Emission quotas

The Kyoto negotiations show the tremendous friction energy issues can cause between the richest and poorest countries in the world. Addressing future energy-related conflicts— whether it be wars over oil fields or disputes over carbon emission quotas— will remain a major role of the UN. 

Chichilnisky, G., Heal, G., 1995, Markets for Tradeable CO Emission Quotas Principles and Practice, OECD Economics Department Working Paper No. 153. 

In order to control the air pollution, the Environmental Protection Agency (EPA) has adopted the National Ambient Air Quality Standards (NAAQS) as required by the Clean Air Act. The emission quota is applied to major industrial pollutants and particularly to the sulfur oxides in an attempt to maintain the standards over an air quality control region. It is a regionalized and not an interstate control. The scientists at Argonne have put together a book which tells how to put together an emission control quota in a local region. 

Regions may be categorized as those where the NAAQS are already violated, where the standards are met and finally where the air is much cleaner than required. The actions to be taken in the various categories are discussed. Of special interest is the situation where additional pollution is allowable—the problems being those of an equitable and wise apportionment of the increased pollution. Four emission quota strategies are considered. 

Emission quotas, which include emission density zoning as a quota variant, continue to receive attention as an air pollution control technique. Their basic function is to relate allowable increments in pollution to designated land uses. They achieve... 

Generally, the emission quota as we see it is applied to the major industrial pollutants and particularly to the sulfur oxides. We view it presently as a method for controlling new industrial locations. The reason for that lies in the difficulty of developing workable models for some of the other pollutants, especially for the mobile source related pollutants, although some work has been done on extending the quota idea beyond the industrial context. 

The emission quota starts with the NAAQS and modifies them as a control technique, and I will indicate just exactly how that happens and why it is done. I thought it might first be helpful to give you some idea about the quota concept, and indeed to indicate that the Clean Air Act also Imposes a quota... 

Necessarily then, the Clean Air Act apportions remaining emissions around the country. The Clean Air Act apportions remaining amounts of clean air by setting up the NAAQS as a constraint over additions to the air pollution baseline in areas where the NAAQS are not yet violated. It is necessarily a quota on new polluting industrial development, applied to air quality control regions. The emission quota concept simply makes explicit the air pollution quota assignment implicit in the Clean Air Act. 

I have indicated that the emission quota is applied to an air quality control region. As most of you know, the air quality control regions are divided into several categories. In the nonattainment areas the NAAQS are violated and no more growth is allowed until the NAAQS are met. In these areas, the emission quota idea does not apply unless the baseline is improved until the NAAQS are no longer violated. 

Obviously, this method for allocating pollutiai increments may not be the most satisfactory we could put together. In the legal analysis for our emission quota work, we looked at other methods for allocating pollution increments, other than the first-come, first-served method. These are discussed later. 

Well, why have emission quotas And how do they differ from the usual controls imposed by the NAAQS ... 

The emission quota links the amount of air pollution allowable with land and land use. The NAAQS don t say anything about land use. That is the next point to make, the next... 

It would be much better, of course, to develop a system under which the application of air quality controls could be made consistent with local land use planning and controls. That is one of the objectives of the emission quota idea. 

Emission quotas deal with these problems in two ways. 

I migiht also point out that the system I have been discussing so far implies mapped Industrial zoning. It implies that communities have or will want to map industrially zoned land in advance of its developmient. That is the key on which this emission quota is based. If municipalities don t do that, and it is increasingly common not to do so, they may use a zoning technique called a "floating zone" under which industrial developient is approved cxi a. case-by-case basis. It will then... 

The first quota type is known as emission density zoning, which has been the popular term used to describe all of these quota techniques even though in our judgment it describes just one variant. We prefer the phrase "emission quotas" as the generic term. Emission density zoning, or EDZ, is an emission quota which assigns a pollution load directly to units of land. The quota is developed only for industrially-zoned areas, but is then translated into an allocation for each acre of land in those areas. 

The second type of quota is called the jurisdictional emission quota, or JEQ. What happens here is that the quota is determined regionally and then assigned to local governments... 

The third quota type is the district emission quota, or DEQ. Under the district emission quota the emission quota is assigned to zoning districts within communities, rather than to the community. This quota simply cuts local governments units out of the picture in the emission quota assignment process and provides more control at the regional level. Some administrative and intergovernmental problem are avoided, but whether regional control will be politically acceptable is problematic. 

A fourth and final type of quota is the floating zone emission quota, or FZEQ. The FZEQ is determined on a case-by-case basis. This system has been operating in Louisville, Kentucky for several years. Under the floating zone quota, when an Industrial developer applies for a source construction and operation permit, the emission quota is determined at that time on the basis of the emission quota assigned to a circle described by a radius of a certain length which extends out from the plant. A circle is described around the plant, the emissions available within the circle are determined and the plant is allowed or not, depending on whether the emission quota is violated. 

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. 

TDR is an interesting concept, but we have quite enough problems to worry about without going that far at the moment. It is useful primarily as applied to Emission Density Zoning, even apart from TDR, the exploration of these possibilities for emission quotas has raised a series of fascinating problems in the application of legal controls to improve air quality. 

MANDELKER Mr. Herzberg is going to cover this in his talk I ll leave that to him. Let me repeat that the emission quota idea that I ve been talking about is definitely based on the air quality control region as the area of control, so it does have that problem. 

Second, with reference to the first part of your question, it s true that EDZ is, in effect, a dispersion technique. You can buy more land to disperse the air pollution. There is some case authority in the courts which indicates that dispersion techniques are not to be allowed. One of the other authors of this report contends that those federal cases would make this system unacceptable under the Clean Air Act. I don t quite agree with him. I don t really think that emission quotas are in the same category as tall stacks, which really do disperse over large areas. We are really [Pg.460]

MANDELKER First, emission quotas are not law yet. Second, the amount of pollution you re allowed to generate per acre is a sum or an amount which is produced by a model which is going to insure that at least over this air quality region the NAAQS will not be violated. And remember, since the model is based on a source to receptor relationship, the model improves existing air quality controls because it avoids the creation of hot spots. This model is calibrated so that hot spots cannot occur. 

I think that emission quotas help with the but I think we should understand that the... 

Resource use quotas Emission quotas allowing these to be traded among... 

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