The So2 Allowance Trading System: the Ironic History of a Grand Policy Experiment

@article{Schmalensee2012TheSA,
  title={The So2 Allowance Trading System: the Ironic History of a Grand Policy Experiment},
  author={Richard. Schmalensee and Robert Stavins},
  journal={Political Economy: Taxation},
  year={2012}
}
Two decades have passed since the Clean Air Act Amendments of 1990 launched a grand experiment in market-based environmental policy: the SO2 cap-and-trade system. That system performed well but created four striking ironies. First, by creating this system to reduce SO2 emissions to curb acid rain, the government did the right thing for the wrong reason. Second, a substantial source of this system’s cost-effectiveness was an unanticipated consequence of earlier railroad deregulation. Third, it… Expand
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