|The traditional command-and-control approach to air pollution control imposes a large information burden on control authorities. Because the magnitude of this burden exceeds their ability to respond, control authorities have promulgated emission standards that are generally neither cost effective nor capable of promoting rapid compliance.|
|Cost-effective emissions trading systems can be designed, but the design depends crucially on the nature of the pollutant being regulated. Three common pollutant classes implying very different designs are: (1) uniformly mixed, assimilative pollutants, (2) nonuniformly mixed, assimilative pollutants, and (3) uniformly mixed, accumulative pollutants.|
|A cost-effective allocation of uniformly mixed, assimilative pollutants could be achieved by an emissions permit system. For any geographic area this system allows ton-for-ton trades among any sources in the airshed. The cost-effective emission reduction credits would be defined in terms of an allowable emission rate. Total cumulative emissions would not be controlled.|
|For nonuniformly mixed assimilative pollutants, an ambient permit system would yield the cost-effective allocation of control responsibility. For each airshed this system requires considering the spatial effects of trades on each receptor site. The cost-effective emission reduction credits in this approach would be defined in terms of allowable concentration increases at specific receptor locations. There would be separate credits associated with each receptor which could be banked and sold independently. Total cumulative emissions would not be controlled with this system either.|
|Uniformly mixed accumulative pollutants can be cost effectively controlled using a cumulative emission permit system. A single emission reduction credit, defined in terms of emissions (tons), not emission rates (tons per year), would suffice. Total cumulative emissions would be controlled by this approach.|
|The regulatory information burden necessary to achieve a costeffective allocation of the control responsibility is smaller with emissions trading systems than with the command-and-control approach. Of the three considered permit approaches, ambient permit systems impose a higher burden than the other two permit systems since they require the use of air dispersion models to derive the transfer coefficients which govern the allowable transfers among sources.|
|Compared with the command-and-control approach, theory suggests that emissions trading programs can be expected to encourage|
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Publication information: Book title: Emissions Trading, an Exercise in Reforming Pollution Policy. Contributors: T. H. Tietenberg - Author. Publisher: Resources for the Future. Place of publication: Washington, DC. Publication year: 1985. Page number: 35.
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