em unit 5 pollution abatement slm
TRANSCRIPT
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Unit 5 Pollution AbatementStructure
05.1IntroductionObjectives
05.2Market Approach for Pollution Abatement05.2.1 Polluter Pays Principle (PPP)05.2.2 Cap and trade05.2.3
Emission Reduction Credits (ERC)
05.2.4 Demand-side management pricing05.2.5 Pricing for water conservation
05.3Environmental Self Auditing and Accounting for Pollution Abatement05.3.1 Financial incentives for eco-friendly technologies05.3.2 Transport sector
Housing sector
05.4Summary05.5Glossary05.6Terminal Questions05.7Answers05.8Caselet
05.1 Introduction
The previous unit provided an introduction to the environmental issues
associated with energy consumption, depletion of resources and the
pollution problems. It is important to learn about methods used for pollution
abatement. This unit will provide information regarding these methods of
pollution abatement.
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One major drawback of modern living and advanced technology today is the
alarming increase in pollution. Governments, organisations and the publicglobally are continually seeking measures to reduce and curb pollution.
According to experts, the best way to control pollution is through population
control as the waste production decreases with the decrease in population.
Wide spread industries are posing a threat of global warming which has to
be restricted to reduce pollution.
Environment policy for Indian industries focuses mainly on the end products
that pollute the environment. But the transfer of pollutants takes place at
every intermediate stage during treatment processes and also consumes a
lot of energy. This also increases the amount of waste released into the
environment. So, the Ministry of Environment and Forests (MoEF)introduced a comprehensive policy for pollution abatement. This policy aims
at controlling pollution at the source level, applying the best practical and
technical solutions, ensuring that the polluter pays for the pollution and
concentrating more on highly polluted areas.
Pollution Abatement Systems Specialists, Inc. (PASS) is a corporation in
southern Philippines, organised by a group of mechanical engineers
involved in using Autoclave treatment for the storage and disposal of
hazardous wastes. The organization supports the demand of this basic
service which has not been properly addressed by both local and national
government.
The Montreal Protocol signed in 1987, the United Nations Framework
Convention on climate change which came into force in 1994 and the Kyoto
Protocol which came into force in 1997 are some of the global organisations
that monitor pollution control.
The World Bank calls China as home 16 of the 20 most polluted cities on
earth, making the country's blighted environment a cautionary corollary to its
economic success. Environmental degradation robs the nation of up to 12%
of its GDP, according to the World Bank, and each year 300,000 Chinese
die prematurely of respiratory ailments. "The rest of the world doesn't
understand how big China's environmental problem is," says Sheri Liao,
head of the Global Village of Beijing, an NGO dedicated to environmental
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education. "But they need to pay attention because our problem is
becoming their problem too."
China is not only contaminating itself, but crops in Japan and South Korea
are withering from Chinese acid rain, which poisons a quarter of the
Chinese landmass. Toxic dust from Chinese sandstorms, the result of
grassland erosion and logging that have helped turn 27% of the country into
desert, travels as far as U.S. shores, obscuring visibility in national parks
and raising mercury levels in fish. Although the U.S. still produces far more
greenhouse gases, particularly in per capita terms, China is the world's
second largest polluter. A U.N. report found that emissions from China
nearly doubled from 1994 to 2002. "In the next 10 years the problem will
become even more serious," predicts Zhu Tong, an environmental-science
professor at Peking University, who notes that Chinas sky rocketing car
ownership and lax implementation of power-plant-emission regulations
could be an asphyxiating mix for global air quality.
With Chinas economic engine requiring ever more energy, the country is
damming a significant part of its length of the Mekong River, threatening
fishing and transportation in the five nations downstream. In 1998, China
banned some domestic logging to protect its dwindling forests, but the Asian
giant's appetite for disposable chopsticks and plywood furniture has hardly
abated. Log imports--second only to the U.S.'s--more than quadrupled from1996 to 2003, according to the World Wildlife Fund.
(Source:http://www.time.com/time/magazine/article/0,9171,1074119,00.html
#ixzz1aBQdCam0)
This unit will provide answers to the below questions:
What are the measures taken for pollution abatement?
What are the benefits of emission reduction?
How are the environmental self audits creating consciousness in the minds
of industrialists?
This unit helps in understanding the various sources of pollution, market
incentives for pollution abatement, cap and trade system which has been a
huge success on keeping a check on emission of pollutants and emission
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reduction credits. You will study the various pricing strategies for water
conservation, fiscal incentives provided for eco-friendly technologies acrossthe world and also the self-auditing methods used by companies to check
pollution.
Objectives
After studying this unit, you should be able to:
assess various market related incentives for pollution abatement
explain the various concepts of carbon trading markets
describe the role of credits for emission reduction
05.2 Market Approach for Pollution Abatement
The technological approach to pollution abatement was found expensive
because reformulating the production process consumed time and money.
Regulatory standards were put in use to control pollution. However, the cost
estimation of these controls was difficult to gauge and along with other
issues, it became essential to introduce a new method. Studies proved that
we could control pollution in a better way by using market approach to
achieve ambient air quality and reduce emissions from sources as well. The
United States of America (U. S. A.) introduced the Clean Air Act
Amendments in 1990. This included more market based incentives to
reduce pollution.
Two forms of market incentives were introduced. They are:
Pollution fees - Pollution fees refer to the taxes levied on polluters
depending on the amount of pollutants discharged into landfills and air
shed waterways.
Marketable permits - Marketable permits are tradable licences that
polluters can buy and sell to reach the control levels set by regulatory
authorities. These permits have been used in the United States because
they do not levy large taxes on small scale industries.
The use of tradable permits in reducing the use of chlorofluorocarbons
(CFCs) to protect the ozone layer became a huge success. The CFC policy
was introduced in 1990 and succeeded in bringing a phase-down of CFCs in
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developed countries, mainly the United States. This was designed to allow a
large number of smaller refineries to gain marketable permits and hence,saved hundreds of millions of dollars per year. This also helped
technological progress and allowed a more systematic transition of refinery
capacity without giving up environmental quality.
05.2.1 Polluter Pays Principle (PPP)
The Polluter Pays Principle (PPP) is an environmental policy in which the
polluter is made to pay for polluting the environment. This policy determines
the various ways in which pollution prevention and control can be allocated.
It is also known as the Extended Polluter Responsibility (EPR). The aim of
this principle is to transfer the responsibility of waste management fromgovernments to the entities that cause pollution. The scope of PPP has
evolved over time and it even prevents accidental pollution.
Today, this principle is recognised as International Environmental Law and
is a fundamental principle of environmental policy of both the European
Community and the Organisation for Economic Co-operation and
Development (OECD). The implementation of PPP is usually done using the
following two different policy approaches:
Command-and-control approaches: These include performance and
technology standards. They also include the elimination of subsidies.
Market-based instruments: These include pollution taxes, tradable
pollution permits and product labelling.
The Kyoto Protocol is an example of application of the PPP at the
international level. Parties that are obliged to reduce their greenhouse gas
emissions need to bear the relevant costs.
Polluter Pays Principle: Approach of the Indian Judiciary
The Polluter Pays Principle came into force in India after the landmark
judgement of Indian Council for Enviro-Legal Action v. UOI & Ors, Citation
AIR 1996 SC 1446. This law brought under the act, the small chemicalcompanies that were adding hazardous pollutants into the soil and polluting
the nearby village.
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The Supreme Court of India stated that the aim of the Polluter Pays
Principle was not only to compensate the victims of pollution, but also toreimburse the cost of environmental degradation. So, the court directed the
private companies to compensate for the damages by taking measures to
clean the environment and also reimburse the victims of pollution.
05.2.2 Cap and trade
Cap and trade is a system introduced to control pollution in which economic
benefits are granted for reducing the emission of greenhouse gases and
other pollutants. Cap and trade programmes have been successful in
reducing emissions on a large scale and improve the air quality exhibiting
controlled costs. This policy sets a cap on pollution by limiting the emissionof carbon dioxide and other industrial pollutants. This concept includes two
parties; the governing body and the units that emit pollutants.
This policy allows the companies to trade their extra permits when their
methods of reducing pollution are comparatively inexpensive. In this case,
the company that sells gets incentives and the company that buys permits
pays for its negative impact.
Pros and cons
The Waxman-Markey bill was passed in the U.S.A in June, 2009. This bill
defines a broad cap and trade system for regulating CO2 emissions. The billhas set a target level of around 3% reduction by 2012; 20% by 2020; 42%
by 2030; and 83% by 2050.
The Kerry-Boxer "Clean Energy Jobs and American Power Act" is another
bill that is similar to the Waxman-Markey bill. It aims to reduce CO2 emission
levels by 80% by 2050 using a market driven solution for reducing pollution.
The targets of these leading legislative bills will significantly decrease global
warming where more funds can be allocated to consumer energy
programmes. The cap and trade system is likely to have a negative impact
on the consumers indirectly. If the businesses and corporations are made to
pay for emitting pollutants, they tend to compensate that cost by increasing
the price of their products. This causes a decrease in demand for the same.
However, energy products are inelastic goods so the demand does not
decrease.
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Alternatively, the government can also utilise the raised revenues to help
lessen the consumer costs. For example, the funds obtained from cap andtrade method can be re-invested in producing clean technology like fuel
efficient cars and bring about cost reduction in other energy sectors.
The government of India recently set up a carbon cap and trade scheme
that proposes to reduce domestic energy consumption by 5% by 2015 using
market-based mechanism. A gradual adoption of this concept by other
countries will help in reducing pollution globally.
A Successful Cap and Trade Example
In 1995, the United States Environmental Protection Agency realised the
intense acid rain occurrences in the Northeast and the Midwest. So, theEPA developed the Acid Rain Programme which became one of the first
market based cap and trade mechanisms in the country.
The high levels of sulphur dioxide emitted from coal burning electrical plants
led to acid rain across the Midwest region. To decrease this emission, in the
year 2000, the sources were limited to 9.5 million tons of SO 2 (compared to
1980 emission levels of 17.3 million tons). The EPA then allotted each plant
a certain number of credits, equal to one ton of SO 2 emissions. At the end of
every year, each plant had to report to the EPA whether or not they had
enough credits for their emissions, (i.e. a plant that emitted 7,000 tons of
SO2 would need to hold 7,000 credits). The companies that had excess
credits could save them for future use or sell them to other companies who
exceeded the limits. The cap and trade method granted financial incentives
to plants that emitted less SO2. The plant that crossed the limit was made to
pay fine to EPA for every extra ton of SO2 emission.
The success of acid rain programme has influenced in lowering SO2emissions drastically. The level of emission has decreased from 17.3 million
tons in 1980 to 8.95 million tons in 2010.
(Source: http://www.ecomii.com/ecopedia/cap-and-trade)
05.2.3 Emission Reduction Credits (ERC)
An Emission Reduction Credit (ERC) is a credit granted to those emission
sources that emit fewer pollutants than the fixed limit. ERC is a legal ability
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of an industry to release pollutants up to a specified quantity as fixed by the
committee. According to the regulations of South West Clean Air Agency(SWCAA), ERCs can either be sold or preserved for future use. It can also
be traded and leased. They provide incentives to the companies that reduce
emissions less than the required level.
Emission Reduction Credits are offered for numerous environmental
pollutants such as carbon monoxide (CO), nitrous oxide (NOx), volatile
organic compounds (VOCs), particulate matter (PM) and reactive organic
gases and also to developers constructing refineries, heavy industrial
facilities or new fossil-fuel power generation facilities. ERCs must be
obtained before constructing a new facility.
ERCs are created in one of several ways:
The shutdown of an industry that has a valid permit restricts it to emit a
fixed quantity of pollutants annually and produces a number of Emission
Reduction Credit equivalents to the number of tons emitted in a year.
Emission Reduction Credits in the non-attainment regions can be
generated by setting a cap on the running capacity of the plant. Credits
can be granted once the operators agree to revise their working limits
and control the emission.
They can also be generated by permanently reducing emissions throughvoluntary installation of emission-reducing technology. On the other
hand, the plant can use an alternative fuel source that has a lesser
annual emission rate than the original fuel.
The companies that emit pollutants can follow one of the above methods to
make full use of ERCs and keep the environment clean.
Activity 1:
Assume that you are the manager of a refrigerator manufacturing unit. Your
company is granted the license to discharge CFCs to a permissible limit andyou have not crossed the limit. What would you do with your extra permits?
(Hint: Refer section 8.2 for detailed guidelines.)
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05.2.4 Demand side management pricing
Demand side management pricing refers to the pricing strategy followed forbalancing the consumption of energy with the available resources. DSM
programmes plan, implement and monitor the usage of electricity to help
consumers modify their ways of usage to save energy.
Earlier, most DSM programmes provided cost effective energy resources to
accept new sources of power including generation facilities, transmission
and distribution capacity additions and power purchases. Nowadays, DSM
is also used for enhancing customer service.
Regulations combined with the incentives can be a new method for cleaning
the environment. The pollution control costs are allocated based on themarket. The regulatory body issues tradable permits to affected companies.
The companies try to reduce their emissions and sell their permits to reap
profits.
Technologies used in demand side management
Some of the technologies employed to reduce the use of total energy are as
follows:
Load levelling - This is a method used to flatten the rise and fall in
energy demand. It is done by decreasing consumption at peak times,
which is known as peak shaving, increasing it during off-peak timesknown as valley filling, or shifting the load from peak to off-peak periods
to effectively utilise the base load generation and decrease the need for
spinning reserves.
Load control - Energy management control systems (EMCSs) act as
stabilizers. They are used to switch the equipment on or off to keep the
load under control. They are typically used for cooling, heating,
ventilation and lighting loads and also to invoke on-site generators and
reduce demand for electricity. Problems concerning the Implementation
Demand Side Management Solutions Include Rate Schedules, Public
Benefits Programmes, Power Factor Charges, Real-Time-Pricing and
Time-of-Use Rates.
Rate schedules - Utilities can revise billing structures to encourage the
consumers to use electricity effectively.
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Time-of-use rates - Time-of-use rates refer to charging higher prices for
peak electricity in order to shift the demand to off-peak periods. Power factor charges - Power factor charges can be employed to
avoid the wastage of energy that occurs due to partially loading the
electrical equipment and hence reduces loss of energy.
Real-Time Pricing - Real-time pricing refers to the electricity price that
varies continuously on hourly basis depending on the utility's load and
the various power plants that have to be operated to fulfil the demand.
These are the technologies which can be used efficiently to reduce the total
energy in the demand side management.
05.2.5 Pricing for water conservation
Water is an economic good. Though it is a renewable source and comes
under one of the basic necessities, the use of water is increasing
tremendously. With the increase in population it is becoming a challenge for
the respective authorities to cater to everybodys needs. Hence, water
conservation, purification and reuse are very essential. Therefore,
governments encourage cost effective technologies for water purification.
Pricing becomes a prime factor to avoid wasting and polluting water. The
government provides incentives for users to curb consumption without
affecting prices on water.
The government of the state of Victoria in Australia has established the
following financial incentive programmes to help business and industry in
reducing its water consumption:
The Storm Water and Urban Recycling Fund This is a $10 million
programme that supports the development of local storm water and
urban recycling projects.
The Smart Water Fund - This fund has made investments of $28 million
in about 170 innovative water conservation, water recycling and bio-solids management projects.
The Living Victoria Water Rebate Programme This offers rebates
for small businesses connected to an urban reticulated supply that have
20 or less employees to enhance the water efficiency of their business..
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Seasonal pricing is another strategy to discourage excessive use of water.
The water rates are increased during summer when the use of waterreaches its peak.
It is important to improve the effectiveness of conservation programmes. For
this, the billing system has to be upgraded and people need to be educated
about the scarcity of water. Education will make them aware of the reasons
for being billed so that a more conscious effort is made to curb their water
charges by using water prudently.
Apart from personal awareness, initiative and effort, the governments effort
and initiative plays an important role in maintaining water cleanliness,
storage and consumption. Financial instruments depend on market forces
and fluctuation in prices to change the perspective of polluters in a way that
supports environmental protection. Some of the financial instruments are:
Subsidies - Subsidies refer to the tax incentives like tax exemptions,
investment tax credits and low interest loans that aim at reducing
pollution. These subsidies encourage the industries to reduce the
quantity of emission of pollutants and obtain incentives for the same.
Deposit refund systems - Deposit refund systems refer to the
surcharges paid by the consumers when they buy a potentially polluted
product. This instrument is mainly used for products that are reusable.
The consumers are offered a discount when they take appropriatemeasures for disposal or return the product to the approved centre for
recycling.
Enforcement incentives - Enforcement incentives are created to
encourage polluters to adhere to the environmental standards and
regulations. These incentives include non-compliance fees which are
charged to polluters not to exceed the fixed levels of pollutant emission.
These financial instruments when properly implemented, help in controlling
pollution effectively and bring down the pollution abatement costs.
Self Assessment Questions
1. ____________________ is an environmental policy in which the polluter
is made to pay for polluting the environment.
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2. Economists have been debating constantly whether the cap trade or
___________ is more effective in reducing emissions.3. The use of tradable permits in reducing the use of____________ to
protect the ozone layer became a huge success. (Pick the right option)
a) Chlorofluorocarbons (CFCs)
b) Carbon dioxide
c) Nitrous oxide
d) Sulphur dioxide
4. The high levels of sulphur dioxide emitted from coal burning electrical
plants led to acid rain across the Midwest in USA. (True/False)
5. Polluter pays principle is a fundamental principle of environmental policy
of both the European Community and the _________________.
6. Which of the following is a financial instrument used to conserve water?
(Pick the right option)
a) Subsidies
b) Taxes
c) Penalties
d) Incentives
05.3 Environmental Self Audit and Accounting for Pollution
Abatement
Environment audits refer to reviewing of a companys operations to assess
the compliance with environmental rules and regulations. They cover a wide
range of business activities, commercial developments and engineering
hazard and operability studies. Environmental audits are popular as they are
frequently used with real estate transactions these days. They identify theenvironmental problems like chemical contamination emerging from past
and current practices and estimate the cost for treating them. The buyer of
the audit can ask for compensation or clean-up costs from the seller if the
audit has some issues.
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Self audits are the voluntary environmental audits which are a valuable
business resource for many companies. This practice benefits the companyas it addresses many facets of a companys operations. For example,
Barbara Ceizler Silver, the author of Environmental Self-Audit for Small
Businesses, described the self-audit as a valuable diagnostic tool that can
be used by companies to identify and report compliance problems relating to
air, water, land use, solid waste and hazardous materials before submitting
formal permit applications or other business processes.
Some of the basic concepts that organisations need to understand about
self auditing are as follows:
Self-audit context and purpose
Before late 1990s, the U.S. Environmental Protection Agency (EPA) did not
offer many incentives for small businesses to self-report, audit and rectify
violations of environmental laws. The regulated entities refused to report
environmental violations as they feared penalties. Therefore, in the late
1990s the EPA developed the policy of self audits to reduce penalties and
prevent criminal prosecutions for businesses which helped in resolving the
violations of environmental laws.
Voluntary or systematic discovery
The violation of environmental laws can be detected either by voluntary or
systematic discovery. A regular monitoring system or the audits created by
the organisation to ensure compliance comes under systematic discovery,
whereas a flexible sampling or monitoring process comes under voluntary
discovery.
Prompt and independent disclosure
The EPA expects the organisations to disclose the discovered violations
sincerely within 21 days without the government or a third party prompting
them to do so. To simplify this process the EPA enables the regulated
entities to submit disclosures online through the agency's Central Data
Exchange. The regulated entities need to register in CDX before submitting
their disclosure forms. These self disclosure forms allow the entities to
provide a detailed checklist that includes all the conditions of a self-audit.
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Correction, remediation and future prevention
The final self-audit process includes a quick correction of violations by theregulated entities. According to the EPA policy, the regulated entities cannot
claim incentives when they repeatedly violate laws. The federal register
states that the correction or remediation efforts should be completed within
60 days.
Financial incentives
In India, the state law makers support self auditing and hence it receives
significant legal protection in 26 States. The body of law states that the
companies that voluntarily test for violations and rectify them need not pay
penalty. According to the Environmental Protection Agency (EPA),environmental groups and other observers, if the self-audit results are not
revealed, the companies tend to pollute the environment more. However,
supporters of secret audits claim that if the results remain confidential it
encourages stewardship of the environment.
David Ronald, a chemical waste litigation reporter from the U.S. A, cited
some of the valuable incentives granted to companies that follow self
auditing efficiently. They are as follows:
Reduces exposure to penalties if the company identifies and corrects
the noncompliance issues before the government takes action.
Increases the number of investors.
Improves reputation and assures citizenship among shareholders and
creditors.
Provides information on planning for future growth.
Finally, Ronald stated that a sincere self audit helps in retaining the loyalty
of the consumer and gains valuable contracts for companies that have
made environmental considerations part of their purchasing and contracting
practices.
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05.3.1 Financial incentives for eco-friendly technologies
There are many companies that are coming up with alternative energysources to encourage green technology. So, the government provides
financial incentives to such companies that employ eco-friendly and cost
effective technologies.
The various grants provided to such companies across the world are as
follows:
Grants available for solar heating installation in France and India
The French government has introduced a scheme that reduces the tax bill
for those who use solar heaters. These heaters use solar radiations to heat
the house or to create hot water. This is a cost-effective method forhouseholds and hotels.
In South India, the United Nations Environment Programme (UNEP) started
a project of installing solar heaters in 18,000 homes. Canara Bank and
Syndicate Bank, in India, provided loans exclusively for this purpose. Buyers
had to pay only 15% of the cost price and were given five years to pay back
the loan amount. By June 2006, more than 17,000 loans had been granted.
This was considered the largest Solar Home System Loan Programme.
Grants available for Go Green projects in San Francisco
The San Francisco Department of the Environment has launched the SF
Home Improvement & Performance (SFHIP) incentive programme. This
programme aims at increasing the affordability of green home
improvements for the residents of San Francisco. San Francisco is one of
the few cities in California that provides governmental incentives as well as
state and federal incentives for going solar.
Qualifying projects include adding insulation, air sealing windows, walls and
crawl spaces, installing upgraded heating and cooling systems.
Fiscal incentives for Green cars in Indonesia
The Indonesian government is encouraging the development of eco-friendly
cars that are both fuel-efficient and affordable. To prevent the harmful
effects of pollution on the environment, the government has taken certain
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initiatives. The government has decided to provide fiscal incentives to the
car makers that produce low-cost eco-friendly cars by 2012.
05.3.2 Transport sector
The process of self auditing makes the industries keep a check on the
emission of pollutants for the fear of paying penalty. Apart from the
pollutants emitted by industries, hazardous gases are liberated from
automobiles.
Transport sector plays an important role in moving goods and other
essential items. Fossil fuels have been the source of energy. This is not only
leading to depletion of non-renewable resources but is also causing a great
deal of pollution. So, conservation of energy in transport sector becomesvery important and it can be done by limiting the use of fossil fuels and
replacing them with the ones that carry high efficiency.
Biofuels and their economic advantage
Biofuels are the products derived from agriculture and organic feed stock.
The most commonly used biofuels in transport sector are bioethanol and
biodiesel. The use of bio fuels helps in reducing carbon emissions, improves
vehicle efficiency. Their cost of production is relatively low compared to the
other fuels.
Bioethanol production is based on fermentation of starch obtained from
sugar based food crops. These fuels do not emit any hazardous chemicals
after combustion. Biodiesel is produced from vegetable oils and fats. This is
later mixed with the conventional diesel or used as pure biodiesel.
Today, 10% of people across the globe use biofuels for transport. There are
ongoing research processes for improved products.
Hybrid cars
Hybrid cars are the cars that use dual engines. They use gasoline andelectricity. The car runs with the help of electricity where gasoline is used to
charge these electric engines. The first hybrid car introduced in the market
was the Honda Civic Hybrid.
Some of the advantages of hybrid cars are as follows:
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Reduced pollution as they are driven by electricity
Lesser tax on hybrid cars
Reduced wearing out of spare parts
Regenerative braking system to charge the batteries
Velib cycle
Velib is a bicycle introduced in France which is an efficient form of urban
transportation. These cycles can be used 24 hours a day and are more
efficient than the other bicycles. This is one of the best ways to reduce
carbon emission as it does not use any fuel.
Countries have begun to take the implications of carbon emission seriouslyas the ill effects are felt worldwide.
05.3.3 Housing sector
Green buildings are buildings that not only conserve energy but also provide
a healthier and more resource-efficient living environment. These buildings
include innovative energy technologies like solar water heaters, radiant
walls and roof barriers.
The U.S. EPA agency has set guidelines for energy efficient homes. Houses
that conform to these guidelines are labelled Energy Star homes. Thesehouses are at least 15 per cent more energy efficient when compared to
other houses. Energy Star rated homes have the following energy efficient
features:
High performance windows
Higher levels of insulation
Tight exterior construction
Non-leaking ducts
Energy efficient heating and cooling equipmentGreen building trends also exist in Europe. The Passivhaus of Germany
are energy efficient homes. These houses are super-insulated and have
highly efficient windows.
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Subsidies provided by the government will encourage the building of more
energy efficient homes. The Office of Energy Efficiency and RenewableEnergy (EERE) in U. S. A. aims to increase the use of renewable energy
and energy efficiency technologies. It offers financial assistance
opportunities for the development and demonstration for such technologies.
The Energy Policy Act of 2005 of U. S. A. provides tax credits to consumers
for energy efficiency home improvements and installation of solar energy
systems and fuel cells.
India too has many Leadership in Energy and Environmental Design
(LEED)-certified green buildings. Bio-diversity Conservation India Limited
(BCIL), a Bangalore based builder, has built some energy efficient
residential homes in Bangalore, India.
Self Assessment Questions
7. Environment audits refer to reviewing of a companys operations to
assess the compliance with environmental rules and regulations.
(True/False)
8. The regulated entities need to register in ___________________before
submitting their disclosure forms.
9. The alternative fuels that can be used to conserve energy in transport
sector are _________ and __________.10. The San Francisco government has introduced a scheme that reduces
the tax bill for those who use solar heaters. (True/False)
11. Hybrid cars use _____________ to charge their batteries.
12. The supporters of ____________ claim that if the results remain
confidential it encourages stewardship of the environment.
Summary
Let us recapitulate the important concepts discussed in this unit.
Pollution abatement is a major challenge faced globally and financing for
the same is the major concern.
There are two forms of incentives introduced as a market approach to
pollution abatement. They are pollution fees and marketable permits.
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Polluter pays principle is a policy that was enforced to control pollution
by making the polluter pay for polluting the environment. Cap and trade is a method of reducing pollution where a cap is set on
the amounts of pollutants that can be discharged into the environment
and the permits obtained by the companies can be traded.
Emission Reduction Credit (ERC) is a credit given to an emission source
whose emission levels are lesser than the fixed limit. These permits can
be sold or banked for future use.
Demand side management pricing is a method in which the energy
consumption is balanced depending on the available energy.
Pricing of water conservation and using financial instruments are
necessary to avoid the wastage of water as water is an economic good.
Environmental self audits refer to the voluntary audits conducted by the
respective industries to keep a check on the emission of pollutants.
Financial incentives are provided to companies that use cost effective,
eco-friendly technologies to conserve energy and prevent pollution.
Planning transport effectively by using biofuels also saves energy and
avoids pollution.
Green buildings are buildings that not only conserve energy but alsoprovide a healthier and more resource-efficient living environment.
Glossary
Autoclave treatment: An autoclave is a strong, pressurised, steam-heated
vessel used for laboratory experiments, sterilization, or cooking. Autoclave
treatment involves applying steam under pressure.
Car-pooling: It is an arrangement whereby several participants or their
children travel together in one vehicle, the participants sharing the costs and
often taking turns as the driver.Deionized water: Water that is free of salts and ions.
Non-attainment regions:A locality wherein the air pollution levels regularly
exceed the National Ambient Air Quality standards.
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Terminal Questions
1. Explain the polluter pays principle.
2. Briefly explain the pros and cons of cap and trade method.
3. What are the financial instruments that help in water conservation?
4. List out the fiscal incentives provided for eco-friendly technologies.
5. What are the rules to be followed to conserve energy in the transport
sector?
Answers
Self Assessment Questions
1. Polluter pays principle
2. Carbon tax
3. Chlorofluorocarbons
4. True.
5. European Community and the Organisation for Economic Co-operation
and Development (OECD).
6. a. Subsidies
7. True
8. Central Data Exchange ( CDX)
9. Compressed Natural Gas (CNG) and propane
10. False. The France Government has introduced a scheme that reduces
the tax bill for those who use solar heaters.
11. Gasoline
12. Secret audits
Terminal Questions
1. The Polluter Pays Principle (PPP) is an environmental policy in which
the polluter is made to pay for polluting the environment. This policy
determines the various ways in which the pollution prevention and
control can be allocated. For more details, refer sub-section 05.2.
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2. The leading legislative bills project that by 2050, the cap and trade
system can bring down the carbon dioxide emission rates to about 80%when compared to emission levels in 2005. This will significantly
decrease global warming and the government can spend the remaining
billions of dollars on consumer energy programmes. For more details,
refer section 05.2.
3. Financial instruments depend on market forces and price fluctuation to
change the perspective of polluters in a way that supports environmental
protection. Some of the financial instruments are:
Subsidies - Subsidies refer to the tax incentives like tax exemptions,
investment tax credits, and low interest loans that aim at reducing
pollution. These subsidies encourage the industries to reduce the
quantity of emission of pollutants and obtain incentives for the same. For
more details, refer section 05.2.
4. There are many companies that specialise in alternative energy, eco-
friendly and green technology. The government provides financial
incentives to such companies that employ eco-friendly and cost effective
technologies.
Grants available for solar heaters in France: The French government
has introduced a scheme that reduces the tax bill for those who use
solar heaters. For more details, refer section 05.3.
5. Some of the rules to be followed to conserve energy in the transport
sector are as follows: planning transport in such a way that it avoids
wasteful driving. For more details, refer section 05.3.
Caselet
Hunter River Salinity Trading Scheme
The Hunter River, located north of Sydney, Australia, faced the problem of
drastic variance in salinity due to the variation in flow rate. Whenever therewas excess rain the flow would increase and natural salts would be picked
up and the salinity level would increase considerably and under low-flow
conditions, salinity levels would be low. An arrangement had to be made to
discharge more saline water and balance the salinity level.
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Setting the cap
To overcome the problem of salinity, the affected communities decided to
set a cap on salinity concentrations. The water in the river was divided into
several blocks and salinity levels were monitored at these checks points.
Defining the property rights
The different levels of salinity was monitored and a proportional discharge
right was allocated accordingly, ensuring that the cap was not breached.
When the salinity levels were low, the property rights for discharge of saline
water would be high and in case of high salinity, rights to discharge saline
would be low.
Allocating and trading property salinity credits
The industries had to obtain license in order to discharge saline water. The
license was originally granted to existing users based on environmental
performance and their economic output.
The participants were allowed to trade their licenses and to maintain
transparency; the trading scheme was made available on the internet.
Thus, the structure of the market and trade facilities encouraged the on-going innovation and efficiency.
Discussion Questions:
1. What was the main problem with the Hunter River?
(Hint: ReferHunter river salinity trading schemein the given caselet.)
2. How did they tackle the problem?
(Hint: Refer By monitoring various checkpoints across the river and
controlling the variation in salinity.)
(Source:http://www.marketbasedinstruments.gov.au/LinkClick.aspx?fileticket
=6ERqKm2euyg%3D&tabid=83&mid=748)
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References
Streeter, S. The Capitol Net & Thomas L Hungerford. 2010. Cap andTrade. U.S.A.: The Capitol.Net.
Yudelson, J. (2008). The Green Building Revolution. U.S.A: Island
Press.
E-References
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http://www.epa.gov/greenbuilding/tools/funding.htm#national2 -
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http://www.water.vic.gov.au/saving/industry/incentives - Retrieved on
November 7, 2011.