Your analysis reminds me of the ‘Sooty Six’ power plant clean up in Connecticut (1998-2002), where the rule was every ton of Sulfur Dioxide emitted had to be offset by not one but four tons worth of allowances (aka ‘allowance trading’). It was touted as a compromise solution offering plant owners flexibility.

It sounded reasonable, and with state allowances amounting to only one third of the required total, it looked as if real clean up was finally at hand. Reps and Senators on both sides of the isle got snookered into promoting it.

Here’s the rub: in a not-much-advertised loophole (aren’t they all?) plants could trade not just in CT but throughout the northeast region, which each year made available twice the number of allowances for all the plants combined! Clean up would occur only if plant owners had a change of heart (so… never).

Back to the B-L-W bill, how naïve is it to ask if this is an oversite?

http://www.nytimes.com/ 2008/ 05/ 27/ business/ 27exxon.html?_r=1&ref=business&oref=slogin