Cost Savings Sans Allowance Trades? Evaluating the SO2 Emission Trading Program to Date

Dallas Burtraw

No 10682, Discussion Papers from Resources for the Future

Abstract: Title IV of the 1990 amendments to the Clean Air Act initiated a historic experiment in incentive-based environmental regulation through the use of tradable allowances for emission of sulfur dioxide by electric generating facilities. To date, relatively little allowance trading has taken place; however, the costs of compliance have been much less than anticipated. The purpose of this paper is to address the apparent paradox that the allowance trading program may not require (very much) trading to be successful. Title IV represented two great steps forward in environmental regulation: first a move toward performance standards and second formal allowance trading. The first step has been sufficient to date for improving dynamic efficiency and achieving relative cost-effectiveness.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 30
Date: 1996
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Citations: View citations in EconPapers (17)

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Working Paper: Cost Savings sans Allowance Trades? Evaluating the SO2 Emission Trading Program to Date (1995)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:rffdps:10682

DOI: 10.22004/ag.econ.10682

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