Environmentalists charge cap & trade control plan fails

12 November 2002 21:32  [Source: ICIS news]

WASHINGTON (CNI)--Environmentalists charged Tuesday that a market-based environmental program in California that is similar to national emissions control plans the Bush administration seeks has failed badly.

Public Employees for Environmental Responsibility (Peer) said today that data from the US Environmental Protection Agency (EPA) indicate that the southern California plan, part of the Regional Clean Air Incentives Market (Reclaim) program, has failed to produce clean air targets expected of it.

Peer, a national alliance of resource professionals from the federal and state levels, said the Reclaim program "is performing substantially below expectations, requires more government involvement and remains critically vulnerable to industry manipulation."

Peer said it drew that conclusion from a review of EPA's own evaluation of Reclaim, a program that allows industries to meet nitrogen oxide and sulphur dioxide emission goals either by reducing emissions or purchasing credits from facilities that have reduced emissions below regulatory limits.

The Bush administration’s "Clear Skies" clean air plan proposes using the "cap-and-trade" (CAT) model pioneered under Reclaim to replace the EPA's new source review (NSR) program currently used to regulate air pollution under the Clean Air Act.

Peer asserts that Reclaim has been a failure and that more traditional enforcement methods are more effective.

EPA acknowledges, notes Peer, that the Reclaim program data "suggest that the program has produced far less emission reductions than were either projected for the program or could have been expected from" the command-and-control (CAC) system it replaced.

The Reclaim CAT program, initiated in 1993, was projected to realise emissions reductions in the southern California region of some 11% per year, but the actual rate of emissions reductions achieved from 1994 to 2000 under Reclaim was some 3% per year, according to the EPA report. The CAC emissions program that was replaced by Reclaim likely would have produced reductions of about 12%/year during that period, said EPA.

But the EPA report also suggests that the Reclaim program was not properly set up and that it is difficult to compare the two emissions programs.

EPA concluded that the experience with southern California's Reclaim program "seems to demonstrate that cap and trade (CAT) can work with Clean Air Act (CAA) New Source Review (NSR). This may be a function of the types of sources included or the controls in place at many facilities. This lesson is contrary to the commonly reported federal view and should be further researched."

The 116-page EPA report on Reclaim is available at http://www.epa.gov/region09/air/reclaim/report.pdf

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