Tradable smoking pollution permits

Tradable smoking pollution permits

As an alternative to smoking bans, some economists have proposed a system of tradable smoking permits as a solution to the problem of cigarette-smoking "externalities" in public bars and restaurants. Tradable smoking pollution permit systems work similar to other cap-and-trade emissions trading systems successfully used by the Environmental Protection Agency since the 1970s to curb other types of pollution. The proposal has been suggested by Profs. Robert Haveman and John Mullahy of the University of Wisconsin-Madison. []

Emissions trading systems allow lawmakers to define the overall level of pollution that is socially acceptable, and then issue tradable permits corresponding to that amount. Companies who wish to pollute must hold permits equal to their emissions. This market-based approach to pollution control provides firms with economic incentives to minimize pollution -- as they can sell unused permits to other firms -- rather than direct regulatory penalties, which tend to have high administrative costs.

Tradable pollution permits as a market-based alternative to smoking bans have been suggested as follows: Lawmakers decide the optimal level of smoking establishments for an area. The total fire occupancies -- or some proxy based on alcohol sales receipts -- for those establishments is totaled up, and smoking pollution permits are issued accordingly. Establishments are required to hold permits equal to size -- fire occupancies or level of alcohol receipts -- if they wish to allow smoking. In essence, they are required to own the property rights over the clean air space of all occupants before any can smoke. Establishments with unused permits can sell them on the open market to smoking establishments, providing economic incentives to reduce smoking in bars and restaurants.


One criticism of tradable smoking pollution permits is that employees and customers should not be required to expose themselves to unnecessary health hazards, even when employees voluntarily seek employment.Fact|date=February 2007 However, proponents sometimes point out that customers are not required to expose themselves to unnecessary health hazards because they are not required to go into the establishment in the first place.Fact|date=February 2007 Another criticism is that emission permits may not work well in all contexts, and there has been little study of the costs and benefits of using them to curtail public smoking.Fact|date=February 2007

Response to Criticisms

The Tobacco Proponents Association of British Columbia has countered the criticism regarding involuntary worker exposure to ETS. Like many jurisdictions, workers in BC are covered by workers' compensation. In certain industries (construction, mining, etc.), workers are exposed to a higher rate of workplace injuries and fatalities. Companies in such industries are required to pay higher rates into the workers' compensation plan to provide for workers and their families in case of injury or death. The TPA has lobbied the provincial government to put a 'price' on worker exposure to ETS and permit businesses who are willing to pay those higher rates to allow smoking. The TPA's position is that it is irrelevant whether workplace injuries are the result of ETS, or a mine collapse, or a fall off of a condo development.

External links

* [ "Let Bars Buy, Sell Smoking Permits," Wisconsin State Journal (September 25, 2005)]

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