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Improving Air Quality: Controlling Stationary Sources

Improving Air Quality: Controlling Stationary Sources. Chapter 12. 1. Understanding Acidic Deposition What is Acidic Deposition?. Occurs when sulfuric and nitric acids mix with other airborne particles and fall to earth as wet or dry ____________

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Improving Air Quality: Controlling Stationary Sources

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  1. Improving Air Quality: Controlling Stationary Sources Chapter 12

  2. 1. Understanding Acidic DepositionWhat is Acidic Deposition? • Occurs when sulfuric and nitric acids mix with other airborne particles and fall to earth as wet or dry ____________ • These acids arise from the chemical reaction of SO2 and NOx emissions with water vapors and oxidants in atmosphere • _____ is the more significant contributor • Major sources are fossil-fueled electricity plants, refineries, and other users of sulfur-containing fuel 69% of SO2 and 20% of NOX: from coal-burning power plants

  3. Acid rain is a regional pollution problem; it causes damage to human health, surface water, forestry, buildings…

  4. 2. Controlling Stationary SourcesOverview • Stationary sources include electric power plants, chemical plants, steel mills, etc. • Primary controls in the U.S. are ___________ _________________with_______________ ___________ added over time • These controls vary with • Facility age (new versus existing) • Facility location (PSD versus nonattainment area) Prevention of Significant Deterioration

  5. (1) Technology-based StandardsDual-Control Approach facilities constructed/modified after 1970 • For new/modified stationary sources • ____-administered stringent limits, New Source Performance Standards (NSPS), are used; more stringent • For existing stationary sources • _____-administered limits are used; less stringent

  6. FYI Setting the Control Technologies • PSD areas (more stringent) • New sources: limits based on best available control technology (BACT) • Existing sources: limits based on best available retrofit technology (BART) • Nonattainment areas (less stringent) • New sources: limits based on lowest achievable emissions rate (LAER) • Existing sources: limits based on reasonable available control technology (RACT) 1 2 3 4

  7. FYI Emission limits in PSD areas are more stringent than those in nonattainment areas; Emission limits for new sources are more stringent than those for existing sources

  8. (2) Emissions Trading • For existing sources • Bubble policy: plants can measure emissions of a single pollutant as an __________ of all emission points • Emissions banking: a source can save __________________________ if it cuts emissions more than required by law and can deposit these through a banking program

  9. Bubble: as if the emissions were captured within a bubble --a facility does not have to apply a uniform limit to each point --the facility can employ abatement equipment to those points where procedures can be implemented more inexpensively --overall limit is achieved in a more cost-effective manner

  10. For new/modified sources • Netting: for use in _____ areas by modified sources; any added emissions associated with a plant modification must be exactly ________ by a reduction from some where else within that same plant • Offset plan: for use in ________________ areas; uses emissions trading to allow releases from a new/modified source to be more than countered by reductions achieved by existing sources Involves trades between existing and new sources

  11. (3) Acid Rain Program: SO2 Emissions Allowance Trading • ________ of the 1990 CAAA established a two-phase acid rain initiative, establishing: • a reduction plan for NOX emissions • a cap and trade allowance program for SO2 emissions • Phase I for the 1995–1999 period; phase II for the 2000–2009 period

  12. Cap and Trade Program for SO2 • National SO2 emissions caps established a permanent annual cap of _____ million tons for electric power plants starting in 2000, tightened to 8.95 million tons for 2010 • SO2 Emissions Allowance Program • EPA issues tradeable emission allowances: each allowance permits the release of ______ of SO2 • Total number issued sets the national limit • Auctions also are held for direct sale of allowances • Administered by the Chicago Board of Trade The first auction was held in 1993

  13. (4) Ozone Control: NOX Trading Programs • Established under CAAA 1990, the Ozone Transport Commission (OTC) developed the OTC NOX Budget Program • In 1998, a new initiative, the NOX SIP call, required affected states to submit revised State Implementation Plans (SIPs) to achieve certain emission limits during ozone season, starting in 2003 • EPA recommended using a cap and trade program and established the NOX Budget Trading Program (NBP) in 2003 as successor to the original OTC program • Goal is to reduce NOX emissions by _________ _____per year The first year of trading was 2003

  14. 3. Analyzing Stationary Source Controls(1) Higher Cost of CAC Methods • Standards-based approach is _____________ • The inflexibility adds to society’s costs and gives low-cost abaters no incentive to clean up beyond the level set by law • Most empirical studies show that the cost of using a command-and-control instrument relative to the least-cost method is _________ than 1

  15. (2) New Source BiasDual Control Approach • Existing sources are controlled by states, which have an incentive to set relatively _________ standards to avoid losing firms to other states • In turn, firms have an incentive not to initiate new construction to avoid the more stringent and more costly NSPS • Result is that the dual control approach perversely ____________ construction of new and presumably cleaner-running new facilities Firms: maintain their existing facilities

  16. (3) Cost-effectiveness of Emissions Trading Programs • Low-cost abaters will reduce emissions and sell excess allowances (suppliers) • Will sell at any P higher than their MAC • High-cost abaters will buy allowances rather than abate (demanders) • Will buy at any P lower than their MAC • Trading should continue until MACs are equal, achieving a cost-effective solution

  17. Polluter’s Abatement DecisionExample: SO2 Abatement $ MAC Up to A0, cheaper for firm to abate; MAC < P P of 1-ton allowance Beyond A0, cheaper for firm to buy allowances; P < MAC SO2 Abatement (millions of tons) 0 A0 The polluter would abate A0 units of SO2.

  18. An emissions cap:A limit on the total amount of pollution that can be emitted (released) from all regulated sources (e.g., power plants); the cap is set lower than historical emissions in order to reduce emissions. Allowances:An authorization to emit a fixed amount of a pollutant. Allowance trading: Sources can buy or sell allowances on the open market. Because the total number of allowances is limited by the cap, emission reductions are assured. FYI

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