AGEC/FNR 406 LECTURE 19

Acid Rain

Name derives from a chemical reaction between

SO2 (sulfur dioxide)

NO2 (nitrogen dioxide)

and

H2O (water)

Reaction leads to...

Creation of sulfuric and nitric acid,

which fall in the form of acidified rain(or snow or sleet).

There are actually two forms of acid deposition:

1. wet deposition

2. dry deposition

http://www.epa.gov/airtrends/sulfur.html

http://www.epa.gov/acidrain/what/index.html

Electric power generation that relies on burning fossil fuels like coal:

2/3 of sulfur dioxide emissions

1/4 of nitrogen oxides emissions

Sources

Both natural and anthropogenic sources(90-95% man-made)• Rain is naturally a bit acidic (pH 5.6) due to

atmospheric CO2.

• U.S. - Electricity generating plants burning high-sulfur content coal and oil

• Canada - Ore smelters

• Europe - Electricity

US Sources

http://www.state.in.us/idem/programs/air/emissionreporting/emissionsdata/

North America (1998 data)

SO2

US: 17.7 million MT(67% from elec utilities)

Canada: 2.7million MT(74% from industry)

About 4 million MT of SO2 crosses the border annually.

http://www.epa.gov/air/emissions/so2.htm

Acid Deposition (Acid Rain)• Regional Pollutant

– Effects felt over a broad geographic area.

– Location important: Effects felt downwind of source.

• Transboundary pollutant– Emitted in one country and transported across a national border

to another country.

U.S. sulfur dioxide emissions responsible for 50-75% of acid deposition over most of eastern Canada.

Canada sulfur dioxide emissions responsible for < 5% of acid deposition in the U.S.

Acid rain impacts

1. Aquatic systems (-)

2. Forests (-)

3. Human health (-)

4. Visibility (-)

5. Agriculture (- /+)

6. Building materials (-)

Critical load

The total amount of acid deposition that can be received without damage to an ecosystem.

Aquatic plants: pH 7.0-9.2

Freshwater shrimp: pH 6

Bottom-dwelling bacteria: pH 5.5

Fish: pH 4.5

Frogs and insects: pH 4.5

4.75

5.00

5.25

5.50

5.75

6.00

1940 1950 1960 1970 1980 1990

Year

pH

Big Moose

Upper Wallface

Example: NY state lakes

Acidification of lakes and streams reduces value of recreational fishing.

Example continued

$250

50

TravelCost

P = 250 -5Q

0

Number of visits

0

Damage = Loss in consumer

surplus.

$200

P = 200 -5Q

40

Damage and cost assessment

Main issues:

1. Market and non-market effects2. Chemical synergies + metals3. “Common metric” problem

Measurement and quantification of MAC is difficult due to interdependencies.

Who benefits? Who should pay?

Actual policy in U.S.

1970-1990- uncertainty prevailed- Reagan administration stalled- EPA regulations focused on local effects

which may have exacerbated problem

1990-present- Clean Air Act: marketable permits

(1990)- NOXexcluded, 1-1 trading ignores location- SO2 falling but NO2 increasing

Why so long?

Political concern regarding job lossesin coal-producing states (IN, IL, MI, OH)

Local losses in high-sulfur coal stateswould be balanced by gains in low-sulfurcoal states

Costs of electricity would rise

Marketable Permits: Allowances

• Emission standard set and number of permits determined.

• Permits issued to polluters based on some allocation system.

• Polluters allowed to trade permits.

• Market should develop…

Why does trading work?

1. If firm can cleanup at a price lower than the permit price, it will.

• Low MAC firms sell permits

2. If cleanup is costly then a firm will choose to buy a permit

• High MAC firms buy permits

3. Anyone who wants to can buy apermit.

Acid Rain Program

• Allowances allocated each year – one allowance allows utility/source to emit one ton of SO2.– Phase I: Allowances to 110 highest emitting coal-fired power

plants (>100 megawatts)

– Phase II: All power plants > 25 megawatts must participate.

• Sources that exceed their allowances fined ($2,000/ton) and allowances reduced by the excess the next year.

• Compliance has been 100% thus far.

EPA Allowance Auctions• Allowances offered at auctions

– 1998-99 Spot auction: 150,000 allowances.– 1998-99 Advance auction: 125,000 allowances– 2000 and after: 125,000 for each auction.

• These allowances can be bought and sold once purchased.

• Allowances sold starting with the highest bid and continuing until allowances sold or bids exhausted.

Experience with trading

• # of permits traded has been rising

• market clearing price has been increasing

http://www.epa.gov/airmarkt/trading/auction.html

Have SO2 emission levels fallen?

Eastern Canada (regulation)

by 1999 emissions had fallen 58%

from 1980 level

United States (regulation + trading)by late 90s emission had fallen

39% from 1970 level

SO2 Emissions under the Acid Rain Program

Sources have started using banked allowances.

Sources have started using banked allowances.

SO2 Emissions and the Allowance Bank

Banked allowances

Comparison of Ambient Sulfur Dioxide Concentrations in the Eastern United States from CASTNet Monitoring Data