Cap, Trade and Skeletons

Did Waxman-Markey’s ancestors really deliver on their promises? 10

Meet the Family

“ACID RAIN” ... grandfather of them all: Whenever critics savage the merits of selling the right to pollute, supporters invoke EPA’s sulfur dioxide (SO2) Acid Rain Program as a shining success story. After rural areas in the Northeast complained in the 1980s about dangerously high PH (acid) levels in their pristine lakes and streams, scientists concluded the contamination was due primarily to sulfur dioxide drifting hundreds of miles from belching power plant smokestacks in the Midwest.

Acid rain was linked to a host of problems, from killing fish to pitting car paint and destroying views in national parks. For humans, walking or swimming in water contaminated by sulfur dioxide it is not particularly dangerous, researchers said. But the pollutants that cause it form fine particles that can be inhaled deep into people’s lungs and have been linked to heart and lung disease, asthma, bronchitis, and premature death.  But despite the scientific evidence of ill effects, industry balked at costly regulation, saying it wasn’t clear their emissions were the source.

To placate all sides, Congress amended the Clean Air Act in 1990 to create the nation’s first cap-and-trade program. Dangerous sulfur emissions from large power plants would be halved by 2010, while saving utilities a projected 20 percent in costs over traditional regulation. The program appeared to work perfectly. By 2007, three years ahead of schedule, sulfur dioxide emissions had been cut by 50 percent, at a savings of $2 billion annually to companies in today’s dollars.

Some of the reasons why it worked may sound familiar: the program created incentives for industry to invest in new technology and alternative fuel sources, with a level playing field ensured by continuous, verifiable emissions monitoring. Sulfur scrubbing equipment was about to come on the market anyway, automatic emission monitoring was available at the plants, and utilities were able to switch to burning either less polluting natural gas, or “low sulfur” coal being opened up in vast, new deposits across the country.

But have regulators halted acid rain? “No, we have not,” said Brian McLean, director of EPA’s office of atmospheric programs, and an architect of the cap-and-trade program. “We have made significant reductions, based on what was our best judgment at the time that was necessary. The PH [acidity] levels of lakes and steams improved, but they did not improve as much as we thought they would.”

In fact, while acid rain deposits have been reduced by about a third in some cases, there’s a long way to go.

“We haven’t finished the job, I guess is the best way to put it,” McLean said. “It just did not go as far as the science had indicated it would back in the 1990’s.”

The reasons are complex, he said, mostly tied to new findings about how sulfur is deposited and flushed out of soil and waterbeds. In response, EPA proposed an even steeper cap on SO2 a few years ago, as much as 70 percent. While there was some grumbling, most companies and every state but North Carolina agreed.

But three major utilities, including Duke Energy, better known for touting its desire to participate in a greenhouse gas cap-and-trade program, sued to stop the new sulfur cap.  The EPA is now working on revisions.

Earlier this month, McLean politely sidestepped answering whether he thought cap and trade was the best approach to achieve the huge cuts in greenhouse gas emissions scientists say are needed to fight climate change.

“The important thing to remember is there are a lot of tools with environmental problems,” he said. “Cap and trade is one of those tools, and it can work very successfully in certain situations. I think it worked very well for acid rain. It works very well for large industrial facilities, and it works very well when the goals are clear, and the rules are clear.”

Janet Wilson is a senior fellow at USC Annenberg’s Institute for Justice and Journalism, and a veteran environmental reporter based in California.

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  1. Janet Wilson's avatar

    Janet Wilson Posted 5:19 pm
    27 Jun 2009

    Thanks for the comments! And yes, conclusion is at the top as you stated. EnviroPerk. I also decided to just lay out the facts as best as I could garner them, rather than calling up usual suspects to get reaction quotes. I agree that there's a lot of follow up reporting, discussion and work to be done on how the experiences form past trading prgrams can be applied to the bill in Congress now. Would have been too much for this one piece I think, but will try to write more! Chrs, Janet

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  2. ldmstr Posted 10:07 am
    28 Jun 2009

    Its amazing???  Greenies gone wild!!!  Again the libs in Congress have over reached and attempted to pass the all or nothing enviro bill.  The House wil of course pass it but the Senate will balk.  Spending billions to please a minority of activists is always the best way to make things happen with the enviromental problems we have.  Forgetting that the rest of the world do not have the billions to spend and we will be the only country to make the effort at risk to our economy and life style.  Yes we could change the way people think in the US but with the materialistic lifestyle we live there will be a limited response to the cry for change.  The best we can look for is a slow change in peoples minds while investing in change one step at a time.  Electric technology is not ready to take over for oil based fuels so a transition from gasoline to compressed natural gas to hydrogen to all electric is possible, but if you think you can force Americans to change look in the mirror and see that you yourselves will not change your minds on "Global Climate Change" without a fight, so where is the middle ground???  Its not an all or nothing argument.  Make the changes slowly making it affordable for everyone to get on the same road, and maybe we will get where we all want to be in the future.  Keep pushing all or nothing and we all loose.

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    1. OrganicCat Posted 8:06 am
      29 Jun 2009

      I think it's clearly evident that event slow changes get pushed back by the party of No.  Hard pushes are necessary for many reasons, one of which is because we can't sustain ourselves at our current level of consumption of resources and another (more obvious one) is that things get watered down so much that if we tried to implement "little" changes they'd be watered down into non-existence.  Larger pushes get changed into what we have here, not what we want, but better than nothing.  Could they try a more bi-partisan effect, maybe reducing the changes a LITTLE bit?  Probably, but in my (admittedly bias) opinion, we don't have the time to squabble over the pork and beans of it, we need to do it in a rational, efficient manner taking the vast majority of scientific evidence into account.As for the electrical comment, I kindly ask that you show evidence that electrical technology is somehow not up to standard for being able to replace current technology at the drop of a hat.  The only thing holding those technologies back are the money grubbing companies making billions off their old technology.  Fat lot of good that did them (like GE).

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  3. Clifford Wells's avatar

    Clifford Wells Posted 3:17 pm
    28 Jun 2009

    How to fix the cap 'n' trade of the old SO2 program, and similar ozone programs such as for NOx?  To me that issue can be resolved to some extent by imposing a "green tax" on the credits.  Often these are expressed as a percentaage such as 15%.  So if you document 100 tons of reductions, you actually get a credit for 85 tons.  One could increase the green tax higher.I didn't get all the way through your article, but another problem was on the issue of "allowances."  Back in the day, air pollution permits had a "maximum emission rate" expressed in watts, BTU, resulting pollution, etc.  These allowances were set very high, assuming dirty fuels such as coal or Bunker-C fuel oil.  All the company had to do was to convert to natural gas or import some Wyoming coal and the problem disappeared overnight - instant credits of thousands of tons.  I am not sure if the Waxman bill allows such gaming of the system.You can bet the lawyers will have a field day with this hot potato though, since they get to comment and sue over any agency regulations in addition to the Congressional votes.  Things should be interesting this fall when the Senate debates the bill, and then EPA and other agencies have to draft regulations such as an "advanced notice of proposed rulemaking" (ANPR).  Hah, they'll be fighting over the clear meaning of words buried in the thousand-page missive as opposed to "unclear legislative intent."  Oops, did I infer the rule is too dang long and is too darn laden with pork?  Me?? Should be interesting viewing!

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    1. ClaudeB Posted 6:25 pm
      28 Jun 2009

      Clifford, that's the point. The idea was to reduce SO2 and NOx levels. If, by substituting their fuel source, they reduced overall emissions at the lowest cost possible for them, that's exactly the point. The economy is all about incentives and profit is the biggest of all.

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      1. Clifford Wells's avatar

        Clifford Wells Posted 7:16 pm
        28 Jun 2009

        Hard to explain this, but Bunker C and high-sulfur coal was rarely if ever used, and only for "emergency" uses.  These were not normal emissions in the least.  What happened was that during the fuel crisis of the 70s and early 80s, facilities were allowed to amend their permits to use high sulfur fuels in case of a national emergency.  So a unit might go from 20,000 TPY to 35,000 TPY and the upper number became the "allowable" under which you could trade.  Hey, nice to be able to trade off 15,000 tons of SO2 credits at 70 dollars per ton, and not do a darn thing! I don't have a lot of good to say about the concept, no matter how good it sounds.  If it works so well, why are CO2 emissions not being significantly reduced in Europe?  Were folks trading phoney date plam tree and airline miles for credits that were used for extra in Eastern Europe?  From a practical standpoint, such Ponzi schemes never really worked as well as they were advertised. The alternative seems to be a carbon tax.  Excuse me, since when did a tax every help anybody?  I believe in helping the needy and stuff, but with a carbon tax?  You must be crazy.  The way to limit CO2 is by restricting CO2 and other greenhouse gas emissions in terms of grams per mile, pounds per million BTU, pounds per therm or million cubic feet of natural gas, grams per kilowatt-hour, kilograms per tonne of fuel, or whatever rate-based measure you can find.  Plain and simple. that's how you do it. 

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  4. Tr2828 Posted 6:20 am
    29 Jun 2009

    Look at the picture is being güvenlik kabini used gasoline in the  United States.

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  5. bmengr Posted 5:32 am
    08 Jul 2009

    We don't have to perfectly account for carbon emissions at the beginning.  Why not start with the easiest measure, which would require permits to sell fuel, give credit for carbon capture, and include the effects of large-scale agricultural activities?  Fine tuning the system could give bonuses for actions that will reduce carbon emissions in the future or take into account smaller actions (and the prospect of a cap being implemented could encourage people to use current, uncapped energy to make more solar, wind, etc devices).From the consumer's perspective, the costs are just built in, so there's no paperwork to be done.  When you pump your gas, the seller will have arranged for permits to cover its use.I'm certainly worried about the potential giveaway of billions of dollars worth of carbon permits to the energy industry, given corruption trends. If we imagine that it is politically possible to have a 100% auction system, however, there would be no reason for companies to pretend to be worse than they are, and thus there wouldn't be a "bunker coal" situation.  Two problems solved at once!  If money from the auction were distributed equally to all American citizens and maybe permanent residents, those consuming the least would come out ahead and there would be better incentives to reduce all around. It will be important to have the infrastructure in place for taking more dramatic action if it does turn out to be needed, or increase the cap if the earth is doing 'ok' and the models start looking more livable.  There's no reason auctions couldn't be held quarterly or even more often, and this would allow a rapid response to actual results.Cap and trade will increase costs or some people, but it will also reduce the extent to which the costs of consumption are externalized and produce a system that is more fair to those who use less.  The tradeoffs between different consumer choices will shift, so that a decision that is best for the environment is more likely to also be better for the purchaser's bottom line.  Hopefully water usage and trash production will also factor in somehow, so that these metrics don't worsen.Remember, we're not just talking about climate change.  Ocean acidification will probably cause the elimination of shellfish, reduce fish production, and kill off reefs - all within the lifetimes of most people here.   Personally, I like being able to eat fish.

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