IPPSIPPS
                      THE INDUSTRIAL POLLUTION PROJECTION SYSTEM
                                          by
                                   Hemamala Hettige*
                                      Paul Martin
                                     Manjula Singh
                                     David Wheeler
                                    December, 1994
           *
           The authors are, respectively, Economist, Environment,
           Infrastructure and Agriculture Division (PRDEI), Policy Research
           Dept., World Bank; Consultant, Environment Unit, EA3, World Bank;
           Ph.D. Candidate, Boston University; and Principal Economist,
           PRDEI, World Bank  The research reported in this paper was
           undertaken in collaboration with the Center for Economic Studies,
           U.S. Bureau of the Census. Our thanks to the US Environmental
           Protection Agency for providing the industrial pollution data and
           to Angela Williams for invaluable assistance with preparation of
           final text and tables.
                  Table of Contents
                  EXECUTIVE SUMMARY                                                                                            1
                  1. INTRODUCTION                                                                                              6
                  2. BUILDING BLOCKS FOR PLANT LEVEL DATABASES                                                                 8
                  2.1     US EPA Emissions Databases                                                                           8
                    2.1.1       The Toxic Release Inventory (TRI)                                                              9
                    2.1.2       Aerometric Information Retrieval System (AIRS)                                                11
                    2.1.3       National Pollutant Discharge Elimination System (NPDES)                                       12
                  2.2     The Human Health and Ecotoxicity Database (HHED                                                     12
                  2.3     The Longitudinal Research Database (LRD)                                                            13
                  3. POLLUTION INTENSITY INDEX CONSTRUCTION                                                                  15
                  3.1.    The Conceptual Goal                                                                                 15
                  3.2.    Operational Complexities                                                                            16
                    3.2.1       Merger of the EPA and LRD files                                                               16
                    3.2.2       The Choice of a Numerator                                                                     16
                    3.2.3.      The Choice of a Denominator                                                                   18
                    3.2.4       Alternative Estimates of Sectoral Pollution Intensities                                       19
                    3.2.5.  Remapping US Facilities to 4-digit ISIC                                                           20
                  4. CONSTRUCTION OF A TOXIC POLLUTION RISK INTENSITY INDEX                                                  21
                  4.1.    Calculation of Risk-Weighted and Unweighted Releases and Transfers                                  21
                  4.2.    Scaling by Shipment Value to Give Pollution Intensity                                               23
                  4.3.  Results                                                                                               24
                                                                       ii
           5. ALTERNATIVE ESTIMATES, CHOICE OF DENOMINATORS,               35
           BOX 1: MAJOR AIR, WATER AND TOXIC POLLUTANTS                    36
           5.1  Alternative Estimates of Sectoral Pollution Intensities     38
           5.2  Different Measures of Activity                              39
           5.3  Medium-Specific Intensities                                 40
            5.3.1 Total Toxic Pollution Intensities by Medium               41
            5.3.2 Metals Intensities                                        50
            5.3.3  Air Pollution Indicators                                 54
            5.3.4  Water Pollution Indicators                               61
           6. CRITICAL ASSESSMENT AND PLANS FOR FURTHER WORK               66
           6.1. Sources of Bias                                             66
           6.2. International Applicability                                 67
           6.3. Plans for Further Work                                      68
                                          iii
       Executive Summary
       The World Bank's technical assistance work with new environmental
       protection institutions (EPI's) stresses cost-effective
       regulation, with implementation of market-based pollution control
       instruments wherever this is feasible.  At present, however, few
       EPI's can do the requisite benefit-cost analysis because they
       lack data on industrial emissions and abatement costs.  For the
       foreseeable future, appropriate estimation methods will therefore
       have to be employed as complements to direct measures of
       environmental parameters at the firm level.  We are developing
       the Industrial Pollution Projection System (IPPS) as a
       comprehensive response to this need.  Estimation of IPPS
       parameters is also giving us a much clearer and more detailed
       view of the sources of industrial pollution.  In this paper, we
       report on our findings to date.
       IPPS has been developed to exploit the fact that industrial
       pollution is heavily affected by the scale of industrial
       activity, its sectoral composition, and the process technologies
       which are employed in production.  Although most developing
       countries have little or no industrial pollution data, many of
       them have relatively detailed industry survey information on
       employment, value added or output.  IPPS is designed to convert
       this information to the best feasible profile of the associated
       pollutant output for countries, regions, urban areas, or proposed
       new projects.  It operates through sector estimates of pollution
       intensity, or pollution per unit of activity.
       We are developing IPPS in two phases.  We have estimated the
       first prototype from a massive U.S. data base, developed by PRDEI
       in collaboration with the Center for Economic Studies of the U.S.
       Census Bureau and the U.S. Environmental Protection Agency.  This
       data base was created by merging Manufacturing Census file data
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