January - March 1997
Reducing Sulfur Dioxide Emissions
Through Market-Based Regulation
[Abstract]
[References]
Predicting Global Climate Change: New Tools,
New Insights
[Abstract]
[References]
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Reducing Sulfur Dioxide Emissions
Through Market-Based Regulation
n 1995, the acid
rain provisions of the 1990 Clean Air Act Amendments (CAAA) went into effect.
By year's end, electric utilities had reduced emissions of sulfur dioxide
(SO2) far more than required by the new law. According to an
Energy Laboratory analysis, the reduction was largely the result of a novel
regulatory scheme that turned the right to emit SO2 into a valuable
commodity that could be bought and sold. Under the new law, utilities were
issued a limited number of fully tradable permits to emit SO2.
Some utilities faced high costs to reduce emissions, so they bought permits
from utilities whose costs were lower. Other utilities reduced emissions
below their allowable levels, thereby freeing up permits to sell or to
save for meeting tighter emissions restrictions in the future. The result
was an unprecedented emissions reduction at a lower-than-expected cost.
Judging by the success of this first large-scale experiment, "market-based"
environmental regulation could be an effective means of controlling other
pollutants, among them worldwide emissions of CO2.
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new climate-change model developed at MIT provides scientists and policymakers
with an unprecedented ability to analyze potential impacts of human activities
and proposed policies on the global climate system. The model simulates
economic growth and associated emissions, flows of greenhouse gases into
and out of land and oceans, chemical reactions in the atmosphere, climate
dynamics, and changes in natural terrestrial ecosystems. It also includes
previously ignored interactions among those processes--interactions that
can have a substantial impact on predicted outcomes. For example, most
models assume that emissions of methane and nitrous oxide from wetlands
and soils are constant. But MIT simulations show that predicted rises in
temperatures will cause natural emissions of those greenhouse gases to
increase by 15%-60%. Other results suggest that when carbon dioxide levels
become very high, the oceans may be a less effective "sink" for
that gas than is often predicted. By simplifying certain components, the
researchers made the model "computationally efficient" without
compromising its ability to represent key climate phenomena. Performing
long-term simulations and repeated runs with changed assumptions is therefore
economically feasible. A series of runs using a range of plausible assumptions
regarding human emissions, ocean circulation, and cloud cover suggests
that predictions of temperature change are even more uncertain than generally
believed. The researchers are now using the model to clarify key sources
of uncertainty and to examine the effectiveness and costs of proposed policy
options.
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