Emissions Trading Programs
Acid Rain Program (ARP)
As the first national cap and trade program in the United States, the ARP provides a flexible and cost-effective approach to reduce pollution. The program requires power plants to reduce emissions linked to the primary precursors of acid rain: sulfur dioxide and nitrogen oxides. It sets a permanent cap on sulfur dioxide emitted by sources in the contiguous U.S., and emission rate requirements for nitrogen oxide emissions.
Cross-State Air Pollution Rule (CSAPR)
CSAPR’s regional trading programs limit power plant emissions that are transported across state lines to address the 1997 and 2006 national ambient air quality standards (NAAQS) for particulate matter and the 1997 NAAQS for ozone. Emissions trading programs include:
- Annual sulfur dioxide and nitrogen oxides programs in 22 states to reduce particulate matter pollution.
- Seasonal nitrogen oxides program in 23 states to reduce ground-level ozone pollution.
Building on the ARP, two phases of more stringent sulfur dioxide emissions limits and state-level ozone limits were introduced in 2015. The ozone limits were updated in 2017 through the CSAPR Update and in 2021 through the Revised CSAPR Update to address the 2008 ozone National Ambient Air Quality Standards (NAAQS).
Good Neighbor Plan (GNP)
The GNP secures significant seasonal nitrogen oxides emission reductions from sources including power plants and industrial facilities contributing to ground-level ozone pollution in 23 states. It reduces seasonal nitrogen oxides emissions through an emissions trading program for power plants and through a set of emission rate limits for industrial facilities. The plan addresses the pollution that significantly contributes to problems that downwind states have attaining and maintaining 2015 ozone NAAQS.
Historical Emissions Trading Programs
The following historical emission trading programs achieved important emission reductions and air quality improvements that helped states to meet older NAAQS. These programs helped to shape current programs.
- Ozone Transport Commission Nitrogen Oxides Budget Program (1999-2002)
- Nitrogen Oxides Budget Trading Program (2003 - 2009)
- Clean Air Interstate Rule (2009 - 2014)
State and Regional Emissions Trading Programs
Emissions trading programs can also be designed to be sub-national approaches to address air quality and other concerns. Regional, state, and local authorities can complement federal programs by setting stricter limits on sources through state or local programs, or they may provide programs where there are no federal programs. The following programs are examples of sub-national approaches that use emissions trading to reduce greenhouse gas emissions:
For regional, state, and local authorities interested in designing emission trading programs to address air quality concerns related to public health and the environment, see Best Practices for practitioners.
Learn more about the progress of EPA's power sector programs over time.
Next, learn about the results of emissions trading programs.