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NMSU professor lays groundwork for market-based anti-air-pollution program

New Mexico State University economics professor Soumendra Ghosh is helping to lay the groundwork for a program that could provide incentives for controlling air pollution in the United States-Mexico border region.

Ghosh has received a $233,000 grant from the Environmental Protection Agency to conduct workshops and seminars along the border from California to Texas on a process known as "emissions permit trading."

The presentations will attempt to develop support and cooperation for a cross-border emissions permit trading program being developed by the Southwest Center for Environmental Research, a consortium of U.S. and Mexican universities, he said. The consortium includes NMSU, San Diego State University in California, the University of Utah, Arizona State University, the University of Texas-El Paso, the Instituto Tecnologia in Monterey, Mexico, and the Universidades Autonomos in several Mexican border states.

One workshop already has been held in Juarez, Mexico, and six more presentations are planned -- another in Juarez, three in Texas and two in California, he said.

Typically, government officials on both sides of the border have attempted to control pollution by what is known as a "command/control" approach, Ghosh said. That is, they set pollution limits, then attempt to penalize polluters when they exceed those limits, he said.

But, by instituting a process of emissions permit trading along the border, authorities could show polluters that it pays to reduce emissions, rather than threatening them with government sanctions, he said.

Under an emissions trading program, businesses receive permits allowing them to emit a certain amount of polluting substances, such as carbon monoxide, sulfur dioxide or nitrogen oxide. If a business reduces the amount of a pollutant it emits, through the use of advanced technology or through reduced production, it can sell the remaining pollution credits granted in the permit to another entity. Under most programs, to sell one pollution credit a business must show it has reduced pollution by more than one unit, Ghosh said.

Emissions permit trading has been used in the United States for approximately five years and has proven so successful that emissions permits for sulfur dioxide are traded as a commodity on the Chicago Board of Trade, he said.

But, Ghosh added, there are still some barriers to a cross- border emissions trading program. Environmental standards and enforcement approaches are different in the United States and Mexico. A true emissions cross-border trading program could only be instituted after intense binational negotiations and is still years away, he said.

"Basically, our presentations are to educate constituencies, such as industry groups, citizens groups and academics," he said.

Jack King
Jan. 31, 2001