Adaptation to Environmental Change: Agriculture and the Unexpected Incidence of the Acid Rain Program

The Acid Rain Program (ARP) cut sulfur dioxide (SO 2 ) emissions from power plants in the United States, with considerable benefits. We show this also reduced ambient sulfate levels, which lowered agriculture productivity through decreased soil sulfur. Using plant-level SO and an atmospheric transport model, we estimate relationship between airborne levels yields for corn soybeans. crop revenue losses these two crops at around $1–$1.5 billion per year, accompanying decreases land value. Back-of-the-envelope calculations of costs to replace lost suggest producer responses were limited suboptimal. (JEL Q15, Q24, Q53, Q58)