Cost Savings from Allowance Trading in the 1990 Clean Air Act: Estimates from a Choice‐Based Model
In: Moving to Markets in Environmental Regulation, S. 194-229
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In: Moving to Markets in Environmental Regulation, S. 194-229
In: Foundations of contemporary environmental studies
In: The Rand journal of economics, Band 38, Heft 4, S. 1159-1179
ISSN: 1756-2171
Many environmental regulations encourage the use of "clean" inputs. When the suppliers of such an input have market power, environmental regulation will affect not only the quantity of the input used but also its price. We investigate the effect of the Title IV emissions trading program for sulfur dioxide on the market for low‐sulfur coal. We find that the two railroads transporting coal were able to price discriminate on the basis of environmental regulation and geographic location. Delivered prices rose for plants in the trading program relative to other plants, and by more at plants near a low‐sulfur coal source.
This paper uses data from the U.S. electric power industry to explore the strategic responses of regulated firms to government enforcement. We focus on the enforcement of New Source Review, a provision of the Clean Air Act that imposes stringent emissions limitations on substantially modified older power plants. Starting in late 1999, the EPA sued the owners of 46 power plants for NSR violations. This paper explores how electric utilities responded to both the perceived threat of future action, and the action itself. We find that the threat of action did have a significant effect on emissions: plants that were likely to be named in the lawsuits (as determined by our discrete choice model of the lawsuit decision) reduced their emissions by about 17 percent on the eve of the lawsuits. After the lawsuits, we find no significant difference between those plants sued and other relatively dirty coal-fired power plants.
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In: NBER Working Paper No. w13512
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In: NBER Working Paper No. w12106
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In: THE ECONOMICS AND POLITICS OF CLIMATE CHANGE, Oxford University Press, 2009
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