Document ID: EPA-HQ-OAR-2003-0053-1288
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2004-04-22T04:00Z

Comments
on
Section
VI
of
IAQR
SNPR
 
Page
9:
You
point
out
that
the
difficulty
with
the
opt­
in
is
determining
baseline
emissions
in
order
to
determine
allocation
of
permits.
One
possibility:
Allow
opt­
in
with
no
allocation,
but
offer
regulatory
relief
from
another
program
(
e.
g.,
BART).
Is
this
possible?
 
Page
9:
"
Immediately
following
is
a
description
of
how
opt­
in
provisions
could
be
incorporated
in
the
IAQR
model
rules,
for
which
EPA
solicits
comment."
Need
to
be
clear
this
description
is
of
a
recommended
set­
up,
not
a
required
one.
The
next
pages
use
"
would"
instead
of
"
could."
 
Page
11:
"
Non­
EGU
boilers
and
turbines
under
the
NOx
SIP
Call
that
choose
to
opt­
in
to
the
IAQR
cap­
and­
trade
program
would
still
be
required
to
meet
the
SIP
call
seasonal
NOx
limitations."
Why?
This
could
address
the
problem
with
the
lack
of
robustness
in
the
seasonal
program.
Has
this
already
been
discussed
and
decided
against?
 
Page
15:
Can't
states
reallocate
excess
Title
IV
allowances
via
an
auction?
 
Page
17:
"
Auctions
treat
existing
and
new
sources
in
a
similar
fashion.
However,
sources
performing
costly
retrofits
to
reduce
emissions
would
then
also
have
to
pay
for
allowances
for
their
remaining
emissions."
I
think
the
"
however"
is
a
non­
sequiter.
Should
also
include
some
lines
on
the
advantages
to
States
of
adopting
auctions.
These
include:
1)
auctions
eliminate
the
permanent
right
to
pollute,
2)
auctions
provide
additional
flexibility
to
states
in
adopting
features
to
the
cap­
and­
trade
program
(
e.
g.,
safety
valve
reductions),
3)
auctions
eliminate
any
perverse
incentives
that
might
be
introduced
by
an
allocation
that
is
updated
periodically,
and
4)
auctions
provide
distortion­
free
revenues
to
the
state.
 
Page
18:
"
Allocating
allowances
for
free
could
lessen
the
financial
impact
of
the
program
on
the
affected
sources
which
already
bear
the
compliance
costs."
I
would
add
" ,
but
would
not
affect
the
sources'
output
decisions."
 
Page
18:
"
Permanent
systems
allocate
all
of
the
allowances
at
the
beginning
of
the
program.
They
provide
long
planning
horizons
for
affected
sources
that
receive
an
allocation.
Additionally,
permanent
allocations
provide
an
incentive
for
units
to
improve
their
generation
efficiency
because
they
can
sell
excess
allowances
if
they
reduce
their
emissions
per
unit
of
power
output."
I
would
cut
everything
after
"
additionally"
because
this
describes
a
feature
of
cap­
and­
trade,
not
of
permanent
allocations.
Also,
should
add
a
line
that
permanent
systems
establish
a
permanent
right
to
pollute
(
i.
e.,
retired
sources
still
receive
valuable
allowances).
 
Page
21,
section
iv:
Should
remind
readers
that
this
is
offered
as
an
example
and
that
states
have
the
discretion
on
what
type
of
allocation
system
to
adopt.
 
Page
24,
paragraph
3:
Since
this
paragraph
starts
"
Allowances
in
the
new
source
set­
aside
could
be
distributed
in
a
number
of
ways,"
one
of
the
ways
that
should
be
mentioned
is
auctioning.
 
Page
26:
Renumber
"
3"
to
"
4."