Sulfur Dioxide

Carolina Power & Light Co. cleaned up in a landmark $21.4-million auction of government-approved pollution permits, the Environmental Protection Agency said Tuesday. The Raleigh, N.C., utility company spent $11.5 million to acquire rights to emit more than 85,000 tons of sulfur dioxide, representing 57% of the 150,010 permits sold, said Brian McLean of the EPA. Carolina Power said the permits will allow it to delay installing costly anti-pollution devices known as "scrubbers."

In a move closely observed in Southern California, the Chicago Board of Trade was chosen by the government Friday to run the world's first exchange in pollution credits. CBOT will deal in federal allowances for utilities to emit sulfur dioxide--which causes acid rain--in a plan to cut emissions in half by the year 2000. These rights can be purchased by utilities that might find buying them more cost-effective than spending money directly to reduce their own emissions.

As an issue, acid rain was as dead as the forests and lakes it was killing in Canada and the northern United States until the fall of 1990. Then Congress was shown how to ease the cost of deeply reducing the sulfur dioxide that pours from electric utility smokestacks, drifts into the clouds and turns to acid rain. The first step was imposing an overall ceiling on smokestack emissions calling for cuts of 5 million tons of sulfur dioxide by 1995 and another 5 million by the year 2000.

In an unprecedented move, one of the nation's biggest emitters of sulfur dioxide plans to buy pollution allowances for its coal-fired plants from one of the nation's cleanest utilities, officials said Monday. The Tennessee Valley Authority, the giant federal utility that operates 59 coal-fired units at 11 plants in Tennessee, Alabama and Kentucky, plans to buy sulfur dioxide emission credits from Wisconsin Power & Light Co., one of the nation's cleanest utilities.

Air pollutants belched out since the beginning of the Industrial Revolution may have offset much of the global warming caused by "greenhouse gases," such as carbon dioxide, researchers said last week.

The Los Angeles Department of Water and Power and other owners of a huge Arizona power plant whose emissions obscure scenic vistas at the Grand Canyon have agreed to tougher smog controls than proposed by the U.S. Environmental Protection Agency. The agreement, to be announced today in Phoenix in Gov. Fife Symington's office, follows months of intensive negotiations with environmentalists.

First there were corn and wheat futures contracts, and later came interest-rate swaps and other fancy financial instruments. But now the world's largest commodity exchange is developing one of its most exotic new investments yet: air pollution permits. "It's a totally new animal," said Michael O'Connell, a spokesman for the Chicago Board of Trade. The CBOT on Tuesday voted to create a new futures contract that allows investors and utilities to trade rights to emit sulfur dioxide.