US Program to Cut Acid Rain has Helped the Planet and the Economy

September 11, 2000

The US acid rain reduction program, which uses, together with an absolute cap on emissions, an innovative market mechanism called emissions trading, has resulted in 30% less pollution than the law allows and at a fraction of the projected price, finds a study released today by Environmental Defense.

From Obstacle to Opportunity: How acid rain emissions trading is delivering cleaner air details the unprecedented success of the US Clean Air Act program in cutting emissions of sulfur dioxide (SO2), which contribute to acid rain. The program, which became law under President George Bush in 1990 and began in 1995, caps power plant SO2 emissions at reduced levels while permitting companies to trade extra reductions - turning those pollution reductions into marketable assets.

According to the study, power plants have cut more than seven million tons of SO2 pollution beyond their initial allotment from the US Environmental Protection Agency. In addition, the most polluting plants have made the greatest reductions, and SO2 levels have dropped despite strong growth in both the US economy and electricity generation in the past five years.

“The US acid rain reduction program shows that economies can grow while pollution levels shrink,” said Andrew Aulisi, Environmental Defense business liaison. “An affordable program that spurs innovation to cut pollution beyond what the law requires is good for business and good for the planet.”

“The US acid rain reduction program has been a clear success,” said Environmental Defense senior attorney Joe Goffman. “Yet growing evidence shows that all major pollutants need to be further reduced to protect the health of our children and to reduce the threat of global warming. Programs that harness the power of the market, like the US acid rain program, can help create large-scale pollution reductions quickly and affordably.”

International negotiators currently are meeting in Lyon, France, and will meet again in November in The Hague to develop rules for the Kyoto Protocol, an international treaty that aims to reduce emissions of the gases that cause global warming. “The success of the US acid rain program — and many of its key design elements, such as its approach to capping emissions, containing costs and ensuring compliance — create a roadmap for international negotiators to follow as they write the rules for carrying out the Kyoto Protocol,” said Environmental Defense senior economist Dan Dudek.

Environmental Defense, a leading national nonprofit organization based in New York, represents more than 300,000 members. Since 1967 we have linked science, economics, and law to create innovative, equitable, and cost-effective solutions to the most urgent environmental problems.

  • Read the report