Acid Rain and Related Programs:
2008 Highlights
United States
Environmental Protection
Agency
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Acid Rain and Related Programs: 2008 Highlights
The Acid Rain Program (ARP), established under Title IV of the 1990 Clean
Air Act (CAA) Amendments, requires major emission reductions of sulfur
dioxide (SC>2) and nitrogen oxide (NOX), the primary precursors of acid
rain, from the electric power industry. The SC>2 program sets a permanent cap on the
total amount of SC>2 that may be emitted by electric generating units (EGUs) in the
contiguous United States, and includes provisions for trading and banking emission
allowances. The program is phased in, with the final 2010 SC>2 cap set at 8.95 million
tons, a level of about one-half of the emissions from the power sector in 1980.
NOX reductions under the ARP are achieved through a program that applies to a
subset of coal-fired EGUs and is closer to a traditional, rate-based regulatory system.
Title IV requires NOX emission reductions for certain coal-fired EGUs by limiting
the NOX emission rate (expressed in Ib/mmBtu) to a value based on a unit's boiler
type. The goal of the NOX program is to limit NOX emission levels from the affected
coal-fired boilers so that their emissions are at least 2 million tons less than the
projected level for the year 2000 without implementation of Title IV. EPA estimated
this projected number to be 8.1 million tons.
From July to October 2009, the U.S. Environmental Protection Agency (EPA) released
three reports detailing progress under the ARP. These reports can be accessed at
. This report highlights the key
results from the previous reports and discusses the start of the Clean Air Interstate
Rule (CAIR).
For more information on the ARP please visit: . Detailed emission results and other facility and allowance data are
also publicly available on EPA's Data and Maps Web page at . To view emission and other facility information in an interactive file
format using Google Earth or a similar three-dimensional platform, go to . Additionally, updated
quarterly SC>2 emission data for ARP coal-fired power plants can be found at . For general information on cap and
trade programs please visit: .
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Acid Rain and Related Programs: 2008 Highlights
Key Components of the ARP S02 Trading
Program
Phases and Reductions: Title IV of the 1990 Clean Air Act
Amendments set a goal of reducing annual SC>2 emissions
by 10 million tons from all sources (8.4 million tons from
power plants) below 1980 levels. To achieve these reduc-
tions, the law required a two-phase tightening of the re-
strictions placed on fossil fuel-fired power plants. Phase I
began in 1995 and Phase II began in the year 2000.
Allowance Allocation: The EPA allocates allowances to
affected utility units based on their historic fuel consump-
tion and a specific emissions rate. Each allowance permits
a unit to emit 1 ton of SC>2 during or after a specified year.
Annual Reconciliation: For each ton of SC>2 emitted in a
given year, one allowance is retired, that is, it can no lon-
ger be used. Allowances may be bought, sold, or banked.
At the end of each year, sources are granted a 60-day grace
period to ensure that they have sufficient allowances to
match their SC>2 emissions during the previous year. If they
need to, they may buy allowances during the grace period.
Sources may sell allowances that exceed their emissions or
bank them for use in future years.
Allowance Trading: SC>2 allowance trading minimizes
compliance costs, and since unused allowances can be sold
to other program participants, the system encourages units
to reduce emissions beyond required levels.
Flexible Compliance: Each source can choose the most
efficient way to reduce its SC>2 emissions. Installing new
control technology, switching to lower-sulfur fuel, or
optimizing existing controls are all options.
Stringent Monitoring: Each source must continuously
measure and record its emissions of SC>2, NOX, and CC>2, as
well as heat input, volumetric flow, and opacity. In most
cases, a continuous emission monitoring system (GEMS]
must be used.
Automatic Penalties and Enforcement: Any source that
fails to hold enough allowances to match its SC>2 emissions
for the previous year must pay to EPA by July 1 an automat-
ic penalty of $2,000 (inflation-adjusted to $3,337 for 2008]
per ton of emissions in excess of allowances held. The
source must also immediately surrender to EPA an amount
(referred to as an "offset") of allowances, issued for the year
the payment is due, equalling the tons of excess emissions.
Moreover, each ton of excess emissions and each day of the
year in which they occur constitute a violation of the Clean
Air Act, subject to a discretionary monetary penalty.
Key Results of the S02 Trading Program
Affected Units: The SC>2 requirements under the ARP ap-
ply to EGUs, fossil fuel-fired combustors that serve a gen-
erator that provides electricity for sale. The vast majority
of ARP SC>2 emissions result from coal-fired EGUs (close to
99 percent), although the program also applies to oil and
gas units. There were 3,572 EGUs subject to the ARP's SC>2
requirements in 2008. These units were at 1,346 facilities
and 419 of those facilities had coal-fired generating units.
S02 Emission Reductions: As Figure 1 shows, ARP units
have reduced annual SC>2 emissions by 56 percent com-
pared with 1980 levels and 52 percent compared with 1990
levels. Sources emitted 7.6 million tons of SC>2 in 2008, well
below the current annual emission cap of 9.5 million tons,
Figure 1: S02 Emissions from Acid Rain Program Sources, 1980-2008
1985 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
• Phase I (1995-1999) Sources • Phase II (2000 on) Sources • All Affected Sources - Allowances Allocated
Source: EPA, 2009
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Acid Rain and Related Programs: 2008 Highlights
and already below the statutory annual cap of 8.95 million
tons set for compliance in 2010. Figure 2 shows state-by-
state SC>2 emission reductions. The states with the highest
emitting sources in 1990 have generally seen the greatest
SC>2 reductions under the ARP.
Compliance: In 2008, all ARP units complied with the re-
quirement to hold enough allowances to cover SC>2 emis-
sions.
Allowances: In 2008, EPA allocated 9.5 million S02 allow-
ances under the ARP. Together with 6.7 million unused al-
Figure 2: State-by-State S02 Emission Levels for Acid Rain Program Sources, 1990-2008
• 1990 Emissions
D 1995 Emissions
• 2000 Emissions
• 2005 Emissions
• 2008 Emissions
Scale: Largest bar equals 2.2 million tons of S02 emissions in Ohio, 1990.
Source: EPA, 2009
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Acid Rain and Related Programs: 2008 Highlights
lowances carried over (or banked) from prior years, there
were 16.2 million allowances available for use in 2008.
ARP sources emitted approximately 7.6 million tons of SC>2
in 2008, less than the allowances allocated for the year, and
far less than the total allowances available (see Figure 3).
Thus after the 2008 allowance reconciliation, the number
of banked allowances increased to 8.6 milion. In 2010, the
total number of Title IV allowances allocated annually will
drop to 8.95 million and remain statutorily fixed at that an-
nual level.
Allowance Market: Figure 4 shows the annual volume of
SC>2 allowances transferred under the ARP (excluding al-
locations, retirements, and other transfers by EPA) since
Figure 3: S02 Emissions and the Allowance Bank, 1995-2008
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
• Allowances Allocated • Unused Allowances from Previous Years ™ Actual Emissions from Affected Sources
Source: EPA, 2009
Figure 4: S02 Allowances Transferred under the ARP
1994 1995 1996 1997 1998 1999 2000 2001
• Trades Between Distinct Entities (significant transfers)
Source: EPA, 2009
2002 2003 2004 2005 2006
Trades Between Related Entities
2007
2008
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- I Acid Rain and Related Programs: 2008 Highlights
official recording of transfers began in 1994. About 5.9 mil-
lion allowances (42 percent) were transferred in economi-
cally significant transactions (i.e., between economically
unrelated parties). Transfers between economically unre-
lated parties are considered a better indicator of an active,
functioning market than are transactions among the vari-
ous facility and general accounts associated with a given
company.
Key Results of the NOX Program
NOX Emission Reductions: Figure 5 shows that NOX emis-
sions from all ARP sources were 3.0 million tons in 2008.
This level is 5.1 million tons less than the projected level in
2000 without the ARP (8.1 million tons), or more than dou-
ble the Title IV NOX emission reduction objective. Although
the ARP was responsible for a large portion of these annual
NOX reductions, programs such as the NOX Budget Trading
Program and other regional and state NOX emission control
programs also contributed significantly.
Compliance: In 2008, 969 coal-fired generation units at
383 facilities were subject to the ARP NOX Program. All
units achieved compliance in 2008.
Environmental Results
S02 Air Quality: Data collected from monitoring networks
show that the decline in SC>2 emissions from the power in-
dustry has improved air quality. The national composite
average of SC>2 annual mean ambient concentrations de-
creased 71 percent between 1980 and 2008.
FigureS: NOX Emission Trends for All Acid Rain Program Units, 1990-2008
1990 1995 1996 1997 1998 1999 2000 2001
• NOX Program Affected Sources
2002 2003 2004 2005 2006
• Title IV Sources Not Affected for NOX
2007 2008
Source: EPA, 2009
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Acid Rain and Related Programs: 2008 Highlights
Acid Deposition Improvements: Monitoring data show
signifianct improvements in the primary acid deposition
indicators:
• Wet Sulfate Deposition: Between the 1989 to 1991
and 2006 to 2008 observation periods, decreases
in wet deposition of sulfate averaged more than 30
percent for the eastern United States (see Figure 6).
Figure 6: Annual Mean Wet Sulfate Deposition
1989-1991
2006-2008
Nitrogen Deposition: Inorganic nitrogen in wet de-
position decreased in the Mid-Atlantic and Northeast,
but to a lesser extent than sulfur (see Figure 7). Wet
nitrogen deposition is influenced by sources outside
the ARP.
Figure 7: Annual Mean Wet Inorganic Nitrogen Deposition
1989-1991
2006-2008
Source: NADP, 2009
Source: NADP, 2009
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Acid Rain and Related Programs: 2008 Highlights
Surface Water Quality Improvements: Acid rain, resulting
from SC>2 and NOX emissions, negatively affects the health
of lakes and streams and creates chemical conditions that
may adversely impact fish and other aquatic animals.
Surface water chemistry provides direct indicators of the
potential effects of acidic deposition on the overall health
of aquatic ecosystems. Surface water monitoring networks,
like EPA's Long-Term Monitoring (LTM) program, provide
information on how water bodies are responding to
changes in emissions. Since the implementation of the ARP,
scientists have found signs of recovery in many, but not
all, of the lakes and streams studied in the eastern United
States:
• Sulfate Concentrations: Measurements of sulfate in
surface waters provide important information on the
level of acidification of a water body. Decreasing sulfate
concentrations in surface water signify a trend toward
recovery from acidification. Figure 8 shows that sulfate
concentrations are declining at almost all sites in the
Northeast (New England, Adirondacks/Catskills and
Pennsylvania [Northern Appalachians]). However,
in the Southern Blue Ridge (Central Appalachians),
sulfate concentrations in many streams are increasing.
Figure 8: Trends in Lake and Stream Water Chemistry at LTM
Sites, 1990-2007, Sulfate Ion Concentration (ueq/L/yr)
1990-2007
Sulfate Ion Concentration
Increasing significant trend
0 Increasing non-significant trend
0 Decreasing non-significant trend
Decreasing significant trend
Acid Neutralization Capacity (ANC): ANC is
a measure of the sensitivity of a water body to
acidification. Movement toward recovery of an acidified
aquatic ecosystem is indicated by an increase in ANC.
Figure 9 shows that ANC is on average increasing in
three of the four regions, which in part can be attributed
to declining sulfate deposition. The site trends also
indicate variation within each region. Only two sites
indicate a significant downward trend in ANC.
Figure 9: Trends in Lake and Stream Water Chemistry at LTM
Sites, 1990-2007, ANC Levels (ueq/L/yr)
1990-2007
Acid Neutralizing Capacity
(ANC)
• Increasing significant trend
0 Increasing non-significant trend
0 Decreasing non-significant trend
• Decreasing significant trend
Source: EPA, 2009
Source: EPA, 2009
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Acid Rain and Related Programs: 2008 Highlights
Human Health Benefits
Benefits from the ARP include the prevention of human
health-related impacts, such as premature death, asthma
exacerbation, and hospital admissions for respiratory
and cardiovascular ailments. Emissions of SC>2 and NOX
are precursors to formation of fine particulate matter
(PM2.s), while NOX also contributes to the formation of
ground-level ozone. These air pollutants are detrimental to
human health. By reducing power sector emissions of SC>2
and NOX, ambient air quality is improved thus improving
human health.
EPA recently updated the estimated U.S. PM2.5 and ozone
health-related benefits due to ARP implementation for the
prospective year 2010 that were originally published in a
2005 journal article.1 The results of the revised assessment
show that estimated PM2.5 health benefits due to ARP
implementation in 2010 are valued at $170-$410 billion
[2008 dollars). The benefits are primarily from reduced
premature mortality of 20,000 to 50,000 incidences per
year in 2010. Using updated methods to assess ground-
level ozone benefits from ARP implementation in 2010
results in total health benefits ranging from $4.1-$17
billion (2008 dollars). The benefits are primarily from
reduced premature mortality of 430 to 2,000 incidences
per year in 2010. These updated benefits do not include
human welfare benefits due to better ecological conditions,
such as improved visibility and reduced acidification of
lakes and streams.
Clean Air Interstate Rule
CAIR was issued on March 10, 2005, in order to build on
the emission reductions under the NBP and the ARP. The
rule was designed to permanently lower emissions of SC>2
and NOX in the eastern United States. CAIR, as promulgat-
ed, was designed to help states address ozone nonattain-
ment and attain the NAAQS for PM2.5 by reducing trans-
ported precursors, SC>2 and NOX. CAIR was also expected
to improve visibility in Class 1 areas, including national
parks, monuments, and wilderness areas. To achieve these
emission reductions, it created three separate compliance
programs: an annual NOX program, an ozone season NOX
program, and an annual SC>2 program.
Each of the three programs uses a two-phased approach,
with declining emission caps in each phase. The first phase
began in 2009 for the NOX annual and NOX ozone season
programs, and will start in 2010 for the SC>2 annual pro-
gram. The rule also establishes a second phase for all three
programs beginning in 2015.
All 28 states and the District of Columbia chose to be part
of the EPA-administered regional CAIR trading programs.
Monitoring and reporting according to EPA's stringent reg-
ulations began in 2008 for the NOX programs and in 2009
for the SC>2 program.
Litigation and CAIR Replacement Rule
On July 11, 2008, the U.S. Court of Appeals for the D.C. Cir-
cuit issued a ruling vacating CAIR in its entirety. EPA and
other parties requested a rehearing, and on December 23,
2008, the Court revised its decision and remanded CAIR to
EPA without vacatur. This ruling leaves CAIR and the CAIR
Federal Implementation Plans (FIPs)—including the CAIR
trading programs—in place until EPA issues new rules to
replace CAIR.
While the court did not impose a deadline by which EPA
must issue the replacement rules, EPA estimates that de-
velopment and finalization of replacement rules could take
about two years. EPA is committed to issuing rules to re-
place CAIR that will help states address the interstate air
emissions transport problem in a timely way and that fully
comply with the requirements of the Clean Air Act and the
opinions of the D.C. Circuit.
Current CAIR Implementation
The CAIR NOX ozone season and CAIR NOX annual program
requirements to hold allowances equivalent to ozone sea-
son and annual emissions started in 2009.
The CAIR SC>2 program requirements for continuous
monitoring and reporting started January 1, 2009. Acid
Rain sources that are already complying with Part 75
monitoring and reporting provisions essentially do not
have to do anything additional to comply with CAIR SC>2
monitoring requirements. Sources not subject to the Acid
Rain Program but subject to CAIR began complying with
Part 75 monitoring and reporting this year. The require-
ment to hold allowances in the CAIR SC>2 program begins
January 1, 2010.
1 Chestnut, L. G., and Mills, D. M. 2005. A fresh look at the benefits and costs of the US Acid Rain Program, Journal of
Environmental Management, 77(3): 252-266.
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Acid Rain and Related Programs: 2008 Highlights
Online Information, Data, and Resources
The availability and transparency of data, from emission
measurement to allowance trading to deposition monitor-
ing, is a cornerstone of effective cap and trade programs.
CAMD, in the Office of Air and Radiation's Office of Atmo-
spheric Programs, develops and manages programs for
collecting these data and assessing the effectiveness of cap
and trade programs, including the ARP.
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 emission trading programs, see . For information about the ARP, see .
Figure 10: U.S. Sulfur Dioxide Emissions from ARP Sources and Ambient Sulfate Concentration, 1990
Note: This example depicts 1990 S02 emissions from ARP sources along with 1990 sulfate concentration data as measured by the
CASTNET monitoring program.
Source: EPA, 2009
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To increase data transparency, EPA has created
supplementary maps that allow the user to display air
market program data geospatially on an interactive
3D platform. Figures 10 and 11 are examples of these
interactive maps. The maps come in the form of a KMZ
file (a compressed KML file) that is downloaded directly
to the user's computer. Data can be explored in new and
meaningful ways by turning different layers on and off,
overlaying data points and satellite imagery, and using
navigation tools to change the view of the Earth's surface.
KMZ/KML files are supported by programs such as Google
Earth, ESRI Arc Explorer, and NASA WorldWind View. These
interactive mapping applications provide a unique way to
identify environmental trends and track the progress of
various EPA programs, such as the ARP.
For more information or to utilize the program, visit the Web
site at .
Figure 11: U.S. Sulfur Dioxide Emissions from ARP Sources and Ambient Sulfate Concentration, 2008
Note: This example depicts 2008 S02 emissions from ARP sources along with 2007 sulfate concentration data as measured by the
CASTNET monitoring program.
Source: EPA, 2009
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