Walls, Nelson, Safirova
Telecommuting and Environmental Policy
over and above RACT. But MERCs cannot be used to satisfy the requirements of best available control
technology, lowest achievable emissions rate, or new source performance standards. Furthermore, the
guidance prohibits the use of MERCs for inspection and maintenance programs and employer trip
reduction programs.13 The guidance does not address implementation issues in much detail, in particular
how MERCs would be used by stationary sources.
MERCs can be generated from a range of actions, including vehicle scrappage programs,
modifications of vehicle fleets, inspection and maintenance programs in areas where they are not
required, clean fuel programs, and trip reduction measures. The orientation has been toward using
technological approaches to create MERCs rather than relying on VMT reduction strategies. Scrappage,
engine retrofit, and clean fleet programs are the most common methods for creating MERCs.
In practice, MERC trading has been very limited. Although some states have provisions for
including mobile sources in their offset programs, only a few—Connecticut, New Jersey, Michigan, and
three air districts in California—have approved the creation of mobile emissions reduction credits. In
those states, MERC trades have accounted for a tiny fraction of the emissions trades that have taken
place. For example, according to Haites and Haider’s (1998) review, MERCs have been involved in less
than 1% of the offset trades in California. The most significant current MERC project in California
created offsets for PG&E National Energy Group’s Otay Mesa Generating Project in San Diego County.
The offsets were generated from the conversion of diesel-fueled trash trucks to compressed natural gas,
and the conversion of ferries to clean diesel technology (Diesel Technology Forum 2003). Houston has
had a MERC program but is only now preparing to authorize the creation of its first MERC, involving a
marine source. Several states allow credits to be created through trip reduction activities, but no MERCs
have yet been created this way.
Possible reasons for the limited use of MERCs include (1) the inherent difficulty of applying
emissions trading to a sector with large numbers of relatively low-emitting sources. Because potential
emissions reductions from any individual vehicle are relatively small, the costs of monitoring and
certifying individual emissions reductions will tend to dwarf the potential value of the credit generated.
Another important reason (2) is a mismatch between the nature of mobile source credits and the needs
of credit buyers. By their nature, mobile source emissions reductions are temporary. For this reason,
states and air districts have required that MERCs be considered temporary. Firms requiring offsets, on
the other hand, must take steps to reduce emissions indefinitely. Finally, one more reason (3) lies in
problems of demonstrating that MERCs meet EPA’s criteria for integrity. Of the integrity criteria, the
requirements that reductions be quantifiable and surplus present the biggest challenge for mobile source
reductions. It is more difficult to quantify emissions reductions from many mobile sources than those
from a few large stationary sources. Stationary source emissions can be directly monitored, thus
providing a high degree of assurance that reductions are actually occurring. There exists no
corresponding monitoring regime for automobiles, and MERC programs frequently rely on emissions
factor approaches rather than on monitored emissions.14
There are other potential uses for credits generated from telecommuting besides interfirm
trading programs of the sort discussed above. The most obvious regulatory uses are for achieving
compliance with rideshare programs, helping demonstrate transportation conformity, and contributing to
voluntary mobile source emissions reduction programs (VMEPs) in the SIP.
4. Ecommute program
In 1999, Congress passed the National Air Quality and Telecommuting Act. This Act
established pilot telecommuting programs in five major U.S. metropolitan areas with the purpose of
studying the feasibility of addressing air quality concerns through teleworking. A group of key
13 At one time, employer trip reduction programs were mandatory for severe non-attainment areas, but Congress
rescinded that requirement in 1995. Some areas still have those programs.
14 EPA’s MOBILE emissions factor model and California’s EMFAC model are often used.
10