Acid Rain Program - Participation By Citizen Groups

Participation By Citizen Groups

Citizens and groups can purchase sulfur dioxide emissions allowances alongside electric utilities and other producers of air pollution in annual auctions conducted by the U.S. Environmental Protection Agency (EPA) and on the Chicago Board of Trade. Each year the U.S. EPA auctions off to the highest bidder about 250,000 pollution allowances that enable their owners to emit one ton of sulfur dioxide.

No national environmental group has ever bid in the annual EPA Auction, but a small number of local groups have participated for many years, apparently on the theory that reducing the supply of allowances may someday drive up the price of acquiring them. For example, one of the oldest of these groups is the Acid Rain Retirement Fund (A.R.R.F.), a non-profit, all-volunteer, community educational group. A.R.R.F. has raised money and bid alongside polluters since 1995 for as many allowances as their funds can buy. But instead of using or trading them, A.R.R.F. retires them permanently, taking allowances off the market and keeping sulfur dioxide out of the air.

Along with allowances purchased in prior years, A.R.R.F. in 2011 owns the right to emit 422,000 pounds (211 tons) of sulfur dioxide per year, plus whatever amount it did not emit under allowances purchased in previous years. Because it did not exercise its right to emit any pollution during 1996–2011, "banking" its emissions allowances for the future, A.R.R.F. holds the legal right to emit a total of 2,240,000 pounds—or 1,120 tons—of sulfur dioxide in 2011. That amount will increase by another 100 tons in 2018, when allowances A.R.R.F. purchased in the 7-year advance auction of 2011 are eligible for use.

Examination of EPA Auction results 1993–2011 indicates groups or individuals like A.R.R.F. who purchased emissions allowances for purposes other than releasing air pollution now own the right to emit 1,321 tons per year. Although most have purchased only one or a few tons, this adds up to considerably more than the 760 tons/year allocated by law to the Miami Fort #5 coal-fired generating unit in Ohio.

Since many purchases were made in earlier years, and unused allowances have accumulated, these groups own the right to emit 16,547 tons of sulfur dioxide in 2011. That's more than the annual allocation of allowances to 132 of the 250 dirtiest generating units in the United States (some are allowed to emit almost 95,000 tons/year).