Because firms can always buy fewer allowances, or even sell them if they abate by enough, they always face an incentive to find cleaner technologies. And, economists figure that since allowances involve no transfers from the private to the public sector, they might be a more politically feasible market-based incentive than a tax. The case Alliance for Clean Coal v. Miller provides an example. The plaintiff is a trade association whose members include miners and distributors of cleaner low-sulfur coal. The defendants are the chair and six commissioners of the Illinois Commerce Commission.
Illinois coal has high sulfur content.
The plaintiff claims that the Illinois Commerce Commission violated the Constitution by enforcing the Illinois Public Utilities Acts and Coal Act. These Acts require the commissioners to take into account the effect on the local coal industry of utilities Clean Air Act compliance plans, and that some plants install scrubbers so that they can continue to use Illinois coal. Obviously, to require that some plants use a particular abatement method undermines the cost-effectiveness of the tradable allowance program. This is especially so in this case, since switching to low-sulfur coal is much less costly than installing scrubbers. An economist, enforcing a constitution of cost-effectiveness, would rule in favor of the plaintiff.