Control emission allocation

The new Clean Air Act will result in a permanent 10 million ton reduction in sulfur dioxide (SOj) emissions from 1980 levels. To achieve this, EPA will allocate allowances of one ton of sulfur dioxide in two phases, The first phase, effective January 1, 1995, requires 110 powerplants to reduce their emissions to a level equivalent to the product of an emissions rate = (2,5 lbs of S02/mm Btu) x (the average mm Btu of their 1985-1987 fuel use). Plants that use certain control technologies to meet their Phase 1 reduction requirements may receive a two year extension of compliance until 1997. The new law also allows for a special allocation of 200,000 annual allowances per year each of the 5 years of Phase 1 to powerplants in Illinois, Indiana and Ohio. 

If governments want to compensate investors for adjustment to regulation/legislation, this would motivate some free allocation of allowances during a transitory period to compensate investors who made investment decisions before there was any reasonable expectation of carbon controls. Different views exist about when this was. Most of those involved in the international process would argue it to have been 199017 or a couple of years thereafter.18 Later relevant landmarks include the adoption of the Kyoto Protocol in 1997, the EU s Green Paper on emissions trading in 2000, and the EU s ratification of the Protocol and adoption of the ETS Directive in 2002. Whatever year is considered applicable, however, as time passes fewer and fewer investments will be able to make the claim that costs were sunk before a reasonable expectation of carbon controls. 

Enterprises need a certain internal organisation for chemicals control. A clear allocation of responsibility and efficient routines must be established within the company for control of the purchase of chemicals, data retrieval, hazard and risk assessment, classification, labelling, SDS, work instructions, training, exposure and emission control, etc. Obviously, smooth and efficient co-operation between actors in the supply chain simplifies the work of enterprises (c.f. Fig. 16.4). Enterprises may meet demands on expertise by making use of the skills of their chemical suppliers, by hiring their own experts or by hiring external expertise as consultants. Normally, a combination of these alternatives is used. 

Excess Emission Reduction Targets — Most of the serious proposals for acid rain control (in fact, both the House and Senate bills of 1984) involve some formula for allocating reductions excess emissions of SO2 over a defined population of emitters (in almost all cases, electric utilities). The principal focus of these efforts is to reduce total regional emissions, thus avoiding the nationally uniform, ambient requirements of the NAAQS. While the proposals differ as to who must come into compliance with what, when, and how, they share the common feature of requiring proportional reductions, in emissions above some threshold level (7). The political and economic implications of this approach have been discussed extensively elsewhere (8). 

Carbon emissions from large stationary sources are more readily controlled than those from smaller, dispersed units. In Europe, the European Union Emission Trading Scheme (ETS) that aims to limit carbon emissions from these point sources was implemented on 1 January 2005. Individual plants are issued with permits which specify the level of carbon that each may emit annually. Companies with surplus permits may sell these to others who wish to exceed their respective allowances. At first, the scheme did not work well because the initial allocations were generous and the market price of permits was too low to be effective in curtailing emissions. In the next phase of the programme, permits could be restricted and their market value would then rise. As these regulations begin to bite and companies have to purchase additional permits on the open market at realistic prices, it may become financially attractive - if not actually required by law - to fit carbon-capture equipment to their exhaust stacks. 

The question is whether this method fairly allocates the emission quota. This problem is important because the Clean Air Act is one of those cross- cutting regulatory programs that affects industry all over the country. It affects industry everyidiere, and we ought to be aware of what the effects of these controls are going to be on industrial opportunities. 

The environmental demands in the two scenarios can also be very different. The greenfield project will need to allocate more resources to activities like environmental permitting which the brownfield owner may be able to deal with in a matter of hours or days. Months may be spent on presentations to investors, governments and future neighbours to explain the impacts of the project on them and to assure them that the emission control equipment at the new plant will be the best in the world. A detailed environmental impact study and the necessary land use permits can take months or years to put in place. The impact of these activities on the project schedule cannot be ignored. 

In the air quality management approach, emission standards ate set in an attempt to achieve a previously set air quality standard (Fig. 4). This requires an allocation step, which apphes emission standards of different stringency to different processes to achieve the air quality standard goal. It should be noted that Fig. 4 shows a short-term statistical pathway to control air pollution episodes (Fig. 5). There has been less success with this... 

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