Question

Why was the U.S. sulfur dioxide allowance trading program widely considered to be a success? In your answer, be sure to discuss the policy’s environmental performance, cost-effectiveness in comparison to other potential policies, compliance and enforcement, and distributional implications.

Answer 1

Why was the U.S. sulfur dioxide allowance trading program widely considered to be a success? In your answer, be sure to discuss the policy’s environmental performance, cost-effectiveness in comparison to other potential policies, compliance and enforcement, and distributional implications.

Answer: the US sulfur dioxide allowance trading program widely considered to be successful. There was problem of acid rain due to sulphur dioxide but it has been hailed at a large success. Clean air Act amendment (CAAA) world first large scale pollutants cap established in 1990.in economic theory these trade schemes was cost effective. Minimum cost required to protect environment. Firm tends to locate their plants in area with greatest percentage of poor and minorities. This program successful with drastically reduction in so2 production. According to 1990 census of population to allocate each plant abetment cost equally to all people living within the state. Benefits and cost in the overall socio economic group receiving benefit and cost proportionally to the share in overall population. Net benefit are positive in every region. The African American Hispanic communities have share of benefit is greater than cost. Although poor have higher cost than benefit. Estimation of $ 56 billion benefit and and cost only $ 558 millionmillion from the SO2 reduction.

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