Ozone Attainment Strategies Based on 'Cap and Trade' - An Overview of Market-Based Emissions Control for the Houston/Galveston Ozone Nonattainment Area

摘要

The eight-county Houston/Galveston, Texas area is classified as a severe ozone nonattainment area. In 1998, the area gained national attention when the total number of ozone exceedance days surpassed the number in Los Angeles, CA which caused the media to rank Houston as the "smoggiest city" in the nation . To bring the area into attainment with the 1-hour ozone National Ambient Air Quality Standard (NAAQS), the Texas Natural Resource Conservation Commission (TNRCC) has proposed revisions to the State Implementation Plan (SIP). One of the agency's attainment demonstration strategies is to control emissions of NOx from industrial sources through a market-based "cap and trade" program. Based on modeling using emissions inventory data, the TNRCC determined that approximately 750 tons of NO_x will have to be cut from the Houston/Galveston area airshed each day. The proposed SIP changes will achieve the bulk of these reductions from the industrial sector. The cap and trade program is designed specifically for industrial sources with a facility-wide potential to emit over 10 tpy of NOx. Smaller sources may also "opt-in" to the program on a very limited basis. Each affected source will be given an allocation of allowances - essentially a new facility-wide maximum allowable NO_x emission rate. The new rate will represent roughly a 90% reduction from present facility-wide emissions levels. However, instead of assigning an allowable rate to each individual piece of equipment, the allocation remains at the facility-wide level. If a source cannot achieve sufficient reductions to meet this new limit (the "cap"), allowances may be purchased from another facility with a surplus. This paper expands upon the basics of the cap and trade program proposed for the Houston/Galveston area, including how the cap is determined, provisions for "opting in", mechanisms for trades, and the potential cost-effectiveness of this emission control strategy.