Emissions trading
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The efficacy of, what later was to be called, the "Cap and Trade" approach to air pollution abatement was first demonstrated in a series of micro-economic computer simulation studies between 1967 and 1970 for the National Air Pollution Control Administration (predecessor to the EPA Air Office) by Ellison Burton and William Sanjour. These studies used mathematical models of several cities and their emission sources in order to compare the cost and effectiveness of various control strategies.[5][6][7][8][9]For each abatement strategy comparison was made with the "least cost solution" produced by a computer optimization program which finds the least costly combination of source reductions to achieve a given abatement goal.[10]  In each case it was found that the least cost solution was dramatically less costly for the same level of pollution produced by any conventional abatement strategy.[11] This led to the concept of "Cap and Trade" as a means of achieving the "least cost solution" for a given level of abatement.
 
 

5.  Burton, Ellison, and William Sanjour. (1967). An Economic Analysis of the Control of Sulphur Oxides Air Pollution. DHEW Program Analysis Report No. 1967-69. Washington, DC: Ernst and Ernst.

6.  Burton, Ellison, and William Sanjour. (1968). A Cost-Effectiveness Study of Particulate and SOx Emission Control in the New York Metropolitan Area. NTIS: PB-227 121/1. Contract Number: PH-86-68-37. Washington, DC: Ernst and Ernst.

7.  Burton, Ellison, and William Sanjour. (1969). A Cost-Effectiveness Study of Air Pollution Abatement in the Greater Kansas City Area. NTIS: PB-227 116/1. Washington, DC: Ernst and Ernst.

8.  Burton, Ellison, and William Sanjour. (1969). A Cost-Effectiveness Study of Air Pollution Abatement in the National Capital Area. NAPCA Contract No. PH 86-68-37, NTIS: PB227110. Washington, DC: Ernst and Ernst.

9.  Burton, Ellison, and William Sanjour. (1970). Applications of Cost-Effectiveness Analysis to Air Pollution Control. DHEW Contract No. CPA 22-69-17. Washington, DC: Ernst and Ernst.

10. Burton, Ellison and Sanjour, William. (1969). "Multiple Source Analysis of Air Pollution Abatement Strategies." Federal Accountant XVIII (March): 48-69.

11,  Burton, E. S. and William Sanjour. (1970). "A Simulation Approach to Air Pollution Abatement Program Planning." Socio-Economic Planning Science 4: 147-150.