How can the government force or incentivize large companies to reduce air pollution?

1 Answer
May 30, 2016

Governments can either: ask for voluntary reductions, place regulatory limits, out-right ban certain chemicals or put a price on a substance and cap the amount that can be emitted.


If scientific studies are suggesting a substance is harmful, governments can initially ask industry to voluntarily reduce emissions of this type. For example, in the early days of climate change (1990s) many governments asked industry for voluntary reductions in carbon - this usually doesn't achieve much, but does send a signal to industry that regulatory approaches may be next.

A regulatory approach may be next in which industry is told they can only emit "X" amount of tonnes of a pollutant from a given plant. This is how most industrial plants are regulated in North America and Europe right now. A new market-based variation is called "cap and trade" where an overall airshed limit is placed in a region and individual companies get some many allowances or credits to use in a given year - once they exceed their limit, they need to buy more from other companies or emit less . This approach has been done for CO2, SO2 and other pollutants.

For a more serious air pollutant, and out-right ban or phase-out of the chemical may be ordered by government. For example, in North America, leaded gasoline was progressively phased out during the 1980s and it is now illegal to have lead in gasoline.

In some special cases, government may actually pay companies to close down highly polluting plants before their actual end of life usefulness. This approach may be used in North America to close down high CO2 emitting coal-fired power plants.