Question

What are the difference and similarity between the Transferable Emission Permits and Emission Standards?

Answer 1

An effluent tax requires some central public authority to set a tax rate, track each polluter's performance and then collect the tax bills. It's essentially an arrangement between polluters and public authorities in which we might anticipate the same kind of adversarial relationship that we get in any tax system. The goal is to operate in a more decentralized manner while integrating economic incentives. Rather than leaving it to a centralized public body, it operates through the polluters themselves through the decentralized business interactions. It is called the transferable emission makes program (TEPs).

But TEP systems do come up with their own collection of issues. Obviously, the manner in which the TEP market works is important for whether this form of policy can succeed. There are a number of important factors: who gets the permits at the outset, the extent of their incentives to mitigate costs, the degree of market rivalry, the procurement rules set by the public agency administrator, the ability to track and enforce enforcement, etc. Nonetheless, the scheme of transferable discharge allowances seems to be an concept worthy of the recognition it gets.

Emissions requirements are continually changing globally, representing demands for air quality as well as expectations on the low, technologically feasible levels of emissions. Medium- and heavy-duty-vehicle emission levels have been in effect since the early 1990s. Although the standards are based on legislation relating to US and EU emissions, they are not necessarily identical. There are often dual standards which require new engines to meet either US or EU standards. Emissions requirements are continually changing globally, representing demands for air quality as well as expectations on the low, technologically feasible levels of emissions. The state of California has led the way in reducing the overall permitted pollution standards to tackle the extreme problems of air quality in southern California; however, many other countries have gradually shifted to progressively lower acceptable levels.