First Major Deal Made in Smog Market

In the first major transaction in the Southland’s fledgling “smog market,” a major manufacturer in Huntington Park invested more than $1 million Tuesday buying pollution credits.

Anchor Glass Container Corp. bought the right to emit 3.446 million pounds of nitrogen oxide pollution from Union Carbide, based in Torrance, for $1.21 million, or 37 cents per pound.

Under the smog market known as RECLAIM, the South Coast Air Quality Management District has granted about 300 Southland industries annual allocations guiding how much pollution they can emit. Each year, the allowed pollution drops about 8%. Companies that cut emissions below their annual limit can sell their excess credits to other companies that may have more trouble meeting their limit.

The air pollution trading program began in January, and because there was only a smattering of early trading, many critics said the program was not as successful as hoped. Air quality officials and economists, however, said the businesses were simply cautious.

“There had been no substantive trade before this,” said AQMD spokesman Bill Kelly. “It’s taken companies a while to figure out where they stand. They don’t want to rush into million-dollar decisions.”