CONCLUSIONS

Reforming Air Pollution Regulations explores the competing arguments for and against emissions trading through case studies of more than a dozen of the approximately 40 bubbles for existing sources proposed for approval by EPA. Drawing also on the research of others, it offers the following conclusions:

1. A few bubbles have reduced pollution more than compliance with conventional regulatory requirements would have. Tn manv other cases, however, the emission reductions attributed to bubbles appear not to have been the result of the opportunity to trade. Rather, the emission reductions under the bubble merely represent regulators' acknowledgment of companies' past responses to conventional control requirements, where the companies had controlled more than required without the incentive provided by trading.
2. A few bubbles have sped pollution abatement, producing reductions in emissions faster than would have occurred in response to conventional control requirements.
3. Bubbles have produced significant cost savings. Even if o ne were to discount claims of savings by a 20 to 50 percent "skepticism" factor, the savings have been considerable. This cost-rationalizing element of bubbling is vulnerable to criticism in communities whose ability to meet air quality standards is in doubt, for cost savings have resulted from forgoing previously identified controls that these communities may need to reach the standards.
4. Bubbles have added some useful flexibility to the Clean Air Act's administration even though their environmental benefits and detriments on the whole have been unremarkable.
5. The bubble policy has inspired virtually no technological innovation.
6. The participation of environmental and public interest grc-ups h'as been vitally important in promoting disapproval of bubbles whose environmental benefits have been misrepresented by applicants. Participation has also encouraged more thorough review and assessment of proposed rules governing emissions trading.

Back...