EPA Approves Emissions Trading Scheme

By Brian Hansen

CHICAGO, Illinois, December 19, 2000 (ENS) - The U.S. Environmental Protection Agency has taken steps to formally sanction the state of Illinois' controversial program of allowing industrial polluters to trade air pollution credits in the smoggy Chicago metropolitan area. The state of Illinois' so called "cap and trade" program for emissions of volatile organic compounds is the first such initiative in the country.


A 1999 American Lung Association study found that long term exposure to ozone can damage the lungs of children. (Photo by Leroy Woodson, courtesy EPA)

Two other states - New Jersey and Michigan - are expected to propose similar initiatives to the U.S. Environmental Protection Agency (EPA) for trading volatile organic compound (VOC) emissions credits in their nonattainment areas. The EPA is expected to approve all three proposals.

Under the Illinois program, polluters that voluntarily cap their VOC emissions at levels 12 percent less than their 1996 levels are eligible to receive emission "credits" from state environmental regulators. Participating polluters then have a choice of choice of actually cutting their emissions by 12 percent, or buying credits from another VOC polluter that pledges to cut its emissions by that amount, in addition to its own 12 percent reduction.


Under the Illinois plan approved by EPA, refineries such as this this one will be able to trade emissions credits with other facilities in an effort to lower the total amount of pollution in the region. (Photo courtesy of the North Atlantic Company)

EPA officials say the trading program effectively reduces VOC emissions by 12 percent in the Chicago metropolitan area, which does not currently meet national health based standards for ozone. Moreover, the trading program will allow participating companies reduce their emissions in sectors that are easiest and cheapest for them to control, EPA officials emphasize.

"We congratulate Illinois for taking this ground breaking approach to reducing emissions that cause ozone," said EPA regional administrator Francis Lyons. "This approach will reward companies that develop new ways to cut their VOC emissions."

VOCs are emitted through a variety of sources, including industrial plants, automobiles and consumer products such as paint strippers. VOCs are classified as ozone precursors, which means that they contribute to the creation of "bad" ground level ozone - commonly known as urban smog - when they react with sunlight and hot weather.

The EPA says the health effects from VOC exposure can include eye, nose, and throat irritation; headaches, loss of coordination and nausea. Overexposure can also cause damage to liver, kidney and central nervous system.


Many city dwellers suffer serious health effects from exposure to urban smog. (Photo courtesy EPA )

Some VOCs can cause cancer in animals, and some are suspected or known to cause cancer in humans. Millions of Americans live in areas that are out of attainment with national ozone health standards established by the EPA.

Repeated exposure to ozone pollution may cause permanent damage to the lungs. Inhaling ozone even in low levels can trigger a variety of health problems, including chest pains, coughing, nausea, throat irritation and congestion. It can also worsen bronchitis, heart disease, emphysema, and asthma, as well as reduce lung capacity.

Scientists have also found that ground level, or "bad" ozone interferes with the ability of plants to produce and store food, making them more susceptible to disease, insects, and other detrimental forces. The EPA estimates that ground level ozone reduces crop production by some $500 million per year.

Bad ozone also wreaks havoc on the foliage of trees and other plants, ruining the landscapes of cities, national parks and recreation areas.

The Chicago metropolitan area currently does not meet the national health based standard for ozone, and is classified by EPA as a "severe nonattainment area" for the air pollutant.

The EPA's Lyons was optimistic that the novel VOC emissions trading program will be an effective way to address the problem, arguing that successful emissions control initiatives are not "one size fits all."

"This program will allow each company to find its own best means of achieving environmental improvement," Lyons said.

Others see things differently. Public Employees for Environmental Responsibility (PEER), a Washington, DC based government watchdog group, argues that such trading programs will allow industries to avoid installing cleanup technologies by instead purchasing air pollution reductions that have been produced in another time or place, or with an altogether different pollutant.


Smog blankets the city of Houston, Texas. (Photo courtesy Galveston-Houston Association for Smog Prevention)

PEER, a whistleblower protection group, says that the EPA's own experts have come forward with grave concerns about such emissions trading schemes.

"According to the agency's own experts, these state trading plans strip away the only safeguards that ensure [that] a true reduction in pollution will result," said Jeff Ruch, the group's executive director. "The public is protected only if we know that each pollution credit trade is an 'apple to apple' exchange. However, EPA is willing to allow an apple to be traded away for the future promise of a guava."

Ruch maintains that such "don't ask, don't tell" emissions trading schemes pose serious public health and environmental consequences. Such programs, he noted, could allow companies to increase their emission of highly toxic chemicals such as benzene, if another company decreases its emissions of nitrogen oxide or some other relatively non-toxic substance.

Such emissions trading programs could also run counter to principles of "environmental justice" by giving big industrial polluters the means to operate unencumbered in low income and minority neighborhoods, Ruch added.


African American children play in the shadow of a polluting facility. Critics maintain that emissions trading programs will disproportionately harm minority communities. (Photo courtesy of Corporate Watch)

Ruch pointed out that the EPA's approval of the Illinois emissions trading scheme comes on the heels of the failed climate change talks held recently in The Hague, Netherlands. At that summit, the United States' proposal to meet greenhouse gas reduction levels through a market based emissions trading program was rejected by a host of countries, Ruch noted.

Ruch blamed the outgoing Clinton/Gore administration for allowing the EPA to approve emissions trading programs like the one put forward by Illinois. Ruch said the administration has allowed its "fixation" on developing market based solutions to "distract it from its primary responsibility of protecting public health."

The Illinois proposal will be open to public comment for 30 days. The EPA's approval notice can be viewed online at: http://www.epa.gov/fedrgstr/EPA-AIR.