Memorandum

-------------------------------------------------

MEMORANDUM

To: Peter J. Monte, founder and owner of United Concrete

From: Adel B. Iglikova, Staff Assistant

-------------------------------------------------

Re: Recommended forms of pending regulation to predict most accurately immediate costs of compliance while incurring the lowest immediate costs

Background:

Legislation in several forms is pending in Congress to control emissions of greenhouse gasses to reduce the adverse effects of climate change. United Concrete Company is a midsized firm that makes cement. The firm is expanding by acquiring other firms; the plants exhibit a wide range of variation in the equipment and processes. The impact of any of the proposed regulations will be heavier on high energy users. The data confirms that the company is a heavy emitter. However, it has very little data on the choices to reduce its emissions. The company also doesn’t know the alternatives that exist for abatement, nor the costs of the abatement choices. Whichever form of regulation Congress may adopt, the regulation’s costs for a firm will be highly correlated with the amount of energy a firm uses. Any regulation of greenhouse gasses will, therefore, impose huge costs on cement makers. It is very important for the industry’s long-term health, that if regulation is inevitable, the regulation be made as cost effective as possible.

Questions Presented and Summary of Recommended Forms:

The Questions:

Which form(s) of pending regulation are most likely to:

1. Allow United Concrete to predict most accurately its immediate costs of compliance?

2. Allow United Concrete to incur the lowest immediate costs of compliance?

Recommended Forms:

To make relevant comparisons to fully address the given request, it is beneficial to analyze each of the compliance alternatives for three regulations. The best way to start out is to determine what the compliance requirements are and what alternative actions exist to...