Tradable Emissions

Over the past few years, and particularly in relation to the global warming debate, there has been increasing advocacy of the adoption of tradable 'permits to pollute' as a cost-effective way of reducing pollution. The objective is to limit waste production while still creating incentives for efficient resource use. A number of systems have been proposed which involve the creation of marketable permits and trading being based on the establishment of payment per unit of pollution or the use of pollution reduction credits. These systems are often preferred to levies since market mechanisms are used to allocate pollution rights once a political process has decided upon the overall level of pollution permitted. As yet, none appear to have been fully implemented in the livestock production and processing sectors, although some license schemes similar to emissions trading have been introduced in the livestock sector. For example, in the Netherlands, livestock farmers have to prepare plans which estimate how much manure will be produced and how it will be spread. Maximum amounts of manure per hectare are permitted and this has created improved methods of manure management and environmental improvements.

Further Reading

Joint Economic Committee. 1997. Tradable Emissions. http://www.house.gov/jec/cost-gov/regs/cost/emission.htm, or click here to view in Acrobat file format .

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