COSTS AND BENEFITS OF REDUCING AIR-POLLUTANTS RELATED TO ACID-RAIN

The 1990 Clean Air Act Amendments initiated a dramatic reduction in em issions of sulfur dioxide and nitrogen oxides by electric power plants . This paper presents the results of an integrated assessment of the b enefits and costs of the program. Dramatic uncertainties characterize the estimates especially with respect to the benefits of the program, many of which were modeled explicitly. The lion's share of benefits re sults from reduced risk of premature mortality especially through redu ced exposure to sulfates, and these expected benefits measure several times the expected costs of the program. Significant benefits also are estimated for improvements in health morbidity, recreational visibili ty, and residential visibility, each of which measures approximately e qual to costs. Areas that were the focus of attention in the 1980s-inc luding effects to soils, forests, and aquatic systems-still have not b een modeled comprehensively, but evidence suggests that benefits in th ese areas are relatively small, at least with respect to ''use values' ' for the environmental assets that are affected. (JEL H43, Q2, Q4).