‘Sources of Emission Reductions: Evidence for US SO2 Emissions 1985-2002’

An enduring issue in environmental regulation is whether to clean up existing “old” plants or in some manner to bring in new “clean” plants to replace the old. In this paper, a unit-level data base of emissions by nearly 2000 electric generating units from 1985 through 2002 is used to analyze the contribution of these two factors in accomplishing the significant reduction of sulfur dioxide emissions from these sources in the United States. The effect on SO2 emissions of the new natural-gas-fired, combined-cycle capacity that has been introduced since 1998 is also examined. The results indicate that cleaning up the old plants has made by far the greater contribution to reducing SO2 emissions, and that this contribution has been especially large since the introduction of the SO2 cap-and-trade program in 1995.

The Temporal Efficiency of SO2 Emissions Trading

This paper provides an empirical evaluation of the temporal efficiency of the US Acid Rain Program, which implemented a nationwide market for trading and banking sulphur dioxide (SO2) emission allowances. We first develop a model of efficient banking and select appropriate parameter values. Then we use aggregate data from the first seven years of the Acid Rain Program to access the temporal efficiency of the observed banking behaviour. We find that banking has been surprisingly efficient and we discuss why this finding disagrees with the common perception of excessive banking in this program.emissions trading, banking, acid rain, tradable permits

Green consumer markets in the fight against climate change

Climate change has become one of the greatest threats to environmental security, as attested by the growing frequency of severe flooding and storms, extreme temperatures and droughts. Accordingly, the European Union’s (EU) 6th Environment Action Programme (2010) lists tackling climate change as its first priority. A key aim of the EU has been to cut CO2 emissions, a major factor in climate change, by 8% until 2012 and 20% until 2020. The European Commission has proposed the encouragement of private consumer market for green products and services as one of several solutions to this problem. However, existing research suggests that the market share of these products has been only 3%, although 30% of individuals favour environmental and ethical goods. This article uses Public Goods Theory to explain why the contribution of the green consumer market to fighting climate change has been and possibly may remain limited without further public intervention