A new study by Evan Ringquist, professor in the Indiana University School of Public and Environmental Affairs, finds the problem hasn't materialized -- that the efficiency gains of allowance trading have not come at the expense of equitable treatment of minorities and the poor.
"There is very little evidence that allowance trading causes 'hot spots,'" Ringquist said. "This study finds there is no inherent trade-off between efficiency and equity when using market-based instruments for pollution control."
The study, "Trading Equity for Efficiency in Environmental Protection? Environmental Justice Effects from the SO2 Allowance Trading Program," is scheduled for publication this spring in the journal Social Science Quarterly.
It focuses on the sulfur dioxide allowance trading program (ATP) established by 1990 amendments to the Clean Air Act. The program created a market for trading pollution credits to reduce emissions of sulfur dioxide, which causes human health problems and acid rain that results in environmental damage.
While the sulfur dioxide program is the largest and most established U.S. market, there are regional markets for other regulated pollutants, including nitrogen oxides, volatile organic compounds and carbon dioxide. Domestic markets have been proposed to curb mercury pollution. And an international carbon market would be an element of a "cap and trade" initiative to slow climate change.
The idea behind emissions allowance trading is simple. Some firms and facilities can reduce their emissions by required amounts without facing excessive costs, but some can't. With a trading system, firms with low control costs will reduce pollution more than necessary and "sell" their excess credits. Firms with high costs will purchase permits rather than over-spend to reduce pollution.
The net result is the same as with a "command and control" program that requires across-the-board cuts for everyone. And the costs to society are smaller. Economists are happy.
But a trading program is likely to reduce pollution more in some locations than in others. Facilities that purchase allowances effectively "import" pollution to their region. Facilities that sell allowances, meanwhile, "export" pollution.
Environmental justice advocates have argued that pollution will be imported to urban centers and aging industrial areas, where polluting facilities have operated for years and the cost of reducing emissions is likely to be high. And it's in such areas, they say, that minority and low-income communities are more likely to live -- especially as white and middle-income residents have left the cities for the suburbs.
Previous studies, including a meta-analysis by Ringquist published in 2005, have found that poor people and minorities were more likely than others to live in polluted areas. So an allowance trading program, while reducing overall pollution, could make a bad situation worse for certain populations.
To examine the claim, Ringquist obtained trading records for all facilities participating in the sulfur dioxide allowance program between January 1995 and March 2009. He then used several statistical models to determine whether allowance trading tended to concentrate pollution in poor communities or communities of color.
He found that it did not. To the contrary, the data show that communities with high percentages of African-American and Hispanic residents experienced fewer imports of SO2 than did other areas.
The analysis does reveal one cause for concern, however: Allowance trading appears to concentrate SO2 emissions in areas with large percentages of people without a high-school education.
Ringquist said that finding suggests government regulators may want to design future emissions trading programs to make it easier for the effects to be monitored by nearby residents, including residents without a high level of education.
To speak with Ringquist, contact Jana Wilson at the School of Public and Environmental Affairs, 812-856-5490 or email@example.com. For a copy of the study, contact Wilson or Steve Hinnefeld at University Communications, 812-856-3488 or firstname.lastname@example.org
Steve Hinnefeld | EurekAlert!
Antarctic Ice Sheet mass loss has increased
14.06.2018 | Technische Universität Dresden
WAKE-UP provides new treatment option for stroke patients | International study led by UKE
17.05.2018 | Universitätsklinikum Hamburg-Eppendorf
Scientists from the University of Freiburg and the University of Basel identified a master regulator for bone regeneration. Prasad Shastri, Professor of...
Moving into its fourth decade, AchemAsia is setting out for new horizons: The International Expo and Innovation Forum for Sustainable Chemical Production will take place from 21-23 May 2019 in Shanghai, China. With an updated event profile, the eleventh edition focusses on topics that are especially relevant for the Chinese process industry, putting a strong emphasis on sustainability and innovation.
Founded in 1989 as a spin-off of ACHEMA to cater to the needs of China’s then developing industry, AchemAsia has since grown into a platform where the latest...
The BMBF-funded OWICELLS project was successfully completed with a final presentation at the BMW plant in Munich. The presentation demonstrated a Li-Fi communication with a mobile robot, while the robot carried out usual production processes (welding, moving and testing parts) in a 5x5m² production cell. The robust, optical wireless transmission is based on spatial diversity; in other words, data is sent and received simultaneously by several LEDs and several photodiodes. The system can transmit data at more than 100 Mbit/s and five milliseconds latency.
Modern production technologies in the automobile industry must become more flexible in order to fulfil individual customer requirements.
An international team of scientists has discovered a new way to transfer image information through multimodal fibers with almost no distortion - even if the fiber is bent. The results of the study, to which scientist from the Leibniz-Institute of Photonic Technology Jena (Leibniz IPHT) contributed, were published on 6thJune in the highly-cited journal Physical Review Letters.
Endoscopes allow doctors to see into a patient’s body like through a keyhole. Typically, the images are transmitted via a bundle of several hundreds of optical...
Light detection and control lies at the heart of many modern device applications, such as smartphone cameras. Using graphene as a light-sensitive material for...
13.06.2018 | Event News
08.06.2018 | Event News
05.06.2018 | Event News
19.06.2018 | Physics and Astronomy
19.06.2018 | Life Sciences
19.06.2018 | Physics and Astronomy