NCPA - National Center for Policy Analysis

Evaluating Bush's Clear Skies Initiative

May 2, 2002

Some environmental specialists are giving President Bush's Clear Skies plan high marks. They say his efforts to cut power plant emissions can result in huge reductions, employing innovative strategies to fight air pollution.

Clear Skies would impose hard caps on power plant emissions of sulfur dioxide, nitrogen oxide and mercury emissions -- requiring reductions of about 70 percent from today's levels over 10 to 15 years. Clear Skies would take a different approach to pollution reduction than the current Clean Air Act:

  • The key is utilizing the cap-and-trade process, rather than command-and-control regulations, thus allowing sources to trade emissions permits -- so that those facing very costly clean-up bills can effectively pay for emissions reductions by others with lower costs.
  • The cap-and-trade program would make no distinction between new sources of pollution and old sources -- whereas the different requirements for "old source" pollution versus "new source" pollution under the Clean Air Act has been a problem.
  • The Clean Air Act has required old plants to meet stricter standards when their useful lives ran out; perversely, this has increased the value of old plants without expensive new pollution control technology, since old plants are allowed to continue operating indefinitely.

Instead, under Clear Skies, plant owners would get both the incentive to reduce emissions and the flexibility to find the cheapest cleanup strategies for key pollutants without regard to a plant's age.

Source: A. Denny Ellerman and Paul L. Joskow (both Massachusetts Institute of Technology), "Clearing the Polluted Sky," New York Times, May 1, 2002.


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