Mobile emission reduction credit
A mobile emission reduction credit (MERC) is an
Background
Government agencies worldwide have struggled with finding new and innovative approaches to address the growing problem of air pollution and global warming. Experts in the field have recognized the importance of developing solutions to reduce greenhouse gas (GHG) emissions. Most proposed strategies to mitigate global climate change focus on reducing the dominant source of GHG emissions to the atmosphere – combustion of fossil fuels, which releases carbon dioxide. Carbon dioxide emissions represent about 84 percent of total U.S. GHG emissions. In the United States, most carbon dioxide (98 percent) is emitted as a result of the combustion of fossil fuels; consequently, carbon dioxide emissions and energy use are highly correlated.[3]
General emission reduction strategies
The two main approaches that have been developed to address this problem include a command-and-control regulatory system and
International approach to emission reduction credits
Emission trading is contemplated on an international level. The
United States approach to emission reduction credits
The United States (which did not ratify the Kyoto Protocol) has the most experience with domestic emissions trading markets. The
All commonly accepted ERCs in the United States must meet each of five criteria before they can be certified by the relevant regulatory authority as an ERC. Namely, the emission reduction must be real, permanent over the period of credit generation, quantifiable, enforceable, and surplus [4] to emission reductions that are already needed to comply with an existing requirement (local, state, or Federal) or air quality plan. These criteria are intended to ensure that the emission reduction is a permanent reduction from the emissions that would otherwise be allowed to offset the permanent increase in emissions from the new or expanding source.
Steps to create a MERC
The steps involved to create a MERC are as follows:
- Identifying an emissions reduction technology for a pollutant
- Identifying a mobile source
- Utilize a Portable Emissions Measurement Systemto measure emissions of the pollutant and take first measurements of the pollutant from the mobile source
- Analyze the measurements to develop a baseline emissions amount
- Apply the emissions reduction technology to the mobile source to provide a modified mobile source
- Connect the Portable Emissions Measurement Systemto the modified mobile source and take second measurements of the modified mobile source
- Analyze the second measurements to develop a modified emissions amount
- Quantify the mobile emissions reduction produced by the emissions reduction technology
- Convert the mobile emissions reduction into a tradable commodity
Monetization of a MERC
The process of converting the mobile emissions reduction into a tradable commodity consists of converting the reduction or a portion of the reduction of emissions into at least one tradable credit, and marketing and
- Debiting the MERC from the customer account
- Receiving information to identify a second customer or purchaser
- Calculating an emissions amount of the pollutant for the purchaser
- Assigning a liability value to the emissions amount for the purchaser
- Accepting payment from the purchaser
- Using the payment to purchase at least one MERC for the purchaser
- Crediting the MERC as assets against the liability value assigned to the second customer for the emissions amount, whereby the emissions amount and the liability value in the second customer account is reduced accordingly
Target pollutants of mobile emission reduction credits
At present, the pollutant may be selected from a group consisting of
See also
- Emissions trading
- Carbon credit
- Flexible mechanisms
- Emission factor
- Joint implementation
- Chicago Climate Exchange
- European Climate Exchange
- European Union Emissions Trading Scheme
- International Petroleum Exchange
- List of futures exchanges
- Personal carbon trading
References
- ^ US Environmental Protection Agency Indoor Air Quality reference guide Appendix I
- ^ California Air Resources Board Guidelines for the generation of mobile source emission reduction credits through purchase and operation of new, reduced-emission heavy-duty vehicles
- ^ US Energy Information Administration Emissions of Greenhouse Gases in the United States 2005 Archived 2011-05-23 at the Wayback Machine
- ^ Texas Commission on Environmental Quality website Implementing Emissions Banking and Trading under SB 1561 Archived 2007-06-14 at the Wayback Machine
External links
- MERCS program - California Air Resources Board's
- Environmental Protection agency's Rule 27 Banking of Mobile Source Emission Reduction Credits
- £400 million carbon credit trade with China