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University of Michigan Law School

1994

Regulation

Property Law and Real Estate

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Marketable Pollution Allowances (Great Lakes Symposium), James E. Krier Jan 1994

Marketable Pollution Allowances (Great Lakes Symposium), James E. Krier

Articles

In March 1993, the EPA auctioned off 150,010 sulfer dioxide emissions permits at the Chicago Board of Trade. The auction brought in $21.4 million and ushered in the Clean Air Act's market-based approach to sulfur dioxide control. Congress created these marketable pollution allowances (MPAs) under Title IV of the Clean Air Act Amendments of 19903 to regulate acid rain pollution. While most MPAs were bought by utilities, to be exchanged as a commodity according to need, some MPAs were removed from the market solely to prevent their use by polluters. The Cleveland-based National Healthy Air License Exchange bought one allowance …