摘要：The SO2 trading program has achieved reductions in emissions ahead of schedule, withallowance prices below the marginal costs that were anticipated for the program. This paperexplores the experience with the program and proposes a taxonomy of reasons why allowanceprices are low. The overarching reason is that the most costly investments to accommodatefull emission reductions have been successfully delayed. Application of a discount rate to theselong run marginal costs yields an estimate of allowance price close to that observed today.Several factors have contributed to the delay in bearing these costs, and helped to reduce theirmagnitude. One group of factors stems from market fundamentals, especially the cost of railtransport of low sulfur coal. A second group includes the influences of state and federalregulators. A third group includes distinctions from the "imagined" program compared to thatwhich was actually been enacted.
