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Technological Change for Sulfur Dioxide Scrubbers under Market-Based Regulation

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  • Ian Lange
  • Allen Bellas

Abstract

The 1990 Clean Air ActAmendments (CAAA) introduced tradable permits for controlling sulfur dioxide (SO2) emissions from coal-burning power plants and forced scrubbers to compete with other SO2 abatement options. While the flexibility of permits reduced overall compliance costs, a secondary benefit would exist if there were resulting advances in scrubber technology. A hedonic model is used to estimate the effect of changing regulatory regimes on scrubber costs. While scrubbers installed under the 1990 CAAA are cheaper to purchase and operate than older scrubbers, these cost reductions seem to be a one-time drop rather than a continual decline.

Suggested Citation

  • Ian Lange & Allen Bellas, 2005. "Technological Change for Sulfur Dioxide Scrubbers under Market-Based Regulation," Land Economics, University of Wisconsin Press, vol. 81(4).
    • Handle: RePEc:uwp:landec:v:81:y:2005:i:4:p546-556
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Allen Bellas & Ian Lange, 2010. "Technological progress in particulate removal equipment at U.S. coal burning power plants," Journal of Regulatory Economics, Springer, vol. 38(2), pages 180-192, October.
    2. Allen Bellas & Duane Finney & Ian Lange, 2013. "Technological Advance in Cooling Systems at U.S. Power Plants," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    3. Stowe, Robert C & Stavins, Robert Norman & Chan, Gabriel Angelo & Sweeney, Richard Leonard, 2012. "The SO2 Allowance Trading System and the Clean Air Act Amendments of 1990: Reflections on Twenty Years of Policy Innovation," Scholarly Articles 8160721, Harvard Kennedy School of Government.
    4. Santosh Kumar Sahu & K. Narayanan, 2016. "Environmental Certification and Technical Efficiency: A Study of Manufacturing Firms in India," Journal of Industry, Competition and Trade, Springer, vol. 16(2), pages 191-207, June.
    5. Kopyrina, Olga & Wu, Kai & Ying, Zhanyu, 2023. "Greening through central inspection: The role of legitimacy pressure and risk-taking," Pacific-Basin Finance Journal, Elsevier, vol. 77(C).
    6. Ren, Shenggang & Hu, Yucai & Zheng, Jingjing & Wang, Yangjie, 2020. "Emissions trading and firm innovation: Evidence from a natural experiment in China," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    7. Grischa Perino, 2010. "Price Discrimination Based on Downstream Regulation: Evidence from the Market for SO2 Scrubbers," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2010-09, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    8. Raphael Calel & Antoine Dechezleprêtre, 2016. "Environmental Policy and Directed Technological Change: Evidence from the European Carbon Market," The Review of Economics and Statistics, MIT Press, vol. 98(1), pages 173-191, March.
    9. Rakesh Kumar Jain & Surender Kumar, 2018. "Shadow price of CO2 emissions in Indian thermal power sector," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 20(4), pages 879-902, October.
    10. David Grover, 2012. "The �advancedness� of knowledge in pollutionsaving technological change with a qualitative application to SO2 cap and trade," GRI Working Papers 100, Grantham Research Institute on Climate Change and the Environment.
    11. Popp, David & Newell, Richard G. & Jaffe, Adam B., 2010. "Energy, the Environment, and Technological Change," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 873-937, Elsevier.
    12. Kumar, Surender & Managi, Shunsuke, 2010. "Sulfur dioxide allowances: Trading and technological progress," Ecological Economics, Elsevier, vol. 69(3), pages 623-631, January.
    13. Chen Feng & Beibei Shi & Rong Kang, 2017. "Does Environmental Policy Reduce Enterprise Innovation?—Evidence from China," Sustainability, MDPI, vol. 9(6), pages 1-24, May.
    14. Grover, David, 2013. "The ‘advancedness’ of knowledge in pollution-saving technological change with a qualitative application to SO2 cap and trade," Ecological Economics, Elsevier, vol. 89(C), pages 123-134.
    15. Bruce L. Benson, 2015. "Regulation As a Barrier to Market Provision and to Innovation: The Case of Toll Roads and Steam Carriages in England," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 30(Spring 20), pages 61-87.
    16. Chan, H. Ron & Chupp, B. Andrew & Cropper, Maureen L. & Muller, Nicholas Z., 2018. "The impact of trading on the costs and benefits of the Acid Rain Program," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 180-209.
    17. Herman R.J. Vollebergh, 2006. "Differential Impact of Environmental Policy Instruments on Technological Change: A Review of the Empirical Literature," Tinbergen Institute Discussion Papers 07-042/3, Tinbergen Institute.

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    More about this item

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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