The Acid Rain Program (ARP), established under 

Title IV of the 1990 Clean Air Act Amendments, requires major emission reductions of sulfur dioxide 

(SO2) and nitrogen oxide (NOx), the primary precursors of 

acid rain, from the electric power industry. The SO2 program sets a permanent cap on the total amount of SO2 that 

may be emitted by electric generating units (EGUs) in the 

contiguous United States. The program is phased in, with 

the final 2010 SO2 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 more traditional, rate-based regulatory system. 

Since the program began in 1995, the ARP has achieved 

significant emissions reductions. As Figure 1 shows, these 

reductions have occurred as electricity generation has increased.

At a Glance: ARP Results in 2008

SO2 Emissions: 7.6 million tons

SO2 Compliance: 100%

SO2 Allowances: Banked allowances increased by 

almost 2 million from 2007 levels

SO2 Allowance Prices: Since July 2008, allowance prices have fallen sharply, with a monthly average nominal 

price in May 2009 of $71/ton

NOx Emissions: 3.0 million tons

NOx Compliance: 100%

September 2009

Figure 1: Trends in Electricity Generation, Fossil Energy Use, Prices, and Emissions from the Electric Power Industry, 1990–2008

 * Generation from fossil fuel-fired plants.

** Constant year 2000 dollars adjusted for inflation.

Source: Energy Information Administration (electricity generation, retail price); EPA (heat input and emissions, representing all affected ARP 

units), 2009

-60%

-40%

-20%

0%

20%

40%

60%

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Electricity Generation* Heat Input SO2 Emissions NOx Emissions Average Retail Price of Electricity**

Percent Change

Acid Rain and Related Programs:

2008 Emission, Compliance, and Market Analyses
Phase II (2000 on) Sources All Affected Sources

9.4 9.3

8.7

5.3 5.4 5.5 5.3 4.9

17.3

16.1 15.7

11.9

12.5 13.0 13.1

12.5

11.2

10.6 10.2 10.6 10.3 10.2

9.4 8.9

7.6

8.7 8.3

7.1 7.0

10.0

9.6 9.5 9.5 9.5 9.5 9.5 9.5 9.5

Phase I (1995-1999) Sources Allowances Allocated

1980 1985 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

2

4

6

8

10

12

14

16

18

20

SO2 Emissions (million tons)

7.0

2

Acid Rain and Related Programs: 2008 Emission, Compliance, and Market Analyses

Figure 2: SO2 Emissions from Acid Rain Program Sources, 1980–2008

Source: EPA, 2009

Over the next several months, EPA will release a series of 

reports summarizing progress under the ARP. This second 

report analyzes 2008 data on emission reductions, reviews 

compliance results, and summarizes market activity. 

A future report will compare changes in emissions to 

changes in acid deposition and surface water chemistry. 

For more information on the ARP, please visit: <www.epa.

gov/airmarkets/progsregs/arp/index.html>. 

SO2

SO2 Emission Reductions

The SO2 requirements under the ARP apply to EGUs, fossil 

fuel-fired combustors that serve a generator which provides 

electricity for sale. The vast majority of ARP SO2 emissions 

result from coal-fired EGUs, although the program also applies to oil and gas units; in total, there were 3,572 EGUs 

subject to the SO2 program in 2008. As Figure 2 shows, 

ARP units have reduced annual SO2 emissions by 56 percent compared with 1980 levels and 52 percent compared 

with 1990 levels. Sources emitted 7.6 million tons of SO2 

in 2008, well below the current annual emission cap of 9.5 

million tons, and already below the statutory annual cap 

set for compliance in 2010 of 8.95 million tons.

Reductions in SO2 emissions from other sources not affected by the ARP (including industrial and commercial boilers 

and the metals and refining industries) and use of cleaner 

fuels in residential and commercial burners contributed to 

a similar overall decline (56 percent) in annual SO2 emissions from all sources since 1980. National SO2 emissions 

from all sources have fallen from nearly 26 million tons in 

1980 to about 11.4 million tons in 2008 (see data available 

at <www.epa.gov/ttn/chief/trends>).

The states with the highest emitting sources in 1990 have 

generally seen the greatest SO2 reductions under the ARP. 

Most of these states are upwind of the areas the ARP was 

designed to protect, and reductions have resulted in important environmental and health benefits over a large region. 

In addition, from 2007 to 2008, reductions in SO2 emissions from ARP units in 38 states totaled about 1.3 million 

tons, or about 15 percent for the year. Five states (Georgia, Indiana, North Carolina, Ohio, and Pennsylvania) accounted for most of the one-year reductions from 2007 to 

2008, ranging from 119,271 to 244,651 tons of SO2 in each 

of these states.

From 1990 to 2008, annual SO2 emissions in 38 states and 

the District of Columbia fell by a total of approximately 8.2 

million tons. In contrast, annual SO2 emissions increased 

by a total of 79,309 tons in 10 states from 1990 to 2008. 

The seven states with the greatest reductions in annual 

emissions since 1990 include Ohio, which decreased 

emissions by over 1.5 million tons, and Illinois, Indiana, 

Kentucky, Missouri, Tennessee, and West Virginia, each 

of which reduced total emissions during this time period 

by more than 500,000 tons. To view emission data in an 

interactive format using Google Earth or a similar threedimensional platform, go to <www.epa.gov/airmarkets/

progress/interactivemapping.html>.
3

Acid Rain and Related Programs: 2008 Emission, Compliance, and Market Analyses

Why SO2 Emissions Decreased in 2008

ARP sources decreased SO2 emissions sharply in 2008, 

with a 15 percent decline from 2007. A portion of this reduction may be attributable to a decrease in utilization, as 

heat input in 2008 fell by about 3 percent (See Table 1). 

The larger cause, however, was the large increase in the 

number of units that employed flue gas desulfurization (or 

scrubbers). The number of reported scrubbers climbed by 

20 percent, from 246 in 2007 to 295 in 2008. This increase 

led to a decline in the overall SO2 emission rate for ARP 

units—0.64 lb/mmBtu in 2007 versus 0.56 lb/mmBtu in 

2008. It is of historical interest that the ARP allowance allocations for Phase II in 2000 were based on an SO2 emission rate of 1.2 lb/mmBtu. 

With the exception of reductions that might have occurred 

as a result of enforcement actions, most of the SO2 reductions in 2008 are likely to have resulted from early compliance planning for the Clean Air Interstate Rule (CAIR). 

Although some states have regulations that will require 

SO2 reductions in future years (such as North Carolina’s 

Clean Smokestacks Act in 2009), one reason controls were 

installed and operated in 2008 was the significant incentive to bank pre-CAIR vintage SO2 allowances, which could 

be used on a 1:1 basis under the CAIR annual SO2 program. 

In contrast, ARP allowances with later vintage years would 

be subject to increased retirement ratios under CAIR (2:1 

in 2010 through 2014, and 2.86:1 in 2015 and thereafter). 

Going forward, the decision by the U.S. Court of Appeals remanding CAIR for further rulemaking by EPA might affect 

sources’ compliance planning and the observed trends in 

SO2 emission reductions.

Fuel Type

2004 2005 2006 2007 2008

SO2 NOx HI SO2 NOx HI SO2 NOx HI SO2 NOx HI SO2 NOx HI

Coal 9,840 3,484 20.49 9,837 3,356 20.77 9,244 3,208 20.44 8,768 3,069 20.75 7,517 2,816 20.25

Oil 377 138 1.00 349 129 0.99 135 63 0.58 149 68 0.61 84 46 0.48

Gas 36 134 4.83 35 142 5.34 8 131 5.70 10 141 6.32 7 129 6.21

Other 3 6 0.03 3 6 0.03 7 7 0.05 7 5 0.05 10 5 0.06

Total 10,256 3,762 26.34 10,223 3,633 27.13 9,393 3,409 26.77 8,933 3,283 27.74 7,617 2,996 26.99

Notes:

•	 Emissions are in thousand tons, and heat input data are in quadrillion Btu (Quads). Totals may not reflect individual rows from rounding. 

Fuel type represents primary fuel type; many electric generating units might combust more than one fuel.

•	 EPA data in Table 1 and used elsewhere in this report are current as of July 1, 2009, and may differ from past reports as a result of resubmissions by sources and ongoing data quality assurance activities.

Source: EPA, 2009

Table 1: SO2, NOx, and Heat Input Trends in Acid Rain Program Units, by Fuel Type

Updating the Human Health Benefits of the Acid Rain Program

In 2005, a peer reviewed journal article, “A Fresh Look at 

the Benefits and Costs of the US Acid Rain Program,”1 assessed the human health and welfare benefits of ARP implementation for the prospective year 2010. The benefits 

were estimated using modeled emission reductions and 

ambient air quality expected to be achieved in 2010 under 

the ARP. The majority of the monetized benefits of ARP 

implementation are from the prevention of health-related 

impacts, such as premature death, due to reductions in ambient concentrations of fine particulate matter (PM2.5) and 

ground-level ozone. This study used the Pope et al., 2002, 

concentration response function to estimate incidences of 

adult premature mortality as a result of PM2.5 exposure.2

The results of this study estimated the U.S. PM2.5 and ozone 

health-related benefits of the ARP to be $134 billion and 

$5.5 billion annually, respectively.3 

Since publication of this article, the assumptions used to 

develop human health effects estimates have changed. For 

example, EPA now also includes concentration response 

functions derived from the Laden et al., 2006 study4 and an 

expert elicitation to estimate incidences of adult premature 

mortality as a result of PM2.5 exposure. Additionally, many 

underlying modeling assumptions have been updated, including population forecasts and baseline incidence rates. 

A majority of these updated assumptions are discussed in 

detail in the recent PM2.5 Regulatory Impact Analysis.5 The 

revised assessment uses the original modeled ambient air 

quality6 and updated health benefits assessment assumptions to update the U.S. PM2.5 and ozone related benefits of 

ARP implementation.
Table 2: Estimated PM2.5 Health Benefits Due to ARP Implementation in 2010

Health Effect

Incidences 

Avoided

Monetized Value 

(millions; 2008$)

Adult Mortality7 from PM2.5

Pope et al., 2002 20,000 $160,000

Laden et al., 2006 50,000 $400,000

Range of Expert Elicitation 7,000 to 66,000 $58,000 to $520,000

Infant Mortality from PM2.5

Woodruff et al. 82 $710

Morbidity from PM2.5

Acute Bronchitis 28,000 $2.2

Acute Myocardial Infarction 30,000 $3,500

Acute Respiratory Symptoms 12,000,000 $790

Asthma Exacerbation 280,000 $15

Chronic Bronchitis 12,000 $5,800

Emergency Room Visits; Respiratory 18,000 $7.2

Hospital Admissions; Cardiovascular 10,000 $300

Hospital Admissions; Respiratory 4,800 $72

Lower Respiratory Symptoms 290,000 $5.6

Upper Respiratory Symptoms 220,000 $6.8

Work Loss Days 2,500,000 $640

Total Value

Pope et al. $170,000

Laden et al. $410,000

Note: Totals may not reflect individual rows from rounding.

Source: EPA, 2009

4

Acid Rain and Related Programs: 2008 Emission, Compliance, and Market Analyses

Figure 3: SO2 Emissions and the Allowance Bank, 1995–2008

8.7

11.7

13.4

15.0

16.6

21.6

19.9

18.8 18.2

17.1

16.4 15.7 15.8 16.2

5.3 5.4 5.5 5.3 4.9

11.2 10.6 10.2 10.6 10.3 10.2

9.4 8.9

7.6

5

10

15

20

25

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

SO2 (million tons)

Source: EPA, 2009

The results of the revised assessment show an increase in 

the estimated value of U.S. PM2.5 and ozone health benefits 

expected from ARP implementation in 2010. Depending 

on whether the Pope or Laden function is used as the primary estimate of incidences of adult mortality avoided, the 

monetized PM2.5 benefit increase ranges from 25 to 204 

percent more than was estimated in the 2005 article notTable 3: Estimated Ozone Health Benefits Due to ARP Implementation in 2010

Health Effect

Incidences 

Avoided

Monetized Value 

(millions; 2008$)

Mortality

Mortality, Non-Accidental (Ito et al., 2005) 1,900 $17,000

Mortality, Non-Accidental (Schwartz, 2005) 660 $5,700

Mortality, Non-Accidental (Bell et al., 2004) 430 $3,700

Mortality, All Cause (Levy et al., 2005) 2,000 $17,000

Mortality, All Cause (Bell et al., 2005) 1,400 $12,000

Mortality, Cardiopulmonary (Huang et al., 2005) 720 $6,200

Morbidity

Hospital Admissions, Respiratory (age 65 and up) 3,000 $75

Hospital Admissions, Respiratory (age 0-2) 2,500 $26

Emergency Room Visits, Respiratory 1,900 $0.74

School Loss Days 910,000 $87

Acute Respiratory Symptoms 2,600,000 $170

Total Value Range $4,100 - $17,000

Note: Totals may not reflect individual rows from rounding.

Source: EPA, 2009 (compiled from papers listed in endnote 8)
5

Acid Rain and Related Programs: 2008 Emission, Compliance, and Market Analyses

ed above (see Table 2). Using updated methods to assess 

ground-level ozone benefits results in total benefits ranging from 75 to 319 percent of those previously predicted 

(see Table 3). 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. 

SO2 Program Compliance

In 2008, all ARP facilities complied with the requirement 

to hold enough allowances to cover SO2 emissions. EPA allocated 9.5 million SO2 allowances under the ARP for 2008. 

Together with 6.7 million unused allowances carried over 

(or banked) from prior years, there were 16.2 million allowances available for use in 2008 (see Figure 3). ARP sources 

emitted approximately 7.6 million tons of SO2 in 2008, less 

than the allowances allocated for the year, and far less than 

the total allowances available (see Figure 3). As a result, 

between 2007 and 2008 the bank increased by nearly two 

million allowances to 8.6 million, a 28 percent increase. In 

2010, the total number of Title IV allowances allocated annually will drop to 8.95 million and remain statutorily fixed 

at that annual level.

2008 SO2 Allowance Market

Figure 4 shows the cumulative volume of SO2 allowances 

transferred under the ARP. The figure differentiates between allowances transferred in private transactions and 

those annually allocated and transferred to source accounts by EPA. 

Private transactions are indicative of both market interest 

and use of allowances as a compliance strategy. Of the nearly 379 million allowances transferred since 1994, about 68 

percent were traded in private transactions. In December 

2001, parties began to use a system developed by EPA to 

allow online allowance transfers. In 2008, account holders registered over 99 percent of all private allowance 

transfers through EPA’s online transfer system. Allowance 

transfers are posted and updated daily on <www.epa.gov/

airmarkets>.

Figure 4: Cumulative SO2 Allowances Transferred under the ARP 

(through 2008)

Source: EPA, 2009

Allowances (millions)

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

50

100

150

200

250

300

350

400

Private Transactions EPA Transfers to Account Holders

1994 1995 1996 1997

Figure 5: SO2 Allowances Transferred under the ARP

Source: EPA, 2009

5

10

15

20

25

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Trades Between Distinct Entities (significant transfers)

Allowances (millions)

Trades Between Related Entities

30

1994

0.9 1.9

4.4

7.9

9.5

6.2

12.7 12.6

11.6

8.1 7.5

10.0 9.5 9.1

5.9

9.2

16.7

8.2

15.2

13.5

18.7

25.0

22.5

21.4

16.5

15.3

19.9

22.4

16.9

13.9
6

Acid Rain and Related Programs: 2008 Emission, Compliance, and Market Analyses

In 2008, 3,236 private allowance transfers involving approximately 13.9 million allowances of past, current, and 

future vintages were recorded in EPA’s Allowance Management System (AMS). About 5.9 million allowances (42 

percent) were transferred in economically significant 

transactions (i.e., between economically unrelated parties). Transfers between economically unrelated parties 

are “arm’s length” transactions and are considered a better 

indicator of an active, functioning market than are transactions among the various facility and general accounts associated with a given company. In the majority of all private 

transfers, allowances were acquired by power companies. 

Figure 5 shows the annual volume of SO2 allowances transferred under the ARP (excluding allocations, retirements, 

and other transfers by EPA) since official recording of 

transfers began in 1994.

Over the first decade of the Acid Rain Program, allowance 

prices were stable and significantly lower than projected. 

When CAIR was proposed in late 2003, allowance prices 

were influenced by the more stringent CAIR SO2 cap and 

new compliance deadline. After CAIR was finalized in 

March 2005, allowance prices continued to trend upward. 

CAIR was the most significant driver of the price adjustment that began in 2004 and culminated with prices in the 

$1,600 range for a short time in December 2005. The Acid 

Rain SO2 market essentially became the CAIR SO2 market. 

In 2008, the SO2 allowance market experienced a 65 percent price decline; the monthly average fell from $509 per 

ton in January to $179 per ton by December.9 That decline 

has continued in 2009, with the allowance price falling to 

an average of $71 per ton by May. Together with the price 

decline, the volume of significant transactions fell sharply 

in 2008. Market observers should not confuse temporary 

high prices in the market response to major regulatory 

How Are Allowances Traded and Tracked?

Once allowances have been auctioned and allocated, utilities can buy, sell, trade, or save them to meet 

their compliance needs. Along with the utilities that 

hold allowances for compliance purposes, other actors such as brokers, environmental groups, and 

private citizens maintain accounts in EPA’s AMS. 

The AMS database records account balances and 

transaction records, and allows public access to the 

trading history of each allowance until it is finally 

retired. EPA does not maintain any sensitive business data, such as the price associated with allowance transfers. Allowance brokers and other market participants generally maintain a market price 

index (MPI) to track trends in prices over time and 

provide market signals similar to other commodity 

markets.

Most allowance transactions take place in the overthe-counter market, where prices are determined 

by each day’s bids and offers, and immediate 

settlement cash trades are enacted bilaterally or 

through brokers. Once trading parties agree on 

a price, they generally complete the transaction 

using standard contracts developed by trade 

associations or other market players (see, for 

example, the sample contract available at <www.

environmentalmarkets.org>). EPA provides a list 

of brokers and environmental groups that may be 

interested in facilitating trades or in helping parties 

retire allowances voluntarily (see <www.epa.

gov/airmarkets/trading/buying.html>). At some 

point after a transaction is complete, the account 

representative of the transferring or selling party 

will usually register the transfer of allowances with 

EPA. The representative can submit a paper form 

or transfer the allowances online using the CAMD 

Business System (see <www.epa.gov/airmarkets/

business/transfer.html>).

Outside of the spot market, utilities and investors have developed a range of more sophisticated 

structures to manage risk, including forward settlements, options, and swaps. However, these allowance trading strategies generally apply to market 

participants who have significant interests in allowance holdings or who are active investors in the 

market; such strategies are not necessary for transferring allowances for basic compliance needs. 

Table 4: SO2 Allowance Market in Brief (close of 2008)

Total Value of the SO2 Allowance Market $2.9 billion*

Average Nominal Price $179 per ton

Total Allowance Volume (Allowable Emissions) 16,227,082

2008 Private Transactions 3,236 transactions moving 

13.9 million allowances

42 percent of allowances transferred 

between economically unrelated 

parties

* Total value of allowance market is a snapshot based on the average nominal price as of December 2008 ($179/ton) and total 

allowance volume available for 2008 compliance.

Source: EPA, 2009
7

Acid Rain and Related Programs: 2008 Emission, Compliance, and Market Analyses

changes (more or less regulation), where buyers and sellers are searching for a new equilibrium based on available 

information they have from consultants and various services, with price volatility. EPA and market analysts have 

identified these regulatory forces—the CAIR emission caps 

and compliance deadlines, followed by the rule changes 

resulting from the July 2008 CAIR court decision—as the 

primary factor affecting current market conditions in the 

period from 2004 to 2008 and not inherent volatility in cap 

and trade programs due to shifts in other variables that 

influence the market. For further analysis see <www.epa.

gov/airmarkets/resource/docs/marketassessmnt.pdf>.

SO2 Allowance Auction

EPA’s 2009 annual ARP allowance auction was held on 

March 24. The annual auction provides an opportunity for 

power plants, brokers, and private citizens to buy and sell 

allowances. Title IV mandates that a limited number of 

allowances allocable to existing sources be withheld and 

auctioned. The auctions help ensure that new electric generating plants have a source of allowances beyond those 

allocated initially to existing units. Proceeds from the auctions are returned to sources in proportion to the allowances withheld. 

The auction includes two “vintages” of allowances. Vintage 

describes the earliest year an allowance may be applied 

against SO2 emissions. In addition to year 2009 allowances, the Clean Air Act mandated that EPA auction additional 

allowances seven years in advance to help provide stability 

in planning for capital investment. These advance allowances will be usable first in 2016. Complete results of the 

annual SO2 Allowance Auction are available at <www.epa.

gov/airmarkets/trading/auction.html>.

NOx

NOx Emission Reductions

Title IV requires NOx emission reductions for certain coalfired EGUs by limiting the NOx emission rate (expressed in 

lb/mmBtu). Congress applied these rate-based emission 

limits based on a unit’s boiler type. The goal of the NOx program is to limit NOx emission levels from the affected coalfired 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.

Figure 6, on page 8, shows that NOx emissions 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, or more than double the Title IV NOx emission reduction objective. While the ARP was responsible for a large 

Sources Achieved 100 Percent NOx

Compliance in 2008, Using a Variety of NOx

Compliance Plan Options

Standard Limitation. A unit with a standard limit meets 

the applicable individual NOx limit prescribed for its boiler type under 40 CFR Parts 76.5, 76.6, or 76.7 (290 units 

used this option in 2008).

Alternative Emission Limit (AEL). A utility can petition 

for a less stringent AEL if it properly installs and operates the NOx emission reduction technology prescribed 

for that boiler, but is unable to meet its standard limit. 

EPA determines whether an AEL is warranted based on 

analyses of emission data and information about the NOx

control equipment (six units used this option in 2008). 

Emissions Averaging. Many companies meet their NOx

emission reduction requirements by choosing to become 

subject to a group NOx limit, rather than by meeting individual NOx limits for each unit. The group limit is established at the end of each calendar year. The group rate 

must be less than or equal to the Btu-weighted group rate 

units would have had if each had emitted at their standard limit rate (673 units used this option in 2008). 

Note: Unit counts do not include those with a retired unit 

exemption.

portion of these annual NOx reductions, programs such 

as the NOx Budget Program under EPA’s NOx State Implementation Plan (SIP) Call and other regional and state NOx 

emission control programs also contributed significantly 

to the NOx reductions achieved by sources in 2008.

From 1995 to 2008, annual NOx emissions from ARP units 

dropped by about 3.1 million tons, a net decrease of 51 

percent. During this period, forty-two states and the District of Columbia reduced NOx emissions, while six other 

states accounted for only about 15,600 tons of increased 

NOx emissions.

Seasonal NOx Control Programs

States subject to EPA’s 1998 NOx SIP Call have achieved 

significant reductions in ozone season NOx emissions since 

the baseline years 1990 and 2000. All of these states have 

achieved reductions since 1990 as a result of programs 

implemented under the 1990 Clean Air Act Amendments, 

with many of them reducing their emissions by more than 

half since 1990. A significant portion of these decreases in 

NOx emissions has been achieved since 2000, largely as a 
8

Acid Rain and Related Programs: 2008 Emission, Compliance, and Market Analyses

result of reductions under ozone season NOx trading programs implemented by the OTC, from 1999-2002, and under the NOx SIP Call, from 2003-2008. For reports about 

these programs, see <www.epa.gov/airmarkets/progress/

progress-reports.html>. 

Even with these other programs, further reductions in annual NOx emissions were achieved in 2008. Possible reasons for this decline could include:

• 8 new selective catalytic reduction systems (SCR) and 

7 new selective noncatalytic reduction systems (SNCR) 

were installed in 2008.

• Sources might have taken advantage of incentives for 

generation of early action (compliance supplement 

pool) allowances intended for use under the CAIR annual NOx program that began in January 2009.

NOx Compliance

The ARP NOx Program does not impose a cap on NOx emissions and does not rely on allowance trading. The ARP NOx 

Program, however, provides compliance flexibility achieved 

through an approach that is designed to maximize NOx 

emission reductions and ensure that those reductions are 

sustained. Under the ARP, EPA allows affected sources to 

comply by either meeting a unit-specific emission rate or 

including two or more units in an emission rate averaging 

plan (see text box on page 7). These options provide affected sources with the flexibility to meet the NOx emission 

reduction requirements in the most cost-effective manner. 

In 2008, all 969 units that were subject to the ARP NOx Program achieved compliance.

Emission Monitoring and Reporting

The ARP requires regulated sources to measure, record, and 

report emissions using continuous emission monitoring 

systems (CEMS) or an approved alternative measurement 

method. The vast majority of emissions are monitored with 

CEMS, while the alternatives provide an efficient means of 

monitoring emissions from the large universe of units with 

lower overall mass emissions. Table 5 shows the number 

of units with and without SO2 CEMS for various fuel types, 

as well as the amount of SO2 emissions monitored using 

CEMS. Although only 32 percent of units use CEMS, 99 percent of all SO2 emissions from ARP sources are monitored 

in this fashion.

CEMS and approved alternatives are a cornerstone of the 

ARP’s accountability and transparency. Since the program’s 

inception in 1995, affected sources have met stringent 

monitoring quality assurance and control requirements, 

and have reported hourly emission data in quarterly electronic reports to EPA. Using automated software audits, 

EPA rigorously checks the completeness, quality, and inSource: EPA, 2009

Figure 6: NOx Emission Trends for All Acid Rain Program Units, 1990–2008

5.5 5.4 5.4 5.5 5.3

4.8

4.5

4.1 4.0

3.8

3.4 3.3 3.1 3.0

2.7

6.7

6.1 5.9 6.0 6.0

5.5

5.1

4.7 4.5 4.2

3.8 3.6

3.4 3.3

3.0

1

2

3

4

5

6

7

8

1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

NOx Emissions (million tons)

NOx Program Affected Sources Title IV Sources Not Affected for NOx
9

Acid Rain and Related Programs: 2008 Emission, Compliance, and Market Analyses

Table 5: Units and SO2 Emissions Covered by Monitoring Method 

for the Acid Rain Program

Number of 

Units

Percentage 

of Units

Percentage of 

SO2 Emissions

Coal CEMS 1,055 29.74 98.68

Gas CEMS 19 0.54 0.03

Non-CEMS 2,259 63.69 0.06

Oil CEMS 42 1.18 0.21

Non-CEMS 159 4.48 0.88

Other CEMS 12 0.34 0.13

Non-CEMS 1 0.03 0.00

Note: “Other fuel units” include units that in 2008 combusted primarily wood, waste, or other nonfossil fuel. The total number of units 

in the table excludes 25 affected units that did not operate in 2008.

Source: EPA, 2009

tegrity of these data. All emission data are available to the 

public on the Data and Maps web site maintained by EPA’s 

Clean Air Markets Division (CAMD) at <camddataandmaps.

epa.gov/gdm/>. The site also provides access to other data 

associated with emission trading programs, including reports, queries, maps, charts, and file downloads covering 

source information, emissions, allowances, program compliance, and air quality.

The emission monitoring requirements for the ARP are 

found in 40 CFR Part 75. Compliance with these provisions 

is also required for sources participating in the CAIR trading programs.

ECMPS

CAMD recently reengineered the process that the regulated 

community uses to maintain, evaluate, and submit monitoring plans, quality assurance certifications, and quarterly 

emission data. An important tool in this effort is the Emissions Collection and Monitoring Plan System (ECMPS). Beginning with reports submitted in April 2009, ECMPS has 

replaced the processes and multiple software tools used 

previously for evaluating, submitting, and receiving compliance-related information. Data submitted via ECMPS 

must meet a basic level of quality. If an evaluation generates 

a “critical” error, sources are able to submit data to meet 

the regulatory deadline but must then resolve the errors 

and resubmit the data. ECMPS also has an expanded set 

of data validation checks that assist EPA in implementing 

improved auditing as sources begin to comply with CAIR. 

ECMPS incorporates the following components:

• A single desktop tool, made available by EPA, for authorized users to import and evaluate their data and 

submit it to CAMD. 

• A new data reporting format based on the flexible Extensible Markup Language (XML) standard. 

• A centralized database at CAMD for receiving and 

maintaining submitted data, which can be accessed 

directly through the desktop tool. 

• Tools and procedures for the quality assurance of data 

prior to submission, including the consolidation of 

evaluation results (feedback) into one set.

• The ability to maintain select data outside of the electronic data report.

• New security requirements.
10

Acid Rain and Related Programs: 2008 Emission, Compliance, and Market Analyses

Endnotes

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.

2 Pope C.A., Burnett R.T., Thun M.J., Calle E.E., Krewski D., Ito K., and Thurston G.D. 2002. Lung cancer, cardiopulmonary mortality, and longterm exposure to fine particulate air pollution, JAMA, 287(9):1132-1141.

3 Year 2008$ inflated from $108 billion and $4.384 billion 2000$ using CPI inflation calculator.

4 Laden F., Schwartz J., Speizer F.E., Dockery D.W. 2006. Reduction in fine particulate air pollution and mortality: Extended Follow-up of the 

Harvard Six Cities Study, American Journal of Respiratory and Critical Care Medicine, 173 (2006) 667-672.

5 See EPA’s Regulatory Impact Analysis for the 2006 PM2.5 National Ambient Air Quality Standards, available at: <www.epa.gov/ttn/ecas/

ria.html>.

6 The original air quality estimates were based on a regulatory air quality modeling platform that has been substantially updated since 

2005. The updates include (1) major changes to base year and future case emissions and meteorological inputs, (2) a new air quality 

model with improved chemistry and other scientific features, and (3) new methods for projecting future air quality relative to current 

measured data. The effects of these improvements on the benefits from the ARP have not been quantified.

7 Valuation includes 3% discount rate for future incidences of premature mortality avoided.

8 O3 Mortality, Non-Accidental

Ito, K., De Leon, S.F., and Lippmann, M. 2005. Associations between ozone and daily mortality: analysis and meta-analysis. Epidemiology

16(4): 446-57.

Schwartz, J. 2005. How sensitive is the association between ozone and daily deaths to control for temperature? American Journal of Respiratory and Critical Care Medicine 171 (6): 627-31.

Bell, M.L., McDermott, A., Zeger, S.L., Samet, J.M., and Dominici, F. 2004. Ozone and short-term mortality in 95 US urban communities, 1987-

2000. JAMA 292(19): 2372-8.

O3 Mortality, All Cause

Levy, J.I., Chemerynski, S.M., and Sarnat, J.A. 2005. Ozone exposure and mortality: an empiric bayes metaregression analysis. Epidemiology

16(4): 458-68.

Bell, M.L., Dominici, F., and Samet, J.M. 2005. A meta-analysis of time-series studies of ozone and mortality with comparison to the national 

morbidity, mortality, and air pollution study. Epidemiology 16 (4): 436-45.

O3 Mortality, Cardiopulmonary

Huang, Y., Dominici, F., and Bell, M. L. 2005. Bayesian hierarchical distributed lag models for summer ozone exposure and cardio-respiratory mortality. Environmetrics 16: 547–562.

9 Based on the Market Price Index (MPI) that uses trade, bid, and offer price as tracked by CantorCO2e.