US Acid Rain Program SO2 trading (1990-2008)
The 1990 Clean Air Act amendments created the first major US cap-and-trade system, capping sulfur dioxide emissions from power plants. Emissions fell faster and at lower cost than the Environmental Protection Agency predicted.
SO2 emissions dropped sharply within a decade, validating cap-and-trade as a policy tool.
A 2008 federal court decision vacated the follow-on Clean Air Interstate Rule, creating years of market uncertainty and showing how legal challenges can disrupt trading programs.
The program proved the mechanism works; its legal turmoil previews the risk of a court challenge to California's amendments.
