Point‐Nonpoint Trading – Can It Work?1

Ribaudo, Marc O. and Jessica Gottlieb, 2011. Point‐Nonpoint Trading – Can It Work? Journal of the American Water Resources Association (JAWRA) 47(1):5‐14. DOI: 10.1111/j.1752‐1688.2010.00454.x Abstract: Water quality trading between point and nonpoint sources is of great interest as an alternative to strict command and control regulations on point sources for achieving water quality goals. The expectation is that trading will reduce the costs of water quality protection, and may speed compliance. The United States Environmental Protection Agency has issued guidance to the States on developing point‐nonpoint trading programs, and United States Department of Agriculture is encouraging farmer participation. However, existing point‐nonpoint trading programs have resulted in very few trades. Supply side and demand side impediments seem to be preventing trades from occurring in most trading programs. These include uncertainty over the number of discharge allowances different management practices can produce, high transactions costs of identifying trading partners, baseline requirements that eliminate low‐cost credits, the reluctance of point sources to trade with unfamiliar agents, and the perception of some farmers that entering contracts with regulated point sources leads to greater scrutiny and potential future regulation. Many of these problems can be addressed through research and program design.     

Environmental performance of urban roadside traders in Jos,Nigeria

In the last ten years official location policy in Nigeria for urban roadside traders, an enterprising group of urban poor operating at the lowest level of the informal sector of the economy has been very negative. Government believes that they should be removed from the streets and tucked away in obscure locations because of their tendency to deface the streets with litter and for causing vehicular and pedestrian traffic congestion. This paper identifies and assesses the magnitude of pollution created by the traders as a prelude to evolving a planning policy and strategy for regulating and formally accommodating street traders in good locations while still ensuring good environmental quality.     

我国排污权交易的法律保障

排污权交易是总量控制目标下最具潜力的环境管理手段，兼具环境质量 保障和成本效率的特点，这一交易的标的是排污权。文章分析了我国实行排污权交易的必要性，并提出实行排污权交易必须提供的法律保障。     

Extension of EU Emissions Trading Scheme to Other Sectors and Gases: Consequences for Uncertainty of Total Tradable Amount

Emissions trading in the European Union (EU), covering the least uncertain emission sources of greenhouse gas emission inventories (CO₂ from combustion and selected industrial processes in large installations), began in 2005. During the first commitment period of the Kyoto Protocol (2008–2012), the emissions trading between Parties to the Protocol will cover all greenhouse gases (CO₂, CH₄, N₂O, HFCs, PFCs, and SF₆) and sectors (energy, industry, agriculture, waste, and selected land-use activities) included in the Protocol. In this paper, we estimate the uncertainties in different emissions trading schemes based on uncertainties in corresponding inventories. According to the results, uncertainty in emissions from the EU15 and the EU25 included in the first phase of the EU emissions trading scheme (2005–2007) is ±3% (at 95% confidence interval relative to the mean value). If the trading were extended to CH₄ and N₂O, in addition to CO₂, but no new emissions sectors were included, the tradable amount of emissions would increase by only 2% and the uncertainty in the emissions would range from −4 to +8%. Finally, uncertainty in emissions included in emissions trading under the Kyoto Protocol was estimated to vary from −6 to +21%. Inclusion of removals from forest-related activities under the Kyoto Protocol did not notably affect uncertainty, as the volume of these removals is estimated to be small.     

The Impact of Uncertainty on Banking Behavior: Evidence from the US Sulfur Dioxide Emissions Allowance Trading Program

In this paper, we study empirically whether uncertainty has an influence on trade in the US sulfur dioxide allowances market. In particular, we investigate the role of uncertainty on banking behavior. To do this, we introduce a tractable, structural model of trading permits under uncertainty. The model establishes a relation between banking behavior and risk preferences, especially prudence in the Kimball (1990) sense. We then test this model using data on allowances, for utilities submitted to the US Environmental Protection Agency’s Acid Rain Program, carried over from one year to the next. Evidence is found of imprudence, namely, utilities bank permits in order to favor higher profits. Another finding is that larger utilities do not adopt behavior significantly different from that of smaller ones. This paper was presented at the “International Workshop on Uncertainty in Greenhouse Gas Inventories: Verification, Compliance & Trading” in Warsaw, Poland, September 2004, under the title “Portfolio Management of Emissions Permits and Prudence Behavior.”     

Compliance and Emissions Trading under the Kyoto Protocol: Rules for Uncertain Inventories

A solution is proposed for proving compliance with emission targets and for emissions trading in the event of uncertainties in reported emission inventories. The solution is based on the undershooting concept, from which the mathematical conditions for both proving compliance with a risk α and calculating effective emissions for trading are derived. Based on the reported emission units, the number of permits granted is reduced in proportion to the uncertainty in the inventory. A country whose inventory has higher uncertainty is thereby allotted fewer permits than a country with the same inventory but smaller uncertainty.     

从"珠三角火力发电厂排污交易试验计划"看粤港区域环境管理制度创新机遇

总结排污交易在中国的发展历程,展望"珠三角火力发电厂排污交易试验计划实施方案"实施,粤港区域环境管理将面临着一次新的挑战,也是区域环境保护制度创新的重大机遇.     

Effective EU and Member State policies for stimulating CCS

Although CO₂ capture and storage (CCS) is widely recognised as an option to mitigate climate change, consistent and effective EU policies to advance CCS are still absent. This paper discusses policy instruments for advancing large-scale deployment of CCS in the European Union, and evaluates them in a multi-criteria analysis. The EU Emissions Trading Scheme (EU-ETS) is a cost-effective instrument for limiting greenhouse gas emissions, but it is questionable whether its currently limited time horizon and short-trading periods will lead to substantial CCS diffusion. Complementary policies at the EU and the Member State level may repair this and provide sufficient incentives for CCS. Potential policies include financial instruments such as investment subsidies, a feed-in scheme, or a CO₂ price guarantee, as well as a CCS mandate or a low-carbon portfolio. These policy options differ with respect to their environmental effectiveness, possible interaction with the EU-ETS, costs and financial risk involved, and their competition with other mitigation options. Interactions between Member State policies and the EU-ETS are smaller in scope than those of EU-wide policies, but they are more likely to lead to displacement of financial resources from other low-carbon technologies. In addition, national policies may pose a significant part of the financial risk of CCS operations with Member States, reducing the operator's incentive to innovate. Overall, structural policies at the EU level, such as a mandate or a low-carbon portfolio standard would be more conducive for realising large-scale deployment of CCS across the EU as well as more acceptable to environmental organisations.     

碳排放权初始分配方法与问题分析

为了有效减缓气候变化对人类社会可持续发展的威胁,积极有效控制二氧化碳的排放刻不容缓。排污权交易理论的提出与发展为低成本高效率地解决气候变化问题提供了可能。在深入研究排污权交易理论以及对比初始排污权分配的方法基础上,结合国内排污权交易市场与碳金融市场的发展情况,为国内构建成熟的排污权交易市场提出建议。     

Energy and economic impacts of an international multi-regional carbon market

The establishment of a global multi-regional carbon market is considered to be a cost effective approach to facilitate global emission abatement and has been widely concerned.The ongoing planned linkage between the European Union’s carbon market and a new emission trading system in Australia in 2015 would be an important attempt to the practice of building up an international carbon market across different regions.To understand the abatement effect of such a global carbon market and to study its energy and economic impact on different market participants,this article adopts a global dynamic computable general equilibrium model with a detailed representation of the interactions between energy and economic systems.Our model includes 20 economic sectors and 19 regions,and describes in detail 17 energy technologies.Bundled with fossil fuel consumptions,the emission permits are considered to be essential inputs in each of the production and consumption activities in the economic system to simulate global carbon market policies.Carbon emission permits are endogenously set in the model,and can be traded between sectors and regions.Considering the current development of the global carbon market,this study takes 2020 as the study period.Four scenarios(reference scenario,independent carbon market scenario,Europe Union（EUh-Australia scenario,and China-EU-Australia scenario） are designed to evaluate the impact of the global carbon market involving China,the EU,and Australia.We find that the carbon price in the three countries varies a lot,from $32/tCO₂ in Australia,to $17.5/tCO₂ in the EU,and to $10/tCO₂ in China.Though the relative emission reduction（3%） in China is lower than that in the EU（9%） and Australia（18%）,the absolute emission reduction in China is far greater than that in the EU and Australia.When China is included in the carbon market,which already includes the EU and Australia,the prevailing global carbon price falls from $22 per ton carbon dioxide（CO₂） to $12/tCO₂,due to the relatively lower abatement cost in China.Seventy-one percent of the EU’s and eighty-one percent of Australia’s domestic reduction burden would be transferred to China,increasing 0.03%of the EU’s and 0.06%of Australia’s welfare.The emission constraint improves the energy efficiency of China’s industry sector by 1.4%,reduces coal consumption by3.3%,and increases clean energy by 3.5%.