# The Acid Rain Program and Environment a l Justice:

S t aff Analysis

U.S. Environm ental Protection Agency Office of Air and Radiation Clean Air Markets Division

Septem ber 2005

1

# Executive Summary

This staff paper analy zes the i m pacts of t h e Acid Rain Program ( A R P ) on people of different races, ethnicities, and incom e lev e ls. Federal agencies are directed by E x ecutive Order 1289 8 (issued in February 1994) to ident i f y and address, as appropriate , disproporti onately high and adverse human health or environm ental effects of their progra m s, po licies, and activities on m i norities and low income populati ons.
Congress passed the ARP in 1990 as part of a m a jor o v er haul of the entire Clean Air Act. Since then, the
program has reduced sulfur dioxi de (SO 2 ) and nitro g en oxi de (NO x ) e m issions 3 2 % and 37% respectively from the power industr y na tionwide, reduced acid depos ition, and i m proved air qualit y in broad swaths of the countr y

. In addition, some acid ified lakes and stream s in the East are beginning to show signs of
recovery . This staff analy s is exa m ines h o w trading of SO 2 em issio n s under the ARP has affected

e m is sions at various geographical scal es (e.g., natio nal, regional, and local) and uses e m issions , air qualit y , and h ealth exposure m odeling to estim ate the benefits of fu ll im plementation of t h e ARP in 20 10

on m i nority and low incom e co mm unities.

Analy ses of SO 2 e m issions trading under the ARP show area s with the highest emissions prior to the
program had the largest emission reductions. This oc curred at both regional and indivi dual pla n t-level scale s ; the lar g est e m is sion reductions occurred in th e Midwest (where e m issions were highest) and the sources with the largest e m issions before the program tended to reduce e m is sions the m o st. Per h aps m o r e i m portantl y , even in areas where emissi ons increased at so m e plants, m onitoring data suggests that air qualit y in those areas still i m proved due to a large ove rall reduction in regionall y-transported air polluti on as a result of the ARP. There have been no vi olations of the SO 2 health-based national a m bie n t air quality standard since at least 2000.

Although the ARP was enacted to reduce acid deposition, it has also benefited public health due to reductions in fine particle c oncentrations. This is because SO 2 and NO x e m is sions react in the at m o sphere, often far from their sources, to form fi ne particle pollution (PM 2. 5 ). Exposure t o PM 2. 5 is known to be associat ed wi th m a ny heart and lung illnesses, as well as prem ature death. It is im portant that any analy s is of the hum an health im pa ct s of the Acid Rain Program include an analy s is of air quality as im p acted by sources at both local and regional scales. This report contains air quality m odeling analy ses using two different m e thodol ogies to estim ate the changes in e xposure of m i norit y and l o w-income popu lations to

am bient concentrations of PM 2. 5 as a result of the AR P. Both anal y ses show tha t , in 2010, each racial, ethnic, and inco m e -level gr oup studied r eceived si m i l a r average i m provem e nt in PM 2. 5 in the e astern U.S. (where the va st m a jority of the e m ission re ductions took place) as a result of the ARP. No disproporti on ately hi gh an d adverse hu man health or environm ental effects of the Acid Rain Program were found for an y m i nority, low-inco me, or other populati on.
Finally

, since air pollution co m es fro m many diverse sources and affect s people both close to and far from its sources, EPA uses a num b e r of progra m s and provisi ons to protect and i m prove air quality

. The Clean Air Act direct s EPA and the States to operate a suite o f program s, o f which the ARP is onl y o n e , to ensure that air qualit y in all areas protects ever yone ’ s health and welfare. The National Am bient Air Quality Standards are in place for all areas of the countr y t o ensure that everyone ’ s air is safe to breathe. In addition, EPA recently prom ulgate d the Clean Air I n terstate Rule (CAIR) to further reduce SO 2 and NO x em issions from ARP sources in the East and the Clean Air Visibility Rule (CAVR) to reduce SO 2 and NO x e m is sions in the West. These new programs, seve r al recent m o bile source rules, and State actions to bring areas into attainment with the NAAQS, will conti nue to im p r ove air quality for all people in the future.



### 2

## The Acid Rain Progra m and Environmental Justice:

S t aff Analysis

President Bill Clinton issued Executive Order 12 898 in February 1994, directing federal agencies to begin:

“...identifying and addressing, as appropriate, disproportionately high and adverse human health or environmenta l effects of its program s, policies, and activitie s on minority populations and low-income populations...” 1



### Executive O r der 12898 gives federal agencies disc retion as to how to conduct environm ental justice analyses. EPA’s guidance, while defining e nvironm ental justice as “ f air tr eatm ent and

m eaningful involvem e nt of all people regard less o f race, colo r, national origin, or in co m e with respect to the developm ent, imple m entati on, and enforcem ent of environm ental laws, regulations, and policies,” 2 

### also leaves analytical d i scretion to individual offices and program s.
This paper explores environm enta l ju stic e issu es r e lated to th e Acid Rain Program (ARP), a national program to decrease acid deposition by reducing em issions of sulfur dioxide (SO 2 

### ) and nitrogen oxides (NO x 

### ) from power plants. The analysis focuses on the SO 2 

### portion of the ARP because it is imple m ented through a cap and trad e m echanism that does not requ ire specific

em ission reductions at any part icular source. Instead, it enforc es a national cap on em issions (which is significantly lower than em issions at the tim e) and allows sources to trade amongst them selves as long as aggregate emissions do n o t exceed th e cap. The ARP is analyzed regularly, and all evidence indicates it has been providing w i despread air quality improvem e nts to the public at large. Em issions have gone down, aci d deposition has been reduced in the most sensitive areas of the country, and ther e have been no violations of the SO 2 

### health-based national

am bient air quality stan dard since at least 2000 3 

### . This indicates tha t the A R P works in conjunction with other program s a nd provisions to provide clean ai r for all people to breathe.

W h ile ther e is no evid en ce tha t this c a p and trade m echanism has led to in creas e d human exposure to air pollution, the Clean Air Mark ets Division (C AMD) has never investigated whether the ARP could cause or contribute to envir onm ental injustices. It is important, theref ore, that we assess 1) how trading of SO 2 

### em issions under the A R P m i ght affect the m i nority and low-incom e communities described in Execu tive Order 12898 and 2) how trad ing of SO 2


### em issions has impacted em issions at both a region al and a local scale. These issues will be especially important as EPA and the states con tinue to implem ent new program s that will ex tend the use of cap and trade to address new probl em s and to reduce additional pollutants.

This paper concludes that the large em issions reductions required by the em ission cap, coupled with the regional natu re of fine particle pollution from pow er plants, have produced large air quality improvem e nts for all peopl e living in the eastern U.S. Th is conclusion is based on two analyses inv e stig ating th e change in average air quality for m e mbers of racial, ethnic, and incom e groups as well as a loca l-scale analysis of the air qua lity implications of e m ission increases in one area.

3

# The Acid Rain Program

In the 1990 Clean Air Act Am endments (CAA), Congress required the ARP SO 2 

### program to reduce em issions to half of 1980 levels, capp i ng them at 8.95 m illion tons per year by 2010. In 2003, em issions were 10. 6 m illion to ns, a 32% reduc tion in annual em issions from 1990 levels and a 38% reduction from 1980 levels. 4 

### Em issions in 2003 were highe r than the cap, because sources redu ced m o re than required in the ea rly y ears of the p r ogram and built up a ba nk of available em ission allow a nces. A m o re detailed explanation of cap and trade and the A R P is below.

Congress did not cap em issions of NO x 

### from power plants; rather, the NO x 

### portion of the ARP requir e s coa l -f ired powe rplan ts to lim it their NO x 

### em issions to specific rates (expressed as pounds of NO x 

### per m illion British th erm a l units (Btu) of heat input). It s e eks to ach i ev e a 2

m illion ton annual redu ction in NO x 

### em issions from what e m issions would have been w ithout the
program in 2000, a goal it has achieved ev ery year since 200 0. Em issions of NO x 

### were 4.1

m illion tons in 2003, a 3 7 % reductio n from 1990 levels. 4



### These em ission reductions of SO 2 

### and NO x 

### have led to improved air quality (especially lower concentrations of fine particles) and reduced acid deposition. In additi on, som e acidified lakes and stream s in the East are beginning to show signs of recovery. Alt hough the program affects power plants throughout the U.S., most of the em ission reductions, and therefore m o st of the environm ental improvements, have taken place in th e eas tern h a lf of the U.S. where m o st of the larges t ( a nd highest-em itting) coal-f ir ed power plants ar e loc a t ed. 4



### As both the structure of the ARP SO 2 

### program and how this program fits with other provisions of the Clean Air Act ar e ke y to this ana l ysis, it is important to discuss several elem ents of the ARP and its relationship to the rest of the Clean Air Act before describing the results of the environm ental jus tice an alyses.

Cap and Tr ade under the ARP The ARP ha s a perm anent annual em i ssion cap on the total am ount of SO 2 

### power plants can

em it. Each source is allo cated SO 2 

### “allowances, ” and each allowance auth orizes the so urce to

em it one ton of SO 2 

### . While agg r egate nation a l em issions cannot exceed the to tal nu mber of allocated allowances (th e cap), sou r ces can m eet their lega l o b liga ti on under the program by either reducing em issions or purchasing allowanc es from othe r sources that reduce em issions below their allocations. At the end of the year, sources with unused allowa nces m a y sell them or bank them for future use, while sources needing extra allowances can pu rchase them t h rough the

m a rket. Trading in the ARP is used to increas e f l exibility a nd achieve em ission reductions at lower cost, but it is th e cap, in conc ert with the National A m bient Air Quality Stan dards (s ee below), that ensures the environm ental goals of clean air and less acid dep o sition are m e t.

Accountability Access to infor m ation about pollu tion is considered critical to environmental justice and to

m eeting the requirem e nts of Executive Order 12898. The ARP has also considered it crucial to its program s from the very beginning and ha s collected and reported em issions data from affected sources since the program ’s inception. In order to know whether any cap and trade

4

### em ission red u ction p r ogram is successful, em issions m u st be m easured accurately and credib ly. In the cap and trade program

, SO 2 

### em ission allowances are a commodity that can be bought and sold, m a king accurate and credib le em issions measurem ent an im portant foundation for the allowance m a rket. Em issions are m easured hourly by each sou r ce and repo rted quarterly to EPA, where they can be access ed on the EP A website at www.epa.g ov/airmarkets . The penalties for
not m onitoring em issions accurately are both au tom a tic and s t ring ent, pro v iding a s t ro ng incentive for sources to comp ly while protecting the integrity of the cap. In addition to the raw data available on the web, EPA reports em ission levels, air quality, and environm ental changes rela ted to th e ARP and reports p r ogress to the public regularly. 4 

### This inform ation collection and dissem i nation reflects the important environm ental justice value of m a king reliable inform ation about environm ental m a tters m o re readily available.

Part of the Clean Air Act The CAA is a suite of program s designed to ensure that all areas m eet health-b ased air quality goals by reg u lating em issions f r om multiple sou r ces us ing a varie t y of mechanism s . These include such program s as:

• National A m bient Air Quality Standards (NAAQS ), which set standards for six criteria pollutants, including SO 2 

### and PM 2. 5



### • State Implem entation Program s (SIPs), which de scrib e how a sta t e will m e et the NAAQS

• New Source Review and New Source Perform a n ce Standards, which ensure that new or significantly m odified power plan ts and other stationary sour ces or air pollution will be cleane r than older, r e tirin g sources an d will not impede progr ess toward a tta ining th e NAAQS

• Mobile source controls

The ARP works closely with othe r aspects of the CAA, particularly the NAAQS program that sets the am bient air quality st andards to protect everyone’s he alth. State compliance with the NAAQS will guaran t ee that no m i nority, low-inco m e , or any other popu lation will experience disproportionate and adverse hum an health or en vironm ental effects as a result of program s aim e d at lowering criteria pollutant em issions. A lthough the ARP was not desi gned to help attain the NAAQS, it has resulted in large reductions in fine particle concentr ations throughout the eastern U.S., including in non-at tainm e nt areas. T h erefore, pub lic health is protected through federal efforts to reduce long-range transport of pollution (such as through the ARP) and state and local efforts to achieve the NAAQS by reduci ng local sources of pollution (such as through siting and operating perm its for sources). Sources covered by the ARP are also sub j ec t to th e other applicable CAA requirem e nts; for example, the ability of a source to buy allowances under the ARP does not alter the requirem e nt that ev ery area m u st m eet the NAAQS or alter any

em ission lim its set under a SIP.



# Analysis of Effects of the ARP on Minority and Lowincome Population Exposure to PM 2.5



### By reducing SO 2 

### and NO x 

### em issions, the ARP has also redu ced the formation and long-range transport of fine particle pollution (P M 2. 5 

### ) throughout the East. SO 2 

### and NO x 

### react in the
atm o sphere to form sulfates and nitrat es, which are significant compone nts of PM 2. 5 

### . PM 2. 5 

### is

5

### known to cause m a ny different kinds of heart and lung problem s, including chronic bronchitis and heart attacks, and can cause prem atur e death. The broad regional reduction in PM 2. 5 

### is the most important health benefit achieve d from i mplem entation of the ARP.

The initial step of this an alysis was to deve lop sc e n arios of emissions and a i r qua lity f o r

two scenarios: w ith the ARP and without the ARP. We had developed these scenarios for an analysis of the health benefits of the ARP, and we used the em issions and air quality data from that analys is to consider the influence each scenar io would have on various population groups. 5



### Em issions of NO x 

### and SO 2 

### and PM 2. 5 

### concentrations in 2010 for the following two scenarios

were m odeled. The 2002 Integrated Planning Model (IPM) a 

### was used for SO 2 

### and NO x 

### e m issions and the Reg u lato ry Mod e ling Syste mf o r Aero sols and Deposition (REMSAD) was used for PM 2. 5 

### concentrations: b



### 1) Withou t the ARP – This scenar io inc l udes all exis ting and new source emission control standard s for SO 2 

### and NO x 

### set before 1990. This scenario takes into consideration the retirem e nt of old facilities and NSR require m e nts for new fa cilities, a growing dem a nd for electricity in the futu re, and a les s efficient N O x 

### control technology option for future

comp liance with the NAAQS. It does not consider the ARP SO 2 

### e m issions cap or N O x 

### standards. Em issions of both pollutants would be expected to increase between 1990 and 2010 in the absence of the ARP.

2) With the AR P – This sce n ario includ es the ARP SO 2 

### e m issions cap with trading and banking and lim its on NO x 

### em issions, as prescribed by the ARP legislation. It also includes sev e ral available fuel switch i ng and em ission control options, as well as

com bustion control options available for the ARP NO x 

### comp lianc e. This scenar io is expected to decrease an nual SO 2 

### emissions by 50% and annual NO x 

### em i ssions by 30% from what they would have been without the ARP.

Modeling of em issions and air quality enable us to isolate th e specific effect of the ARP on
atm o spheric concentrations of PM 2. 5 

### . Modeling also enables us to l ook at the projected impact of the ARP in the future (e.g., when it is fully implem ented in 2010). EPA, therefore, conducted detailed m o deling of the impact of the AR P on minority and low in com e populations and

comp ared the improve ments in PM 2. 5 

### concentrations that these groups are expected to receive as a result of the ARP to improvem e nts that other groups are expected to receive. These analyses

a IPM is a m u lti -reg i on al m o d e l o f th e U.S. power sector th at projects em issions a n d costs

. The m odel has been used

ex ten s i v ely to su ppo rt m a j o r ru les affecti n g th e power in d u stry and o t h e r assessm en t acti v ities. Th e m o d e l and t h e

assum p t i ons w e re re vi ewe d b y t h e EP A Sci e nce Ad vi s o ry B o ar d du ri n g t h ei r revi e w of t h e Sect i o n 8 1 2 C A A A Prospective St udy. T h e m ode l also recei ve d detailed re view in c o njuncti on with t h e E n e r gy Inform ation Age n cy’s Natio n a l En ergy Mo d e ling Syste m in 20 03 by th e Presid en t ’ s C o u n ci l o f E c on om i c Advi s o rs an d was f u r t her im pro v ed as a result. M o re in fo rm ati on on I P M can be f o u n d at h ttp ://w ww.ep a.go v/ ai rmarkets/epa-i p m /
b REMSAD is an air qu ality mo d e l t h at estimates th e tr an spo r t and tran sform a t i o n o f em issio n s in t o amb i en t PM 2.5
co n c en tration s . Th e m o d e l u s es a 3 6 b y 36 k ilo m e ter g r id cov e ri n g th e con tin en tal Un ited States as well as so m e

ar eas o f f s h o r e

. Th is m o d e l has b e en r e v i ew ed and u s ed ex ten s iv ely to suppo r t m a j o r ru les af f ecting t h e po w e r in du stry as wel l as fo r To tal Max i m u m Dail y Lo ad (TMD L) a n al y s es. M o re i n f o rm ati on on R E M S A D ca n be fo u n d
at h ttp ://resmad

. sa in tl.co m

.



### 6

### showed that the ARP did not degrade air quality for any population group and that all groups received sim ilar improvem e nts.

Figure 1 displays the change in PM 2. 5 

### concentrations due to the ARP (“ With the ARP” comp ared to “W ithout the ARP”). This gives an estim ated change in exposure to P M 2. 5 

### , indicating where the m a in PM 2. 5 

### i mprovem e nts occurred. All areas experienced improvem e nts in PM 2. 5 

### due to the ARP. This m a p shows that the greatest im prove m e nts occurred in the Midwest and radiated out from there across th e eas tern U.S., with m u ch lo wer levels of improvem e nt in the W e st. These modeling re sults a r e con s isten t with the loca ti on and m a gnitude of e m ission reductions from power plants under the ARP.

Figure 1: Projected Reduction in Annual PM 2. 5 

### Concentrations in 2010: “With the ARP” Com p ared to “Without th e ARP”

So urce: E P A R E M S A D M o de l i ng, 2 0 0 2



### Methods for Estimating the Impact on Mi nority and Low Income Populations Using the geographic changes in PM 2. 5 

### concentrations across the U.S. resulting from the ARP in 2010, EPA took two slightly different approaches to analyze the potential im pact of the program on PM 2. 5 

### concentrations for m i nority and low-incom e populations in 2010. 6
, 7 

### The m a in differences between the analyses are summarized in Table 1.

7

### Table 1. Methodology Comparison betw een En vironmental Justice Analyses A and B

Analysis A Analysis B

1. Scope: Divided into eastern and western by lo ngitude - 98.5 1. Scope: 31 eastern states

2. Census data: Block data (race), Count y data (income), 201 0 projections ( W oods and P oole) 2. Census data: Census tract data, 200 0 data

3. Race Variab les: Nu m b er of African A m eri can, As ian, Caucasia n , Native A m eri can, and “Other” at t h e blocklevel; Nu m b er of Hispanic and NonHispanic at the block-level 3. Race Variab les: Percent of the populati on th at is white and percent non-white calculated for each tract and

co m p ared to the state avera g e

4. Income Vari ables: Nu m b er of people above and bel o w the povert y line at the
count y level 4. Income Vari ables : Percen t above and below the poverty level calculated for each tract and com p a r ed to average povert y rate i n the eastern states studied 5. Analytical M e thods: Estimated average chan ge in exposur e to PM 2. 5 for each group 5. Analytical M e thods: Conducted regression analy s is with change in PM 2. 5 as the dependent variable



### Scope Because em issions from power plants in the W e st are qu ite lo w relative to em issions in the East, both analy s es isolated th e impact in the East. In Analysis A, EPA produced nationwide results and results for the East and W e st separately. c 

### This showed th at there was a larg e difference in air quality improvem e nts between states in the East and W e st. Analysis B was lim ited to 31 eastern states, where m o st of the change too k place. d



### Census Data The two analyses used census data from di fferent years. Analysis A used 2010 population projections (based on 2000 census data) develope d by W oods and Poole, while Analysis B used data from the 2000 census.

The REMSAD air quality grid does not directly m a tch up wi th the geographical units of census data, so each analysis also had to assign air quality concentrations to census units. For the

c I n A n al y s i s A, t h e east e r n U. S. i s defi ned as t h o s e area s Ea st of - 9 8. 5 l o n g i t ude (a l i n e t h at ru ns fr om ro ug hl y cent r al No rt h Dak o t a s o ut h t h r o ug h t h e Gre a t Pl ai ns st at es t o we st Texa s).
d Alab am a, Arkan s as, Conn ecticu t , Delaware, District of C o lu m b ia, Flo r i d a, Geo r g i a, Illin ois, In d i an a, Iowa, Kent ucky

, L o u i si ana, M a i n e , M a ry l a nd, M a s s ach uset t s , M i chi g a n , M i nne sot a , M i ssi ssi p p i

, M i ss ou ri

, N e w Ham p shire, Ne w Je rsey , New Yo rk , No rth C a rolina

, Ohi o , Penn sylv an ia, Rh od e Island , Sou t h Caro lin a, Ten n e ssee, Verm o n t , Virgin ia, W e st Vi rgin ia, W i scon si n



### 8

### analysis on race, Analysis A used pro j ected 2010 data for census blocks, th e sm allest geographical area, bounded by visible borders , for which census data are collected. e 

### For the analysis on incom e , Analysis A used county-leve l data. Analysis B used 2000 data for census tracts, sm all statistica l subdivisions of a count y originally designed to have between 2,500 and 8,000 people and to be hom ogeneous with respect to population characteris tics, economic status, and living conditions. f



### Race Variab les For Analysis A, racial cate gories included African Am erican s, Asians, Caucasians, Native Am ericans and Others (group that encomp asses all other races). Hispanics and non-Hispanics were also co nsidered.

For Analysis B, the percentage of the census tr act population that is nonwh ite was calculated. In addition, the tract was identified as “m inority” if the resulting percentage was higher than the
average p e rcentage m i nority for a res p ectiv e state. This was used to comp are areas with higher

num b ers of m i norities to areas with lower num bers of m i norities.

Incom e Variables For Analysis A, the number of people above and below the poverty line at the county level was used to define low and high incom e categories, respectively. g



### For Analysis B, the percentage of each censu s tract population below the poverty threshold was calculated. In addition, the tract wa s identified as “poor” if the resulting percentage w a s higher than the average percentage of population under the poverty threshold for the eastern U.S.

Analytical Methods Analysis A tallied average change in each population group ’s exposure to PM 2. 5 

### due to the ARP.

Analysis B r a n sta tis tica l regres sions relating the change in P M 2. 5 

### concentrations with the dem ographic variables to evaluate whether poverty or race w a s a ssoci ated wi t h changes i n ai r quality. The poor and m i nority v a riables were used in separate regression s because th ey were highly co rrelated. S t ate dumm y variables were added to acco unt for between-state v a riation. Statis tical s i gnificance was calcu lated at th e 99 % level. Regressions were run and coefficients calcu lated f o r the f o llo wing:

• Tract below poverty percenta ge (eastern average)

• Tract below nonwhite percentage (state average)

e Th ere are 5

, 1 2 7 sq uare grid cells in th e REMSAD m o d e lin g do m a in

. f C e ns us t r act s t h at st ra ddl e m o re t h a n one R E M S A D gri d c e l l were as si g n e d wei g ht ed a v erages ba sed o n t h e p r op or tio n of t

h e tr act i n each cell. Th is assumes p opu la tio n is d i stri b u t ed ev en ly thro ugh ou t th e cen s u s t r act.
g No te th at si n c e th e g r i d cell an d coun ty bou nd aries are not n e sted, two ru les were d e v e lo p e d to calcu l a te th e p o v e rty d a ta for each g r id cell: (1) If a grid cell falls co m p lete ly with a cou n t y, t h e p o v e rty d a ta fo r t h at co un ty were

u s ed , and (2) Fo r tho s e g r i d cells fallin g i n m u l tip le co un ties, a po pu lation

- weigh t ed av erag e of th e p e rcen tag e of
p e op le b e low an d abov e p o v e r t y lin e in t h e co un ties w e r e used

.



### 9

### Results Despite variations in m e thods us ed, both analyses had sim ilar resu lts. First, both analyses show that the aggregate improvem ent in PM 2. 5 

### is sim ilar for all groups studied. The projected annual average red u ction in PM 2. 5 

### concentration for the eastern U.S. in 2010 under the ARP is approxim a tely 1.5 μg/m 3 

### for Analysis A and 1.6 μg/m 3 

### for Analysis B. h 

### As we will des c ribe later, any sm all differences in exposure to PM 2. 5 

### that occurred between the population groups appear to be very sm all comp ared to the overall improvem e nt s for everybody.

Overall, the results of both Anal ysis A and Analysis B indicate th at the A R P has been effective in achieving its intended results – broad regional reductions in air pollution for all Am ericans.

• The ARP i m proved air quality substantially overall.

• The ARP i m proved air quality subs tantially for each population group.

• No disproportionately high and adverse hum an health or environm ental effects were found for m i nority or low-incom e groups.

Analysis A Table 2 shows the population-weighted average exposure change for PM 2. 5 

### for t h e man y population groups studied in Analysis A. It al so presents the population-w e ighted average percentage change in PM 2. 5 

### exposure. In general, PM 2. 5 

### improvem e nts were m u ch more significan t in the East comp ared to the W e st, m a in ly because there are m o re power plants in the East.

When interpreting the results in Table 2 for the entire country, one should note that the largest

num b ers of Hispanic an d Native Am erican census tracts are in the W e st. These gro ups tend to live in areas where pollution from ARP sources is low and, thus, tend to have lower exposure to PM 2. 5 

### from ARP sources with or without the AR P. They do, however, seem to receiv e the greatest benefit from the ARP in the West comp a r ed to the other groups analyzed.

h The di f f ere n ce s bet w een t h e c h an ge i n e x p o s u re f o r

t h e t w o anal y s es i s d u e t o di ffe re nt m e t hods o f ass i gni n g ai r q u a lity to t h e po pu latio n using cen s u s d a ta id en tified in Tab l e 1.



### 10

### Table 2: Absolute and Percentage Decrease in PM 2. 5 

### Levels in 2010 by Race, Ethnic and Income Group

Po pu la t i o n W e ig ht ed A v e r ag e A b so lut e Ch ang e ( u g/m 3 ) Po pu la t i on W e igh t e d A v e r ag e Percent a ge Ch a n g e ( % )

Cate g o ry Gr ou p A ll US Easte r n U S We st e r n U S All U S Eas t e r n U S We st e r n U S

All All 1. 1 1. 5 0. 04 7. 9 10

. 2 0. 9

A f

r i can A m e r i c a n 1. 4 1. 6 0. 03 8. 9 9. 8 0. 6

As i a n 0. 8 1. 4 0. 01 4. 7 8. 3 0. 3

Race Ca u cas ia n 1. 1 1. 5 0. 05 8. 2 10

. 4 1. 1

N a tiv e A m e r ic an 0. 7 1. 3 0. 06 5. 8 9. 8 1. 5

Oth e r 0. 6 1. 2 0. 03 4. 2 7. 7 0. 8

E t hnic i ty Hi sp ani c 0. 6 1. 2 0. 04 4. 7 7. 8 1. 03

Non

- H i s p an i c 1. 2 1. 5 0. 04 8. 4 10

. 4 0. 9

In c o m e Bel o w Po v e rt y 1. 1 1. 5 0. 04 7. 7 10

. 1 1. 1

Ab o v e P o v e r t y 1. 1 1. 5 0. 04 7. 9 10

. 2 0. 9

So urce: M c C u bbi n et al

., 20 0 5

.



### The rest of this discu ssio n focuses on results for the eastern U

. S., where PM 2. 5 

### pollutio n f r om power plants was higher prior to the program and where improvem e nt wa s both needed and achieved.

Analysis A found that of the vari ous racial groups all received si gnificant, yet slightly different, improve m e nts in PM 2. 5 

### concentrations that were of si m ilar m a gnitude. Improvem e nts ranged from 1.2 to 1.6 μg/m 3 

### , i n cluding:

• African Americans (1.6 μg/m 3 

### )

• Caucasians (1.5 μg/m 3 

### )

• Asians (1.4 μg/m 3 

### )

• Native Am e r icans (1.3 μ g /m 3 

### )

• Hispanics (1 .2 μg/m 3 

### )

Figures 2 and 3 show the cum u lative distribution of the change in PM 2. 5 

### by race and b y Hispanic/Non-Hispanic, respectively. These figures show that all m e m b ers of all groups received at least som e benefit from the Acid Rain Progr am and that large portions of each group received large improvem e nts in air qua lity du e to the AR P.

11

### Figure 2: Cumulative Distribut io n of the Decrease in PM 2. 5 

### (ug/m 3 

### ) by Race in the Eastern U.S.

So urce: M c C u bbi n et al

., 20 0 5



### Figure 3: Cumulative Distribut io n of the Decrease in PM 2. 5 

### (ug/m 3 

### ) for Hispanics and NonHispanics in the Eastern U.S.

So urce: M c C u bbi n et al

., 20 0 5



### 12

### The analyses of the impacts of the A R P on people below the poverty line in Analysis A show that bo th po or and nonp oor groups received sign ificant – and equal – improvem e nts. Both poor and nonpoor received improvem e nts of 1.5 μg/ m 3 

### each. Figure 4 shows the cum u lative distribution of the change in PM 2. 5 

### for people above and below th e poverty line in the Eastern U.S. This graph shows that improvem e nts were nearly identical for people above and below the poverty line.

Figure 4: Cumulative Distribut io n of the Decrease in PM 2. 5 

### (ug/m 3 

### ) for Individuals Below and Above the Poverty Line in the Eastern U.S.

So urce: M c C u bbi n et al

., 20 0 5



### Analysis B Analysis B comp ared census tr acts that were abo v e the average state-level percent m i nority population to tracts that were belo w the average. It also comp ared census tracts that w e re above the eastern average for percentage in poverty to those below the eastern average. The analysis found that tracts with a higher per centage of m i norities or poor people have received slightly greater reductions in PM 2. 5 

### . The differences were very sm all comp ared to the overall average improve m e nt that all groups receiv ed . However, they were sta tistica lly s i g n if icant. This indic a ted that, if anyth i ng, m i norities and poor people r eceived greater benefits fro mthe program.

When Analysis B accoun ted for the f act th at th ere are s i m ilar ities with in a sta t e with respec t to air quality improvem e nt s, there appeared to be a high correlation betw een percent of minority population in a tract and PM 2. 5 

### improvem e nts.

13

### Limitations to the Analysis of 2010 ARP Projections This analy s is is based on m odeled forecasts of changes in power plan t em issions in 20 10 as a result of the ARP comp ared to the hypothetical of em issions that would have occurred if the
program had not been implem ented. The accuracy of these an alyses is dep e ndent on th e accuracy of the various m odels and the a ssump tions built into the m odels.



# Overview Analysis of the Acid Rain Program

To supplement m odeled projections of the im pac t of the ARP in 2010, we also include in this report analyses of how em issions have alrea dy changed since the ARP was passed by Congress in 1990. i 

### We focus here on the SO 2 

### component of the program to understand, specifically, the impact of em issions tra d ing on loca l comm unities.

In the past, most of EPA’s assessm ents of th e ARP have focused on national and regional level results bec a u se the ARP’s goals we r e nation a l in scale. However, because local increases in

em issions could have implications for various population groups, we exam ine the regional, state, and local level. Em issions analyses are best used a s an initia l s c reen ing ass e ssm ent to identif y plants and regions that might require further stud y. Because SO 2 

### e m issio n s are transp orted regionally, the location of e m issi on increases is not a good indicator of the location of the air quality and health impa cts of those em issions.



### National Emissions Have Been R e duced 32% from 1990 Levels The ARP successfully reduced em issions at th e national level. In 2003, annual national SO 2


### em issions were 38% lower than 1980 levels a nd 32% lower than 1990 levels (see Figure 5). These reductions occurred despit e a substantia l n a tionwide in creas e in power generation at these

sources.

i In this rep o rt, 19 9 0 is use d as a ba se line for analyses of em issions beca use th at is th e year th e ARP was sig n e d in t o l a w. T h e Aci d R a i n Pr o g ram was i m pl em ented begi nni ng i n 19 9 5

. Usi n g a y ear pri o r t o 19 9 5 as a basel i n e i s im port a nt beca use m a ny pl ant s re duce d em i ssi ons bey o n d e xpect at i o ns p r i o r t o 1 9 9 5 i n a n t i c i p at i o n o f t

h e pr o g ram

.



### 14

### Figure 5: National SO 2 

### Emissio n s under the ARP

Source: E P A, 2004



### Regions an d States wit h Highest Emissi ons Prior to the ARP Reduced the Most Before the ARP began, som e were concerned th at the larg e coal plants of the Midwest would purchase allowances and increase em issions unde r the program

, adding to poor air quality and acid rain th roughout the Midwest an d Northeast. Re searchers at the Env i ronm ental Law Institu te, Massachus etts Ins titu te o f Technology, and Envi ronm ental Defense have found that, g e nerally, the opposite has occurred. Most of the SO 2 

### reductions have occurred at large units – particularly those burn i n g high sulfur coal in the Midwest – b ecause that is where the cheapes t red u ctions were availab l e. 8

, 9 

### Also, most allowances in the early year s of the program (Phase I) were used in the state wh ere th ey were issued, ind i cating that there were n o t large shifts in em issio n s across the regions. 10



### EPA analyses comp aring 1990 em is sions to an average of Phase II (average of 2000-2003)

em issions also found that states with high em issi ons prior to the program were m o st likely to achieve deep reductions. Figure 6 shows that m o st of these states with high em issions prior to the ARP are located upwind of the areas the ARP was de signed to protect. Reductions in these states resulted in important environm en tal and health benefits over a la rge regional scale. In addition, the states th at redu ced em issions had large annu al redu ction s , while th e states that h a d increased

em issions – largely attributable to growth a nd not increases in em is sions rates – had much

sm aller ann u al increas es. The states with the greatest reductions were in the Midwest and included Ohio, Illinois, Indiana, and Missouri.

15

### Figure 6: S t ate-level S O 2 

### Emissio n s

Source: E P A, 2004



### Plants with the Highes t Emissions Prior to the Program Generally Achieved Greatest Reductions It is not surprising that som e of the plants under the ARP increased em issions while others decreased em issions because th ere is no require m e nt under a cap and trade program for any one power plant to reduce em issions as long as em issi ons from all sources are reduced. If the lowest

em itting sou r ces in creas e em issions by a sm all am ount, it is unlikely that such increases would cause sign ificant impacts on the local air qualit y. This is because the program has resulted in large regional reductions in em issions. Ho wever, if som e sources increase em issions substantia lly , there is gr e a ter po tent ia l tha t loca l impacts could occur.

To identify the size of the plants that reduced em issions between 1990 and the 2001-03 average, Figure 7 plots annual SO 2 

### em issions for each p l an t in 1990 versus the chan ge in em issions at th at plant during the ARP (b etween 1990 and 2001-03). 11 

### The red line indicates em issions reductions that would have occurred if all sources had reduced the sam e am ount (approxim a tely one-third from 1990 levels). Dots above the line represen t the plants with less than average em i ssion reductions, while dots below the line represent the plants with greater than average reductions.

The results of this analysis include:

• The plants with the highest em issions in 1990 tended to reduce their pollution the most.

• Som e plants (those plotted in the yellow ar ea of the figure) in creas ed em issions. Thes e plants tended to have lower em issions in 1990 (under 100,000 tons).

16

### • Plants that had high em issions in 1990 were also more likely to reduce beyond what they would have reduced if all plants reduced em issions the sam e percentage (approxim a tely one-third).

In conclusion, trading under the ARP has gene rally reduced em issions m o st at the highestem itting power plants, while em issions at som e sm aller power plan ts hav e exper i ence d sm all increases. Plants with the highest em i ssions in 1990 tended to achieve the greatest tons of reduction and percentage of reduction. This confirm s results of studies by external

r e sear cher s. 8, 9, 10, 1213



### Figure 7: Plant-Level 1990 SO 2 

### Emissions Compared to Changes in SO 2 

### Emissions betw ee n 1990 and the 2000-03 Average

- 3 50, 00 0 - 3 00, 00 0 - 2 50, 00 0 - 2 00, 00 0 - 1 50, 00 0 - 1 00, 00 0 -50, 00 0 0 50, 00 0

0 5 0, 000 100

, 000 15 0, 000 200

, 000 2 50, 0 0 0 3 0 0

, 0 0 0 3 50, 00 0 4 0 0

, 000

1990 S O 2 E m i s s i o n s ( t o n s )ChangeinSO2 (tons)from1990 to2001-03

C h ang e i n E m i s s i ons i f A l l P l ant s R e duc e S a m e A m ou nt

A c t ual C h ange i n E m i s s i o n s

The red line represents the expected cha nge in SO 2 from 1990 levels if each plant achieved the same percent reduction as the entire universe of affected sou r ces did in aggregate (approxim a t e ly one-third). This analy s is does not incl ude plants tha t were not in operation in 1 990.

Source: E P A, 2004



### 17

## Case Study: Local Emission Increases in the Study Area Are Balanced Out by Nearby Emission Decreases

For a cap an d trade p r og ram to achieve positiv e environm ental and health outcom e s in all locations, em issions increases in on e area m u st be offset by reductions of at least the sam e

m a gnitude in a location close enough in proxi m ity to ensure that air quality improves everywhere. The radius within which such “off-se tting” reductions m u st occur differs depending on the pollutant in question and other factors, such as m e teorological conditions. To further explore local impacts of trading em issions, EPA also conducted a cas e study analysis on a particular cluster of Midwestern pow er plan ts th at increased em issi ons and could have resulted in elevated local levels of air pollution.

For this case study exam ining local impacts of th e ARP, EPA chose plants that fit the following criter ia tha t could ind i ca te a potential local problem : 1) Had em is sions in the top 50 plants for current em issions 2) Increased their em issions be tween 1990 and the 2001-03 average 3) Did not improve their rates of SO 2 

### em issions per unit of heat input (S O 2 

### rates) between 1990 and the 2001-03 average 4) W e re clustered with at least one other plant (within 50 kilom e ters)

While several plants fit one or tw o criteria, only one pair of plants fit all o f these criteria. The two plants are Keystone and Hom e r City, both located in Pennsylvania.

Using Geographic Inform ation Sy stem (GIS) software, buffers were drawn around the Keystone and Hom e r City plants at various distances (50 km, 100 km , 200 km ). We chose 50 km (30

m iles) and 200 km (125 m iles) using a study by Levy et al. 14 

### , which showed that a sig n ificant portion of total population exposure (around hal f) occurred beyond 200 km of a powe rplant, while approxim ately 20% of the exposure occurs within 50 km of the plant. j 

### Another study by the sam e authors found sim ilar results for sulfate and nitrate particles at power plants in the Washington, DC, area. 15 

### These findings suggest that, while pollution from an individual power plant rem a ins important, reducing total, aggreg ate em issions within both a 50 and 200 kilom e ter buffer from a plant is also important for re ducing the population’s exposure. In comp arison,

som e other pollutants, s u ch as tiny p a rticle s em itted directly f r om diesel e ngine vehicles, deposit closer to th e sources and affect polluti on levels closer to the s ources th an NO x 

### and SO 2 

### , which

com e out of the stack in gaseous form a nd settle further away from their source.

Together, the Hom e r City and Keystone plants increased em issions by 45,000 tons between 1990 and the 2001-03 average (a 19% in crease). Figure 8 shows, however, that this increase occurred in an area where th ere w e re m a ny power plants that both increased and decreased em issions

j Th is stud y used th e CALPUFF atm o sp h e ric d i sp ersion m o del to loo k at the h ealth b e n e fi ts o f in stallin g co n t ro ls at in d i v i d u a l po wer p l an ts in Illin o i s to po pu latio n s liv ing at various distance s from po wer plants. For s u lfates,
ap pro x i m a tel y 2 0 % o f t

h e to tal ex po su re to su lfates (ran g e 1 % - 4 5 %) is lo cated with i n 5 0 k ilo m e ters o f th e p l an t. Half o f th e t o tal p opu latio n exp o s ure to a p l an t’s po llu tio n w a s f oun d to occu r b e y o nd 20 0 k ilo m e ter s o f th e p l an t. Wh ile these resu lts are sp eci fic to Illino i s, t h ey d o ind i cate th at th e v a st m a j o rity o f th e exp o s ure fro m a g i v e n p o wer p l an t o ccur s b e yo nd 5 0 k ilo m e ter s fr o m th e p l an t an d a substan tial p o r tion of th e expo sure o c cu r s ev en b e yon d 200 k ilo m e ters from th e p l an t

.



### 18

### during this period. For exam ple, the total em i ssions within a 50 km buffe r zone around Hom e r City and Keystone (including these two plants ) were 30% lower on av erage over 2001-03 than they had been in 1990. This decrease occurred m a inly because the Con e m a ugh plant (lo cated within 50 kilom e ters of these plants ) insta lled con t rol techno lo gy f o r SO 2 

### on its two coal-fired units in the m i d-1990s. The em ission decreases at Conem a ugh m o re than comp ensated for the increases at Hom e r City and Keystone. In addi tion, em issions within a 200 kilom e ters buffer zone decreased by 41% during the sam e ti m e peri od due to reductions at m a ny other plants, m o st notably Rivesville (W V), Mount Storm ( W V), Ca rdinal (OH), and Ashtabula (OH). In this region of the country, the cap and trade compone nt of the program was extrem ely effe ctive in reducing emissions, despite som e increases at certain p l ants. As a result, one would expect improve m e nts in air quality and environm ental benefits throughout the area.

The Hom e r City/Keysto n e case s t ud y illus t rates the importan ce of lookin g broadly w h en assessing the impacts of em issions from individu al power plants. This ca se study is a “perfect
storm ” situation where all of the factors that could cause pot ential problem s line up. In addition, it is loca ted in an ar ea of poten tial concern due to the num ber of large coal-fired power plants, high concentrations of ai r pollution, and large population centers. Yet, our analysis indicates that people living in this area had substantially less S O 2 

### em issions com i ng from the set of power plants around them after 2000 than occurred in 1990. In additi on, the results of comp arable analyses in other areas are expe cted to be sim ilar. Support for this com e s from looking at Figure 1 earlier that shows forecasted air quality im provem e nts nationwide altho ugh not all p o wer plants in the trad ing pro g ra m are lowering em issions.

Figure 8: Homer City and Keystone Case Study: Local Emiss i ons w i thin Various Distances from Pow er Plants

L e g e n d



### D P A _pl ant s E v e n t s P l a n t_ d a ta 1

. tx t E v e n ts
C H ANG E

_ S O 2 

# ! (

- 336 5 0 6 . 600 0 00 - - 270 0 0 0 . 0 0 0 0 0 

# ! (

- 269 9 9 9 . 999 9 99 - - 180 0 0 0 . 0 0 0 0 0 

## ! (

- 179 9 9 9 . 999 9 99 - - 900 0 0

. 0 0 0 0 0 0 

### ! (

- 899 9 9

. 9999 9 9 - - 1 000 0 . 000 0 0 0 ! (

- 999 9 . 9 9999 9 - - 1 0 00. 0 0000 0

- 999

. 9 9 9999 - 1 000. 0 000 0 0 " ) 1000

. 000 0 01 - 10 0 0 0 . 0 0 0 0 0 0 

### " ) 1000 0

. 0 0 0 001 - 9 0 0 00. 0 0 0 0 0 0 

## " ) 9000 0

. 0 0 0 001 - 1 8 0 000

. 0 0 0 0 0 0 

# " ) 1800 0 0

. 0 0 0001 - 2 7 000 0

. 0 0 0 0 0 0 

# " ) 2700 0 0 0 0 0001 3 6 000 0 0 000 0 0 1, 00 1 t o 10, 0 00 t o n de c r e a s e

10, 0 01 t o 90, 000 t o n i n c r e a s e 1, 00 0 t o n dec r eas e t o 1, 0 00 t o n i n c r e a s e 1, 00 1 t o 10, 0 00 t o n in c r ea s e 10, 0 01 t o 90, 000 t o n d e c r eas e 90, 0 01 t o 180

, 000 t o n de c r ea s e 180, 001 t o 27 0

, 00 0 t o n d e c r e a s e > 2 7 0, 0 0 1 t o n de c r ea s e C han ge i n S O 2: 19 90 t o 20 01- 03

Ho m e r Ci t y Ke y s t o n e

50 k m

10 0 km

20 0 km

S o urce: E P A, 2004



### 19

### Regional-Scale Air Quality Improved Significantly

While identifying plants and regi ons that have increased or de creased em issions is important, EPA is m o st interested in whet her air quality actually improve d. EPA found that, even in areas where som e plants increased em issions, em issi on reductions throughout the eastern U

. S. appear to have resulted in overall improve m e nts in ai r quality. Data from EPA’s Clean Air S t atus and Trends Network (CASTN ET) indicate that SO 2 

### and sulfate improve m e nts occurred throughout the U.S., even in areas where indiv i dual plan ts increas ed emissions.

During the late 1990s, following implem entation of the ARP, dram atic regional improvem e nts in SO 2 

### and sulfate concentrations were observed at long-term monitoring sites throughout the eastern U.S. This was not surprising, as reductions in SO 2 

### em i ssions can reduce am bient concentrations of both SO 2 

### and sulfates (as explained earlie r, sulfates are a component of PM 2. 5 

### ). This is due to the la rge r e duction s in SO 2 

### e m issions from Acid Rain sources. Analyses of regional m o nitoring data from CASTN ET show t h e geographic pattern of SO 2 

### and airborne sulfate in th e eastern U. S.

From 1989 t h rough 1991, prior to implem entatio n of the ARP, the highest am bient concentrations of SO 2 

### in the East were observed in we stern Pennsylvania and along the Ohio River Valley. Am bient SO 2 

### concentrations have decreased significantly since 1991, with average concentratio ns in the eas tern U. S. decreasing 57% in the Northeas t and 38% in the Mid-Atlantic region

. Before the program , in 1989 through 1991 (see Fi gure 9), the highest ambient sulfate concentrations were observed in we stern Pennsylvania, along the Ohio River Valley, an d in northern Alabam a. Li ke SO 2 

### concentrations, related sulfate concentr ations in am bient air have decreased since the pro g ram was i m plem ented, with averag e concentrations decreasing approxim ately 30% in all reg i on s of the eastern U.S. Both the m a gnitude of the highest concentrations and the size of the reg i on where th ey occur were dram atically reduced following implem entation of the ARP. The largest decreases were observed along the O h io River V a lley (see F i gure 9). Sim ilar results have been shown for we t sulfate concentrations in precipitation.

Because of these improvem e nts in air quality and reductions in sulfur dep o sition, acid ified lakes and stream s have recovered in m a ny areas and very substantial hum an health benefits occurred as people throughout the East were ex posed to m u ch lower levels of PM 2. 5


### .

20

### Figure 9. Mean Ambient Sulfate C o ncentrat ions in 1989-1991 and 2001-2003 in th e Eastern United States

2001 -20 03 1989 -19 91

Source: E P A, 2004 

# Limitations of these Analyses

EPA has e m ployed well-accepted an alytical m e thods and m o dels in these analyses. H o wever, in
any comp lex analyses using estim a ted param e ters and inputs from num e r ous m odels, there are likely to be lim itations and sources o f uncerta in ty . These analyses are no exception. As outlin ed in this report, these analyses used m a ny i nputs and tools, includi ng projected em ission inventories, air quality models (with their associated param e ters and inputs), and population and incom e estim a tes. Each of these inp u ts inc l ude s uncertainties but reflect the best av ailable inform ation at the tim e the analysis was conducte d. Each tool has lim itations and reflects the uncertainty of its data inputs, but all are well-res pected and f r equently used in scientific analyses. The Clean Air Markets D i vision al so recognizes that there m a y be additional approaches and

m e thods used to address this issue.

A potential lim itation of these analyses involves th e spatial relationship be tween analytical tools and som e as pects of environm ental justice im pacts. Local scale and enviro nm ental jus t ice impacts of the em issions controlled by the Acid Rain Program are a combined consequence of both long-range transpo r t of em issions and thos e em itted from nearby sources. The two m odels used in these analyses (IPM to project power pla n t em issions ; the REMS AD air quality m odel to estim ate fine particle co ncentration s ) are well- respected m odels that have been used for

21

### num e rous EPA analyses of em issions and air qu a lity impacts f r om power genera tion s ources. They are best when used to characterize the l ong-range transport aspects of regional air pollution problem s. The 36 km 2 

### grid size in R E MSAD and averag ing of values to aggregate up for regional analyses create lim itations in capturing sm a ller-sca le grada tions in concentration of fine particles and in estim a ting exposure to pollutants.

In general, analyses relying on the location of power plant em issi ons as an indicator of their potential health effects m a y ove re mphasize the contribution of sp ecific local sources to localscale h ealth effects, while inad equately accounting for the contri bution of long-range transport. This lim itation applie s to the em issio n s case s t ud y portion of these analys es. The location of power plant em issions is not al ways a good indicator of the hea lth effects of those em i ssions. Health effects of power plant em issions depe nd on factors such as m e teorology, wind speed and direction, and stack heightof plants, as well as the freque ncy and duration of hum a n e xposure. As already n o ted, m a ny of the health effects of power plants occur in co mmunities h undreds of

m iles downwind from s p ecific sources.

Air quality data from the CASTNET monitoring network is provided in these analyses to dem onstrate that regional air quality has im pr oved substantially since implem entation of the Acid Rain Program . As fine particle pollution is a regional problem , ofte n occurring hundreds of

m iles f r om the em issions that caused it, th is m onitoring network provides an appropriate perspective to characterize the regional impact of e m issions changes from power plants. However, the analyses do not include urban air quality m onitoring sites and do not fully depict

sm all-scale changes in a i r qua lity at locations be tw een m onitoring sites, s u ch as those that cou l d occur due to changes in em issions from power plants.



# Conclusions

This staff paper shows that the ARP is expected to improve air quality for all population groups in 2010 when it is fully implem e nted and that improvem e nts for each pop ulation grou p will be sim ilar. It sh ows that th e ARP will not have di sproportion a tely high and adverse hum an health o r environm ental effects on m i nor ity, low-incom e , or other popula tions. Moreover, analyses of

em ission changes from each source dem onstrate that cap and trade h a s been an effective policy tool to achieve the greatest em ission reductions at power plants that had the highest emissions of SO 2 

### in 1990. This has led to large, re gional impr ovem e nts in air quality.

Any discussion of the ARP, howeve r , m u st consider th at it is part of the Cl ean Air Act, a suite of provisions and program s designed to ensure th at all areas m eet ai r quality goals. These include the NAAQS , SIPs, New Source Review, New So urce Perform a nce Standards, m obile source controls, and toxic em ission control program s, as we ll as the ARP. If certain plan ts in the ARP either fail to contribute to air qua lity improvem e nt in polluted areas o r even cause air q u ality to worsen, these other Clean Air Act provisions and pr ogram s are available to ensure th at all areas will m eet air quality goals. Taken sep a rately, each provision is unlikely to ensure full p r otection, but together they improve air qu ality for all Am ericans.

22

### As an example of this, E P A recently r ecognized that further reduction s in SO 2 

### and NO x 

### from power plants are necess a ry to ensu re that the P M 2. 5 

### NAAQS are m e t. The goal was not to get rid of the cap and trade m echanism but to reas sess the cap and s e t it at a leve l that would result in additional em ission reductions fr om plants contributing to li ngering air quality problem s. Building on the success of the ARP, EPA prom ul gated a new cap and trade program , the Clean Air Interstate Rule (CAIR), in March 2005 to achi eve additional large reduc tions in em issions of SO 2 

### and NO x 

### from powe r sources located in the easter n U.S. Another recent ru le, the Clean Air Visibility R u le, will furt her reduce em issions of SO 2 

### and NO x 

### in the western U.S.

As CAMD c ontinues to implem e nt program s like CA IR to help bring a ll a r eas in to a tta inm e nt with the NAAQS, the Division is committed to continuing to evaluate its cap and trade
program s. This is essential for both E P A and the public to learn about the successes, challenges, and appropriate uses of such policy tools.

1 59 Fed e r a l Reg i ster 7 629 ; Feb r u a r y 16

, 19 94

. 2 U.S. Env i ro nmen tal Pro t ectio n Ag en cy. (20 05). Env i ro nmen tal j u stice. Accesse d 14 M a y 20 0 5 h ttp ://www.epa.go v/comp lian c e/en viron m en t a lju stice/in d ex.h t ml

. 3 p e rson al co mm u n i catio n , EPA Office o f Air Qu ality Plann i ng an d Standard s, Sep t em b e r 2 7
, 2 005

. 4 U.S. Env i ro nmen tal Pro t ectio n Ag en cy. (20 04). Aci d Ra i n Prog ram 20 03 p r og ress repo rt . Was h ington, D.C.: G P O

. EPA 430- R-0 4

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