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With the passage of the 1990 Federal Clean Air Act, Congress toughened national efforts to control air pollution. The 1990 Act addressed some new areas in the field of air pollution control. For the first time, Congress took measures to reduce airborne toxics, acid rain and the depletion of the ozone layer. It strengthened efforts to reduce urban air pollution, in part by imposing new restrictions on mobile sources (cars) and it adopted new market-based approaches to pollution control.
Criteria Pollutants. The 1970 and 1977 Federal Clean Air Acts required that local metropolitan areas be evaluated by state agencies and the Environmental Protection Agency to determine whether they meet air-quality standards for five pollutants: ozone, carbon monoxide, total suspended particulate matter, sulfur dioxide and nitrogen dioxide. By the time the 1990 Federal Clean Air Act was passed, lead had been added as a criteria pollutant (October, 1978) and particulate matter less than 10 microns in diamter, known as PM10, replaced total suspended particulates (July, 1987).
In areas determined not to meet standards for any criteria pollutant, the state air pollution control agency (the TNRCC in Texas) has the responsibility to work with local county and city governments and regional planning commissions to develop and enact a plan to clean up the air.
Some 96 metropolitan areas in the U.S. did not meet the standards for ozone as of April, 1993.(10) Under the 1990 Federal Clean Air Act, all but 10 of these cities must meet ozone standards by 1999 at the latest, and all but Los Angeles, CA - the most heavily polluted city - must comply by 2007. (Los Angeles has until 2010). Similarly, if an area does not meet federal standards for other criteria pollutants, a plan must be developed and implemented to reduce emissions of those pollutants.
Airborne Toxics. The 1990 Federal Clean Air Act added additional protections against air toxics by ordering the EPA to identify industries that release toxic chemicals and requiring major sources of these chemicals to install "maximum achievable control technology" by the year 2003. Sources other than major sources would be required to install less costly forms of control. There are currently 189 compounds identified by Congress and the EPA as toxic. Compounds may be added or deleted from the list through a petition process. Despite these improvements, there is still debate about whether these control technology levels will be stringent enough to protect those living near industries that emit hazardous air pollutants. For example, some environmental groups have faulted the Act for not putting more stringent controls on certain toxic emissions from large industrial sectors such as utilities - which often release mercury and cadmium emissions - and steel manufacturers - which often release carcinogenic compounds from coke ovens.(11)
Acid Rain. Emissions of sulfur dioxide - one of the gases that produces acid rain - are subject to stronger controls and monitoring. Power plants will be limited to 8.9 million tons per year of sulfur dioxide emissions by the year 2000, down from 19 million tons per year emitted in 1980. This reduction will be accomplished in two phases, with the 110 "dirtiest" utilities (those with the most emissions) - most of which are in the Midwest - accounting for most of the cuts by 1995. By 2000, the remaining major utilities, including those in Texas, must also reduce sulfur dioxide emissions.
Atmospheric Ozone. Ozone can be helpful or harmful to humans and the environment depending on where it is. High above the earth in the stratosphere, an ozone layer protects life on earth from harmful ultra-violet radiation from the sun. At ground level, though, ozone is a harmful constituent of smog. The 1990 Federal Clean Air Act phased out the production of certain chemicals that may deplete the stratospheric ozone layer and regulated the disposal of other possible ozone-depleting substances. For example, methyl chloroform, a solvent widely used in such products as automobile brake cleaner and fabric spot removers, must be phased out by 1996.(12) Freon, the refrigerant used in the majority of air conditioning units, is also being phased out.
Mobile Sources. The Federal Clean Air Act imposed reductions in the amount of hydrocarbons and nitrogen oxides present in tailpipe exhaust for all 1994 vehicles and required that these standards be maintained for 100,000 miles. The Act also dictated the sale of only "reformulated" gasoline, which reduces volatility and toxic components and increases oxygen content, in the cities with the highest levels of ground-level ozone pollution and the sale of gasoline with a higher oxygen content in those cities that exceed standards for carbon monoxide. In Texas, the reformulated gasoline requirements apply to Houston, while oxygenated fuel requirements apply in El Paso. In cities where ozone pollution exceeds standards, the Federal Act requires consumers have their car or vehicle tailpipe emissions tested. Vehicles that do not meet the emission standards they were built to meet would have to be repaired.
Finally, the Act encouraged the development and sale of alternative fuels such as ethanol, liquified petroleum gas and natural gas by requiring manufacturers to begin producing such cars for sale - starting with the manufacture of 500,000 of these clean-fuel cars for sale in Southern California in 1999.(13) The Act also required private and government owners of large fleets of cars to purchase certain alternative fuel vehicles for their fleets in those cities with the most severe ozone problems (see section on Mobile Sources).
Using the Market to Control Pollution. The 1990 Clean Air Act significantly changed the government's approach to controlling air pollution, embracing for the first time a market-based strategy designed to give companies incentives to comply.
Here's how the system works. Under Title IV of the Clean Air Act, each of the 110 electric utilities with the most sulfur dioxide emissions is granted a set number of pollution "allowances," based on its historical fuel use. An allowance is equivalent to one ton of sulfur dioxide emissions. Each utility may emit sulfur dioxide up to the limit imposed by its allowances. However, if a utility emits less than its allotted amount by being more efficient, using a lower-sulfur fuel or using a renewable energy source like solar or hydroelectric power, it may sell its unused allowances to another utility as "pollution credits." Conversely, if a utility cannot stay within the limits imposed by its allowances, it can buy pollution credits from a less polluting utility. The system has two major advantages: it rewards companies that pollute less and yet it is flexible enough to accommodate companies which can not meet the standard of pollution control.
In addition to the allowances granted to companies based upon historical fuel use, 300,000 allowances (about 2.8 percent of the nearly 11 million tons of sulfur dioxide emitted each year) are placed in a special "Energy and Renewable Energy" reserve to reward companies for adopting new efficiency measures or renewable energy projects. These reserve allowances can either be sold directly by the company or be auctioned through the Chicago Board of Trade. On March 29, 1993, buyers at the Chicago Board of Trade paid $21.4 million for the right to emit 150,010 tons of sulfur dioxide.(15)
In 2000, a second phase of the program will extend "basic" allowances to all electric-steam utilities generating more than 25 megawatts. These two phases should help reduce sulfur dioxide emissions from 19 million to 8.9 million tons per year between 1985 and 2010.(16)
In theory, the market-based approach is designed to reduce pollution in the most cost-effective manner. The traditional "command and control" approach usually employed in environmental legislation would have required two different companies to reduce emissions in the same way. The market system permits Company A to reduce emissions to meet the requirements for both emitters and then sell some of these allowances to Company B at a lower price than would be needed for B to reduce pollutants.
Still, there are potential flaws in this "free trade" system. For example, the allowance program assumes that reductions in sulfur dioxide emissions will be of equal benefit to human health and the environment regardless of where they are made. This is not always true; some areas of the country are more prone to acid rain than others. The Adirondack Council, the local governing structure of the famous state park in upstate New York, has protested the fact that New England utilities will be allowed to sell pollution credits to Midwestern utilities, whose pollution is the source of acid rain already damaging Northeastern forests, lakes and rivers.(17)
| Market Incentives in Texas |
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| Texas is actively developing a variety of market-based mechanisms to reduce air pollution, including ozone, nitrogen oxide and pollution from cars. A few of these programs are described below.
Emission Reductions Credit Banking Program. Under the Federal Clean Air Act, any major new source of emissions in those areas that do not meet ozone standards - Houston/Galveston/Brazoria, Dallas/Fort Worth, El Paso and Beaumont/Port Arthur - must be more than offset by the reduced emissions from existing sources. For example, in order for a new industry that emits 50 tons per year of either nitrogen oxide or volatile organic compounds to locate in the El Paso area, there must be a corresponding reduction of 60 tons per year of those pollutants within El Paso. "Emission reduction credits" are seen as a flexi-ble alternative that allows growth to occur while still reducing overall pollution as required by the Clean Air Act. Under Texas' "Emissions Reductions Banking Rule," adopted in 1993, sources of VOCs and nitrogen oxide emissions receive emission reduction credits if they reduce emissions below the level required by law, either through a permanent reduction in emissions or by closing an emission source. These reduction credits are certified by the Texas Natural Resource Conservation Commission (TNRCC) and recorded or "deposited" in the Emissions Reductions Bank. A company can then sell its credits to companies within the same non-attainment area to new industries arriving in the area that need offsets for new permits or expansion of existing facilities.(14) Nitrogen Oxide Trading. In Houston/Galveston and Beaumont/Port Arthur, all major sources of nitrogen oxide such as utilities and petroleum refineries are required to achieve specific reductions in emissions by May 31, 1997 using "Reasonably Available Control Technology" (RACT). Under a new rule passed by the Texas Natural Resource Conservation Commission, rather than meeting this 1997 compliance deadline through RACT, a source could instead continue to emit previous levels of emissions by buying emission credits. For example, a source with multiple emission units could trade across units to achieve allowable emission levels even if some individual units did not comply. Or, two different facilities could trade among themselves so that the total emissions averaged out to the compliance level of emissions for the area. Under the Nitrogen Oxide RACT rule, however, a company could not use emission credits to increase pollution, only to meet the RACT emission limits. Alternative Fuels Program. Under a new rule adopted by the TNRCC, vehicles using conventional fuels in a private or public fleet which needs to comply with Clean Air Act requirements could be converted or scrapped in favor of vehicles using cleaner fuels not currently required by regulation. The resulting decrease in emissions would generate mobile emission reduction credits, which could be sold to other fleet operators unable to comply with fleet regulations. |
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