Title IV of the Clean Air Act Amendments of 1990 (CAAA 1990) created the first large scale cap-and-trade program as a means to control acid rain in the United States. The program regulated the emission of sulfur dioxide (SO2) and nitrous oxide (NOx) in the atmospherethe precursor to acid rain (formerly acid deposition). Economists have long argued for the use of market-based incentive approach as oppose to the traditional command-and-control methods for its ability to be efficient and cost-effective. Title IV went into full effect in 1995 and has been lauded among one of the most successful regulation as it was efficient in reducing SO2 at lower cost than other program.
Market based or incentive based programs work by providing incentives for individuals and firms to alter polluting behavirors. This is accomplished by inposing opportunity cost through pricing. The altering of polluting bvehaviors is achieved by changes in the regulatory environment in which firms operate. However, when prices are low there is the potential for the loss of incentive.
Such loss in the regulatory environment occurred in 2008 when the D.C. Circuit overturned the Clean Air Interstate Rule (CAIR) and remanded the dispute to EPA to develop new rules for its replacement. This thesis found regulatory uncertainty to contribute significantly to the decline in the price of emission permits. However, the contribution is relatively small. The adoption of technology appears to be the driving factor behind the decline in the price of emission permits. In the context of the Clean Air Act, there was the expectation of more stringent SO2 standards and impending regulation of mercury emissions. Scrubber technology used to control the emission of SO2 has also shown to be effective in limiting the emissions of oxidized mercury. Since the announcement of these standards there has been a statistically significant increase in the number of control technologies being implemented.
| Identifer | oai:union.ndltd.org:LSU/oai:etd.lsu.edu:etd-04262012-080430 |
| Date | 16 May 2012 |
| Creators | Paramanand, Narendra |
| Contributors | Keithly, Walter, Reams, Margaret A., Wascom, Michael |
| Publisher | LSU |
| Source Sets | Louisiana State University |
| Language | English |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lsu.edu/docs/available/etd-04262012-080430/ |
| Rights | unrestricted, I hereby certify that, if appropriate, I have obtained and attached herein a written permission statement from the owner(s) of each third party copyrighted matter to be included in my thesis, dissertation, or project report, allowing distribution as specified below. I certify that the version I submitted is the same as that approved by my advisory committee. I hereby grant to LSU or its agents the non-exclusive license to archive and make accessible, under the conditions specified below and in appropriate University policies, my thesis, dissertation, or project report in whole or in part in all forms of media, now or hereafter known. I retain all other ownership rights to the copyright of the thesis, dissertation or project report. I also retain the right to use in future works (such as articles or books) all or part of this thesis, dissertation, or project report. |
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