The Cost and Benefits of Reducing Acid Rain

1. The Cost and Benefits of Reducing Acid Rain By Sarah Abdulkarim

2. Introduction: Acid rain is considered one of the serious environmental problems and it is harmful to: • people • Lakes, streams, forests • animals that live in these ecosystems.

3. What is Acid Rain? Acid rain is a term that describes the mixture of wet and dry deposited material from the atmosphere containing higher than normal amounts of Nitric and Sulfuric acids (U.S Environmental Protection Agency)

4. How is it formed? • from natural sources such as volcanoes • man made sources from fossil fuel combustion (U.S Environmental Protection Agency)

5. Under the Clean Air Act Amendments (1990) • (EPA) set a goal to reduce the annual sulfur dioxide emissions by 10 million tons below the 1980 levels • Two phases were developed to achieve this goal. Burtraw and Palmer

6. Under the Clean Air Act Amendments (1990) • Phase I: • began in 1995 • affected 445 units • Phase II: • affected existing utility units • began in 2000

7. TAF and NAPAP The Tracking and Analysis Framework (TAF) is developed for the National Acid Precipitation Assessment Program (NAPAP) to analyze the cost and benefits of the assessment.

8. Emissions are controlled by two major alternatives: • Scrubbing • Fuel switching: • less costly (~$2 billion less/year) • Switching from high to low sulfur coal. • Expected to result in a net job loss of 7,000.

9. Acid Rain Programs EPA. 2005. National Acid Precipitation Assessment Program Report to Congress.

10. Per Capita Benefits in 2010 for Affected Population The main source of benefits is reduced human mortality 59.29

11. Benefits • The main source of benefits is reduced human mortality • Benefits were low on the aquatics, forests, and agriculture. • The economists stated some reasons: • Availability of substitutes for recreational or other kind of assets that the environment provides. • Individuals don’t have the same kind of substitution with respect to health and visibility • Environment can hold nonuse values

12. Costs • Based on the command and control approach under the market of insufficiency, the cost was $1500/ton. • Title IV 1990 of The Clean Air Act, the EPA predicted the costs in 2010 which could range between $450- $620/ton

13. The costs have continued to decline for two reasons : • The program gives utilities the flexibility to exploit advantageous trends in coal markets. • The cost of rail transport that have led to a drop in the cost of switching to lower sulfur coal.

14. EPA. 2005. National Acid Precipitation Assessment Program Report to Congress.

15. EPA. 2005. National Acid Precipitation Assessment Program Report to Congress.

16. Conclusion • The dominant category of benefits is mortality • About 89% of the total health benefits are attributable to changes in SO2 and 11% attributable to changes in NOX emissions. • The public wasn’t concerned about its effects on the ecological system as they were concerned on public health. • Benefits outweigh the costs of the emission reductions

17. Questions