United States emissions trading

Air Quality and Power Production in the United States Emissions Trading and State-Level Initiatives in the Control of Acid-Producing Emissions, Mercury, and Carbon Dioxide... 

United States Emissions Trading and State-Level Initiatives in the Control of Acid-Producing... 

Total world demand for 1,1,1-trichloroethane in 1987 was 578 thousand tonnes demand in the United States in 1990 was 280 tliousand tonnes. In 1989, production capacity in the United States was estimated to be 470 thousand tonnes and production capacity outside the United States was estimated to be approximately 454 thousand tonnes. All non-essential emissive uses of 1,1,1-trichloroethane will be phased out by the year 2000 (Snedecor, 1993). Production in the United States in 1993 was reported to be 205 246 tonnes (United States International Trade Commission, 1994). 

Commission Decision of 28 November 2001 (COM(2001) 3739 final), State aid No. N416/2001 - United Kingdom Emission Trading Scheme (available at http //www.europa.eu.int/comm/secretariat general/sgb/state aids/comp-2001/ n416-01.pdf), p. 9, para. Vl(b). 

Cofiring biomass has environmental benefits in addition to lowering greenhouse gases. Since biomass has little or no sulfur, sulfur dioxide (SOj) emissions are less when biomass fuels are used. In the United States, power plants have allowable sulfur dioxide levels for each gigawatt of power produced. If they produce less than the allowable amount of sulfur dioxide, they receive credits with which they can trade on the open market. The price for these sulfur dioxide credits is about 70 to 200 per ton. 

In a comparison of nine economic models, estimated costs to the United States as of the late 1990s ranged from a loss in gross domestic product from 40 billion to 180 billion, with assumptions of no emission trading from 20 billion to 90 billion with trading only among developed countries and from... 

For example, sulfur emissions from utility power plants in the United States are subject to an emissions cap and an allowance-trading system established under the Clean Air Act. An effective cap on annual sulfur dioxide emissions took effect in 2000, so no more than 8.95 million tons of SO can be emitted annually. Utilities that want to build another coal plant must purchase sulfur emission allowances from others who do not need them. This system provides a market incentive for utilities to reduce their sulfur emissions as long as the cost of such reductions is less than the price of purchasing the allowances. 

The United Kingdom has viewed itself as a leader in emissions trading and it was the first Member State to publish a draft NAP in January 2004, which was of course much examined by others. As explained by David Harrison and Daniel Radov, the NAP process started early in the UK and there was extensive stakeholder consultation. This did not... 

The EU Emissions Trading Directive established a very low level of heat input (20 MWth) as the threshold for inclusion in the ETS. If there is one refrain that arises from virtually every one of the ten NAP processes included in this volume, it is that the inclusion of small installations was not worth it. As noted in one contribution after another, a large proportion of CO2 emissions originate from a small number of installations, while a very large number of the installations contribute only a small percentage of emissions. For instance, in the United Kingdom, 20% of the sites account for 94% of emissions and 80% of the sites contribute 6% of the emissions (see Harrison and Radov, United Kingdom ). Similar statistics are found in every Member State. 

David Harrison, B. A., M.Sc., Ph.D., is Head of the Global Environmental Practice of NERA Economic Consulting, an international consultancy with offices in Europe, the United States, Australia and Asia. He directs projects in environmental economics and policy, climate change, natural resource damage assessment, energy policy, economic impact assessment, and transportation. Dr Harrison has participated actively for more than twenty-five years in the development of emissions trading... 

Tradable or marketable permits, which enable pollution (or resource consumption) control to be concentrated amongst those who can do it economically without increasing total emissions. Trading can be internal within a company for different company sites, as well as between companies. Tradable market permits have been used for SO2 emissions in the United States in the 1990s and were introduced in Europe for CO2 emissions in 2005. 

In addition, Article 17 of the Kyoto Protocol authorizes a target-based emissions trading system. The respective provisions need further elaboration. According to the Protocol, Annex B states parties may participate in emissions trading for the purpose of fulfilling their commitments under Article 3 of the Kyoto Protocol. The emission reduction units acquired will be credited to the acquiring State Party. The Conference of Parties under the Framework Convention is mandated to develop rules and modalities for emissions trading. 

The United States government appears particularly eager to make use of these mechanisms—especially emissions-trading with Rus-... 

A more effective approach to clean air policy, and one example of a sensible program being implemented by the federal government, is the Clean Air Interstate Rule or CAIR, intended to reduce emissions of particulate matter and NO in the eastern United States. EPA finalized the CAIR rules on March 10, 2005 in response to a finding of non-attainment of National Ambient Air Quality Standards (NAAQS) for fine particulate matter and ozone formation. CAIR requires reductions in SOj and NOj emissions from coal-fired power plants the emissions limits spelled out in the CAIR plan affect electric utilities in 28 eastern states and the District of Columbia. Emissions reductions are to be achieved through a market-based cap-and-trade system similar to other air pollution programs EPA has put into practice over the last few decades. 

Why have cap-and-trade policies flourished in comparison to pollution taxes in the United States Perhaps most obviously, a system in which discharge permits are issued, but made saleable, looks rather like the regulatory system currently in place in the United States, with the added twist of marketability. Another reason has to do with the uncertainty each system creates. Specifically, under a cap-and-trade system, the total amount of pollution is firmly fixed-that is the purpose of the cap. What is uncertain are exactly where the emissions will occur (this depends upon who trades with whom), and how much an emissions permit (the right to emit one ton in a given year, say) will cost —the latter is determined in a competitive market. 

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