Outline:

1
Outline ChE 150, February 24, 2009

• Finish Tradable Permits (simulation)
• Recycling

2
Pollution is tied to the economy.
utilization
manufacture
extraction
waste
- Ce - Cm Bu - Cw gt 0

• Benefit (Bu) scales with GDP

• Pollution associated with extraction,
  manufacture, disposal

• Meaning of zero-waste society ... clean
  technology ?

Pollution when chemical waste streams exceed
environmental capacity and directly affect our
well-being

• Dermal
• Inhalation
• Ingestion

3
Depletion of good ozone in stratosphere

• Stratosphere 20 50 km, elevated O3 (10 ppm)

• Absorbs harmful UV radiation

• CFCs destroy this ozone (Crutzen, Molina,
  Rowland Nobel Prize 1995)

• Montreal Protocol (1987) dramatically reduced
  atmospheric ozone

materials, energy
Human mortality,life-span adjustments
Ozone depletingsubstances CFCs, HCFCs
Ozone layer lossincrease in UV
products
4
Photochemical Smog Cause Effect Chain
materials, energy
Human ecologicaldamage fromoxidants
NOx and volatile organics
Photochemical oxidation reactions
products

• Ozone is derived from NOx

• Irritates lungs, affects vegetation, destroys
  chlorophyll

• Smog VOCs irritate eyes (formaldehyde)

• Closely tied to combustion transportation
  sectors

5
Acid Rain Environmental Cause Effect Chain
materials, energy
Human ecologicaldamage fromH and metals
SO2 and NOx emission to air
Acidification rxns acid deposition
products

• Sources
• non-transportation fuel combustion (85)
• industry, transportation

• Enters humans through inhalation
• absorbed into upper respiratory system
• swells, constricts airway passages
• cause lung disease, cardiovascular disease

• Harms fish (aluminum leaching from soil),
  decreases plant growth

6
Lead persists in the environment, and
accumulatesin organisms

• Primarily found as particulates, can suspend in
  air

• Sources gasoline additives (banned 1970, CAA),
  paint,industrial processes

• Enters waterways, uptake by aquatic species

• Enters humans through inhalation ingestion
• Target organs liver, brain
• Strong correlation between lead levels and
  decreased IQ in urban settings.

7
A Clean Freshwater Supply is Vitally Important

• Freshwater uses in U.S.
• agricultural irrigation (42 )
• electricity generation (38 )
• public supply (11 )
• industry, rural

• Pollution Sources
• Point sources are specific locations
• Sewar outlets, industrial discharges, 89 Exxon
  Valdez
• Non-point sources
• Urban runoff, pesticides, road runoff

• Freshwater can be recharged
• evaporation, precipitation natures
  distillation of water

8
(No Transcript)
9
Cost-Benefit Analysis of Pollution
MD Marginal Damage loss in well being due to
extra pollution WTP to avoid pollut.
MD
MAC

MAC Marginal Abatement Cost cost of reducing
depositions end-of-pipe technology, e.g. flue
gas desulphurization
a
P is optimal pollution
b
pollution level
p
CLcritical load
Analysis relies on ability to estimate damages
10
How to reach p environmental regulation
MD
MAC
Implement emission Standards Command and
Control

Require best available technology, not entailing
excessive costs
Market based instruments
a
b
p
CL
Pigouvian Tax Tax per unit output (e.g.
electricity) equal to the marginalexternal cost,
with tax revenue being directed at compensating
those harmed or abating environmental damage.
All strategies seek to internalize an externality
11
Classroom Game SO2 Discharge Permits

• Divide up in 6 groups - pick names.
• Consider the following marginal abatement cost
  curves

Simulation adopted from A.W. Ando D. T. J.
Ramirez, Univ. Illinois at Urbana-Champaign
12
Scenario 1 Command and Control
Each firm is subject to a uniform standard of
1480 tons of SO2 per year.
Your firm should calculate and report 1)
Abatement quantity (tons) 2) Cost imposed upon
firm ()
13
Scenario 2 Tradable Discharge Permits,
non-facilitated
Each firm is provided permits worth 1480 tons of
SO2 emission per year.
Find other firms to buy or sell with. Report the
following -number of permits purchased or
sold -the total transaction cost or profit
14
Scenario 3 Tradable Discharge Permits,
facilitated
Each firm is provided permits worth 1480 tons of
SO2 emission per year.
Your firm should work through the market
facilitator to determine the market price of a
permit, and the number of permits your firm will
buy or sell.
15
Tradable Discharge Permits Summary

• Approach to reduce pollution in a cost-effective
  fashion
• Firms elect whether or not to abate pollution
• Permit can be purchased (from other firms) to
  allow discharge
• Number of permits is set by regulatory agency

16
Who bought, who sold, and why?
17
What is the role of the market facilitator?

• What would happen without a facilitator?
• Is there another forum for trading?
• For programs in the US
• most trading is bilateral
• regulatory body approves trades, distributes
  initial permits, and imposes fines

18
What are the downside of permits?

• Many unresolved problems
• enforcement
• initial allocation of permits
• Is there another forum for trading?
• For programs in the US
• most trading is bilateral
• regulatory body approves trades, distributes
  initial permits, and imposes fines