Acid Rain
Program
2003 Progress Report
SEPTEMBER 2004
CLEANAIR
MARKET PROGRAMS
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The Acid Rain Program Progress Report is published annually by EPA to update
the public on compliance with the Acid Rain Program, the status of implementa-
tion, and progress toward achieving environmental goals. The Acid Rain Program
2003 Progress Report updates data reported in previous years, specifically:
SC>2 emissions, allowance market information, and program compliance
NOx emissions and program compliance
Status and trends in acid deposition, air quality, and ecological effects
Detailed unit-level emissions data are available on EPA's Clean Air Markets web-
site. For more information on the Acid Rain Program, including additional infor-
mation on SO2 and NOX emissions, acid deposition monitoring, and the environ-
mental effects of acid deposition, please visit EPA's Clean Air Markets website at
www.epa.gov/airmarkets.
EPA Acid Rain Program
2003 Progress Report
EPA 430-R-04-009
Clean Air Markets Division
Office of Air and Radiation
U.S. Environmental Protection Agency
September 2004
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Summary
Congress created the Acid Rain Program in Title IV of the 1990 Clean Air Act Amendments. The Acid
Rain Program has the goals of lowering the electric power industry's annual emissions of:
• Sulfur dioxide (802) to half of 1980 levels, capping them at 8.95 million tons starting in 2010,
and
• Nitrogen oxide (NOx) to 2 million tons lower than the forecasted level for 2000, reducing
annual emissions to a level of 6.1 million tons in 2000.
In 2003, Acid Rain Program emission controls on the electric power industry resulted in:
• SO2 emissions of 10.6 million tons, a reduction of 38 percent from 1980 levels. Emissions were
4 percent higher in 2003 than in 2002. This small increase resulted from increased production
of electricity by coal-fired and oil-fired units that emit much more SO2 than natural gas units
that generated less power in 2003. The main cause of this was the substantial increase in natural
gas prices. Large, early SO2 reductions that were very beneficial at the program's outset enabled
banked allowances to be available to cover these emissions.
emissions of 4.2 million tons, which were close to 4 million tons less than the emissions
forecasted for 2000. Other regulations, such as the NOx Budget Program in the Northeast, also
contributed to this reduction in emissions.
As in years past, the electric power industry achieved nearly 100 percent compliance with Acid Rain
Program requirements — only 1 unit had emissions exceeding the SO2 allowances that it held and
no units were out of compliance with the NOx program. This exceptionally high level of compliance
was, in part, achieved as a result of the Acid Rain Program's continued provision of accurate and com-
plete SO2 and NOX emissions data. This process was augmented by a substantial auditing effort and
accountability through rigorous, yet streamlined, reporting systems.
SO2 and NOX are the key pollutants in the formation of acid rain. These pollutants also contribute to
the formation of fine particles (sulfates and nitrates) that are associated with significant health effects
and regional haze. Additionally, NOX combines with volatile organic compounds (VOCs) to form
ozone (smog), and nitrates that are transported and deposited at environmentally detrimental levels in
parts of the country. The United States (U.S.) electric power industry accounts for approximately 67
percent of total annual SO2 emissions and 22 percent of total annual NOx emissions.
Since the Acid Rain Program began in 1995, the lower SO2 and NOx emissions levels from the power
sector have contributed to significant air quality and environmental improvements that EPA's Clean
Air Status and Trends Network (CASTNET) and other long-term environmental monitoring networks
are reporting.
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Over the last decade:
• Ambient SO2 and sulfate levels are down more than 40 percent and 30 percent, respectively, in the
eastern U.S.
• Wet sulfate deposition, which acidifies sensitive lakes, streams and forest soils, has decreased 39
percent in the northeastern U.S. and 17 percent in the southeastern U.S.
• Some modest reductions in inorganic nitrogen deposition and wet nitrate concentrations have
occurred in the Northeast and Mid-Atlantic regions, but other areas have not shown much
improvement.
• Signs of recovery in acidified lakes and streams are evident in the Adirondacks, the northern
Appalachian Plateau, and the upper Midwest. These signs include lower concentrations of sulfates,
nitrates, and improvements in acid neutralizing capacity.
The Acid Rain Program has produced remarkable and demonstrable results. It has reduced S02 emissions faster and
at far lower costs than anticipated, yielding wide-ranging health and environmental improvements. In fact, during
2003, the Office of Management and Budget found the program accounted for the largest quantified human health
benefits — over $70 billion annually — of any federal regulatory program implemented in the last 10 years, with
annual benefits exceeding costs by more than 40:1.
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Origins of the
Acid Rain Program
Acid deposition, more commonly known as acid
rain, occurs when emissions of sulfur dioxide
(SO2) and nitrogen oxides (NOX) react in the
atmosphere (with water, oxygen, and oxidants) to
form various acidic compounds. Prevailing winds
transport the acidic compounds hundreds of miles,
often across state and national borders, where
they may impair air quality and damage public
health, acidify lakes and streams, harm sensitive
forest and coastal ecosystems, degrade visibility,
and accelerate the decay of building materials.
The Acid Rain Program, established under Title IV
of the 1990 Clean Air Act Amendments, requires
major reductions of SO2 and NOX emissions. The
SO2 program sets a permanent cap on the total
amount of SO2 that may be emitted by electric
power plants in the contiguous U.S. at about one-
half of the amount of SO2 these sources emitted in
1980. Using a market-based cap and trade mecha-
nism allows flexibility for individual combustion
units to select their own methods of compliance.
One allowance provides a regulated unit limited
authorization to emit one ton of SO2. Provisions
of the 1990 Clean Air Act outline the allocation
of allowances to regulated units based on historic
fuel consumption and specific emission rates
prior to the start of the program. For any year,
the number of allowances totals the SO2 emis-
sions cap.
The program uses a more traditional approach to
NOx emission limitations for certain coal-fired elec-
tric utility boilers, with the objective of achieving a
2 million ton reduction from projected NOx emis-
sion levels that would have been emitted in 2000
without implementation of Tide IV.
The Acid Rain Program is comprised of two
phases for SO2 and NOX. Phase I applied primar-
ily to the largest coal-fired electric generation
sources from 1995 through 1999 for SO2 and
from 1996 through 1999 for NOX. Phase II for
both pollutants began in 2000. For SO2, it applies
to thousands of combustion units generating elec-
tricity nationwide; for NOX it generally applies to
affected units that burned coal during 1990-1995.
S02 Emission Reductions
Electric power generation is by far the largest
single source of SO2 emissions in the U.S.,
accounting for approximately 67 percent of total
SO2 emissions nationwide in 2002.l In 2003,
3,497 units were subject to the SO2 provisions
of the Acid Rain Program. That year, 10.6 mil-
lion tons of SO2 were emitted, an increase of 4
percent from 2002. To date, Acid Rain Program
sources posted a total annual reduction in SO2
emissions of approximately 38 percent compared
to 1980 levels (32 percent compared to 1990 lev-
els). Figure 1 shows the trend in SO2 emissions
since 1980 for all Title IV affected sources.
For 2003, a total of 9.5 million allowances were
allocated. Adding these allowances to the 8.6 mil-
lion unused allowances carried over (or banked)
from prior years, a total of 18.2 million allowances
were available for use in 2003. Sources emitted 10.6
million tons of SO2 in 2003, 1.1 million tons more
than the allowances granted in the year but far less
than the total allowable level.
FIGURE 1
SO2 Emissions under the Acid Rain Program
Source: EPA
20
1980 1985 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003
| Phase I sources
] Phase II sources
all sources
allowances allocated forthatyear
National Emission Inventory 2002: www.epa.gov/ttn/chief/trends/index.html. Emissions from each individual electricity
generating unit affected by the Acid Rain Program are available on EPA's Clean Air Markets website at www.epa.gov/
airmarkets.
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FIGURE 2
SO2 Emissions and the
Allowance Bank, 1995-2003
Source: EPA
25
20
.2 15
10
21.6
16.6
15.0
13.5
11.7
8.7
19.9
18.8
18.2
1995
1996 1997
1998 1999 2000 2001
2002
2003
] Allowances allocated thatyear
J Unused allowances from previous year (bank)
i Actual emissions from affected sources
As shown in Figure 2, the bank was reduced
by 1.1 million allowances (12 percent) in 2003.
Over time the bank is expected to continue to
be depleted as sources use banked allowances to
continue to comply with the stringent Phase II
requirements. Figure 3 explains in more detail
the origin of the allowances that were available
for use in 2003.
In 2010, the annual total of allowances allocated
drops to 8.95 million (representing close to 50
percent of the emissions from the power industry
in 1980) and remains statutorily fixed at that
annual level permanently.
Reductions in SC>2 emissions from other sources
not affected by the Acid Rain Program, includ-
ing smelters and sulfuric acid manufacturing
plants, and use of cleaner fuels in residential and
commercial burners, have also contributed to
the 41 percent decline of SC>2 emissions from all
sources since 1980 (National Emission Inventory
www.epa.gov/ttn/chief/ trends/index.html).
FIGURES
Origin of 2003 Allowable SC>2 Emissions Levels
Source: EPA
Type of Allowance Allocation
Initial Allocation
Allowance Auctions
Opt-in Allowances
Total 2003 Allocation
Banked Allowances
Total 2003 Allowable
Number ot
Allowances
9,191,897
250,000
99,188
9,541,085
8,646,818
18,187,903
Explanation of Allowance Allocation Type
Initial Allocation is the number of allowances granted to
units1 based on the product of their historic utilization and
emissions rates specified in the Clean Air Act.
Allowance Auctions provide allowances to the market that
were set aside in a Special Allowance Reserve when the
initial allowance allocation was made.
Opt-in Allowances are provided to units entering the
program voluntarily. There were 11 opt-in units in 2003.
Banked Allowances are those held over from 1995 through
2002, which can be used for compliance in 2003 or any
future year.
1 In this report, the term "unit" means a fossil-fuel fired combustor that serves a generator that provides electricity for sale.
The vast majority of SO2 emissions affected by the program come from coal-fired generation units, but oil and natural gas
units are also included in the program.
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The states with the highest emissions in 1990
achieved the greatest SO2 reductions during the
Acid Rain Program. Most of these states were
upwind of the areas the Acid Rain Program was
designed to protect, and reductions resulted in
important environmental and health benefits over
a large regional scale (see Figure 4). In addition,
the states that reduced emissions had total annual
reductions of approximately 5.5 million tons, while
the states that had increased emissions — largely
attributable to growth and not increases in emis-
sions rates — had much smaller annual increases (a
total increase of approximately 440,000 tons).
For 31 states and the District of Columbia, aver-
age annual SO2 emissions in 2000-2003 were
lower than annual emissions in 1990. Among
these states, twelve states decreased their annual
average emissions by more than 100,000 tons
between 1990 and 2000-2003. These states were
Florida, Georgia, Illinois, Indiana, Kentucky,
Massachusetts, Missouri, New York, Ohio,
Pennsylvania, Tennessee, and West Virginia. The
states with the greatest reductions were in the
Midwest and included Ohio (1 million tons of
reduction) and Illinois, Indiana, and Missouri
(over 500,000 tons of reduction each).
In 17 states annual emissions increased between
1990 and 2000-2003. These states were
Arkansas, Colorado, Idaho, Kansas, Louisiana,
Minnesota, Montana, Nebraska, North
Carolina, North Dakota, Oklahoma, Oregon,
South Carolina, Texas, Vermont, Virginia, and
Wyoming. Only one state increased more than
100,000 tons annually. Of the remaining states,
one-third had emissions increases of less than
1,500 tons, another third had increases between
1,500 tons and 20,000 tons, and the remain-
ing third had increases between 20,000 and
100,000 tons.
S02 Allowance Market
The allowance trading mechanism of the Acid
Rain Program enabled the 3,497 units subject
to the SO2 requirements in 2003 to pursue a
variety of compliance options. The allowance
market has given some sources the incentive to
FIGURE 4
State by State SC>2 Emissions Levels
Source: EPA
B Emissions in 1930
| Phase I average 1935-1993
QJ Phase II average 2000-2003
Scale: Largest bar equals 2.2 million tons of emissions in Ohio, 1990
FIGURES
SC>2 Allowance Price Index
Source: Cantor Fitzgerald
300
250
1995 1996
1997 1998
1999
2000 2001
2002 2003
reduce their SO2 emissions below the level of
their allowance allocation in order to bank their
allowances for use in future years or to sell them
to other sources. Other sources have been able
to postpone or reduce expenditures for control
by purchasing allowances from sources that con-
trolled below their allowance allocation level.
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Why were S02 emissions higher in 2003 than in 2002?
In 2003, electricity sales rose by more than 1 percent. Additionally, relative prices changed among fossil fuels that supply over 70
percent of the nation's power. While coal prices for power generation rose about 1 percent, petroleum prices increased 34 per-
cent, and natural gas prices increased 55 percent. There was hotter-than-normal summer weather in major parts of the country
during 2003 and nuclear units were not able to run as hard as they did in 2002. All of this led to coal-fired electricity generation
increases of about 2 percent, oil-fired generation increases of 25 percent, and natural gas-fired generation decreases of about 9
percent.1'2 Coal-fired and oil-fired generation have much higher S02 emissions rates than natural gas fired units per unit of elec-
tricity output. Close to 75 percent of the additional 400,000 tons of S02 emissions emitted from sources in the Acid Rain Program
during 2003 come from increased coal-fired generation, and the remainder comes from increased oil-fired generation.3
The early, large reductions in S02 that sources in the Acid Rain Program made at the start of the Program in the mid-1990s,
resulting in emissions that were well below the emissions cap, enabled them to bank allowances to use in situations like
this where prices quickly changed and were not foreseen well in advance by many sources of generation. Notably, the overall
average rate of S02 emissions for coal-fired units did not change substantially from 2002 to 2003, but the amount of coal
burned (on a Btu-basis) was about 3 percent higher.
1 Energy Information Administration, Electric Power Monthly. December 2003. March 2004.
2 Energy Information Administration, U.S. Coal Supply and Demand: 2003 Review, EIA website under coal publications.
3 EPA's Acid Rain data base for 2003 air emissions.
FIGURE 6
SC>2 Allowances Transferred
under the Acid Rain Program
Source: EPA
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
| Between Economically Related Organizations
Q Between Economically Unrelated Organizations
The marginal cost of compliance — the cost of
reducing the next ton of SO2 emitted from the
power sector — is reflected in the price of an
allowance.
Allowance prices for 2003 experienced an
upward trend, and closed the year roughly 63
percent above the prior year. Prices were in the
range of $150 to $220 per allowance, ending the
year around $215 (see Figure 5).
In 2003, almost 4,200 allowance transfers affect-
ing roughly 16.5 million allowances (of past,
current, and future vintages) were recorded in the
EPA Allowance Tracking System. Of the allow-
ances transferred, 8 million (49 percent) were
transferred in economically significant transac-
tions (i.e., between economically unrelated par-
ties). The majority of the allowances transferred
in economically significant transactions were
acquired by power companies. Figure 6 shows
the annual volume of SO2 allowances trans-
ferred under the Acid Rain Program since official
recording of transfers began in 1994.
Figure 7 shows the cumulative volume of SO2
allowances transferred under the Acid Rain
Program. Over 250 million allowances have been
transferred since 1994, with 70 percent of those
transfers submitted by authorized account rep-
resentatives for private accounts. In December
2001, parties began to use a system developed by
EPA to allow transfers to occur online. In 2003,
3,536 out of 4,192, or 84 percent, of transfers
were done electronically.2
All official allowance transactions are posted and updated daily on www.epa.gov/airmarkets.
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S02 Program Compliance
As in previous years, compliance with the Acid
Rain Program continues to be extraordinarily
high — nearly 100 percent.
In 2003, one unit out of 3,497 was out of com-
pliance because of 14 tons of excess emissions
above the allowances it held. The owner was
assessed a penalty of approximately $40,000.
A total of 10.6 million allowances was deducted
from sources' accounts in 2003 to cover emissions.
Figure 8 displays these allowance deductions, as
well as the remaining banked allowances from
1995-2003.
A source that does not hold enough allowances
in its unit account to cover its annual SO2 emis-
sions has "excess emissions" and must pay a
$2,900 per ton automatic penalty. Title IV set
a penalty of $2,000 in 1990, which has been
adjusted annually for inflation, so the year
2003 penalty was $2,900 per ton.
NOX Emissions Reductions
Title IV of the 1990 Clean Air Act amendments
requires NOX emissions reductions for certain
coal-fired units. This portion of the Acid Rain
Program applies rate-based NOX emissions limits
to these units and seeks to attain a 2 million ton
annual reduction from all power industry sources
relative to the NOx emissions levels projected
to occur in 2000 (8.1 million tons) absent the
Acid Rain Program. This goal was first realized
in 2000, and has been met every year thereafter,
including 2003.
Total NOX mass emissions for coal-fired electric
generating units affected by the NOX program
component were reduced to 3.8 million tons
from 5.5 million tons in 1990. NOx emissions
from the entire power industry were 4.2 million
tons in 2003 (see Figure 9). Reductions from all
power generation in 2003 were 2.5 million tons
(or 37 percent) below 1990 emissions levels and
about half (3.9 million tons) of the forecasted
FIGURE?
Cumulative SC>2 Allowances Transferred
(through 2003)
Source: EPA
300
250
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
EPA Transfers to Account Holders
I Private Transactions
FIGURES
SC>2 Allowance Reconciliation
Summary, 2003
Total Allowances Held in
Accounts as of 3/1/2004
(1995 through 2003 Vintages)1
Unit Accounts
General Accounts2
Allowances Deducted for
Emissions (1995 through 2003)3
2004 Penalty Allowances Deducted
Banked Allowances
Unit Accounts
General Accounts
14,025,337
4,162,566
10,595,944
14
7,591,959
3,429,393
4,162,566
1 The number of allowances held in the Allowance Tracking System (ATS)
accounts equals the number of 2003 allowances allocated (see Figure 3) plus
the number of banked allowances. March 1, 2004 represents the Allowance
Transfer Deadline, the point in time at which unit accounts are frozen and
after which no transfers of 1995 through 2003 allowances will be recorded.
The freeze on these accounts is removed when annual reconciliation is
complete.
2 General accounts can be established in the ATS by any utility, individual or
other organization.
3 Includes 1,383 allowances deducted from opt-in sources for reduced
utilization.
7
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FIGURES
NOx Emissions under the
Acid Rain Program
Source: EPA
1990 1995 1996 1997
1999 2000 2001 2002 2003
| NOX Program affected sources
J Title IV sources not affected by NOX Program
FIGURE 10
State by State NOX Emissions Levels
Source: EPA
B Emissions in 1990
O Phase I average 1996-1999
Q Phase II average 2000-2003
Scale: Largest bar equals 500,000 tons of emissions in Ohio, 1990
levels for 2000. These reductions have been
achieved while the amount of fuel burned to pro-
duce electricity, as measured by heat input, has
increased 30 percent since 1990. Without further
reductions in emission rates or the institution of a
NOX Compliance Plan Options
Standard Limitation. A unit with a standard limit meets
the applicable individual NOX limit prescribed for its
boiler type under 40 CFR 76.5, 76.6, or 76.7.
Early Election. Phase II Group 1 NOX affected units
could meet a less stringent Phase I NOX limit begin-
ning in 1997, three years before they would normally be
subject to an Acid Rain NOX limit. In return for accepting
a NOX limit three years earlier than would normally be
required, an early election unit does not become subject
to the more stringent Phase II NOX limit until 2008.
Emissions Averaging. Many companies have their
units meet their NOX emissions reduction requirements
by choosing to become subject to a group NOX limit, rath-
er than meeting individual NOX limits for each unit. The
group limit is established at the end of each calendar
year, and the group rate for the units must be less than
or equal to the Btu-weighted group rate units would have
had if each had emitted at their standard limit rate.
Alternative Emission Limitation (AEL). A utility can
petition for a less stringent AEL if it properly installs
and operates the NOX emissions reduction technology
prescribed for that boiler, but is unable to meet its stan-
dard limit. EPA determines whether an AEL is warranted
based on analyses of emissions data and information
about the NOX control equipment.
cap on NOx emissions, however, NOx emissions
from power plants may rise with increased use of
fossil fuels in some areas of the country.
As with SO2, the states with the highest NOX
emissions in 1990 tended to achieve the greatest
emission reductions (see Figure 10). The Acid
Rain Program was responsible for a large portion
of the annual NOx reductions, but other pro-
grams that control NOx, such as the OTC NOx
Budget Program, the NOX SIP call's NOX Budget
Trading Program, and state programs have also
contributed to NOx reductions, particularly in
the Northeast. Overall, the states that reduced
NOX emissions from all sources had total annual
average reductions of approximately 1.9 million
tons for the years 2000-2003, while the states
that increased NOX emissions had much smaller
increases (a total increase of approximately
79,000 tons).
For 36 states and the District of Columbia,
average annual NOx emissions from 2000 to
8
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NOX Emissions
NOX emissions come from a wide variety of sources
including those affected by the Acid Rain Program. NOX
emissions from electric power generation account for
approximately 22 percent of NOX emissions from all
sources. NOX emissions from transportation sources
are 55 percent of all NOX emissions. Nationally, total
NOX emissions have decreased 12 percent from 1990
through 2001. NOX emissions from transportation sources
decreased 14 percent, but NOX emissions from heavy
duty vehicles increased by 10 percent. The emission
decreases from electric power generation and other
fuel combustion sources are due in part to a variety of
federal and state emission reduction programs (including
the Acid Rain Program, the Ozone Transport Commission
NOX Budget Program, and the NOX SIP call) and federal
enforcement actions (National Emissions Inventory
www.epa.gov/ttn/chief/trends/index.html).
2003 were lower than annual NOx emissions
in 1990. The states with the greatest reductions
included Pennsylvania (more than 200,000 tons
of reductions) and Indiana, Kentucky, New York,
Ohio, Texas, and West Virginia (with more than
100,000 tons of reductions each).
Twelve states had average annual emissions
from 2000-2003 that were greater than annual
1990 NOx emissions: Arizona, Arkansas, Idaho,
Kansas, Minnesota, Mississippi, Montana,
Nebraska, Oregon, Utah, Vermont, and
Washington. One-third of the states had increas-
es well under 2,000 tons. Another third had
increases between 2,000 tons and 6,500 tons,
and the remaining states had increases between
6,500 tons and 22,000 tons.
NOX Emissions Limits
Instead of using cap and trade to achieve NOx
emissions reductions, the Acid Rain Program estab-
lishes NOx emissions limitations (Ib/mmBtu) for the
boilers of most coal-fired electric generation units.
The Acid Rain Program NOX regulation (40 CFR
part 76) establishes emissions limits for each
boiler type (see Figure 11). Unit operators have
several options for complying with the limits (see
text box on NOx Compliance Plan Options).
FIGURE 11
Number of NOX Affected Units
by Boiler Type
Source: EPA
Coal-Fired Boiler Type
Phase I Group 1 Tangentially-fired
Phase I Group 1 Dry Bottom
Wall-fired
Phase II Group 1
Tangentially-fired
Phase II Group 1 Dry Bottom
Wall-fired
Cell Burners
Cyclones > 155 MW
Wet Bottom > 65 MW
Vertically-fired
Total
FIGURE 12
Compliance Options in the
NOX Program, 2003
Source: EPA
Compliance Option
Standard Emission Limitation
Early Election
Emissions Averaging
Alternative Emission Limitation
Total
Standard
Emission
Limit (Ib/
mmBtu)
0.45
0.50
0.40
0.46
0.68
0.86
0.84
0.80
Number
of Units
132
119
302
306
37
56
26
26
1,004
Units covered by
Compliance Option
121
271
623
25
1,040*
"The total number of units covered by specific NOX compliance options is
greater than 1,004 because some units have multiple compliance plans. For
calendar year 2003,28 units had both early election and averaging plans, and
8 units had both AEL and emissions averaging compliance plans (1,004 plus
28 plus 8 equals 1,040).
NOX Program Compliance
In 2003, 1,049 Acid Rain Program units were
required to meet NOx emission limitations. Of
these 1,049 coal-fired units, 45 have been retired,
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Continuous Emissions
Monitoring Systems (CEMS)
Electricity generating units under the Acid Rain Program
are required to measure and record emissions using
Continuous Emissions Monitoring Systems (CEMS) or an
approved alternative measurement method. Since the
program's inception in 1995, the emissions data — con-
tinuously reported by sources, verified and recorded by
EPA, and posted for public consumption on the Internet
— have been among the most complete and accurate
data ever collected by EPA. Electronic audit capabilities
include software that performs rigorous checks to ensure
the completeness, high quality, and integrity of the
emissions data. In 2003, for the third consecutive year,
100 percent of affected sources were reporting hourly
emissions electronically. CEMS are a cornerstone of the
program's accountability and transparency.
leaving 1,004 NOX units that must meet their
NOx emissions limits through compliance with
their respective NOx compliance plans.3 Figure
12 summarizes the compliance options chosen for
NOx affected units in 2003. Emissions averaging
was the most widely chosen compliance option;
57 emissions averaging plans involving 623 units
were employed in 2003. No units were out of
compliance with the NOX program.
Status and Trends in Acid
Deposition, Air Quality and
Ecological Effects
The emission reductions achieved under the Acid
Rain Program have led to important environ-
mental and public health benefits. These include
improvements in air quality with significant ben-
efits to human health, reductions in acid deposi-
tion, the beginnings of recovery from acidifica-
tion of fresh water lakes and streams, improve-
ments in visibility, and reduced risk to forests,
materials and structures.
To evaluate the impact of emissions reductions
on the environment, scientists and policymakers
use data collected from long-term national moni-
toring networks such as the Clean Air Status and
Trends Network (CASTNET) and the National
Atmospheric Deposition Program (NADP).
Data collected from monitoring networks show
that the decline in SC>2 emissions from the power
industry has decreased acidic deposition and
improved air quality. The decline in NOx emis-
sions, however, has not been as significant and
the environmental improvements are not as wide-
Deposition Monitoring Networks
To evaluate the impact of emissions reductions on the environment, scientists and policymakers use data collected from
long-term national monitoring networks such as the Clean Air Status and Trends Network (CASTNET) and the National
Atmospheric Deposition Program (NADP). Deposition and air quality monitoring data from these and other air quality monitor-
ing networks can be accessed on or through the CASTNET website at www.epa.gov/castnet. CASTNET provides atmospheric
data on the dry deposition component of total acid deposition, ground-level ozone, and other forms of atmospheric pollution.
CASTNET is considered the nation's primary source for atmospheric data to estimate dry acidic deposition and to provide
data on rural ozone levels. Used in conjunction with other national monitoring networks, CASTNET data are used to deter-
mine the effectiveness of national emission control programs. Established in 1987, CASTNET now comprises over 70 monitor-
ing stations across the U.S. The longest data records are primarily at eastern sites. EPA operates a majority of the monitoring
stations; however, the National Park Service operates approximately 30 stations in cooperation with EPA.
CASTNET continues to provide accountability and performance measure-related information for the Acid Rain Program and is
available to provide deposition and air quality baselines to support future accountability and program evaluation needs. As such,
both near and long-term program goals involve advancing the monitoring and assessment capabilities of the network to better
inform transport and air quality model evaluation. Future changes will also provide critical information for implementation of an
integrated monitoring strategy for the U.S. and Canada.
Detailed compliance information by unit can be found on EPA's Clean Air Markets website at www.epa.gov/airmarkets.
10
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spread. Although the Acid Rain Program has met
its NOX reduction targets, total nitrogen deposi-
tion has increased in many areas of the country
due to other sources such as motor vehicles and
agriculture.
FIGURE 13
Regional Changes in Deposition of Sulfur and
Nitrogen from 1989-91 to 2001-03
Source: EPA
Acid Deposition
During the late 1990s, following implementation
of Phase I of the Acid Rain Program, dramatic
regional improvements in SC>2 and ambient sul-
fate concentrations were observed at CASTNET
sites throughout the Eastern U.S. This is due to
the large reductions in SC>2 emissions from Acid
Rain sources. Analyses of regional monitoring
data from CASTNET show the geographic pat-
tern of SO2 and airborne sulfate in the Eastern
U.S. Three-year mean, annual concentrations of
SC>2 and sulfate from CASTNET long-term mon-
itoring sites are compared from 1989 through
1991 and 2001 through 2003 in both tabular
results and graphically (see Figures 13-18).4>5
From 1989 through 1991, prior to implementa-
tion of Phase I of Title IV, the highest ambient
concentrations of SC>2 in the East were observed
in Western Pennsylvania and along the Ohio River
Valley. Ambient SC>2 concentrations have decreased
significantly since 1991, with average concentra-
tions in the Eastern U.S. decreasing 57 percent in
the Northeast and 38 percent in the Mid-Atlantic
region (see Figures 13, 14a and 14b).
Before the program, in 1989 through 1991 (see
Figures 15a-15b), the highest ambient sulfate con-
centrations, greater than 7 ug/m3, were observed
in Western Pennsylvania, along the Ohio River
Valley, and in Northern Alabama. Most of the
Eastern U.S. experienced annual ambient sulfate
concentrations greater than 5 ug/m3.
Like SO2 concentrations, ambient sulfate con-
centrations have decreased since the program
was implemented, with average concentrations
decreasing approximately 30 percent in all
regions of the Eastern U.S. Both the size of the
affected region and magnitude of the highest con-
Measurement Unit
Wet sulfate kg/ha
deposition
Wet sulfate mg/L
concentration
Ambient ug/m3
sulfur dioxide
concentration
Ambient sulfate ug/m3
concentration
Wet inorganic kg/ha
nitrogen
deposition
Wet nitrate mg/L
concentration
Total ambient ug/m3
nitrate
concentration
Based on data compiled
annually by the National
Atmospheric Deposition
Program/National Trends
Network (NADP/NTN)
nadp.sws.uiuc.edu and the
Clean Air Status and Trends
Network (CASTNET) www.
epa.gov/castnet.
Region
Mid-Atlantic
Midwest
Northeast
Southeast
Mid-Atlantic
Midwest
Northeast
Southeast
Mid-Atlantic
Midwest
Northeast
Southeast
Mid-Atlantic
Midwest
Northeast
Southeast
Mid-Atlantic
Midwest
Northeast
Southeast
Mid-Atlantic
Midwest
Northeast
Southeast
Mid-Atlantic
Midwest
Northeast
Southeast
1989
-91
28
25
23
18
2.3
2.2
1.8
1.4
13
11
7
5
6.4
5.6
3.9
5.6
5.9
6.0
5.3
4.3
1.4
1.4
1.3
0.8
3.5
4.0
2.0
2.2
Average
2001
-03
20
16
14
15
1.7
1.6
1.3
1.1
8
6
3
3
4.7
3.9
2.7
3.9
5.3
5.8
4.4
4.2
1.2
1.4
1.1
0.8
3.0
3.8
2.0
2.1
Percent
Change
-29
-36
-39
-17
-26
-27
-28
-21
-38
-45
-57
-40
-27
-30
-31
-30
-10
-3
-17
-2
-14
0
-15
0
-14
-5
0
-5
Points on maps represent location of monitoring sites.
Based on data compiled annually by the National Atmospheric Deposition Program/National Trends Network (NADP/NTN)
nadp.sws.uiuc.edu and the Clean Air Status and Trends Network (CASTNET) www.epa.gov/castnet.
-------
FIGURE 14a
Annual Mean Ambient Sulfur Dioxide
Concentration 1989 through 1991
Source: CASTNET
FIGURE 141)
Annual Mean Ambient Sulfur Dioxide
Concentration 2001 through 2003
Source: CASTNET
centrations were dramatically reduced following
implementation of Title IV. The largest decreases
were observed along the Ohio River Valley (see
Figures 15a-15b).
Analyses of the NADP long-term monitoring
data show that wet sulfate deposition, sulfate
that falls to the earth through rain, snow, and
fog, has also decreased since the Acid Rain
Program was implemented. A strong correlation
between large scale SC>2 emissions reductions
and large reductions in sulfate concentrations in
precipitation has been noted for the Northeast,
one of the areas most affected by acid deposi-
tion. Some of the greatest reductions in wet sul-
fate deposition occurred in the Mid-Appalachian
region, including Maryland, New York, West
Virginia, Virginia, and most of Pennsylvania. Wet
sulfate deposition decreased throughout the early
1990s in much of the Ohio River Valley and
Northeastern U.S. Other less dramatic reductions
were observed across much of New England,
portions of the Southern Appalachian Mountains
and in the Midwest. Average decreases in wet
deposition of sulfate range from 39 percent in
the Northeast to 17 percent in the Southeast (see
Figures 16a-16b).
A principal reason for reduced concentrations
of sulfate in precipitation in the Northeast is a
reduction in the long-range transport of sulfate
from emission sources located in the Ohio River
Valley. The reductions in sulfate documented in
the Northeast, particularly across New England
and portions of New York, were also affected
by SO2 emissions reductions in Eastern Canada.
Concurrent with these sulfate reductions were
similar reductions in precipitation acidity,
expressed as hydrogen ion (H+) concentrations
(NADP).
Sources affected by the Acid Rain Program
account for a portion of nationwide NOX emis-
sions. Emissions trends from other source catego-
ries also affect air concentrations and deposition
of nitrogen. Significant improvements in nitrogen
deposition have not been evident since the Acid
Rain Program began.
Inorganic nitrogen deposition and wet nitrate
concentrations have decreased modestly since
12
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FIGURE 15a
Annual Mean Ambient Sulfate
Concentration 1989 through 1991
Source: CASTNET
FIGURE 151)
Annual Mean Ambient Sulfate
Concentration 2001 through 2003
Source: CASTNET
FIGURE 16a
Annual Mean Wet Sulfate Deposition
1989 through 1991
Source: National Atmospheric Deposition Program
FIGURE 16b
Annual Mean Wet Sulfate Deposition
2001 through 2003
Source: National Atmospheric Deposition Program
Wet SO42-
(kg/ha)
Wet SO42'
(kg/ha)
13
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FIGURE 17a
Annual Mean Wet Inorganic Nitrogen
Deposition 1989 through 1991
Source: National Atmospheric Deposition Program
FIGURE 171)
Annual Mean Wet Inorganic Nitrogen
Deposition 2001 through 2003
Source: National Atmospheric Deposition Program
\
N
(kg/ha)
-1
-2
-3
-4
-5
-6
-7
-8
-9
FIGURE 18a
Annual Mean Total Ambient Nitrate
Concentration 1989 through 1991
Source: CASTNET
FIGURE 18b
Annual Mean Total Ambient Nitrate
Concentration 2001 through 2003
Source: CASTNET
14
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1991 in the Mid-Atlantic and Northeast regions,
but have remained relatively constant in the
Midwest and Southeast (see Figures 17a-17b).
Ambient nitrate concentrations (nitric acid plus
particulate nitrate) have also decreased in the
Mid-Atlantic, but have remained relatively con-
stant in other regions of the Eastern U.S. (see
Figures 18a-18b).
Recovery of Acidified
Lakes and Streams
While climate change, forest maturation, distur-
bances such as pest outbreaks, and land use history
all impact ecosystems that are also affected by acid
deposition, scientists have demonstrated measur-
able improvements in some lakes and streams
resulting from the Acid Rain Program.6 Scientists
studied lakes and streams in five regions — New
England, the Adirondack Mountains, the Northern
Appalachian Plateau (including the Catskill
Mountains), the Upper Midwest, and the Ridge/
Blue Ridge — and found signs of recovery in many,
but not all, of those areas (see Figure 19). These
signs of recovery include reductions in sulfate and
aluminum concentrations and decreases in acidity.
For example, almost all Adirondack lakes had
reductions in sulfate concentrations that coincide
with reductions in atmospheric concentrations
of sulfur. These reductions in sulfate, as well
as reductions in nitrate concentrations that do
not appear to be due to changes in atmospheric
deposition, have resulted in increased pH and
acid neutralizing capacity (ANC is an indicator
of aquatic ecosystem recovery) as well as reduc-
tions in the amount of toxic inorganic aluminum
in Adirondack lakes.
Increasing ANC was evident in three of the
regions studied (Adirondacks, Northern
Appalachian Plateau, and Upper Midwest).
One-quarter to one-third of lakes and streams
in these regions previously affected by acid rain
are no longer acidic at base-flow conditions,
although they are still highly sensitive to future
changes in deposition.
Improvements in Surface Water
Long-term monitoring networks provide information on
the chemistry of lakes and streams, which allows us to
look at how water bodies are responding to changes in
emissions. The data presented here show regional trends
in acidification from 1990 to 2000 in areas of the eastern
U.S. For each lake or stream in the network, measure-
ments of various indicators of recovery from acidification
were taken. These measurements were plotted against
time, and trends for the given lake or stream during the
ten-year period were then calculated as the change
in each of the measurements per year (e.g., change in
concentration of sulfate per year). Using the trends cal-
culated for each water body, median regional changes
were determined for each of the measures of recovery. A
negative value of the "slope of the trend" means that the
measure has been declining in the region, while a posi-
tive value means it has been increasing. The greater the
value of the trend, the greater the yearly change in the
measurement. Movement toward recovery is indicated
by positive trends in acid neutralizing capacity (ANC) and
negative trends in sulfate, nitrate, hydrogen ion, and alu-
minum. Negative trends in base cations can balance out
the decreasing trends in sulfate and nitrate and prevent
ANC from increasing.
FIGURE 19
Regional Trends in Lake and
Stream Acidification 1990-2000
Source: EPA
sulfate
nitrate
ANC
base cations
-1 0 1
Slope of Trend
Maine lakes(n=11)
Vermontlakes(n=11)
i Adirondack lakes (n=50)
l Catskill streams (n=4)
l Pennsylvania streams (n=5)
l Virginia streams (n=74)
Source: Stoddard, J. L., J. S. Kahl, E A. Deviney, D. R. DeWalle, C.
T. Driscoll, A. T. Herlihy, J. H. Kellogg, P. S. Murdoch, J. R. Webb,
and K. E. Webster. 2003. Response of surface water chemistry to
the Clean Air Act Amendments of1990. EPA/620/R-03/001, U.S.
Environmental Protection Agency, Washington, DC.)
Stoddard, J. L., J. S. Kahl, E A. Deviney, D. R. DeWalle, C. T. Driscoll, A. T. Herlihy, J. H. Kellogg, P. S. Murdoch, J. R. Webb, and K. E.
Webster. 2003. Response of surface water chemistry to the Clean Air Act Amendments of1990. EPA/620/R-03/001, U.S. Environmental Protection
Agency, Washington, DC.)
15
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Specifically:
• Eight percent of the lakes in the Adirondacks
are acidic, down from 13 percent in the
early 1990s.
• Fewer than 1 percent of lakes in the Upper
Midwest are acidic, down from 3 percent in
the early 1980s.
• Eight percent of the streams in the Northern
Appalachian Plateau region are currently
acidic during base-flow conditions, down
from 12 percent in the early 1990s.
In New England and the Ridge/Blue Ridge regions,
however, there have been no significant improve-
ments, suggesting that additional reductions are nec-
essary for ecosystem recovery. Specifically:
• In New England, 5.5 percent of lakes are
acidic, an insignificant change from the
early 1990s when 5.6 percent of lakes in the
region were acidic.
• There has been no change in the number of
acidic waters in the Ridge/Blue Ridge region
in the past decade.
The data on sulfate concentrations are similar to
that for ANC; there have been decreases in lake
sulfate concentrations in some but not all of the
regions studied. Trends in nitrate concentrations
were much smaller than trends in sulfate concentra-
tions, though lakes in the Adirondacks and streams
in the northern Appalachian Plateau exhibited sig-
nificant downward trends in nitrate in the 1990s. It
should be noted, however, that this does not appear
to reflect changes in emissions or deposition in these
areas and is likely a result of ecosystem factors that
are not yet fully understood.
Long-Term Environmental
Monitoring at EPA
EPA's Temporally Integrated Monitoring of Ecosystems (TIME)
and Long-Term Monitoring (LTM) programs are designed
to detect trends in the chemistry of regional populations of
lakes or streams and to determine whether emissions reduc-
tions have had the intended effect of reducing acidification.
TIME/LTM monitors a total of 145 lakes and 147 streams,
representing all of the major acid sensitive regions of the
northern and eastern U.S. (upper Midwest, New England,
Adirondack Mountains, northern Appalachian Plateau
(including the Catskill Mountains), and the Ridge/Blue
Ridge Provinces of Virginia). TIME/LTM measures a variety
of important chemical characteristics, including ANC, pH,
sulfate, nitrate, major cations (e.g., calcium and magne-
sium), and aluminum. While the representativeness of the
TIME/LTM network is somewhat limited, the TIME program
is the most coherent individual regional dataset for this kind
of analysis. In addition, the U.S. Geological Survey has been
measuring surface water quality at several research water-
sheds throughout the U.S., where sample collection during
hydrologic events and ancillary data on other watershed
characteristics have been used to assess the watershed pro-
cesses controlling acidification of surface waters.
Quantifying Costs and Benefits
of the Acid Rain Program
Later estimates of the cost of full implementa-
tion of the Acid Rain trading program for SC>2
are significantly lower than originally estimated.
Independent analyses have estimated annual costs
in the range of $1 to $2 billion per year (2000$)
in 2010 when the program is nearly fully imple-
mented, substantially less than were predicted
in 1990. The most recent estimates provided by
Ellerman and by Carlson are $1.3 to $1.5 bil-
lion/year ($2000) and $1.1 billion/year by 2010,
respectively7'8. A recent Office of Management
and Budget (OMB) analysis estimated costs of the
SO2 program between $1.1 and $1.8 billion9. EPA
expects NOx costs to be no more than a billion
7 Ellerman, Denny, "Lessons from Phase 2 Compliance with the U.S. Acid Rain Program," MIT Center for Energy and
Environmental Policy Research, Cambridge, MA, 2003.
8 Carlson, Curtis P., Dallas Burtraw, Maureen Cropper, and Karen Palmer (Carlson et al, 2000). "SC>2 Control by Electric
Utilities: What are the Gams from Trade?" Journal of Political Economy, Vol. 108, No. 6: 1292-1326.
9 Informing Regulatory Decisions: 2003 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded
Mandates on State, Local, and Tribal Entities, 2003 Office of Management and Budget, Office of Information and Regulatory
Affairs www.whitehouse.gov/omb/inforeg/2003_cost-ben_final_rpt.pdf.
16
-------
dollars annually, and likely to be substantially less
from the limited analysis that has been done in
this area.
The OMB study also found that the Acid Rain
Program accounted for the largest quantified
annual human health benefits — over $70 bil-
lion — of any federal regulatory program imple-
mented in the last 10 years, with annual benefits
exceeding costs by more than 40:1.
The benefits to New Yorkers of improving natural
resources in the Adirondacks are estimated to be
between $300 million and $750 million per year,
according to a new study by Resources for the
Future (RFF). The five-year study, supported by an
EPA grant, estimates New Yorkers' willingness-to-
pay for total ecological benefits in the Adirondack
Park at $38 to $113 per household per year. (This
total benefit estimate is the sum of use and nonuse
benefits — benefits to New Yorkers who use the
Park as well as to those NY residents who do not
visit the Park but want to know this resource is
being protected.) The Acid Rain Program, Title
IV of the 1990 Clean Air Act Amendments, was
passed in part, in response to the public's concern
about the acidification of lakes and soils in the
Adirondacks. By reducing NOx and SC>2 emis-
sions from power plants, acidic deposition in lakes
and on shallow soils with low acid neutralizing
capacity is also reduced. Until now, policy mak-
ers had no way of considering the total economic
value of such environmental improvements. RFF's
rigorous methodology involved extensive use of
focus groups and a carefully crafted survey of a
representative sample of over 1,800 New Yorkers
administered on the internet and by mail. The
project, while specific to the Adirondack Park,
nevertheless suggests benefits can be estimated
using a similar methodology for other ecological
resource improvements that result from improve-
ments in air quality.
National Tools for Further Emission Reductions
The Acid Rain Program has proven to be an effective and efficient means of reducing S02 and NOX emissions from power
plants. However, it is increasingly clear that further reductions are needed not only to continue reductions in acid rain, but
also to reduce ground level ozone, regional haze, and fine particles. To achieve these important reductions, the EPA has
developed the Clean Air Rules, a suite of actions that will dramatically improve air quality nationwide. Three of the rules
— the Clean Air Interstate Rule, Clean Air Mercury Rule, and Clean Air Nonroad Rule — specifically address the transport
of pollution across state borders. They provide much needed, national regulatory controls, like the Acid Rain Program, to
achieve significant improvements in air quality, health, and quality of life. The proposed Clean Air Mercury and Clean Air
Interstate Rules, which may use the cap and trade approach to achieve required reductions, create a multi-pollutant strategy
to reduce power plant emissions of S02, NOX, and mercury. Taken together, this suite of rules in conjunction with state and
regional programs, will build on past successes and make the next 15 years one of the most productive periods of air quality
improvement in our history.
17
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Office of Air and Radiation
Clean Air Markets Division
EPA 430-R-04-009
1200 Pennsylvania Ave, NW
(6204J)
Washington, DC 20460
www.epa.gov/airmarkets
September 2004
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