Abstract
The high level of industrial activity in the Bio Bio Region has led to local air pollution problems, due to the high emission levels of particulate matter. The feasibility of bringing liquefied natural gas to the region is under study. This paper compares a system of tradable emissions permits and command and control type regulation for industrial sources considering two alternatives for reducing PM10 emissions: Changing the fuel used to natural gas and incorporating air pollution control technologies. It was found that given certain fuel prices, the industries will likely change to natural gas without the need for regulation. Moreover, it was found the maximum price that could be paid whilst retaining the economic attractiveness of this alternative as a cost-effective option for emissions reductions.
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