POLLUTION CONTROL POLICIES (TAXES, TRADABLE PERMITS)
1. Overview of U.S. Pollution Control
1.1 Historical Context
The background of pollution control policies in America lies in the period of industrial revolution
when fast industrialization resulted in the pollution of the environment. Originally, there was no
regulation and industries can release pollution in the air, water and ground without any
consequences. Thus, The Great Smog of 1952 in London, which led to health problems, became
an international alert, and industrial pollution’s severe consequences were seen (Smith, 2013). In
the United States, a book written by Rachel Carson, “Silent Spring” published in 1962, was
instrumental in spreading the word about the harm that excessive use of pesticides and pollution
can do to the environment. This was the era that saw a shift of efforts in controlling pollution and
at this point governments became involved. The 1970s is the decade most associated with the
development of the modern U. S. environmental policy. The U. S got its EPA in 1970 under
President Nixon and this was considered a major achievement (Kraft, 2018). The major
legislations regulating pollution were passed during this time including the Clean Air Act of 1970
and the Clean Water Act of 1972The event that happened in Santa Barbara in 1969 when an oil
rig exploded and spilled oil into the sea also contributed to the increase in public awareness on
the need to protect the environment; again showing that there is a need for the enhancement of
adequate legislation (Hanna, 2019). Thus, the historical analysis of pollution control legislation
in the context of the U. S. indicates the gradual shift toward the acknowledgement of the need to
address environmental issues along with economic development. Whereas, the initial measures
have been rather reactive, responding to emergencies as they occurred, the progress had been
gradually made in terms of the proactive and holistic strategies. Such historical background is
essential for evaluating the present pollution control policies as it makes the viewers aware of the
past achievements and failures and shows that all policies have to be developed and improved
constantly (Andrews, 2014).
1.2 Key Legislation
Many acts in the U.S have played a critical role in the formulation of pollution control measures
with the legal provisions aimed at reducing impacts of industrial activities on the environment.
The Clean Air Act (CAA) of 1970 is one of the most influential environmental laws, which
grants the EPA official right to regulate the emission of air Pollutants from both stationary and
mobile sources (Environmental Protection Agency [EPA], 2020). This act provided for regulation
of some of the customary pollution which includes sulfour dioxide and nitrogen oxides that leads
to the formation of acid rain as well as smog (Kraft & Vig, 2019). The CAA was further
expanded in 1990 that included such matters as acid rain, the urban air quality, and toxic
emissions (Reitze, 2013). In a similar fashion, the Clean Water Act of 1972 was designed to
stand for the protection and enhancement of the nation’s waters by controlling point and
nonpoint sources of pollution, providing aid to publicly owned wastewater treatment works for
upgrading the capacity of wastewater treatment, and preserving the wetlands (Copeland, 2016).
The Safe Drinking Water Act (SDWA) of 1974 also has an important role by regulating the
quality of drinking water in the U.S, prescribing the guidelines on water quality and monitoring
all the states, regions, and water suppliers who enforce these standards (Davis, 2017). RCRA
1976 is an act that mainly deals with hazardous and non-hazardous solid waste management
promoting resource recovery and waste reduction (EPA, 2019). Another classic legislation that
can be named is the Comprehensive Environmental Response, Compensation, and Liability Act
or CERCLA or Superfund of 1980 which was aimed at the cleanup of hazardous waste sites and
spills (Probst & Konisky, 2015). These laws as a whole give a systematic approach to the control
of pollution which in a way portrays a wide range of strategies for polluting the environment and
the health of the people.
1.3 Regulatory Agencies
Bureaus in the U.S offer an important function of implementing pollution control measures and
enforcing environmental laws. The Environmental Protection Agency or EPA came into
existence in 1970, and it remains the most important government organization that works for the
protection of human health and the environment as it formulates and implements laws, carries
out studies, awareness creation and offers funds to state environmental initiatives, non-profit
organizations, and learning institutions (EPA, 2020). This agency’s enforcement decisions
includes broad spectrum of polluting substances and environmental concerns such as air and
water pollution, hazardous waste disposal and others, another crucial agency is the Occupational
Safety and Health Administration (OSHA), though its main goal is to protect the employees’
rights in the workplace, it also involves the environmental issues which may pose a threat to the
employees (OSHA, 2019). OSHA’s regulation protects industries from toxic chemicals and
pollutants; thus, indirectly, protecting the environment. The Department of energy also has an
important role in energy efficiency and renewable sources of energy which leads into decrease of
pollution and greenhouse gases (DOE, 2021). On a state level, there are state environmental
protection agencies that help to carry out federal policies as well as help with state issues
concerning the environment. For instance, CARB (2020) is a leading regulatory agency in the
United States famous for its high set air quality standards and effective policies and measures
that help to increase the use of environmentally friendly car models and CleanTech technologies.
It is not uncommon for these state agencies to be used as pilot projects in which federal policies
and regulations can be implemented if successful. Regulatory authorities are he most critical in
transforming legal requirements into policies that may be implemented to their optimum
efficiency. They give the required supervision and compliance to ensure polluters are checked
and improvements in environmental performance are made constantly. The interdependency of
these agencies together with their specialized skills and equipment are essential in driving
change in pollution control and the general health of the society as well as the environment
(Rosenbaum, 2017).
2. Pollution Taxes in the U.S.
2.1 Federal Tax Policies
There has been a constant drive by the federal government to institute taxes that would have the
effect of discouraging pollution in the U. S. The second federal effort is the introduction of
excise taxes to products that pollute, like gasoline, for instance. The federal gasoline tax which
was primarily for the purpose of financing highways construction also has an environmental
argument which is that it reduces on the amount of fuel used hence reducing on green house
emissions (Parry & Small 2005). The federal government has also considered the carbon taxes as
being more direct strategies of emissions reduction. Carbon taxation involves putting a price on
the carbon content of the fossil fuels making consumers and producers look for ways of
decreasing their utilization of the substance (Metcalf, 2019). The federal government also use tax
credit and subsidy to encourage the use of cleaner technologies and renewable power for
example, the ITC and the PTC are specifically geared towards supporting solar and wind energy
and other types of renewable power projects by lowering the cost of the investment (Mendelsohn
& Feldman, 2013). These financial incentives are important in the world when it comes to the
shift from the conventional fossil fuel based economy to a more sustainable energy economy.
Further, the federal government has introduced tax incentives for efficiency of energy in
structures and equipment used in residential and commercial property (Bird & Hernández, 2012).
That is why the attempts to introduce pollution taxes at the federal level is accompanied by a
number of political and economical difficulties. Industries that would be affected negatively by
high taxation on the polluting activities also oppose the action alongside political leaders who
would prefer economic consequences on businesses and consumers (Aldy, 2017). Similarly,
federal tax polices fail to meet their intended goals of enhancing environmental quality since
there are always loopholes in the system which enable the polluters to evade taxes. However, the
federal tax policies still remain as one of the fulsome strategies of the U.S to tackle the problems
of pollution and to support sustainable development.
2.2 State-Level Taxes
State-level pollution taxes in the U. S. serve as additional instruments to federal programs,
designed taking into consideration the state’s conditions concerning pollution and its impact on
the economy. California is a perfect example as it has adopted several state taxes and charges to
combat pollution. The state’s cap-and-trade program, which was initiated back in 2012, regulates
the emissions of greenhouse gases and lets companies purchase and trade CO2 permits. Thus, the
given market-based approach not only helps generate the revenues that can be further invested in
renewable energy and efficiency projects but also encourages companies to search for new ways
of cutting their emissions (Cullenward & Coghlan, 2016). Other states have also put in place
different taxes to curb pollution as noted above and below; For example, the Maryland has put in
place the nitrogen and phosphorus fertilizer use tax for the farming activities with an aim of
controlling the flow of the nutrients into Chesapeake Bay because this water body has been
greatly affected by water nutrient pollution (Higgins, 2015). Likewise, Washington state has also
tried to pass the carbon tax but such policies have incurred political challenges and backlash
from the different groups (Mankiw, 2013). These initiatives represent various state-specific
measures taken in the U.S to fight pollution through fiscial measures. Pollution taxes can be set
at the state level and, in this case, may be more diverse and creative than federal policies, which
enables the development of specific programs to combat pollution on the state level. However,
these taxes can also have large problems like leakage, where businesses move their base to states
where the taxes are not so high (Murray & Maniloff, 2015). Moreover, the implementation of
these taxes entails significant exertion and costs as the government often needs to establish tall
structures to monitor and enforce these taxes. Sate-level pollution taxes are one of the key
components of the multifaceted strategy of pollution management and environmental
preservation in the United States.
2.3 Implementation Challenges
There are several difficulties that one can associate with the application of pollution taxes in the
U.S which may adversely affect the efficiency of the method and one such problem is political
resistance, which can stem from apprehensions regarding the effect that such taxes will have on
the business and consumers. Sectors that depend on the use of fossil fuels or other polluting
activities usually oppose pollution taxes stating that such mechanisms raise the cost of doing
business and hence decrease their competitive edge (Aldy, 2017). Largely this can result in
legislative stalemate where new taxes cannot be created or existing ones cannot be expanded.
Another difficulty is related to equality and justice in applying pollution taxes. Another important
issue is regressive effects, when the lion’s share of taxes is paid by the population with the lowest
income. Thus, policymakers need to avoid the above regressive impacts of pollution taxes as
much as possible, for instance, through offering credits or by using the taxation income to
finance public services in the affected communities (Metcalf, 2019).There are also administrative
problems that are deemed to act as barriers as well. Pollution taxes are relatively easy to
implement, but measurement and monitoring of emissions which are necessary for the correct
application of pollution taxes may be technically difficult and expensive. Having strong
compliance and enforcement systems are critical features for deterring tax frauds and for making
sure that emitters are penalized (Carlson & Burtraw, 2019). Also included is the problem of
coordinating tax policies across the jurisdictions in a bid to avoid the occurrence of a situation
whereby there are conflicting polices to those in place. This is especially true when examining
state-level taxes because different approaches create competition issues and administrative issues
(Murray & Maniloff, 2015). The last aspect that should be taken into consideration is the
acceptance of the pollution taxes by the public. Opposition from the public can stem from
ignorance of the consequences of the environment or self-interest in regards to individual pocket.
Consequently, information sharing and involving the public is crucial for gaining more
supporters and promoting the general changes in people’s appreciation of environmental
responsibility (Bird & Hernández, 2012). Mitigating these implementation challenges is very
crucial for optimally utilising pollution taxes in the fight against pollution for the improvement
of the environment and a sustainable world.
3. Tradable Permits in the U.S.
3.1 Cap-and-Trade Programs
The fundamental concept behind these programs is to define the overall level of emissions that
should be allowed from some industries or geographical areas and then allocate permits or
allowances to the firms equal to this amount. To date, companies need to obtain sufficient
permits that could cover their emissions, and firms can buy or sell permits in the market, which
creates the economic motivation for lowering the emissions (Ellerman, Joskow, & Harrison,
2003). The most famous cap-and-trade programme in the U. S is the Acid Rain Programme set
under the Clean Air Act Amendments of 1990. It was able to bring down the SO2 emission to
more than 50% reduction of 1990 levels by 2007 and proved the efficiency of market based
instruments (Schmalensee and Stavins, 2013). Another large scale cap-and-trade mechanism is
the Regional Greenhouse Gas Initiative, which is a multi-state collaborative to reduce CO2
emission from electricity generation in the Northeastern and Mid-Atlantic regions. RGGI was
initiated in 2009 and is the only mandatory market based program in U. S to address the issue of
emissions. It includes a regional CO2 allowance which is auctioned quarterly with a specified
limit. These auctions generate the money which is then utilized for financing energy efficiency,
renewable power, and consumer value initiatives (RGGI, 2021). That is why RGGI is rather
effective in lowering emissions as well as creating considerable economic values for states
participating in it. There are some difficulties and, in some cases, criticism of such programs.
Some of the concerns include what has been referred to as ‘leakage’ in which emissions
reductions in the capped areas are offset by the corresponding emissions’ increases in non-
capped areas (Bushnell, 2010). Moreover, the first distribution of permits is also a problem of
argument: to distribute them freely or to sell them to the highest bidder as this is important in the
sustainment and credibility of the cap and trade programs addressing the above problems.
3.2 Regional Initiatives
Sub-national efforts have been key in the promotion of cap-and-trade systems especially in the
U. S where state level efforts have often had to pioneer such attempts due to lack of federal
legislation. For instance, the Western Climate Initiative ( WCI) is a multi- state and multi-
province partnership of the United States of America and Canada that seeks to design regional
policies for combating green house gas emissions. Out of all the projects in the WCI, California’s
involvement has been quite significant. The first developed in 2013 is the Californian plan that is
still functioning and is among the largest global programs that targets several sectors such as
electricity generation, industry and transportation fuels. The program implemented in California
has been marked by stiff implementation and coverage of all niches. It allocates a limit each year
and reduces this limit progressively, making it possible for there to be constant reductions in
emissions. This also provides powers for connection with other jurisdictions like Quebec for
making a single, larger and a more integrated market for emissions trading. This linkage
improves the stability of the market and also lowers the cost of compliance as well (Goulder &
Hafstead, 2018). Another important local scheme is the above-mentioned RGGI. Despite the
losses in emissions, RGGI has provided massive economic benefits in addition to launching a
revenue-generating source for New Jersey, an Analysis Group research identified that RGGI
provided . These surveys peg the economic value of the scheme at $ 4 billion for the
participating states and it has created thousands of new jobs in the first three years of its
operation only (Hibbard et al. , 2011). It has also offered a model for other states or regions
interested in the market-based solutions to emission reduction. Thus, regional initiatives are not
devoid of different challenges. There are always disagreements among states with different
political systems and economy, regional programs for example, tend to suffer from the fact that
firms can easily relocate to other states, which may have less strict requirements, regional
mechanisms are still crucial to the United States’ fight against climate change and pollution.
They actually provide important lessons and concepts that can be applied to other more general
initiatives at the national and international levels(Rabe, 2016).
3.3 Market Performance
Performance of the cap-and-trade markets in the U. S has been slightly above average bearing in
mind the successes and the challenges that have been observed. The Acid Rain Program is
usually regarded as an example of success, which has achieved the goal of cutting the emissions
of SO2 at lesser cost compared with other regulatory instruments. The trading of SO2 allowance
was very liquid and efficient, which proved to be a great example for the subsequent emissions
trading programs (Schmalensee & Stavins, 2013). But in the case of carbon markets the
performance has been rather volatile and unpredictable. The RGGI market’s allowance prices
have been changing over time, primarily because of overissuance of permits in the first few
years. Some changes such as the adjustment of the cap and the creation of the cost containment
reserve have been effective in stabilizing the market and enhancing the allowance prices, this has
a positive impact on the encouragement of emission reduction (RGGI, 2021). The Californian
program has also experienced price fluctuations and problems of permit over-allocation,
however, policy interventions, and the introduction of a floor price has led to stabilization of the
market functioning (Hughes, 2013). Several factors such as the design of the cap-and-trade
system, the level of the cap and the overall economic conditions of the market affect the market
performance. For instance, recession cuts the utilisation of industrial products and hence the
emission of gases, decreasing the need for the allowances and thus decreasing the price. This was
evident from the 2008 financial crisis that affected the EU ETS, and learned from for the U.S.
markets (Ellerman et al. , 2016). Also, proper monitoring, reporting and verification mechanisms
for the emissions data is crucial for proper market performance. Influence strength of cap-and-
trade programs is determined by the accuracy of emissions data and implementation of the rules
(Carlson & Burtraw, 2019).
4. Case Studies
4.1 SO2 Trading Program
Out of all the cap-and-trade systems the first one implemented in the United States was under the
SO2 Trading Program which was started under the Acid Rain Program in the 1990 Clean Air Act
Amendments. This one aimed at decreasing sulfur dioxide (SO2) emissions which is one of the
protagonists that provoke acid rain, from thermoelectric power plants. The program established a
nationwide limit on the emission of SO2 and provided allowances which the power plants could
freely exchange. Of them, one allowance allowed the holder to emit one ton of SO2, while the
total availability of allowances confined the holders from emitting exceeding the cap (Ellerman
et al. , 2003). In regards to the SO2 Trading Program, it can be seen that there were
environmental and economic benefits. Thus, by 2007 emissions of SO2 were below 50 % of
1980 level; the program is said to have prevented over 18,000 premature deaths expected from
bad quality of air yearly (Schmalensee & Stavins, 2013). From an economic perspective, they
converted the efficiency of the market based solutions in comparison to traditional top down
command and control regulations. The adventurous feature of trading helped the utilities to
determine the cheapest means of achieving the emission reduction targets which could be by
undertaking the technological modification, use of low sulfur coal or even buying allowances
from other plants. But the program also had some difficulties i.e the imperfection of the system
as a problem of over allocation of allowances at the beginning which in turn caused the
allowance price to be low and also may have slowed further reduction of emissions. Moreover,
emissions cuts were also not regionally balanced – some locations saw more advancement in air
quality than others (Schaeffer et al. , 2004, Schmalensee & Stavins, 2013). The SO2 Trading
Program is still considered as the outstanding model of the successful use of market-based
environmental policy.
4.2 California Cap-and-Trade
A successful cap-and-trade system of the United States can be exemplified with the SO2 Trading
Program launched under the Acid Rain Program of the 1990 Clean Air Act Amendments. This
program therefore was intended for the reduction of SO2 emissions, which is the main culprit of
acid rain from power plants and established a national ceiling on emissions of SO2 and
distributed allowances that the power plants could exchange. One allowance allowed the holder
to emit one ton of SO2 and the total number of allowances was restricted so that the stipulated
cap was not crossed (Ellerman et al. , 2003). The SO2 Trading Program is evidently an
environmentally and economically efficient program. By 2007 SO2 emission was reduced to
50% below the 1980 level and the program helped avoid over 18000 early deaths annually
resulting from better quality air (Schmalensee & Stavins, 2013). In terms of efficiency, the
program shown that RE with the help of MBAs was cheaper than the traditional CACs. The
‘cost-reflective’ nature of trading enabled utilites to find the cheapest way to cut emissions – that
is whether to modernise plant, switch from high-sulphur coal, or to buy allowances from other
plants. But it was also a program with difficulties. To these challenges the following were
identified; one of them being the over allocation of allowances which saw the allowance prices
drop and limited further emission reductions. Moreover, the spatial allocation of emissions
reductions also varied across the world, which means that some areas had a bigger impact on the
quality of the air than others (Schmalensee & Stavins, 2013). Still, the experience of the SO2
Trading Program can be considered as a very successful example of the use of market policy in
the management of environmental pollution.
4.3 RGGI (Regional Greenhouse Gas Initiative)
The Regional Greenhouse Gas Initiative (RGGI) was formed in 2009 to be a multisate effort to
limit CO2 emissions from the sector of electricity generation in Northeastern and Mid-Atlantic
states. RGGI was the first enforceable market construct program in the U. S. that targeted at
curbing green house gas emissions. The initiative puts in place a regional limit to CO2 emission
and this is through allowance selling of allowances that is quarterly. The money generated from
these auctions is put in the energy efficiency projects, renewable power initiatives, and
consumers’ advantage plans (RGGI, 2021). RGGI has done well in its goals of cutting emissions
while states in the region have also enjoyed other economic benefits. An Analysis Group study
by revealed that the price benefit in New York State as a result of participation in RGGI was $1.
US$ 4 billion in economic value for the participating states and generate thousands of
employment opportunities in the initial three years (Hibbard et al. , 2011). The RGGI states’
power sector emissions have decreased by over 40 percent since the program began and the
program has been copied by other regions seeking to employ similar techniques (RGGI, 2021).
There have been issues with the program, for example, the need to bring the stipulation of the
cap in relation to the trends in emissions and with reference to the state of the economy. Initial
caps placed proved to be too high, which put too many allowances in the market and depressed
their prices. These problems have been solved, adjusting the cap and implementing a cost
containment reserve that have made the functioning of the RGGI program more stable (RGGI,
2021). The ability to work in cooperation with stake holders, its adaptability, and focus on
restructuring the received auction revenues back into improved ecological projects has been
RGGI’s strength.
5. Economic Impacts
5.1 Cost-Benefit Analysis
A key component in the apply of environmental economics, the cost-benefit analysis CBA is
used in assessing the economics of pollution control measures such as pollution taxes or permits.
This analytical method entails comparing the cost of bringing into force such policies with the
gains that come with low pollution and improved health in regarding to benefits in pollution
control, such factors include; reduced health expenses, higher productivity among employees,
and prevention of harm to the environment (Morgenstern, 2014). The EPA is well-known for
employing cost-benefit analysis to its work; one of the most famous analyses was the one
conducted regarding the Clean Air Act. The EPA has estimated, that the benefits of the Clean Air
Act during the period 1970 to 1990 were 42 times higher than the costs, mainly because of
reduced mortality and respiratory diseases (EPA, 2011). They stress the great economic gains
also from eliminating air pollution, which tend to outweigh the costs of introducing regulatory
measures but it’s also evident that cost-benefit analyses show the issue of benefits as
multifaceted and not without its share of difficulties in terms of measurement. For example, the
use of monetary indicators to express willingness to pay for the enhancement of health status or
the restoration of ecosystem services comes with numerous assumptions and known unknowns.
Further, the costs and benefits can be distributed unevenly among different groups in society –
the equity issue (Pearce, 2000). These factors should be taken into account by the policymakers
because the policy for controlling pollution must be efficient, not only from the economic point
of view, but also fair. Emission charges and credit auctions have been observed to provide net
gains if properly structured and applied. For instance, a research on the SO2 Trading Program
revealed that the advantages such as the mitigation of acid rain and better health standards were
much higher than the costs incurred by the industry (Schmalensee & Stavins, 2013). Likewise,
the Regional Greenhouse Gas Initiative (RGGI) has been shown to provide net economic gains
in the states that are members, this is based on the reported efficiency and reinvestment in
renewable sources of energy that has been funded from the auction income (Hibbard et al. 2011).
These examples demonstrate the possibilities of market instruments to combine environmental
and economic objectives.
5.2 Industry Responses
Businesses’ reactions to pollution control measures including taxes and tradable permits may
differ with aspects like cost, availability of environmental friendly technologies, and
competition. Generally, industries subject to these policies have several options: they can
technically change the equipments which reduce emissions, change the type of inputs which
pollute less, purchase allowances or permits from other firms, or transfer the costs to consumers
(Porter & van der Linde, 1995). In the context for the SO2 Trading Program, many power plants
opted for the installation of flue-gas desulfurization units or ‘scrubbers’ to lower the SO2
emission. Some changed to low-Sulfur coal or bought allowances to meet the emissions. The
nature of the trading system enabled the firms to adopt the least cost means of compliance and
thus had little net economic effect (Ellerman et al. , 2003). Such flexibility is one of the main
benefits of the market-based strategies over the command-and-control regulations. Companies
adapt to pollution taxes also by including the price of polluting in their business planning. For
instance, the carbon tax encourages organizations to purchase energy conservation and low
carbon products to lower their taxes as they can result in drastic cuts in greenhouse gas emissions
and foster the development of new cleaner technologies (Metcalf, 2019). Nonetheless, pollution
taxes are only efficient provided the tax rate and the policy framework’s stability are well
established. Fluctuations or policy changes in taxes may affect the business planning and
investment greatly. Nevertheless, there are negative reactions as well, where certain industries
fail to adhere to pollution control policies attributing to the issues of extra cost and less
competitiveness. This can be seen in lobbying against the introduction of new regulations or in
activities aimed at gaining exclusions and privileges. These concerns have to be met by the
policymakers who need to come up with policies that will be suitable for the intended
environmental conservation alongside the economic implications like offering transition
subsidies or offering a bonus to early adopters (Aldy, 2017). And other important aspects include
communication and other stakeholders in order to get the support of the respective industry and
proper implementation of the measures for controlling pollution.
5.3 Innovation and Investment
Taxes especially, the market permit systems can give large incentives and contribute to the
development of clean technologies and emission standards. The act of placing a price on
pollution serves the purpose of giving certain signals to firms to develop improved technologies
that do not pollute as much and this is what has come to be referred to as the Porter Hypothesis
which postulates that the sound environmental regulation fosters competition and innovation
(Porter & van der Linde, 1995). Technology improvement and dissemination was one of the most
significant accomplishments of SO2 Trading Program according to the findings of the study. It
accelerated the technological innovation in scrubbers, learning by doing and scale effect and also
reduced the cost of the programme (Schmalensee and Stavins 2013). As with the EU ETS and
various carbon prices, there have been associations made with the development of investment in
renewable energy and energy efficiency (Ellerman et al. , 2016). Another example that illustrates
the activities of the pollution control policy is the system of environmental policies in California
– the cap-and-trade program. This program has been getting rather large revenues from the sale
of allowances, and those revenues are being used for financing of clean generation, energy
efficiency and climate change. Such expenditures have also provided a boost to building up a
robust clean technology industry in California, VC funds and new products, services (Goulder &
Hafstead, 2018). Based on the success of the Californian program, it can be concluded that
market CG policies can be used to generate employment and advance environmental
conservation practices simultaneously. Therefore, pollution control policies function as a driving
force for innovations, and the innovations are not limited to the large scale industrial innovations.
These policies can also stimulate market for incremental innovations such as efficient home
appliances, electric cars, smart grid, etc Since pollution taxes and tradable permit can open a
market for low emission products these policies can change consumers demand and stimulate
their preference towards green goods. It can lead to the alterations of the public perception and
play the part in the transition to the low-carbon society.
6. Future Directions
6.1 Policy Reform Proposals
In the following areas, there are some significant suggestions for developing the current pollution
control policies in the United States as long as the country still facing the problem of pollution
and climate change. Among these, one of the key goals is improving the functioning of the
existing cap-and-trade systems and pollution taxes. Some changes might concern the cap
adjustments to fit current emissions and economic realities, so that overissue of permits and
weak signals from market price to encourage emissions cuts are avoided (Schmalensee &
Stavins, 2013). The other recommendation is that there should be a national carbon tax or that
carbon pricing instruments should be extended to other segments of the economy. Optimal
design of carbon tax would serve as a stable price indicator that would prompt enterprises and
consumers to engage in the acquisition of cleaner technologies (Metcalf, 2019). To prevent
equity issues, the policymakers could use the revenue raised from the carbon tax to compensate
the families in need or to invest into the green projects in the relevant areas. Also, altering the
subsidies and tax credits to the fossil fuel is very important. Eliminating such subsidies would
make it possible to achieve a more level competitive field between renewable energy and other
high-emitting industries because the latter continue to benefit from various subsidies (Coady et
al. , 2019). Perhaps, shifting these resources to clean power and energy efficiency projects could
help move the economy to a cleaner path much faster. Proposed reform relates to enhancing the
existing or developing new standards within which innovation is feasible. This entails offering
more definite information and assistance on carbon capture and storage (CCS) technologies
which have the possibility of sharply slashing emissions from industrial operations and
electricity generation (Gibbins & Chalmers, 2008). Improving the plans is the better coordination
of federal and state policies in the field of pollution prevention and control.
6.2 Emerging Technologies
This is particularly pointed out to the function that new technologies have in the further
improvement of pollution control and climate change. More exploration and production of the
renewable energy resources such as the solar energy, the wind energy, the battery storage system
is crucial in reducing the use of the fossil fuels and hence reduction of green house gases
emission. The costs of these technologies have remained on the decline at a faster rate than the
conventional energy sources thus making them gain more popularity (IRENA, 2020). Another
area is carbon capture, utilization, and storage or in short CCUS technologies. These
technologies entail capturing CO2 from other emissions resulting from industrial processes and
either, pumping it back into the ground or using it in other industrial processes. Another course in
this discipline may also help to significantly cut industrial emissions, which are among the most
difficult to curb (Global CCS Institute, 2020). Hydrogen is emerging as another promising area
for de-carbonising as also the sectors that cannot be easily electrified such as the manufacturing
industries and long-haul transportation. The utilization of green hydrogen produced by renewable
energy is anticipated to replace fossil energy in the utilization of the applications and thus reduce
emissions and enhance energy security (IEA, 2019). Enhancements of energy technologies such
as smart grid, energy efficient building and electric cars also have a massive emission reduction
capacity. These technologies can increase the use intensity and thereby decrease the demand for
energy hence the emission rates and costs (IEA, 2020). Public research and development funding
for such technologies, as well as further policy support, will be crucial for the further transfer of
these technologies and bringing the world to the desired goal in terms of emissions.
6.3 International Cooperation
The nation which contributes to the greenhouse gas emissions significantly, the United States has
the important part to play the role in combating the climate change. These efforts include signing
and implementing of international agreements among them is the Paris Agreement. The reduction
of global warming has been set by the Paris Agreement to below 2°C of the pre-industrial level
with the further endeavour to limit the global temperature rise to 1°C. 5°C (UNFCCC, 2015).
Cooperation with other nations for technology investment as well as implementation can also
improve the pollution control around the world. Global collaboration through research
cooperation, technology licensing, and capacity enhancement projects can go a long way in
sharing of technology and implementation of best practices (Dechezleprêtre et al. , 2017). The
United States can also help the developing countries in their plans of shifting to low carbon
economies through offering them funds or technical support. Co-ordinating carbon pricing
initiatives and emissions trading schemes is another crucial area in the global level cooperation
and establishing connections between the national and regional carbon markets may lead to the
formation of bigger and more active markets that contribute to price effectiveness and overall
lower cost of emission cuts (Flachsland et al. , 2009). This can also help avoid carbon leakages
whereby companies that emit a lot of carbon move to other countries which do not have strict
polices on emissions. Cooperation can also be expressed by sharing data and experiences on
pollution control policies within the international markets. This can assist the nations in
emulating the performances as well as the drawbacks of other nations in order to create better
and efficient policy frameworks (Meckling & Nahm, 2019). Enhancing the international relations
in the sphere of pollution and climate change is very vital for the global environmental and
economic objectives.
7. Policy Evaluation and Adaptation
7.1 Effectiveness Metrics
The assessment of the performance of policies in the control of pollution entails the
determination of several indicators that capture physical, economic and social consequences, the
measures of effectiveness are such things as the degree and extent of emission reduction, costs,
and benefits in the enhancement of public health. For instance, emissions reductions can be
determined by calculating the change in the amount of pollutants like sulphur dioxide (SO2),
nitrogen oxides (NOx) and carbon dioxide (CO2) from policy imposed levels (Ellerman et al. ,
2003). The SO2 Trading Program has proved effective due to the following key impacts where
SO2 emission has been reduced by more than one half from 1980 levels (Schmalensee &
Stavins, 2013). Economic cost effectiveness is another vital measure that defines the amount of
effort in terms of money to be invested in emission reductions, Pollution taxes and tradable
permits are much more appreciated than command-and-control practices because of their cost
efficiency. Research has also revealed that such policies can produce or even surpass the level of
environmental gains at reduced costs as the firms have an option to adopt the cheapest way of
reducing their pollution levels (Goulder & Parry, 2008). Less pollution is therefore healthy for
the public and this forms part of any policy success since it means that respiratory diseases,
cardiovascular diseases and premature deaths are less likely to occur. The example of this is the
Clean Air Act that has been linked with significant public health impacts such as, more than
200000 avoided premature deaths, and millions of cases of respiratory diseases are also
prevented (EPA, 2011). These advantages are usually much greater than the costs of measures to
combat pollution which confirms the importance of rational legislation.
7.2 Public Perception and Engagement
The last element in the success of the policies to control pollution is the public awareness and
participation. It can be stated that only those policies are likely to be implemented effectively and
maintained which are comprehensible to the people and supported by them. They settled on the
points above as vital as the basis of effective communication about the benefits and costs of these
policies to the public. This entails clear information on how the policies will enhance air quality,
the health of the public and quality life (Dietz et al. , 2009). Public participation entails the use of
the public in the formulation and implementation of policies. This can be done undertaken
through public consultations, hearings and people’s participation in decision making, also
consulting with the public on a continual basis makes it possible for most people to develop
confidence in the government by developing policies that reflect the needs and fears of different
groups of people especially those with highest vulnerability to pollution (Fung, 2006). Awareness
and information are integral components for raising support in the community as such activities
may consist of informational initiatives, schools programs, public seminars regarding the
problems of pollution and the advantages of control activities. For instance, California has being
able to achieve certain degree of success in the implementation of cap-and-trade program mainly
because of increased public awareness campaigns and the engagement of stakeholders in the
policy making process (Hughes, 2013). Nevertheless, there lies a major problem because the PS
is only a part of the public that is informed and may have misconceptions about pollution control
policies. Solving these issues is possible only through utilizing communication approaches that
respond to controversies with facts. The stakeholders need to also ensure that the benefits of
pollution control measures are also to be enumerated, which includes employment opportunities
in the renewable energy sectors and improved energy self reliance (Leiserowitz et al. , 2013).
7.3 Adaptive Management Strategies
Adaptive management is a process progressively of implementation of policies where constant
assessment of the outcomes and progress through the use of updated information is involved.
This approach is also rather applicable for pollution control policies as it gives the opportunity to
elaborate adequate reactions to appearing challenges and opportunities. Another way of
improving the robustness of pollution control measures is by using the concept of adaptive
management that creates mechanisms that allow for adaptation of the management strategies in
cases of uncertainty (Holling, 1978). Another component of adaptive management is monitoring
and evaluation, which is to be performed continually. This involves information on the amount of
emission, the quality of the environment, economic effect and health consequences in order to
evaluate the effectiveness of policies meant to curb pollution, this for instance, through observing
the emissions and allowance trading activities in the SO2 Trading Program, important
information concerning the performance of the program and the directions for changes have been
received (Schmalensee & Stavins, 2013).When implementing the monitoring and evaluation
recommendations, policymakers can implement useful changes to the existing policies and
programs. This may entail changing coefficients of emissions limitations, changing taxation
rates, or adjusting the legal acts regulating sectoral activities to correspond to the present-day
objectives and conditions. The ability to change the policies depending on the real life
information and feed back is also imperative to ensure that the policies remain relevant as well as
effective in the ever-changing environment (Lee, 1999). And another factor that needs to be
incorporated in adaptive management is stakeholders’ engagement. Stakeholders’ involvement in
the policy evaluation and revision also promotes the inclusiveness of various views and
specialists in the process thus improving the quality of the policy adaptations. Thus, cooperation
between the governmental institutions, business, academia, and non-governmental organizations
can contribute to the development of new approaches to pollution control and improvement of
the efficiency of pollution management strategies (Folke et al. , 2005). in summary, adaptive
management strategies make it possible for pollution control policies to improve their chances of
delivering the desired results in a constantly changing environment.
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