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9
In 1990, the Clean Air Act Amendments (CAAA) was passed as an extension
of the Clean Air Act (CAA) of 1977. It is clearly stated in the CAAA that all areas
were required to achieve ozone attainment within 20 years. Also market-based
instruments, including emissions trading, were strongly encouraged by the CAAA.
Los Angeles air basin was the only area in the U.S. to fit into the category of “extreme
nonattainment” for ozone (EPA, 2002, p. 5), and NOx is one of the major sources
contributing to the formation of ground level ozone4 (CBE, OBE, v.s. SCAQMD, et
al, 2003, p. 14). Thus, the SCAQMD was forced to address the problems of pollution
of SOx and NOx. Realizing the difficulties of traditional CAC instruments in emission
reduction, the SCAQMD began to consider cap-and-trade (CAT), a market-based
instrument to manage the air quality in Los Angeles basin. The RECLAIM program
was adopted by the SCAQMD Governing Board on October 15, 1993, with the policy
objective to “provide facilities with added flexibility in meeting emissions reduction
requirements while lowering the cost of compliance” (SCAQMD, 2004, p.1).
As the first region that began to experiment with emissions trading to address
air pollution problems, the SCAQMD faced considerable regulatory uncertainties
during the regulatory design process. Various interest groups, including federal and
state agencies, environmental organizations and business groups, participated in policy
dialogues and rulemaking processes. On October 15, 1993, the Regional Clean Air
Incentives Market program (RECLAIM) was adopted by the SCAQMD Governing
Board, and cap-and-trade was used as the primary instrument. Since January 1, 1994,
4 Ozone is “an air pollutant produced in the presence of sunlight from the primary emissions of NOx
and volatile organic compounds in the lower atmosphere” (CBE, OCE, v.s. SCAQMD, et al., 2003, p.
14).
Object Description
| Title | Processes, effects, and the implementation of market-based environmental policy: southern California's experiences with emissions trading |
| Author | Zhan, Xueyong |
| Author email | xzhan@usc.edu; xueyongzhan@gmail.com |
| Degree | Doctor of Philosophy |
| Document type | Dissertation |
| Degree program | Public Administration |
| School | School of Policy, Planning, and Development |
| Date defended/completed | 2008-07-01 |
| Date submitted | 2008 |
| Restricted until | Unrestricted |
| Date published | 2008-10-30 |
| Advisor (committee chair) | Tang, Shui-Yan |
| Advisor (committee member) |
Mazmanian, Daniel A. Henry, Ronald |
| Abstract | This research provides a positive explanation of the implementation processes and effects of market-based environmental policy by conducting a case study on RECLAIM (Regional Clean Air Incentives Market), the first regional emission permits trading program that has been implemented by South Coast Air Quality Management District (SCAQMD) to address air pollution problems in the Los Angeles air basin since 1994.; Firstly, I developed a game theoretic model of environmental policy implementation. This model integrates theories of administrative rulemaking, policy implementation, institutional rational choice and transaction cost politics. I argue that administrative agency tries to minimize political transaction costs of policy implementation when writing rules.; Based on the formal model, I conducted a quantitative analysis to examine the interactions between SCAQMD and its key stakeholders, such as federal, state and local governments, businesses, and environmental NGOs, during the rulemaking of RECLAIM. I found that SCAQMD is more likely to adopt rule changes suggested by state and federal environmental agencies. This research identifies the dominant role of organized interest groups, the existence of interagency lobbying, and the lack of citizen control over the rulemaking of RECLAIM. Furthermore, I conducted an evaluation of the rules governing the RECLAIM program, and I identify the major distortions of the RECLAIM rules in comparison with an ideal cap-and-trade emissions trading market. Also, I used OLS regression to examine the effects of policy difference on emission level in California between 1990 and 1999. This evaluation fails to reject the null hypothesis that using cap-and-trade (CAT) compared with using command-and-control (CAC) has no different effects on emission of both NOx and SO2 from point sources at the county level in California in the 1990's.; In summary, this research finds that the implementation of emissions trading is political, and interest group politics may distort the regulatory design and implementation of an emissions trading program. While cap-and-trade is promising to better protect our environment and natural resources, its implementation is conditioned by many political and administrative factors. Inadequate rules may come as the results of political compromises, and they may impact the functioning of an emissions trading system. |
| Keyword | emissions trading; rulemaking; RECLAIM; implementation; environmental governance |
| Geographic subject (city or populated place) | Los Angeles |
| Geographic subject (state) | California |
| Coverage date | 1990/2000 |
| Language | English |
| Part of collection | University of Southern California dissertations and theses |
| Publisher (of the original version) | University of Southern California |
| Place of publication (of the original version) | Los Angeles, California |
| Publisher (of the digital version) | University of Southern California. Libraries |
| Provenance | Electronically uploaded by the author |
| Type | texts |
| Legacy record ID | usctheses-m1719 |
| Contributing entity | University of Southern California |
| Rights | Zhan, Xueyong |
| Repository name | Libraries, University of Southern California |
| Repository address | Los Angeles, California |
| Repository email | cisadmin@lib.usc.edu |
| Filename | etd-Zhan-2335 |
| Archival file | uscthesesreloadpub_Volume44/etd-Zhan-2335.pdf |
Description
| Title | Page 20 |
| Contributing entity | University of Southern California |
| Repository email | cisadmin@lib.usc.edu |
| Full text | 9 In 1990, the Clean Air Act Amendments (CAAA) was passed as an extension of the Clean Air Act (CAA) of 1977. It is clearly stated in the CAAA that all areas were required to achieve ozone attainment within 20 years. Also market-based instruments, including emissions trading, were strongly encouraged by the CAAA. Los Angeles air basin was the only area in the U.S. to fit into the category of “extreme nonattainment” for ozone (EPA, 2002, p. 5), and NOx is one of the major sources contributing to the formation of ground level ozone4 (CBE, OBE, v.s. SCAQMD, et al, 2003, p. 14). Thus, the SCAQMD was forced to address the problems of pollution of SOx and NOx. Realizing the difficulties of traditional CAC instruments in emission reduction, the SCAQMD began to consider cap-and-trade (CAT), a market-based instrument to manage the air quality in Los Angeles basin. The RECLAIM program was adopted by the SCAQMD Governing Board on October 15, 1993, with the policy objective to “provide facilities with added flexibility in meeting emissions reduction requirements while lowering the cost of compliance” (SCAQMD, 2004, p.1). As the first region that began to experiment with emissions trading to address air pollution problems, the SCAQMD faced considerable regulatory uncertainties during the regulatory design process. Various interest groups, including federal and state agencies, environmental organizations and business groups, participated in policy dialogues and rulemaking processes. On October 15, 1993, the Regional Clean Air Incentives Market program (RECLAIM) was adopted by the SCAQMD Governing Board, and cap-and-trade was used as the primary instrument. Since January 1, 1994, 4 Ozone is “an air pollutant produced in the presence of sunlight from the primary emissions of NOx and volatile organic compounds in the lower atmosphere” (CBE, OCE, v.s. SCAQMD, et al., 2003, p. 14). |
