CAPITULO II: Marco Teórico
2.1 Antecedentes de la investigación
2.1.7 El neoinstitucionalismo y la acción pública como elementos
The first policy scenario that we analyze is the EPA’s Clean Air Interstate Rule (CAIR) in combination with the version of EPA’s proposed mercury rule that includes mercury trading.25
23 For modeling convenience our version of the NOx SIP Call region includes all the generators located in New England, New York, MAAC, ECAR, and SERC. Thus, we inflate the summertime NOx emissions cap to be large enough to cover emissions from those generators in this region not covered by the regulation.
24 Under the form of updating modeled in the New York SO
2 policy, emission allowances are distributed to emitting
plants based on their share of total electricity generation from all plants covered by the regulation in the year three years prior to the current year. As a facility increases its share of generation, it gradually increases its share of total emission allowances.
25 The two competing proposals for regulating mercury from EPA and the resulting final rules are described in Appendix 4.
Under the originally proposed version of CAIR, emissions of SO2 and NOx are regulated within a 28 state region,
mostly east of the Mississippi, plus the District of Columbia.26 The region is a supplement to the Title IV SO
2
trading program and a replacement for the seasonal NOx SIP Call program for electricity generating units. Under the proposed rule, regional annual SO2 allowance distributions are capped at 3.9 million tons beginning in
2010 and 2.7 million tons beginning in 2015. Actual emissions will be higher over the modeling time horizon due to the allowance bank. We follow EPA modeling of the SO2 CAIR and Title IV within one national trading regime. A
single national region is characterized using model results that account for the opportunity to use Title IV
allowances within the CAIR region at an offset ratio that changes over time. The actual emission caps that we model are reported in Table 7.
Under CAIR as proposed, regional annual NOx emission distributions are capped at 1.6 million tons beginning in 2010 and 1.3 million tons beginning in 2015. The NOx caps that we model, as reported in Table 7, include an adjustment of about 331,000 tons for units outside the CAIR NOx region but within the MAPP and New England electricity regions in the model.
Table 7. Annual Emissions under CAIR policy with Proposed EPA Mercury Rule as Modeled in Haiku
(tons) 2010 2015 2020
NOx (million) 1.931* 1.631* 1.631*
SO2 (million) 6.078 5.001 4.264
Mercury 30.445 27.565 24.985
*
NOx caps include an adjustment of about 331,000 tons for units outside the CAIR NOx region but within the MAPP and New Englandelectricity regions in the model.
26The 28 states included in the region covered by the proposed version of the CAIR rule are: Alabama, Arkansas, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia, and Wisconsin.
Under the mercury cap-and-trade program found in the proposed version of the mercury rule, the national annual allocation of emission allowances is capped at 34 tons beginning in 2010 and 15 tons beginning in 2018. Actual emissions will vary over the modeling time horizon due to the allowance bank and also due to the safety valve that places a ceiling on mercury allowance prices. We model cap and trade for mercury and we adopt as our mercury emission cap EPA’s prediction of annual emissions in the presence of a $35,000 per pound safety valve ceiling on the price of mercury permits and the ability to bank allowances. Hence, as shown in Table 7, the mercury emission targets that we actually model are 30.4 tons in 2010, which is lower than the allocation because firms are expected to bank emission allowances. We model emissions of 25.0 tons in 2020, in excess of the allocation for that year, as firms draw down the allowance bank and also because the safety valve price is reached in the EPA modeling. The safety valve ceiling on allowance price in the EPA’s proposed rule is implemented by issuing additional allowances. Allowances purchased at the safety valve price reduce the size of the allocation in the following year. However, if the safety valve price were achieved again in the following year then emissions over time would approximate the level that achieves a steady allowance price equal to the safety valve. The effect is to cause total emissions to exceed the intended emission cap, which is illustrated in Figure 4. In the EPA’s final rule, the safety valve is removed and replaced by an increase in the number of emission allowances that are distributed in phase I that be banked for use in subsequent periods.
Figure 4. Mercury Allowance Allocation and Modeled Mercury Emissions
0 5 10 15 20 25 30 35 40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 M e rc ur y ( Tons /y r) Allowance Allocation Modeled Emissions
Continuation of the SIP Seasonal NO x Policy
we find emissions during the summer ozone season within the eastern region increase under the CAIR rule as proposed and the EPA Mercury Cap when the seasonal NOx program is terminated as specified in the draft CAIR rule. Two possible remedies to this increase are tighter annual caps or maintenance of a seasonal cap. The policy scenario we model here is the latter. The policy ensures that emissions of NOx during the five-month ozone season do not exceed levels established under current policy to help reduce summer ozone problems. Having two NOx policies of this sort means that generators that are located within both the CAIR region and the SIP region must have two permits for every ton of NOx emitted in the summer season. The dual programs mean that the costs of NOx controls will be split between two regulatory targets and the prices of CAIR NOx allowances are expected to be lower when they are combined with the SIP Call than when they are not.