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Pollution Permits

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by

Michelle Chen

on 7 June 2016

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Transcript of Pollution Permits

The Effects of Pollution on Our Environment
What Can Our Government Do?
Pollution Permits!
These are licenses distributed by the government which allow companies to pollute to a certain degree.
How Pollution Permits Relate to the Economy
Resources:
more pollution leads to less resources which cause wants to exceed resources even more
Supply and Demand:
companies can profit from selling excess permits as long as there continues to be a demand
The Kyoto Treaty
Pollution Permits
Pros and Cons
Pros:
• Incentive for companies to produce less pollution
• Less pollution = better for environment
• Companies can profit from their permits (sell it for money)
Cons:
• If they exceed the amount they pollute they must pay additional money for a permit
• Difficult to measure pollution levels
• Rich companies can simple buy more permits (pollution wouldn't reduce that much)

1. Spectra Energy’s Pine River; 12,201 tonnes
2. Rito Tinto Alcan; 5,820 tonnes
3. Catalyst Paper Organization; 5,802 tonnes
gas plant in Northwest B.C.
biggest single air polluter
specialize in smelting aluminum
Kitimat, B.C.
mill in Crofton, B.C.
pulp and paper company
emit nitrogen oxides, sulphur dioxide (smog), organic compounds and particulate matter
most emissions from heavy industry and natural gas plants
companies focus on cost-saving when the buy the permits thus improving our standards and conditions
concentrates emissions to one industry and provide incentive to not produce emissions so they can sell it
Consequences?
How Do Permits Help?
The BIG Polluting Companies in B.C.
POLLUTION PERMITS
signed in Kyoto, Japan in 1997
Purpose: to get major industrialized economies of the world to commit to reduce their greenhouse gas emissions

Kyoto Treaty: Developing Countries
developing countries not subjected to agreement, but encouraged to be environmentally friendly
China
Many people are concerned
China is predicted it will become one of the planets biggest polluters over the next 10 years.

First Phase:
signed by 156 countries, came into effect in 2004, ended in 2014
reduce emissions to levels less than those occurring in 1990
main goal: EU cut emissions by 8%, UK reduce by 20%
* developing countries not subjected to agreement, but encouraged to be environmentally friendly
Remedies
Remedies proposed under the Kyoto Treaty:
Tradable Pollution Permits

The government, or an appointed agency, selling the right to generate a given quantity of pollution to firms in an industry.
These can be bought, and traded, with the result being:

High polluters
have to buy more permits
Therefore: increases their costs, and makes them less competitive and less profitable

Low polluters:
receive extra revenue from selling their surplus permits
makes them more competitive and more profitable.

Winnie, Eugenia, Cindy, Michelle 1-1
pollution is a NEGATIVE externality
costs spill over to other parties not involved

Externalities
Full transcript