Making a market for SO sub 2 emissions trading

Journal Article · Wed Jul 01 04:00:00 EDT 1992 · Electricity Journal; (United States)

DOI:https://doi.org/10.1016/1040-6190(92)90129-U· OSTI ID:7246362

Solomon, B D; Rose, K

Under the innovative, market-based approach to acid rain control included in the Clean Air Act amendments of 1990 (CAAA), sulfur dioxide emission allowances allocated to existing electric utility sources of these emissions can be used by utilities, banked for future use, or sold or traded to other users. Most power plants that burn fossil fuels will need to obtain an adequate supply of allowances from the market of EPA-sponsored auctions to cover their future emissions. This article addresses the respective roles of regulators and the private sector in facilitating a market for SO{sub 2} emission allowances. In previous work, the authors have argued that state public utility commissions should seize the opportunity to encourage utilities to facilitate the allowance market. Yet it is the nature of new markets that many potential participants (including regulators) are risk-averse and wait for others to make the first move. Taken to the extreme, such behavior is a prescription for failure. The authors stated purpose is both to offer a perspective on how to make a market for what was previously considered an externality, as well as to stimulate debate among the various players and elicit better ideas. In fact, much more may be at stake. The success or failure of the emissions trading program could well set a benchmark for future environmental protection efforts in the US and globally.

• OSTI ID: 7246362
• Journal Information: Electricity Journal; (United States), Journal Name: Electricity Journal; (United States) Vol. 5:6; ISSN ELEJE; ISSN 1040-6190
• Country of Publication: United States
• Language: English

Related Subjects

20 FOSSIL-FUELED POWER PLANTS
200202* -- Fossil-Fueled Power Plants-- Waste Management-- Noxious Gas & Particulate Emissions
200600 -- Fossil-Fueled Power Plants-- Economic
Industrial
& Business Aspects-- (1990-)
ACID RAIN
AIR POLLUTION CONTROL
ATMOSPHERIC PRECIPITATIONS
CARBON COMPOUNDS
CARBON DIOXIDE
CARBON OXIDES
CHALCOGENIDES
CONTROL
ECONOMICS
ELECTRIC POWER INDUSTRY
ENVIRONMENTAL IMPACTS
INDUSTRY
LAWS
MARKET
NITROGEN COMPOUNDS
NITROGEN OXIDES
OXIDES
OXYGEN COMPOUNDS
POLLUTION CONTROL
POLLUTION LAWS
PRICING REGULATIONS
RAIN
RATE STRUCTURE
REGULATIONS
SULFUR COMPOUNDS
SULFUR DIOXIDE
SULFUR OXIDES
SUPPLY AND DEMAND
US CLEAN AIR ACT