pollution abatement and control expenditures, 1972-94.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters