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Entire Book - Southwest Consortium for Environmental Research ...

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Improving Transboundary Air Quality with<br />

Binational Emission Reduction Credit Trading<br />

Improvement—comprised of local government, industry, and public<br />

representatives—was established to give environmental policy advice<br />

to environmental officials on both sides of the border. JAC has promoted<br />

a number of programs <strong>for</strong> improving air quality, including<br />

strengthening vehicle inspection, promoting dedicated commuter<br />

lanes, and the seasonal use of oxygenated gasoline (NEJAC 2003).<br />

The ef<strong>for</strong>ts outlined above, while important at the local level,<br />

only address a minority of the air quality issues on the border or<br />

elsewhere in Mexico. An important point, which will be taken up in<br />

detail in subsequent chapters, is that U.S. and Mexican environmental<br />

standards are similar—there is little disagreement about<br />

what is desirable. But Mexico, a developing country, has not set the<br />

same priority on monitoring, en<strong>for</strong>cing, and there<strong>for</strong>e achieving air<br />

quality goals as the United States, nor is it reasonable to think it<br />

should. The reality is that Mexico does not have the resources to<br />

meet all of its environmental goals and has placed a higher priority<br />

on solving problems with potable water and sewers, believing that<br />

these will have a greater impact on public health and quality of life<br />

than improved air quality. Nevertheless, improved air quality is an<br />

important goal <strong>for</strong> border communities.<br />

The question then is, How can policy coordination be achieved<br />

along the U.S.-Mexican border in an ef<strong>for</strong>t to improve air quality?<br />

The answer is that there is no single answer. In some circumstances<br />

command-and-control may be the best solution, in others it might<br />

be corrective taxes and subsidies that make the most sense. The<br />

authors argue that the best solution <strong>for</strong> the border often turns out<br />

to be emission reduction credit trading, and that is the focus of this<br />

monograph—using emissions trading as a policy coordination device<br />

on the U.S.-Mexican border. That is, this monograph is about how<br />

to design, construct, and administer emissions trading programs so<br />

that the shared goals of achieving good air quality can be met.<br />

Emissions trading is an increasingly popular policy choice. The<br />

1990 U.S. Clear Air Act and Amendments (CAAA) encouraged<br />

states to adopt market-based mechanisms, such as emissions trading,<br />

to assist in attaining and maintaining air quality standards (EPA<br />

2002c). In the context of CAAA, concern centers on the criteria pollutants—carbon<br />

dioxide (CO 2 ), nitrogen oxide (NO x ), sulfur dioxide<br />

(SO 2 ), lead (Pb), ozone (O 3 ), and especially particulate matter<br />

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