The Acid Rain Experience: Should We Be Concerned about SO 2 Emissions Hotspots?

1. The Acid Rain Experience: Should We Be Concerned about SO2 Emissions Hotspots? Emissions Marketing Association Annual Spring Meeting Amy Kinner, Rona Birnbaum May 4, 2004

2. What Are the Benefits of a Cap and Trade Approach? • Certainty that a specific regional level of emissions will be achieved and maintained over time (even with economic growth) • More regulatory certainty, more compliance flexibility, and lower transaction costs for sources • Fewer administrative resources needed by industry and government • Drives down costs, making further improvements feasible • Complements other Clean Air Act provisions (e.g., NAAQS) to help protect local air quality

3. National SO2 Emissions Have Been Reduced Significantly Total Annual SO2 Emissions From Acid Rain Sources (1980-2002) Total annual emissions from Acid Rain sources were reduced by an average of approximately 5 million tons between 1990 and Phase II (2000-2002).

4. 1990 Phase I average (1995 - 1999) Phase II average (2000 - 2002) Scale: 1990 emissions in Ohio were 2.2. million tons State-Level SO2 Emissions Were Reduced in States with Highest 1990 Emissions SO2 Emissions from Power Plants 1990-2002 • Greatest emissions reductions in states with highest emissions in 1990. • Largest reductions in Ohio, Indiana, Missouri, Illinois, and West Virginia.

5. What Have People Been Saying about Emissions Reductions under the Acid Rain Program? • Our analysis describes how annual SO2 emissions changed between 1990 and 2000-2002 (Phase II) • Why is EPA assessing the program now? • All good environmental programs should track results for accountability. • There are requirements to assess impacts (e.g., GPRA/PART, NAPAP). • Several years of Phase II data are now available. The Acid Rain Program Reduced Emissions at Highest Emitting Sources: • In Phase I, highest-emitting sources reduced the most. • (Environmental Law Institute, 2000 and Environmental Defense, 2000). • In Phase II, most abatement by units with higher SO2 emissions, especially in the Midwest. • (Ellerman, 2003) Increases in SO2Emissions Occurred during the Acid Rain Program: • SO2 emissions in 16 states increased from 1990 levels. • (Environmental Integrity Project, 2002). • Between 1995 and 2000, SO2 emissions increased at 300 of the “dirtiest” 500 power plants • (Clear the Air, 2002).

6. How Could We Identify Acid Rain Program Sources that Could Contribute to Local Impacts? There are various ways we could identify sources that could potentially be of concern. Emissions • Plants with high emissions (e.g., highest 25% of emitters). • Plants that increased emissions or did not reduce as much as others during the program. • Plants that did not improve their SO2 emissions rates during the program. • States or regions where emissions are high or increasing. Air Quality/Environmental Effects • Plants affecting air quality in an area where pollutant levels are high (e.g., non-attainment area). • Plants affecting air quality in a “sensitive” area (e.g., high numbers of asthmatic children or nitrogen-saturated forests). The Acid Rain Program accomplished its goal of reducing national SO2 emissions. What happened at the local level?

7. National Annual SO2 Emissions Were Reduced by 32% Between 1990 and 2000-02 SO2 Emissions Changes Between 1990 and 2000-02 (Acid Rain Sources) • 335 facilities decreased emissions between 1990 and 2000-02 (total reductions = 6.3 million tons). • 282 facilities increased emissions between 1990 and 2000-02 (total increases = 1.2 million tons).* • Blue circles indicate sources that reduced emissions more than 1,000 tons. • Orange squares indicate sources that increased emissions more than 1,000 tons. • The size of the symbols are proportional to the size of the change in emissions. • Emissions from sources represented by hollow circles did not change more than 1,000 tons. * This only includes facilities with emissions in 1990. It does not include new sources or sources that did not operate in 1990.

8. Largest Reductions Occurred at Plants with Highest 1990 Emissions Plant-Level 1990 SO2 Emissions and SO2 Emissions Changes by 2000-02 • Plants with highest emissions in 1990 achieved greatest reductions by 2000-02. • Plants that increased emissions tended to have lower emissions in 1990. • Many plants that decreased emissions experienced substantial decreases, while most plants that increased emissions experienced smaller increases.

9. A Comparison of Third Quartile and Fourth Quartile Plants* • 44% of plants reduced emissions. • Average SO2 rates improved only slightly. • Large percent increase in heat input (30%). • 74% of plants reduced emissions. • Large average improvements in SO2 rates. • Smaller percent increase in heat input (16%) Are third quartile plants now a concern? • While many increased emissions, 72% improved their SO2 rates. • Third quartile plants continued to have lower average emissions and SO2 rates than fourth quartile plants. * Plants were ranked by 1990 emissions (1=lowest emissions, 627=highest emissions). Using these rankings, plants were divided into quartiles, with plants with the highest 25% of emissions in the fourth quartile and plants with the next highest 25% of emissions in the third quartile.

10. Plants in Fourth Quartile of Emissions in 1990: A Comparison of Plants that Increased and Plants that Decreased Emissions • Of the 157 plants with the highest emissions in 1990 (fourth quartile), 40 plants increased emissions, while 117 plants decreased emissions. • Plants that decreased emissions during the Program had higher mean emissions and higher SO2 rates in 1990. • Plants that increased emissions from 1990 levels had higher mean emissions and higher mean SO2 rates by 2000-02.

11. Under the Acid Rain Program, National SO2 Reductions Were Achieved Despite Significant Increases in Heat Input • National heat input increased by 20% between 1990 and 2000-02, including increases in heat input of: • 35% at facilities that increased their emissions • 9% at facilities that decreased their emissions • If SO2 rates had not improved, national SO2 emissions would have increased by 20%. • Actual 2000-02 emissions (at both increasing and decreasing facilities) were below what they would have been had 1990 SO2 rates not improved.

12. Regional Sulfate Concentrations Have Been Reduced • The Acid Rain Program has achieved its main goal, reducing regional sulfur deposition and sulfate concentrations significantly. This has provided substantial benefits to human health and the environment. Average Annual Sulfate Concentrations (2000-02) Average Annual Sulfate Concentrations (1989-91) Source: Clean Air Status and Trends Network (CASTNET)

13. Has the Program Improved Air Quality Overall? • During the Acid Rain Program, other protections (NAAQS) were in place to protect local areas. • Average SO2 concentrations have dropped steadily • Average SO2 concentrations remain well below the NAAQS. Source: EPA, Latest Findings on Air Quality: 2002 Status and Trends Report. (August 2003)

14. Conclusions • The Acid Rain Program accomplished its main goal of achieving large regional reductions in emissions and reducing regional sulfur deposition and sulfate concentrations significantly. • This has provided substantial human health and environmental benefits. • While many of the largest plants decreased emissions, some increases in emissions were also observed, often due to increased unit usage (growth). • EPA will continue to look at local air quality to understand the local environmental and health impacts of such increases in emissions. • If such increases in emissions are a problem, protection of local environments in the future will rely on: • National health-based standards and state/local government authority to address local impacts • Tighter cap (e.g., proposed in Clean Air Interstate Rule)