Air Quality Programs

Control of Mobile-Source Air Pollution Exhaust Pollutants Hydrocarbons  ground-level ozone  smog Nitrogen oxides (NOx)  ozone and acid rain Carbon monoxide Carbon dioxide Evaporative emissions hydrocarbons

Control of Mobile-Source Air Pollution

Control of Mobile-Source Air Pollution Auto makers have been required to install pollution control equipment (such as catalytic converters) on all new cars. Gasoline suppliers have been required to produce reformulated fuels that reduce emissions. The Corporate Average Fuel Economy (CAFE) program requires auto makers to produce cars that generally have better fuel efficiency. Inspection and Maintenance programs are required in urban areas with higher pollution levels. The use of lead as a gasoline additive was ended in the 1980s.

Control of Mobile-Source Air Pollution Mobile-source controls are generally uniform and technology-based. Emissions controls have been imposed on new cars but not old cars. Better options?

Command-and-Control Policies The first large-scale federal environmental programs thirty years ago relied heavily on uniform, technology-based emission standards. This command-and-control approach usually is not cost-effective, so Congress and the EPA have developed innovative programs and options that can achieve the same goals at a much lower cost.

Innovative Air Quality Policies Different Treatment of Existing and New Sources – Since it would usually be more costly to upgrade pollution control equipment on older plants than to build new equipment into new plants, new sources are subject to more stringent regulations. The Bubble Policy – Under early Clean Air Act provisions, a plant that emitted pollution from several points (several “smokestacks”) would face separate emissions limits at each point. – Under the bubble policy, the plant can instead focus its control efforts on certain points as long as its overall emissions meet the standard. A plant’s emissions are regulated as if it is enveloped in a bubble, and all that matters is the total level of emissions escaping from the bubble.

Innovative Air Quality Policies Netting – When a facility expands, its new emissions can be offset against reductions elsewhere in the facility. Offsets – A new plant (or pollution source) can be built in a nonattainment area if the business pays existing sources to reduce their emissions by a larger amount. This option involves emissions trading between different polluters.

Control of Lead Emissions Until the 1980s and 1990s there were significant emissions of lead from the use of leaded gasoline in cars. The EPA required the introduction of unleaded gas starting in 1975. Starting in the 1980s gasoline refineries were required to gradually eliminate lead from the gasoline they produced. The use of lead in gasoline was banned as of December 1995.

A policy innovation: Lead Trading The marginal cost of eliminating lead from gasoline differed between refineries, so uniform standards would not have been cost-effective. The EPA granted “credits” to refineries that reduced their lead levels faster than required. Refineries could “bank” their credits to use later or could sell credits to other refineries.

A policy innovation: Lead Trading Lead trading allowed refineries with higher lead-reduction costs to reduce their levels more slowly. The market for lead credits was very active – many refineries bought or sold credits. The lead trading policy reduced the cost of compliance by millions of dollars.

A policy innovation: Lead Trading Lead trading was successful for (at least) two reasons: It was easy to monitor the level of lead in the gasoline produced by each refinery. Gasoline was produced for the national market  no “hot spots.” The lead trading policy provided a model for the SO2 permit-trading policy later.