Makes it unlawful, after January 1, 2002, for: (1) the owner or operator of an affected facility to emit nitrogen oxides exceeding the amount of allowances held; or (2) any person to hold, use, or transfer such allowances, except as provided under this Act.
Repeals the nitrogen oxides emission reduction program under the Clean Air Act.
Imposes penalties for emissions in excess of allowances. Requires offsets of allowances in the calendar year following the one in which excess emissions occurred.
Decreases the amount of sulfur dioxide authorized to be emitted under an existing allowance program for 2007 and subsequent years.
Provides for regulations to: (1) protect specified regional ecosystems, including those modifying nitrogen oxide and sulfur dioxide allowance allocations; and (2) control electric utility and industrial source mercury emissions.
Directs the Administrator to establish a competitive grant program to fund research related to the effects of nitrogen deposition on sensitive watersheds and coastal estuaries in the eastern United States.