Cap and trade program design options by philippines
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Each allowance permits a unit to emit one ton of SO 2. Sources may choose among several options to reduce emissions. Sources may sell or bank save excess allowances if they reduce emissions and have more than they need, or purchase allowances if they are unable to keep emissions below their allocated level. At the end of the year, each source must hold sufficient allowances to cover its SO 2 emissions each allowance represents one ton of emissions.
The Acid Rain Program called for a two million ton reduction in NO x emissions below levels by A significant portion of these reductions have been achieved by coal-fired utility boilers that have installed low-NO x burner technologies.
As with the SO 2 emission reduction requirements, the NO x program was implemented in two phases, beginning in and The NO x program embodies many of the same principles of the SO 2 trading program, in that it also has a results-oriented approach, flexibility in the method to achieve emission reductions, and program integrity through measurement of the emissions. However, it does not "cap" NO x emissions as the SO 2 program does, nor does it utilize an allowance trading system. An applicability determination is a formal EPA response to questions about how regulations apply to a particular situation.
The references after each description highlight the key provisions applied in each response. Each determination is based on application of 40 CFR Contact Us to ask a question, provide feedback, or report a problem. Jump to main content. NO x reductions under the ARP are achieved through a program that applies to a subset of coal-fired EGUs and is closer to a traditional, rate-based regulatory system.
Since the program began in , the ARP has achieved significant emission reductions. See our annual progress reports for more information on the progress of the ARP.
The ARP was the first national cap and trade program in the country and it introduced a system of allowance trading that uses market-based incentives to reduce pollution. Reducing emissions using a market-based system provides regulated sources with the flexibility to select the most cost-effective approach to reduce emissions, and has proven to be a highly effective way to achieve emission reductions, meet environmental goals, and improve human health.
Title IV of the Clean Air Act set a goal of reducing annual SO 2 emissions by 10 million tons below levels by means of a two-phase cap and trade program for fossil fuel-fired power plants:. Reductions in SO 2 emissions are facilitated through a market-based cap and trade system. The allowance trading system includes low-cost rules of exchange that tailor EPA's administrative role and facilitate allowance trading as a viable compliance strategy for reducing SO 2.
Under this system, EPA sets a cap on overall emissions. SO 2 allowances are then allocated to affected units serving generators greater than 25 megawatts. All new units based on their historic fuel consumption and specific emission rates. Each allowance permits a unit to emit one ton of SO 2. Sources may choose among several options to reduce emissions. Sources may sell or bank save excess allowances if they reduce emissions and have more than they need, or purchase allowances if they are unable to keep emissions below their allocated level.