# Acid Rain and Related Programs: 2008 Highlights

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# Acid Rain and Related Programs: 2008 Highlights 

# T he Acid Rain Program (ARP), established under Title IV of the 1990 Clean Air Act (CAA) Amendments, requires major emission reductions of sulfur dioxide (SO 2 

### ) and nitrogen oxide (NO x

### ), the primary precursors of acid rain, from the electric power industry. The SO 2 

### program sets a permanent cap on the total amount of SO 2 

### that may be emitted by electric generating units (EGUs) in the contiguous United States, and includes provisions for trading and banking emission allowances. The program is phased in, with the final 2010 SO 2 

### cap set at 8.95 million tons, a level of about one-half of the emissions from the power sector in 1980. NO x

### reductions under the ARP are achieved through a program that applies to a subset of coal-fired EGUs and is closer to a traditional, rate-based regulatory system. Title IV requires NO x

### emission reductions for certain coal-fired EGUs by limiting the NO x

### emission rate (expressed in lb/mmBtu) to a value based on a unit’s boiler type. The goal of the NO x

### program is to limit NO x

### emission levels from the affected coal-fired boilers so that their emissions are at least 2 million tons less than the projected level for the year 2000 without implementation of Title IV. EPA estimated this projected number to be 8.1 million tons. From July to October 2009, the U.S. Environmental Protection Agency (EPA) released three reports detailing progress under the ARP. These reports can be accessed at < www.epa.gov/airmarkets/progress/arp08.html >. This report highlights the key results from the previous reports and discusses the start of the Clean Air Interstate Rule (CAIR). For more information on the ARP please visit: < www.epa.gov/airmarkets/progsregs/ arp/index.html >. Detailed emission results and other facility and allowance data are also publicly available on EPA’s Data and Maps Web page at < camddataandmaps. epa.gov/gdm >. To view emission and other facility information in an interactive file format using Google Earth or a similar three-dimensional platform, go to < www. epa.gov/airmarkets/progress/interactivemapping.html >. Additionally, updated quarterly SO 2 

### emission data for ARP coal-fired power plants can be found at < www. epa.gov/airmarkets/quarterlytracking.html >. For general information on cap and trade programs please visit: < www.www.epa.gov/captrade/ >.

# Key Components of the ARP SO 2

# Trading Program **Phases and Reductions:** Title IV of the 1990 Clean Air Act Amendments set a goal of reducing annual SO 2 

### emissions by 10 million tons from all sources (8.4 million tons from power plants) below 1980 levels. To achieve these reduc tions, the law required a two-phase tightening of the re strictions placed on fossil fuel-fired power plants. Phase I began in 1995 and Phase II began in the year 2000. **Allowance Allocation:** The EPA allocates allowances to affected utility units based on their historic fuel consump tion and a specific emissions rate. Each allowance permits a unit to emit 1 ton of SO 2 

### during or after a specified year. **Annual Reconciliation:** For each ton of SO 2 

### emitted in a given year, one allowance is retired, that is, it can no lon ger be used. Allowances may be bought, sold, or banked. At the end of each year, sources are granted a 60-day grace period to ensure that they have sufficient allowances to match their SO 2 

### emissions during the previous year. If they need to, they may buy allowances during the grace period. Sources may sell allowances that exceed their emissions or bank them for use in future years. **Allowance Trading:** SO 2 

### allowance trading minimizes compliance costs, and since unused allowances can be sold to other program participants, the system encourages units to reduce emissions beyond required levels. **Flexible Compliance:** Each source can choose the most efficient way to reduce its SO 2 

### emissions. Installing new control technology, switching to lower-sulfur fuel, or optimizing existing controls are all options.

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# Acid Rain and Related Programs: 2008 Highlights **Stringent Monitoring:** Each source must continuously measure and record its emissions of SO 2 

### , NO x

### , and CO 2 

### , as well as heat input, volumetric flow, and opacity. In most cases, a continuous emission monitoring system (CEMS) must be used. **Automatic Penalties and Enforcement:** Any source that fails to hold enough allowances to match its SO 2 

### emissions for the previous year must pay to EPA by July 1 an automatic penalty of $2,000 (inflation-adjusted to $3,337 for 2008) per ton of emissions in excess of allowances held. The source must also immediately surrender to EPA an amount (referred to as an “offset”) of allowances, issued for the year the payment is due, equalling the tons of excess emissions. Moreover, each ton of excess emissions and each day of the year in which they occur constitute a violation of the Clean Air Act, subject to a discretionary monetary penalty. 

# Key Results of the SO 2

# Trading Program **Affected Units:** The SO 2 

### requirements under the ARP ap ply to EGUs, fossil fuel-fired combustors that serve a gen erator that provides electricity for sale. The vast majority of ARP SO 2 

### emissions result from coal-fired EGUs (close to 99 percent), although the program also applies to oil and gas units. There were 3,572 EGUs subject to the ARP’s SO 2 

### requirements in 2008. These units were at 1,346 facilities and 419 of those facilities had coal-fired generating units. **SO 2**  

### Emission Reductions: As Figure 1 shows, ARP units have reduced annual SO 2 

### emissions by 56 percent com pared with 1980 levels and 52 percent compared with 1990 levels. Sources emitted 7.6 million tons of SO 2 

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

## Figure 1: SO 2

## Emissions from Acid Rain Program Sources, 1980-2008

Source: EPA, 2009 All Affected Sources Phase II (2000 on) Sources 9 . 4 9 . 3 8 . 7 5 . 3 5 . 4 5 . 5 5 . 3 4 . 9 1 7 . 3 1 6 . 1 1 5 . 7 1 1 . 9 1 2 . 5 1 3 . 0 1 3 . 1 1 2 . 5 1 1 . 2 1 0 . 6 1 0 . 2 1 0 . 6 1 0 . 3 1 0 . 2 9 . 4 7 . 6 8 . 7 8 . 3 7 . 1 7 . 0 1 0 . 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 20SO2Emissions (million tons)

7 . 0 8 . 9

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### and already below the statutory annual cap of 8.95 milliontons set for compliance in 2010. Figure 2 shows state-bystate SO 2 

### emission reductions. The states with the highest emitting sources in 1990 have generally seen the greatest SO 2 

### reductions under the ARP. **Compliance:** In 2008, all ARP units complied with the re quirement to hold enough allowances to cover SO 2 

### emis sions. **Allowances:** In 2008, EPA allocated 9.5 million SO 2 

### allowances under the ARP. Together with 6.7 million unused al 

# Acid Rain and Related Programs: 2008 Highlights

Scale: Largest bar equals 2.2 million tons of SO 2 

### emissions in Ohio, 1990. Source: EPA, 2009 

## Figure 2: State-by-State SO 2

## Emission Levels for Acid Rain Program Sources, 1990-2008

1 9 9 0 E m i s s i o n s 1995 E m i s s i o n s 2 0 0 0 E m i s s i o n s 2 0 05 Emissions 2 0 08 Emissions

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# Acid Rain and Related Programs: 2008 Highlights lowances carried over (or banked) from prior years, there were 16.2 million allowances available for use in 2008. ARP sources emitted approximately 7.6 million tons of SO 2 

### in 2008, less than the allowances allocated for the year, and far less than the total allowances available (see Figure 3). Thus after the 2008 allowance reconciliation, the number of banked allowances increased to 8.6 million. In 2010, the total number of Title IV allowances allocated annually will drop to 8.95 million and remain statutorily fixed at that an nual level. **Allowance Market:** Figure 4 shows the annual volume of SO 2 

### allowances transferred under the ARP (excluding al locations, retirements, and other transfers by EPA) since



## Figure 4: SO 2

## Allowances Transferred under the ARP

Source: EPA, 2009 5 10 15 20 25

1 995 1 996 1 9 9 7 1 998 1 999 2 0 0 0 2 0 0 1 2 0 02 2 0 0 3 2 0 04 2 0 0 5 2 0 06 2 0 0 7 2 0 0 8 Trades Between Distinct Entities (significant transfers)Allowances (millions)

Trades Between Related Entities 30

1 994 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 

## Figure 3: SO 2

## Emissions and the Allowance Bank, 1995-2008

8 . 7 1 1 . 7 1 3 . 4 1 5 . 0 1 6 . 6 2 1 . 6 1 9 . 9 1 8 . 8 1 8 . 2 1 7 . 1 1 6 . 4 1 5 . 7 1 5 . 8 1 6 . 2

5 . 3 5 . 4 5 . 5 5 . 3 4 . 9 1 1 . 2 1 0 . 6 1 0 . 2 1 0 . 6 1 0 . 3 1 0 . 2 9 . 4 8 . 9 7 . 6 5 1 0 1 5 2 0 2 5

1 9 9 5 1 9 96 1 99 7 1 998 1 999 2 0 0 0 2 0 0 1 2 0 02 2 0 0 3 2 0 04 2 0 0 5 2 0 06 2 0 0 7 2 0 0 8 Allowances Allocated Unused Allowances from Previous Years Actual Emissions from Affected SourcesSO2(million tons)



### Source: EPA, 2009

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# Acid Rain and Related Programs: 2008 Highlights official recording of transfers began in 1994. About 5.9 mil lion allowances (42 percent) were transferred in economi cally significant transactions (i.e., between economically unrelated parties). Transfers between economically unre lated parties are considered a better indicator of an active, functioning market than are transactions among the vari ous facility and general accounts associated with a given company. 

# Key Results of the NOx

# Program **NO x** 

### Emission Reductions: Figure 5 shows that NO x

### emis sions from all ARP sources were 3.0 million tons in 2008. This level is 5.1 million tons less than the projected level in 2000 without the ARP (8.1 million tons), or more than dou ble the Title IV NO x

### emission reduction objective. Although the ARP was responsible for a large portion of these annual NO x

### reductions, programs such as the NO x

### Budget Trading Program and other regional and state NO x

### emission control programs also contributed significantly. **Compliance:** In 2008, 969 coal-fired generation units at 383 facilities were subject to the ARP NO x

### Program. All units achieved compliance in 2008. 

# Environmental Results **SO 2**  

### Air Quality: Data collected from monitoring networks show that the decline in SO 2 

### emissions from the power in dustry has improved air quality. The national composite average of SO 2 

### annual mean ambient concentrations de creased 71 percent between 1980 and 2008. 

## Figure 5: 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

1 9 9 0 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 04 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8NOxEmissions (million tons)

NO xProgram Affected Sources Title IV Sources Not Affected for NO x 

### Source: EPA, 2009

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# Acid Rain and Related Programs: 2008 Highlights **Acid Deposition Improvements:** Monitoring data show significant improvements in the primary acid deposition indicators:

• **Wet Sulfate Deposition:** Between the 1989 to 1991

and 2006 to 2008 observation periods, decreases in wet deposition of sulfate averaged more than 30 percent for the eastern United States (see Figure 6). **Nitrogen Deposition:** 

## • Inorganic nitrogen in wet de position decreased in the Mid-Atlantic and Northeast, but to a lesser extent than sulfur (see Figure 7). Wet nitrogen deposition is influenced by sources outside the ARP. 

## Figure 6: Annual Mean Wet Sulfate Deposition 1989-1991

2006-2008

Source: NADP, 2009 

## Figure 7: Annual Mean Wet Inorganic Nitrogen Deposition 1989-1991

2006-2008

Source: NADP, 2009

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# Acid Rain and Related Programs: 2008 Highlights **Surface Water Quality Improvements:** Acid rain, resulting from SO 2 

### and NO x

### emissions, negatively affects the health of lakes and streams and creates chemical conditions that may adversely impact fish and other aquatic animals. Surface water chemistry provides direct indicators of the potential effects of acidic deposition on the overall health of aquatic ecosystems. Surface water monitoring networks, like EPA’s Long-Term Monitoring (LTM) program, provide information on how water bodies are responding to changes in emissions. Since the implementation of the ARP, scientists have found signs of recovery in many, but not all, of the lakes and streams studied in the eastern United States:

• **Sulfate Concentrations:** Measurements of sulfate in

surface waters provide important information on the level of acidification of a water body. Decreasing sulfate concentrations in surface water signify a trend toward recovery from acidification. Figure 8 shows that sulfate concentrations are declining at almost all sites in the Northeast (New England, Adirondacks/Catskills and Pennsylvania [Northern Appalachians]). However, in the Southern Blue Ridge (Central Appalachians), sulfate concentrations in many streams are increasing. 

## Figure 8: Trends in Lake and Stream Water Chemistry at LTM Sites, 1990-2007, Sulfate Ion Concentration (μeq/L/yr)

Increasing significant trend Increasing non-significant trend Decreasing non-significant trend Decreasing significant trend 

### 1990-2007 Sulfate Ion Concentration

Source: EPA, 2009 

## Figure 9: Trends in Lake and Stream Water Chemistry at LTM Sites, 1990-2007, ANC Levels (μeq/L/yr)

Source: EPA, 2009 

### 1990-2007 Increasing significant trend Increasing non-significant trend Decreasing non-significant trend Decreasing significant trend 

### Acid Neutralizing Capacity (ANC) 

### • **Acid Neutralization Capacity (ANC):** ANC is

a measure of the sensitivity of a water body to acidification. Movement toward recovery of an acidified aquatic ecosystem is indicated by an increase in ANC. Figure 9 shows that ANC is on average increasing in three of the four regions, which in part can be attributed to declining sulfate deposition. The site trends also indicate variation within each region. Only two sites indicate a significant downward trend in ANC.

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# Acid Rain and Related Programs: 2008 Highlights

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. 

# Human Health Benefits Benefits from the ARP include the prevention of human health-related impacts, such as premature death, asthma exacerbation, and hospital admissions for respiratory and cardiovascular ailments. Emissions of SO 2 

### and NO x 

### are precursors to formation of fine particulate matter (PM 2.5 

### ), while NO x

### also contributes to the formation of ground-level ozone. These air pollutants are detrimental to human health. By reducing power sector emissions of SO 2 

### and NO x

### , ambient air quality is improved thus improving human health. EPA recently updated the estimated U.S. PM 2.5 

### and ozone health-related benefits due to ARP implementation for the prospective year 2010 that were originally published in a 2005 journal article. 1

### The results of the revised assessment show that estimated PM 2.5 

### health benefits due to ARP implementation in 2010 are valued at $170–$410 billion (2008 dollars). The benefits are primarily from reduced premature mortality of 20,000 to 50,000 incidences peryear in 2010. Using updated methods to assess groundlevel ozone benefits from ARP implementation in 2010 results in total health benefits ranging from $4.1–$17 billion (2008 dollars). The benefits are primarily from reduced premature mortality of 430 to 2,000 incidences per year in 2010. These updated benefits do not include human welfare benefits due to better ecological conditions, such as improved visibility and reduced acidification of lakes and streams. 

# Clean Air Interstate Rule CAIR was issued on March 10, 2005, in order to build on the emission reductions under the NBP and the ARP. The rule was designed to permanently lower emissions of SO 2 

### and NO x

### in the eastern United States. CAIR, as promulgated, was designed to help states address ozone nonattain ment and attain the NAAQS for PM 2.5 

### by reducing trans ported precursors, SO 2 

### and NO x 

### . CAIR was also expected to improve visibility in Class 1 areas, including national parks, monuments, and wilderness areas. To achieve these emission reductions, it created three separate compliance programs: an annual NO x

### program, an ozone season NO x 

### program, and an annual SO 2 

### program. Each of the three programs uses a two-phased approach, with declining emission caps in each phase. The first phase began in 2009 for the NO x

### annual and NO x

### ozone season programs, and will start in 2010 for the SO 2 

### annual pro gram. The rule also establishes a second phase for all three programs beginning in 2015. All 28 states and the District of Columbia chose to be part of the EPA-administered regional CAIR trading programs. Monitoring and reporting according to EPA’s stringent reg ulations began in 2008 for the NO x

### programs and in 2009 for the SO 2 

### program. 

## Litigation and CAIR Replacement Rule On July 11, 2008, the U.S. Court of Appeals for the D.C. Cir cuit issued a ruling vacating CAIR in its entirety. EPA and other parties requested a rehearing, and on December 23, 2008, the Court revised its decision and remanded CAIR to EPA without vacatur. This ruling leaves CAIR and the CAIR Federal Implementation Plans (FIPs)—including the CAIR trading programs—in place until EPA issues new rules to replace CAIR. While the court did not impose a deadline by which EPA must issue the replacement rules, EPA estimates that de velopment and finalization of replacement rules could take about two years. EPA is committed to issuing rules to re place CAIR that will help states address the interstate air emissions transport problem in a timely way and that fully comply with the requirements of the Clean Air Act and the opinions of the D.C. Circuit. 

## Current CAIR Implementation The CAIR NO x

### ozone season and CAIR NO x

### annual program requirements to hold allowances equivalent to ozone sea son and annual emissions started in 2009. The CAIR SO 2 

### program requirements for continuous monitoring and reporting started January 1, 2009. Acid Rain sources that are already complying with Part 75 monitoring and reporting provisions essentially do not have to do anything additional to comply with CAIR SO 2 

### monitoring requirements. Sources not subject to the Acid Rain Program but subject to CAIR began complying with Part 75 monitoring and reporting this year. The require ment to hold allowances in the CAIR SO 2 

### program begins January 1, 2010.

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# Acid Rain and Related Programs: 2008 Highlights 

# Online Information, Data, and Resources The availability and transparency of data, from emission measurement to allowance trading to deposition monitor ing, is a cornerstone of effective cap and trade programs. CAMD, in the Office of Air and Radiation’s Office of Atmo spheric Programs, develops and manages programs for collecting these data and assessing the effectiveness of cap and trade programs, including the ARP. The CAMD Web site provides a public resource for general information on how market-based programs work and what they have accomplished, along with the processes, information, and tools necessary to participate in any of these market-based programs. For information about EPA’s air emission trading programs, see < www.epa.gov/ airmarkets >. For information about the ARP, see < www. epa.gov/airmarkets/progsregs/arp/index.html > . 

## Figure 10: U.S. Sulfur Dioxide Emissions from ARP Sources and Ambient Sulfate Concentration, 1990

Note: This example depicts 1990 SO 2 

### emissions from ARP sources along with 1990 sulfate concentration data as measured by the CASTNET monitoring program. Source: EPA, 2009

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# Acid Rain and Related Programs: 2008 Highlights To increase data transparency, EPA has created supplementary maps that allow the user to display air market program data geospatially on an interactive 3D platform. Figures 10 and 11 are examples of these interactive maps. The maps come in the form of a KMZ file (a compressed KML file) that is downloaded directly to the user’s computer. Data can be explored in new and meaningful ways by turning different layers on and off, overlaying data points and satellite imagery, and using navigation tools to change the view of the Earth’s surface. KMZ/KML files are supported by programs such as Google Earth, ESRI Arc Explorer, and NASA WorldWind View. These interactive mapping applications provide a unique way to identify environmental trends and track the progress of various EPA programs, such as the ARP. For more information or to utilize the program, visit the Web site at < epa.gov/airmarkets/progress/interactivemapping. html >. 

## Figure 11: U.S. Sulfur Dioxide Emissions from ARP Sources and Ambient Sulfate Concentration, 2008

Note: This example depicts 2008 SO 2 

### emissions from ARP sources along with 2007 sulfate concentration data as measured by the CASTNET monitoring program. Source: EPA, 2009

### United States Enivironmental Protection Agency Office of Air and Radiation Office of Atmospheric Programs Clean Air Markets Division 1200 Pennsylvania Ave., NW Washington, DC 20460 EPA-430-R-09-031 December 2009 www.epa.gov/airmarkets

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