Analysis of the Bush Proposal to Reduce the SO2 Cap

A. Denny Ellerman

February 2002

A. Denny Ellerman, February 2002

This paper evaluates President Bush\'s recent proposal to reduce the cap on total SO2emissions using a model of emissions banking that fits the experience so far under Title IV. It provides a brief introduction to emissions banking and reports results concerning the effect of a the proposed reduction of the cap on emissions, abatement costs, and the value of the existing SO2 allowance endowment.

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