The SO2 Allowance Trading System and the Clean Air Act Amendments of 1990: Reflections on Twenty Years of Policy Innovation

Gabriel Chan, Robert Stavins, Robert Stowe and Richard Sweeney
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Gabriel Chan: Harvard Kennedy School
Robert Stowe: Harvard Kennedy School

No 2012.06, Working Papers from Fondazione Eni Enrico Mattei

Abstract: The introduction of the U.S. SO2 allowance-trading program to address the threat of acid rain as part of the Clean Air Act Amendments of 1990 is a landmark event in the history of environmental regulation. The program was a great success by almost all measures. This paper, which draws upon a research workshop and a policy roundtable held at Harvard in May 2011, investigates critically the design, enactment, implementation, performance, and implications of this path-breaking application of economic thinking to environmental regulation. Ironically, cap and trade seems especially well suited to addressing the problem of climate change, in that emitted greenhouse gases are evenly distributed throughout the world’s atmosphere. Recent hostility toward cap and trade in debates about U.S. climate legislation may reflect the broader political environment of the climate debate more than the substantive merits of market-based regulation.

Keywords: Cap-and-Trade; Market-Based Environmental Policy; Acid Rain; Sulfur Dioxide; Clean Air Act Amendments (search for similar items in EconPapers)
JEL-codes: Q52 Q55 Q58 (search for similar items in EconPapers)
Date: 2012-02
New Economics Papers: this item is included in nep-ene, nep-env, nep-his and nep-res
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Citations: View citations in EconPapers (21)

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Related works:
Working Paper: The SO2 Allowance Trading System and the Clean Air Act Amendments of 1990: Reflections on Twenty Years of Policy Innovation (2012)
Working Paper: The SO2 Allowance Trading System and the Clean Air Act Amendments of 1990: Reflections on Twenty Years of Policy Innovation (2012)
Working Paper: The SO2 Allowance Trading System and the Clean Air Act Amendments of 1990: Reflections on Twenty Years of Policy Innovation (2012)
Working Paper: The SO2 Allowance Trading System and the Clean Air Act Amendments of 1990: Reflections on Twenty Years of Policy Innovation (2012)
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