AEM 2500 2010 Lec 26 Tradable Pollution Permits in Practice SO2 sv

AEM 2500 2010 Lec 26 Tradable Pollution Permits in Practice SO2 sv

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Emissions Credits Trading: Clean Air Act (CAA) eneral motivation: O2 designated as a criteria (or common) pollutant General motivation: SO2 designated as a criteria (or common) pollutant. Existing sources to meet EPA effluent standards or technology standards set through the State Implementation Plan (SIP). New sources have to meet more stringent New Source Performance Standards (e.g., install SO2 scrubbers that require 90% reduction of uncontrolled emissions). Also, laws for non- attainment areas did not allow new sources — no new pollution (or production) allowed. Concern about stifling economic growth. All emissions trades under this program run off concept of Emission Pollution Credits . (different from allowances) Netting (1974): allows a firm to create a new source of emissions in a plant to reduce an equal amount of emissions from another source in the plant. Internal trading. •O f f s e t s (1979): in “non attainment areas” a new source could enter as long as it ffset their new emissions by reducing emission from other sources by greater offset their new emissions by reducing emission from other sources by greater amounts. External. Bubble (1979): an existing plant can consider all of its individual sources in aggregate and to adjust levels of control to different sources as long as aggregate limit is not exceeded. Internal and external. Banking (1979): save emission reduction above and beyond permit requirements for future use in emissions trading. Internal.
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Lead Pollution Credit Trading: CAA Phase Down In 1970 average gasoline contained level of 2.4 gms./gal. – Unleaded fuel required for all vehicles by EPA in 1975. Catalytic converters required on all new cars. In 1982, EPA reacted to growing evidence of severity of health effects attributable to lead. Instituted lead phase down and emissions program to substantially curtail remaining use of leaded gasoline: Nov. 1, 1982 1.1 gms./gal. Jul. 1, 1985 0.5 gms./gal. Jan. 1, 1986 0.1 gms./gal Phase out completely by 1996. uantity allocated to firms based on higher amount of leaded gas produced Quantity allocated to firms based on higher amount of leaded gas produced by firm and current standard. – If a refinery added less than an average that was allowed, then earned lead rights equal to difference (i.e., credits).
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AEM 2500 2010 Lec 26 Tradable Pollution Permits in Practice SO2 sv

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