A new study titled, "Trading Equity for Efficiency in Environmental Protection? Environmental Justice Effects from the SO2 Allowance Trading Program,” by Evan Ringquist, who works as professor in the Indiana University School of Public and Environmental Affairs, has allayed the fears about the formation of highly polluted ‘hot spots’ in the communities of minority and low-income group due to the trading of emission allowances.
His research brought out a very negligible amount of data to support the theory that allowance trading induces hot spots. The details of the study are to be published in the Social Science Quarterly journal this spring.
Evan Ringquist
The study concentrates on the sulfur dioxide allowance trading program (ATP) established in the U.S. market in 1990 by making changes to the then existing Clean Air Act. The trading program introduced a market for selling or buying the pollution credits for reducing the level of SO2sulfur dioxide discharges that inflicted damages to ecology with acid rains and created health problems to humans. The program enabled those companies that reduced their pollution levels more than the required quantity to sell their credits to other companies to manage their deficits. Companies with higher level of pollution purchased the credits instead of spending more money on pollution reduction efforts.
Advocates of Environmental justice argued that the trading method will eventually make the purchasers of credits to import pollution to their regions while the sellers will export pollution. The feared that the pollution level will be more in the old industrial areas that operated for a number of years due to an increased level of capital requirement to implement pollution controls. They dreaded that the low income and minority communities living in the area will be more affected.
For his study Ringquist has investigated and researched the trading records of all the manufacturing facilities that joined the sulfur dioxide allowance program between the periods January 1995 to March 2009. He utilized a number of statistical examples to ascertain the effect of the allowance on the poor and black communities and detected that the program did not affect them. He further found that communities with increased percentage of Hispanic and African-American residents did suffer less than the other areas. His study found that the trading caused more SO2 emissions in areas with large percentage of uneducated population.
This study is anticipated to assist the government in formulating its upcoming emission trading programs by including the local communities to monitor the consequence effectively.