Market focus - Sky-high cost of clean air
US emissions allowance prices for sulphur dioxide (SO2) rose nearly 200% in 2005 and 300% during 2004. Sandy Fielden of Logical Information Machines examines the SO2 emissions allowance market and discovers which market drivers are forcing prices ever higher
Acid rain occurs when emissions of SO2 and nitrogen oxide (NOx) react with water, oxygen and oxidants in the atmosphere to form various acidic compounds. The discussion here focuses on SO2 emissions. Title IV of the 1990 US Clean Air Act Amendments sought to reduce acid rain. The act established an acid rain programme run by the US Environmental Protection Agency (EPA).
According to the EPA, electric power generation accounts for nearly 70% of acid rain. As a result, the law directed the EPA to
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