King Rat (gkr) wrote,
King Rat

Eco 200: trading pollution credits

(group) A Tacoma, Washington electrical utlity purchased from a manufacturing firm, for $265,000, the right to add 60 tons of particulate matter to the air each year. The manufacturer had reduced its annual emissions by 69 tons a few years earlier through modernizing its plant. The representative of an environmental organization objected that the practice of selling rights to pollute simply meant that as soon as on air polluter drops out of the ring, there will be a ready substitute.

  1. What benefits of the system does this criticism ignore?

    All the benefits depend on fixing the total amount of pollution allowed at a constant number, then allowing trading to happen within that amount. The price of the credits will rise, giving incentives to those who hold them to modernize their plants so they can sell the credits. It also provides a way to pay for the modernization that does happen. However, if the total amount of pollution is allowed to rise, the public still is going to see greater levels of pollution, no matter who is issuing the particulate matter.

  2. The utility used the credits to renovate and operate a generating plant that would burn garbage as well as other fuels, thus reducing solid waste disposal problems. Is it better for the environment to bury or to incinerate garbage?

    I have no idea. I've never studied the costs of either in relation to the other. I assume the electrical utility thought it was better but whether they thought it was better for the environment or better for their shareholders I cannot say. Their fiduciary duties are toward their shareholders, not the environment.


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