With new technologies introduced into our society in the past hundred years such as motor vehicles and electric utilities, many pollutants are put into the air. One of these pollutants is Nitrogen oxide. Nitrogen oxide, or NOx, is a group of highly reactive gases, all of which contain nitrogen and oxygen. These gases form when fuel is burned at high temperatures. These gases react in the presence of sunlight and can be carried hundreds of miles from their origins, causing air pollution over wide regions. In 1997, over 23 million tons of nitrogen oxides were emitted into the air in the United States. This is an obvious problem in our society that causes acid rain, smog, global warming, and water quality deterioration. In this paper we are going to discuss the main reason for the high level of NOx and the ways society and government can do to help lower the level of NOx in the air.
The main reason we have an inefficient level of nitrogen oxide is because of the increase use of cars and electric utilities. The Environmental Protection Agency says, Emission reductions from electric utilities and other large boilers would be the most cost effective in terms of dollars spent per ton of NOx reduced. With the large amounts of NOx in our air today, there are concerns of global warming, smog, acid rain, and water quality deterioration. Global warming is formed from one member of the NOx family, nitrous oxide that is a greenhouse gas. It accumulates in the atmosphere with other greenhouse gases causing a gradual rise in the earth s temperature. This will lead to increased risks to human health, rise in the sea level, other changes to plant and animal habitat. Smog is formed by NOx and contributes to the formation of ground-level ozone. Ground-level ozone occurs at high levels during the summertime. This can cause serious respiratory problems to children, elderly, and people with chronic lung problems. Acid rain is formed when NOx and sulfur dioxide react with other substances to form acids that fall to the earth as rain, snow, fog, or dry particles. Acids can be carried by the wind for hundreds of miles. Acid rain damages forests, cars, and buildings. Acid rain contaminates lakes and streams, making it unsuitable for fishes to live in. Water quality deterioration happens when heavy amounts of nitrogen are in water bodies that upset the chemical balance of nutrients used by aquatic plants and animals. A large amount of nitrogen in water bodies can lead to oxygen depletion and reduces fish and shellfish populations. Clearly, these four problems cannot be ignored and either government or society needs to help reduce the quantity of NOx in the air.
One way the government could control the level of NOx in the air is through command and control. Command and control is when the government places constraints on the behavior of households and firms. If households or firms choose not to follow the government s laws then they will suffer a penalty established by the government. For example, the government requires every car to have a catalytic converter on automobiles, sulfur and nitrogen removing scrubbers on the smokestacks of coal-burning utilities, and banning the use of leaded gasoline. Also the government puts restrictions on emissions limitations on the exhaust of automobiles and prohibitions against the dumping of toxic substances. The advantages of the laws and restrictions the government has put on households and firms is that it forces people to reduce NOx without them needing to know what NOx is, it helps protect society from the harmful effects of NOx, and people will be more inclined to follow the government s laws and restrictions if they are subjected to a fine. Even though command and control may seem to be right there are disadvantages that cause command and control to fail. First, Command and control can have high monitoring costs such as making sure every car or coal-burning utilities have catalytic converter or scrubbers. Secondly, the regulation may not be fair to all firms. One firm may think it does not need to have scrubbers. Third, if the regulation is worded poorly, then firms can find ways to go around the law and not reduce their pollution at all. A good example of this is in the past 10 years NOx emissions from the highway vehicles decreased by more than 5 percent, while vehicles miles traveled increased significantly. Even though cars are releasing less NOx with the regulations on emissions, people are just driving more negating any net social benefit. Another way for government to control or reduce NOx is by Taxing.
Pollution taxing is done to make individual self-interest coincide with the social interest. Pollution taxes are different than command and control in that they do not define certain behaviors as legal or illegal and specifying penalties for engaging in illegal behavior. For example, let us say that a firm is polluting at an unregulated level of 8 units of NOx, and the government imposes a tax equal for each unit of NOx. The firm pays one dollar for each unit of NOx. If the firm still pollutes 10 units of NOx then they will pay ten dollars. Of course the firm is not going to continue polluting 10 units of NOx, it will realize that reducing the level of pollution can reduce the costs. In this example, the firm will go from 10 units to 9 units of NOx. The advantage of a pollution tax is that the tax can modify polluters actions so the target level of pollution can be reached with low costs. The disadvantage of a pollution tax is what tax level will induce the target level of pollution. Since the government does not have perfect information on how the polluters will respond to the taxes, it is hard for them to accurately pick the correct tax level. A further way for the government to reduce NOx is by tradable permits.
Tradable permits are permits that are given to firms and that firm has a right to pollute up to the amount of permits they have purchased. These permits give the firms a right to pollute and are transferable. This means that firms can trade permits to other firms. Firms that have a high cost of abatement will purchase permits while firms with a low cost of abatement will choose to abate pollution. For example, the EPA has developed an emissions trading program that states may use in controlling NOx emissions. The program allows sources that exceed their emissions reduction requirements, or that achieve the required reductions ahead of schedule, to sell credits to other sources that cannot meet their limits. The main difference between a command and control system and marketable pollution permits system is that once the initial target level of pollution is made then polluters are free to buy and sell the rights to pollute. This is a good system because once the government sells the permits then it leaves it up to the different firms to reach the required pollution level. A disadvantage with this system is the geographic considerations. For some pollution, the geographic location can have a big effect on the damages the pollution generates. If the pollution stays in mainly one area then it is easy to use marketable permits. If the pollution moves via the wind then the choice between marketable permits and pollution taxes is difficult. This is difficult in NOx because it stays in an area as smog and also moves to other areas as acid rain. The last way for the government to control the level of NOx is through pollution prevention.
Pollution prevention programs are not supposed to control pollution itself, but to address the market failure caused by the NOx. The different government agencies get help from corporations so they can reduce pollution cheaper by developing technologies that are more profitable and cleaner. The main reason for these programs is because it is harder for individual firms to come up with new technology where has the government can allocate a whole new agency or division to develop technology to reduce NOx cheaply. Coal burning firms do not necessarily have to burn fossil fuels to generate electricity. They can use nuclear power, hydropower, wind energy, geothermal energy, or solar energy. Of these, nuclear power and hydropower are most widely used. There are also alternative energies available to automobiles, including natural gas powered vehicles, battery-powered cars, fuel cells, and combinations of alternative and gasoline powered vehicles. All sources of energy have environmental costs as well benefits. Some types of energy are more expensive to produce than others, which means that not all Americans can afford all types of energy. Nuclear power, hydropower, are the cheapest forms today, but changes in technologies and environmental regulations may shift that in the future. All these factors must be considered when deciding which energy source to use today and which to invest in for tomorrow.
In summary, pollution taxes are preferable to command and control regulations since pollution taxes minimize abatement costs and provide other desirable incentives. But, under certain conditions, pollution taxes are less desirable than command and control because techniques in achieving the correct level of NOx. It would be hard to choose between these two, luckily marketable pollution permits combines the desirable qualities of both. In trading permits, firms can minimize their abatement costs and reach the target level of pollution efficiently. Along with tradable permits, the government should invest in new technology that helps prevent pollution. Along with new technology, individuals can do their part in reducing NOx in the air. Individuals can use energy efficient appliances, turn off lights, computers, and other appliances when not using them, carpool, buy vehicles with low NOx emissions, maintain all vehicles well, and be well informed. If individuals and firms are able to find their cheapest abatement costs then they could reduce total emissions of NOx by an average of 28%. This rule will remove about 1.2 million tons of NOx from the air. Obliviously, it will be impossible to remove all of the NOx in the air today, but hopefully with improving technology and peoples better understanding of nitrogen oxide effects, we can help reduce NOx.