2000). Phase II began in January 2000 and expanded to include all electricity-generating facilities over 25 MW. At the beginning of the Phase II program, annual electric utility emissions of SO2 were capped at 9.2 million tons. By 2010, the cap is scheduled to drop to 8.95 million tons, which will be equivalent to a 10-million-ton or a 50% reduction in emissions from electricity generation when compared with those in 1980.
The SO2 emissions trading program provided the large reductions in SO2 emissions from stationary sources and at much less estimated cost than would have been obtained from traditional technology-based control strategies (GAO 2000). EPA reported that all companies maintained compliance from the inception of the program through 2000; some noncompliance occurred in 2001 apparently as a result of simple and small accounting errors (EPA 2001d). A decrease of 3 million tons of SO2 was seen in the beginning of the program (EPA 2001d), and the total achieved reductions from Phase I was approximately 22% over the base allocations (see Figure 5-1). The beginning of Phase II saw an additional 1-million-ton decrease in SO2, bringing the nationwide total emissions to 11.2 million tons. This