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Designing a Transborder Trading Scheme mated, even though U.S. officials favor the transaction. (While job loss may be an issue in some cases, it was not an issue with the El Paso Electric Brick Kiln Project; see box, page 107). EMISSIONS TRADING ON THE U.S.-MEXICAN BORDER Emissions trading is particularly well-suited for policy coordination on the border. The border is highly urbanized and most of the population and industry are concentrated in 14 twin cities (Peach and Williams 2000). Many of the twin cities form a single airshed where sources on one side of the border affect air quality on the other side. In three cases, twin cities are labeled nonattainment for the same pollutants on both sides of the border: El Paso and Ciudad Juárez are nonattainment for ozone, carbon monoxide, and suspended particulates; and Ambos Nogales and Mexicali-Calexico are nonattainment for suspended particulates. For all of these twin cities, studies have found that at least some pollution sources on the Mexican side of the border contribute to nonattainment on the U.S. side. These areas at least are candidates for emissions trading programs. As part of an outreach effort, the authors conducted a series of workshops along the U.S.-Mexican border in Mexicali, Nuevo Laredo, Reynosa, Matamoros, and Ciudad Juárez. Participants from both sides of the border were invited and representatives from state and federal governments, non-governmental organizations (NGOs), academia, and the business community were included. The purpose of these workshops was to bring together interested stakeholders in an open discussion forum for examining the feasibility of emissions trading along the border. More than 200 people participated. Workshops consisted of presentations, small group discussions, and numerous other types of interactions. An important goal was to discern conditions under which emissions trading would receive public support. In this regard, six principles for designing emissions trading programs were identified: • Emissions trading must respect the sovereignty of both the United States and Mexico 121
Improving Transboundary Air Quality with Binational Emission Reduction Credit Trading • Only mutually beneficial trades should be allowed; that is, emissions trading programs must result in improved environmental quality for both trading partners • Emissions trading programs must not adversely affect employment opportunities in either country • Direct negotiation between U.S. and Mexican government officials should be kept to a minimum • Where direct coordination between governments is necessary, the negotiations should be handled by local officials when possible • Emissions trading programs should be phased in over time; as an intermediate step, pilot programs like the El Paso Electric Brick Kiln Project should be implemented With these basic principles in mind, the authors developed the following recommendations on the design of a transborder emissions trading program. 1. A transborder emissions trading program should be a baselineand-trade program. Mexico does not currently have the comprehensive emissions inventory required for cap-and-trade, and environmental enforcement is weak. Both of these facts make a cap-and-trade trading scheme impractical. Further, baselineand-trade allows for project-based trades, which are easier for U.S. officials to monitor if the seller is in Mexico and for Mexican officials to monitor if the seller is in the United States. 2. Baseline should be determined by the officials of the purchaser’s jurisdiction. The asymmetry in benefits from emissions trading provide perverse incentives to regulators of the seller’s jurisdiction because citizens of the seller’s country benefit from both an improved environment and from the cash flow arising from the sale of the ERC. Citizens of the buyer’s jurisdiction only benefit to the extent that the value of the environmental improvement exceeds the cost of purchasing the ERC. Thus, officials of the seller’s country have an incentive to approve a baseline that generates only marginal, or even no, environmental benefit in the hopes of generating cash flow. The only 122
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THE SCERP MISSION The Southwest Con
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Authors SCERP Monograph Series, no.
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Published by San Diego State Univer
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Contents Foreword v Prefacio ix Pre
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Improving Transboundary Air Quality
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Prefacio “Si vale la pena tener u
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Prefacio pudiera ser difícil, cost
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I Introduction THE VIEW FROM EL PAS
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Introduction Resource Conservation
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Introduction approaches to correcti
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Introduction into the environment.
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Introduction maquiladoras, to hire
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Introduction (PM 10 and PM 2.5 )—
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Introduction installing scrubbers,
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Introduction The existence of emiss
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Introduction would require an initi
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Introduction EPE generated emission
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OVERVIEW Introduction This volume i
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II A Snapshot of the Border THE MEA
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A Snapshot of the Border states—B
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A Snapshot of the Border Table 1. U
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A Snapshot of the Border Interestin
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Table 3. Percentage Change in Borde
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A Snapshot of the Border Another so
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A Snapshot of the Border plants tha
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A Snapshot of the Border Air Qualit
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A Snapshot of the Border quality. T
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A Snapshot of the Border million in
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A Snapshot of the Border THE ENVIRO
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