Marketable Emissions Allowances
Pursuant to the Clean Air Act of 1990, each year in March the U.S. Environmental Protection Agency auctions off to the highest bidder about 250,000 pollution allowances that enable companies to emit one ton of sulfur dioxide. Those companies face statutory penalties of $2,000/ton for every ton of sulfur dioxide they emit in excess of those for which they own allowances. Emissions allowances are bought and sold daily through the Chicago Board of Trade like soybeans, rice or any other commodity. Only a limited number of allowances are available each year. After those allowances are used, no more can be issued. The Acid Rain Retirement Fund raises money and bids alongside polluters in the annual auctions for as many allowances as their funds can buy. But instead of using or trading them, A.R.R.F. retires them permanently, taking allowances off the market and keeping sulfur dioxide out of the air. Thus, every pollution allowance A.R.R.F. removes from circulation prevents that pollution from being legally emitted into the air.
Read more about this topic: Acid Rain Retirement Fund
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