Acid Rain and Related Programs
2006 PROGRESS REPORT
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2006 PROGRESS REPORT
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The Acid Rain Program was
designed to reduce the adverse
effects of acid deposition
through reductions in annual
emissions of SO0 and NOV.
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he U.S. Environmental Protection Agency
(EPA) publishes an annual report to update
, , the public on compliance with the Acid Rain
Program (ARP), its status of implementation, and
progress toward achieving environmental goals.
The Add Rain and Related Programs 2006 Progress
Report updates data reported in previous years,
specifically:
Sulfur dioxide (S02) emissions, allowance market
information, and program compliance.
Nitrogen oxides (NOX) emissions and program
compliance.
Key Findings
Total S02 emissions fell below 10 million
tons for the first time under ARP.
NOX emissions in 2006 were 3.3 million
tons below 1990 levels.
Acid deposition has declined significantly
from levels measured before ARP,
with corresponding water quality
improvements in lakes and streams.
Estimated public health benefits from ARP
emission reductions exceed program costs
by a margin of more than 40 to 1.
Status and trends in acid deposition, air quality,
and ecological effects.
New programs, such as the Clean Air Interstate
Rule (CAIR), that are building on the ARP to further
improve environmental quality.
In this year's report, EPA incorporates early CAIR
compliance planning into the findings associated
with the ARP, including contributions to a significant
S02 emission decrease in 2006, and other relation-
ships between the ARP, CAIR, and other new air
quality rules.
For more information on the ARP, CAIR, and related
programs, including additional information on S02
and NOX emissions, acid deposition monitoring,
environmental effects of acid deposition, and
detailed unit-level emission data, please visit EPA's
Clean Air Markets Web site at
.
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Sulfur dioxide (S02) and nitrogen oxides (NOX) are the
key pollutants involved in the formation of acid rain.
These pollutants also contribute to the formation of
fine particles (sulfates and nitrates) that are associated
with significant human health effects and regional
haze. Sulfates and nitrates are transported and
deposited at levels harmful to sensitive ecosystems in
many areas of the country. Additionally, NOX combines
with volatile organic compounds (VOCs) to form
ground-level ozone (smog). The U.S. electric power
industry accounts for approximately 70 percent of
total U.S. S02 emissions and 20 percent of total U.S.
NOY emissions from man-made sources.1
A
The Acid Rain Program (ARP) was created under Title
IV of the 1990 Clean Air Act Amendments (CAAA) to
reduce the adverse effects of acid deposition through
reductions in annual emissions of SO, and NOY. The
Z A
Act calls for S02 reductions of 10 million tons from
1980 emission levels, largely achieved through a
market-based cap and trade program, which utilizes
emission caps to permanently limit S02 emissions
from power plants. NOX reductions under the ARP
are achieved through a program closer to a more
traditional, rate-based regulatory system. The NOX
program is designed to limit NOX emission levels to
2 million tons less than those projected for the year
2000 without implementation of Title IV.
Since the start of the ARP in 1995, reductions in
S02 and NOX emissions from the power sector have
contributed to significant improvements in air quality
and environmental and human health. The S02
program affected 3,520 electric generating units
(EGUs) in 2006 (with most emissions produced by
1,062 coal-fired units). The NOX program applied to a
subset of 982 operating coal-fired units in 2006.
The 2006 compliance year marked the 12th year of
the program. During this period, the ARP has:
Reduced S02 emissions by more than 6.3 million tons
from 1990 levels, or about 40 percent of total power
sector emissions.
S02 emissions from ARP units fell sharply, declining
830,000 tons from 2005 levels. Reduced energy
demand, decreased oil use because of fuel
prices, and early Clean Air Interstate Rule (CAIR)
compliance all appear to be factors in this decline.
« Total S02 emissions fell below 10 million tons
for the first time under the ARP. Sources emitted
approximately 9.4 million tons of S02 in 2006,
below the emission cap of 9.5 million tons.
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» With nearly 6.1 million unused (banked)
allowances from prior years, S02 emissions were
40 percent below the total 2006 allowable S02
emissions of 15.7 million tons.
Cut NOX emissions by 3.3 million tons from 1990
levels, so that emissions in 2006 were less than half
the level anticipated without the program. Other
efforts, such as the NOX Budget Trading Program
(NBP) in the eastern United States, also contributed
to this reduction.
Led to significant decreases in acid deposition. For
example, between the 1989-1991 and 2004-2006
observation periods, wet sulfate deposition
decreased 35 percent in the Northeast and 33
percent in the Midwest. These reductions have
resulted in positive changes in environmental
indicators, including improved water quality in
lakes and streams.
Provided the most complete and accurate emission
data ever developed and made those data available
through comprehensive electronic data reporting
and Web-based tools for agencies, researchers,
affected sources, and the public.
Delivered pioneering e-government results,
automating administrative processes, reducing
paper use, and providing online systems for doing
business with EPA.
Achieved extremely high compliance levels, with
100 percent compliance with the allowance
holding requirements for S02 in 2006, and a single
unit out of compliance for NOX.
Reduced implementation costs by allowing sources
to choose cost-effective compliance strategies.
After 12 years of implementation, monitoring, and
assessment, the ARP has proven to be an effective and
efficient means of meeting emission reduction goals
under the Clean Air Act (CAA). A 2005 study estimated
the program's benefits at $122 billion annually in 2010,
while cost estimates are around $3 billion annually (in
2000$).2 Despite the program's historic and projected
benefits, EPA analyses of recent studies of human
health, data from long-term monitoring networks,
and ecological assessments have revealed the need for
additional emission reductions to protect human health
and continue ecological recovery and protection. EPA
recognized the need for further S02 and NOX controls
on the power industry to address pollutant transport
problems many states face in efforts to attain National
Ambient Air Quality Standards (NAAQS) for ozone and
fine particles. The success of the acid rain trading and
NOX emission reduction programs, along with the need
for further reductions, provided the impetus for a suite
of new rules promulgated in 2005: CAIR, the Clean Air
Visibility Rule (CAVR), and the Clean Air Mercury Rule
(CAMR).
Building on the ARP model, EPA promulgated CAIR
in the spring of 2005 to address transport of fine
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particles and ozone in the eastern United States,
CAVR to improve visibility in national parks and
wilderness areas, and CAMRto reduce nationwide
mercury emissions from coal-fired power plants.
Starting in 2009 and 2010, CAIR establishes regional
caps on S02 and NOX emissions. Annual S02 emissions
for affected eastern states are capped at 3.7 million
tons in 2010 and 2.6 million tons in 2015. Annual
NOX emissions for affected eastern states are capped
at 1.5 million tons in 2009 and 1.3 million tons in
2015. CAIR will operate concurrently with the ARR
CAVR addresses S02 and NOX power sector emissions
from non-CAIR states located in the West and parts
of New England. Affected sources under CAVR must
reduce S02 and NOX emissions that impair visibility
in national parks and wilderness areas. Notably, EPA
allows states to establish additional regional cap and
trade programs to accomplish these reductions from
power plants and other stationary sources.
CAMR establishes a national cap on mercury emissions
beginning in 2010 and utilizes a market-based cap
and trade program. Additionally, new coal-fired
power plants will be required to meet standards of
performance that limit mercury emissions. These
programs will serve as a key component of strategies
to protect human health and the environment across
the United States into the next decade.
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From 2005 to 2006 ARP sources
reduced SO2 emissions below
10 million tons for the first
time under the program, and
NOV emissions fell to 3.4 million
/\
tons, a decrease of nearly 50
percent from 1990 levels.
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Origins of the Acid Rain Program
Acid deposition, more commonly known as acid
rain, occurs when emissions of sulfur dioxide (S02)
and nitrogen oxides (NOX) react with water, oxygen,
and oxidants in the atmosphere to form various
acidic compounds. Prevailing winds transport these
compounds hundreds of miles, often across state
borders, where they impair air quality and damage
public health, acidify lakes and streams, harm
sensitive forests and coastal ecosystems, degrade
visibility, and accelerate the decay of building
materials.
The Acid Rain Program (ARP), established under
Title IV of the 1990 Clean Air Act Amendments
(CAAA), requires major reductions of S02 and NOX
emissions from the electric power industry. The S02
program sets a permanent cap on the total amount
of S02 that may be emitted by electric generating
units (EGUs) in the contiguous United States. The
program is phased in, with the final 2010 S02 cap set
at 8.95 million tons, a level of about one-half of the
emissions from the power sector in 1980.
As seen in Figure 1, emissions of both S02 and
NOX have decreased markedly under the ARP while
combustion of fossil fuels, measured as "heat input,"
for electricity generation has increased significantly.
Using a market-based cap and trade mechanism to
reduce S02 emissions allows flexibility for individual
combustion units to select their own methods of
compliance. Currently, one allowance provides a
Figure 1: Trends in Electricity Generation, Fossil Energy Use, Prices, and Emissions
from the Electric Power Industry
60%
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(0
U
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regulated unit limited authorization to emit one ton
of S02. The Clean Air Act (CAA) allocates allowances
to regulated units based on historic fuel consumption
and specific emission rates prior to the start of the
program.3 The total allowances allocated for each year
equal the S02 emission cap. The program encourages
early reductions by allowing sources to bank unused
allowances in one year and use them in a later year.
The ARP adopts a more traditional approach to
achieve NOY emission reductions. Rate-based limits
A
apply to most of the coal-fired electric utility boilers
subject to the ARP. An owner can meet these
NOX limits on an individual unit basis or through
averaging plans involving groups of its units.
The ARP is composed of two phases for S02 and
NOX. Phase I applied primarily to the largest coal-
fired electric generation sources from 1995-1999 for
SO, and from 1996-1999 for NOY. Phase II for both
Z A
pollutants began in 2000. In 2006, the S02 Phase II
requirements applied to 3,520 units, with most of
the emissions produced by 1,062 coal-fired units. The
Phase II NOX requirements applied to 982 of those units
that have a generation capacity of 25 megawatts (MW)
or more and burned coal between 1990 and 1995.
SO2 Emission Reductions
Electric power generation is by far the largest
single source of S02 emissions in the United States,
accounting for approximately 70 percent of total S02
emissions nationwide.4
As shown in Figure 2, ARP sources have reduced
annual S02 emissions by 46 percent compared to
1980 levels and 40 percent compared to 1990 levels.
Reductions in S02 emissions from other sources
not affected by the ARP (including industrial and
commercial boilers and the metals and refining
industries) and use of cleaner fuels in residential and
commercial burners have contributed to a similar
overall decline (47 percent) in annual S02 emissions
from all sources since 1980. National S02 emissions
from all sources have fallen from nearly 26 million
tons in 1980 to less than 14 million tons in 2006 (see
).
Figure 2: SO Emissions from Acid Rain Program Sources
20.On
19I- 13.0 13.1
12.5 ii ii 12.5
Phase I (1995-1999) Sources All Affected Sources
Phase II (2000 on) Sources Allowances Allocated
11.2 ... -me
7.0
10.0
*_
^
' 10.2
9.6
9.5
10.3 10.2
9.5
9.5
9.5
9.4
9.5
1980 1985 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Year
Source: EPA, 2007
[8]-
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Figure 3: SO Emissions and the Allowance Bank, 1995-2006
25
w? 20
C
C
o
15
10
Allowances allocated
Unused allowances from previous years
- Actual emissions from affected sources
21.6
19.9
18.8
18.2
17.1
16.4
15.7
11.7
1995 1996
1997 1998
1999
2000 2001
Year
2002 2003 2004 2005
2006
Source: EPA, 2007
For 2006, EPA allocated over 9.5 million S02
allowances under the ARR Together with more
than 6.1 million unused allowances carried over (or
banked) from prior years, there were 15.7 million
allowances available for use in 2006. Sources emitted
approximately 9.4 million tons of S02 in 2006, less
than the allowances allocated for the year, and far less
than the total allowances available (see Figure 3).5
The number of banked allowances grew, from 6.1
million available for 2006 compliance to 6.3 million
available for 2007 and future years. In the next several
years, industry anticipation of stringent emission
requirements under CAIR is expected to encourage
sources to pursue additional reductions. While
these reductions will result in an increase in banked
allowances, tighter retirement ratios under CAIR (that
Figure 4: State-by-State SO Emission Levels, 1990-2006
I I SO2 Emissions in 1990
I I SO2 Emissions in 1995
^M SO2 Emissions in 2000
I I SO2 Emissions in 2006
Scale: Largest bar equals
2.2 million tons of SO2
emissions in Ohio, 1990
Source: EPA, 2007
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in effect lower the S02 emission cap) will lead to
depletion of the bank and further reduce emissions.
In 2010, the total number of Title IV allowances
allocated annually will drop to 8.95 million and remain
statutorily fixed at that annual level. Because of the
retirement ratios in the CAIR region, EPA projects that
emissions will be significantly lower than this statutory
cap. Table 1 explains in more detail the origin of the
allowances that were available for use in 2006, and
Table 3 shows how those allowances were used.
From 2005 to 2006, reductions in S02 emissions from
ARP units in 35 states and the District of Columbia
totaled 873,000 tons. Modest increases in 13 states
totaled 43,000 tons, resulting in a net national
decrease of 830,000 tons, or more than 8 percent,
for the year. Among the states with large reductions,
12 states (Florida, Illinois, Indiana, Kansas, Kentucky,
Massachusetts, North Carolina, Nevada, New York,
Ohio, Pennsylvania, and Virginia) decreased emissions
by more than 25,000 tons each. The largest reduction
was in Ohio, where ARP units reduced emissions by
more than 123,000 tons from 2005 levels.
The states with the highest emitting sources in 1990
have seen the greatest S02 reductions during the
ARP (see Figure 4 on page 9). Most of these states
are upwind of the areas the ARP was designed to
protect, and reductions have resulted in important
environmental and health benefits over a large region.
For the 32 states and the District of Columbia that
reduced annual S02 emissions from 1990 to 2006, total
annual S02 emissions were approximately 6.7 million
tons lower in 2006 than they were in 1990. For the 16
states where annual emissions increased from 1990 to
2006, total emissions were up by only about 328,000
tons from 1990 levels. In contrast, the 2006 emissions
were more than 100,000 tons less than 1990 levels in
each of 13 states: Florida, Georgia, Illinois, Indiana,
Kentucky, Massachusetts, Missouri, New York, Ohio,
Pennsylvania, Tennessee, West Virginia, and Wisconsin.
The six states with the greatest annual reductions
Table 1: Origin of 2006 Allowable
SO2 Emission Levels
Initial ' 9,191,897
Allocation ,
Allowance 1250,000
Auction i
Opt-in 97,678
Allowances
Total Banked 16,116,062
Allowances**
The initial allocation of
i allowances is granted to
I units* based on the product
| of their historical utilization
| and emission rates specified
| in the CAA.
| The allowance auction
| provides allowances to the
| market that were set aside in
| a Special Allowance Reserve
I when the initial allowance
| allocation was made.
| Opt-in allowances are provided
I to units entering the program
| voluntarily. There were eight
| opt-in units in 2006.
| Banked allowances accrue
| in accounts from previous
I years. These allowances were
| available for compliance in
| 2006 or any future year.
* 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
S02 emissions under the program result from coal-fired generation units,
but oil and natural gas units are also included in the program.
** Total banked allowances are adjusted from the 2005 Progress Report
to account for additional deductions made for electronic data reporting
(EDR) resubmissions after 2005 reconciliation was completed.
Source: EPA, 2007
include Ohio, which decreased emissions by 1.3 million
tons, and Illinois, Indiana, Missouri, Tennessee, and
West Virginia, each of which reduced emissions by
more than 500,000 tons per year.
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Why SO2 Emissions Decreased
Sharply in 2006
For the first time under the ARP, S02 emissions in 2006 fell below 10
million tons. Overall reductions from 2005 were over 830,000 tons
(see Table 2). This decrease stemmed from a number of factors:
Heat input (measured in million British thermal units (mmBtu))
dropped for oil-fired units, with a comparable increase in heat
input from gas-fired units as well as much less oil use at dual fuel
units classified as gas-fired units. Switching from oil to gas reduces
S02 because oil is higher in sulfur content than natural gas. Fuel
switching resulted in about a 243,000-ton S02 reduction from oil
and gas units combined.
Emissions from coal-fired ui
Reductions came from botr
installed flue qas desulfuriz.
ecreased by about 593,000 tons.
ontrolled units and those with
equipment (scrubbers).
Reductions in heat input and the S02 emission rate of units
without scrubbers resulted in a decrease of about 412,000 tons
of S02 emissions. Overall heat input for these units was down
2.1 percent, but the overall emission rate was down even more,
about 3.5 percent. The emission rate decline may be partially
attributable to early CAIR compliance planning.
Units equipped with scrubbers (either in both 2005 and 2006, or
just 2006) caused a decrease in S02 emissions of about 182,000
tons. Heat input to these units declined by less than 1 percent,
but their emission rate dropped nearly 11 percent, reflecting the
addition of several scrubbers on previously uncontrolled units.
Some of the scrubber installations were expected as a result of
existing state or federal actions. Others appear to be part of an
early compliance response to CAIR.
Overall, about 650 coal units had at least some decrease in mass
emissions due to reduced heat input, reduced emission rate, or both.
Table 2: SO2, NOX, and Heat Input Trends in
Acid Rain Program Units, by Fuel Type
S02 NOX HI S02 NOX HI
i. I A I I L \ A I
Notes: All emission data are in thousand tons and all heat input data are in
billion mmBtu. Totals may not reflect individual rows due to rounding. Fuel type
represents primary fuel type, and many units may combust more than one fuel.
Source: EPA, 2007
SO2 Program Compliance
Approximately 9.4 million allowances were
deducted from sources' accounts in 2006 to
cover emissions. Table 3 displays these allowance
deductions, as well as the remaining banked
allowances from 1995 through 2006. In 2006,
all ARP facilities were in compliance with the
S02 allowance holding requirements. Title IV set
a penalty of $2,000 per ton in 1990, which is
adjusted annually for inflation. The 2006 penalty
level was set at $3,152 per excess ton. The ARP's
cap and trade approach offers emission sources
the flexibility to comply with regulations using
their choice of the most cost-effective strategies
available. Since the program's inception,
the compliance rate has consistently been
extraordinarily high.
Table 3: SO2 Allowance Reconciliation
Summary, 2006
Total Allowances Held (1995-2006 Vintages)* 15,655,637
Facility Accounts** 12,483,262
General Accounts*
Allowances Deducted for Emissions"
3,172,375
9,392,922
Penalty Allowance Deductions (2007 Vintage) 0
Banked Allowances 6,262,715
Facility Accounts
3,090,340
General Accounts
3,172,375
* The allowance transfer deadline is March 1 of the year following
the compliance year. At this point, facility accounts are frozen,
and no further transfers of allowances are recorded. The freeze on
accounts is removed when the annual reconciliation is complete.
** From 1995 through 2005, EPA reconciled emissions and
allowances for compliance under the ARP separately
for each unit. In 2006, EPA began reconciling emissions
and allowances at the facility level for compliance purposes.
*** General accounts that are not subject to reconciliation can
be established in the Allowance Tracking System (ATS) by any
utility, individual, or other organization.
**** Includes 489 allowances deducted from opt-in sources for
reduced utilization.
Source: EPA, 2007
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SO2 Allowance Market
Figure 5 shows the cumulative volume of S02
allowances transferred under the ARR The figure
differentiates between allowances transferred in
private transactions and those annually allocated
and transferred to sources' accounts by EPA. Private
transactions are indicative of both market interest
and use of allowances as a compliance strategy.
Of the nearly 330 million allowances transferred
since 1994, about 68 percent were traded in private
transactions. In December 2001, parties began to use
a system developed by EPA to allow online allowance
transfers. In 2006, account holders registered about
94 percent of all private allowance transfers through
EPA's online transfer system.6
In 2006, nearly 6,400 private allowance transfers
(moving roughly 22.4 million allowances of past,
current, and future vintages) were recorded in the
EPA Allowance Tracking System (ATS). About 9.5
million (42 percent) were transferred in economically
significant transactions (i.e., between economically
unrelated parties). Transfers between economically
unrelated parties are "arm's length" transactions
and are considered a better indicator of an active,
functioning market than are transactions among the
various units of a given company.
In the majority of all private transfers, allowances
were acquired by power companies. Figure 6 shows
the annual volume of S02 allowances transferred
under the ARP (excluding allocations, retirements,
and other transfers by EPA) since official recording
of transfers began in 1994. Note that the volume
of private transfers recorded in 2006 rose for the
second straight year and returned to levels not seen
since 2000-2001. Market liquidity had declined due
to an overall contraction in the related electricity
markets following disruptions precipitated by events
such as the collapse of Enron in late 2001.
Figure 5: Cumulative SO Allowances Transferred through 2006
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Figure 6: SO Allowances Transferred under the Acid Rain Program
Irt 30-°
§ 25-° H
= 20.0 -
S 15.0 -
1 55 MW |
! Wet Bottom > 65 MW i
'Vertically Fired
I Total All Units
Source: EPA, 2007
0.45
0.50
0.40
0.46
0.68
0.86
0.84
0.80
n/a
132 |
113 |
301 |
295 |
37 |
54
24
26
982 !
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Figure 7: NO Emission Trends for Acid Rain Program Units, 1990-2006
6.1 5.9 6.0 6.0
5.5
5.1
4.5
4.2
3.8 3.6
3.4
1990
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Year
NO Program Affected Sources D Title IV Sources Not Affected for NOx
Source: EPA, 2007
Figure 8: State-by-State NO Emission Levels for Acid Rain Program Sources, 1990-2006
NOx Emissions in 1990
NOx Emissions in 1995
^| NOx Emissions in 2000
| | NOx Emissions in 2006
Scale: Largest bar equals 500
thousand tons of NOx emissions
in Ohio, 1990
Note: NBP states shaded in gray
Source: EPA, 2007
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was responsible for a large portion of these annual
NOX reductions, other programssuch as the Ozone
Transport Commission (OTC), NOX Budget Trading
Program (NBP) under EPA's NOX State Implementation
Plan (SIP) Call, and other regional NOX emission
control programsalso contributed significantly to
the NOX reductions achieved by sources in 2006.
From 2005 to 2006, NOY emissions from ARP units
A
dropped by 224,000 tons, a net decrease of more
than 6 percent. Thirty-six states and the District of
Columbia reduced 2006 NOX emissions by 247,000
tons below 2005 levels. Of these states, Alabama,
Florida, Iowa, Louisiana, Nevada, New York, and Ohio
reduced their NOX emissions by more than 10,000
tons each from 2005 levels. Twelve states had modest
increases in NOX emissions in 2006, totaling 23,000
tons above 2005 levels.
As with S02, the states with the highest N0x-emitting
sources in 1990 tended to see the greatest power
plant NOX emission reductions (see Figure 8). The
sum of reductions in the 41 states and the District of
Columbia that had lower annual NOV emissions in
A
2006 than in 1990 was approximately 3 million tons,
Role of Seasonal NOV
A
Control Programs in
Reducing Annual Emissions
States subject to EPA's 1998 NOX SIP Call have achieved
significant reductions in ozone season NOX emissions sin
the baseline vears 1990 and 2000. All of these states ha
implemented under the CAAA, with many of them
reducing their emissions by more than half since 1990. A
significant portion of these decreases in NOX emissions has
been achieved since 2000, largely as a result of reductions
under the OTC program and NBP. With the CAIR ozone
season NOX program taking effect in 2009, further
emission declines will occur across the region through the
year 2020. For NBP compliance reports, see:
.
while the sum of increases in the seven states that had
higher annual NOX emissions in 2006 than in 1990
was much smaller, about 37,000 tons. Nine of the
13 states with NOY emission decreases of more than
A
100,000 tons were in the Ohio River Basin.
The ARP requires program participants to measure,
record, and report emissions using continuous
emission monitoring systems (CEMS) or an approved
alternative measurement method. The vast majority
of emissions are monitored with CEMS while the
alternatives provide an efficient means of monitoring
emissions from the large universe of units with lower
overall mass emissions. Figures 9 and 10 on page
17 show the number of units with and without S02
CEMS for various fuel types, as well as the amount of
S02 emissions monitored using CEMS.
CEMS and approved alternatives are a cornerstone
of the ARP's accountability and transparency. Since
the program's inception in 1995, affected sources
have met stringent monitor quality assurance
and control requirements, and reported hourly
emission data in quarterly electronic reports to EPA.
Using automated software audits, EPA rigorously
15!
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checks the completeness, quality, and integrity of
these data. All emission data are available to the
public on the Data and Maps Web site maintained
by EPA's Clean Air Markets Division (CAMD) at
. The
site also provides access to other data associated
with emission trading programs, including reports,
queries, maps, charts, and file downloads covering
source information, emissions, allowances, program
compliance, and air quality.
The emission monitoring requirements for the ARP are
found in 40 CFR Part 75. These provisions are also re-
quired for participation in the NBR The Part 75 require-
ments will also be used in the future to implement
CAIRandCAMR.
Emissions Collection and
Monitoring Plan System
(ECMPS)
CAMD is reengineering the way the regulated community
maintains, evaluates, and submits monitoring plans, quality
assurance (QA) certifications, and quarterly emission data.
An important tool in this effort is the Emissions Collection
and Monitoring Plan System (ECMPS). ECMPS will replace
the current processes and multiple software tools used for
evaluating, submitting, and receiving the data. '""
be available for use in 2008, but will be required for all
sources beginning in 2009.
CAMD's goals for the ECMPS project include:
Creating a single desktop tool for
to import and evaluate their data
» Creating a new data reporting format based on the
flexible XML (Extensible Markup Language) standard.
» Creating a centralized database at CAMD for receiving
and maintaining submitted data. The desktop tool has
direct access to this database.
» Providing users with the ability to assure the quality
of data prior to submission and receive one set of
evaluation results (feedback).
taminq selec
ie of the electronic data
Developing and implementing new security
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Figure 9: SO2 Monitoring Methodology for the Acid Rain Program, Number of Units
13
1,062
2,158
168n
Coal Units w/ CEMS Oil Units w/o CEMS
Gas Units w/o CEMS D Gas Units w/ CEMS
Oil Units w/ CEMS D Other Fuel Units w/ CEMS
Other Fuel Units w/o CEMS
Note: "Other fuel units" include units that in 2006 combusted primarily wood, waste, or other non-fossil fuel. The total number of units in Figure 9
excludes 64 affected units that did not operate in 2006.
Source: EPA, 2007
Figure 10: Monitoring Methodology for the Acid Rain Program, Total SO2 Mass
0.40%
*
1.18%
98.41 %
Coal Units w/CEMS
D All Other Units w/CEMS
All Other Units w/o CEMS
Note: Percentages do not add to 100 percent due to rounding.
Source: EPA, 2007
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Emission reductions attributed
to the ARP have helped reduce
wet sulfate acid deposition by
up to 35 percent since the late
1980s in some eastern regions
of the United States.
s» JT^^^^'WWPBMfttS^^^fc^^^^^^
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Status and Trends in Air Quality, Acid Deposition,
and Ecological Effects
The emission reductions achieved under the ARP
have led to important environmental and public
health benefits. These include improvements in air
quality with significant benefits to human health;
reductions in acid deposition; the beginnings of
recovery from acidification in fresh water lakes and
streams; improvements in visibility; and reduced risk
to forests, materials, and structures. Table 5 on page
20 shows the regional changes in key air quality and
atmospheric deposition measurements linked to
the ARP's SO, and NOY emission reductions.
Z A
To evaluate the impact of emission 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/National Trends Network (NADP/
NTN). These complementary, long-term monitoring
networks provide information on a variety of indicators
necessary for tracking temporal and spatial trends in
regional air quality and acid deposition (see Table 6 on
page 21).
CASTNET provides atmospheric data on the dry
deposition component of total acid deposition,
ground-level ozone, and other forms of atmospheric
pollution. Established in 1987, CASTNET now
consists of 87 sites across the United States. EPA's
Office of Air and Radiation operates most of the
monitoring stations; the National Park Service (NPS)
funds and operates approximately 30 stations in
cooperation with EPA. Many CASTNET sites have
a continuous 20-year data record, reflecting EPA's
commitment to long-term environmental monitoring.
Information and data from CASTNET are available at
.
NADP/NTN is a nationwide, long-term network
tracking the chemistry of precipitation. NADP/NTN
offers data on hydrogen (acidity as pH), sulfate,
nitrate, ammonium, chloride, and base cations.
The network is a cooperative effort involving many
groups, including the State Agricultural Experiment
Stations, U.S. Geological Survey, U.S. Department
of Agriculture, EPA, NPS, the National Oceanic and
Atmospheric Administration (NOAA), and other
governmental and private entities. NADP/NTN has
grown from 22 stations at the end of 1978 to more
than 250 sites spanning the continental United
States, Alaska, Puerto Rico, and the Virgin Islands.
Information and data from NADP/NTN are available at
.
19]
-------
While CASTNET provides ambient air quality data,
EPA also uses data from other ambient monitoring
networks, including the State and Local Ambient
Monitoring and National Ambient Monitoring
Systems (SLAMS/NAMS). These networks are used to
document National Ambient Air Quality Standards
(NAAQS) attainment and show trends in ambient air
quality overtime.
Table 5: Regional Changes in Air Quality and Deposition of Sulfur and Nitrogen,
1989-1991 versus 2004-2006 (From Rural Monitoring Networks)
Ambient S02
Concentration (ug/m3)
Wet Sulfate
Concentration (mg/L)
Ambient Sulfate
Concentration (ug/m3)
Wet Sulfate
Deposition (kg/ha)
Wet Inorganic
Nitrogen Deposition
(kg/ha)
Wet Nitrate
Concentration (mg/L)
Ambient Nitrate
Concentration (ug/m3)
Total Ambient Nitrate
Concentration (Nitrate
+ Nitric Acid) (ug/m3)
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
: Mid-Atlantic
Midwest
Northeast
Southeast
"
10.0
6.7
5.2
2.3
2.2
i.9
1.3
6.2
5.4
3.8
5.4
26"8
22.3
22.2
18/1
5.9
5.9
55
4.3
1.5
15
1.4
0.8
0.8
2.1
0.4
06
3.2
40
i~9
2.2
*Percent change is estimated from raw measurement data, not rounded; refined techniques for measuring and calculating pe
""""""7* ~ ""**
5.1
2.8
3.3
1.6
1.5
1.1
1.1
4.4
3.6
2.4
4.1
'i'g.i
14.9
14.5
143
5.0
5.4
41
4.1
1.0
i7
0.8
0.7
0.7
1.7
0.4
67
2.5
37
1A
2.0
-39
-49
-58
-37
-31
-33
-40
-18
-29
-34
-37
-24
-28
-33
-35
-2?*
-16*
-9*
-25*
-5*
-30
-17
-38
-10
-1*
-18
3*
17
-20*
-20*
-26*
-7*
centages yield values that are at or below the sensitivity of the method may not be
significant due to the combination of margin of error and spatial averaging.
Source: CASTNET and NADP/NTN, 2007
20
-------
Table 6: Air Quality and Acid Deposition Measures
Sulfur Dioxide S02 X
Primary precursor of wet and dry acid deposition; primary precursor to
fine particles in many regions.
Sulfate Ion SO,
Nitrate Ion N03 X
Major contributor to wet acid deposition; major component of fine
particles in the Midwest and East; can be transported over large
distances; formed from reaction of S02 in the atmosphere.
Contributor to acid and nitrogen wet deposition; major component of fine
particles in urban areas; formed from reaction of NOX in the atmosphere.
Nitric Acid HN03 X
Strong acid and major component of dry nitrogen deposition; formed as
a secondary product from NOX in the atmosphere.
Ammonium
Ion
Contributor to wet and dry nitrogen deposition; major component of
fine particles; provides neutralizing role for acidic compounds; formed
from ammonia gas in the atmosphere.
Ionic
Hydrogen
Indicator of acidity in precipitation; formed from the reaction of sulfate
and nitrate in water.
Calcium Ca2+ X X
Magnesium Mg2+ X X
Potassium K+ X X
Sodium Na+ X X
Source: EPA, 2007
These base cations neutralize acidic compounds in precipitation and
the environment; also play a major role in plant nutrition and soil
productivity.
21
-------
Accountability and the ARP: Assessing Ecological Response
to track, assess, and report on the trends and conditions in
the environment as they respond to program implementation
and emission reductions.
The data collected through air monitoring networks, such
as CASTNET and NADP, provide a picture of changes in
air quality and pollutant deposition as a result of emission
reductions achieved by the ARP (see Figure 11). However,
to assess the ecological impact of the ARP, EPA must go a
step further and look at how changes in pollutant deposition
correspond to changes in ecosystem conditions. This step
requires examining the trends and conditions of ecosystems
that are susceptible to changes in pollutant deposition and,
specifically, studying a few key ecological indicators that can
be used to represent ecosystem response and recovery.
EPA's Temporally Integrated Monitoring of I
and Long-Term Monitoring (LTM) programs are designed to
detect trends in the chemistry of lakes or streams in regions
sensitive to acid deposition. TIME/LTM monitors a total of
145 lakes and 147 streams, representing all of the major acid
sensitive regions of the northern and eastern United States
(New England; Adirondack Mountains; northern Appalachian
Plateau, including the Catskill Mountains; and the Ridge/Blue
Ridge Provinces of Virginia) (see Figure 11). TIME/LTM measures
a variety of important chemical characteristics, including acid
neutralizing capacity (ANC), pH, sulfate, nitrate, major cations
(e.g., calcium and magnesium), and aluminum. 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
watersheds throughout the United States, where sample
collection during hydrologic events and ancillary data on
other watershed characteristics have been used to assess the
watershed processes controlling acidification of surface waters.
To determine whether decreased emissions have had the
intended effect of reducing impacts of acid deposition on
PA links emission trends with data from the
CASTNET and NADP networks and the TIME/LTM programs.
Combining these links in the "chain of accountability"
allows EPA to determine whether emission reductions, and
consequent reductions in pollutant deposition, translate into
ecological response (i.e., changes in surface water quality
necessary to protect fish and other aquatic organisms). This
integration of data enables EPA to assess the effectiveness
of the ARP in meeting its goal of protecting ecosystems by
reducing the adverse effects of acid deposition.
Without long-term monitoring of atmospheric deposition anc
lake and stream chemistry, EPA would not be able to assess
the ecological response to the emission reductions achieved
by the ARP. Such monitoring networks are critical for tracking
the progress made in restoring and/or protecting sensitive
ecosystems under regulatory programs and informing future
policy decisions.
Figure 11: National Deposition and Surface Water Monitoring Sites
Total Acid Deposition
Spatial Patterns
Long-term Trends |
Source: EPA, 2007
CAAA Title IV Emission
Reductions
ARP
Development & Implementation
Accountability/Monitoring
Reports to Congress and Public
How do emission reductions correlate
with decreases in deposition?
Are surface waters recovering?
Are we meeting the goals?
Are additional reductions necessary?
[22]-
-------
In March 2005, EPA promulgated CAMR to reduce
mercury emissions from power plants by 2010. In
conjunction with CAIR, mercury emission reductions
under CAMR are expected to reduce atmospheric
concentrations and deposition of mercury. Cutting
mercury emissions would also translate to reductions
in methylmercury contamination in fish, particularly
in mercury-sensitive watersheds throughout many
parts of the United States. This reduction would
improve the health of people and wildlife that con-
sume fish from these waters. These reductions will be
achieved through implementation of a combination
of independently operated state programs plus an
interstate emission cap and trade program modeled
after the ARR
In order to assess the efficacy of these emerging
regulatory programs, scientific information is needed,
including a more complete understanding of the fate
of mercury emissions with respect to total (i.e., wet
and dry) deposition, a quantifiable assessment of the
sources contributing to mercury deposition (especially
coal-fired power plant emissions), and an assessment
as to whether or not mercury "hotspots" exist or
may develop over the course of implementing the
mercury rules. At present, EPA lacks the ambient
mercury concentration and deposition data,
particularly on dry deposition in source-impacted
areas, to adequately assess the atmospheric mercury
changes anticipated from the regulatory programs.
In addition, mercury atmospheric data are needed to
evaluate and improve mercury model estimates and
to facilitate source apportionment analyses.
To meet some of these data needs, EPA is
collaborating with NADP, as well as other federal
agencies, states, tribes, academic institutions,
industry, and other organizations to establish
a new, coordinated network for monitoring
atmospheric mercury species. The network will
measure air concentrations of mercury in its gaseous
and particulate forms, event-based mercury wet
deposition, and meteorological and land-cover
variables needed for estimating dry deposition fluxes.
When fully implemented, the network will serve
many functions, including:
Facilitate the calculation of wet, dry, and total
mercury deposition.
Provide data for evaluating predictive and
diagnostic models and for assessing source-
receptor relationships.
Build a data set for analyzing spatial and temporal
trends of ambient mercury concentrations and wet
deposition in selected locations.
The network will consist of monitoring stations with
a broad range of classifications, including rural,
suburban, and urban; near-source/high-emissions;
sensitive ecosystems; and regionally representative.
Stations will adopt standard operational procedures
based on methods developed from EPA and other
research efforts. Data will be quality-assured and
accessible online. For more information about this
effort, please visit the NADP mercury initiative Web
site at .
23
-------
Emerging Issues: Remote
Assessment Methods
Satellite observations and other remote sensing technologies
are emerging as potentially useful new techniques for
understanding atmospheric chemistry and analyzing changes
in atmospheric pollutant concentrations. For example, the
NASA EOS Aura orbiting satellite platform launched in
2004 includes the Ozone Monitoring Instrument (OMI).7
Researchers have developed an algorithm using the output
of this instrument to observe from space the signal of S02
gases in the atmosphere near the ground. Using weekly,
monthly, or annual average S02 concentrations observed by
this instrument, maps of degassing and air pollution stationary
sources can be generated. S02 emissions have been measured
by OMI over known sources of air pollution, such as the Ohio
River Valley (see Figure 12).
Figure 12: Two-Year Average SO2
Burdens over the Ohio River Valley
Air Quality
Data collected from monitoring networks show
that the decline in S02 emissions from the power
industry has improved air quality.10 Based on EPA's
latest air emission trends data located at , the national
composite average of S02 annual mean ambient
concentrations decreased 53 percent between
1990 and 2006 as shown in Figure 13. The largest
single-year reduction (21 percent) occurred in the
first year of the ARP, between 1994 and 1995.
These trends are consistent with the ambient trends
observed in the CASTNET network. During the
late 1990s, following implementation of Phase I of
the ARP, dramatic regional improvements in S02
and ambient sulfate concentrations were observed
at CASTNET sites throughout the eastern United
States, due to the large reductions in S02 emissions
from ARP sources. Analyses of regional monitoring
data from CASTNET show the geographic pattern
of S02 and airborne sulfate in the eastern United
States. Three-year mean annual concentrations
of S02 and sulfate from CASTNET long-term
monitoring sites are compared from 1989-1991
and 2004-2006 in both tabular form and graphic-
ally in maps (see Table 5 on page 20 and Figures
17a through 18b on page 28).
The map in Figure 17a shows that from 1989-1991,
prior to implementation of Phase I of the ARP,
the highest ambient concentrations of S02 in the
East were observed in western Pennsylvania and
along the Ohio River Valley. Figure 17b indicates a
significant decline in those concentrations in nearly
all affected areas after implementation of the ARP
and other programs.
Before the ARP, in 1989-1991, the highest ambient
sulfate concentrations, greater than 7 micrograms
per cubic meter (ug/m3), were also observed in
[24]-
-------
western Pennsylvania, along the Ohio River Valley,
and in northern Alabama. Most of the eastern
United States experienced annual ambient sulfate
concentrations greater than 5 ug/m3. Like S02
concentrations, ambient sulfate concentrations have
decreased since the program was implemented, with
average concentrations decreasing 35 percent in all
regions of the East (see Table 7 on page 27). Both
the size of the affected region and magnitude of the
highest concentrations have dramatically declined,
with the largest decreases observed along the Ohio
River Valley (see Figures 18a and 18b on page 28).
Figure 13: National SO2 Air Quality, 1990-2006 (Based on Annual Arithmetic
Average)
a
a
*,
c
_o
".p
(0
+-
c
0)
u
c
o
u
+-
c
0)
!5
E
O
to
0.04-
0.03-
0.02-
0.01-
0.00
National Ambient Air Quality Standard
10% of sites have concentrations above this line.
i i i i i i i i i i i i i i i r
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Year
Source: EPA, 2007
25
-------
Emerging Issues: Trends in Sulfate
Concentrations
Since S02 is a precursor to the formation of sulfate, reductions
in S02 emissions under the ARP were expected to translate into
similar reductions in sulfate. Although there is an observed
downward trend in the ambient concentration of sulfate since
the implementation of the ARP, these reductions have not been
as dramatic as those observed for S02 emissions and ambient
S02 concentrations.
The ARP was established to reduce emissions of the two key
contributors to the formation of acid deposition, S02 and NOX.
As discussed earlier, S02 and NOX emissions can react in the
atmosphere to form fine particulates which are harmful to the
human respiratory system and damaging to sensitive ecosystems.
Sulfate particles are formed after gaseous S02 is emitted and
oxidized by hydroxyl radical ions. Sulfate particles can then
be deposited on the surface (dry deposition) or the particles
can react with H202 or 03 in clouds or fog to form sulfuric acid
(H2S04). Sulfuric acid in wet deposition is known as acid rain.
In order to assess environmental results of the ARP, air quality
monitoring networks, such as CASTNET, were established to
measure ambient concentrations of S02 and sulfate. These data,
combined with S02 emission data from CEMS at ARP-affected
sources, provide an idea of how emission reductions under the
ARP are translating into reductions in acid deposition over time
(see Figures 14 through 16 and Table 7).
Figure 14: Trends in Regional Annual SO2 Figure 15: Trends in Regional SO2 Ambient
Emissions (Coal-fired, Acid Rain Program Units) Concentrations (CASTNET Sites)
Y
Regional SO2 Emissions (tons)
from CEMS Measurements
^JJ 6,400 tons
^H Pre CAAA: 1935
^H Phase I: 1996-1999
EIZI Phase II: 2003-2006
Regional SO2
Concentrations (ug/m3)
from CASTNET Measurements
^^|J? ug/m3
| | Pre CAAA: 1987-1990
^^ Pre-ARP: 1993-1994
^f Phase I: 1996-1999
I Phase II: 2003-2006
Source: EPA, 2007
Source: EPA, 2007
[26]-
-------
Further study is necessary to understand the cause of annual
changes in ambient sulfate concentrations. A study of
meteorological data and multiple species data, such as ozone
and ammonia ion concentrations, might provide insight into
the factors influencing the rate of sulfate formation and what,
if any, additional sources or pollutants might be responsible for
the trends in sulfate concentrations in air quality.
Figure 16: Trends in Regional Ambient
Sulfate Concentrations (CASTNET Sites)
N y
y
Average Regional SO4
Concentrations (ug/m3)
from CASTNET Measurements
PreCAAA: 1987-1990
Pre-ARP: 1993-1994
Phase I: 1996-1999
Phase II: 2003-2006
V
Source: EPA, 2007
Table 7: Summary of Regional Trends Data (SO2 Emissions and Ambient SO2
and Sulfate Concentrations)
Region
Change in SO Emissions Change in SO Concentration
1987-1990
Change in Sulfate
Concentration
1987-1990
2003-2006
2003-2006
2003-2006
Northeast
Midwest
Mid-Atlantic
Southeast
Total Change in East
-79%
-68%
-58%
-66%
-67%
-64%
-50%
-44%
-40%
-50%
-43%
-38%
-33%
-29%
-35%
* Data are not available for 1987-1989; therefore, 1985 is used for this comparison.
Source: EPA, 2007; CASTNET, 2007
-[27]
-------
Figure 17a: Annual Mean Ambient SO2
Concentration, 1989-1991
Source: CASTNET
Figure 17b: Annual Mean Ambient SO2
Concentration, 2004-2006
Source: CASTNET
Figure 18a: Annual Mean Ambient Sulfate Figure 18b: Annual Mean Ambient Sulfate
Concentration, 1989-1991 Concentration, 2004-2006
:
Source: CASTNET
Note: For maps depicting these trends for the entire continental United States, see maps available at .
[28]-
-------
NOX
Although the ARP has met its NOX emission
reduction targets, emissions from other sources
(such as motor vehicles and agriculture) have led to
increased ambient nitrate concentrations in some
areas. NOX levels can also be affected by emissions
transported via air currents over wide regions.11 From
2004 through 2006, reduced ozone season NOX
emissions from power plants under the NOX SIP Call
led to more significant region-specific improvements
in some indicators than have been seen in previous
years. For instance, annual mean ambient nitrate
concentrations for 2004-2006 decreased in the
Midwest by nearly 20 percent from the annual
mean concentration in 1989-1991 (see Figures
19aand 19b). While these improvements maybe
partly attributed to added NOX controls installed for
compliance with the NOX SIP Call, the findings at this
time are not conclusive.
Figure 19a: Annual Mean Total Nitrate Figure 19b: Annual Mean Total Nitrate
Ambient Concentration, 1989-1991 Ambient Concentration, 2004-2006
Source: CASTNET
Source: CASTNET
Note: For maps depicting these trends for the entire continental United States, see maps available at .
-[29]
-------
Acid Deposition
NADP/NTN monitoring data show significant
improvements in some deposition indicators. For
example, wet sulfate deposition (sulfate that falls
to the earth through rain, snow, and fog) has
decreased since the implementation of the ARP in
much of the Ohio River Valley and northeastern
United States. Some of the greatest reductions
have occurred in the mid-Appalachian region,
including Maryland, New York, West Virginia,
Virginia, and most of Pennsylvania. Other less
dramatic reductions have been observed across
much of New England, portions of the southern
Appalachian Mountains, and some areas of the
Midwest. Between the 1989-1991 and 2004-2006
observation periods, average decreases in wet
deposition of sulfate averaged around 30 percent
for the eastern United States (see Table 5 on page
20 and Figures 20a and 20b). Along with wet
sulfate deposition, wet sulfate concentrations have
also decreased significantly. Since the 1989-1991
period, average levels decreased 40 percent in the
Northeast, 31 percent in the Mid-Atlantic, and
33 percent in the Midwest. A strong correlation
between large-scale S02 emission reductions
and large reductions in sulfate concentrations in
precipitation has been noted in the Northeast, one
of the areas most affected by acid deposition.
Figure 20a: Annual Mean Wet Sulfate
Deposition, 1989-1991
Source: NADP
Figure 20b: Annual Mean Wet Sulfate
Deposition, 2004-2006
Note: For maps depicting these data for the entire continental United States,
see maps available at .
[30]-
-------
Figure 21 a: Annual Mean Wet Inorganic
Nitrogen Deposition, 1989-1991
I^
Source: NADP
Figure 21 b: Annual Mean Wet Inorganic
Nitrogen Deposition, 2004-2006
Source: NADP
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 S02 emission reductions in eastern
Canada. NADP data indicate that similar reductions in
precipitation acidity, expressed as hydrogen ion (H+)
concentrations, occurred concurrently with sulfate
reductions, but have not decreased as dramatically
due to a simultaneous decline in acid-neutralizing
base cations, which act to buffer acidity.
Reductions in nitrogen deposition recorded since the
early 1990s have been less pronounced than those
for sulfur. As noted earlier, emission trends from
source categories other than ARP sources significantly
affect air concentrations and deposition of nitrogen.
Inorganic nitrogen deposition decreased modestly in
the Mid-Atlantic and Northeast but remained virtually
unchanged in other regions (see Figures 21a and 21b).
Note: For maps depicting these data for the entire continental United States,
see maps available at .
-[31]
-------
Emerging Issues: Using Critical Loads to Assess Ecosystem Health
A critical load is a quantitative estimate of the exposure to
one or more pollutants below which significant harmful
effects on specific sensitive elements of the environment do
-From the 1988 United Nations Economic Commission
for Europe (UNECE) Protocol Concerning the Control
of Nitrogen Oxides or Their Transboundary Fluxes.
Accepted by the United States in July 1989.
Recommendations in separate reports of the National
Research Council (NRC) and the federal Clean Air Act
Advisory Committee (CAAAC) urge EPA to expand its
ecosystem protection capacities by exploring issues such
as the use of critical loads in the development of
secondary NAAQS.
The NRC formed a Committee on Air Quality Management
to examine the role of science and technology in the
implementation of the CAA and to recommend ways in
which the scientific and technical foundations for air quality
findings and recommendations to EPA, the NRC Committee
pointed out the need for alternative air quality standards to
protect ecosystems and recommended investigating the use of
critical loads as a potential mechanism to address this need.12
CAAAC echoed the recommendation to examine critical loads
as a useful tool for ecosystem protection in its 2005 report
to EPA.13
Critical loads provide a science-based tool for managers
and policymakers to assess the progress made by federal
air emission reduction programs, evaluate the impact of
potential new emission sources in federally protected areas,
and manage sensitive natural resources where air pollution
and other disturbances occur. Critical loads were first
developed and applied in Europe to address the impacts
of acid deposition associated with S02 and NOX emissions.
The UNECE Convention on Long-Range Transboundary Air
Pollution was signed in 1 979. Critical loads were adopted
in 1988 as part of the protocol process to address the
effects of air pollution on ecosystems, human health,
and cultural resources.
In North America, the concept of critical loads was applied
in the 1 960s with the first Great Lakes Water Quality
Agreement, which set lake phosphorus loading limits to
reduce eutrophication. Canada established the first critical
load for air pollution in the 1980s (for wet sulfate deposition)
as part of a U.S.-Canada memorandum on transboundary
air pollution. Although the United States was a signatory to
the memorandum, critical loads were not used in the United
States until 1989, when the U.S. Forest Service applied the
critical loads concept as a screening tool to protect air quality
in Class I areas.
Over the past five years, there has been renewed interest
in critical loads in the United States. Recent critical loads
initiatives include the Conference of New
and Eastern Canadian Premiers project to map forest
sensitivity to sulfur and nitrogen deposition; the Federal
Land Managers Air Quality Report, which articulated a
commitment to fostering the development of critical loads;
a series of meetings known as the "Riverside Meetings"
convened by the U.S. Forest Service; and a 2006 multi-
agency Critical Loads Workshop.
For more information on EPA's assessment-related activities,
go to . See also .
[32]-
-------
Acid rain, resulting from S02 and NOX emissions, is
one of many large-scale anthropogenic effects that
negatively affect the health of lakes and streams in the
United States. Since the implementation of the ARP,
scientists have observed measurable improvements
in some lakes and streams in four regions of the
eastern United StatesNew England, the Adirondack
Mountains, the northern Appalachians (including the
Catskill Mountains), and the southern Appalachians
(including the Blue Ridge)and found signs of recovery
in many, but not all, of those areas (see Figure 22).14
The long-term monitoring networks that exist in
these regions provide information on the chemistry
of lakes and streams, and a look at how water bodies
are responding to changes in emissions. The data
presented here show regional trends in acidification
from 1990 to 2005 (see Figure 22). For each lake
or stream in the network, measurements 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
15-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
calculated for each water body, median regional
changes were determined for each of the measures
of recovery. A negative value of the "slope of the
regional trend" means that the measure has been
declining in the region, while a positive value means
it has been increasing. The greater the value of the
trend, the greater the yearly change. Movement
Figure 22: Regional Trends in Eastern Lakes and Streams, 1990-2005
Sulfate (|jeq/L/yr)
Nitrate (|jeq/L/yr)
ANC (|jeq/L/yr)
Hydrogen Ion (|jeq/L/yr)
Base Cations (|jeq/L/yr)
-2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5
Slope of Regional Trend
1.0
I So. Appalachian Streams (n=69)
I No. Appalachian Streams (n=9)
] Adirondack Lakes (n=49)
] New England Lakes (n=31)
Note: Bars show the magnitude of the regional trend for each variable in each region.
Source: EPA, 2007
!33]
-------
toward recovery is indicated by positive trends in acid
neutralizing capacity (ANC) and negative trends in
sulfate, nitrate, hydrogen ion (measured in micro-
equivalents per liter per year [ueq/L/yr]), and aluminum
(measured in micrograms per liter per year [pg/IV
yr]). Negative trends in base cations (which are weak
acid cations in soils, such as calcium, magnesium,
and potassium) and positive trends in organic acids
can balance out the decreasing trends in sulfate and
nitrate and prevent ANC from increasing. The results
of these regional trend analyses are shown in Figure
22 on page 33 and Table 8.
Trends in surface water from 1990 to 2005 include:
Sulfate concentrations are declining substantially
in all but one of the regions. In the southern
Appalachians, however, sulfate concentrations are
increasing. This region is unusual because its soils
can store large amounts of sulfate deposited from
the atmosphere. Only after large amounts of sulfate
have accumulated in the soils do stream water
sulfate concentrations begin to increase, remaining
elevated until the stored sulfur is depleted. This
phenomenon is now being observed in the
southern Appalachians, despite decreasing sulfate
in atmospheric deposition. Still, due to inclusion
of the latest data, the magnitude and direction of
the trends in this region are substantially changed
from the 2005 Add Rain Program Progress Report.
Table 8: Results of Regional Trend Analyses on Lakes and Streams, 1990-2005"
Sulfate (ueq/L/yr)
Nitrate (ueq/L/yr)
Acid Neutralizing Capacity
(ueq/L/yr)
Base Cations (ueq/L/yr)
Hydrogen Ion (ueq/L/yr)
Organic Acids (ueq/L/yr)
Aluminum (ug/L/yr)
-1.42
-0.03
+0.15
-0.93
-0.01
+0.04
insufficient data
-2.07
-0.37
+0.93
-1.19
-0.24
+0.15
-4.72
-2.30
-0.31
+0.80
-2.25
+0.01
-0.06
insufficient data
+0.09
-0.10
+0.08
+0.17
-0.01
insufficient data
insufficient data
* Values show the slope of the regional trend (the median value for the trends in all of the sites in the region). Regional trends that
are statistically significant are shown in bold.
Source: EPA, 2007
34
-------
Trend estimates using previous data (through the
early 2000s) were heavily influenced by gypsy
moth defoliation of trees in most of the region's
watersheds, particularly affecting trends in ANC,
sulfate, and nitrate. As ecosystems have recovered
from the impacts of this defoliation event, the
extent of deposition impacts on this region appear
less severe than in past years.
Nitrate concentrations are decreasing significantly
in all of the regions. This trend does not appear to
reflect changes in emissions or deposition in these
areas and is likely a result of ecosystem factors.
The acidity of lake and stream water, as indicated
by ANC trends, is decreasing in three of the four
regions as a result of declining sulfate (and to some
extent nitrate).
Base cations are decreasing in the northern
Appalachians, Adirondack Lakes, and New England
Lakes. This may be a concern because, although
base cation concentrations in lakes and streams are
expected to decrease when rates of atmospheric
deposition decline, if they decrease too much, they
limit recovery in pH and ANC.
Concentrations of organic acids, natural forms of
acidity, are currently increasing in many parts of the
world, but the cause is still being debated. Increases
in organic acids over time can limit the amount
of recovery observed. Only the New England and
Adirondack regions are showing significant increases
in organic acids, which may be responsible for 10-15
percent less recovery (in ANC) than expected.
Aluminum is a critical element because it increases
when lakes and streams acidify, and is very toxic to
fish and other wildlife. The one region where good
aluminum data exist (the Adirondacks) is showing
strong declines in the most toxic form of aluminum
(inorganic monomeric aluminum).
35
-------
CAIR will reduce SO2 emissions
NOX emissions by approximately
60 percent from 2003 levels
-------
Understanding Clean Air Rules
Building on the ARP and NBP, EPA finalized CAIR
in 2005, requiring further S02 and NOX emission
reductions in 28 eastern states and the District of
Columbia. CAIR will reduce region-wide S02 emissions
by approximately 70 percent and NOX emissions
by approximately 60 percent from 2003 levels to
prevent significant contribution to nonattainment in
downwind ozone and PM25 nonattainment areas.
CAIR includes emission budgets for each jurisdiction
based on application of highly cost-effective controls
to fossil fuel-fired EGUs in model cap and trade
programs with two phases of reductions. However,
states have discretion in deciding which sources to
control to meet the budget, and whether to par-
ticipate in the federally run cap and trade programs
delineated in the model rules.
Rules and Programs to Ensure Further Improvements
A combination of well-established, existing programs, and new In the spring of 2005, EPA prom
regulations that will soon begin implementation, are in a position rules designed to achieve additic
to address the interstate transport of ozone, fine particles, mercury from power plants. The
and mercury deposition. Together, these rules and programs and CAVR.15 See Figure 23 for a
will help ensure further improvements in human health and power sector rules are connecte
environmental protection. Along with the ARP, the NOX SIP Call
in the eastern United States and the Tier 2 mobile source and
diesel rules establish programs that will help states achieve the
ozone and fine particle NAAQS.
Figure 23: Key Clean Air Rules Related to Electric Power Industry
In the spring of 2005, EPA promulgated a suite of air quality
rules designed to achieve additional reductions of S02, NOX, and
mercury from power plants. These rules include CAIR, CAMR,
and CAVR.15 See Figure 23 for a flow-chart showing how the
power sector rules are connected.
Clean Air Act (CAA)
Section 110-State
Implementation Plans
(SIPs)
Section 111 (New
Source Performance
Standards)
Section 111(d)
(State Plans for Non-Criteria
Pollutants from Existing
Sources)
Parts C and D
(New Source
Review)
Sections 169Aand
169B (Visibility SIPs)
Acid Rain Program
(1995-forward)
Source: EPA, 2007
37
-------
To address their contribution to unhealthy levels of
fine particles in downwind states, CAIR requires 25
eastern states and the District of Columbia to reduce
and cap annual S02 and NOX emissions.
In addition, CAIR requires 25 eastern states and the
District of Columbia to reduce and cap ozone season
(May through September) NOX emissions to address
their contribution to unhealthy levels of 8-hour ozone.
As shown in Figure 24, most states covered under
CAIR are required to address contributions to both
PM25 and ozone nonattainment, and therefore reduce
annual SO, and NOY emissions as well as seasonal NOY
Z A A
emissions. These reductions will help states attain the
NAAQS for ozone and fine particles in most areas that
were designated as being in nonattainment as of April
2006 (see Figure 25).
All the states covered under CAIR have chosen to
participate in the trading programs for S02 and NOX.
Some states also have direct control programs that
complement the trading programs.
Generally, the CAIR model rules include fossil fuel-fired
boilers and combustion turbines serving an electric
generator with a nameplate capacity greater than
25 MW and producing electricity for sale. These are
generally the same types of sources as covered under
the ARP and NOY SIP Call. However, the universe
A
of CAIR sources is somewhat more inclusive in two
ways. First, CAIR affects some sources that either
permanently (e.g., simple-cycle turbines and certain
cogeneration units) or temporarily (e.g., independent
power producers, or IPPs, with power-purchase
agreements in effect) were exempt from the ARP. EPA
included these units because they were designed and
Figure 24: States Covered under CAIR/CAVR/CAMR for SO2, NOX, and Mercury
CAIR Emission Caps*
(million tons)
Annual S02
(2010)
Annual NOX
(2009)
2009/2010 2015
3.7 2.6
1.5
1.3
Seasonal NOX 0.6 0.5
(2009)
*for the affected regions
CAMR Annual Emission Caps*
(tons)
States not covered by CAIR, but covered by CAVR
States controlled for fine particles (annual SO? and NO,)
States controlled for ozone (ozone season NO,)
States controlled for both fine particles (annual SO2 and NO,) and ozone (ozone season NO,)
All states, plus 2 tribes and the District of Columbia, are covered by CAMR.
Mercury
2010
38
2018
15
CAVR
Outside of CAIR Region BART
Source: EPA, 2007
[38]-
-------
Figure 25: Projected Nonattainment Areas in 2020 After Reductions From CAIR, CAVR,
and Clean Air Act Programs
Legend
Both PM and Ozone
Nonattainment
PM Only
Nonattainment
Ozone Only
Nonattainment
Nonattainment Areas
Projected to Attain
Area
Count
3
13
7
106
Note: Figure 25 depicts 129 areas that, as of April 2006, were in nonattainment of the PM2B or ozone NAAQS (or both). As indicated in
the legend, 106 of those areas are projected to attain the applicable NAAQS by 2020 as a result of existing programs, such as Title IV of
the Clean Air Act, the NOX SIP Call, some existing state rules, and the addition of CAIR and CAVR. Note that the 23 areas that are forecast
to remain in nonattainment may need to adopt additional local or regional controls to attain the NAAQS by the dates set pursuant to the
CAA. These additional local or regional measures are not forecast in Figure 25, and therefore the figure overstates the extent of expected
nonattainment in 2020.
Source: EPA, 2006
operated to be in the business of producing electricity
for sale and were part of the universe of sources that
EPA demonstrated could reduce emissions in a highly
cost-effective manner for purposes of CAIR.
Second, CAIR affects some power-generating sources
that were not regulated under the NOX SIP Call because
the CAIR definition of "fossil-fuel-fired" is consistent
with the definition used in the ARP (i.e., combusting
any fossil fuel is considered "fossil fuel-fired"). The NOX
SIP Call definition only considers a source to be "fossil
fuel-fired" if more than 50 percent of annual heat input
results from combusting fossil fuels.
The majority of the approximately 320 new sources
expected to be affected under CAIR are simple-cycle
combustion turbines outside the NOX SIP Call region
that came online prior to 1991. Most of the others
are IPP units or cogeneration units that were exempt
from the ARP. Table 9 on page 40 delineates the
expanding coverage of electricity generators from the
ARP to CAIR and CAMR.
How the New Trading
Programs Work
States had the choice of participating in the federal
cap and trade programs to reduce S02 and NOX
emissions and all have elected to do so. The result is
a larger seasonal NOX program beginning in 2009, a
new annual NOX program beginning in 2009, and a
new S02 program in the CAIR region with a tighter,
regional cap in 2010. All three new CAIR programs
require additional reductions in 2015 (See timeline in
Figure 26 on page 41). States can either submit state
plans for EPA approval or come under a federal plan
that also serves as a backstop to enter the program.
The state plans can use EPA's model trading rules, with
-[39]
-------
Table 9: Overview of Fossil Fuel-Fired Electricity Generators Covered under EPA's
Cap and Trade Programs
I Basic
Applicability
>25
Exceptions
>25
coal-fired
utility boilers
that burned
coal between
1990-95
Same as S02
plus some
boiler types
>2BMW(but
OTC states may
be >1 BMW) and
certain non-EGUs
greater than 250
mmBtu/hr
Certain cogens,
plus units that
burn less than
50% fossil fuel
>25
>25MW and
certain non-
EGUs greater
than 250
mmBtu/hr*
>25 MW, coal-fired
Certain cogens j Certain cogens | Certain cogens
(different than
NBP)
(different than
NBP)
(same as CAIR)
Geographic
coverage
Certain IPPs,
cogens, qualify-
ing facilities,
and simple
cycle turbines
48 contiguous j 48 contiguous | 20 states + DC 25 states + DC 25 states + DC 50 states + DC
states + DC
states + DC
+ 2 tribes
* States in the NBP can expand their CAIR NOX ozone season program applicability to include non-EGUs in the NBP.
Source: EPA, 2007
state-specific approaches to allocating NOX allowances,
allowing sources to opt-in, and including industrial
sources that are subject to the NOX SIP Call trading
program. The federal backstop program was published
in May 2006 and went into effect in June 2006.
Therefore, the regulated community has faced CAIR
requirements that have been in effect since June 2006.
Under Title IV of the CAA, the ARP will continue to
operate even after the new regional CAIR S02 trading
program begins in 2010. (Title IV NOX requirements
also remain unchanged under CAIR.) Sources will use
Title IV S02 allowances to demonstrate compliance
with annual CAIR requirements as well as with annual
Title IV requirements. As a result, banked Title IV
allowances can be used for CAIR compliance, and
sources in all states subject to CAIR for S02 will be
subject to two S02 trading programs that share the
same currency.
Under CAIR, however, one allowance does not always
cover one ton of emissions. Instead, for purposes of
CAIR, S02 allowances of vintage 2009 and earlier will
each cover one ton of emissions; vintage 2010 - 2014
allowances will authorize 0.50 tons of emissions;
and vintage 2015 or later allowances will authorize
0.35 tons of emissions. These ratios achieve the more
stringent reductions required under CAIR, maintain the
value of ARP allowances, and make ARP compliance a
foregone conclusion with CAIR compliance.
The NBP will cease to operate with the start of the
seasonal NOX trading program under CAIR in 2009.
Sources in most CAIR states will be subject to two
separate CAIR NOX trading programs: an annual NOX
program for PM2 5 control and a seasonal NOX program
for ozone control. However, these two programs will
not share currency, as CAIR annual and ozone season
NOX allowances are not interchangeable.
EPA will provide NOX emission allowances to each state
according to the state budget for each program. States
covered by both programs will allocate both annual and
seasonal allowances to sources (or other entities).
40
-------
The CAIR seasonal NOX program allows the use of
banked allowances from the NOX SIP Call, just as
the CAIR S02 program allows the use of banked
allowances from the ARR The annual NOX trading
program includes a limited compliance supplement
pool of allowances to be awarded for early reductions
in 2007 and 2008, or to address issues of reliability of
electricity supply in 2009.
The structure of the CAIR programs and, in particular,
the provisions allowing use of banked allowances from
ARP and NBP, exemplify EPA's effort to ensure an orderly
transition to CAIR's trading programs and strongly
encourage early reductions. There is a substantial
incentive for sources to begin complying with CAIR
immediately, and emissions already have dropped
as a result.
CAIR Allowance Market and
State Activity
Although there will be two distinct markets, EPA
expects that the prices in both the annual and seasonal
markets will be established by the cost of controls for
annual compliance. There has been trading activity
in the 2009 seasonal NOX market and limited annual
NOX CAIR market trading. Observers expect that
active trading will not occur until CAIR SIPs have been
approved and NOX allowance accounts are populated
later this year.
For both the S02 and NOX markets, it will take
time for buyers and sellers to continue to assess
the fundamentals of the changes introduced by
CAIR, but this is secondary to the achievement of
Figure 26: Timeline for Implementation of CAIR/CAMR/CAVR (2005-2018)
Phase I: CAIR NOX Programs
(ozone-season and annual)
Early Emission Reduction Period
(annual CAIR NOX program)
(07 and 08) '
FIP
(June 06)
CAIR
signed
(09)
Early reductions for CAIR NOX ozone-season
program and CAIR SC>2 program begin
immediately because NOX SIP Call and Title IV
allowances can be banked into CAIR.
Phase I: CAIRSO2 Program
(10)
Phase II: CAIR NOX and
SO2 Programs Begin
(15)
©©©©©©©©
CAMR
signed
A
CAVR
signed
SPs Due
(Nov 06)
Regional Haze (RH)
SIPs Due (Dec 08)
Phase II: CAMR Hg Program
(18)
States develop SPs
(18 months)
Phase I: CAMR Hg Program
(10)
CAVR BART Controls Required
(5 years after RH SIPs approved)
CAM Rand CAVR
Note: Dotted lines indicate a range of time.
Note: During the CAIR annual NOX program early emission reduction period, owners may earn additional allowances available through a
compliance supplement pool established under EPA's CAIR rulemaking.
Source: EPA, 2007
-[41]
-------
Figure 27: Current and Projected SO2 Scrubber and NOX SCR Controls on
Coal-fired EGUs
300,000
250,000
200,000
S
«J
CQ
cn
(3
50,000
180 units
1209 units
Projected 201)
111 units
Committed
2007-20D
Projected 2020
Projected 201>
Committed 37 units
2007-201>
Projected 2020
Projected 20E 16 units
Committed 27 units
Scrubbers
Scrubbers + SCRs
Note: Existing, committed, and projected controls are due to existing programs as well as CAIR, CAMR, and CAVR.
Source: EPA, for IPM, 2007
the environmental accountability and results of the
program. CAIR required covered states to submit SIPs to
EPA by September 2006. The agency also promulgated
a federal implementation plan (FIP) that implements the
model trading rules for every CAIR state and offered to
leave it in place for states not wishing to submit a SIR
EPA expects all 29 affected jurisdictions to participate in
the EPA-run trading programs.
States have some flexibility in participating in the
trading programs, including determining NOX allowance
allocations independently. Nearly all states submitting
SIPs thus far have established their own allocation
methodologies, often including special set-asides
for new sources and for various state priorities, like
renewable energy or add-on emission controls. In some
cases, states roll any unclaimed set-aside allowances
back into the main allowance pool; others hold them
over for possible distribution in the future.
States may also choose to allow participation by non-
EGUs from the NBP and can allow other units to opt-in
using methodologies in the CAIR model rules. Of the
19 states plus the District of Columbia that are subject
to both the NOX SIP Call and CAIR (note that Rhode
Island was included in the former, but not the latter), all
but five have indicated they will include the NBP's non-
EGUs in the CAIR NOX ozone season program. Most
states thus far have chosen not to include the model
rule provisions that allow sources to opt-in.
Whether sources in a state are subject to a SIP or a
FIP, there will be initiation of the allocation of NOV
A
allowances under CAIR by the end of this year (S02
allowances already have been allocated under Title IV).
[42]-
-------
Figure 27 shows advanced S02 and NOX controls
already in place in the CAIR region, as well as those
controls that facilities have already committed to
install or that are projected under CAIR with additional
consideration of CAMR and CAVR requirements.
CAMR requires all 50 states, the District of Columbia,
and two tribes to regulate mercury emissions from
coal-fired EGUs. CAMR establishes "standards of
performance" limiting mercury emissions from new
and existing coal-fired power plants and, like CAIR,
creates a model cap and trade program with two
phases of reductions. The first phase cap is 38 tons,
taking advantage of "co-benefit" reductionsmercury
reductions achieved by reducing S02 and NOX emissions
under CAIRto fulfill EPA's requirement to act on
mercury emissions. The second phase, beginning in
2018, goes further to reduce emissions to 15 tons upon
full implementation. CAMR sets an emission reduction
requirement in the form of an annual budget for each
state and two tribes in accordance with the two caps.
New coal-fired power plants will have to meet new
source performance standards in addition to being
subject to the caps. EPA established annual budgets
for each state, and states must ensure that current
and future mercury emissions from coal-fired EGUs do
not exceed the annual state budget. Like CAIR, CAMR
does not exempt the units that may be exempt under
the ARR The summary of applicability across programs
in Table 9 on page 40 includes general CAMR
applicability for comparison.
Furthermore, under CAMR, affected coal-fired
electric utility units will be required to continuously
monitor mercury mass emissions for the first
time, regardless of whether or not they will be
participating in the trading program. Monitoring
technologies will be subject to rigorous certification
and quality assurance/quality control requirements
under 40 CFR Part 75. Affected sources are required
to install and certify continuous emissions or sorbent
trap monitoring systems by January 1, 2009.
This new requirement is one of the primary areas
of focus for EPA's CAMR implementation efforts.
Recent work by both EPA and industry has advanced
mercury monitoring systems, reference testing
methods, and calibration standards to a point that
measuring capabilities that had limited feasibility
a few years ago now are fully or nearly ready and
even commercially available. Over the past year, the
performance and reliability of mercury monitoring
systems have substantially improved as a result of
field demonstrations and testing by EPA and industry.
EPA continues to work closely with the regulated
community, monitoring equipment and software
vendors, academia, and other organizations to ensure
timely implementation of a technically sound, effective
CAMR mercury monitoring program.
The trading program under CAMR will work similarly
to existing programs and the S02 and NOX programs
under CAIR, with two notable differences between the
CAMR and CAIR trading programs. First, there are no
opt-in provisions included in CAMR; second, allowances
under CAMR are measured in ounces rather than tons.
Even with some states choosing to control mercury
emissions directly, EPA expects a robust trading
program. In July 2006, EPA conducted limited modeling
meant to be illustrative of a reduced market based on
the states and tribes EPA projected would participate
in the national trading program at the time. This
more limited market represents states that allocated
close to 69 percent of the initial budget of mercury
allowances and comprises more than 700 units. These
units represent more than 200 GW of capacitynearly
equivalent to the number of coal-fired units in the
successful NBP across a larger number of states. As with
the NBP, EPA expects a viable market will result.
J43
-------
Based on this modeling, prices for mercury allowances
are expected to be the same as or lower than prices
in a full national market. This is because several states
that would have required relatively large amounts
of mercury allowances to comply with CAMR, such
as Illinois, will not be participating. Overall, states
opting to participate in the trading program generally
are characterized by larger percentages of coal-fired
generation. Moreover, 21 states submitted state
plans to EPA by the November 2006 CAMR deadline,
and additional state plans have been received since.
The remaining states are actively working on plans.
Of all affected jurisdictions, 35 states and two tribes
are planning on participating in the CAMR trading
program. Twelve states have indicated they will not
participate in the trading program, and at least one
state is still undecided. Three states (Idaho, Vermont,
and Rhode Island) and the District of Columbia do not
have any coal-fired EGUs and thus have zero budgets.
States not participating in the trading program
must ensure they meet their state budget with
other methods. Alternatives often involve control
requirements based on percent reduction provisions
determined through an analysis of control options
that states have evaluated as feasible. Some states
have chosen to do this in phases like EPA has, though
the start of the second phase is accelerated in some
cases. Unlike a capped program, percent reduction
programs do not necessarily guarantee emissions will
remain below a state's budget, often because of the
uncertainty of new source growth overtime. Therefore,
states are often coupling these programs with caps to
ensure the state's budget will be maintained.
Where mercury trading programs are enacted, EPA
expects emission controls to exceed requirements in
2010. This is because sources are likely to optimize the
controls installed for CAIR to reduce as much mercury
as possible in anticipation of increasing prices for
mercury allowances under the lower second phase cap.
In December 2006, EPA proposed a CAMR federal
plan to be finalized in states that either fail to submit
a CAMR state plan or whose state plan is somehow
deficient. EPA is evaluating comments and plans to
finalize the CAMR federal plan by the end of 2007
and have it go into effect in the first half of 2008. The
plan puts into place a cap and trade program in any
state in which the federal plan is finalized and contains
provisions to create trading programs for states or
regions that could emerge in the future.
CAVR supplements the emission reductions of
CAIR by requiring emission controls known as best
available retrofit technology (BART) for industrial
facilities emitting air pollutants that reduce visibility
by contributing to regional haze in national parks
and wilderness areas. For the electric power industry,
CAVR applies outside of the states covered by CAIR.
For all other industries, it is a nationwide program. The
pollutants include PM25 and its precursors, such as
S02, NOX, volatile organic compounds, and ammonia.
The BART requirements apply to facilities built
[44
-------
Figure 28: Projected Coal-fired ECU Retrofits with CAIR/CAMR/CAVR by 2020'
* Retrofits also include Title IV, NOX SIP Call and other State programs.
Starbursts within circles represent Activated Carbon Injection retrofits.
"Scrubber" also includes Reagent Injection for Fluidized Bed Combustion units. These units achieve an SO2
removal efficiency similar to scrubbers.
"Non-Economic" indicates that a unit that is not projected to operate.
Coal-fired units also have additional particulate controls not shown.
Source: EPA, 2007
SCR Only
<300 MW
300 MW to 600 MW
0 >600 MW
SCR/Scrubber
<300 MW
300 MW to 600 MW
0 >600 MW
SNCR Only
G <300 MW
O 300 MW to 600 MW
O >600 MW
SNCR/Scrubber
<300 MW
300MWto600MW
0 >600 MW
Scrubber Only
<300 MW
300 MW to 600 MW
0 >600MW
IGCC
O <300 MW
O 300 MW to 600 MW
O >600 MW
Re power
<300 MW
300 MW to 600 MW
0 >600 MW
Low NOx Burner
C <300 MW
O 300MWto600MW
O >SOO MW
Non-Economic
O <300 MW
O 300 MW to 600 MW
>600 MW
between 1962 and 1977 that have the potential to
emit more than 250 tons a year of visibility-impairing
pollution. The requirements cover 26 categories,
including utility and industrial boilers and large
industrial plants such as pulp mills, refineries,
and smelters.
Many of these facilities have not been subject to federal
pollution control requirements for these pollutants.
Under the 1999 regional haze rule, states are required
to set periodic goals for improving visibility in the 156
"Class I" natural areas, including national parks. CAVR
includes guidelines for states to use in determining
which facilities must install controls and the type of
controls the facilities must use. States must develop
their implementation plans by December 2007, identify
the facilities that will have to reduce emissions under
BART, set emission limits for those facilities, and require
installation of BART in 2014.
-[45]
-------
For CAIR-affected EGUs, participation in the CAIR
programs meets federal source-specific BART
requirements because CAIR was determined to be
better than BART controls under CAVR in the CAIR
region. Specifically, controls for EGUs subject to CAIR
will result in more visibility improvement in natural
areas than BART would have provided. States could,
however, require additional reductions.
Projected Controls
Although aspects of CAIR and CAMR are in
litigation, implementation moves ahead. Having
promulgated these environmental programs, EPA has
gone on to work with states, which are now working
aggressively to put implementing rules in place.
The regulated community is going forward with
installing equipment for CAIR, entering into contracts
for construction of mercury controls, and putting
monitoring systems in place.
Sources have begun responding to the new require-
ments with investments and application of retrofit
technology. EPA estimates that in 2010, EGUs
accounting for 60 percent of total capacity will have
scrubbers, increasing to 73 percent by 2020. Modeling
shows that the percentage of advanced controls will
go up (with the amount of capacity with advanced
controls projected to increase even faster) and the
number of units without advanced controls will go
down, especially for larger units (see Figure 28 on
page 45).
As observed with previous programs, the regulated
community responds with a sense of purpose and
alacrity to cap and trade programs. EPA, using existing
CAA authority, is moving to address interstate transport
Figure 29: SO2 Allowance Trading Volume and Prices from June 2000 to June 2007
Simplified Monthly Transfer Volume and Price, 2000-2007
C
o
0)
E
C
s_
H
2.00
1.50
1.00
0.50
0.00
$1,800
$1,600
$1,400 -£
$1,200 ^
«_*
$1,000 g
'Z
$800 °-
$600
$400
$200
(0
C
£
o
.vO
Date
Source: EPA, 2007
[46}
-------
Figure 30: Actual and Forecasted SO Allowance Prices
EPA Projected Allowance
Price, 2006 Dollars
$533
Up to 2010
Vintage
2010-2014
Vintage
June 2007 Spot Market
Price Range
$705
2006
Vintage
2010
Vintage
Source: EPA, 2007
of S02 and NOX emissions and lower mercury emissions
with CAIR, CAMR, and CAVR. EPA expects these
programs to deliver significant human health and
environmental improvements in a cost-effective manner
by harnessing market forces to achieve substantial
required emission reductions.
CAIR and the SO2Trading Market
In 2006 trading, prices began the year at nearly
$1,500 per ton. As EPA discussed in the 2005 Add
Rain Program Progress Report, market observers
characterized this high price as a result of uncertainty
over the implementation of CAIR. However, by
mid-2006, prices were lower and had stabilized,
generally trading through the second half of 2006 in
a band between $400 and $600 per ton. Prices have
generally remained at this level through the end of
June 2007. EPA also observed that, during the period
of peak allowance prices in late-2005 and early-2006,
transfer volumes were generally lower in the market,
which indicates that many market participants were not
trading during this period of high volatility. EPA expects
that trade volumes will again increase as the market
continues to stabilize in 2007. Figure 29 shows the
variation in S02 allowance price and transfer volume
from June 2000 though June 2007.
Current prices continue to compare favorably with
EPA's updated estimate of future S02 allowance prices
under CAIR. As shown in Figure 30, EPA projected
that pre-2010 vintage allowances would be worth
$533 per allowance in 2010, and that 2010-2014
vintage allowances would be worth $267 per
allowance due to the 2:1 retirement ratio that applies
to those vintage allowances in the CAIR region.
47
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Table 10: Aquatic Ecosystem Status Categories for the Adirondacks
Acute Concern
Elevated Concern
Moderate
Concern
< 0 micro
equivalent
per Liter
(ueq/L)
I Complete loss of fish populations is expected. Planktonic communities have extremely low
I diversity and are dominated by acidophilic forms. The numbers of individuals in plankton
I species that are present are greatly reduced.
0 - 50 ueq/L I Fish species richness is greatly reduced (more than half of expected species are missing). On
I average, brook trout populations experience sub-lethal effects, including loss of health and
I reproduction (fitness). During episodes of high acid deposition, brook trout populations may
I experience lethal effects. Diversity and distribution of zooplankton communities declines.
50-100
ueq/L
Low Concern |> 100 ueq/L
I Fish species richness begins to decline (sensitive species are lost from lakes). Brook trout
I populations are sensitive and variable, with possible sub-lethal effects. Diversity and
| distribution of zooplankton communities begin to decline as species that are sensitive to
acid deposition are affected.
Fish species richness may be unaffected. Reproducing brook trout populations are expected
where habitat is suitable. Zooplankton communities are unaffected and exhibit expected
diversity and distribution.
* It is important to note that the wide range of ANC values within these categories makes it likely that substantial improvements in ANC may
occur without changing the categorization of a given lake.
Source: EPA, 2007
June 2007 spot market prices show that the prices
for the earlier vintages are trading for $505 to $705
per ton, and that the later vintages (2010-2014) are
trading for $270 to $370 per ton (see Figure 30 on
page 47). These market prices compare favorably
with, though slightly above, EPA's estimate for the
CAIR markets.
Predicting the Response of Acidified Lakes
and Streams Under CAIR
In addition to the improvements in lake and stream
acidity resulting from implementation of the ARP,
CAIR will further reduce SO, and NOY emissions,
Z A
thereby reducing acid deposition and contributing
to improvements in lake and stream conditions. EPA
utilized a surface water chemistry model called the
Model of Acidification of Groundwater in Catchments
(MAGIC) to estimate the response of acidified lakes
and streams to these reductions in acid deposition.
MAGIC incorporates a small number of processes that
are important in influencing the long-term response of
surface waters to acidic deposition.
The Adirondack region of New York was selected as the
location for this evaluation. Aquatic ecosystem status
categories have been defined to track recovery for this
area and are presented in Table 10. This analysis uses
projected acid deposition scenarios for 2010, 2015,
and 2020 that depict acid deposition in the absence
(baseline) and presence of CAIR for each year. Using the
difference between the baseline and CAIR deposition
data, MAGIC projects the response of indicators of
stream and lake acidity (such as ANC) to reductions in
acid deposition resulting from CAIR implementation.
48
-------
Figure 31: Simulated Responses in 2020 and 2050 of Adirondack Lakes to Changes
in Acid Deposition (Baseline Conditions versus CAIR Scenarios)
a; 100
(0
^ 75 J
^ 50 \
0)
3
E
3
U
25 .
0
2020
Base Scenario CAIR Scenario
-50 0 50 100 150 200
2020 Lake ANC (ueq/L)
250
a; 100
(0
^ 75 J
^ 50 \
0)
E
3
U
25 -
0
2050
Base Scenario CAIR Scenario
-50 0 50 100 150 200 250
2050 Lake ANC (ueq/L)
27
Acute Elevated Moderate Low
Concern Concern Concern Concern
2020 Lake Status
30
Acute Elevated Moderate Low
Concern Concern Concern Concern
2050 Lake Status
Note: Baseline results are shown in red while CAIR results are shown in green - values rounded. The wide range of ANC values within these categories
makes it likely that substantial improvements in ANC may occur without changing the categorization of a given lake.
Source: EPA, 2007
The improvements in ANC predicted for lakes in
the Adirondacks are depicted in the cumulative
distribution plots in Figure 31. The cumulative
distribution plots provide information about the
change in ANC for all lakes and show that ANC under
CAIR is consistently higher than without CAIR. For
example in 2020, 59 percent of lakes under CAIR
and 56 percent of lakes without CAIR have ANC
greater than 50. The bar graphs in Figure 31 show
the change in ecosystem status categories for lakes
in the Adirondacks between the baseline and CAIR
conditions. On average, MAGIC projects that ANC
will increase by 7.5 ueq/L in 2020 and 12 ueq/L in
2050 with CAIR. This analysis clearly indicates that
improvements in aquatic ecosystem status for the
lakes in the Adirondacks should occur as a result of
reductions in acid deposition attributable to CAIR
emission reductions.
!49]
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The availability and transparency of data, from
emission measurement to allowance trading to
deposition monitoring, is a cornerstone of effective
cap and trade programs. The Clean Air Markets
Division (CAMD), in the Office of Air and Radiation's
Office of Atmospheric Programs, develops and
manages programs for collecting these data
and assessing the effectiveness of cap and trade
programs, including the ARR
The CAMD Web site provides a public resource for
general information on how market-based programs
work and what they have accomplished, along with
the processes, information, and tools necessary to
participate in any of these market-based programs.
For information about EPA's air emissions trading
programs, see: .
For information about the ARR see:
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1. See (Total emissions are preliminary projections, based on 2002 National Emissions Inventory).
2. Chestnut, L. G., Mills, D. M. (2005, November). A fresh look at the benefits and costs of the U.S. Acid Rain Program. Journal
of Environmental Management, Vol. 77, Issue 3, 252-256.
3. For the statutory provisions on allowance allocations, see Section 403 of the CAA, as amended in 1990.
See .
4. See .
5. Detailed emissions and allowance data for ARP sources are available on the Data and Maps portion of EPA's Clean Air Markets
Web site, see .
6. Allowance transfers are posted and updated daily on .
7. See for further information. The S02 data team includes researchers
from a number of locations, including the Goddard Earth Sciences and Technology Center at the University of Maryland
Baltimore County; the Joint Center for Earth Systems Technology at the University of Maryland Baltimore County; the National
Aeronautics and Space Administration, Goddard Space Flight Center; and the Royal Netherlands Meteorological Institute
(KNMI).
8. Kim, S.W., et al. "Satellite-observed U.S. power plant NOX emission reductions and their impact on air quality." Geophysical
Research Letters, Vol. 33, No. 22, L22812, doi: 10.1029/2006GL027749, 29 November 2006.
9. Borrell, P., Burrows, J., Platt, U., & Zehner, C. (2001). Determining tropospheric concentrations of trace gases from space. ESA
Bulletin, 107,72-81.
10. It should be noted that there has not been a violation of the S02 standard at any U.S. monitoring site since 2000.
11. See the EPA Office of Transportation and Air Quality Web site < www.epa.gov/otaq> for information on recent rules
to reduce NOX emissions from mobile sources. Additional NOX reductions are occurring as a result of the NBP See EPA's
September 2007 report, NOX Budget Trading Program: 2006 Program Compliance and Environmental Results, at , which discusses these NOX reduction efforts.
12. National Research Council (2004). Air Quality Management in the United States. National Academies Press, Washington, DC.
13. Clean Air Act Advisory Committee, Air Quality Management Work Group (2005). "Recommendations to the Clean Air Act
Advisory Committee: Phase 1 and Next Steps."
14. The data used to compute trends for the Southern Appalachians include a significant update (over five years of new data),
resulting in a substantial change in the magnitude and direction of the trends shown in the 2005 Acid Rain Progress Report.
The trends shown here should be regarded as more accurate estimates of long-term patterns for this region.
15. CAIR (see ), CAMR (see ), CAVR (see ).
53
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S-EPA
United States
Environmental Protection Agency
Office of Air and Radiation
Clean Air Markets Division
1200 Pennsylvania Ave, NW (6204)
Washington, DC 20460
EPA-430-R-07-011
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