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126
was recommended as the main implementation mechanism (Market Advisory
Committee, 2007). While the implementation plan is still in development and there are
still debates on various aspects of AB 32, previous emissions trading experiences in
the U.S. may highlight some key issues regulators have to consider. In other words,
California’s regulators need to pay more attention to the mechanism of emissions
trading and how political negotiations among stakeholders may influence the design
and implementation of its cap-and-trade program. Currently, there are debates on its
design. Should California use a combination of grandfathering and auction? Should
CEMS be mandatory? How many sectors and facilities should be covered? All these
concerns have been addressed by businesses and environmental groups with very
different suggestions. Business groups are more concerned about the costs of a
cap-and-trade program, while environmental groups care more about environmental
equity/justice issues. Since the rulemaking of cap-and-trade is open to all stakeholders,
it is inevitable that California’s cap-and-trade program may come up with some
features that are not consistent with market principles as the results of compromises.
As the first state in the U.S. to initiate a state-level policy action to the fight
against global climate change, California faces a huge political challenge: the free
rider problem. Unlike the cap-and-trade programs of SO2 and NOx that have great
local or domestic benefits, the benefits of emission reductions of GHGs are more
global. Local efforts to address GHG emissions may provide global public goods, yet
the regulatory burdens and compliance costs to the California economy may be
tremendous. On the other hand, the leakage problem may also make California’s
efforts meaningless (Bushnell et al., 2007, Stavins, 2007). California is considering
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 137 |
| Contributing entity | University of Southern California |
| Repository email | cisadmin@lib.usc.edu |
| Full text | 126 was recommended as the main implementation mechanism (Market Advisory Committee, 2007). While the implementation plan is still in development and there are still debates on various aspects of AB 32, previous emissions trading experiences in the U.S. may highlight some key issues regulators have to consider. In other words, California’s regulators need to pay more attention to the mechanism of emissions trading and how political negotiations among stakeholders may influence the design and implementation of its cap-and-trade program. Currently, there are debates on its design. Should California use a combination of grandfathering and auction? Should CEMS be mandatory? How many sectors and facilities should be covered? All these concerns have been addressed by businesses and environmental groups with very different suggestions. Business groups are more concerned about the costs of a cap-and-trade program, while environmental groups care more about environmental equity/justice issues. Since the rulemaking of cap-and-trade is open to all stakeholders, it is inevitable that California’s cap-and-trade program may come up with some features that are not consistent with market principles as the results of compromises. As the first state in the U.S. to initiate a state-level policy action to the fight against global climate change, California faces a huge political challenge: the free rider problem. Unlike the cap-and-trade programs of SO2 and NOx that have great local or domestic benefits, the benefits of emission reductions of GHGs are more global. Local efforts to address GHG emissions may provide global public goods, yet the regulatory burdens and compliance costs to the California economy may be tremendous. On the other hand, the leakage problem may also make California’s efforts meaningless (Bushnell et al., 2007, Stavins, 2007). California is considering |
