Abstract: Ground-level ozone remains a serious problem in the United States. Because ozone nonattainment is a summer problem, episodic rather than continuous controls of ozone precursors are possible. We evaluate the costs and effectiveness of an episodic scheme that requires people to buy permits to drive on high-ozone days. We estimate the demand function for permits based on a survey of 1,300 households in the Washington, DC, metropolitan area. Assuming that all vehicle owners comply with the scheme, the permit program would reduce volatile organic compounds (VOCs) by 50 tons and nitrogen oxides (NOx) by 42 tons per Code Red day at a permit price of $75. Allowing for noncompliance by 15 percent of respondents reduces the effectiveness of the scheme to 39 tons of VOCs and 33 tons of NOx per day. The cost per ozone season of achieving these reductions is approximately $9 million (2008 USD). This compares favorably with permanent methods of reducing VOCs that cost $645 per ton per year.

Abstract: It appears inevitable, absent legislative intervention, that regulation under the Clean Air Act (CAA) will move beyond mobile sources to the industrial and power facilities that emit most U.S. greenhouse gas (GHG) emissions. We analyze the mechanisms available to the EPA for regulating such sources, and identify one, New Source Performance Standards (NSPS) as the most predictable, likely, and practical, i.e. knowable, pathway. Based on the legal structure of the NSPS and the EPA’s traditional approach, we analyze a hypothetical GHG NSPS for one sector, coal electricity generation. This analysis indicates that efficiency improvements and perhaps biomass cofiring could be implemented through the NSPS, yielding modest but meaningful emissions reductions. Trading could also rein in costs. Though analysis is limited to one sector and does not include modeling of costs, it suggests that CAA regulation, though inferior to comprehensive climate legislation, could be a useful tool for regulating stationarysource GHGs.