Regulation of Emissions large point sources
Command and control
- the traditional approach
- mandate cleanup technology
- accept best efforts
Market incentives
- novel approach Clean Air Act 1990
- allowance required for actual emissions
- open market for trading allowances
- mandate total allowances issued
Notes:
In recent decades, the areas of the world which are significantly affected by acid rain have been expanding rapidly. However, in Europe and North America controls are underway.
In the U.S. the Clean Air Act of 1990 introduced an innovative form of emissions control on SO2 which is widely credited with having enabled much more stringent limits than would otherwise have been feasible. It is also regarded by many as a model for Carbon Dioxide, indeed it underlies present plans for implementing the limits agreed in the Kyoto Protocol. It is thus important to examine the concept of "Tradable Emissions Allowances” carefully, and understand what circumstances it requires in order for it to work, and what benefits it may be expected to yield compared to alternative approaches.