SPPA Professor Stephan Schott part of Carleton team publishing piece on evaluating NOx cap-and-trade system in the US

S. Morteza Mesbah, Amir Hakami, and Stephan Schott, 2012 “Improving NOx Cap-and-Trade System with Adjoint-Based Emission Exchange Rates” Environmental Science and Technology DOI: 10.1021/es302406y

Emissions trading is an approach to reducing pollution that combines an overall cap on emissions  with opportunities for trading rights to emit pollutants among the responsible companies. Emissions trading works best when the pollutant in question has the same effects no matter where it is emitted. This paper contrasts the existing US trading system, which  focuses only on overall emissions levels with a hypothetical one that takes the local impacts of emissions into account. The paper simulates a trading regime based on source-specific pollution ratios that determine the extent to which a polluter can increase emissions after buying an emission permit from another polluter (with different local smog formation and health impacts). We find,  in our simulation for coal power plants in the United States, that there are large potential net benefits from switching from the current system to an emission trading system of the sort suggested in the paper. We suggest that there would be significant improvements in environmental performance and large reductions in negative health impacts (but only negligible changes to total pollution abatement costs).  Our findings mean that  more detailed research in the reform of the current NO_X trading regime is warranted.