When Congressional Hearings established the huge health impacts of lead in gasoline, particularly on children, the U. S. Environemntal Proection Agency began to examine ways to remove the lead as quickly as possible. Compared to enforcing limits on the lead emissions from every gasoline-powered vehicle, it was much more administratively feasible to control the lead problem at the point of gasoline production.
EPA wanted to allow flexibility in how the deadlines were met without increasing the amount of lead used. While some refiners could meet early deadlines with ease, others could do so only with a significant increase in cost. Recognizing that meeting the goal did not require every refiner to make the transition at the same time, EPA initiated an artificial market in the rights to use lead in refining gasoline to provide additional flexibility in meeting the regulations.
Under this program lead rights (authorizing the use of a fixed amount of lead over the transition period) were allocated to the various refiners. Refiners who did not need their full share of authorized rights (due to early compliance) could sell their rights to other refiners.
Refiners had an incentive to eliminate the lead quickly because early reductions freed up rights for sale. Acquiring these credits made it possible for other refiners to comply with the deadlines, even in the face of equipment failures or Acts of God; fighting the deadlines in court, the traditional response, was unnecessary.
Designed purely as a means of facilitating the transition to lead-free gasoline, the lead banking program ended as scheduled on December 31, 1987.
Several features of this program are noteworthy. First, the lead program limited an input to emissions, not emissions directly. Second, the lead program was designed to eliminate a pollutant, not merely place an upper limit on its annual use. Third, it resulted in a much earlier phase out of lead than would have traditionally been possible because of the inter-refinery flexibility it offered. The traditional approach, setting the deadline late enough to allow the even refinery facing the most difficult compliance problems to meet it, would have resulted in a great deal more lead being injected into the air.