Case Analysis : Polluter Corporation

1119 Words Nov 22nd, 2015 5 Pages
Introduction Background

An emission allowance is an authorization by a permitting authority or the Environmental Protection Agency Administrator to emit a specified amount of pollutant during a specified period of time. This equates that if a company reduces its amount of pollution to lower levels than the allowance, then the company could sell emission credits to companies that fail to reduce their pollution or buy additional emission allowances if needed [Emission Credit]. An emission allowance is also referred as a permit, typically a marketable commodity that may be sold, traded, or bought for usage by entities covered by the emission allowance (EA) programs [Cap and Trade].
Case Summary

Polluter Corporation (The “Company”) is a registered firm with the Securities and Exchange Commission. This Company operated facilities in the United States which manufactured household cleaning products for retail distribution. Polluter Corporation emits a significant amount of greenhouse gases due to its outdated equipment and the United States government funded this company with allocated emission allowances (EAs) for each year. The government grants EAs with varying amounts for the number of years that the emission allowance is projected to be utilized.
The Company is projected to upgrade its facilities in 2014 in order to decrease the amount of greenhouse gas emitted which projects an excess of EAs for the fiscal years after 2014. However, Polluter Corporation still needs…

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