Acid Rain: Emissions Trends and Effects in the Eastern United States
(Letter Report, 03/09/2000, GAO/RCED-00-47).

Pursuant to a congressional request, GAO provided information on acid
rain emissions trends in the eastern United States, focusing on: (1)
sulfur dioxide and nitrogen oxides emitted into the air at the national
level; (2) deposition in the eastern United States and in three
environmentally sensitive areas; (3) sulfates and nitrates in lakes in
the Adirondack Mountains and the prospects for the lakes' recovery from
the damage caused by acid rain; and (4) the extent to which utilities in
11 midwestern states used sulfur dioxide allowances originally assigned
to utilities in their states, compared with allowances that originated
in other states from 1995 through 1998.

GAO noted that: (1) in the United States, total emissions of sulfur
dioxide declined 17 percent from 1990 through 1998, but total emissions
of nitrogen oxides changed little during the same time period; (2)
sulfur dioxide emissions from electric utility power plants also
declined 17 percent during this period, and nitrogen oxide emissions
from electric utility power plants declined by 8 percent; (3) in the
eastern United States, total deposition of sulfur decreased 26 percent
from 1989 through 1998, while total deposition of nitrogen decreased 2
percent, according to a preliminary analysis performed by an
Environmental Protection Agency (EPA) contractor of data collected by
EPA and other federal agencies; (4) for the three environmentally
sensitive areas, the trends were generally similar; (5) there was a 26
percent decrease in wet sulfate deposition in the Adirondack Mountains;
(6) in the Adirondack Mountains from 1992 through 1999, sulfates
declined in 92 percent of a representative sample of lakes, but nitrates
increased in 48 percent of those lakes; (7) the decrease in sulfates is
consistent with decreases in sulfur emissions and deposition, but the
increase in nitrates is inconsistent with the stable levels of nitrogen
emissions and deposition; (8) on the basis of GAO's review of relevant
scientific literature, it appears that the vegetation and land
surrounding these lakes have lost some of their previous capacity to use
nitrogen, which allowed more of the nitrogen to flow into the lakes and
increase their acidity; (9) increases in these lakes' acidity raise
questions about their prospects for recovering under the current program
and being able to support fish and other wildlife; (10) the utilities in
the 11 midwestern states relied on sulfur dioxide allowances that
originated in those states for 11.2 million of the 13.9 million
allowances they used from 1995 through 1998, according to EPA's data;
and (11) conversely, the utilities used 2.7 million allowances that
originated in other states, of which about 538,000 originated in six
northeastern and mid-Atlantic states.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-00-47
     TITLE:  Acid Rain: Emissions Trends and Effects in the Eastern
	     United States
      DATE:  03/09/2000
   SUBJECT:  Air pollution control
	     Industrial pollution
	     Precipitation (weather)
	     Environmental monitoring
	     Electric powerplants
	     Environmental policies
	     Environmental law
IDENTIFIER:  EPA Acid Rain Program
	     EPA National Acid Precipitation Assessment Program
	     Adirondack Mountains
	     Appalachia
	     Blue Ridge (GA)

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GAO/RCED-00-47

Appendix I: Effect of Acid Rain on Human Health and Selected Ecosystems and
Anticipated Recovery Benefits

26

Appendix II: Allowances Used by the 25 States Participating in Phase I of
the Acid Rain Program, 1995-98

27

Appendix III: Net Flow of Allowances Used by the 25 States Participating in
Phase I of the Acid Rain Program, 1995-98

29

Appendix IV: Comments From the Environmental Protection Agency

31

Table 1: Wet Sulfate Deposition in Three Environmentally Sensitive Areas 13

Table 2: Wet Nitrate Deposition in Three Environmentally Sensitive Areas 15

Table 3: Time Periods Needed for Recovery of Selected Ecosystems 19

Table 4: Percentage of Waters in Three Environmentally Sensitive Areas
Projected to Be Acidic in 2040, With Implementation of the 1990 Amendments
21

Figure 1: National Sulfur Dioxide Emissions, by Major Source, 1990-98 8

Figure 2: National Nitrogen Oxide Emissions, by Major Source, 1990-98 9

Figure 3: Wet Sulfate Deposition in Eastern States, 1983-94 and 1995-98 12

Figure 4: Wet Nitrate Deposition in Eastern States, 1983-94 and 1995-98 14

Figure 5: Changes in Sulfate and Nitrate Concentrations in 52 Adirondack
Lakes, 1992-99 17

Figure 6: Allowances Allocated and Used, by Source, for Six Midwestern
States, 1995-98 22

EPA Environmental Protection Agency

NAPAP National Acid Precipitation Assessment Program

Resource, Community, and
Economic Development Division

B-284509

March 9, 2000

The Honorable Patrick J. Leahy
United States Senate

The Honorable John E. Sweeney
House of Representatives

Acid rain--which is largely the result of burning fossil fuels to generate
electricity-- can harm human health and damage forests, lakes, and streams.
In the Clean Air Act Amendments of 1990, the Congress directed the
Environmental Protection Agency (EPA) to decrease these adverse effects by
reducing the emissions of the two major causes of acid rain--sulfur dioxide
and nitrogen oxides--from electric utility power plants that burn coal and
other fossil fuels. Sulfur dioxide and nitrogen oxide emissions return to
earth (in a process called deposition) in various chemical compounds. Total
sulfur deposition includes sulfates in precipitation (called wet sulfates),
dry sulfate particulates, and dry sulfur gas. Similarly, total nitrogen
deposition includes nitrates in precipitation (called wet nitrates), dry
nitrate particulates, and dry nitrogen oxides.

The act places an annual limit on sulfur dioxide emissions from the largest
electric utilities. It also allocates a number of emissions allowances--each
representing the right to emit 1 ton of sulfur dioxide--to each power plant,
based on historical usage and other factors, and permits the utilities
(through a process known as allowance trading) to buy and sell these
allowances and apply them against their annual emissions. The act also
places an annual limit on the nitrogen oxide emission rate for individual
utilities.

You asked us to analyze the trends from 1990 through 1998 in (1) sulfur
dioxide and nitrogen oxides emitted into the air (emissions), at the
national level; (2) deposition in the eastern United States and in three
environmentally sensitive areas (the Adirondack Mountains, mid-Appalachian
area, and southern Blue Ridge area); and (3) sulfates and nitrates in lakes
in the Adirondack Mountains and the prospects for the lakes' recovery from
the damage caused by acid rain. You also asked us to determine the extent to
which utilities in 11 midwestern states used sulfur dioxide allowances
originally assigned to utilities in their states, compared with allowances
that originated in other states, particularly mid-Atlantic and northeastern
states, during 1995 through 1998.1

In the United States, total emissions of sulfur dioxide--one of two major
causes of acid rain--declined 17 percent from 1990 through 1998, but total
emissions of nitrogen oxides--the other major cause--changed little during
the same time period. Meanwhile, sulfur dioxide emissions from electric
utility power plants (the largest single source of such emissions) also
declined 17 percent during this period, and nitrogen oxide emissions from
electric utility power plants (the second largest source) declined by 8
percent.

In the eastern United States, total deposition of sulfur decreased 26
percent from 1989 through 1998, while total deposition of nitrogen decreased
2 percent, according to a preliminary analysis performed by an EPA
contractor of data collected by EPA and other federal agencies. For the
three environmentally sensitive areas, the trends were generally similar.
For example, there was a 26-percent decrease--measured as the annual average
for 1983-94 versus 1995-98--in wet sulfate deposition in the Adirondack
Mountains.

In the Adirondack Mountains from 1992 through 1999, sulfates declined in 92
percent of a representative sample of lakes--selected by the Adirondack
Lakes Survey Corporation, but nitrates increased in 48 percent of those
lakes. The decrease in sulfates is consistent with decreases in sulfur
emissions and deposition, but the increase in nitrates is inconsistent with
the stable levels of nitrogen emissions and deposition. On the basis of our
review of relevant scientific literature, it appears that the vegetation and
land surrounding these lakes have lost some of their previous capacity to
use nitrogen, which allowed more of the nitrogen to flow into the lakes and
increase their acidity. Increases in these lakes' acidity raise questions
about their prospects for recovering under the current program and being
able to support fish and other wildlife.

The utilities in the 11 midwestern states relied on sulfur dioxide
allowances that originated in those states for 11.2 million (81 percent) of
the 13.9 million allowances they used from 1995 through 1998, according to
EPA's data. Conversely, they used 2.7 million allowances that originated in
other states, of which about 538,000 originated in six northeastern and
mid-Atlantic states.

The combustion of coal and other fossil fuels produces, as by-products, a
wide variety of chemicals, including such gases as sulfur dioxide and
nitrogen oxides.2 These gases, which are emitted into the air and may be
carried up to hundreds of miles by air currents, are transformed into acidic
compounds, which are then returned to the earth. When the compounds are
delivered by precipitation, such as rain and snow, the process is called wet
deposition. When they are delivered as gases, aerosols, and particles, the
process is called dry deposition. In addition, in high-elevation and coastal
areas, they may be delivered through cloud or fog water, called cloud
deposition.

While acid rain is the commonly used term, acid deposition is more accurate
because it encompasses both wet deposition (through rain, snow, sleet, fog,
and cloud water) and dry deposition (of gases, aerosols, and particles).
Chemically, the deposition of sulfur dioxide and nitrogen oxides is acidic.
Through various means, these emissions can cause harm to human health,
various ecosystems, and material and cultural resources. (App. I describes
the effects of acid rain on human health and selected ecosystems and the
benefits of recovering from these effects.)

The Acid Rain Program, established by title IV of the 1990 amendments,
required reductions of sulfur dioxide and nitrogen oxide emissions. Power
plants can reduce their emissions by, for example, using coal that includes
less sulfur or by installing equipment (called scrubbers) to trap sulfur
dioxide before it is emitted into the air. The required reductions were
expected to provide significant environmental benefits by reducing acid
deposition levels and potentially reversing the impact of previous damage to
various ecosystems and human health. To reduce these adverse environmental
effects, title IV targeted the emissions from electric utilities, which were
the source of 70 percent of sulfur dioxide emissions and 30 percent of
nitrogen oxide emissions. By 2010, annual emissions of sulfur dioxide were
to be reduced by 10 million tons (relative to the nation's 1980 level of
25.9 million tons). Annual emissions of nitrogen oxides were to be reduced
by 2 million tons (relative to the nation's 1980 level of 24.8 million
tons).

The program was implemented in two phases, with Phase I beginning in January
1995 and Phase II beginning in January 2000. Phase I mandated the
participation of 263 of the largest electric utility power plant units in 21
states. Approximately 150 additional units--which would have been covered in
Phase II--voluntarily participated in Phase I, bringing the total number of
states to 25. Phase II affects an additional 2,000 units in all 48
contiguous states and the District of Columbia.

The program also established an allowance trading system that permits
electric utilities to trade sulfur dioxide allowances and apply them against
their annual emissions. The trading system allows the utilities more
flexibility in planning how to achieve the required reductions in emissions
and also enables them to minimize the costs of complying with these
reductions.3 The annual allowances for emissions were allocated to the
affected utility units based on their historical fuel use, the emission
rates specified in the law, and other factors. The utilities are required to
own enough allowances at the end of each year to cover the emissions from
the affected units. Allowances that are not used each year can be saved (or
"banked") and used to cover emissions in future years.

The nitrogen oxide reductions are to be achieved by installing equipment to
control these emissions. The legislation placed a limit on the annual
emissions rate for individual power plants, measured in terms of pounds of
emissions per amount of fuel burned. Although companies with several utility
units may average their emissions rates, there is no limit on nitrogen oxide
emissions and no general trading and banking system.

Emissions Remained About the Same

Although emissions of sulfur dioxide declined from 1990 through 1998,
emissions of nitrogen oxides changed little during that time period,
according to EPA's data. Reduced emissions by power plants accounted for
most of the decline of sulfur dioxide emissions. The decline in total sulfur
dioxide emissions and stability in nitrogen oxide emissions during the 1990s
continue the respective trends from 1975 through 1990.

Sulfur dioxide emissions from all sources declined from 23.7 million tons in
1990 to 19.6 million tons in 1998, according to EPA's data. This represents
a decline of 17 percent. These emissions declined each year between 1990 and
1996, then increased each year from 1996 through 1998. Emissions from
electric utilities declined from 15.9 million tons in 1990 to 13.2 million
tons in 1998. This also represents a decline of 17 percent. (See fig. 1.)
The largest year-to-year decline in electric utilities' emissions was from
14.9 million tons in 1994 to 12.1 million tons in 1995. From the 1995 level
of 12.1 million tons, utility emissions rose to 13.2 million tons in 1998.4

Figure 1: National Sulfur Dioxide Emissions, by Major Source, 1990-98
Source: EPA.

In 1998, electric utilities accounted for 67 percent of total sulfur dioxide
emissions, according to EPA. Industrial fuel combustion and other sources
accounted for the remaining 33 percent.

Nitrogen oxide emissions from all sources were 24.0 million tons in 1990 and
24.5 million tons in 1998, according to EPA's data. Although the total
emissions level remained about the same, electric utilities' emissions
declined from 6.7 million tons in 1990 to 6.1 million tons in 1998,
representing an 8-percent decline. (See fig. 2.)

Figure 2: National Nitrogen Oxide Emissions, by Major Source, 1990-98
Source: EPA.

In 1998, on- and off-road vehicles and engines accounted for 53 percent of
nitrogen oxide emissions. Electric utilities accounted for 25 percent.
Industrial fuel combustion and other sources accounted for the remaining 22
percent.

Deposition Changed Little, and in Environmentally Sensitive Areas, Trends
Were Generally Similar

Total (wet plus dry) deposition of sulfur declined by an average of 26
percent in the eastern United States during 1989-98, according to a
preliminary analysis prepared by an EPA contractor, while total (wet plus
dry) deposition of nitrogen declined by 2 percent at the same locations.5
Thus, the deposition trends followed trends in emissions. According to the
Director, Institute of Ecosystem Studies, they are also consistent with the
long-term (1963-99) trends observed at a site in New Hampshire.6 Wet
deposition of sulfates and nitrates--generally the largest component of
sulfur and nitrogen deposition, respectively--recorded in three
environmentally sensitive areas was generally consistent with the overall
trends in wet deposition.

Data on wet deposition come from the National Atmospheric Deposition
Program's National Trends Network, which consists of over 200 monitors
throughout the country. Data on dry deposition come from EPA's Clean Air
Status and Trends Network, which consists of 74 monitors located primarily
in eastern states. Data from both the wet and dry deposition monitoring
networks are used to determine total deposition. For example, the data from
the EPA contractor's preliminary analysis, which come from 34 wet and dry
deposition monitoring stations, are thought--by EPA and its contractor--to
be representative of overall deposition patterns in the eastern United
States. In addition, in 1994, EPA initiated a monitoring project to measure
cloud deposition at four locations, but, according to EPA officials, it
discontinued the effort in 1999 because of budget constraints and the
difficulty of interpreting the data. Although this monitoring effort and
other short-term efforts have provided some data on cloud deposition, far
less is known about cloud deposition than about wet and dry deposition,
according to an EPA official.7

EPA officials provided the following information on measuring deposition.
The actual amounts and relative proportions of wet and dry deposition for
any given year depend on such factors as the amount and type of pollutants
and precipitation. The relative proportions of wet and dry deposition vary
widely by climatic region, with wet deposition constituting from 20 percent
of the total in dry regions to 80 percent in rainy regions. To even out
normal annual variations, deposition is often measured in terms of multiyear
averages. Statistical tools have not yet been developed to discern the
statistical significance of deposition trends for relatively short time
periods. This limitation is particularly evident when changes in deposition
are relatively small, and it may not be possible to distinguish how much of
an apparent trend may be due to an actual change in deposition or to natural
variations in climate. Most acid deposition trend analyses to date have
focused on wet deposition, in part because it is the most easily and
commonly measured form of deposition and because of concerns about the
complexity of measuring dry and cloud deposition.

Environmentally Sensitive Areas

Both wet and dry deposition of sulfur declined from 1989 through 1998 at the
34 monitoring stations, according to the preliminary analysis. Specifically,
wet deposition declined by an average of 21 percent, while dry deposition
declined by an average of 33 percent. Moreover, as shown in the maps in
figure 3, there were widespread decreases in wet sulfate deposition in the
eastern states between 1983-94 and 1995-98.8

Figure 3: Wet Sulfate Deposition in Eastern States, 1983-94 and 1995-98

Source: J.A. Lynch, V.C. Bowersox, and J.W. Grimm, "Changes in Sulfate
Deposition in Eastern U.S.A. Following Enactment of Title IV of the Clean
Air Act Amendments of 1990," Atmospheric Environment, in press 2000. Updated
by the principal author to include data for 1998.

Moreover, in all three environmentally sensitive areas, wet sulfate
deposition declined by 9 percent or more. As shown in table 1, the largest
reduction--26 percent--was recorded in the Adirondacks; the next largest--23
percent--in the mid-Appalachian area;9 and the smallest reduction--9
percent--in the southern Blue Ridge area.10 According to the chairman of the
deposition program's executive committee, these declines are primarily
attributable to a significant decrease in sulfur dioxide emissions. For
example, in the mid-Appalachian area, the sulfate concentration in rainfall
decreased by 26 percent (due to lower emissions), while precipitation
increased 4 percent.11

Table 1: Wet Sulfate Deposition in Three Environmentally Sensitive Areas

                     Mean annual wet sulfate deposition
                     (kilograms per hectare)
                                                        Change from
 Area                1983-94           1995-98          1983-94
                                                        to 1995-98
 Adirondacks         25.5              18.9             -26%
 Mid-Appalachian     27.8              21.4             -23%
 Southern Blue Ridge 21.6              19.6             -9%

Source: Dr. James Lynch, Pennsylvania State University.

States and Three Environmentally Sensitive Areas

Total (wet plus dry) deposition of nitrogen changed little from 1989 through
1998 at the 34 monitoring stations, according to the preliminary analysis.
Specifically, wet deposition decreased by an average of 7 percent, while dry
deposition increased by an average of 9 percent. The divergence in trends
for wet and dry deposition is believed to be due to natural variability in
weather conditions and the geographic patterns of emissions during that
time. The maps in figure 4 illustrate that there was little change in wet
nitrate deposition in the eastern states between 1983-94 and 1995-98.

Figure 4: Wet Nitrate Deposition in Eastern States, 1983-94 and 1995-98
Source: J.A. Lynch, V.C. Bowersox, and J.W. Grimm, "Changes in Sulfate
Deposition in Eastern U.S.A. Following Enactment of Title IV of the Clean
Air Act Amendments of 1990," Atmospheric Environment, in press 2000. Updated
by the principal author to include data for 1998.

The trends in wet deposition also differed somewhat among the three
environmentally sensitive areas. As shown in table 2, there were declines in
the Adirondacks (5 percent) and the mid-Appalachian area (4 percent), but
there was an 11-percent increase in the southern Blue Ridge area. According
to the chairman of the executive committee, these trends reflect different
emissions and precipitation patterns in the three areas. For example, in the
Adirondacks, the nitrate concentration in rainfall decreased by 6 percent
(due to lower emissions) and precipitation increased by 2 percent, whereas
in the southern Blue Ridge, the nitrate concentration decreased by 3 percent
and precipitation increased by 14.7 percent.12

Table 2: Wet Nitrate Deposition in Three Environmentally Sensitive Areas

                     Mean annual wet nitrate deposition

                     (kilograms per hectare)
                                                         Change from
 Area                1983-94           1995-98           1983-94
                                                         to 1995-98
 Adirondacks         19.7              18.7              -5%
 Mid-Appalachian     17.4              16.7              -4%
 Southern Blue Ridge 11.3              12.6              +11%

Source: Dr. James Lynch, Pennsylvania State University.

About Prospects for the Lakes' Recovery

In the Adirondack Mountains, sulfates in a representative sample of lakes
declined in most cases between 1992 and 1999, which is consistent with the
decrease in sulfur dioxide emissions on a national level and sulfate
deposition in the eastern states. However, nitrates in almost half of these
lakes increased during the same time period; this is not consistent with the
essentially unchanged levels of nitrogen oxide emissions and nitrate
deposition. On the basis of our review of the scientific literature, it
appears that the increases in nitrates reflect a reduction in the capacity
of the vegetation and lands surrounding these lakes to use nitrogen. Thus,
more of the nitrates flow into the lakes and increase their acidity. Because
of the long time periods that may be needed to reverse these factors, the
prospects for recovery of the acidified Adirondack lakes are uncertain.

Often Increased

From 1992 through 1999, the amount of sulfates measured in sampled lakes in
the Adirondack Mountains decreased in most cases, according to data
collected by the Adirondack Lakes Survey Corporation.13 Specifically, the
amount of sulfates decreased in 48 of the 52 lakes (92 percent) regularly
monitored by the corporation; the amount of sulfates was unchanged in 2
lakes and increased in the final 2 lakes, as shown in figure 5. (These lakes
were selected to represent the characteristics, such as soil thickness and
source of water, of lakes found in the area.) This is consistent with the
declines in sulfur dioxide emissions and sulfate deposition. In contrast,
during the same time period, the amount of nitrates measured in these lakes
increased in many cases. Specifically, the amount of nitrates increased in
25 of the 52 lakes (48 percent), decreased in 13 lakes, and was unchanged in
the remaining 14 lakes. This is not consistent with the essentially
unchanged levels of nitrogen oxide emissions and nitrate deposition.

Figure 5: Changes in Sulfate and Nitrate Concentrations in 52 Adirondack
Lakes, 1992-99
Source: Adirondack Lakes Survey Corporation.

According to the relevant scientific literature, the extent to which wet and
dry sulfates and nitrates end up in lakes and streams depends on the amount
of these acids that is diverted by natural processes. Most importantly,
growing vegetation uses nitrogen as a nutrient. This capacity varies by
season and by the age of the vegetation because vegetation requires nitrogen
primarily during the growing season, and young, growing forests generally
use more than older forests. In addition, the soils surrounding the
Adirondack lakes have apparently lost some of their capacity to neutralize
acids. Historically, years of acid deposition have depleted the soils' base
elements (such as calcium), which provide the capacity to neutralize acids.

In the 1980s, when the Clean Air Act Amendments were being developed, it was
believed that nitrogen would be a less important source of acidification
than sulfur. As we noted in a 1984 report, trees and other vegetation use
much of the nitrogen and, thus, prevent it from passing over or through the
soil to streams and then to lakes.14 However, that absorptive capacity has
limits. In a 1995 study, EPA noted that this capacity could eventually
become overloaded--a situation referred to as "nitrogen saturation."15 As
the vegetation on the surrounding land became saturated, more and more of
the deposited nitrates would pass through to, and affect, the waters.

Seasonal patterns in nature compound the dangers posed by nitrogen
saturation. This is because both the first melting of snow each year and the
spawning of fish and other aquatic organisms occur in the spring. The water
from the first melting is always the most concentrated in the acidic and
other substances deposited in the snow that accumulated over the winter
months. (The proportion of nitrogen in these substances tends to be high
because, as noted above, nitrogen is generally not used by vegetation during
the winter.) This highly acidic water often passes into lakes at about the
same time as fish and other aquatic species lay their eggs or hatch their
offspring, and these eggs and offspring are more vulnerable to the acidity
than are the adults.

Recovery of acidified lakes is expected to take a number of years even where
nitrogen saturation is not a problem, according to the National Acid
Precipitation Assessment Program (NAPAP).16 According to various analyses,
lakes in the Adirondack Mountains are taking longer to recover than lakes
located elsewhere and are likely to recover less or not recover, without
further reductions of acid deposition.

In 1998, NAPAP estimated the time periods that would likely be needed for
various ecosystems to respond to decreases in emissions.17 Some of these
time periods are shown in table 3.

Table 3: Time Periods Needed for Recovery of Selected Ecosystems

 Ecosystem                             Time period for recovery
 Acute human health effects            Hours to weeks
 Episodic effects on aquatic resources Days to months
 Chronic effects on aquatic resources  Years to decades
 Soil nutrient reserves                Decades to centuries

Source: NAPAP.

In general, the recovery of lakes and streams may depend in part on the
recovery of the surrounding soils. For example, U.S. Geological Survey
researchers examining a set of streams across the eastern states found that,
although the sulfates measured in these streams had declined over recent
years, the streams' ability to counteract acidity (called acid neutralizing
capacity) had not increased.18 They concluded that the neutralizing capacity
would not increase until the replenishment of base substances in the soil
(called cations), provided largely by the weathering of the underlying rock,
was greater than the rate of acid deposition. Thus, the lakes' recovery--if
it is limited by the time required to weather the underlying rock--could
take decades or even centuries.

Because of two factors, acidified Adirondack lakes may recover more slowly
than other lakes. First, because many of the Adirondack watersheds have been
exposed to acid deposition for long periods of time, their soils have been
relatively depleted of substances that can neutralize acids. Second, the
soils in the most acidified types of Adirondack watersheds are relatively
thin (i.e., they offer little chance for contact between the soil and
precipitation) and, thus, can offer less material to neutralize the acidic
substances in precipitation. For both of these reasons, less acidic material
will be neutralized in the soil and more will flow into the waters. This
analysis is supported by a 1998 study and by 1995 projections.

A peer-reviewed 1998 study analyzed lake acidity for 1982-94 for the
Adirondacks and New England.19 It found that the sulfate concentrations in
all of those lakes generally declined. However, it also found that, while
the New England lakes' acid neutralizing capacity improved significantly,
the Adirondack lakes' capacity either showed no improvement or further
declined. According to the study's authors, this difference is due to higher
historic rates of acid deposition in the Adirondacks than in New England.

This finding is reinforced by the 1995 EPA study that projected how long it
might take lakes and streams in three eastern areas to become acidified (to
lose their acid neutralizing capacity).20 The study prepared a series of
scenarios on the number of years for these lakes and streams to become
acidic, depending on the relative vulnerability of the different waters and
the recuperative powers of their watersheds. For example, even with the
reductions mandated by the 1990 amendments and assuming 50 years before
nitrogen saturation developed, it estimated that 43 percent of the
Adirondack lakes may become acidified by 2040.21 This is more than twice the
proportion (19 percent) observed to be acidic in 1984. It is also a far
higher proportion, given the same assumptions, than for the mid-Appalachian
(9 percent) and southern Blue Ridge (4 percent) areas. (See table 4.) On the
other hand, also assuming 50 years before nitrogen saturation developed, but
without the 1990 amendments, it estimated that 50 percent of the Adirondack
lakes would be acidified by 2040.

Table 4: Percentage of Waters in Three Environmentally Sensitive Areas
Projected to Be Acidic in 2040, With Implementation of the 1990 Amendments

                                             Time to watershed nitrogen
                                             saturation

 Watershed              Percent observed to  50 years  100 years 250 years
                        be acidic in 1984
 Adirondack lakes       19                   43        26        15
 Mid-Appalachian
 streams                4                    9         5         4
 Southern Blue Ridge
 streams                0                    4         0         0

Source: EPA, Acid Deposition Standard Feasibility Study: Report to Congress,
Oct. 1995.

the States Where They Originated

Utilities in the 11 midwestern states used sulfur dioxide allowances from
their own states for 11.2 million (81 percent) of the 13.9 million
allowances they used from 1995 through 1998, according to EPA's data. The
remaining 2.7 million allowances (19 percent) originated in other states.
Despite the use of allowances from other states, the midwestern utilities
did not use all the allowances allocated to them for these 4 years. Of the
18.5 million allowances originally allocated to them, they did not use 7.3
million allowances, which they may have sold or will be able to use or sell
in future years. National trends are similar to trends for the midwestern
states.

Although the midwestern states overall used allowances from other states for
19 percent of all the allowances they used, this percentage varied by state.
For example, the five states that used the most allowances--Ohio, Indiana,
Illinois, Kentucky, and West Virginia−also used the most out-of-state
allowances. Ohio, which used more allowances than any other state, used
allowances from other states for 19 percent of the 4.4 million allowances it
used. Twenty-eight percent of the allowances used by Illinois came from
other states, and 30 percent of the allowances used by West Virginia came
from other states. Four states did not use any out-of-state allowances. (See
fig. 6 for data on the six midwestern states that used the most allowances.)

Figure 6: Allowances Allocated and Used, by Source, for Six Midwestern
States, 1995-98
Source: EPA.

Of the 2.7 million out-of-state allowances used by midwestern utilities,
about 538,000 (20 percent) originated in the six northeastern and
mid-Atlantic states. The largest sources were Pennsylvania (405,000) and New
York (70,000).

Similarly, at a broader level, utilities in the 25 states that participated
in Phase I of the Acid Rain Program used allowances from their own states
for 81 percent of their total and out-of-state allowances for the remaining
19 percent. (These are the same proportions as in the 11 midwestern states.)
The reliance on out-of-state allowances varied considerably among states:

In six states, utilities covered all of their sulfur dioxide emissions with
allowances that originated in their own states. Among these states,
Wisconsin used the most allowances.

In 14 states, utilities covered as much as 24 percent of their emissions
with out-of-state allowances. These states included Indiana (19 percent) and
Alabama (24 percent).

In the remaining five states, utilities covered between 25 and 45 percent of
their emissions with allowances from other states. The highest percentages
were in West Virginia (30 percent) and Pennsylvania (45 percent).

(App. II shows the allowances that were used by utilities in the 25 states
and by region for 1995 through 1998.)

The use of allowances that originated in other states varied among five
geographic regions--Midwest, Southeast, mid-Atlantic, Northeast, and West.
For example, 10 percent of the allowances used by the three western states
originated in other states, while 36 percent of the allowances used by the
three mid-Atlantic states originated in other states.

There was substantial buying and selling of allowances among the
participating utilities. In 14 states, utilities sold more allowances to
utilities in other states than they purchased from other states. For
example, the utilities in Tennessee sold nearly 493,000 more allowances than
they purchased. In 10 states, utilities bought more allowances from other
states than they sold to other states. For example, utilities in Indiana
bought 279,000 more allowances than they sold.22 In the remaining state,
utilities did not sell any allowances to, or buy any allowances from, other
states. The net flow of allowances by state and region is shown in appendix
III.

Because the utilities that participated in Phase I reduced their sulfur
dioxide emissions more than the minimum required, they did not use as many
allowances as they were allocated for the first 4 years of the program.
Specifically, of the 30.2 million allowances allocated to utilities
nationwide, almost 8.7 million, or 29 percent, of the allowances were not
used. These unused allowances can be used to offset sulfur dioxide emissions
in future years.

In the first 4 years following implementation of the Acid Rain Program,
sulfur dioxide emissions generally continued their long-term decline, while
nitrogen oxide emissions generally remained stable. Moreover, sulfate
deposition in the eastern states and in the three environmentally sensitive
areas generally declined, which is consistent with trends in emissions.
Finally, the level of sulfates in a sample of lakes in the Adirondack
Mountains generally declined, which is consistent with the trend in sulfate
deposition. However, although nitrate deposition was generally stable, the
level of nitrates in these lakes often increased. This apparently occurred
because the vegetation and soils surrounding the lakes have lost some of the
capacity to use nitrogen. These trends highlight the significance of
nitrogen oxide emissions and the resulting nitrogen deposition, which may
not have been fully appreciated when the 1990 amendments were being drafted.
Because those amendments require relatively little reduction in nitrogen
oxide emissions, the prospects are uncertain for the recovery of already
acidified lakes and for preventing further acidification.

We provided a draft of this report to EPA for review and comment. EPA
generally agreed with the facts presented in the report. Also, EPA said that
the report successfully linked together several complex subjects and
explained them in an understandable way. (App. IV contains EPA's comments.)
Finally, EPA provided technical clarifications, which we incorporated as
appropriate.

To analyze the trends in national sulfur dioxide and nitrogen oxide
emissions, deposition levels in the eastern United States, and the
environmental impact of deposition on sensitive areas, we interviewed
officials from, and reviewed studies and other documents prepared by,
federal agencies that have a role in managing or supporting the Acid Rain
Program. These agencies included EPA, the Forest Service, the National
Oceanic and Atmospheric Administration, the National Park Service, the U.S.
Geological Survey, and the National Acid Precipitation Assessment Program.
We also interviewed representatives of, and reviewed studies and other
documents prepared by, advocacy, environmental, and research organizations,
including the Adirondack Council, Environmental Defense Fund, Natural
Resources Defense Council, Resources for the Future, Sierra Club, and Trout
Unlimited. Regarding the data from various monitoring networks that measure
acid deposition levels and the impact on various ecosystems, we interviewed
researchers from, and reviewed studies and other documents prepared by, the
Adirondack Lakes Survey Corporation, Appalachian State University, Institute
of Ecosystem Studies, National Atmospheric Deposition Program, and
Pennsylvania State University, who have analyzed the data from the networks
and conducted research.

Regarding the trading of sulfur dioxide allowances, we obtained and analyzed
EPA data for calendar years 1995 through 1998. We calculated the number of
allowances that were used, as well as the number that were not used and can
be used in future years. We also calculated the number of used allowances
that originated in the state where they were used and the number that
originated in another state.

Although we did not independently verify the reliability of the data we
obtained from EPA or other sources, these are the data sources that are
generally used by EPA, other federal agencies, and other analysts. We
performed our review from May 1999 through February 2000 in accordance with
generally accepted government auditing standards.

As arranged with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 7 days after
the date of this letter. At that time, we will send copies of this report to
Senator Robert C. Smith and Senator Max Baucus, in their capacities as
Chairman and Ranking Minority Member of the Senate Committee on Environment
and Public Works; Representative Tom Bliley and Representative John D.
Dingell, in their capacities as Chairman and Ranking Minority Member of the
House Committee on Commerce; other interested Members of Congress; and the
Honorable Carol M. Browner, Administrator, EPA. We will also make copies
available to others upon request.

If you have any questions about this report, please contact me or David
Marwick at (202) 512-6111. Key contributors to this report were Joseph L.
Turlington, DeAndrea Michelle Leach, Richard A. Frankel, and Susan M. Pandy.
Peter F. Guerrero
Director, Environmental
Protection Issues

Effect of Acid Rain on Human Health and Selected Ecosystems and Anticipated
Recovery Benefits

 Human health
 and ecosystem   Effects                       Recovery benefits
                 In the atmosphere, sulfur
                 dioxide and nitrogen oxides
                 become sulfate and nitrate
                 aerosols, which increase      Decrease emergency room
 Human health    morbidity and mortality from  visits, hospital admissions,
                 lung disorders, such as       and deaths.
                 asthma and bronchitis, and
                 impacts to the cardiovascular
                 system.
                 Acidic surface waters
                 decrease the survivability of Reduce the acidic levels of
                 animal life in lakes and      surface waters and restore
 Surface waters  streams and in the more       animal life to the more
                 severe instances eliminate    severely damaged lakes and
                 some or all types of fish and streams.
                 other organisms.
                 Acid deposition contributes
                 to forest degradation by      Reduce stress on trees,
                 impairing trees' growth and   thereby reducing the effects
                 increasing their              of winter injury, insect
 Forests         susceptibility to winter      infestation, and drought,
                 injury, insect infestation,   and reduce the leaching of
                 and drought. It also causes   soil nutrients, thereby
                 leaching and depletion of     improving overall forest
                 natural nutrients in forest   health.
                 soil.
                 Acid deposition contributes
                 to the corrosion and
                 deterioration of buildings,   Reduce the damage to
                                               buildings, cultural objects,
 Materials       cultural objects, and cars,   and cars, and reduce the
                 which decreases their value
                 and increases costs of        costs of correcting and
                 correcting and repairing      repairing future damage.
                 damage.
                 In the atmosphere, sulfur     Extend the distance and
                 dioxide and nitrogen oxides   increase the clarity at
                 form sulfate and nitrate      which scenery can be viewed,
 Visibility      particles, which impair       thus reducing limited and
                 visibility and affect the     hazy scenes and increasing
                 enjoyment of national parks   the enjoyment of national
                 and other scenic views.       parks and other vistas.

Allowances Used by the 25 States Participating in Phase I of the Acid Rain
Program, 1995-98

Continued from Previous Page

 Allowances in
 thousands
                               Allowances used

 Region/state     Allowances   Total    Same      Percent Other    Percent
                  allocated             state             states
 Midwest
 Illinois         1,781.1      1,955.4  1,417.3   72      538.1    28
 Indiana          3,286.8      2,715.1  2,205.3   81      509.8    19
 Iowa             162.2        90.0     88.6      98      1.4      2
 Kansas           110.4        58.5     58.5      100     0        0
 Kentucky         1,565.0      1,286.7  963.9     75      322.8    25
 Michigan         342.0        234.7    234.7     100     0        0
 Minnesota        90.7         52.4     52.4      100     0        0
 Missouri         2,145.7      1,114.6  1,108.8   99      5.8      1
 Ohio             5,767.5      4,404.1  3,587.3   81      816.8    19
 West Virginia    2,505.6      1,615.1  1,131.5   70      483.6    30
 Wisconsin        753.6        387.3    387.3     100     0        0
 Subtotal         18,510.4     13,913.9 11,235.6  81      2,678.3  19
 Southeast
 Alabama          961.0        677.2    514.7     76      162.5    24
 Florida          728.6        571.2    490.9     86      80.3     14
 Georgia          2,981.6      1,620.7  1,577.6   97      43.2     3
 Mississippi      251.0        281.7    251.9     89      29.7     11
 Tennessee        2,090.7      1,090.4  1,087.4   100     3.0      a
 Subtotal         7,012.9      4,241.2  3,922.5   92      318.7    8
 Mid-Atlantic
 Maryland         638.4        584.0    517.7     89      66.3     11
 New Jersey       112.9        76.1     73.2      96      2.9      4
 Pennsylvania     2,640.2      1,947.1  1,074.5   55      872.6    45
 Subtotal         3,391.5      2,607.2  1,665.4   64      941.8    36
 Northeast
 Massachusettsb   115.9        180.1    170.0     94      10.0     6
 New Hampshire    171.2        177.6    128.9     73      48.7     27
 New York         866.1        374.1    293.8     79      80.3     21
 Subtotal         1,153.3      731.8    592.8     81      139.0    19
 West
 California       4.8          0        0         0       0        0
                               Allowances used

 Region/state     Allowances   Total    Same      Percent Other    Percent
                  allocated             state             states
 Utah             2.6          c        c         100     0        0
 Wyoming          135.6        60.4     54.0      90      6.3      10
 Subtotal         143.0        60.4     54.0      90      6.3      10
 Total            30,211.1     21,554.5 17,470.3  81      4,084.2  19

Note: Individual amounts may not sum to totals and subtotals because of
independent rounding.

aAmount rounds to less than 0.5 percent.

bPower plants in Massachusetts that voluntarily participated in Phase I were
affected by that state's cap on company emissions. Because the Environmental
Protection Agency (EPA) did not consider the cap when it allocated
allowances for these power plants, approximately 54,000 allowances were
deducted from future year accounts. Therefore, the utilities in
Massachusetts used more in-state allowances during 1995-98 than they were
allocated.

c Amount rounds to less than 0.5 thousand.

Source: EPA.

Net Flow of Allowances Used by the 25 States Participating in Phase I of the
Acid Rain Program, 1995-98

Continued from Previous Page

 Allowances in thousands
               Allowances used
               Total inflow               Total outflow
 Region/state                                                   Net flow a
               (acquired from other       (sold to other
               states)                    states)
 Midwest
 Illinois      538.1                      101.9                 436.2
 Indiana       509.8                      230.4                 279.4
 Iowa          1.4                        0                     1.4
 Kansas        0                          10.1                  -10.1
 Kentucky      322.8                      111.3                 211.5
 Michigan      0                          0                     0
 Minnesota     0                          b                     b
 Missouri      5.8                        141.4                 -135.6
 Ohio          816.8                      720.1                 96.7
 West Virginia 483.6                      711.4                 -227.8
 Wisconsin     0                          93.6                  -93.6
 Subtotal      2,678.3                    2,120.2               558.1
 Southeast
 Alabama       162.5                      94.8                  67.6
 Florida       80.3                       92.4                  -12.2
 Georgia       43.2                       268.4                 -225.2
 Mississippi   29.7                       7.6                   22.1
 Tennessee     3.0                        495.9                 -492.9
 Subtotal      318.7                      959.2                 -640.5
 Mid-Atlantic
 Maryland      66.3                       28.6                  37.7
 New Jersey    2.9                        14.6                  -11.7
 Pennsylvania  872.6                      627.3                 245.3
 Subtotal      941.8                      670.5                 271.3
 Northeast
 Massachusetts 10.0                       40.6                  -30.6
 New Hampshire 48.7                       19.7                  29.0
 New York      80.3                       201.6                 -121.3
 Subtotal      139.0                      261.9                 -122.9

               Allowances used
               Total inflow               Total outflow
 Region/state                                                   Net flow a
               (acquired from other       (sold to other
               states)                    states)
 West
 California    0                          4.6                   -4.6
 Utah          0                          0.9                   -0.9
 Wyoming       6.3                        66.9                  -60.5
 Subtotal      6.3                        72.4                  -66.0
 Total         4,084.2                    4,084.2               0

Note: Individual amounts may not sum to totals and subtotals because of
independent rounding.

aA positive number in this column indicates that the utilities in a given
state acquired more allowances from utilities in other states than they sold
to utilities in other states; a negative number indicates the reverse.

bAmount rounds to less than 0.5 thousand.

Source: EPA.

Comments From the Environmental Protection Agency

(160486)

Table 1: Wet Sulfate Deposition in Three Environmentally Sensitive Areas 13

Table 2: Wet Nitrate Deposition in Three Environmentally Sensitive Areas 15

Table 3: Time Periods Needed for Recovery of Selected Ecosystems 19

Table 4: Percentage of Waters in Three Environmentally Sensitive Areas
Projected to Be Acidic in 2040, With Implementation of the 1990 Amendments
21

Figure 1: National Sulfur Dioxide Emissions, by Major Source, 1990-98 8

Figure 2: National Nitrogen Oxide Emissions, by Major Source, 1990-98 9

Figure 3: Wet Sulfate Deposition in Eastern States, 1983-94 and 1995-98 12

Figure 4: Wet Nitrate Deposition in Eastern States, 1983-94 and 1995-98 14

Figure 5: Changes in Sulfate and Nitrate Concentrations in 52 Adirondack
Lakes, 1992-99 17

Figure 6: Allowances Allocated and Used, by Source, for Six Midwestern
States, 1995-98 22
  

1. The 11 midwestern states are Illinois, Indiana, Iowa, Kansas, Kentucky,
Michigan, Minnesota, Missouri, Ohio, West Virginia, and Wisconsin.

2. These by-products include several compounds of nitrogen and oxygen, which
we refer to generally as nitrogen oxides.

3. For more information on allowance trading, see our report, Air Pollution:
Allowance Trading Offers an Opportunity to Reduce Emissions at Less Cost
(GAO/RCED-95-30, Dec. 16, 1994).

4. According to EPA officials, this increase is attributable primarily to
higher emissions at power plants that were not covered by Phase I.

5. The analysis was prepared by Environmental Science and Engineering, Inc.
As of Feb. 1, 2000, EPA officials were reviewing the draft analysis.

6. According to the director, Dr. Gene Likens, data from the Hubbard Brook
Experimental Forest monitoring station in New Hampshire, which has the
longest continuous record of precipitation chemistry measurement in North
America, show that sulfur deposition has declined since 1963 and that
nitrogen deposition, after increasing from 1963 through 1975, has been
relatively stable since 1975.

7. In some locations, cloud deposition is not only more acidic than other
deposition, but it is equal to or greater than the amount of other
deposition.

8. These maps are based on observations of wet deposition from 84 monitoring
stations of the National Atmospheric Deposition Program that had
sufficiently complete data. According to Dr. James Lynch, Professor of
Forest Hydrology at Pennsylvania State University and Chairman of the
National Atmospheric Deposition Program's Executive Committee, wet sulfur
deposition in the eastern states during 1995-98 was from 10 to 25 percent
lower than the 1983-94 trend.

9. The mid-Appalachian area includes Maryland, Pennsylvania, Virginia, West
Virginia, and portions of northern New Jersey and southeastern New York.

10. The southern Blue Ridge area includes the southeast portion of
Tennessee, the southwest portion of North Carolina, and the very
northernmost portion of Georgia and South Carolina.

11. According to the chairman of the deposition program's executive
committee, the decreases in deposition in the Adirondack and mid-Appalachian
areas appear to be due largely to decreases in emissions because
precipitation was roughly the same in 1983-94 and 1995-98. However, for the
southern Blue Ridge area, the relationship between emissions and deposition
is less clear. This is because precipitation in the southern Blue Ridge area
increased by 14.7 percent in 1995-98 relative to the 1983-94 level. The
greater amount of precipitation in 1995-98 affected both wet deposition
amounts and concentration levels. When such differences in precipitation
occur, it is much more difficult to determine the relative importance of
changes in emissions.

12. According to the chairman of the executive committee, the increase in
precipitation, rather than a decrease in emissions, is likely the reason for
the decrease in nitrate concentrations in this area.

13. This nonprofit corporation was formed in 1983 to gather information on
the chemical condition and biological status of these lakes.

14. An Analysis of Issues Concerning Acid Rain (GAO/RCED-85-13, Dec. 11,
1984).

15. Acid Deposition Standard Feasibility Study: Report to Congress, EPA
430-R-95-001a, Oct. 1995.

16. The program was established by the Congress in 1980 to study the
processes and effects of acid precipitation.

17. See NAPAP Biennial Report to Congress: An Integrated Assessment, May
1998.

18. David W. Clow and M. Alisa Mast, "Long-term Trends in Stream Water and
Precipitation Chemistry at Five Headwater Basins in the Northeastern United
States," Water Resources Research, Vol. 35, No. 2, pp. 541-54, Feb. 1999.

19. J. Stoddard et al., "A Regional Analysis of Lake Acidification Trends
for the Northeastern U.S., 1982-1994," Environmental Monitoring and
Assessment, Vol. 51, pp. 399-413, 1998. The study was based on data
collected through EPA's Long Term Monitoring Program.

20. See fn. 15.

21. The 1992-99 data on the 52 Adirondack lakes suggest that nitrogen
saturation occurred earlier than the least optimistic of the scenarios
modeled by EPA.

22. The net flow of allowances for a state is the difference between the
number of allowances sold to utilities in other states and the number of
allowances bought from utilities in other states.
*** End of document. ***