Abstract
Why have so few emissions markets been implemented? This article addresses this question by examining the political economy of the REgional CLean AIr Market (RECLAIM) for Los Angeles. RECLAIM offers an excellent opportunity to study the political obstacles of emissions markets, because its nitrogen oxides and sulfur oxides component was implemented while its volatile organic compounds component was not. By carefully analyzing the decisions of the regulatory agency responsible for RECLAIM, this article offers a precise explanation of the political obstacles faced by an emissions market like RECLAIM. These obstacles include the difficulty in extending markets to sources and products that were previously unregulated under a command-and-control regime. Also, political conflict arising because of uncertainty is more contentious under emissions markets than under command-and-control regulation. This article then offers suggestions for improving the political feasibility of emissions markets.