Developing a Framework for Effective Air Quality Management

3.7 Implementation of Air Quality Plans

3.7.6 Funding Air Quality Management Programs
Funding to support compliance programs can often be inadequate causing even the best designed program to fail. There are a number of options used worldwide to provide needed funds.

The primary approach to support compliance programs has been to charge fees to the companies that are regulated. These fees can take several forms. Table 3.7.6-1 lays out the various fees that air quality management programs charge.
3.7.6-1 Types of Fees Collected in Various Air Quality Management Programs

A permit system can provide an effective mechanism for handling fees related to stationary sources. In the case of a permit that must be reviewed annually, then a fee is attached to the issuance of this annual permit. The fee is calculated based on the information provided with the permit application.

In many developing countries, fees end up being charged to polluting industries but these fees become taxes rather than fees. For the purpose of this report, a fee is defined as a charge designed to cover the cost of providing some level of government oversight. A tax, on the other hand, is a charge that is disconnected from the service being performed by an agency but goes into the governments general revenues to be allocated as the government sees fit. A tax rarely helps a compliance agency to meet its responsibilities since the tax often gets directed elsewhere. An important consideration in developing countries should be to consider requiring regulations of a similar intensity across the country to preclude economically disadvantaging a particular area due to more stringent regulation. Failure to do this can result in significant increases in pollution in areas with less effective regulations.

The U.S. Clean Air Act requires state and local agencies to charge an annual permit fee and requires that those funds be directed to the air quality management agency that is ensuring compliance with air quality regulations.