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Tradable Standards for Clean Air Act Carbon Policy

April 2012

Citation: 42 ELR 10338

Issue: 4

Author: Dallas Burtraw, Art Fraas, and Nathan Richardson

EPA is in the process of regulating U.S. greenhouse gas (GHG) emissions using its powers under the Clean Air Act. The likely next phase of this regulatory program is performance standards under §111 of the Act for coal plants and petroleum refineries, which the Agency has committed to finalize by the end of 2012. Section 111 appears to allow use of flexible, marketbased regulatory tools. One such tool, tradable standards, appears to be a legally and politically viable choice for the Agency, and evidence suggests they are substantially more cost-effective than traditional performance standards.

Dallas Burtraw is Darius Gaskins Senior Fellow, Art Fraas is a Visiting Scholar, and Nathan Richardson is a Resident Scholar at Resources for the Future.

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