摘要：Title IV of the 1990 Clean Air Act Amendments (CAAA) established a market fortransferable sulfur dioxide (SO2) emission allowances among electric utilities. This market offersfirms facing high marginal abatement costs the opportunity to purchase the right to emit SO2from firms with lower costs, and is expected to yield cost savings compared to a command andcontrol approach to environmental regulation. This paper uses econometrically estimatedmarginal abatement cost functions for power plants affected by Title IV of the CAAA toevaluate the performance of the SO2 allowance market. Specifically, we investigate whether themuch-heralded fall in the cost of abating SO2, compared to original estimates, can be attributed toallowance trading. We demonstrate that, for plants using low-sulfur coal to reduce SO2emissions, technical changes and the fall in low-sulfur coal prices have lowered marginalabatement cost curves by over 50% since 1985. The flexibility to take advantage of these changesis the main source of cost reductions, rather than trading per se. In the long run, allowance tradingmay achieve cost savings of $700-$800 million per year compared to an "enlightened" commandand control program characterized by a uniform emission rate standard. The cost savings wouldbe twice as great if the alternative to trading were forced scrubbing. However, a comparison ofpotential cost savings in 1995 and 1996 with actual emissions costs suggests that most tradinggains were unrealized in the first two years of the program.
关键词：acid rain; sulfur dioxide; air pollution; Clean Air Act; Title IV; permit trading
