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95
CACs, an assumption that may be wrong. Stated differently, the cost-effectiveness of
emissions trading is not self-evident.
Theoretically the logic behind cap-and-trade is quite straightforward (Atkinson
and Tietenberg, 1987), and cap-and-trade systems can produce efficient and effective
environmental outcomes if there are no transaction costs. In an ideal setting, permits
are treated as property; the allocation of permits is through auction; inter-temporal and
inter-regional trading should be allowed; compliance and monitoring costs are low.
However, the implementation rules and processes can be very complex for various
political and administrative reasons. Thus, it is unclear whether the rules of an
environmental market are able to create strong incentives for participants to actively
reduce emissions or trade permits so as to produce the most efficient and effective
environmental outcomes. While presumably the environmental effectiveness of
cap-and-trade emissions trading should be the same as, if not better than, traditional
command-and-control instruments (Crocker, 1966, Dales, 1968, Ellerman, 2003), in
practice it is always difficult to compare the effectiveness of emissions trading
programs with command-and-control regulations because we do not know what would
have happened if no emissions trading program has been implemented in a place. In
recent years, scholars have raised questions regarding the effectiveness issue (Drury et
al., 1999, Stavins, 1995). Is market-based environmental governance more effective
than traditional command-and-control regulations? How do implementation rules and
processes relate to the effects of emissions trading? There are still doubts from
environmental groups, businesses and even policy makers, and answers to these
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 106 |
| Contributing entity | University of Southern California |
| Repository email | cisadmin@lib.usc.edu |
| Full text | 95 CACs, an assumption that may be wrong. Stated differently, the cost-effectiveness of emissions trading is not self-evident. Theoretically the logic behind cap-and-trade is quite straightforward (Atkinson and Tietenberg, 1987), and cap-and-trade systems can produce efficient and effective environmental outcomes if there are no transaction costs. In an ideal setting, permits are treated as property; the allocation of permits is through auction; inter-temporal and inter-regional trading should be allowed; compliance and monitoring costs are low. However, the implementation rules and processes can be very complex for various political and administrative reasons. Thus, it is unclear whether the rules of an environmental market are able to create strong incentives for participants to actively reduce emissions or trade permits so as to produce the most efficient and effective environmental outcomes. While presumably the environmental effectiveness of cap-and-trade emissions trading should be the same as, if not better than, traditional command-and-control instruments (Crocker, 1966, Dales, 1968, Ellerman, 2003), in practice it is always difficult to compare the effectiveness of emissions trading programs with command-and-control regulations because we do not know what would have happened if no emissions trading program has been implemented in a place. In recent years, scholars have raised questions regarding the effectiveness issue (Drury et al., 1999, Stavins, 1995). Is market-based environmental governance more effective than traditional command-and-control regulations? How do implementation rules and processes relate to the effects of emissions trading? There are still doubts from environmental groups, businesses and even policy makers, and answers to these |
