Sulfur dioxide, or SO2, belongs to the family of sulfur oxide gases (SOx).
SOx gases are formed when fuel containing sulfur, such as coal and oil, is burned, and when gasoline is extracted from oil, or metals are extracted from ore.
SO2 dissolves in water vapor forming acid and interacts with other gases and particles in the air to form sulfates and other products that can be harmful to people and their environment; the emissions from the burning of coal and oil can end up falling to earth as acid rain.
The most ambitious application of a market-based instrument to reduce pollution has been for the control of sulfur dioxide (SO2) emissions. The acid rain reduction program under Title IV of the Clean Air Act amendments of 1990 established an allowance trading program to cut SO2 emissions by 10 million tons from 1980 levels — a 50 percent reduction.