Flexible Permitting Promotes Operating Flexibility and Facilitates Environmental Protection

摘要

In this paper, we compare designs for environmental permitting and their impact on capital investment decisions, process modification, operating flexibility, and compliance assurance. We examine both traditional permitting approaches, which set source-specific limits, and flexible permitting approaches, which set process or facility-wide emissions caps. We find that more flexible permitting approaches are favored over traditional source-specific caps because they enable facilities to make changes to their processes that make economic and environmental sense without incurring the costs and delays associated with permit modifications and new source review. Traditional environmental permitting approaches, especially under the Clean Air Act, can pose a significant burden to both industry and the permitting agency. Under these approaches, facilities considering innovations or process changes frequently must obtain permit modifications, which add to the time, cost, and risk associated with undertaking innovative process changes. Based on a series of interviews with facilities and permitting agencies in New Jersey and Texas, we compare these states' flexible permitting programs with traditional permitting. We find that the reduction in cost and risk associated with the flexible permitting system reduces the cost of modifying production processes, enabling them to respond to market demand and enhancing environmental protection.