The United States (US) was the first country to develop a national emissions trading system (ETS). Designed to address the issue of acid rain, the goal of the program is to control emissions of pollutants that cause acid rain while minimizing implementation costs to society. In 1990, Title IV of the Clean Air Act (CAA) Amendments introduced a federal ETS for sulfur dioxide (SO2) allowances, also known as the Acid Rain Program (ARP). This state-of-the-art regulatory approach set a politically predetermined universal cap on SO2 emissions from the electric power sector and allowed trading of entitlements among emitters to meet its phased-in emission limits in a cost-effective manner. This market-based policy design is known as cap-and-trade.