New report verifies success of nitrogen oxide emission trading program in northeastern states

April 11, 2002 — The Environmental Protection Agency (EPA) and the Ozone Transport Commission (OTC) recently released a report showing the continuing success of the NOx Budget Program, a market-based emissions trading program for reducing nitrogen oxide emissions in the Northeast.

NOx is a prime ingredient in the formation of ground level ozone (smog), which can irritate the respiratory tract, impair breathing ability and cause various other respiratory problems. In a unique partnership between federal and state government, the OTC asked EPA to help implement the program when it began in 1999.

In 2001, the third year of the program, nearly 1,000 sources in nine participating states and Washington, D.C., reduced NOx emissions 12 percent below allowable emission levels. Moreover, emissions were more than 60 percent below 1990 levels.

The program represents the first application of a “cap and trade” emission reduction mechanism to an issue other than acid rain, where the trading strategy has been used successfully nationwide since 1995 to control sulfur dioxide emissions from power plants.

The same cap and trade mechanism is the basis of President Bush’s recently-announced Clear Skies Initiative for reducing sulfur dioxide, mercury and Nox from power plants. The OTC was created by Congress in the 1990 Clean Air Act Amendments to better coordinate the efforts of northeastern states in reducing NOx emissions.

The “2001 OTC NOx Budget Program Compliance Report” can be found at: or .

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