TY - JOUR AU - Chan,Gabriel AU - Stavins,Robert AU - Stowe,Robert AU - Sweeney,Richard TI - The SO2 Allowance Trading System and the Clean Air Act Amendments of 1990: Reflections on Twenty Years of Policy Innovation JF - National Bureau of Economic Research Working Paper Series VL - No. 17845 PY - 2012 Y2 - February 2012 UR - http://www.nber.org/papers/w17845 L1 - http://www.nber.org/papers/w17845.pdf N1 - Author contact info: Gabriel Chan Kennedy School of Government Harvard University 79 JFK Street Cambridge, MA 02138 Tel: 617-496-0739 Fax: 617-496-8753 E-Mail: gabe_chan@hksphd.harvard.edu Robert Stavins JFK School of Government Harvard University 79 JFK Street Cambridge, MA 02138 Tel: 617/495-1820 Fax: 617/496-3783 E-Mail: robert_stavins@harvard.edu Robert Stowe Kennedy School of Government Harvard University 79 JFK Street Cambridge, MA 02138 Tel: 617-496-4265 E-Mail: robert_stowe@harvard.edu Richard Sweeney Harvard Kennedy School E-Mail: rich_sweeney@hksphd.harvard.edu AB - The introduction of the U.S. SO2 allowance-trading program to address the threat of acid rain as part of the Clean Air Act Amendments of 1990 is a landmark event in the history of environmental regulation. The program was a great success by almost all measures. This paper, which draws upon a research workshop and a policy roundtable held at Harvard in May 2011, investigates critically the design, enactment, implementation, performance, and implications of this path-breaking application of economic thinking to environmental regulation. Ironically, cap and trade seems especially well suited to addressing the problem of climate change, in that emitted greenhouse gases are evenly distributed throughout the world’s atmosphere. Recent hostility toward cap and trade in debates about U.S. climate legislation may reflect the broader political environment of the climate debate more than the substantive merits of market-based regulation. ER -