The U.S. EPA has initiated a multi-phased study of the acid rain problem. As part of Phase I, Radian Corporation investigated SO2 emissions and controls in the industrial sector. The primary objective of this work was to provide a consistent set of capital investment and operating costs for flue gas desulfurization (FGD) systems applied to both industrial and electric utility boilers. Retrofit factors and the cost of FGD systems applied to new boilers were addressed. Wet limestone scrubbing and lime spray drying FGD systems were evaluated. In conducting the work to provide a consistent set of capital investment and operating costs for FGD systems retrofitted to existing boilers, the following issues were investigated: 1) Apparent discontinuities in both FGD system capital investment and operating costs as a function of boiler capacity in the region between industrial boilers and small utility boilers. 2) FGD retrofit factors applied to existing boilers based on published reports. 3) Differences between PEDCo Environmental, Inc. and TVA cost estimates for utility boiler FGD systems. These costing issues were examined on the bases of design scope, costing factors (for equipment installation, indirect investment, etc.), year of costs, inherent strengths and weaknesses, and published data of actual system costs. Recommendations are made for the cost bases to use in further acid rain studies.