Blog Post 8: Administration & Operations

The National Acid Rain Program

Cap and trade is a policy that seeks to reduce emissions in a competitive manner by involving trade options of carbon credits between businesses. Cap and trade has been highly scrutinized since its inception, yet one successful program set forth by cap and trade goes highly un-noticed. The National Acid Rain Program is aimed at benefiting the public health and environment through effectively stopping acid rain. Acid rain is caused by emissions of sulfur dioxide and nitrogen oxides. The main emitters of sulfur dioxide and nitrogen oxides are coal-burning power plants; therefor they are impacted most by this policy. Businesses that emit these acid rain chemicals are, as in all cap and trade programs, buy and sell emission permits. They can purchase more “allowances” (emission permits) if they feel they will emit more gasses than they have a permit for. If they end up having excess permits that exceed the amount of gas they have released, they may sell the permits to another company that needs more credits. The Environmental Protection Agency labeled this program a success along with industries involved and economists. Many experts have concluded that the “U.S. Acid Rain Program has been reasonably efficient” and “both reassuring and surprising (Ellerman)”. Cap and Trade will never be universally accepted, but it does have effective programs that seek to save our environment and upkeep the well-being of society.

Chestnut, L. G., & 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. doi:10.1016/j.jenvman.2005.05.014

Ellerman, A., & Montero, J. (2007). The Efficiency and Robustness of Allowance Banking in the U.S. Acid Rain Program. Energy Journal, 28(4), 47-71. Retrieved from EBSCOhost.

EPA. (n.d.). Progress and Results | Clean Air Markets | Air & Radiation | US EPA. US Environmental Protection Agency. Retrieved September 12, 2011, from

Napolitano, S., Schreifels, J., Stevens, G., Witt, M., LaCount, M., Forte, R., & Smith, K. (2007). The U.S. Acid Rain Program: Key Insights from the Design, Operation, and Assessment of a Cap-and-Trade Program. Electricity Journal, 20(7), 47-58. doi:10.1016/j.tej.2007.07.001

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