Emission allowances and utility compliance choices: Market development and regulatory response

This paper will examine the multifaceted goals and problems of states and utilities relative to compliance with Title IV of the Clean Air Act Amendments of 1990, and in particular as they pertain to the development and functioning of the allowance market together with utility pollution control and power generation technology choice. Section 2 presents possible utility compliance strategies along with possible barriers that utilities may confront regarding the development of a SO{sub 2} allowance market. Section 3 discusses current regulatory barriers and requirements being implemented by state PUCs, and Section 4 offers some policy recommendations to achieve the goals of Title IV. Finally, Section 5 presents a summary and conclusion; Appendix A provides programs/mandates developed to date by high sulfur coal states in response to Title IV compliance requirements. (VC