A comprehensive description and evaluation of the first three years of the U.S. Acid Rain Program. This environmental control program is the world's first large-scale use of a tradeable emission permit system for achieving environmental goals. The book analyzes the behavior and performance of the market for emissions permits, known as allowances, and quantifies emission reductions, compliance costs, and cost savings associated with the trading program. The book also includes chapters on the historical context in which this pioneering program developed and the political economy of allowance allocations. Finally, the book discusses the program's successes, its weaknesses, and the lesson learned regarding application of the emissions-trading approach to controlling other types of emissions, including greenhouse gases. The volume is an indispensable addition to the library of all interested in the application of marker principles for meeting environmental goals.
• Most up-to-date analysis available on US Clean Air program and US environmental policy on pollution • Authors Joskow, Schmalensee, and Ellerman are internationally recognized authorities on the subject • Balanced assessment is based in the real world and uses virtually no maths
List of illustrations; List of tables; Authors; Preface; Acknowledgments; 1. A market-based experiment; 2. A political history of Federal Acid Rain Legislation; 3. The political economy of allowance allocations; 4. The pre-1995 trend in SO2 emissions; 5. Title IV compliance and Emission reductions, 1995–97; 6. Emissions trading: the effect on abatement behavior; 7. Emissions trading: development of the allowance market; 8. Title IV's voluntary compliance program; 9. The cost of compliance with the Title IV in Phase I; 10. Cost savings from emissions trading; 11. Errors, imperfections, and allowance prices; 12. Concluding observations.