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Read the whole article "The SO2 Allowance Trading System: The Ironic History of a Grand Policy Experiment" and answer the following questions.

A. Describe the design of the SO2 Allowance Trading System (including a description of how the emissions target was determined and how the permits were allocated) [note in the article the "elbow" of the abatement cost curve is a point of abatement level below which the marginal abatement costs rise slowly and above which the marginal abatement costs rise sharply.]

B. In the introduction the authors state, The design and implementation of the landmark SO2 cap-and-trade system have led to four striking ironies that are the focus of this essay. First, subsequent research indicates that in enacting an ambitious - and successful - policy to reduce SO2 emissions in order to curb acid rain, the government essentially did the right thing for the wrong reason. According to the authors, why was the cap-and-trade system the right thing for the wrong reason?

C. There is some evidence that the SO2 allowance program favored scrubbers over low-sulfur coal as a way to abate emissions. According to the article, why this favoritism?

D. How did rail deregulation affect the cost of the program?