Acid Rain 

Program

2003 Progress Report

S E P T E M B E R 2 0 0 4
The Acid Rain Program Progress Report is published annually by EPA to update 

the public on compliance with the Acid Rain Program, the status of implementation, and progress toward achieving environmental goals. The Acid Rain Program 

2003 Progress Report updates data reported in previous years, specifically:

 • SO2 emissions, allowance market information, and program compliance

 • NOX emissions and program compliance

 • Status and trends in acid deposition, air quality, and ecological effects 

Detailed unit-level emissions data are available on EPA’s Clean Air Markets website. For more information on the Acid Rain Program, including additional information on SO2 and NOX emissions, acid deposition monitoring, and the environmental effects of acid deposition, please visit EPA’s Clean Air Markets website at 

www.epa.gov/airmarkets.

EPA Acid Rain Program

2003 Progress Report

EPA 430-R-04-009

Clean Air Markets Division

Office of Air and Radiation

U.S. Environmental Protection Agency

September 2004
1

Congress created the Acid Rain Program in Title IV of the 1990 Clean Air Act Amendments. The Acid 

Rain Program has the goals of lowering the electric power industry’s annual emissions of:

 • Sulfur dioxide (SO2) to half of 1980 levels, capping them at 8.95 million tons starting in 2010, 

and

 • Nitrogen oxide (NOX) to 2 million tons lower than the forecasted level for 2000, reducing 

annual emissions to a level of 6.1 million tons in 2000. 

In 2003, Acid Rain Program emission controls on the electric power industry resulted in:

 • SO2 emissions of 10.6 million tons, a reduction of 38 percent from 1980 levels. Emissions were 

4 percent higher in 2003 than in 2002. This small increase resulted from increased production 

of electricity by coal-fired and oil-fired units that emit much more SO2 than natural gas units 

that generated less power in 2003. The main cause of this was the substantial increase in natural 

gas prices. Large, early SO2 reductions that were very beneficial at the program’s outset enabled 

banked allowances to be available to cover these emissions.

 • NOX emissions of 4.2 million tons, which were close to 4 million tons less than the emissions 

forecasted for 2000. Other regulations, such as the NOX Budget Program in the Northeast, also 

contributed to this reduction in emissions. 

As in years past, the electric power industry achieved nearly 100 percent compliance with Acid Rain 

Program requirements — only 1 unit had emissions exceeding the SO2 allowances that it held and 

no units were out of compliance with the NOX program. This exceptionally high level of compliance 

was, in part, achieved as a result of the Acid Rain Program’s continued provision of accurate and complete SO2 and NOX emissions data. This process was augmented by a substantial auditing effort and 

accountability through rigorous, yet streamlined, reporting systems. 

SO2 and NOX are the key pollutants in the formation of acid rain. These pollutants also contribute to 

the formation of fine particles (sulfates and nitrates) that are associated with significant health effects 

and regional haze. Additionally, NOX combines with volatile organic compounds (VOCs) to form 

ozone (smog), and nitrates that are transported and deposited at environmentally detrimental levels in 

parts of the country. The United States (U.S.) electric power industry accounts for approximately 67 

percent of total annual SO2 emissions and 22 percent of total annual NOX emissions.

Since the Acid Rain Program began in 1995, the lower SO2 and NOX emissions levels from the power 

sector have contributed to significant air quality and environmental improvements that EPA’s Clean 

Air Status and Trends Network (CASTNET) and other long-term environmental monitoring networks 

are reporting. 

Summary
2

Over the last decade:

 • Ambient SO2 and sulfate levels are down more than 40 percent and 30 percent, respectively, in the 

eastern U.S.

 • Wet sulfate deposition, which acidifies sensitive lakes, streams and forest soils, has decreased 39 

percent in the northeastern U.S. and 17 percent in the southeastern U.S.

 • Some modest reductions in inorganic nitrogen deposition and wet nitrate concentrations have 

occurred in the Northeast and Mid-Atlantic regions, but other areas have not shown much 

improvement.

 • Signs of recovery in acidified lakes and streams are evident in the Adirondacks, the northern 

Appalachian Plateau, and the upper Midwest. These signs include lower concentrations of sulfates, 

nitrates, and improvements in acid neutralizing capacity.

The Acid Rain Program has produced remarkable and demonstrable results. It has reduced SO2 emissions faster and 

at far lower costs than anticipated, yielding wide-ranging health and environmental improvements. In fact, during 

2003, the Office of Management and Budget found the program accounted for the largest quantified human health 

benefits — over $70 billion annually — of any federal regulatory program implemented in the last 10 years, with 

annual benefits exceeding costs by more than 40:1.
3

Origins of the 

Acid Rain Program

Acid deposition, more commonly known as acid 

rain, occurs when emissions of sulfur dioxide 

(SO2) and nitrogen oxides (NOX) react in the 

atmosphere (with water, oxygen, and oxidants) to 

form various acidic compounds. Prevailing winds 

transport the acidic compounds hundreds of miles, 

often across state and national borders, where 

they may impair air quality and damage public 

health, acidify lakes and streams, harm sensitive 

forest and coastal ecosystems, degrade visibility, 

and accelerate the decay of building materials. 

The Acid Rain Program, established under Title IV 

of the 1990 Clean Air Act Amendments, requires 

major reductions of SO2 and NOX emissions. The 

SO2 program sets a permanent cap on the total 

amount of SO2 that may be emitted by electric 

power plants in the contiguous U.S. at about onehalf of the amount of SO2 these sources emitted in 

1980. Using a market-based cap and trade mechanism allows flexibility for individual combustion 

units to select their own methods of compliance. 

One allowance provides a regulated unit limited 

authorization to emit one ton of SO2. Provisions 

of the 1990 Clean Air Act outline the allocation 

of allowances to regulated units based on historic 

fuel consumption and specific emission rates 

prior to the start of the program. For any year, 

the number of allowances totals the SO2 emissions cap.

The program uses a more traditional approach to 

NOX emission limitations for certain coal-fired electric utility boilers, with the objective of achieving a 

2 million ton reduction from projected NOX emission levels that would have been emitted in 2000 

without implementation of Title IV.

The Acid Rain Program is comprised of two 

phases for SO2 and NOX. Phase I applied primarily to the largest coal-fired electric generation 

sources from 1995 through 1999 for SO2 and 

from 1996 through 1999 for NOX. Phase II for 

both pollutants began in 2000. For SO2, it applies 

to thousands of combustion units generating electricity nationwide; for NOX it generally applies to 

affected units that burned coal during 1990-1995.

SO2 Emission Reductions

Electric power generation is by far the largest 

single source of SO2 emissions in the U.S., 

accounting for approximately 67 percent of total 

SO2 emissions nationwide in 2002.1 In 2003, 

3,497 units were subject to the SO2 provisions 

of the Acid Rain Program. That year, 10.6 million tons of SO2 were emitted, an increase of 4 

percent from 2002. To date, Acid Rain Program 

sources posted a total annual reduction in SO2

emissions of approximately 38 percent compared 

to 1980 levels (32 percent compared to 1990 levels). Figure 1 shows the trend in SO2 emissions 

since 1980 for all Title IV affected sources. 

For 2003, a total of 9.5 million allowances were 

allocated. Adding these allowances to the 8.6 million unused allowances carried over (or banked) 

from prior years, a total of 18.2 million allowances 

were available for use in 2003. Sources emitted 10.6 

million tons of SO2 in 2003, 1.1 million tons more 

than the allowances granted in the year but far less 

than the total allowable level.

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FIGURE 1

SO2 Emissions under the Acid Rain Program

Source: EPA

1 National Emission Inventory 2002: www.epa.gov/ttn/chief/trends/index.html. Emissions from each individual electricity 

generating unit affected by the Acid Rain Program are available on EPA’s Clean Air Markets website at www.epa.gov/

airmarkets.
4

As shown in Figure 2, the bank was reduced 

by 1.1 million allowances (12 percent) in 2003. 

Over time the bank is expected to continue to 

be depleted as sources use banked allowances to 

continue to comply with the stringent Phase II 

requirements. Figure 3 explains in more detail 

the origin of the allowances that were available 

for use in 2003.

In 2010, the annual total of allowances allocated 

drops to 8.95 million (representing close to 50 

percent of the emissions from the power industry 

in 1980) and remains statutorily fixed at that 

annual level permanently.

Reductions in SO2 emissions from other sources 

not affected by the Acid Rain Program, including smelters and sulfuric acid manufacturing 

plants, and use of cleaner fuels in residential and 

commercial burners, have also contributed to 

the 41 percent decline of SO2 emissions from all 

sources since 1980 (National Emission Inventory 

www.epa.gov/ttn/chief/ trends/index.html).

FIGURE 3

Origin of 2003 Allowable SO2 Emissions Levels

Source: EPA

Type of Allowance Allocation

Number of 

Allowances Explanation of Allowance Allocation Type

Initial Allocation 9,191,897 Initial Allocation is the number of allowances granted to 

units1 based on the product of their historic utilization and 

emissions rates specified in the Clean Air Act.

Allowance Auctions 250,000 Allowance Auctions provide allowances to the market that 

were set aside in a Special Allowance Reserve when the 

initial allowance allocation was made.

Opt-in Allowances 99,188 Opt-in Allowances are provided to units entering the 

program voluntarily. There were 11 opt-in units in 2003.

Total 2003 Allocation 9,541,085

Banked Allowances 8,646,818 Banked Allowances are those held over from 1995 through 

2002, which can be used for compliance in 2003 or any 

future year.

Total 2003 Allowable 18,187,903

1 In this report, the term “unit” means a fossil-fuel fired combustor that serves a generator that provides electricity for sale. 

The vast majority of SO2 emissions affected by the program come from coal-fired generation units, but oil and natural gas 

units are also included in the program.

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FIGURE 2

SO2 Emissions and the 

Allowance Bank, 1995–2003

Source: EPA
5

The states with the highest emissions in 1990 

achieved the greatest SO2 reductions during the 

Acid Rain Program. Most of these states were 

upwind of the areas the Acid Rain Program was 

designed to protect, and reductions resulted in 

important environmental and health benefits over 

a large regional scale (see Figure 4). In addition, 

the states that reduced emissions had total annual 

reductions of approximately 5.5 million tons, while 

the states that had increased emissions — largely 

attributable to growth and not increases in emissions rates — had much smaller annual increases (a 

total increase of approximately 440,000 tons). 

For 31 states and the District of Columbia, average annual SO2 emissions in 2000–2003 were 

lower than annual emissions in 1990. Among 

these states, twelve states decreased their annual 

average emissions by more than 100,000 tons 

between 1990 and 2000–2003. These states were 

Florida, Georgia, Illinois, Indiana, Kentucky, 

Massachusetts, Missouri, New York, Ohio, 

Pennsylvania, Tennessee, and West Virginia. The 

states with the greatest reductions were in the 

Midwest and included Ohio (1 million tons of 

reduction) and Illinois, Indiana, and Missouri 

(over 500,000 tons of reduction each).

In 17 states annual emissions increased between 

1990 and 2000–2003. These states were 

Arkansas, Colorado, Idaho, Kansas, Louisiana, 

Minnesota, Montana, Nebraska, North 

Carolina, North Dakota, Oklahoma, Oregon, 

South Carolina, Texas, Vermont, Virginia, and 

Wyoming. Only one state increased more than 

100,000 tons annually. Of the remaining states, 

one-third had emissions increases of less than 

1,500 tons, another third had increases between 

1,500 tons and 20,000 tons, and the remaining third had increases between 20,000 and 

100,000 tons.

SO2 Allowance Market

The allowance trading mechanism of the Acid 

Rain Program enabled the 3,497 units subject 

to the SO2 requirements in 2003 to pursue a 

variety of compliance options. The allowance 

market has given some sources the incentive to 

reduce their SO2 emissions below the level of 

their allowance allocation in order to bank their 

allowances for use in future years or to sell them 

to other sources. Other sources have been able 

to postpone or reduce expenditures for control 

by purchasing allowances from sources that controlled below their allowance allocation level.

FIGURE 4

State by State SO2 Emissions Levels

Source: EPA

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FIGURE 5

SO2 Allowance Price Index

Source: Cantor Fitzgerald
6

The marginal cost of compliance — the cost of 

reducing the next ton of SO2 emitted from the 

power sector — is reflected in the price of an 

allowance. 

Allowance prices for 2003 experienced an 

upward trend, and closed the year roughly 63 

percent above the prior year. Prices were in the 

range of $150 to $220 per allowance, ending the 

year around $215 (see Figure 5). 

In 2003, almost 4,200 allowance transfers affecting roughly 16.5 million allowances (of past, 

current, and future vintages) were recorded in the 

EPA Allowance Tracking System. Of the allowances transferred, 8 million (49 percent) were 

transferred in economically significant transactions (i.e., between economically unrelated parties). The majority of the allowances transferred 

in economically significant transactions were 

acquired by power companies. Figure 6 shows 

the annual volume of SO2 allowances transferred under the Acid Rain Program since official 

recording of transfers began in 1994. 

Figure 7 shows the cumulative volume of SO2

allowances transferred under the Acid Rain 

Program. Over 250 million allowances have been 

transferred since 1994, with 70 percent of those 

transfers submitted by authorized account representatives for private accounts. In December 

2001, parties began to use a system developed by 

EPA to allow transfers to occur online. In 2003, 

3,536 out of 4,192, or 84 percent, of transfers 

were done electronically.2

Why were SO2 emissions higher in 2003 than in 2002?

In 2003, electricity sales rose by more than 1 percent. Additionally, relative prices changed among fossil fuels that supply over 70 

percent of the nation’s power. While coal prices for power generation rose about 1 percent, petroleum prices increased 34 percent, and natural gas prices increased 55 percent. There was hotter-than-normal summer weather in major parts of the country 

during 2003 and nuclear units were not able to run as hard as they did in 2002. All of this led to coal-fired electricity generation 

increases of about 2 percent, oil-fired generation increases of 25 percent, and natural gas-fired generation decreases of about 9 

percent.1,2 Coal-fired and oil-fired generation have much higher SO2 emissions rates than natural gas fired units per unit of electricity output. Close to 75 percent of the additional 400,000 tons of SO2 emissions emitted from sources in the Acid Rain Program 

during 2003 come from increased coal-fired generation, and the remainder comes from increased oil-fired generation.3

The early, large reductions in SO2 that sources in the Acid Rain Program made at the start of the Program in the mid-1990s, 

resulting in emissions that were well below the emissions cap, enabled them to bank allowances to use in situations like 

this where prices quickly changed and were not foreseen well in advance by many sources of generation. Notably, the overall 

average rate of SO2 emissions for coal-fired units did not change substantially from 2002 to 2003, but the amount of coal 

burned (on a Btu-basis) was about 3 percent higher. 

1 Energy Information Administration, Electric Power Monthly, December 2003, March 2004. 2 Energy Information Administration, U.S. Coal Supply and Demand: 2003 Review, EIA website under coal publications. 3 EPA’s Acid Rain data base for 2003 air emissions.

FIGURE 6

SO2 Allowances Transferred 

under the Acid Rain Program

Source: EPA

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2 All official allowance transactions are posted and updated daily on www.epa.gov/airmarkets.
7

SO2 Program Compliance

As in previous years, compliance with the Acid 

Rain Program continues to be extraordinarily 

high — nearly 100 percent.

In 2003, one unit out of 3,497 was out of compliance because of 14 tons of excess emissions 

above the allowances it held. The owner was 

assessed a penalty of approximately $40,000.

A total of 10.6 million allowances was deducted 

from sources’ accounts in 2003 to cover emissions. 

Figure 8 displays these allowance deductions, as 

well as the remaining banked allowances from 

1995–2003.

A source that does not hold enough allowances 

in its unit account to cover its annual SO2 emissions has “excess emissions” and must pay a 

$2,900 per ton automatic penalty. Title IV set 

a penalty of $2,000 in 1990, which has been 

adjusted annually for inflation, so the year 

2003 penalty was $2,900 per ton.

NOX Emissions Reductions

Title IV of the 1990 Clean Air Act amendments 

requires NOX emissions reductions for certain 

coal-fired units. This portion of the Acid Rain 

Program applies rate-based NOX emissions limits 

to these units and seeks to attain a 2 million ton 

annual reduction from all power industry sources 

relative to the NOX emissions levels projected 

to occur in 2000 (8.1 million tons) absent the 

Acid Rain Program. This goal was first realized 

in 2000, and has been met every year thereafter, 

including 2003. 

Total NOX mass emissions for coal-fired electric 

generating units affected by the NOX program 

component were reduced to 3.8 million tons 

from 5.5 million tons in 1990. NOX emissions 

from the entire power industry were 4.2 million 

tons in 2003 (see Figure 9). Reductions from all 

power generation in 2003 were 2.5 million tons 

(or 37 percent) below 1990 emissions levels and 

about half (3.9 million tons) of the forecasted 

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FIGURE 7

Cumulative SO2 Allowances Transferred 

(through 2003)

Source: EPA

FIGURE 8

SO2 Allowance Reconciliation 

Summary, 2003

Source: EPA

Total Allowances Held in 

Accounts as of 3/1/2004 

(1995 through 2003 Vintages)1

18,187,903

 Unit Accounts 14,025,337

 General Accounts2 4,162,566

Allowances Deducted for 

Emissions (1995 through 2003)3

10,595,944

2004 Penalty Allowances Deducted 14

Banked Allowances 7,591,959

 Unit Accounts 3,429,393

 General Accounts 4,162,566

1 The number of allowances held in the Allowance Tracking System (ATS) 

accounts equals the number of 2003 allowances allocated (see Figure 3) plus 

the number of banked allowances. March 1, 2004 represents the Allowance 

Transfer Deadline, the point in time at which unit accounts are frozen and 

after which no transfers of 1995 through 2003 allowances will be recorded. 

The freeze on these accounts is removed when annual reconciliation is 

complete.

2 General accounts can be established in the ATS by any utility, individual or 

other organization.

3 Includes 1,383 allowances deducted from opt-in sources for reduced 

utilization.
8

levels for 2000. These reductions have been 

achieved while the amount of fuel burned to produce electricity, as measured by heat input, has 

increased 30 percent since 1990. Without further 

reductions in emission rates or the institution of a 

cap on NOX emissions, however, NOX emissions 

from power plants may rise with increased use of 

fossil fuels in some areas of the country.

As with SO2, the states with the highest NOX

emissions in 1990 tended to achieve the greatest 

emission reductions (see Figure 10). The Acid 

Rain Program was responsible for a large portion 

of the annual NOX reductions, but other programs that control NOX, such as the OTC NOX

Budget Program, the NOX SIP call’s NOX Budget 

Trading Program, and state programs have also 

contributed to NOX reductions, particularly in 

the Northeast. Overall, the states that reduced 

NOX emissions from all sources had total annual 

average reductions of approximately 1.9 million 

tons for the years 2000–2003, while the states 

that increased NOX emissions had much smaller 

increases (a total increase of approximately 

79,000 tons). 

For 36 states and the District of Columbia, 

average annual NOX emissions from 2000 to 

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 76.5, 76.6, or 76.7.

Early Election. Phase II Group 1 NOX affected units 

could meet a less stringent Phase I NOX limit beginning in 1997, three years before they would normally be 

subject to an Acid Rain NOX limit. In return for accepting 

a NOX limit three years earlier than would normally be 

required, an early election unit does not become subject 

to the more stringent Phase II NOX limit until 2008.

Emissions Averaging. Many companies have their 

units meet their NOX emissions reduction requirements 

by choosing to become subject to a group NOX limit, rather than meeting individual NOX limits for each unit. The 

group limit is established at the end of each calendar 

year, and the group rate for the units 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.

Alternative Emission Limitation (AEL). A utility can 

petition for a less stringent AEL if it properly installs 

and operates the NOX emissions 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 emissions data and information 

about the NOX control equipment.

FIGURE 10

State by State NOX Emissions Levels

Source: EPA

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FIGURE 9

NOX Emissions under the 

Acid Rain Program

Source: EPA
9

2003 were lower than annual NOX emissions 

in 1990. The states with the greatest reductions 

included Pennsylvania (more than 200,000 tons 

of reductions) and Indiana, Kentucky, New York, 

Ohio, Texas, and West Virginia (with more than 

100,000 tons of reductions each). 

Twelve states had average annual emissions 

from 2000–2003 that were greater than annual 

1990 NOX emissions: Arizona, Arkansas, Idaho, 

Kansas, Minnesota, Mississippi, Montana, 

Nebraska, Oregon, Utah, Vermont, and 

Washington. One-third of the states had increases well under 2,000 tons. Another third had 

increases between 2,000 tons and 6,500 tons, 

and the remaining states had increases between 

6,500 tons and 22,000 tons.

NOX Emissions Limits

Instead of using cap and trade to achieve NOX

emissions reductions, the Acid Rain Program establishes NOX emissions limitations (lb/mmBtu) for the 

boilers of most coal-fired electric generation units.

The Acid Rain Program NOX regulation (40 CFR 

part 76) establishes emissions limits for each 

boiler type (see Figure 11). Unit operators have 

several options for complying with the limits (see 

text box on NOX Compliance Plan Options).

NOX Program Compliance

In 2003, 1,049 Acid Rain Program units were 

required to meet NOX emission limitations. Of 

these 1,049 coal-fired units, 45 have been retired, 

NOX Emissions

NOX emissions come from a wide variety of sources 

including those affected by the Acid Rain Program. NOX

emissions from electric power generation account for 

approximately 22 percent of NOX emissions from all 

sources. NOX emissions from transportation sources 

are 55 percent of all NOX emissions. Nationally, total 

NOX emissions have decreased 12 percent from 1990 

through 2001. NOX emissions from transportation sources 

decreased 14 percent, but NOX emissions from heavy 

duty vehicles increased by 10 percent. The emission 

decreases from electric power generation and other 

fuel combustion sources are due in part to a variety of 

federal and state emission reduction programs (including 

the Acid Rain Program, the Ozone Transport Commission 

NOX Budget Program, and the NOX SIP call) and federal 

enforcement actions (National Emissions Inventory 

www.epa.gov/ttn/chief/trends/index.html).

FIGURE 11

Number of NOX Affected Units 

by Boiler Type

Source: EPA

Coal-Fired Boiler Type

Standard 

Emission 

Limit (lb/

mmBtu)

Number

of Units

Phase I Group 1 Tangentially-fired 0.45 132

Phase I Group 1 Dry Bottom 

Wall-fired

0.50 119

Phase II Group 1 

Tangentially-fired

0.40 302

Phase II Group 1 Dry Bottom 

Wall-fired

0.46 306

Cell Burners 0.68 37

Cyclones > 155 MW 0.86 56

Wet Bottom > 65 MW 0.84 26

Vertically-fired 0.80 26

Total 1,004

Compliance Option Units covered by 

Compliance Option

Standard Emission Limitation 121

Early Election 271

Emissions Averaging 623

Alternative Emission Limitation 25

Total 1,040*

*The total number of units covered by specific NOX compliance options is 

greater than 1,004 because some units have multiple compliance plans. For 

calendar year 2003, 28 units had both early election and averaging plans, and 

8 units had both AEL and emissions averaging compliance plans (1,004 plus 

28 plus 8 equals 1,040).

FIGURE 12

Compliance Options in the 

NOX Program, 2003

Source: EPA
10

leaving 1,004 NOX units that must meet their 

NOX emissions limits through compliance with 

their respective NOX compliance plans.3 Figure 

12 summarizes the compliance options chosen for 

NOX affected units in 2003. Emissions averaging 

was the most widely chosen compliance option; 

57 emissions averaging plans involving 623 units 

were employed in 2003. No units were out of 

compliance with the NOX program.

Status and Trends in Acid 

Deposition, Air Quality and 

Ecological Effects

The emission reductions achieved under the Acid 

Rain Program have led to important environmental and public health benefits. These include 

improvements in air quality with significant benefits to human health, reductions in acid deposition, the beginnings of recovery from acidification of fresh water lakes and streams, improvements in visibility, and reduced risk to forests, 

materials and structures.

To evaluate the impact of emissions reductions 

on the environment, scientists and policymakers 

use data collected from long-term national monitoring networks such as the Clean Air Status and 

Trends Network (CASTNET) and the National 

Atmospheric Deposition Program (NADP). 

Data collected from monitoring networks show 

that the decline in SO2 emissions from the power 

industry has decreased acidic deposition and 

improved air quality. The decline in NOX emissions, however, has not been as significant and 

the environmental improvements are not as wideContinuous Emissions 

Monitoring Systems (CEMS)

Electricity generating units under the Acid Rain Program 

are required to measure and record emissions using 

Continuous Emissions Monitoring Systems (CEMS) or an 

approved alternative measurement method. Since the 

program’s inception in 1995, the emissions data — continuously reported by sources, verified and recorded by 

EPA, and posted for public consumption on the Internet 

— have been among the most complete and accurate 

data ever collected by EPA. Electronic audit capabilities 

include software that performs rigorous checks to ensure 

the completeness, high quality, and integrity of the 

emissions data. In 2003, for the third consecutive year, 

100 percent of affected sources were reporting hourly 

emissions electronically. CEMS are a cornerstone of the 

program’s accountability and transparency.

Deposition Monitoring Networks

To evaluate the impact of emissions reductions on the environment, scientists and policymakers use data collected from 

long-term national monitoring networks such as the Clean Air Status and Trends Network (CASTNET) and the National 

Atmospheric Deposition Program (NADP). Deposition and air quality monitoring data from these and other air quality monitoring networks can be accessed on or through the CASTNET website at www.epa.gov/castnet. CASTNET provides atmospheric 

data on the dry deposition component of total acid deposition, ground-level ozone, and other forms of atmospheric pollution. 

CASTNET is considered the nation’s primary source for atmospheric data to estimate dry acidic deposition and to provide 

data on rural ozone levels. Used in conjunction with other national monitoring networks, CASTNET data are used to determine the effectiveness of national emission control programs. Established in 1987, CASTNET now comprises over 70 monitoring stations across the U.S. The longest data records are primarily at eastern sites. EPA operates a majority of the monitoring 

stations; however, the National Park Service operates approximately 30 stations in cooperation with EPA.

CASTNET continues to provide accountability and performance measure-related information for the Acid Rain Program and is 

available to provide deposition and air quality baselines to support future accountability and program evaluation needs. As such, 

both near and long-term program goals involve advancing the monitoring and assessment capabilities of the network to better 

inform transport and air quality model evaluation. Future changes will also provide critical information for implementation of an 

integrated monitoring strategy for the U.S. and Canada.

3 Detailed compliance information by unit can be found on EPA’s Clean Air Markets website at www.epa.gov/airmarkets.
11

spread. Although the Acid Rain Program has met 

its NOX reduction targets, total nitrogen deposition has increased in many areas of the country 

due to other sources such as motor vehicles and 

agriculture.

Acid Deposition

During the late 1990s, following implementation 

of Phase I of the Acid Rain Program, dramatic 

regional improvements in SO2 and ambient sulfate concentrations were observed at CASTNET 

sites throughout the Eastern U.S. This is due to 

the large reductions in SO2 emissions from Acid 

Rain sources. Analyses of regional monitoring 

data from CASTNET show the geographic pattern of SO2 and airborne sulfate in the Eastern 

U.S. Three-year mean, annual concentrations of 

SO2 and sulfate from CASTNET long-term monitoring sites are compared from 1989 through 

1991 and 2001 through 2003 in both tabular 

results and graphically (see Figures 13-18).4,5

From 1989 through 1991, prior to implementation of Phase I of Title IV, the highest ambient 

concentrations of SO2 in the East were observed 

in Western Pennsylvania and along the Ohio River 

Valley. Ambient SO2 concentrations have decreased 

significantly since 1991, with average concentrations in the Eastern U.S. decreasing 57 percent in 

the Northeast and 38 percent in the Mid-Atlantic 

region (see Figures 13, 14a and 14b).

Before the program, in 1989 through 1991 (see 

Figures 15a-15b), the highest ambient sulfate concentrations, greater than 7 μg/m3, were observed 

in Western Pennsylvania, along the Ohio River 

Valley, and in Northern Alabama. Most of the 

Eastern U.S. experienced annual ambient sulfate 

concentrations greater than 5 μg/m3. 

Like SO2 concentrations, ambient sulfate concentrations have decreased since the program 

was implemented, with average concentrations 

decreasing approximately 30 percent in all 

regions of the Eastern U.S. Both the size of the 

affected region and magnitude of the highest con4 Points on maps represent location of monitoring sites.

5 Based on data compiled annually by the National Atmospheric Deposition Program/National Trends Network (NADP/NTN) 

nadp.sws.uiuc.edu and the Clean Air Status and Trends Network (CASTNET) www.epa.gov/castnet.

Measurement Unit Region

Average

 1989 2001 Percent 

 -91 -03 Change

Wet sulfate 

deposition

kg/ha Mid-Atlantic

Midwest

Northeast

Southeast

28

25

23

18

20

16

14

15

-29

-36

-39

-17

Wet sulfate 

concentration

mg/L Mid-Atlantic

Midwest

Northeast

Southeast

2.3

2.2

1.8

1.4

1.7

1.6

1.3

1.1

-26

-27

-28

-21

Ambient 

sulfur dioxide 

concentration

ug/m3 Mid-Atlantic

Midwest

Northeast

Southeast

13

11

7

5

8

6

3

3

-38

-45

-57

-40

Ambient sulfate 

concentration

ug/m3 Mid-Atlantic

Midwest

Northeast

Southeast

6.4

5.6

3.9

5.6

4.7

3.9

2.7

3.9

-27

-30

-31

-30

Wet inorganic 

nitrogen 

deposition 

kg/ha Mid-Atlantic

Midwest

Northeast

Southeast

5.9

6.0

5.3

4.3

5.3

5.8

4.4

4.2

-10

-3

-17

-2

Wet nitrate 

concentration

mg/L Mid-Atlantic

Midwest

Northeast

Southeast

1.4

1.4

1.3

0.8

1.2

1.4

1.1

0.8

-14

0

-15

0

Total ambient 

nitrate 

concentration

ug/m3 Mid-Atlantic

Midwest

Northeast

Southeast

3.5

4.0

2.0

2.2

3.0

3.8 

2.0

2.1

-14

-5

0

-5

FIGURE 13

Regional Changes in Deposition of Sulfur and 

Nitrogen from 1989-91 to 2001-03

Source: EPA

Based on data compiled 

annually by the National 

Atmospheric Deposition 

Program/National Trends 

Network (NADP/NTN) 

nadp.sws.uiuc.edu and the 

Clean Air Status and Trends 

Network (CASTNET) www.

epa.gov/castnet.
12

centrations were dramatically reduced following 

implementation of Title IV. The largest decreases 

were observed along the Ohio River Valley (see 

Figures 15a-15b).

Analyses of the NADP long-term monitoring 

data show that wet sulfate deposition, sulfate 

that falls to the earth through rain, snow, and 

fog, has also decreased since the Acid Rain 

Program was implemented. A strong correlation 

between large scale SO2 emissions reductions 

and large reductions in sulfate concentrations in 

precipitation has been noted for the Northeast, 

one of the areas most affected by acid deposition. Some of the greatest reductions in wet sulfate deposition occurred in the Mid-Appalachian 

region, including Maryland, New York, West 

Virginia, Virginia, and most of Pennsylvania. Wet 

sulfate deposition decreased throughout the early 

1990s in much of the Ohio River Valley and 

Northeastern U.S. Other less dramatic reductions 

were observed across much of New England, 

portions of the Southern Appalachian Mountains 

and in the Midwest. Average decreases in wet 

deposition of sulfate range from 39 percent in 

the Northeast to 17 percent in the Southeast (see 

Figures 16a-16b).

A principal reason for reduced concentrations 

of sulfate in precipitation in the Northeast is a 

reduction in the long-range transport of sulfate 

from emission sources located in the Ohio River 

Valley. The reductions in sulfate documented in 

the Northeast, particularly across New England 

and portions of New York, were also affected 

by SO2 emissions reductions in Eastern Canada. 

Concurrent with these sulfate reductions were 

similar reductions in precipitation acidity, 

expressed as hydrogen ion (H+) concentrations 

(NADP).

Sources affected by the Acid Rain Program 

account for a portion of nationwide NOX emissions. Emissions trends from other source categories also affect air concentrations and deposition 

of nitrogen. Significant improvements in nitrogen 

deposition have not been evident since the Acid 

Rain Program began.

Inorganic nitrogen deposition and wet nitrate 

concentrations have decreased modestly since 

FIGURE 14a

Annual Mean Ambient Sulfur Dioxide 

Concentration 1989 through 1991

Source: CASTNET

FIGURE 14b

Annual Mean Ambient Sulfur Dioxide 

Concentration 2001 through 2003

Source: CASTNET
13

FIGURE 16b

Annual Mean Wet Sulfate Deposition 

2001 through 2003

Source: National Atmospheric Deposition Program

FIGURE 16a

Annual Mean Wet Sulfate Deposition 

1989 through 1991

Source: National Atmospheric Deposition Program

FIGURE 15b

Annual Mean Ambient Sulfate 

Concentration 2001 through 2003

Source: CASTNET

FIGURE 15a

Annual Mean Ambient Sulfate 

Concentration 1989 through 1991

Source: CASTNET
14

FIGURE 18b

Annual Mean Total Ambient Nitrate 

Concentration 2001 through 2003

Source: CASTNET

FIGURE 18a

Annual Mean Total Ambient Nitrate 

Concentration 1989 through 1991

Source: CASTNET

FIGURE 17a

Annual Mean Wet Inorganic Nitrogen 

Deposition 1989 through 1991

Source: National Atmospheric Deposition Program

FIGURE 17b

Annual Mean Wet Inorganic Nitrogen 

Deposition 2001 through 2003

Source: National Atmospheric Deposition Program
15

1991 in the Mid-Atlantic and Northeast regions, 

but have remained relatively constant in the 

Midwest and Southeast (see Figures 17a-17b).

Ambient nitrate concentrations (nitric acid plus 

particulate nitrate) have also decreased in the 

Mid-Atlantic, but have remained relatively constant in other regions of the Eastern U.S. (see 

Figures 18a-18b).

Recovery of Acidified 

Lakes and Streams

While climate change, forest maturation, disturbances such as pest outbreaks, and land use history 

all impact ecosystems that are also affected by acid 

deposition, scientists have demonstrated measurable improvements in some lakes and streams 

resulting from the Acid Rain Program.6 Scientists 

studied lakes and streams in five regions — New 

England, the Adirondack Mountains, the Northern 

Appalachian Plateau (including the Catskill 

Mountains), the Upper Midwest, and the Ridge/

Blue Ridge — and found signs of recovery in many, 

but not all, of those areas (see Figure 19). These 

signs of recovery include reductions in sulfate and 

aluminum concentrations and decreases in acidity.

For example, almost all Adirondack lakes had 

reductions in sulfate concentrations that coincide 

with reductions in atmospheric concentrations 

of sulfur. These reductions in sulfate, as well 

as reductions in nitrate concentrations that do 

not appear to be due to changes in atmospheric 

deposition, have resulted in increased pH and 

acid neutralizing capacity (ANC is an indicator 

of aquatic ecosystem recovery) as well as reductions in the amount of toxic inorganic aluminum 

in Adirondack lakes. 

Increasing ANC was evident in three of the 

regions studied (Adirondacks, Northern 

Appalachian Plateau, and Upper Midwest). 

One-quarter to one-third of lakes and streams 

in these regions previously affected by acid rain 

are no longer acidic at base-flow conditions, 

although they are still highly sensitive to future 

changes in deposition. 

Improvements in Surface Water

Long-term monitoring networks provide information on 

the chemistry of lakes and streams, which allows us to 

look at how water bodies are responding to changes in 

emissions. The data presented here show regional trends 

in acidification from 1990 to 2000 in areas of the eastern 

U.S. For each lake or stream in the network, measurements of various indicators of recovery from acidification 

were taken. These measurements were plotted against 

time, and trends for the given lake or stream during the 

ten-year period were then calculated as the change 

in each of the measurements per year (e.g., change in 

concentration of sulfate per year). Using the trends calculated for each water body, median regional changes 

were determined for each of the measures of recovery. A 

negative value of the “slope of the trend” means that the 

measure has been declining in the region, while a positive value means it has been increasing. The greater the 

value of the trend, the greater the yearly change in the 

measurement. Movement toward recovery is indicated 

by positive trends in acid neutralizing capacity (ANC) and 

negative trends in sulfate, nitrate, hydrogen ion, and aluminum. Negative trends in base cations can balance out 

the decreasing trends in sulfate and nitrate and prevent 

ANC from increasing.

FIGURE 19

Regional Trends in Lake and 

Stream Acidification 1990-2000

Source: EPA

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Source: Stoddard, J. L., J. S. Kahl, F. A. Deviney, D. R. DeWalle, C. 

T. Driscoll, A. T. Herlihy, J. H. Kellogg, P. S. Murdoch, J. R. Webb, 

and K. E. Webster. 2003. Response of surface water chemistry to 

the Clean Air Act Amendments of 1990. EPA/620/R-03/001, U.S. 

Environmental Protection Agency, Washington, DC.)

6 Stoddard, J. L., J. S. Kahl, F. A. Deviney, D. R. DeWalle, C. T. Driscoll, A. T. Herlihy, J. H. Kellogg, P. S. Murdoch, J. R. Webb, and K. E. 

Webster. 2003. Response of surface water chemistry to the Clean Air Act Amendments of 1990. EPA/620/R-03/001, U.S. Environmental Protection 

Agency, Washington, DC.)
16

Specifically:

 • Eight percent of the lakes in the Adirondacks 

are acidic, down from 13 percent in the 

early 1990s.

 • Fewer than 1 percent of lakes in the Upper 

Midwest are acidic, down from 3 percent in 

the early 1980s.

 • Eight percent of the streams in the Northern 

Appalachian Plateau region are currently 

acidic during base-flow conditions, down 

from 12 percent in the early 1990s.

In New England and the Ridge/Blue Ridge regions, 

however, there have been no significant improvements, suggesting that additional reductions are necessary for ecosystem recovery. Specifically:

 • In New England, 5.5 percent of lakes are 

acidic, an insignificant change from the 

early 1990s when 5.6 percent of lakes in the 

region were acidic.

 • There has been no change in the number of 

acidic waters in the Ridge/Blue Ridge region 

in the past decade.

The data on sulfate concentrations are similar to 

that for ANC; there have been decreases in lake 

sulfate concentrations in some but not all of the 

regions studied. Trends in nitrate concentrations 

were much smaller than trends in sulfate concentrations, though lakes in the Adirondacks and streams 

in the northern Appalachian Plateau exhibited significant downward trends in nitrate in the 1990s. It 

should be noted, however, that this does not appear 

to reflect changes in emissions or deposition in these 

areas and is likely a result of ecosystem factors that 

are not yet fully understood. 

Quantifying Costs and Benefits 

of the Acid Rain Program 

Later estimates of the cost of full implementation of the Acid Rain trading program for SO2

are significantly lower than originally estimated. 

Independent analyses have estimated annual costs 

in the range of $1 to $2 billion per year (2000$) 

in 2010 when the program is nearly fully implemented, substantially less than were predicted 

in 1990. The most recent estimates provided by 

Ellerman and by Carlson are $1.3 to $1.5 billion/year ($2000) and $1.1 billion/year by 2010, 

respectively7,8. A recent Office of Management 

and Budget (OMB) analysis estimated costs of the 

SO2 program between $1.1 and $1.8 billion9. EPA 

expects NOX costs to be no more than a billion 

Long-Term Environmental 

Monitoring at EPA

EPA’s Temporally Integrated Monitoring of Ecosystems (TIME) 

and Long-Term Monitoring (LTM) programs are designed 

to detect trends in the chemistry of regional populations of 

lakes or streams and to determine whether emissions reductions have had the intended effect of reducing acidification. 

TIME/LTM monitors a total of 145 lakes and 147 streams, 

representing all of the major acid sensitive regions of the 

northern and eastern U.S. (upper Midwest, New England, 

Adirondack Mountains, northern Appalachian Plateau 

(including the Catskill Mountains), and the Ridge/Blue 

Ridge Provinces of Virginia). TIME/LTM measures a variety 

of important chemical characteristics, including ANC, pH, 

sulfate, nitrate, major cations (e.g., calcium and magnesium), and aluminum. While the representativeness of the 

TIME/LTM network is somewhat limited, the TIME program 

is the most coherent individual regional dataset for this kind 

of analysis. In addition, the U.S. Geological Survey has been 

measuring surface water quality at several research watersheds throughout the U.S., where sample collection during 

hydrologic events and ancillary data on other watershed 

characteristics have been used to assess the watershed processes controlling acidification of surface waters.

7 Ellerman, Denny, “Lessons from Phase 2 Compliance with the U.S. Acid Rain Program,” MIT Center for Energy and 

Environmental Policy Research, Cambridge, MA, 2003.

8 Carlson, Curtis P., Dallas Burtraw, Maureen Cropper, and Karen Palmer (Carlson et al, 2000). “SO2 Control by Electric 

Utilities: What are the Gains from Trade?” Journal of Political Economy, Vol. 108, No. 6: 1292-1326.

9 Informing Regulatory Decisions: 2003 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded 

Mandates on State, Local, and Tribal Entities, 2003 Office of Management and Budget, Office of Information and Regulatory 

Affairs www.whitehouse.gov/omb/inforeg/2003_cost-ben_final_rpt.pdf.
17

dollars annually, and likely to be substantially less 

from the limited analysis that has been done in 

this area.

The OMB study also found that the Acid Rain 

Program accounted for the largest quantified 

annual human health benefits — over $70 billion — of any federal regulatory program implemented in the last 10 years, with annual benefits 

exceeding costs by more than 40:1.

The benefits to New Yorkers of improving natural 

resources in the Adirondacks are estimated to be 

between $300 million and $750 million per year, 

according to a new study by Resources for the 

Future (RFF). The five-year study, supported by an 

EPA grant, estimates New Yorkers’ willingness-topay for total ecological benefits in the Adirondack 

Park at $38 to $113 per household per year. (This 

total benefit estimate is the sum of use and nonuse 

benefits — benefits to New Yorkers who use the 

Park as well as to those NY residents who do not 

visit the Park but want to know this resource is 

being protected.) The Acid Rain Program, Title 

IV of the 1990 Clean Air Act Amendments, was 

passed in part, in response to the public’s concern 

about the acidification of lakes and soils in the 

Adirondacks. By reducing NOX and SO2 emissions from power plants, acidic deposition in lakes 

and on shallow soils with low acid neutralizing 

capacity is also reduced. Until now, policy makers had no way of considering the total economic 

value of such environmental improvements. RFF’s 

rigorous methodology involved extensive use of 

focus groups and a carefully crafted survey of a 

representative sample of over 1,800 New Yorkers 

administered on the internet and by mail. The 

project, while specific to the Adirondack Park, 

nevertheless suggests benefits can be estimated 

using a similar methodology for other ecological 

resource improvements that result from improvements in air quality.

National Tools for Further Emission Reductions

The Acid Rain Program has proven to be an effective and efficient means of reducing SO2 and NOX emissions from power 

plants. However, it is increasingly clear that further reductions are needed not only to continue reductions in acid rain, but 

also to reduce ground level ozone, regional haze, and fine particles. To achieve these important reductions, the EPA has 

developed the Clean Air Rules, a suite of actions that will dramatically improve air quality nationwide. Three of the rules 

— the Clean Air Interstate Rule, Clean Air Mercury Rule, and Clean Air Nonroad Rule — specifically address the transport 

of pollution across state borders. They provide much needed, national regulatory controls, like the Acid Rain Program, to 

achieve significant improvements in air quality, health, and quality of life. The proposed Clean Air Mercury and Clean Air 

Interstate Rules, which may use the cap and trade approach to achieve required reductions, create a multi-pollutant strategy 

to reduce power plant emissions of SO2, NOX, and mercury. Taken together, this suite of rules in conjunction with state and 

regional programs, will build on past successes and make the next 15 years one of the most productive periods of air quality 

improvement in our history.
Office of Air and Radiation

Clean Air Markets Division

EPA 430-R-04-009

1200 Pennsylvania Ave, NW

(6204J)

Washington, DC 20460

www.epa.gov/airmarkets

September 2004