In this paper a new methodology for state and utility-level analysis of the cost and regional economic impacts of strategies for lowering utility SO2 emissions is discussed and applied to the state of Ohio. The methodology is based upon probabilistic production costing and economic input-output analysis. The model considers the entire range of potential control strategies from a system perspective and develops trade-off curves between the costs of electricity and the production of SO2 emissions. This approach to the U.S. acid rain problem focuses on utility planning, coal-field employment, and economic impact assessment of proposed U.S. Congressional legislation. The paper initially reviews uncertainties involved in evaluating acid rain control programs and discusses modeling techniques that have been used in the past. Five specific aspects of the Bush Administration’s proposed amendments to the U.S. Clean Air Act are investigated: hardware retrofits, energy conservation, industrial sources of SO2, credits for NOx reductions, and emissions banking. The paper concludes with an example of a non-inferior set generated by the model.
