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RECLAIM: Southern California's Failed Experiment With Air Pollution Trading

March 2003

Citation: ELR 10261

Author: Curtis A. Moore

The bottom line is that capitalism may now be getting its ultimate test. For the smog market, more than any other system, will reveal whether financial incentives can prod major corporations into simultaneously acting for the public good and their own profit. Tom Elias The Daily Breeze, December 27, 1993

Manufacturers, power plants[,] and refineries have reduced emissions by a scant 16%--much less than was anticipated by this time. Businesses were given 10 years to eliminate about 13, tons of pollution annually, but as the program nears its end they have eliminated just 4, tons, according to projections by the South Coast Air Quality Management District. The Los Angeles Times, April 17, 2001

It is unlikely that any metropolitan area in the world has a longer, more distinguished record of combating air pollution than southern California. It is there that the linkage between car, truck, and other exhaust fumes and the thick clouds of "smog" blanketing the area was established by Dr. Arie Haagen-Smit. It is in California that the first motor vehicle emission control program--still the world's most stringent--was established and the first coordinated air pollution control program adopted. Relying almost wholly on traditional "command-and-control" mechanisms in which polluters were identified, then required under penalty of law to curb their pollution, the area made almost fantastic strides in curbing air pollution from the 1950s through the mid-1990s.

It is not surprising, therefore, that when southern California decided in 1993 to partially abandon traditional command-and-control regulation in favor of a novel and untried system of "trading," in which polluters could exchange their emissions not unlike stocks and bonds, it attracted notice throughout the world.

Curtis Moore, coeditor and publisher of the Health & Clean Air Newsletter (http://healthandcleanair.org), was Republican counsel to the U.S. Senate Committee on Environment and Public Works from 1978-1989, where he worked on a wide range of environmental laws and issues. He is also the coauthor with Alan Miller of Green Gold: Japan, Germany, the United States, and the Race for Environmental Technology, as well as numerous articles in periodicals ranging from Ambio to the New York Times. As a consultant on international environmental policies and technologies, his clients have included Tokyo Electric Power, the California Air Resources Board, and Greenpeace.

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