YOU ARE HERE: LAT HomeCollections

Trading Emission Credits Works

June 01, 1993

The April 27 letter from Joe Burrow, "Clean the Air on Smog Issues," misses the point on trading emission credits.

"Emission reduction credits" is a system that lets businesses trade emissions and clean up the air. This happens because the Air Pollution Control District keeps a percentage of every transaction for clean air purposes.

Without these trades, new population-driven businesses such as gas stations and dry cleaners could not open. And existing businesses would be unable to expand and remain competitive within their industry markets.

The trade between 3M and P&G is a good example of how this system works. 3M voluntarily reduced emissions at its Camarillo plant beyond what is required of any regulation. Since they had a legal right to emit the contaminants, but chose not to, they are allowed to "bank" these as Emission Reductions Credits, or ERCs.

Why allow this, one might ask, as Mr. Burrow did. The answer is, the air benefits in two ways. First, while the ERCs sit in the bank, the air is cleaner by that amount of pollution. Secondly, when the ERCs are used, the APCD keeps at least 20% to provide a net gain for cleaner air.

Let's look at what P&G purchased and what is going into the air because of that purchase. P&G needed to increase its permitted emissions by 38 tons per year. To gain this right, they had to find 59 tons per year to allow for air quality improvement.

As a result of this transaction, at least 21 tons of pollution per year has been permanently removed from the air. In addition to this clean air improvement, 210 new jobs were created in Oxnard. This is a win-win situation.

There is more to the 3M story. Because of a corporate policy not to profit from the sale of emissions, 3M donated the proceeds of the credits transaction to create a $1.5-million clear-air fund. To date, the fund is helping SCAT change its buses from diesel to clean burning natural gas. The Buena High School solar heater will be rebuilt and placed back into service, saving fuel costs for the school and improving air quality. A curriculum is being developed to educate high school students about air quality and how they can help improve it.

Trading emission rights is good for business and good for clean air. It is required by the law and it makes sense. It's an exceptionally beneficial situation when a company uses the proceeds for the betterment of the community.


Baldwin is air pollution control officer for Ventura County

Los Angeles Times Articles