The German air pollution policy is still dominated by the traditional command and control approach. The U.S. American SO2 Allowance Program, created under Title IV of the Clean Air Act Amendments of 1990, represents a radical departure from this approach. The paper compares the German and U.S. American SO2 regulations for coal fired power plants and discusses the different experiences. Character and stringency of regulations, reactions of electric utilities and costs of alternative policy measures are analysed.