Greenhouse-gas regulation will impose vastly greater compliance difficulties than did the Acid Rain program.
Dr. John Bewick is founder of Compliance Management Inc., an environmental, health and safety consulting firm based in Hingham, Mass. Bewick formerly was secretary of environmental affairs for the Commonwealth of Massachusetts. Email him at firstname.lastname@example.org.
The cap-and-trade mechanism in the Clean Air Act Acid Rain legislation represented a path-breaking shift in environmental regulation, by moving from command and control to market mechanisms. Industry was given the freedom to meet SO2 reduction targets using least-cost options, with financial incentives to reduce emissions below caps and to sell the resulting credits. According to some estimates, this saved 55 to 75 percent of initially projected program costs.
Regulation of greenhouse gases (GHG) differs dramatically. Instead of 110 power plant sources (263 units) initially affected by the SO2 regulations, millions of sources emit GHG in many industrial sectors. Rather than the single gas regulated in Phase I of Acid Rain, there are multiple GHGs to regulate. This makes the problem of accurate measurement, enforcement and validation dramatically more difficult. And the expected costs are in the hundreds of billions of dollars to replace or retrofit coal-fired generating plants. If the regulations are crafted poorly, this could lead to major disruptions and dislocations in the U.S. economy..