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Environmental regulation and productivity: The case of electricity generation under the CAAA-1990

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  • Hancevic, Pedro Ignacio

Abstract

This paper measures the impact of the 1990 Clean Air Act Amendments on coal-fired boilers' productivity and output. The Act led to generating units adopting a number of different pollution abating behaviors, one of which was an input change to lower SO2 emitting coal. A key feature of the production technology is that each boiler is designed to burn a particular variety of coal, with significant deviations from the targeted coal characteristics resulting in productivity losses. Using data for the 1985–1999 period, I present empirical evidence of the policy impact. The main findings are that productivity declined between 1% and 2.5%, on average, and output losses ranged from 1% to 6% for affected boilers, varying across regions and over time.

Suggested Citation

  • Hancevic, Pedro Ignacio, 2016. "Environmental regulation and productivity: The case of electricity generation under the CAAA-1990," Energy Economics, Elsevier, vol. 60(C), pages 131-143.
    • Handle: RePEc:eee:eneeco:v:60:y:2016:i:c:p:131-143
    DOI: 10.1016/j.eneco.2016.09.022
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    More about this item

    Keywords

    Productivity; Production function estimation; Environmental regulations; Sulfur dioxide; Electricity generation; Coal-fired boilers;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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