CLEANING UP SUPERFUND

Superfund, the federal program for cleaning up hazardous waste disposal sites, is a disaster. Since its passage in 1980, the program has blended inefficiency, waste and injustice into a toxic stew, and the situation is only getting worse. Reforming the program is a priority for Republicans in Congress, but there is no consensus on how to do it. Most proposals boil down to passing the buck from one group to another.

A basic flaw in Superfund is that decisions on which sites to clean up, and to what degree, are divorced from the underlying value of the property as real estate. This is because the program purportedly aims to protect public health. In fact, public health can be safeguarded if contamination is kept on site and human exposure prevented, ends that can usually be achieved with a fence, restrictions on future use and perhaps some ground water treatment. Anything further, any effort to remove the contaminants and restore the land to pristine condition, is an investment in real estate, not health. Yet that is what Superfund often requires.Given the expense of cleanup, the investment is often a poor one. Superfund mandates that billions of dollars be spent on ''remediation,'' without regard to whether sites will actually be used for any productive purpose. Sites must be cleaned far in excess of what is necessary for normal industrial or commercial use. The Environmental Protection Agency likes to assume that every Superfund site will some day be a housing development, and it wants children to be able to eat the dirt daily without the remotest chance of suffering any ill effect.

The potential liabilities attached to Superfund are so hideous that no sensible real estate developer wants to touch a site. As the chief executive of a cleanup firm told a Senate Committee: ''We work on many sites to clean them up only for abandonment.'' Such abandoned sites are known as ''brownfields,'' and they are part of Superfund's toxic legacy.

Many suggestions for reforms are circulating. One of the most important would make cleanup standards more responsive to future land use. If a site is to be used for industrial or commercial use, it would no longer be cleaned up to residential standards. This change, by itself, would save billions. It would represent important progress, but it would leave decision-making about remediation seriously flawed in two important ways.

First, the decision on the future use of a site would be made in a vacuum, without consideration of cleanup costs. A rational process would reverse this.

The second problem with this reform proposal is that it leaves decisions about individual sites up to the government, acting through command-and-control regulatory procedures. It makes more sense to rely on the market to determine which of the hundreds of thousands of potential Superfund sites should be cleaned up, and to what level.

Making these improvements should be straightforward. The government could establish general contamination limits for different potential uses of existing sites, such as waste dump, industrial, commercial, residential or park. However, the owner of a particular site would have no obligation to clean it up. He could choose instead to leave it idle. The landowner's only duty would be to contain the contamination and ensure that it does not threaten the health or property of those nearby. Whether cleanup took place would depend on whether it was a necessary part of containment, and on whether development of the land after cleanup could be a profitable investment.

The federal government could move toward such a market approach by privatizing the thousands of waste sites owned by the Departments of Energy and Defense. These sites could be auctioned off, subject only to obligations that contamination must be kept on site and that any future use must be preceded by appropriate remediation. The price at the auction could be either positive or negative - that is, a bidder might pay the government for the site, or it might accept the site only if the government paid it to undertake the containment obligation. Either would be a positive step.

Letting the marketplace handle Superfund would produce big benefits. It would establish sensible priorities among sites and eliminate the current system of worst-first, with its emphasis on the most intractable and least useful properties. This would encourage cleanups, and make usable again many sites that are now the real estate equivalent of a leper colony. It would improve containment by encouraging the development of specialists who make a buck by taking sites off the hands of both government and private owners. It would harness the energies of the private sector to develop more effective and efficient cleanup technologies. It would get the government out of the business of site management, a task it cannot perform well. Finally, a market system would assure that resources spent on cleanup actually add value to land. Currently, they are a wasteful boondoggle for well-connected contractors.

Perhaps most important, a market approach to Superfund would get rid of a program that is possibly the worst ever enacted by the U.S. Congress. Superfund is a failure. It is time to let the market clean it up.

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