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Introduction
(PM 10 and PM 2.5 )—and volatile organic compounds (VOC). In
2003, EPA (2003b) reported that 70 market-based programs existed
in 26 states. At least 17 states have emissions trading programs,
including three located on the border (Texas, Arizona, and
California). Emissions trading has also been used successfully to
reduce acid rain in the eastern United States (see box, page 12).
A number of international emissions trading programs aimed at
coordinating environmental policy between developed and developing
countries already exist, most famously the United Nations
Convention on Climate Change (UNCCC). The Kyoto Accord,
reached under UNCCC, allows for joint implementation (JI), under
which reductions in greenhouse gases in developing countries can be
used as offsets for greenhouse gases emitted in developed countries.
Parties to the protocol recognize that JIs allow developed countries
to finance environmentally beneficial projects in developing countries,
thereby achieving global greenhouse gas emission standards
more efficiently. In essence, JI projects allow the “low-hanging
fruit” in developing countries to be picked first, while the cost is
borne by developed countries. Given the limited resources available
in developing countries, these projects might not be undertaken in
the absence of JIs. This illustrates the general principal that in coordination
of environmental policy between developed and less-developed
economies, emissions trading has the additional benefit of
allowing the developed country to provide additional resources to
the developing country, in effect, paying for the enforcement of
agreed-upon environmental standards without regard to where the
remediation is undertaken. That is, emissions trading can facilitate
the transfers of resources to places where those resources can be used
most efficiently. Citizens of the developing country obtain funds to
finance environmental remediation and benefit from lower-cost
abatement. Both countries benefit from improved environmental
quality. This is obviously an advantage for the border, where
resources are especially limited.
Some object to emissions trading on the grounds that it is unethical.
Commentators who hold this point of view argue that it is
unethical to allow a source to pollute to the detriment of the collective
environment just because the source has purchased a permit. 2
These commentators argue that this is an immoral usurpation of a
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