Cost Effectiveness and Risk Anayses for Simulation of a SOx Emission Trading Program in Taiwan
Emission trading program (ETP) is an effective economic incentive policy for pollution abatement. A proper market-based ETP can effectively promote pollution reduction and technology advance, thereby harmonizing the conflict between economical development and environmental protection. Various national air pollution control policies and bubble strategies were implemented and planed in recent years. To support the decision-making analysis for an appropriate domestic emissions trading program (ETP), this study analyzed and assessed the potential cost effectiveness and air pollution risk of an ETP. Trading behaviors were simulated based on a marginal cost difference and a random approaches. Ambient air qualities before and after the trading were simulated by the ISC model. Air pollution risk was defined based on the ambient standard, a population exposure index, and two types of damage functions. For those scenarios with risk being increased after the trading, an offset policy was applied to reducing the risk. Four varied scenarios based on the data collected for the Tao-hsu-mao airshed were established to simulate monopoly, non-monopoly, and typical markets for evaluating the cost effectiveness and pollution risk under varied markets, using the proposed simulation approaches. According to the simulation results, the total trading cost and saving are about NT$ 2.4-5.2 and 2.4-4.6 billion, respectively. The scenarios with few significantly large emission sources, population exposure and damage potential are both increased after the trading because pollution permits are transferred from a low population density area to a high density area. On the other hand, for scenarios without large sources, the air quality violation ratio may be increased after the trading because pollution permits are transferred into several small areas and thus concentrate the emission and induce some peak effects. These risks can be reduced by an offset policy based on population density difference or distance. However, the risk increased after the ETP trading is not significantly large for four simulated scenarios. Even though it is possible to increase the risk, a proper offset or other policy can be applied to reduce the risk. A proper ETP should be an attractive policy for environmental authority to implement. This study collected information for various ETPs and associated experiences. A systematic procedure with development of mathematical and optimization models was proposed for assessment of potential benefit, effectiveness, and ambient air quality risk of a ETP. The ETP decision-making analysis is expected to be improved based on the proposed procedure, and hopefully an appropriate ETP can be designed and implemented. Emissions trading is a market-incentive pollution reduction approach that has been adopted by several foreign countries. A proper ETP is expected to resolve the conflict between the economic development and environmental protection and to increase pollution dischargers’ incentive to adopt efficient pollution control technologies and therefore effectively achieve the pollution reduction goal.
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