Sources of Emission Reductions: Evidence for US SO2 Emissions 1985-2002

An enduring issue in environmental regulation is whether to clean up existing "old" plants or in some manner to bring in new "clean" plants to replace the old. In this paper, a unit-level data base of emissions by nearly 2000 electric generating units from 1985 through 2002 is used to analyze the contribution of these two factors in accomplishing the significant reduction of sulfur dioxide emissions from these sources in the United States. The effect on SO2 emissions of the new natural-gas-fired, combined-cycle capacity that has been introduced since 1998 is also examined. The results indicate that cleaning up the old plants has made by far the greater contribution to reducing SO2 emissions, and that this contribution has been especially large since the introduction of the SO2 cap-and-trade program in 1995