Washington, DC – Brushing aside internal objections, the US Environmental Protection Agency (EPA) is now set to formally approve authority for three states to trade air pollution credits on an “open market” or inter-sector basis, according to records released today by Public Employees for Environmental Responsibility (PEER). The three states are New Jersey, Michigan and Illinois. All three states are air quality non-attainment areas and none has an approved attainment plan.

Fresh on the heels of international rejection of expanded trading schemes at the Hague Conference on Global Warming, US EPA is moving in a quiet, piecemeal fashion to expand trading markets by allowing states to set up their own programs. Under these state programs, industries could sell or trade credits between different pollution sources (e.g., smokestacks for auto emissions) and over different periods of time (allowing industries to create credits today for past pollution reductions). Over the past five years, New Jersey has developed a de facto trading market. The imminent US EPA approval will provide a formal sanction for that market.

The central problem with open market trading is that it allows industries to avoid installing clean-up technologies by instead purchasing air pollution reductions that have been produced at another time, place or with an altogether different pollutant. Specialists within EPA object to the absence of any reliable “quantification protocols” or other means of quality/comparability assurance.

“According to the agency’s own experts, these state trading plans strip away the only safeguards that ensure a true reduction in pollution will result,” stated Jeff Ruch, PEER Executive Director. “The public is protected only if we know that each pollution credit trade is an ‘apple-to-apple’ exchange, however EPA is willing to allow an apple to be traded away for the promise of a future guava.”

For further information concerning the problems with open marketing trading plans read the PEER White Paper Trading Thin Air

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