Acid Rain Formation
                                                                              United States' '         ^
                                                                              Environmental Protection ^  *.~ June t993
                                                                              Agency              ^        <

                                                                              Air and Radiation (6204J)	'  '
 Acid ram is caused when pollutants releas&d from the
 burning of coal and other fossil fuels chemically react
 with other substances in the atmosphere to form acids.
 When these acids are carried down from the atmosphere
 in rain, fog, or snow, they can harm fish, damage high-
 altitude  forests, and contribute to the deterioration of
 buildings and historical monuments.  The  pollutants
 that cause  acid rain also have been known  to impair
 visibility in  many regions of the nation, including the
.scenic vistas of our national parks.
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         he Clean Air Act Amendments of
          1990 call for major reductions in the
         pollutants that cause acid rain. The
 Amendments also establish a new approach
 to environmental management. This brochure
 answers some of the most commonly asked
 questions about the Acid Rain Program.
     How Do the Clean Air Act
     Amendments Reduce Acid Rain?

     The Clean Air Act Amendments require electric utili-
     ties to substantially reduce emissions of sulfur dioxide
     and nitrogen oxides, the primary pollutants that con-
     tribute  to  acid rain. Coal-burning electric power
     plants are the main source of sulfur dioxide emissions
     and a major source of nitrogen oxides emissions in the
     United States.

     Over the next 15 years, utilities nationwide must cut
     their sulfur dioxide emissions in half from 1980 levels.
     The Glean Air Act Amendments also set a permanent
     ceiling on the total amount of sulfur dioxide that may
     be emitted nationwide. So  even as our population
     grows and  the demand for  electric power  increases,
     emissions will not increase.. The  law. also requires
     most coal-burning utilities to install new burner tech-
     nology to reduce nitrogen oxides emissions by about
     30 to 50 percent.
              Utility SO, Emissions
            30
            20
§
s
"S

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     Does EPA Mandate How Sulfur
     Dioxide Reductions Must Be Achieved?

     No. Utilities have considerable flexibility in deciding
     how to reduce these emissions. To provide this flexi-
     bility, Congress set up an "allowance trading system."
     Starting in 1995, EPA will allocate a limited number of
     "allowances" to power plants.  Each allowance per-
     mits a utility to emit 1 ton of sulfur dioxide during
     a specified year. By law, utilities may not emit more
     tons of sulfur dioxide than the allowances they hold.
     Because an average utility will be allocated half the
     number of allowances that it emitted in 1980, it will
     need to reduce sulfur dioxide emissions substantially.

     Allowances may be bought, sold, or traded among
     utilities, industrial plants, or anyone  else interested in
     purchasing them. As the following hypothetical exam-
     ple illustrates, the tradability of allowances offers
     utilities considerable flexibility in choosing the most
     cost-effective method to reduce sulfur dioxide emis-
     sions, thus offering potential for customer savings.
     The options listed in the box below are just a sampling
     of the many ways utilities can cut emissions under
     the law.

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    .Could Some Areas of the Country
     Experience, an Increase in Pollution?

     Given the substantial sulfur dioxide reductions re-
     quired under the Clean Air Act Amendments, it is un-
     likely that emissions will increase in any locality. Even
     if a utility were to purchase many  allowances, the
     Amendments require states to  enforce strict emissions
     limits to protect public health,  and these limits cannot
     be exceeded no matter how many allowances are held.
|f|  How Does EPA Know That the
KF  Reductions Are Really Taking Place?

     Boilers in every power plant will have a "continuous
     emission monitoring system," much like a water meter,
     that will measure and record every ton of sulfur diox-
     ide emitted. Utilities must keep very detailed records
     of these measurements and report them to EPA. In
     addition, EPA requires the plant to perform a series of
     tests of the monitoring system to ensure its accuracy
     prior to allowing utilities to operate  the equipment.
     EPA also requires the plant to check the monitors daily
     and conduct accuracy tests at least once a year.


A  Does the Allowance  Trading System
W  Really "Sell" Pollution?

     No. The new law calls  for substantial reductions of
     pollutants currently released into our nation's air. The
     purpose of the allowance program is to enable utilities
     to reduce emissions where it is most cost-effective to
     do so. Utilities that are able to reduce their  emissions
     below the limits set by EPA can  sell or trade their
     "unused allowances"  to  utilities where other controls
     could be too costly. Such a sale would not increase
     pollution, but simply shift control requirements from
     one plant to another. Furthermore, since new plants
     built after 1995 will not be allocated any allowances by
     EPA, they will have to buy allowances in order to op-
     erate, further reducing pollution from  existing plants.
     This also gives utilities a strong incentive to develop
     new methods for efficiently reducing emissions.

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 What Happens if a Utility Emits More
 Sulfur Dioxide Than It Is Allowed?

 A utility is fined $2,000 for each ton of sulfur dioxide
 it emits over its allowance allocation. So if Utility A
 emits 15,000 tons of sulfur dioxide while having only
 12,000 allowances, it will pay a $6 million fine for
 exceeding its allowance allocation. Moreover, the util-
 ity must reduce emissions the following year by the
 amount it exceeded its limit in the year of violation. In
 this case, Utility A would be allowed to emit only 9,000
 tons of sulfur dioxide the year following the violation.


 What Will Controlling Acid Rain Cost
 the Consumer?

 Utility rates are expected to increase by only 0.5 to 1.2
 percent on average. For consumers served by today's
 heavy emitters of sulfur dioxide, electricity rates could
 increase by as much as 10 to 15 percent. The market-
based  allowance trading  system  should save the
 American people about 25  to 50 percent over the
 same level of emission reduction without trading.
This savings totals more than $1 billion annually.


 How Will Reducing Add Rain Affect
 the Environment?

Americans will benefit from the Acid Rain Program in
 a number of ways. Lakes and streams affected by acid
rain will, be able to recover,  restoring fish and other.
life. Visibility will improve, in the East by more than -
30 percent, allowing for increased enjoyment of scenic
vistas.  The vitality  of forests, particularly the red
spruce forests that populate mountain ridges from
Maine to Georgia, will be restored,  and the Acid Rain
Program will  preserve our cultural heritage by pro-
tecting historical buildings and monuments.

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