# Acid Rain Pr ogr am 2004 Pr ogr ess Repor t

10 YEARS OF A CHIEVEMENT

# Acid Rain Pr ogr am 2004 Pr ogr ess Repor t
CONTENT S Summar y .................................................................................................... 2 Origins of the Acid Rain Pr ogr am ................................................................ 3 SO 2 Emission Reductions

............................................................................ 4 SO 2 Allowance Mar ket

................................................................................ 6 SO 2 Pr ogr am Compliance

........................................................................... 8 NO x Emission Reductions

............................................................................ 9 Emissions Monitoring and Repor ting

......................................................... 11 St atus and T r ends in Air Quality , Acid Deposition, and Ecological Ef f ects
... 13 Under st anding the Monitoring Networ ks

................................................... 14 Air Quality

................................................................................................ 15 Acid Deposition

........................................................................................ 17 Recover y of Acidif ied Lakes and Str eams .................................................... 19 Quantifying Costs and Benef its of the Acid Rain Pr ogr am ........................... 21 National Actions f or Fur ther Emission Reductions—2005 Clean Air Rules

.... 23 Online Inf ormation, Dat a, and Resources ............................Inside back cover

EPA 430-R -05-012 Clean Air Mar kets Division Of f ice of Air and Radiation U .S. Envir onment al Pr ot ection Agency October 2005

# E P Apub lishes an ann ual r epor t to update the pub lic on compliance with the Acid Rain Pro g ram, the status of implementation, and pro g r ess to w a r d achie ving en vironmental goals. Because this r epor t b uilds upon and updates pr e vious r epor ts, those who ar e ne w to the pro g ram might find it helpful to fir st r ead some backg round mater ial on the EP A W eb site at www .epa.go v/ air mark ets/ar p
. The Aci d Rain Progr am 2004 Progress Repor t updates data r epor ted in pr e vious y ear s, specifically:
• Sulfur dio xide (SO 2 

### ) emissions, allo w ance mark et infor mation, and pro g ram compliance

. • Nitro gen o xides (NO x 

### ) emissions and pro g ram compliance

. • Status and tr ends in acid deposition, air quality , and ecolo g ical effects.
• Benefits and costs of the Acid Rain Pro g ram. This r epor t marks the 10th year of the Acid Rain Pro g ram b yhighlighting some of the major de v elopments that ha v e occur r ed ov er that time , including advances in emission controls, improv ements in pro g ram management, and electronic deliv e r y of ser vices, and matur ity of the pro g ram’ s allowance trading mark et. F or mor e infor mation on the Acid Rain Pro g ram, including additional infor mation on SO 2 

### and NO x 

### emissions, acid deposition monitor ing, en vironmental effects of acid deposition, and detailed unit-le v el emissions data, please visit EP A’s Clean Air Mark ets W eb site at www .epa.go v/air mark ets.2 ✧ Acid Rain Pr ogr am, 2004 Pr ogr ess Repor t 

# Summar y Sulfur dio xide (SO 2 ) and nitro gen o xides (NO x ) ar e the k ey pollutants in the for mation of acid rain. These pollutants also contr ib ute to the for mation of fine par ticles (sulf ates and nitrates) that ar e associated with significant human health effects and r e g ional haze

. Additionally , NO x combines with v olatile organic compounds (V OCs) to for m g round-le v el ozone (smo g) and nitrates that ar e transpor ted and deposited at en vironmentally detr imental le v els in par ts of the countr y . In the United States, the electr ic po w er industr y accounts for nearly 70 per cent of total ann ual SO 2 emissions and slightly mor e than 20 per cent of total ann ual NO x emissions. The Acid Rain Pro g ram w as cr eated to implement Title IV of the 1990 Clean Air Act Amendments. The pur pose of Title IV is to r educe the adv er se effects of acid deposition through r eductions in ann ual emissions of SO 2 and NO x b y10 million tons and b y2 million tons belo w projected le v els, r espectiv ely

. Since the star t of the Acid Rain Pro g ram in 1995, the lo w er SO 2 and NO x emission le v els from the po w er sector ha v e contr ib uted to significant air quality and en vironmental and human health impro v ements. The 2004 compliance y ear mark ed the 10th y ear of the prog ram. Dur ing that per iod, the Acid Rain Pro g ram has:
• Reduced SO 2 emissions b yo v er 5 million tons from 1990 le v els, or about 34 per cent of total emissions from the po w er sector
. Compar ed to 1980 le v els, SO 2 emissions from po w er plants ha v e dropped b y7 million tons, or mor e than 40 per cent.
• Cut NO x emissions b yabout 3 million tons from 1990 le v els, so that emissions in 2004 w e r e less than half the le v el anticipated without the pro g ram. Other effor ts, such as the NO x Budget T

rading Pro g ram in the easter n United States, also contr ib uted significantly to this r eduction.
• Led to significant cuts in acid deposition, including r eductions in sulf ate deposition of about 36 per cent in some r e g ions of the United States and impro v ements in en vironmental indicator s, such as fe w er acidic lak es. • Pro vided the most complete and accurate emission data e v er de v eloped under a federal air pollution control pro g ram and made that data a v ailab le and accessib le b yusing compr ehensiv e electronic data r epor ting and W eb-based tools for agencies, r esear cher s, affected sour ces, and the pub lic

. • Ser v ed as a leader in deliv e r ing e-go v e r n ment, automating administrativ e processes, r educing paper use , and pro viding online systems for doing b usiness with EP A.
• Resulted in nearly 100 per cent compliance through r igorous emissions monitor ing, allo w ance tracking, and an automatic , 

## Acid Rain Progr am 1995–2005: From Gr and P olicy Experiment to Demonstr at ed Results Congr ess cr eat ed the Acid Rain Pr ogr am’s SO 2 emissions cap-and-tr ade ap pr oach in 1990 amid uncer t ainty that the innovative, mar ket-based contr ol pr ogr am would wor k

. Since the pr ogr am’s implement ation, air pollution contr ol e xper ts fr om a wide r ange of per spectives agr ee that it is one of the most successful envir onment al pr ogr ams in U .S. histor y . The pr ogr am ser ves as a model f or a new gener ation of r egional and national contr ol pr ogr ams, such as the 2005 Clean Air Int er st at e Rule (C AIR). A 2005 study estimat es that in 2010, the Acid Rain Pr ogr am’s annual benef

its will be ap pr oximat ely $122 billion (2000$), at an annual cost of about $3 billion—a 40-to-1 benef it-to-cost r atio

.Acid Rain Pr ogr am, 2004 Pr ogr ess Repor t ✧ 3 easily under stood penalty system for noncompliance

. Flexibility in compliance strateg ies r educed implementation costs. Building on the Acid Rain Pr o g ram model, EP A pr

om ulgated the Clean Air Inter state Rule (C AIR) in March 2005, to address transpor t of fine par ticles and ozone in the easter n United States, the Clean Air Mercury Rule (C AMR) to reduce nationwide mercury emissions fr om po w

er plants, and the Clean Air Visibility Rule (C A VR) to impr o

v

e visibility in national parks and wilder ness areas. 

# Origins of the Acid Rain Pr ogr am Acid deposition, mor e commonly kno wn as acid rain, occur s when emissions of SO 2 and NO x r eact with w ater , o xygen, and o xidants in the atmospher e to for m v a r ious acidic compounds. Pr e v ailing winds transpor t the acidic compounds hundr eds of miles, often across state and national bor der s, wher e they impair air quality and damage pub lic health, acidify lak es and str eams, har m sensitiv e for est and coastal ecosystems, deg rade visibility , and accelerate the deca y of b uilding mater ials. The Acid Rain Pro g ram, estab lished under Title IV of the 1990 Clean Air Act Amendments, r equir es major r eductions of SO 2 and NO x emissions from the electr ic po w er industr y . The SO 2 pro g ram sets a per manent cap on the total amount of SO 2 that ma y be emitted b yelectr ic po w e r plants in the contiguous United power plants r egulated under the Acid Rain Pro g ram to select their own methods of compliance . Cur r ently , one allowance provides a limited author ization to emit one ton of SO 2 . The Clean Air Act allocated allowances to r egulated units based on histor ic fuel consumption and specific emission rates pr ior to the star t of the pro g ram. The total allowances allocated for each year equal the SO 2 emissions cap

. The pro g ram encouraged early r eductions b yallowing sour ces to bank un used allowances in one year and use them in a later year . The pro g ram uses a mor e traditional approach to achie v e NO x emission r eductions. Rate-based limits apply to most of the coal-fir ed electr ic utility boiler s subject to the Acid Rain Pro g ram. The prog ram does not estab lish a cap on NO x emissions;
States. The pro g ram is phased in, Figure 1

. Tr ends in Electricity Gener ation and Emissions from with the 2010 SO 2 cap set at Electric P ower Sourcesabout one-half of the 1980 emis40 % sions from the po w er sector
. As seen in Figur e 1, emissions 30 % of both SO 2 and NO x ha v e f allen 20 % significantly at the same time as 10 % comb ustion of fossil fuel (coal, oil, or natural gas), measur ed as 0% “heat input, ” for electr icity gener-

- 10% ation, has incr eased. The incr ease in electr icity generation has not

- 20%

Heat Input SO Emissions

2 Electricity Net Generation Average Retail Price of Electricity N O Emissions

xPercent Change

only been achie v ed at lo w e r emission le v els, it has occur r e d while the r eal r etail price of electr

icity has f allen. Using a mark et-based cap and trade mechanism to r educe SO 2 emissions allows flexibility for individual fossil fuel-b ur ning units at electr ic - 30%

- 40%

- 50% 1990 1995 1996 19 97 1998 1 999 2 000 2001 200 2 2 003 20 04 Year
Sources: EPA (heat input and emissions) and Ener gy Inf ormation Administr ation (electricity gener ation and price values). Note: Heat input and emissions dat a r e f lect Acid Rain Pr ogr am units. Gener ation r e f lects all f ossil fuel-f ir ed electricity -only plants in the Unit ed St at es. Ret ail price r e f lects full national values f o r the electricity -gener ating sector

.4 ✧ Acid Rain Pr ogr am, 2004 Pr ogr ess Repor t



## SO 2 

## Emission Reductions from Acid Rain Progr am Sources: A Decade of Cost-Ef f

ective Progr ess In 1995, the f i r st year of implement ation, SO 2 emissions decr eased by 24 percent—nearly 4 million tons—fr om 1990 levels. During the past decade, SO 2 emissions dr op ped an additional 13 percent fr om 1995 levels despit e a 20 percent incr ease in utilization (based on heat input). In 2004, SO 2 emissions fr om all Acid Rain Pr ogr am units tot aled 10.3 million tons, a 34 percent decr ease fr om 1990 levels (15.7 million tons). Until SO 2 allowance prices began to incr ease in 2004 in anticipation of EPA ’ s 2005 Clean Air Int er st at e Rule (C AIR), allowance prices gener ally r emained under $200/ton, well below e xpect ed contr ol costs f or the pr ogr am. instead, it is designed to achie v e a 2 million ton r eduction from projected 2000 NO x emission le v els without implementation of Title IV

. The Acid Rain Pro g ram is composed of tw o phases for SO 2 and NO x . Phase I applied pr imar ily to the largest coal-fir ed electric generation sour ces from 1995 through 1999 for SO 2 and from 1996 through 1999 for NO x . Phase II for both pollutants began in 2000. In 2004, the SO 2 Phase II r equir ements applied to 3,391 operating units; the Phase II NO x r equir ements applied to 989 operating units that b u r ned coal from 1990 to 1995. 

# SO 2 

# Emission Reductions
Electr ic po w er generation is b yf ar the largest single sour ce of SO 2 emissions in the United States, accounting for nearly 70 per cent of total SO 2 emissions nationwide

. 1 In 2004, 3,391 operating units w e re subject to the SO 2 pr o

visions of the Acid Rain Pr o g ram. As sho wn in Figure 2, Acid Rain Pr o g ram sources ha v

e reduced annual SO 2 emissions b y

40 percent compared to 1980 lev els and 34 percent compared to 1990 lev els. Reductions in SO 2 emissions fr om other sources not affected b y

the Acid Rain Pr o g ram, including industr ial and commercial boiler s and the metals and refining industr ies, and use of cleaner fuels in residential and commercial b u r ner s, ha v

e also contr ib uted to an ev en g reater decline (45 percent) in annual SO 2 emissions fr om all sources since 1980 (see www .epa.go v/air trends). F or 2004, EP A allocated a total of 9.5 million SO 2 allo w

ances under the Acid Rain Pr o g ram. Adding these allo w

ances to the 7.6 million un used allo w

ances car r ied o v

er (or bank ed) fr om pr ior y ear s, ther e w e r

e 17.1 million allo w

ances a v

ailab le for use in 2004. Sour ces emitted 10.3 million tons of SO 2 in 2004, some what mor e than the allo w

ances allocated for the y ear b u t f ar less than the total allo w

a

b le le v

el (see Figur e 3). 2 The n umber of bank ed allo w ances dropped from 7.58 million a

v ailab le for 2004 compliance , to 6.86 million a v ailab le for compliance in 2005 and futur e y ear s. This r eduction amounts to 9.5 per cent of the total bank. Ov er time , the bank is expected to contin ue to be depleted as sour ces use bank ed allo w ances to comply with the stringent Phase II r equir ements. In 2010, the ann ual total n umber of allo w ances allocated drops to 8.95 million (about half of the emissions from the po w er industr y in 1980) and r emains statutor ily fix ed at that ann ual le v el per manently

. Figur e 4 explains in mor e detail the or

ig in of the allo w ances that w e r e a v ailab le for use in 2004, and Figur e 9 (on page 8) sho ws ho w those allo w ances w e r e used.

1 National Emission In v entor y 2002: www .epa.go v/ttn/chief/tr ends/index.html.

2 Detailed emissions data for Acid Rain Pro g ram sour ces ar e a v ailab le on the Data and Maps por tion of EP A's Clean Air Mark ets W eb site at www .epa.go v/air mark ets.Acid Rain Pr ogr am, 2004 Pr ogr ess Repor t ✧ 5Emissions (million tons)Emissions (million tons) Figure 2: SO 2 Emissions under the Acid Rain Progr am
20 18 16
14
12
10 8 6
4
2
0 9.4 9.3 8.7

5.3 5.4 5.5 5.3 4.9 16. 1 17.3 15.7

11 .9 12.5 13.0 13. 1 12.5 11 .2 10.6 10.2 10.6 10.3 Phase I Sources Phase II Sources All Sources Allowances allocat ed f o r that year

1980 1985 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: EPA Y ear Figure 3: SO 2 Emissions and the Allowance Bank , 1995–2004

25

20

15

10

5

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 8.7 11 .7 13.5 15.0 16.6 21 .6 19.9 18.8 18.2 17. 1 Allowances Allocat ed that Y ear Unused Allowances fr om Pr evious Y ear (bank) Actual Emissions fr om af f ect ed sources

Source: EPA Y ear
The states with the highest-emitting sour ces in 1990 ha v e seen the g r eatest SO 2 r eductions dur ing the Acid Rain Pro g ram. Most of these states ar e upwind of the ar eas the Acid Rain Pro g ram was designed to protect, and r eductions ha v e r esulted in impor tant en vironmental and health benefits ov er a large r e g ional scale (see Figur e 5 on page 6). In addition, the states that r educed emission from 1990 to 2004 had total ann ual r eductions of approximately 5.9 million tons, while the states that had incr eased emissions—largely attr ib utab le to g rowth and not incr eases in emission Figure 4: Origin of 2004 Allowable SO 2 Emission Levels

T

ype of Allowance Allocation Number of SO 2 Allowances Explanation of Allowance Allocation T ype Initial Allocation 9, 191 ,897 Initial allocation is the number of allowances gr ant ed to units* based on the pr oductof their historic utilization and emission r a t es specif ied in the Clean Air Act. Allowance Auction 250,000 The allowance Auction pr ovides allowances to the mar ket that wer e set aside in a Special Allowance Reser ve when the initial allowance allocation was made. Opt-in Allowances 99, 188 Opt-in allowances ar e pr ovided to units ent ering the pr ogr am volunt arily . Ther e wer e 11 opt-in units in 2004. T

o t al 2004 Allocation 9,541 ,085

To t a l Banked Allowances 7,574,959 Banked allowances ar e those allowances accrued in a unit’s account fr om pr evious year s, which can be used for compliance in 2004 or any futur e year . T

o t al 2004 Allowable Emissions 17, 116,044

Source: EPA *Note: In this r epor t, the t erm “unit” means a f ossil fuel-f ir ed combustor that ser ves a gener ator that pr ovides electricity f or sale. The vast majority of SO 2 emissions af f ect ed by the pr ogr am come fr om coal-f ir ed gener ation units, but oil and natur al gas units ar e also included in the pr ogr am.6 ✧ Acid Rain Pr ogr am, 2004 Pr ogr ess Repor t

rates—had much smaller ann ual incr eases (a total incr ease of approximately 430,000 tons). F or 32 states and the Distr ict of Columbia, ann ual SO 2 emissions in 2004 we r e lower than emissions in 1990. Among these states, 13 decr eased their ann ual emissions b y mor e than 100,000 tons between 1990 and 2004: Alabama, Flor ida, Georg ia, Illinois, Indiana, K entucky , Massachusetts, Missour i, Ne w Y

ork, Ohio , P ennsylvania, T

ennessee , and W est Virg inia. The states with the g r eatest r eductions we r e in the Midwest and include Ohio (1.1 million tons r educed), Illinois, Indiana, and Missour i, each of which r educed ov er 500,000 tons. Figur e 5: St at e-by -St at e SO 2 Emissions Levels, 1990–2004

Emissions in 1990 Phase I Average 1995–1999 Emissions in 2004 Source: EPA

Scale: L a r gest bar equals 2.2 million ton s o f emissions i n Ohi o , 1990 

# SO 2 

# Allowance Mar ket
The allo w ance trading mechanism enab les Acid Rain Pro g ram sour ces to pur sue a v a riety of compliance options, while the cap on SO 2 emissions ensur es that r eductions ar e made and maintained o v er time

. Some sour ces ha v e opted to r educe their SO 2 emissions belo w the le v el of their allo w ance allocation in or der to bank their allo w ances for use in futur e y ear s or to sell them. Other sour ces ha v e been ab le to postpone or r educe expenditur es for control b ypur chasing Figure 6: SO 2 Allowance Prices

$800 $700 $600 $500 $400 $300 $200 $100

$0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Year Source: Cantor Fitzger ald allo w ances from sour ces that controlled belo w their allo w ance allocation le v el. The allo w ance pr

ices end up r eflecting these flexib le compliance decisions. Economists r efer to this as the marg inal cost of compliance—the cost of r educing the next ton of SO 2 emitted from the po w er sector
. The pr ice of an allo w ance incr eased shar ply dur ing 2004, ending the y ear at about $700 after beg inning the y ear at about $215 (see Figur e 6). The incr ease pr imar ily occur r ed because of EP A’s Clean Air Inter state Rule (C AIR). C AIR r equir es fur ther SO 2 r eductions from sour ces in many easter n U

. S

. states beg inning in 2010, and the mark et has alr eady begun to f actor the marg inal cost of futur e compliance with C AIR and the futur e v alue of bank ed allo w ances toda y

. In 2004, nearly 20,000 pr ivate allowance transfer s affecting roughly 15.3 million allowances (of past, cur r ent, and futur e vintages) we r e r ecorded in the EP A Allowance T racking System (A TS). Of the allowances transfer r ed, 7.5 million (49 per cent) we r e transfer r ed in economically significantNominal PriceAcid Rain Pr ogr am, 2004 Pr ogr ess Repor t ✧ 7
transactions (i.e ., between economically unr elated par ties). The major ity of the allowances transfer r e d in economically significant transactions we r e acquir ed b y power companies. Figur e 7 (on page 8) shows the ann ual volume of SO 2 allowances transfer r ed under the Acid Rain Pro g ram (excluding allocations, r etir ements, and other transfer s b yEP A) since official r ecording of transfer s began in 1994. Figur e 8 (on page 8) sho ws the cum ulativ e v olume of SO 2 allo w ances transfer r ed under the Acid Rain Pro g ram. The figur e differ entiates betw een allo w ances transfer r ed in pr iv ate transactions and those ann ually allocated and transfer r ed to sour ces’ accounts b yEP A. Nearly 270 million allo w ances ha v e been transfer r ed since 1994, with about 68 per cent of those transfer s submitted b yauthor ized account r epr esentativ es. In December 2001, par ties began to use a system de v eloped b yEP A to allo w transfer s to occur online

. In 2004, account holder s r e g ister ed about 93 per cent of all pr iv ate allo w ance transfer s through EP A’s online transfer system. 3

3 All official allo w ance transactions ar e posted and updated daily on www .epa.go v/air mark ets. 

## Then and Now—The Evolving Mar ket f or Acid Rain Progr am SO 2 

## Allowances Since the inception of the Acid Rain Pr ogr am, tr ader s in utilities and br oker ages have seen consider able developments in the SO 2 allowance mar ket. Changes in fuel sup ply , tr ading pr ocesses, electr onic dat a tr ansf er , mar ket par ticipants, economic and business conditions, weather , EP A r egulations and settlements, and t ax law s have all inf luenced the mar ket’s f i r st decade. Inf ormal discussions with mar ket par ticipants pr ovided anecdot al evidence of sever al changes, including: ✧ Early tr ades r equir ed consider able legal advice, cost as much as $5 per ton in br oker age f ees, and took months to complet e. With st andardized tr ansaction agr eements and contr act f orms, one br oker not ed that tr ansaction f ees have dr op ped to $0.50 per ton and tr ades typically t a ke one or two weeks. ✧ In 1995, utilities t ended to engage in simple tr ades to cover their needs. By 2000, ener gy mar ket er s had joined in speculative tr ading and intr oduced instruments like options and vint age year swaps. In 2002, some tr ader s obser ve that r eaction to the dissolution of Enr on t empor arily r e ver sed the tr end toward a lar ger , mor e comple x mar ket. Recently , banks and hedge funds have br ought back speculative tr ading, and two tr ading sy st ems (the New Y o r k Mercantile Exchange [NYMEX] and the Chicago Climat e Exchange [CCX]) have cr eat ed futur es mar kets f or allowances. ✧ T r ader s not e that impr oved access to allowance and emission dat a, such as thr ough EPA ’s Dat a and Maps W eb sit e, has pr ovided incr easingly accessible, up-to-dat e information, pr oviding a f irm f oundation f or well-inf ormed allowance tr ansactions. ✧ Initially , utilities banked allowances and prices f ell based on the r elatively low -cost compliance option of using low -sulfur coal fr om W yoming’s P owder River Basin. The additional r eductions r equir ed under C AIR have alr eady begun to inf luence mar ket prices f or SO 2 allowances.8 ✧ Acid Rain Pr ogr am, 2004 Pr ogr ess Repor t
Figure 7 : SO 2 Allowances Tr ansf erred under the Figure 8: Cumulative SO 2 Allowances Acid Rain Progr am Tr ansf erred (through 2004)

15 20 25 30Millions of Allowances

10 250
200
150
100
50 5
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 0 Between Economically Unrelated Organizations Between Economically Related Organizations

9.2 16.7

8.2 15.2 13.5 18.7 25.0 22.5 21.4

16.5 15.3Millions of Allowances 300

0 EPA Transfers to Account Private Transactions

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Year Source: EPA Year Source: EPA 

# SO 2 

# Pr ogr am Compliance A total of nearly 10.3 million allo w ances w e r e does not hold enough allo w ances in its unit deducted from sour ces’ accounts in 2004 to co v e r account to co v er its ann ual SO 2 emissions has emissions. Figur e 9 displa ys these allo w ance deduc- “excess emissions” and m ust pa y an automatic tions, as w ell as the r emaining bank ed allo w ances penalty

. Title IV set a penalty of $2,000 per ton in from 1995 through 2004. 1990, which has been adjusted ann ually for inflaAs in pr e vious y ear s, compliance with the Acid tion; the 2004 penalty w as $2,963 per ton. The Rain Pro g ram contin ues to be extraor dinar ily o wner s of the four units out of compliance in high—nearly 100 per cent. In 2004, four units out 2004 w e r e assessed a penalty of appro ximately $1.4 of 3,391 w e r e out of compliance

. Asour ce that million for emitting 465 tons of SO 2 in excess of the allo w ances held in their accounts. Figure 9: SO 2 Allowance Reconciliation Summar y, 2004

T

o t al Allowances Held (1995-2004 vint ages) 4 17, 116,044 Unit Accounts 13,610,501 Gener al Accounts 5 3,505,543 Allowances Deducted f or Emissions 6 P enalty Allowance Deductions (2005 Vint age) 10,259,771 465 Banked Allowances 6,856,273 Unit Accounts 3,350,730 Gener al Accounts 5 3,505,543 Source: EPA

4 As of Mar ch 1, 2004, the Allo w ance T ransfer Deadline , the point in time at which unit accounts ar e frozen and after which no tr ansfer s of 1995 through 2004 allo w ances will be r ecor ded. The fr eeze on these accounts is r emo v ed when ann ual r econciliation is complete

. T h e total held in the A TS accounts equals the n umber of 2004 allo w ances allocated (see Figur e 4 on page 5) plus the n umber of bank ed allo w ances.
5 General accounts can be estab lished in the A TS b yan y utility , individual, or other organization.

6 Includes 212 allo w ances deducted from opt-in sour ces for r educed utilization.Acid Rain Pr ogr am, 2004 Pr ogr ess Repor t ✧ 9 

# NO x 

# Emission Reductions
Title IV of the 1990 Clean Air Act Amendments r equir es NO x emission r eductions for cer tain coal-fir ed units. Unlik e the SO 2 prog ram, Cong r ess applied rate-based emission limits based on a unit’ s boiler type to achie v e NO x r eductions (see Figur e 10). The NO x emission rate is expr essed as pounds per unit of heat input (lbs/mmBtu) to the boiler

. Owner s can meet the NO x limits for each individual unit or meet the a

v erage of g roups of units. The NO x pro g ram seeks to attain a 2 million ton ann ual r eduction from all Acid Rain Pro g ram sour ces r elativ e to the NO x emission le v els that we r e projected to occur in 2000 (8.1 million tons) absent the Acid Rain Pro g ram. This goal was fir st r ealized in 2000, and has been met e v er y year ther eafter , including 2004. Figur e 11 (on page 10) shows that NO x emissions from all Acid Rain Pro g ram sour ces we r e 3.8 million tons in 2004. This le v el is mor e than 4 million tons less than the projected le v el in 2000 without the Acid Rain Pro g ram, or mor e than doub le the Title IV NO x emissions r eduction objectiv e . These r eductions ha v e been achie v ed while the amount of fuel b u r ned to produce electr icity , as measur ed b yheat input, has incr eased 34 per cent since 1990. While the Acid Rain Pro g ram was r esponsib le for a large por tion of these ann ual NO x r eductions, other prog rams, such as the Ozone T ranspor t Commission (O TC) NO x Budget T rading Pro g ram and the EP A’ s NO x State Implementation Plan (SIP) Call, both of which ar e seasonal, r e g ional NO x prog rams, also contr ib uted significantly to the NO x r eductions achie v ed b y emitting sour ces in 2004. As with SO 2 , the states with the highest NO x emitting sour ces in 1990 tended to see the g r eatest power plant NO x emission r eductions (see Figur e 12 on page 10). The sum of r eductions in the 38 states and the Distr ict of Columbia. that had lowe r ann ual NO x emissions in 2004 than in 1990 wa s approximately 2.7 million tons, while the sum of incr eases in the 10 states that had higher ann ual NO x emissions in 2004 than in 1990 was much smaller , less than 63,000 tons. Eight of the 11 states with NO x emission decr eases of mor e than 100,000 tons we r e in the Ohio Riv er Basin. Figure 10: Number of NO x -Af f ected T itle IV Units by Boiler T ype Coal-Fired Boiler T y pe T itle IV St andard Emission Limit

(lb/mmBtu) Number of Units

Phase I Gr oup 1 T angentially -f ir ed 0.45 132 Phase I Gr oup 1 Dr y Bottom, W all-f ir ed 0.50 116 Phase II Gr oup 1 T angentially -f ir ed 0.40 301 Phase II Gr oup 1 Dr y Bottom, W all-f ir ed 0.46 298 Cell Burner s 0.68 37 Cyclones >155 MW 0.86 54 W et Bottom >65 MW 0.84 24 Ve r tically -f ir ed 0.80 27 To t a l 98910 ✧ Acid Rain Pr ogr am, 2004 Pr ogr ess Repor tNOxemissions (millions) Figure 11: NO x Emission Tr ends f or Acid Rain Progr am Units 1990 to 2004

7 6.7 6.1 5.9 6.0 6.0 6 5.5 5.4 5.4 5.5 5.3 5.5 NO x Program affected sources Title IV sources not affected by NO x Program

4.8 5.1 5 4.5 4.7
4.1 4.5 4.0 4.2 4 3.8 3.8 3 2 1 0 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 3.4

Year Source: EPA
Note: The shar p decline in emissions obser ved since 1999 r e f lects not only the Phase II Acid Rain Pr ogr am NO x r equir ements, but also seasonal r eductions fr om May to Sept ember that began in nine nor theastern U .S. st at es and D .C. in 1999 and 11 additional st at es under the NO x SIP Call beginning in 2004 (see the shaded st at es in Figur e 12). New Hampshir e par ticipat ed in the nor theast ern U .S. pr ogr am thr ough 2002, but does not par ticipat e in the NO x SIP Call pr ogr am. Figure 12: St ate-by -St ate NO x Emission Levels f or All Acid Rain Progr am Sources 1990 to 2004

Scale: L a r gest bar equals 500,000 ton s o f emissions i n Ohi o , 1990 Emissions in 1990 Phase I Average 1996–1999 Emissions in 2004
2004 NO x SIP Call States Source: EPA



## Sources Achieved 100 P ercent NO x 

## Compliance in 2004, Using a Variety of NO x 

## Compliance Plan Options St andard Limit ation. A unit with a st andard limit meets the ap plicable individual NO x limit pr escribed f or its boiler type under 40 CFR 76.5, 76.6, or 76.7 (116 units used this option in 2004). Early Election. Phase II Gr oup 1 NO x af f ect ed units could meet a less stringent Phase I NO x limit beginning in 1997, thr ee year s bef or e 2000, when they would normally become subject to an Acid Rain NO x limit. In r eturn f or accepting a NO x limit thr ee year s earlier than would normally be r equir ed, an early election unit does not become subject to the mor e stringent Phase II NO x limit until 2008 (273 units used this option in 2004). Emissions A v

eraging. Many companies have their units meet their NO x emission r eduction r equir ements by choosing to become subject to a gr oup NO x limit, r ather than by meeting individual NO x limits f or each unit. The gr oup limit is est ablished at the end of each calendar year, and the gr oup r a t e f or the units must be less than or equal to the Btu-weight ed gr oup r a t e units would have had if each had emitt ed at their st andard limit r a t e (620 units used this option in 2004). Alternative Emission Limit ation (AEL). A utility can petition f or a less stringent AEL if it pr operly inst alls and oper at es the NO x emissions r eduction t echnology pr escribed f or that boiler , but is unable to meet its st andard limit. EPA det ermines whether an AEL is warr ant ed based on analy ses of emission dat a and inf ormation about the NO x contr ol equipment (21 units used this option in 2004).
Note: Unit counts e xclude units with a Retir ed Unit Exemption. Also , some units used multiple compliance options. T en units under an emissions aver aging plan also wer e cover ed by an AEL, and 31 units wer e under both an emissions aver aging and early election plan.Acid Rain Pr ogr am, 2004 Pr ogr ess Repor t ✧ 11


## Then and Now: Advances in NO x 

## Control Since Congr ess enact ed the Acid Rain Pr ogr am in 1990, the electric power industr y has made signif icant innovations and advances in r educing NO x emissions. The Acid Rain Pr ogr am ser ved as the impetus f or some of these changes, but other pr ogr ams, such as EPA ’s 1998 NO x SIP Call, have led to many of the advances. Some highlights include: ✧ Boiler optimization. Boiler optimization modeling sy st ems manipulat e multiple contr ol par amet er s simult aneously in order to meet a unit’s specif ic oper ational needs and emission r eduction goals. Sources have shown that optimization is capable of r educing NO x emissions by between 13 and 24 percent, while maint aining or incr easing boiler ef f

iciency and signif icantly r educing fuel costs. In addition, optimization and NO x r eductions in units with selective cat alytic r eduction sy st ems (SCRs) can lower ammonia usage and e x t end cat aly st lif e, r esulting in lower oper ational costs. ✧ Advanced combustion contr ols. The design of low -NO x burner (LNB) emission contr ol t echnologies has impr oved signif icantly since 1995, leading to lower NO x emission r a t es. The aver age NO x emission r a t e fr om boiler s utilizing LNB t echnology in 2003 was between 35 and 60 percent lower than the aver age emission r a t e fr om LNB units in 1995. ✧ Ap plication of SCR to coal-f ir ed boiler s. In 1995, ther e wer e signif icant doubts in the electric power industr y about the ap plication of SCR t echnology to U .S. coal-f ir ed boiler s, par ticularly because of high-sulfur fuel int er f ering with cat aly st per f ormance. With the r eductions r equir ed under the 1998 NO x SIP Call, the industr y has moved to r esolve those issues, and by the end of 2004, over 130 coal-f ir ed boiler s in the Unit ed St at es had inst alled SCRs (primarily f or NO x SIP Call compliance) and wer e able to achieve sust ained emission r a t es as low as 0.03 lbs/mmBtu.



# Emissions Monitoring and Repor ting
The Acid Rain Pro g ram r equir es pro g ram completeness, high quality , and integ r ity of the par ticipants to measur e , r ecor d, and r epor t emis- emission data. CEMS and appro v ed alter nativ es ar e sions using contin uous emission monitor ing sys- a cor ner stone of the Acid Rain Pro g ram’s accounttems (CEMS) or an appro v ed alter nativ e measur e- ability and transpar ency . ment method. Since the pro g ram’s inception in The emission monitor ing r equir ements ar e 1995, emissions ha v e been contin uously monitor ed found in 40 CFR P a r t75. In addition to the Acid and r epor ted b ysour ces, v e r ified and r ecor ded b y Rain Pro g ram, these provisions ar e also r equir ed for EP A, and pro vided to the pub lic through EP A’s par ticipation in the NO x Budget T rading Pro g ram, W eb site

. All affected sour ces r epor t hourly emis- a NO x trading pro g ram used b y man y easter n states sion data in electronic r epor ts (submitted quar ter- in r esponse to EP A’ s 1998 NO x SIP Call, and will ly), and EP A conducts automated softw ar e audits be used in the futur e to implement two ne w r ules that perfor m r igorous checks to ensur e the promulgated in 2005, C AIR and C AMR.12 ✧ Acid Rain Pr ogr am, 2004 Pr ogr ess Repor t



## Advances in Emissions and Allowance Tr ansf er Repor ting ✧ At the st ar t of the Acid Rain Pr ogr am, sources used a combination of paper f o rms and f lop py disks. The pr ogr am r equir ed submission of emission dat a on f lop py disks, and other source inf ormation management activities, such as monitoring plan information, allowance tr ansf er , and cer tif icat es of r epr esent ation, wer e all originally addr essed thr ough paper f orms. ✧ This ap pr oach r equir ed manual r e view and entr y for paper submissions and individual f ile uploads f or emission dat a. EPA feedback on submission issues involved individual lett er s to sources. ✧ Over time, EPA moved to electr onic tr ansf er of inf ormation:

- Monitoring plans moved primarily to electr onic submission as par t of the quar t e rly r epor ting pr ocess. EPA r eleased Monitoring Dat a Checking (MDC) sof twar e that allowed sources to ent er , analyze, print, and e xpor t electr onic monitoring plans. EPA uses MDC to conduct electr onic audits of submitt als and pr ovide automat ed f eedback to sources.

- Thr ough the Emissions T r acking Sy st em f ile tr ansf er pr otocol (ET S-FTP), EPA moved to dir ect, secur e electr onic tr ansf er of quar t erly r epor ts fr om a source’s comput er to EPA ’s mainfr ame sy st em. EPA then was able to pr ovide inst ant automat ed f eedback to sources concerning issues with submitt ed emission dat a.

- In 2001 , an Online Allowance T r acking Sy st em enabled dir ect Int ernet r ecording f or allowance tr ades. ✧ Now the Online Allowance T r acking Sy st em is int egr at ed with an enhanced Clean Air Mar kets Division Business Sy st em (CBS) and of f e r s online allowance tr ading as well as online options f or other account and source inf ormation management activities. ✧ Public access to inf ormation has advanced dr amatically . Early access was thr ough paper compliance r epor ts, and then individual unit dat a f iles that wer e dif f

i

cult to use. Now , det ailed unit, f acility , st at e, and national emissions and other dat a f or ARP sources is available fr om EP A ’s Dat a and Maps W eb sit e (http://cfpub .epa.gov/gdm/). This sit e pr ovides a combination of easy to access “quick” r e por ts and highly f l e xible, custom “quer y” r epor ts. ✧ EPA is in the pr ocess of designing a compr ehensive Emissions Collection and Monitoring Plan Sy st em (ECMPS) to cover all aspects of secur e r epor ting of emissions, monitoring plans, and quality assurance dat a.Acid Rain Pr ogr am, 2004 Pr ogr ess Repor t ✧ 13 

# St atus and T r ends in Air Quality , Acid Deposition, and Ecological Ef f

ects
The emission r eductions achie v ed under the fication of fr esh w ater lak es and str eams, impro v eAcid Rain Pro g ram ha v e led to impor tant en vi- ments in visibility , and r educed r isk to for ests, ronmental and pub lic health benefits. These mater ials, and str uctur es. Figur e 13 sho ws the include impro v ements in air quality with signifi- r e g ional changes in man y of these k ey v a r iab les cant benefits to human health, r eductions in acid link ed to the Acid Rain Pro g ram’s SO 2 and NO x deposition, the beg innings of r eco v e r yfrom acidi- emission r eductions. Figure 13: Regional Changes in Air Quality and Deposition of Sulfur and Nitrogen (1989 to 1991 ver sus 2002 to 2004)

Measur ement Unit Region Aver age* P ercent Change** 1989–1991 2002–2004 W et sulf at e deposition kg/ha Mid- Atlantic Midwest Nor theast Southeast 27 23 23 18 20 16 14 15 -24 -32 -36 -19 W et sulf at e concentr ation mg/L Mid- Atlantic Midwest Nor theast Southeast 2.4 2.3 1. 9 1. 3 1. 6 1. 5 1. 2 1. 0 -33 -32 -35 -23 Ambient sulfur dioxide concentr ation μ g/m 3 Mid- Atlantic Midwest Nor theast Southeast 13 10 6.8 5.2 7. 9 5.7 3. 1 3.2 -37 -46 -54 -39 Ambient sulf at e concentr ation μ g/m 3 Mid- Atlantic Midwest Nor theast Southeast 6.4 5.6 3.9 5.4 4.6 3.8 2.6 4.0 -27 -33 -33 -26 W et inor ganic nitr ogen deposition kg/ha Mid- Atlantic Midwest Nor theast Southeast 5.9 6.0 5.3 4.3 5.5 5.7 4.5 4.3 -8 -4 -16

0 W et nitr at e concentr ation mg/L Mid- Atlantic Midwest Nor theast Southeast 1. 5 1. 4 1. 3 0.8 1. 1 1. 3 1. 0 0.7 -28 -12 -22 -9 Ambient nitr at e concentr ation μ g/m 3 Mid- Atlantic Midwest Nor theast Southeast 0.9 2. 1 0.4 0.6 0.9 1. 8 0.5 0.7 -3 -11 27 14 T

o t al ambient nitr at e concentr ation (nitr at e + nitric acid) μ g/m 3 Mid- Atlantic Midwest Nor theast Southeast 3.5 4.0 2.0 2.2 2.9 3.5 1. 8 2.0 -15 -13 -7 -6
Source: C A S TNET and NADP/NTN *Measur ement dat a ar e r epor t ed as two signif icant digits and r e f lect an updat ed r ounding convention fr om last year’s r epor t. **P ercent change is estimat ed fr om r aw measur ement dat a, not r ounded; some of the measur ement dat a used to calculat e percent age s may be at or below det ection limits.14 ✧ Acid Rain Pr ogr am, 2004 Pr ogr ess Repor t 

# Under st anding the Monitoring Networ ks
T

o e v aluate the impact of emission r eductions on the en vironment, scientists and policymak er s use data collected from long-ter m national monitor ing netw orks such as the Clean Air Status and T

r ends Netw ork (C ASTNET) and the National Atmospher ic Deposition Pro g ram/National T r ends Netw ork (NADP/NTN). These complementar y , long-ter m monitor ing netw orks pro vide infor mation on a v a r iety of indicator s necessar y for tracking temporal and spatial tr ends in r e g ional air quality and acid deposition (see Figur e 14). C ASTNET provides atmospher ic data on the dr y deposition component of total acid deposition, g round-le v el ozone , and other for ms of atmospheric pollution. Estab lished in 1987, C ASTNET now consists of mor e than 80 sites across the United States. EP A’ s Office of Air and Radiation operates most of the monitor ing stations; the National P ark Ser vice (NPS) funds and operates approximately 30 stations in cooperation with EP A. Man y C ASTNET sites ar e approaching a contin uous 20-year data r ecord, r eflecting EP A’s commitment to longter m en vironmental monitor ing. Pub lic access to C ASTNET data ar e a vailab le through the Clean Air Mark ets W eb site at www .epa.gov/air mark ets. NADP/NTN is a nationwide , long-ter m netw ork tracking the chemistr y of pr ecipitation. NADP/NTN offer s data on h ydr o gen (acidity as pH), sulf ate , nitrate , ammonium, chlor ide , and base cations. The netw ork is a cooperati v

eeffor t in v

olving man y g r oups, including the State Ag r icultural Exper iment Stations, U

. S

. Geolo g ical Sur v

e

y

, U

. S

. Depar tment of Ag r icultur e , EP A, NPS , the National Oceanic and Atmospher ic Administration (NO AA), and other go v

e r nmental and pr

i v

ate entities. NADP/NTN has g r o

wn from 22 stations at the end of 1978 to more than 250 sites spanning the continental United States, Alaska, Puer to Rico , and the Virg in Islands. While C ASTNET pro vides some ambient air quality data, EP A also uses data from other ambient monitor ing netw orks, including the State and Local Air Monitor ing Stations and National Air Monitor ing Stations (SLAMS/NAMS). These netw orks ar e used to document National Ambient Air Quality Standar ds (NAA QS) attainment and sho w tr ends in ambient air quality o v er time

. Figure 14: Air Quality and Acid Deposition Measurements

Chemicals Why are these measured by the networ ks? SO 2 Sulfur Dioxide Indicator of ambient air quality ; measur ed in dr y monitoring networ ks; major pr ecur sor to acid deposition SO 4 2­ Ionic Sulf at es, Par ticulat e Sulf at es Indicator s of ambient air quality and sulfur deposition; r egional tr anspor t; corr elat ed with sulfur dioxide emissions; measur ed in wet and dr y monitoring networ ks NO 3­ Ionic Nitr at es, Par ticulat e Nitr at es Indicator s of ambient air quality and nitr ogen deposition; corr elat ed with NO x emissions; measur ed in wet and dr y monitoring networ ks HNO 3 Nitric Acid Str ong acidic compound; main component of dr y nitr ogen deposition; measur ed in dr y monitoring networ ks NH 4 + Ionic Ammonium, Par ticulat e Ammonium Indicator s of ambient air quality and nitr ogen deposition; associat ed with pr oduction of f ine par ticles; aer osol ammonium is associat ed with sulf at e ion; can play a r ole neutr alizing atmospheric acidic species; measur ed in wet and dr y monitoring networ ks H + Ionic Hydr ogen Indicator of acidity in pr ecipit ation; measur ed in wet deposition monitoring networ ks Ca 2 + Mg 2 + K + Na + Calcium Magnesium P o t assium Sodium These base cations ar e indicator s of the ability to neutr alize acids in pr ecipit ation; also play an impor t ant r ole in plant nutrition and soil pr oductivityAcid Rain Pr ogr am, 2004 Pr ogr ess Repor t ✧ 15 

# Air Quality Data collected fr om monitor ing netw orks sho w that the decline in SO 2 emissions fr om the po w

er industr y has impr o

v

ed air quality

. 7 Based on EP A’

s latest air emissions tr ends data located at www .epa.go v/air tr ends/index.html, the national composite a v

erage of SO 2 annual mean ambient concentrations decr eased 49 per cent betw een 1990 and 2004 as sho wn in Figur e 15. The largest single-y ear r eduction (21 per cent) occur r ed in the fir st y ear of the Acid Rain Pr o g ram, betw een 1994 and 1995. These tr ends ar e consistent with the ambient tr ends obser v ed in the C ASTNET network. Dur ing the late 1990s, following implementation of Phase I of the Acid Rain Pro g ram, dramatic r e g ional improv ements in SO 2 and ambient sulf ate concentrations we r e obser v ed at C ASTNET sites throughout the easter n United States, due to the large r eductions in SO 2 emissions from Acid Rain Pro g ram sour ces. Analyses of r e g ional monitor ing data from C ASTNET show the geo g raphic patter n of SO 2 and airbor ne sulf ate in the easter n United States. Thr ee-year mean ann ual concentrations of SO 2 and sulf ate from C ASTNET long-ter m monitor ing sites ar e compar ed from 1989 through 1991 and 2002 through 2004 in both tab ular for m and g raphically in maps (see Figur e 13 on page 13 and Figur es 16a through 17b on page 16). The map in Figur e 16a sho ws that from 1989 through 1991, pr ior to implementation of Phase I of the Acid Rain Pro g ram, the highest ambient concentrations of SO 2 in the East w e r e obser v e d in w ester n P ennsylv ania and along the Ohio Riv e r V

alley . Figur e 16b indicates a significant decline in those concentrations in nearly all affected ar eas. Befor e the Acid Rain Pro g ram, in 1989 through 1991, the highest ambient sulfate concentrations, g r eater than 7 μg/m 3 , w e r e obser v ed in w ester n P ennsylv ania, along the Ohio Riv er V alley , and in nor ther n Alabama. Most of the easter n United States exper ienced ann ual ambient sulf ate concentrations g r eater than 5 μg/m 3 . Lik e SO 2Concentration, ppm Figure 15: SO 2 Air Quality, 1990–2004 (Based on Annual Arithmetic Aver age) 0.04

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 National St andard

90% of sites ha ve concentr ations below this line

10% of sites ha ve concentr ations below this line Ave r a g e 334 Sit es

0.03

0.02

0.01

0.00

Source: EPA air emission tr ends, www .epa.gov/air tr ends/2005/ econ-emissions.html concentrations, ambient sulf ate concentrations ha v e decr eased since the pro g ram w as implemented, with a v erage concentrations decr easing appro x imately 30 per cent in all r e g ions of the East. Both the size of the affected r e g ion and magnitude of the highest concentrations ha v e dramatically declined, with the largest decr eases obser v ed along the Ohio Riv er V alley (see Figur es 17a and 17b). Although the Acid Rain Pr o g ram has met its NO x r eduction targets, emissions fr om other sour ces (such as motor v ehicles and ag r icultur e) ha v

e led to incr eased ambient nitrate concentration in some ar eas of the countr y (see Figur e 13 on page 13). NO x levels in some ar eas can also be affected b y

emissions transpor ted via air cur r ents o v

er wide r e g ions. 8 In 2004, r educed NO x emissions fr om po w

er plants under the NO x Budget T rading Pr o g ram led to mor e significant r e g ion-specific impr o

v

ements in some indicator s than ha v

e been seen in pr e

vious y ear s. F o r instance , total annual mean ambient nitrate concentrations (nitr ic acid plus par ticulate nitrate) for 2002 thr ough 2004 ha v

e decr eased in the Mid-Atlantic and Midw est b y

about 15 per cent fr om the annual mean concentration in 1989 thr ough 1991 (see Figur es 18a and 18b on page 17). While these impr o

v

ements ma y be par tly attr ib uted to added NO x contr ols installed for compliance with the NO x SIP Call, the findings at this time ar e not conclusi v

e .

7 It should be noted that ther e has not been a violation of the SO 2 standar d at an y of the monitor ing sites since 2000.

8 See the EP A Office of T ranspor tation and Air Quality W eb site at www .epa.go v/otaq for infor mation on r ecent r ules to r educe NO x emissions from mobile sour ces. Additional NO x r eductions ar e occur r ing as a r esult of the NO x Budget T rading Pro g ram. See EP A's August 2005 r epor t, Ev aluating Oz one Control Progr ams in the Easter n United States: Focus on the NO x Budget T r ad ing Progr am , 2004, at www .epa.go v/air tr ends/2005/ozonenbp .pdf , which discusses these NO x r eduction effor ts.16 ✧ Acid Rain Pr ogr am, 2004 Pr ogr ess Repor t
Figure 16a: Annual Mean Ambient Sulfur Figure 16b: Annual Mean Ambient Sulfur Dioxide Concentr ation, 1989 through 1991 Dioxide Concentr ation, 2002 through 2004

SO 2 ( � g/m 3 )

– 0 – 2 – 4 – 6 – 8 – 10 – 12 – 14 – 16 – 18 –> 20 Source: C A S TNET Figure 17a: Annual Mean Ambient Sulf ate Concentr ation, 1989 through 1991 SO 2 ( � g/m 3 )

– 0 – 2 – 4 – 6 – 8 – 10 – 12 – 14 – 16 – 18 –> 20 Source: C A S TNET Figure 17b: Annual Mean Ambient Sulf ate Concentr ation, 2002 through 2004

SO 4 2­ ( � g/m 3 )

– 1
– 2
– 3
– 4
– 5
– 6
– 7
– >8 Source: C A S TNET SO 4 2­ ( g/m 3 ) � – 1

– 2
– 3
– 4
– 5
– 6
– 7
– >8 Source: C A S TNETAcid Rain Pr ogr am, 2004 Pr ogr ess Repor t ✧ 17
Figure 18a: Annual Mean T o t al Ambient Nitr ate Figure 18b: Annual Mean T o t al Ambient Nitr ate Concentr ation, 1989 through 1991 Concentr ation, 2002 through 2004

To t a l N O 3 � ( g/m 3 )

– 0.0

– 1 .0

– 2.0

– 3.0

– 4.0

– 5.0

– >6.0 Source: C A S TNET To t a l N O 3 � ( g/m 3 )

– 0.0

– 1 .0

– 2.0

– 3.0

– 4.0

– 5.0

– >6.0 Source: C A S TNET

The C A S TNET maps in this r epor t r epr esent ambient concentr ations f or the east ern Unit ed St at es only . During the early year s of C A S TNET (1989 to 1991), monitoring cover age was limit ed to the East with only a handful of sit es in the W est, which wer e locat ed primarily in National Par k Ser vice-Class I ar eas. T oday , EPA , together with its par tner s such as NPS, has added many sit es to the networ k , which now consists of mor e than 80 sit es acr oss the countr y . 

# Acid Deposition
NADP/NTN monitor ing data sho w significant impro v ements in some deposition indicator s. F o r example , w et sulf ate deposition—sulf ate that f alls to the ear th through rain, sno w , and fo g—has decr eased since the Acid Rain Pro g ram w as implemented with some of the g r eatest r eductions occur r ing in the Mid-Appalachian r e g ion, including Mar yland, Ne w Y ork, W est Virg inia, Virg inia, and most of P ennsylv ania. W et sulf ate deposition decr eased throughout the early 1990s in m uch of the Ohio Riv er V alley and nor theaster n United States. Other less dramatic r eductions ha v e been obser v ed across m uch of Ne w England, por tions of the souther n Appalachian Mountains and in some ar eas of the Midw est. A v erage decr eases in w e t deposition of sulf ate range from 36 per cent in the Nor theast to 19 per cent in the Southeast (see Figur e 13 on page 13, and Figur es 19a, and 19b on page 18). Since 1991, w et sulf ate concentrations ha v e decr eased significantly as w ell, with a v erage le v els decr easing 35 per cent in the Nor theast, 33 per cent in the Mid-Atlantic , and 32 per cent in the Midw est. A strong cor r elation betw een large scale SO 2 emission r eductions and large r eductions in sulf ate concentrations in pr ecipitation has been noted in the Nor theast, one of the ar eas most affected b yacid deposition. A pr incipal r eason for r educed concentrations of sulf ate in pr ecipitation in the Nor theast is a r eduction in the long-range transpor t of sulf atef

f

f

r r

f

r 1 8 ✧ A c id Rain P r og r a m, 2004 P r og r ess Repor t

f rom em i ss i on sour ces l ocate din t h e Oh io R iv e r V

alley . Th e r eductions in sulf ate documented in the N or t h east , p a r t icu l ar lyac ross N e wEn gl an dan d p o r t ions o f Ne w Y ork, w e r e a l so a ff ecte d b y SO 2 emission r ed uctions in easte r n C ana d a. NADP d ata in d icate t h at simi l ar r ed uctions in pr eci p itation acidity , e x p r esse das h ydro g en ion ( H + ) concentrat ions , occu r r e dconcu r r ently with sulf at e r ed uc
t ions , b ut ha v e not d ecr e ase das d ramatica lly d ue to asi m ul taneous d ec l ine in aci d -neutra l izin g b ase cations , w h ic h act to b uffer acidity

. Re d uctions in nit ro g en d e p osition r eco r d e d since the early 1990s ha v e b een l ess d ramatic t h an
F igure 19a: Annual Mean Wet Sulf at e D eposition 1989 through 1991 th ose f or su lf u r . A s note dear l ie r , emission t r e n d s f rom sou r ce categor ies other than A ci dRain P ro g r am sou r c es si g ni f icant ly a ff ect air concentra

t ions an d d e p osition o f nit ro g en. I nor g anic nit rog en d e p osition d ec r ease dmo d est lyin t h e Mi dAt l antic an dNor theast (a v era g in g 8 to 16 p er cent ) b u t r e maine dvir tua llyunc h an g e din ot h er r e g i ons ( see Fi g ur e s 20a an d20 b )

. Wet nitrate concentrations ha v e dro pp e dsi g ni f icant lyin t h e Mi dAt l antic an dNor t h east r e g i ons , b u t a r e not tie dto p r eci p itation ( see Fi g u r e 13 on p a g e 13 )

. M o d est r e d uctions o f a b out 10 p er cent ha v e occu r r e din th e Mi dw est an d S out h east.

F igure 19 b : Annua l Mean Wet Sulf ate D eposition 2002 t h roug h 2004 W

Source: National Atmos p heric De p osition P r o g r a m

F i g ur e 2 0 a : Annua l M e an We t I n or ganic N itro g en Deposition 1989 t h rou gh 1991 S ource : N ationa l Atmos ph eric De p osition Pr ogr a m

F i g u r e 20 b : Annua l Mean We t I n or ganic Nitro g en Deposition 2002 t h rou gh 2004

Source: National Atmospheric Deposition P r o g r a m S o urce : N ationa l Atmosp h eric Deposition Pr ogr a m

Note: Dots on maps r epr esent monitoring sit esAcid Rain Pr ogr am, 2004 Pr ogr ess Repor t ✧ 19 

# Recover y of Acidif ied Lakes and Str eams
Ov er the past 25 y ear s, the effect of acid deposition on lak es and str eams has been the focus of m uch r esear ch, par ticularly in ar eas of the easter n United States that ar e both sensitiv e to acid deposition and r eceiving significant le v els o v er time

. These ar eas encompass Ne w England, the Adirondack Mountains, the nor ther n Appalachian Plateau (including the Catskill and P ocono Mountains), and the Blue Ridge r e g ion (including str eams in w ester n Virg inia) (see Figur e 21). As sho wn in the deposition maps, abo v e , implementation of Title IV has r esulted in decr eased sulf ate deposition across the East, while changes in nitrate deposition ha v e been small. Recent studies pro vide data r egar ding the r esponse of lak es and str eams to changes in emissions. A 2005 study 9 examined alterations in lak e w ater chemistr y as a r esult of deposition changes at 130 monitor ing sites betw een 1984 and 2001. The sites w e r e chosen to allo w generalizations r egar ding the effects of decr eases in acidic deposition in 3,666 lak es throughout the entir e nor theaster n United

9 W arb y , R.A.F ., J ohnson, C .E., and Dr iscoll, C. T

. Chemical recov er y of surf ace wa ters across the nor theaster n United States from reduced inputs of aci d i c deposition: 1984-2001. Syracuse , N e wY o rk: Syracuse Univ e r sity

. 

## Improvements in Sur f ace W a ter EPA ’s T empor ally Figure 21: Regional Tr ends in Lake and Int egr at ed Monitoring of Stream Acidif ication, 1990-2000 Ecosy st ems (TIME) and Long- T

erm Monitoring sulfate (L

TM) pr ogr ams (described in a t e xt box nitrate on page 20) pr ovide inf ormation on the chem- ANC istr y of lakes and str eams, which allow s r esearcher s base to under st and how wat er cations bodies ar e r esponding to changes in emissions. The Slope of Trend dat a pr esent ed her e show -3 -2 -1 0 1 2 * * * * * * * * *

Maine lakes (n=11) Vermont lakes (n=11) r egional tr ends in acidif i- Adirondack lakes (n=50 Catskill streams (n=4) cation fr om 1990 to 2000 Pennsylvania streams (n=5) Virginia streams (n=74) in ar eas of the east ern * = not significant Unit ed St at es. For each lake or str eam in the net- Source: Stoddar d, J .L., Kahl, J

. S ., De viney , F

.A., DeW alle , D .R., Dr iscoll, C

. T

. , Herlih y , A.T ., wor k , measur ements of K ello gg, J

. H., Mur doch, P

. S

. , W ebb , J .R., and various indicator s of r ecov- W ebster , K.E. (2003) Response of surf ace wa ter er y fr om acidif ication wer e c hemistr y to the Clean Air Act Amendments of 1990. EP

A620-R-03-001. W ashington, DC: U

. S

. t a ken. These measur ements En vironmental Protection Agency

. wer e plott ed against time, and tr ends f or the given lake or str eam during the 10-year period wer e then calculat ed as the change in each of the measur ements per year (e.g., change in concentr ation of sulf at e per year). Using the tr ends calculat ed f or each wat er body , median r egional changes wer e det ermined f or each of the measur es of r ecover y . A negative value of the “slope of the tr end” means that the measur e has been declining in the r egion, while a positive value means it

has been incr easing. The gr eat er the value of the tr end, the gr eat er the yearly change in the measur ement. Movement toward r ecover y is indicat ed by positive tr ends in acid neutr alizing capacity (ANC) and negative tr ends in sulf at e, nitr at e, hydr ogen ion, and aluminum. Negative tr ends in base

cations can balance out the

decr easing tr ends in sulf at e and nitr at e and hinder impr ovements in ANC.20 ✧ Acid Rain Pr ogr am, 2004 Pr ogr ess Repor t



## Long- T

erm Environment al Monitoring at EP A EPA ’s T empor ally Int egr at ed Monitoring of Ecosy st ems (TIME) and Long- T

erm Monitoring (L TM) pr ogr ams ar e designed to det ect tr ends in the chemistr y of r egional populations of lakes or str eams and to det ermine whether emission r eductions have had the int ended ef

f ect of r educing acidif ication. These pr ogr ams monitor a tot al of 145 lakes and 147 str eams, r epr esenting all of the major acid-sensitive r egions of the nor thern and east ern Unit ed St at es, including the up per Midwest, New England, Adir ondack Mount ains, nor thern Ap palachian Plat eau (including the Catskill Mount ains), and the Blue Ridge Mount ain r egion of Vir ginia. TIME/L TM measur e a variety of impor t ant chemical char act eristics, including acid neutr alizing capacity (ANC), pH, sulf at e, nitr at e,major cations (e.g., calcium and magnesium), and aluminum. While the r epr esent ativeness of the TIME/L TM networ k is somewhat limit ed, the TIME pr ogr am pr ovides a coher ent individual r egional dat aset f or this kind of analy sis. In addition, the U .S. Geological Sur vey (USGS) has been measuring sur f ace wat er quality at sever al r esearch wat er sheds thr oughout the Unit ed St at es, wher e sample collection during hydr ologic events and ancillar y dat a on other wat ershed char act eristics have been used to assess the wat er shed pr ocesses contr olling acidif ication of sur f ace wat er s. States. The o v erall decr ease in acidic deposition has r esulted in some chemical r eco v e r yof surf ace w ater s, with incr eases in pH and ANC and decr eases in strong acidic anions and inorganic monomer ic alumin um. The 2005 study r epor ts a systematic incr ease in ANC in lak es across the Nor theast:
• Appro ximately 4.5 per cent of lak es in the Nor theast ar e chronically acidic (ANC<0), do wn from 6 per cent in 1984.
• Ele v en per cent of lak es ha v e lo w ANC le v els (ANC 0-25), do wn from 13 per cent in 1984.
• Appro ximately 84.5 per cent of lak es ha v e moderate ANC le v els (ANC>25), up from 81 per cent in 1984.
• Despite r e g ion-wide incr eases in ANC in r ecent y ear s, w ater s with ANC<50 r emain sensitiv e to acidic deposition and could exper ience adv er se biolo g ical r esponse associated with episodic acidification. It is also impor tant to note that estimates of the n umber s of acidic and lo w-ANC lak es w ould incr ease if smaller lak es (<4 hectar es) w e r e consider ed. Another r ecent study 10 focused specifically on a subset of nor theaster n lak es in the Adirondack Mountain r e g ion from 1992 to 2004. This study found tr ends similar to those for the nor theaster n r e g ion for 48 lak es included in the Adirondack Long-T er m Monitor ing Pro g ram:
• F o r ty-se v en of 48 sites sho w ed significant decr eases in combined concentrations of sulf ate and nitrate

. • The declines in sulf ate concentrations ha v e not been unifor m o v er the 1992 to 2004 per iod, with g r eater declines in the 1990s and a le v eling of sulf ate concentrations o v er the last fiv e y ear s as emissions of SO 2 and w et sulfate deposition ha v e le v eled off

. • T w enty-se v en of the 48 lak es sho w ed significant decr eases in nitrate concentrations, with only thr ee exhibiting incr eases. It is unclear wh y nitrate concentrations ha v e declined at

10 Dr iscoll, C

. T

. , Dr iscoll, K.M., Roy , K.M., and Duk ett, J

. Changes in the chemistr y of lak es in the Adirondack r e g ion of Ne w Y ork follo wing declines in acidic deposition. Environmental Geoc hemistr y and Health. (in r e vie w)Acid Rain Pr ogr am, 2004 Pr ogr ess Repor t ✧ 21

cer tain locations while ther e has not been an y appr eciab le change in emissions of NO x or atmospher ic nitrate deposition.
• Thir ty-se v en of the 48 lak es sho w ed significant tr ends of incr easing ANC , attr ib uted to decr easing concentrations of both SO 4 2- and NO 3-

. Rates of ANC incr ease ar e r elativ ely slo w , ho w e v e r , and, at cur r ent rates, it will be se v eral decades befor e full chemical r eco v e r yis approached. Recent studies 11 used data on Shenandoah National P ark w ater shed ecosystems to deter mine r e g ional tr ends for str eams in w ester n Virg inia:
• An analysis using data from 1988 to 2003 sho w ed that sulf ate concentrations w e r e generally not decr easing and, in man y cases, w e r e incr easing. Decr eases in nitrate concentrations w e r e generally g r eater than those for sulf ate and could account for m uch of the obser v e d incr ease in ANC concentrations. Changes in nitrate concentrations w e r e attr ib uted to the gypsy moth defoliation of w ater sheds dur ing the late 1980s and early 1990s; the same conclusion w as r eached in a 1998 to 2001 analysis. Thus, the 1988 to 2003 tr end analysis pro vides less e vidence for r eco v e r yfrom acidification due to atmospher ic deposition. Implementation of the Acid Rain Pr o g ram has substantially r educed emissions of SO 2 and NO x fr

om po w

er generation sour ces. Ho w

e

v

e r

, the National Acid Pr ecipitation Assessment Pr o g ram (NAP AP) 2005 Repor t to Cong r ess, 12 recent modeling, and man y pub lished ar ticles indicate that SO 2 and NO x emission r eductions achie v

ed under Title IV ar e insufficient to achie v

e full r eco v

e r

y

or to prev

ent fur ther acidification in some r e g ions. The studies descr ibed abo v

e suppor t that conclusion, sho wing that en vir onmental impr o

v

ements ha v

e been slo w in man y sensiti v

e ar eas, and signs of r eco v

e r

y

still ar e not e

vident in some ar eas. The NAP AP Repor t to Cong r ess concluded that additional SO 2 and NO x emission r eductions fr om po w

er plants and other sour ces ar e necessar y to decrease deposition and further r educe the number of acidic lakes and str eams in man y r e g ions of the United States. Additional emission r eductions will be achie v

ed through implementation of existing or futur e r egulations to addr ess transpor t of ozone and fine par ticles and mer cur y deposition, including the NO x SIP Call in the Easter n United States; Tier II and diesel r ules affecting mobile sour ces; state implementation plans to achie v

e the ozone and fine par ticle National Ambient Air Quality Standar ds (NAA QS); and the r ecent r ules to r educe inter state transpor t of fine par ticles and ozone , mer cur y

, and r e g ional haze fr om po w

er plants. 

# Quantifying Costs and Benef its of the Acid Rain Pr ogram A new 2005 analysis 13 of the annual benefits and costs of the Acid Rain Pr o g ram updates those of the NAP AP 1990 Integ rated Assessment and a 1995 EP A r epor t, 14 and integ rates scientific kno wledge that has emerged since the 1990s. An expanded list of impacts incr eases the pr o g ram’ s estimated benefits, while new er implementation strateg ies—unfor eseen in 1990—lo w

er estimated costs. The estimated v alue of the pr o g ram’ s annual benefits in the y ear 2010 no w totals $122 billion (2000$). These benefits r esult mostly fr om the pr e

v

ention of health-r elated impacts (such as pr ematur e deaths, illnesses, and w ork da ys missed due to illness), b ut also include impr o

v

ed visibility in parks, and other r ecr eational and ecosystem impr o

v

ements. The paper indicates that these benefits stem fr om the substantial differ ence that the Acid Rain Pr o g ram is expected to make in man y ar

eas meeting NAA QS b y

2010 for fine par ticles less than 2.5 micr ometer s in diameter (PM 2.5 ) and ozone standar ds (see Figur e 22 on page 22). Notab ly , some

11 W ebb , J .R., De viney , F

.A., Jr ., and Maben, S

. Shenandoah W atershed Stud y (SW AS) Annual Repor t for 2003. Univ e r sity of Virg inia. W

ebb , J .R., Cosb y , B

. J

. , D e viney , F

.A., Jr ., Gallo w a y , J .N ., Maben, S

. W

. , and Bulger , A .J

. (2004) Ar e brook trout str eams in w ester n Virg ini a and Shenandoah National park r eco v e r ing from acidification? Environmental Science and T e c hnolog y , 38

. 12 2005 National Acid Pr ecipitation Assessment Pro g ram Repor t to Cong r ess, www .al.noaa.go v/A QRS/r epor ts/napapr epor t05.pdf

. 13 Chestn ut, L.G

. and Mills, D

. A fr esh look at the benefits and cost of the U

. S

. Acid Rain Pro g ram. Jour nal of Environmental Management.

(ar ticle in pr ess)

14 Human Health Benefits from Sulf ate Reduction under Title IV of the 1990 Clean Air Act Amendments. EP A-430-R-95-010.22 ✧ Acid Rain Pr ogr am, 2004 Pr ogr ess Repor t
significant benefits are not quantified, such as the 20 per cent reduction in mer cur y emissions fr om po w

er plants; impr o

v

ements to urban visibility , for est health, and surf ace w ater quality; and incr eased longe vity and r educed soiling of painted and stone surf aces. The 2005 study finds that the estimated annual cost of the Acid Rain Pr o g ram in 2010 is $3 billion, with the SO 2 pr o g ram accounting for about $2 billion per y

ear in 2010. These findings ar e generally consistent with other r ecent independent findings, and ar

e f ar less than the or ig inal NAP AP estimates. 15 EP A expects NO x costs to be no mor e than $1 billion annually , and likely less, fr om the limited analysis that has been completed in this ar ea. This leads to a mor e than 40-to-1 benefit-cost ratio

. Among the most impor tant f actor s in r educing SO 2 pr o g ram costs w as impr o

v

ed transpor tation and pr oduction of coal, which enab led sour ces to incr ease the use of lo w-sulfur coal. The flexibility offer ed b y

the SO 2 pr o g ram also ma y ha v

e enab led technolo g ical inno v

ations that lo w

e r

ed compliance costs. F or instance , boiler adaptations and lo w

er than expected installation and operation costs for flue gas desulfur ization systems (scr ubber s) r educed costs belo w or

ig inal estimates. 16 Figure 22: Human Health Benef its from Acid Rain Progr am PM 2.5 and Ozone Reduction

Avoided Health Ef f ects Related to T itle IV’s PM 2.5 and Ozone Reductions Number of Cases Avoided* Monet ary V

alue—Millions (U .S. 2000$) PM 2.5 Reduction Mor t ality (adults) 18,000 $106, 171 Inf

ant mor t ality (childr en less than 1) 100 $779 Chr onic br onchitis (adults) 11 ,000 $4,274 Nonf at al hear t att acks (adults) 24,000 $2,018 Respir ator y hospit al admissions (all ages) 8,700 $130 Cardiovascular hospit al admissions (adults) 11 ,400 $246 Emer gency r oom visits f or asthma (childr en) 14,700 $4 Acut e br onchitis (childr en) 27,700 $10 Asthma e xacerbations (childr en with asthma) 29,400 $1 Up per respirator y symptoms (children with asthma) 353,400 $9 Lower r espir ator y symptoms (childr en) 299,500 $5 Minor r estrict ed activity day s (adults) 12,766,400 $677 W o r k loss day s (adults) T

o t al related to PM 2.5 reduction 2,200,000 $240 $114,564 Ozone Reduction Mor t ality 700 $4, 101 Respir ator y hospit al admissions (age ≥ 65) 1 ,500 $27 Respir ator y hospit al admissions (age ≤ 2) 1 ,800 $14 Emer gency r oom visits f or r espir ator y illness 400 $0. 1 School loss day s 785,500 $59 Acut e respirator y symptoms, minor restrict ed activity 1 ,612, 100 $161 W o r k er pr oductivity loss T

o t al related to ozone reduction n.a. $22 $4,384
T

o t al related to PM 2.5 and ozone reductions $118,949

Source: Chestnut, L.G. and Mills, D

. A fr esh look at the benef its and cost of the U .S. Acid Rain Pr ogr am. Journal of En vironment al Management. (ar ticle in pr ess)

* Rounded to the near est hundr ed

15 See , for example:

Eller man, D

. (2003) Lessons from Phase 2 compliance with the U

. S

. Aci d Rain Progr am . Cambr idge , Massachusetts: MIT Center for Energy and En

vironmental P olicy Resear ch Carlson, C

. P

. , Bur tra w

, D

. , Cropper , M., and P almer , K. SO 2 control b yelectr ic utilities: What ar e the gains from trade? Jour nal of Political Econom y , V

ol. 108, No . 6: 1292-1326

. Infor ming Regulator y Decisions: 2003 Repor t to Cong r ess on the Costs and Benefits of F e deral Regulations and Unfunded Mandates on State , Local, and T r ibal Entities (2003) Office of Management and Budget, Office of Infor mation and Regulator y Aff air s: www .whitehouse .go v/omb/infor eg/2003_cost-ben_final_rpt.pdf

16 EP A estimates r eco gnize that some s witching to lo w er-sulfur coal (and accompan ying emission r eductions) w ould ha v e occur r ed in the absence of Title IV as railroad der egulation lo w e r ed the cost of transpor ting coal from W y oming's P o wder Riv er Basin electr ic p owe r plants in the Midw est and as plant operator s adapted boiler s to differ ent types of coal.Acid Rain Pr ogr am, 2004 Pr ogr ess Repor t ✧ 23

Inter st ate Rule (C AIR)

Ozone and par ticles Par ticles only Ozone only

Source: EPA
Note: EPA pr oposed in March 2005 to add Delawar e and New Jer sey to the st at es in C A IR cover ed f or f ine par ticles. 

# National Actions f or Fur ther Emission Reductions— 2005 Clean Air Rules Figure 23: St ates Covered by the Clean Air In the spr ing of 2005, in the absence of ne w leg islation, EP A prom ulgated a suite of air quality r ules designed to addr ess additional r eductions of SO 2 , N O x , and mer cur y (Hg) from po w er plants. These r ules include the Clean Air Inter state Rule (C AIR), the Clean Air Mer cur y Rule (C AMR), and the Clean Air Visibility Rule (C A VR). 17 C AIR will per manently lo w

er and cap emissions of SO 2 and NO x in 28 easter n states and the Distr ict of Columbia (see Figures 23 and 24), star ting in 2009 for NO x and 2010 for SO 2 . The r ule addresses the transpor t of ozone and fine par ticles resulting fr

om these emissions. States ha v

e the option to adopt a model cap and trade pr o g ram administered b y

EP A to achiev e the cap

. The C AIR SO 2 trading pr o g ram is designed to w ork with the existing Acid Rain Figure 24: C AIR/C AMR Emission Caps Air Emission Cap C AIR (f or 28 Eastern St ates and DC) C AMR
SO 2 —Phase 1 3.6 million tons in 2010 SO 2 —Phase 2 2.5 million tons in 2015 NO —Phase 1 x 1 .5 million tons in 2009 (annual) 0.6 million tons 2009 (ozone season) NO —Phase 2 x 1 .3 million tons in 2015 (annual) 0.5 million tons 2015 (ozone season) Hg—Phase 1 38 tons in 2010 Hg—Phase 2 15 tons in 2018 Pr o g ram. Sources tur n in Acid Rain allo w

ances at a ratio of g reater than 1-to-1 to achiev e reductions be y

ond Title IV of the Clean Air Act. When fully implemented, C AIR will reduce SO 2 emissions b y o

v

er 70 percent and NO x emissions b y

o

v

er 60 percent fr om 2003 lev els, leading to decreased par ticulate matter, ozone concentrations, and acid deposition. Accor ding to EP A models, C AIR will pr o

vide health and en vir onmental benefits v alued at more than 25 times the expected costs of compliance

. 17 C AMR is the fir st-ev er r ule to per manently cap and reduce mercury emissions fr om coal-fired po w

e r plants in all 50 states and the Distr ict of Columbia. C AMR estab lishes standar ds of perfor mance limiting T echnolo gy (B AR T), scr ubber s for SO 2 , and mercury emissions fr om new and existing coal-fired advanced low-NO x b u r ner s, on man y coal-fired po w

er plants and creates a cap and trade pr o g ram to units outside of the C AIR re g ion in 2013/2014. 17 reduce nationwide utility emissions in tw o distinct Based on these thr ee r egulations, EP A estimates phases. By 2018, a 15-ton cap will be in place

. Along that po w

er plants will install pollution control techwith the C AIR r ule , this will result in a mercury nolo gy , such as scr ubber s for SO 2 contr ol and SCRs reduction fr om coal-fired po w

er plants of nearly 70 for NO x contr ol. By 2010, nearly half (46 per cent) of percent fr om cur rent lev els. 17 the units in the nationwide coal-fir ed fleet totaling C A VR applies to non-C AIR states, pr imar ily in r oughly 146.3 GW of capacity will ha v

einstalled the W est, and affects power plants and other major scr ubber s, while about 39 per cent, or 126.5 GW of sources with the potential to impact visibility , fine po w

er plant capacity , will ha v

einstalled SCRs. By par ticles, acid deposition, and ozone in cer tain areas 2020, nearly tw o-thir ds (72 per cent) of units will of the country . C A VR places Best A vailab le Retr ofit ha v

escr ubber s (230.5 GW of capacity) and o v

er 56

17 C AIR (See www .epa.go v/cair/index.html), C AMR (See www .epa.go v/air/mer cur yr ule), C A VR (See www .epa.go v/oar/visibility/index.html )24 ✧ Acid Rain Pr ogr am, 2004 Pr ogr ess Repor t

per cent will ha v

einstalled SCR (180.9 GW), accor ding to EP A’

s pr ojections. 17 EP A pr ojects that these r ules will result in significant monetized health benefits (1999$). These estimates range fr

om $62 billion to $73 billion annually in 2010, and fr om $120 billion to $140 billion annually in 2020. The v ast major ity of these benefits result fr om the reduced lev els of fine par ticles in the ambient air that will occur fr om reductions in SO 2 and NO x emissions. Reductions in SO 2 emissions fr om 1993 lev els (b y 4.3 million tons in 2010 and b y

6.1 million tons in 2020) account for the largest por tion of impr o

v

ements in ambient fine par ticle conditions. The remaining benefits result fr om ozone impr o

v

ements associated with NO x emission reductions. Notab ly , these r ules also pr o

vide m ultiple unquantified benefits, including the v alue of increased ag r icultural cr op and commercial forest yields, visibility impr o

v

ements, reductions in nitr o gen and acid deposition and the resulting changes in ecosystem functions, and health and w elf are benefits associated with reduced mercury emissions. 17,18 EP A expects that the air quality impacts of these r egulations, coupled with r ecent r ules to r educe fine par ticles and NO x from motor v ehicles, will be extensiv e . Figur es 25, 26, and 27 show ar eas projected to exceed NAA QS in 2010 and 2020, compar ed to toda y

. Figur e 25 shows ozone and PM 2.5 nonattainment ar eas pr imarily occur r ing in easter n states and Califor nia. As the ne w r ules ar e implemented, nonattainment is expected to decline pro g r essiv ely , with 92 fe wer ar eas b y 2010 (see Figur e 26), and 106 fe wer ar eas b y 2020 (see Figur e 27). As these maps indicate , implementing these thr ee new r egulations is an impor tant step to w

a r

d

impr o

ving futur e air quality in the United States and helping states and local comm unities meet NAA QS for fine par ticles and ozone

. Futur e pro g r ess r epor ts will beg in to pro vide information impor tant to the transition to C AIR, C AMR, and C A VR, while contin uing to r epor t on compliance under the Acid Rain Pro g ram.

17 C AIR (See www .epa.go v/cair/index.html), C A MR (See www .epa.go v/air/mer cur yr ule/), C A VR (See www .epa.go v/ oar/visibility/index.html)

18 Multi-pollutant leg islativ e analysis, October 2005, EP A

19 Cur r ent r ules include Title IV of C AA, NO x SIP Call, and some

existing state r ules.

20 Ar eas for ecast to r emain in nonattainment ma y need to adopt additional local or r e g ional controls to attain the standar ds b y dates set pur suant to the Clean Air Act. These additional local or r e g ional measur es ar e not for ecast her e , and ther efor e this figur e o v er states the extent of expected nonattainment. Figure 25: Current Nonatt ainment Areas

Source: EPA Legend Area Count Both PM and Ozone Nonattainment 36 PM Only Nonattainment 3 Ozone Only Nonattainment 90 N o t e : Curr ently , 129 ar eas ar e designat ed as nonatt ainment f or PM 2.5 and/or 8-hour Ozone (April 1 , 2005). For fur ther inf ormation on designations and r elat ed r equir ements, see www .epa.gov/air/oaqps/glo/designations/inde x.htm and www .epa.gov/pmdesignations. Figure 26: PM 2.5 and Ozone Att ainment in 2010

Source: EPA
Legend Ar e a C o u n t Both PM and Ozone Nonattainment 6 PM Only Nonattainment 15 Ozone Only Nonattainment 16 Nonattainment areas projected to attain 92 N o t e : 92 ar eas ar e pr oject ed to meet the PM 2.5 and 8-Hour Ozone St andards in 2010 with C AIR/C AMR/C A VR and some curr ent rules, absent additional local contr ols. 19,20 Figure 27 : PM 2.5 and Ozone Att ainment in 2020

Source: EPA
Legend Area Count Both PM and Ozone Nonattainment 3 PM Only Nonattain ment 13 Ozone Only Nonatt ainment 7 Nonattainment are as projected to att a in 106 N o t e : 106 ar eas ar e pr oject ed to meet the PM 2.5 and 8-Hour Ozone St andards in 2020 with C AIR/C AMR/C A VR and some curr ent rules, absent additional local contr ols. 19,20

# Online Inf ormation, Dat a, and Resources
About the Clean Air Mar kets Division The availability and tr ansparency of dat a— from emission measurement to allowance tr ading to deposition monitoring—is a corner stone of ef f ective cap and tr ade progr ams. The Clean Air Mar kets Division in the Of f ice of Air and Radiation’s Of f ice of Atmospheric Progr ams manages progr ams f or collecting these dat a and assessing the ef

f ectiveness of cap and tr ade progr ams, including the Acid Rain Progr am.
www .epa.gov/airmar kets Regulator y Inf ormation
T

o learn more about how emissions cap and tr ade progr ams wor k , see:
www .epa.gov/airmar kets/ar p Acid Rain Progr am
www .epa.gov/airmar kets/pr ogsr egs/ noxview .html NO x T r ading Progr ams
www .epa.gov/airmar kets/capandtr ade/ inde x.html Gener al Cap-and- T r ade Information Also see recent related rulemakings, including:
www .epa.gov/cair Clean Air Interst ate Rule (C AIR)
www .epa.gov/C AMR/inde x.htm Clean Air Mercur y Rule (C AMR)
www .epa.gov/visibility Clean Air Visibility Rule (C A VR) Progress and Results Sever al repor ts have assessed the progress and results and projected future impacts of the Acid Rain Progr am.
www .sciencedir ect.com/science/ journal/03014797 A F r esh Look at the Benef its and Costs of the U .S. Acid Rain Progr am www .al.noaa.gov/A QRS/r epor ts/ napapr epor t05.pdf 2005 N ational Acid Precipit ation Assessment Progr am Repor t to Congress
www .r f f.or g/Documents/ RFF -RPT

- Adir ondacks.pdf V

a luation of N atur al Resource Im pro v ements in the Adirondacks
www .adir ondacklakessurvey .org Jenkins, J., Roy, K., Driscoll, C., Beur kett, C. Acid Rain and the Adirondacks: A Research Summar y

. Adir ondack Lakes Survey Cor por ation Emission, Allowance, and Environment al Dat a For more inf ormation on emissions, allowance, and environment al dat a, see: cfpub .epa.gov/gdm EP

A Clean Air Markets Data and Maps
www .epa.gov/castnet Clean Air S t atus and T r ends Netw ork (C

AS TNET)
www .epa.gov/airmar kets 2005 Atlas: Atmosphere in Mo tion nadp .sw s.uiuc.edu N

ational Atmospher ic Deposition Progr am/ N

ational T r ends Netw ork

# 1970 – 1994 1970 20 million people celebr at e the f i r s t Ear th Day

.



# 1978 The National Atmospheric Deposition Pr ogr am/National T r ends Networ k (NADP/NTN) begins monitoring sulfur and nitr ogen and deposition to ecosy st ems.



# 1990 Congr ess str engthens the C AA and est ablishes the Acid Rain Pr ogr am using a mar ketbased ap pr oach to r educe SO 2 

### fr om power plants by mor e than 50 percent. 

# 1994 Pr oject ed costs of compliance r e-estimat ed by the Government Account ability Of f

ice and the Electric P ower Research Institut e at less than half of original estimat es. 

# 1977 Congr ess str engthens the C AA and includes r equir ements f or SO 2 

### pollution contr ol at power plants. 

# 1970 Clean Air Act (C AA) is passed.



# 1980 Lake acidif ication and f ish loss in the Adir ondacks, Gr een Mount ains, and Sierr a Nevada make national new s. 

# 1987 The Clean Air St atus and T r ends Networ k (C AS TNET) is est ablished to monitor dr y deposition. 

# 1993 EP A publishes acid r ain r egulations, and Chicago Board of T r ade holds f i r s t auction of SO 2 

### allowances. 

# 1986 The Unit ed St at es and Canada begin study of cr oss-border acid r ain tr anspor t. The Unit ed St at es is called upon to r educe emissions of SO 2 

### and NO x 

### , especially fr om coal-burning power plants. 

# 1980 The National Acid Pr ecipit ation Assessment Pr ogr am (NAPAP), mandat ed by Congr ess, begins study on acid r ain.

# 2000 – 2005

1998 Regulator y r e visions enhance ef f

iciencies of compliance and administr ation. Nearly 10 million economically signif icant allowance tr ansf er s t a ke place. 

# 1999 Allowance banking peaks. SO 2 

### early r eductions tot al over 11 million tons. 

# 1995 – 1999

1995 Phase I of Acid Rain Pr ogr am implement ation begins. SO 2 

### emissions f all to 5 million tons below 1980 levels. Acidity of r ainf all in the east ern Unit ed St at es dr ops 10 to 25 percent. 

# 1996 About 150 of the lar gest coal-f ir ed power plants begin to implement Acid Rain Pr ogr am NO x 

### r equir ements.


# 1997 Mor e than 80 percent of af f

ect ed companies have engaged in privat e allowance tr ansactions. 

# 2000 Phase II of Acid Rain Pr ogr am begins, r egulating additional smaller/cleaner plants and r equiring fur ther r eductions in NO x 

### and SO 2 

### . 

# 2001 Intr oduction of the On-line Allowance T

r acking Sy st em begins an er a of paperless allowance tr ansf er r ecording. 

# 2002 EPA begins electr onic audit pr ocess to sup plement e xisting rigor ous monitoring pr ogr am.



# 2003 Lakes and str eams in the Adir ondacks, Up per Midwest and Nor thern Ap palachian Plat eau show signs of r ecover y . 

# 2004 Acid Rain Pr ogr am sources emit 34 percent less SO 2 

### and 43 percent less NO x 

### than in 1990, despit e a 34 percent incr ease in fuel usage. 

# 2005 New study estimat es 2010 annual Acid Rain Pr ogr am benef its at $122 billion and annual costs at $3 billion. According to 2005 NAPAP r epor t, fur ther emission r eductions ar e necessar y to achieve br oader envir onment al r ecover y . EPA pr omulgat es C AIR, C AMR, and C A VR.1EPAUnited StatesEnvironmental Protection AgencyOffice of Air and RadiationClean Air Markets Division1200 Pennsylvania Ave, NW (6204J)Washington, DC 20460www.epa.gov/airmarketsOfficial BusinessPenalty for Private Use $300EPA 430-R-05-012October 20052Recycled/Recyclable—Printed withVegetable Oil Based Inks on 100% Postconsumer,Process Chlorine Free Recycled Paper