The Smog Market

DIRTY air can be attacked from a number of angles. One approach getting increased attention is the creation of a market in "pollution credits." Businesses or utilities that take steps to meet or exceed emissions standards set by the government are able to sell credits to those who have more trouble reaching the mark. On balance, goals are reached.

The idea presents difficulties, however. For one, it can be difficult to monitor and enforce. Care has to be taken that the credits are valued fairly and that fast-dealing companies don't claim more credits than they deserve.

Efficiency is the big plus. Businesses that are able to move ahead with pollution controls will do so, while laggards pay to lag. The built-in incentives work better than government fiats, say proponents.

The track record for pollution credits isn't long. The concept was worked into the 1990 Clean Air Act. Midwestern utilities can trade their "pollution rights" in an effort to attain, as a group, the halving of emissions that cause acid rain.

An even larger experiment is scheduled to begin in southern California in 1994. That's when the South Coast Air Quality Management District will begin letting companies in its sprawling jurisdiction buy and sell the right to pollute. Since southern California has a big part in setting the antismog agenda for the nation, its move away from traditional regulation will be carefully watched.

More immediately, the Bush administration is planning to launch a variation on pollution credits - giving companies the option of buying and destroying gas-belching older cars in lieu of installing antipollution equipment in their plants. Called "cash for clunkers," the program could help remove one highly noxious source of fumes while giving consumers the wherewithal to purchase less-polluting vehicles.

Again, policing and tight rules - to make sure the clunkers were really in use - are vital.

Regulators, whether in Washington or locally, will still have a role. They have to unequivocably set the clean-up goals, establish a time frame for meeting them, and, if the market doesn't do the trick, be ready to step in with other methods.