Allowances
AAEA Promotes
Environmental Justice Allowance Reserve
EJAR
Climate change legislation and regulation will need to address environmental justice concerns related to the perception that emission trading programs cause disproportionate pollution from older, dirtier plants to negatively impact low-income and minority communities. There is also widespread belief that global warming and climate change will disproportionately affect low-income and minority communities. AAEA is recommending an Environmental Justice Allowance Reserve (EJAR) to address the racial 'Hot Spots' issue. These allowances would come from a special reserve, similar to the current Acid Rain Program Renewable Energy and Conservation Reserve, when the initial allowance allocation is made. They would be awarded to utilities, automakers and others that undertake environmental justice practices and programs designed to mitigate or prevent price shocks, increase the installation of pollution control equipment, promote community education and enhance health-related activities. Utilities and automakers could choose to work with organizations and businesses that conduct environmental justice activities related to climate change mitigation and reductions in emissions of sulfur dioxide, nitrogen oxides and mercury.
As an alternative to legislation and as an insurance policy in case climate change legislation does not pass, AAEA has developed a voluntary EJAR program that provides a platform for utilities, automakers and communities to address and influence the Hot Spots issue. Any utility, automaker or citizen can: sell to, donate or purchase compliance allowances from, the voluntary AAEA-EJAR or otherwise support the EJAR program. AAEA is currently meeting with interested stakeholders to develop EJAR projects. AAEA has also developed an emissions trading platform to directly facilitate exchanges. The AAEA EJAR program will leverage allowances and resources to promote environmental justice practices and projects designed to:
- Increase the installation of pollution control equipment,
- Promote community education and
- Enhance health-related activities.
AAEA will alert businesses, mayors, states, civil rights groups, environmental justice organizations, Congress and the general public about innovative methods for participating in this program, enhancing electricity production, auto emissions reductions and protecting constituent communities.
Allowances are fully marketable commodities. Once allocated, allowances may be bought, sold, traded, or banked for use in future years. Allowances may not be used for compliance prior to the calendar year for which they are allocated.
Participation in the EJAR will clearly show that a utility or automaker is exceeding emission compliance and is willing to include AAEA in the emission trading market. Significant participation in the EJAR will indicate that a utility's or automaker's units are not Hot Spot plants or emissions contributors. AAEA will publicize the EJAR participant list and projects. If you have questions or need additional information, contact us at: AfricanAmericanEnvironmentalist@msn.com
AAEA received its Acid Rain Program Account and NOx Budget Program Account on May 5, 2003 and is now eligible to hold and trade allowances:
AAEA received its authorization
to make on-line allowance transfers
on May 22, 2003.
Utilities interested in participating
in the Environmental Justice Allowance Reserve (EJAR) program,
described below, are encouraged to transfer allowances on-line.
| EPA Account Name: AAEA Sulfur Dioxide (SO2) Acid Rain Program Account Number: 999900000695 Sulfur Dioxide (SO2) Acid Rain Program AAR ID Number: 600898 To SO2 Document Nitrogen Oxides (NOx) Budget Program Account Number: 999900000232 Nitrogen Oxides (NOx) Budget Program AAR ID Number: 600898 To NOx Document |
Source of Animation: Vanaire
Emissions Trading (cap & trade) is a market tool for reducing air pollution. A cap is placed on total emissions from sources of pollution by EPA and businesses are given allowances (allocated) based on historical emissions levels, sold allowances or allowances are auctioned (sold like radio & television licenses). An allowance authorizes a unit within a utility or industrial source to emit one ton of SO2 during a given year or any year thereafter. At the end of each year, the unit must hold an amount of allowances at least equal to its annual emissions, i.e., a unit that emits 5,000 tons of SO2 must hold at least 5,000 allowances that are usable in that year. However, regardless of how many allowances a unit holds, it is never entitled to exceed the limits set under Title I of the Act to protect public health.
Utilities can meet pollution caps by installing control equipment or trade emissions to meet federal clean air requirements. The current program for sulfur dioxide, under Title IV of the Clean Air Act Amendments of 1990, designed to reduce acid rain, allows for the trading of allowances among utilities for a set price based upon whether the utility reduces emissions below the cap (no need for additional allowances), or exceeds the cap (thus purchasing allowances from those below the cap with allowances to spare). Cap & trade for sulfur dioxide resulted in almost 100% compliance and was very successful in reducing sulfate deposition.
Recent Acid Rain Program Emission Reductions:
SO2 emissions from power plants in 2001 were 10.6 million tons, 33% lower than 1990 emissions and 5% lower than 2000 emissions.
NOx emissions from power plants were 4.10 million tons in 2001, 25% lower than 1990 emissions and 8% lower than 2000 emissions.
In support of AAEA organization goal #8:. Resolve environmental racism and injustice issues through the application of practical environmental solutions.
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