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As part of the State Implementation Plan for attaining the National Ambient Air Quality Standard for ozone, the Texas Commission of Environmental Quality has created a Highly Reactive Volatile Organic Compounds (HRVOC) Emissions Cap and Trade Program for industrial point sources in the Houston/Galveston/Brazoria area. This series of papers examines the potential air quality impacts of this new emission trading program through photochemical modeling of potential trading scenarios; this paper examines the air quality impact of allowing facilities to trade chlorine emission reductions for HRVOC allocations on a reactivity weighted basis. The simulations indicate that trading of anthropogenic chlorine emission reductions for HRVOC allowances at a single facility or between facilities, in general, resulted in improvements in air quality. Decreases in peak 1-h averaged and 8-h averaged ozone concentrations associated with trading chlorine emissions for HRVOC allocations on a Maximum Incremental Reactivity (MIR) basis were up to 0.74 ppb (0.63%) and 0.56 ppb (0.61%), respectively. Air quality metrics based on population exposure decreased by up to 3.3% and 4.1% for 1-h and 8-h averaged concentrations. These changes are small compared to the maximum changes in ozone concentrations due to the VOC emissions from these sources (5–10 ppb for 8-h averages; up to 30 ppb for 1-h averages) and the chlorine emissions from the sources (5–10 ppb for maximum concentrations over wide areas and up to 70 ppb in localized areas). The simulations indicate that the inclusion of chlorine emissions in the trading program is likely to be beneficial to air quality and is unlikely to cause localized increases in ozone concentrations (‘hot spots’). [ABSTRACT FROM AUTHOR]