Case Study #1:  Reducing Acid Rain in the United States

In the 1980s, scientists discovered that lakes, streams, and forests - even buildings and statues - were being damaged by acid rain. Congress authorized a ten-year, $570-million study to determine the cause, and a major culprit was found: sulfur dioxide (SO2), an air pollutant generated by power plants and other  industrial facilities.

When SO2 enters the atmosphere, a chemical reaction occurs forming a destructive acid. This acid returns to the earth as tiny particles, fog, snow or the destructive rain which first caught the scientists' attention.

Acid rain can harm entire forests by robbing soil of nutrients trees need to survive. It can make lakes and streams uninhabitable for fish and other wildlife. As it passes over cities, it can leave its chemical "fingerprints" on manmade objects from skyscrapers to cars.

To reduce acid rain and protect the environment, the first step is reducing the amount of SO2 in the atmosphere. Congress took this critical first step by revising the Clean Air Act in 1990. A cap and trade program focusing on SO2 emissions from power plants was created beginning in 1995. The new program had two key features:

• First, it cut the amount of sulfur dioxide that could be emitted by power plants in half. A cap on emissions was established at 50% of 1980 levels (17.5 million tons of SO2 were emitted that year).
• Second, the program gave plant operators flexibility to choose the emissions-reduction plan that worked best for their facilities. They could change to lower-polluting fuels, install devices to "clean" their emissions, or they could trade surplus pollution allowances.