pollution allowance


Also found in: Dictionary.
Related to pollution allowance: Cap and trade

pollution allowance

or

emission rights,

government-issued permit to emit a certain amount of a pollutant. The holder of the permit may use it to pollute legally, may trade permits, or may sell the permit for a profit. The allowance issued to a polluter is reduced over time as permitted levels of a pollutant are cut. By specifying reductions in emissions but leaving the polluter to decide how to cut them, the system is intended to provide free-market incentives to lessen both pollution (principally acid rainacid rain
or acid deposition,
form of precipitation (rain, snow, sleet, or hail) containing high levels of sulfuric or nitric acids (pH below 5.5–5.6).
..... Click the link for more information.
) and compliance costs. A company that cuts its pollution below its permitted level may sell the surplus allowance; a company that exceeds its limits without purchasing an extra allowance is fined. Under the Clean Air Act of 1990, federal allowances for sulfur dioxide emissions are issued to polluters, and additional allowances are auctioned. Usually bought by companies, allowances are sometimes purchased by environmentalists who retire them in order to reduce overall emissions. Sponsored by the Environmental Protection Agency and run by the Chicago Board of Trade, the first U.S. air pollution auction was held in 1993. While many have praised the system's innovative market-driven approach to the problem of environmental pollution, critics question its monitoring provisions and raise the possibility that it may merely shift pollution from one region to another. Under the 1997 Kyoto Protocol on greenhouse gases (as amended in 2001; effective 2005; extended to 2020 in 2012), nations that emit fewer such gases than permitted under the accord may sell their surplus emission rights to other nations.
References in periodicals archive ?
The resolution called upon Congress to impel the EPA to act by tracking pollution allowance trading.
The greater the difference in damages caused by emissions from any pair of firms, the higher the exchange rate and the greater the spread between the prices that they face for pollution allowances.
Entec backs a process of auctioning pollution allowances.
Obama backs a Aocap-and-tradeAo system to limit carbon emissions and establish a market in pollution allowances, a proposal that passed the House and has stalled in the Senate.
25) Grandfathering subjects existing sources to more lax requirements than those faced by new pollution sources and often grants them an economic advantage, such as by giving existing sources freely distributed pollution allowances.
But after the initial free pollution allowances are phased out, electricity prices could be 19 percent higher by 2030.
Under such a system, emissions targets would be progressively cut and the number of allowances would diminish, leaving anyone who has not reduced emissions short of pollution allowances and facing significant costs.
But about 15 percent of such pollution allowances would be auctioned by bid, with the proceeds used to cover higher energy costs for people with lower income.
It sets up a carbon trading system that is expected to raise upward of $60 billion annually through the sale of pollution allowances.
Its proposals include a limit on carbon emissions, a renewable energy standard and a cap and trade system for pollution allowances.
Reducing electricity, heating, and cooling loads (and bills) in our homes, offices, and buildings, and our consumption of gasoline by making our transportation system more efficient, can be accelerated if we auction, instead of doling out for free, the pollution allowances that are the heart of a cap-and-trade program.
establish an economy-wide GHG cap-and-trade system that auctions 100 percent of carbon pollution allowances, promotes energy efficiency and accelerates clean energy technologies;