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transferable discharge permits

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What are the advantages and disadvantages of transferable discharge permits? Was the approach taken with the 1990 Clean Air Act transferable discharge permit program appropriate? Why or why not? What alternative approach do you recommend?

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Some background Information
In a transferable emission permit system a new type of property right is created. This property right consists of a permit to emit pollutants. Each permit (also known as an allowance) entitles its holder to emit one unit (kilogram, tonne, or however the permit is calibrated) of the waste material specified in the right (Popp, 2012). Rights holders would ordinarily have a number of such permits at any point in time. If a discharger owned 100 permits, for example, it would be entitled to emit, during some specified period of time, a maximum of 100 units of the designated type of pollutant.

What are the advantages and disadvantages of transferable discharge permits?
There are some disadvantages that comes with discharge permits. These discharge permits are transferable; they can be bought and sold among anybody allowed to participate in the permit market, at whatever price is agreed upon by the participants ...

Solution Summary

Transferable discharge permits are examined. The discharge permit program appropriate is determined.

See Also This Related BrainMass Solution

Efficient Pollution Control - Effluent Fees and Transferable Permits

Four firms located at different points on a river dump various quantities of effluent into it. The effluent adversely affects the quality of swimming for homeowners who live downstream. These people can build swimming pools to avoid swimming in the river, and firms can purchase filters that eliminate harmful chemicals in the material that is dumped into the river.

As a policy advisor for a regional planning organization, how would you compare and contrast the following options for dealing with the harmful effect of the effluent:

a.) An equal rate effluent fee on firms located on the river.
b.) An equal standard per firm on the level of effluent each firm can dump.
c.) A transferable effluent permit system in which the aggregate level of effluent is fixed and all firms receive identical permits.

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