Abstract

MARDONES, Cristian  and  FUENTES, Jorge. REGULATIONS TO REDUCE PM _2.5 EMISSIONS AND EXTERNALITIES ON THEIR PRECURSORS WHEN THERE IS AVAILABILITY OF CLEAN FUEL. Rev. Int. Contam. Ambient [online]. 2017, vol.33, n.3, pp.505-520. ISSN 0188-4999.  https://doi.org/10.20937/rica.2017.33.03.13.

The metropolitan area of Concepción, Chile, shows high ambient levels of fine particulate matter (PM2.5) due in part to industrial sources. In order to analyze reduction alternatives, a system of emission permisson is compared to an emission standard, considering two alternatives: end of pipe technologies and fuel substitution to natural gas. We conclude that with increases of natural gas availability, the industrial sources will change their fuel even without regulation because lower prices generate significant cost savings; moreover, fuel substitution generates externalities for reducing emissions of SO2 and NOX (both pollutants are precursors of PM2.5). These externalities should justify subsidizing the installation of liquid natural gas plants in industrial areas highly polluted with PM2.5.

Keywords : environmental economics; cost-effective; economic instruments.

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