Environmental and economic effects of sulfur dioxide emissions trading pilot scheme in China: A quasi-experiment

This chapter offers a cross-jurisdictional analysis of the design and implementation of mandatory emissions trading schemes. It traces the beginning of emissions trading schemes from the sulfur dioxide emissions trading scheme in the United States, which was implemented through the Clean Air Act Amendments of 1990. After initial experiments at a local and regional level, the United States launched the first large-scale, countrywide trading system. This program sought to address the acid rain problem by creating a trading regime for sulfur dioxide emissions. This was the birthplace of large-scale emissions trading systems and from this point onwards, emissions trading schemes began to spread across jurisdictions. The chapter describes how the EU’s speedy adoption of an emissions trading directive in 2003 could be seen as an instance of horizontal borrowing from the United States, spurred by the simple need to keep the costs of reducing emissions down.

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An Interim Evaluation of Sulfur Dioxide Emissions Trading

The Journal of Economic Perspectives ◽

10.1257/jep.12.3.53 ◽

1998 ◽

Vol 12 (3) ◽

pp. 53-68 ◽

Cited By ~ 225

Author(s):

Richard Schmalensee ◽

Paul L Joskow ◽

A. Denny Ellerman ◽

Juan Pablo Montero ◽

Elizabeth M Bailey

Keyword(s):

Sulfur Dioxide ◽

Acid Rain ◽

Large Scale ◽

Emissions Trading ◽

Tradeable Permits ◽

Abatement Costs ◽

Sulfur Dioxide Emissions ◽

Acid Rain Program ◽

The U.S

This paper summarizes recent empirical research on compliance costs and strategies and on permit market performance under the U.S. acid rain program, the first large-scale, long-term program to use tradeable emissions permits to control pollution. An efficient market for emissions permits developed in a few years, and this program more than achieved its early goals on time, and it cost less than had been projected. Because of expectation errors, however, investment was excessive, and permit prices substantially understate abatement costs. The tradeable permits approach has worked well, but it is not a miracle cure for environmental problems. Coauthors are Paul L. Joskow, A. Denny Ellerman, Juan Pablo Montero, and Elizabeth M. Bailey.

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When Cap-and-Trade Works

Can We Price Carbon? ◽

10.7551/mitpress/9780262037952.003.0005 ◽

2018 ◽

pp. 125-162

Author(s):

Barry G. Rabe

Keyword(s):

Climate Change ◽

Energy Efficiency ◽

Renewable Energy ◽

Sulfur Dioxide ◽

Greenhouse Gas ◽

Emissions Trading ◽

Political Support ◽

Cap And Trade ◽

Sulfur Dioxide Emissions ◽

Trading Program

Cap-and-trade has also faced numerous political challenges but also includes some more successful cases. Some of the experience of the American sulfur dioxide emissions trading program has been replicated for carbon in the case of the Regional Greenhouse Gas Initiative. This alliance among nine Northeastern states has retained political support for more than a decade and also pioneered a system to auction allowances to generate revenue. These funds are then concentrated on expansion of energy efficiency and renewable energy in the region, thereby further addressing climate change and also building a broader base of political support.

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