Environmental Protection through “Cap and Trade”

As a kid growing up in the 1990’s I remember watching public service announcements and educational videos warning my generation of the dangers of pollution. The main focus of this effort was to educate people about acid rain. Stories consistently appeared in the news regarding damage to a local cityscape as a result of acid rain deposition.

This widespread concern eventually led to political action with the passage of the Clean Air Act Amendments in 1990. An important part of that legislation included the creation of a “cap and trade” system, started in 1995, that caps power plant emissions of SO2 (sulfur dioxide) and NOx (nitrogen oxide) – the primary contributors to acid rain. In accordance with the cap, allowances are distributed to the utilities and can be used to account for emissions, banked for future emissions, or sold to another utility that needs extra allowances to order to be in compliance.

As an intern here at the EPA’s Clean Air Markets Division, I have experienced first hand how, over the past couple of decades, “cap and trade” programs have played a vital role in the EPA’s efforts to lower harmful air emissions and their deposition.

The use of “cap and trade” programs has led to a decrease in wet deposition of the sulfate portion of acid rain by 40 percent through the Acid Rain Program (ARP). Another “cap and trade” program administered by the Clean Air Markets Division is the NOx Budget Trading Program (NPB). Emission reductions achieved under the NPB has led to improvements in air quality and resulted in 103 million Americans breathing cleaner air as well as 580 to 1,800 incidences of premature deaths avoided in 2008.

It is great to know that “cap and trade” systems are effective, but the urgency of the 1990’s regarding acid rain has faded. People are focused on so many other things that it is becoming difficult to keep acid rain at the forefront of people’s minds. The scientific community has voiced concern that many acid-sensitive ecological systems have still not been fully restored and they contend further emissions reductions are needed. Though we have come very far and found that “cap and trade” is a successful tool to reduce the harmful pollutants that cause acid rain, we still have a way to go. For more information.

About the author: Josh Stewart is the Communications Intern with the EPA’s Clean Air Markets Division. Josh is currently working on his Master’s Degree in Political Management at The George Washington University.

Editor's Note: The views expressed here are intended to explain EPA policy. They do not change anyone's rights or obligations. You may share this post. However, please do not change the title or the content, or remove EPA’s identity as the author. If you do make substantive changes, please do not attribute the edited title or content to EPA or the author.

EPA's official web site is www.epa.gov. Some links on this page may redirect users from the EPA website to specific content on a non-EPA, third-party site. In doing so, EPA is directing you only to the specific content referenced at the time of publication, not to any other content that may appear on the same webpage or elsewhere on the third-party site, or be added at a later date.

EPA is providing this link for informational purposes only. EPA cannot attest to the accuracy of non-EPA information provided by any third-party sites or any other linked site. EPA does not endorse any non-government websites, companies, internet applications or any policies or information expressed therein.