Thayer Watkins
Silicon Valley
& Tornado Alley

Daniel Dudeck and Pollution Cap Trading

One of the great successes of environmental policy was the sulfur dioxide capacity trading program. One of the architects of that program was Daniel Dudeck.He is now chief economist for Environmental Defense. His specialty is seeking and developing free market solutions to environmental problems.

The problem on many people's minds in the 1980's was acid rain caused by sulfur dioxide (SO2) in the atmosphere being absorbed in water droplet and falling to the earth in rain. The acid rain was killing trees and other vegetation and creating corrosion on metal. Prohibiting SO2 pollution was not economically feasible and ultimately would not work. Allowing a limited amount was more realistic. The problem was that none of the regulators knew where the cutbacks in SO2 production should take place. The policy of allowing the trading of excess qotas on SO2 production allows the economy to decide where the production cutbacks should occur.

The program of allowing the trading of excess SO2 quotas was incorporated in 1990 in amendments to the Clear Air Act. The program became known as The Acid Rain Program.

Daniel Duceck hoped to set up a similar program for global trading of carbon dioxide (CO2) emissions quotas CO2

(To be continued.)

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