Emissions Trading and the Polluter-Pays Principle : do Polluters Pay under Grandfathering?

Emissions trading is becoming increasingly popular in environmental law. Allowances to trade emissions can either be auctioned off or handed out free of charge by means of grandfathering. Although grandfathering is frequently used in emissions trading schemes, it is a popular view in the economic and legal literature that grandfathering is inconsistent with the polluter-pays principle. We come to a different, more nuanced view. The question of whether polluters pay under grandfathering depends on how the polluter-pays principle is interpreted. We present a taxonomy of interpretations. Based on an efficiency interpretation of the principle, consistency is demonstrated by emphasizing the economic impact of the opportunity costs of gratis allowances and the lump sum nature of the subsidy that is inherent to grandfathering. Inconsistency can only be claimed based on an equity interpretation of the polluter-pays principle. Allocating allowances free of charge means that polluting firms receive a capital gift making their shareholders richer, which may be perceived as unfair. We draw two conclusions. First, contrary to what some have claimed, grandfathering is compatible with an efficiency interpretation of the polluter-pays principle. Second, only auctioning is consistent with an extended form of this principle. Auctioning ensures not only that pollution costs are internalized (efficiency), but also that producers buy their allowances before they pass on those costs to consumers (equity)

The Role of Environmental Economics in Recent Policy Making at the European Commission

This article examines the use of environmental economics at the European Commission in recent policy making concerning climate change, energy, and air pollution. In particular, we describe economic analysis of policy options designed to help the European Union (EU) to achieve its objective of reducing greenhouse gas emissions by 20 percent and increasing the share of renewable energy to 20 percent by 2020. This analysis looked at cost-effectiveness and emission trading options as well as equity issues. We also discuss an economic analysis of policy options for including carbon capture and storage (CCS) in the EU Emissions Trading Scheme. The analysis finds that CCS could result in significant cost savings. The additional costs of making CCS mandatory or using subsidies were also estimated. Economic assessments prepared for the revision of the national emission ceiling directive suggest that air pollution objectives can be met at modest costs and that monetary benefits exceed costs. The assessments also find that limiting the additional costs for poorer Member States does not increase overall costs significantly and that when limited to regional zones, emissions trading of air pollutants could save costs but might lead to hot spots. Copyright 2010, Oxford University Press.

Experimental study of electron ejection by heavy ion irradiation of solids: Observation of forward and backward emitted electron jets

Doubly differential cross sections for electron emission induced by the passage of swift heavy ions such as Fq+ (1.5-2.0 MeV/u) through thin solid foil targets were measured at the Tandem accelerator of the JR Macdonald Laboratory at Kansas State University. The complete angular distribution of electron emission up to 4000 eV (beyond the maximum of the "binary encounter" electron peak) was determined as a function of the projectile charge state (q = 5 and 9) and the target material in a wide Z range: C (Z = 6), At (Z = 13) and Au (Z = 79). Electrons emitted from the foils between 0 and +/-180degrees with respect to the beam axis were energy and angle analysed by means of a toroidal electrostatic electron spectrometer equipped with a 2D position sensitive channelplate detector. In addition to low energy cascade electrons, electrons from collective excitation (plasmons), target Auger electrons, convoy electrons and binary encounter electrons, we also observe a new feature never before seen in electron angular distributions: narrow electron jets ("spikes") emitted along the ion beam axis in forward and backward directions. This observation is made possible by the good angular resolution of our spectrometer and the possibility to record the entire angular distribution in a single run. (C) 2002 Elsevier Science B.V. All rights reserved