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State-Level Policies and Regulatory Guidance for Compliance in the Early Years of the SO2 Emission Allowance Trading Program

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  • Lile, Ronald D.
  • Burtraw, Dallas

Abstract

The Clean Air Act Amendments (CAAA) of 1990 instituted a historic experiment in emission allowance trading for sulfur dioxide (SO2). A necessary requirement for evaluating this experiment is an understanding of how the cost recovery rules and other guidance given to firms by state-level public utility commissions (PUCs) and elected bodies has affected compliance behavior. From the onset of the CAAA, there has been varied response by state policy-makers toward SO2 compliance. This paper presents a compilation of these actions as they took shape in states that were affected by the SO2 program. Our primary interest is on the proposals that emerged during the embryonic years of the allowance program, from 1990 to 1993, when investment plans for utilities affected by the first phase of the program beginning in 1995 were taking shape.

Suggested Citation

  • Lile, Ronald D. & Burtraw, Dallas, 1998. "State-Level Policies and Regulatory Guidance for Compliance in the Early Years of the SO2 Emission Allowance Trading Program," Discussion Papers 10828, Resources for the Future.
    • Handle: RePEc:ags:rffdps:10828
    DOI: 10.22004/ag.econ.10828
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    1. repec:ucp:bknber:9780226304557 is not listed on IDEAS
    2. Bohi, Douglas R. & Burtraw, Dallas, 1997. "SO2 Allowance Trading: How Experience and Expectations Measure Up," Discussion Papers 10878, Resources for the Future.
    3. Fullerton, Don & McDermott, Shaun P. & Caulkins, Jonathan P., 1997. "Sulfur Dioxide Compliance of a Regulated Utility," Journal of Environmental Economics and Management, Elsevier, vol. 34(1), pages 32-53, September.
    4. Coogins Jay S. & Smith Vincent H., 1993. "Some Welfare Effects of Emission Allowance Trading in a Twice-Regulated Industry," Journal of Environmental Economics and Management, Elsevier, vol. 25(3), pages 275-297, November.
    5. Bernstein, Mark & Farrell, Alex & Winebrake, James, 1994. "The environment and economics the impact of restricting the SO2 allowance market," Energy Policy, Elsevier, vol. 22(9), pages 748-754, September.
    6. Robert J. Gordon, 1990. "The Measurement of Durable Goods Prices," NBER Books, National Bureau of Economic Research, Inc, number gord90-1.
    7. Bohi, Douglas R. & Burtraw, Dallas, 1997. "SO2 allowance trading: How do expectations and experience measure up?," The Electricity Journal, Elsevier, vol. 10(7), pages 67-75.
    8. Bohi, Douglas R., 1994. "Utilities and state regulators are failing to take advantage of emission allowance trading," The Electricity Journal, Elsevier, vol. 7(2), pages 20-27, March.
    9. Douglas R. Bohi & Dallas Burtraw, 1991. "Avoiding regulatory gridlock in the acid rain program," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 10(4), pages 676-684.
    10. Winebrake, James J. & Farrell, Alexander E. & Bernstein, Mark A., 1995. "The clean air act's sulfur dioxide emissions market: Estimating the costs of regulatory and legislative intervention," Resource and Energy Economics, Elsevier, vol. 17(3), pages 239-260, November.
    11. Bohi, Douglas R. & Burtraw, Dallas, 1992. "Utility investment behavior and the emission trading market," Resources and Energy, Elsevier, vol. 14(1-2), pages 129-153, April.
    12. Renee Rico, 1995. "The U.S. allowance trading system for sulfur dioxide: An update on market experience," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 5(2), pages 115-129, March.
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    Cited by:

    1. Elaine F. Frey, 2013. "Technology Diffusion and Environmental Regulation: The Adoption of Scrubbers by Coal-Fired Power Plants," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    2. Burtraw, Dallas & Palmer, Karen, 2003. "The Paparazzi Take a Look at a Living Legend: The SO2 Cap-and-Trade Program for Power Plants in the United States," RFF Working Paper Series dp-03-15, Resources for the Future.
    3. Di Maria, Corrado & Lange, Ian & van der Werf, Edwin, 2014. "Should we be worried about the green paradox? Announcement effects of the Acid Rain Program," European Economic Review, Elsevier, vol. 69(C), pages 143-162.
    4. Burtraw, Dallas & Palmer, Karen L. & Heintzelman, Martin, 2000. "Electricity Restructuring: Consequences and Opportunities for the Environment," Discussion Papers 10854, Resources for the Future.
    5. Curtis Carlson & Dallas Burtraw & Maureen Cropper & Karen L. Palmer, 2000. "Sulfur Dioxide Control by Electric Utilities: What Are the Gains from Trade?," Journal of Political Economy, University of Chicago Press, vol. 108(6), pages 1292-1326, December.
    6. Stratford Douglas & Seth Wiggins, 2015. "Effects of Acid Rain Regulations on Production of Eastern Coals of Varying Sulfur Content," Working Papers 15-38, Department of Economics, West Virginia University.
    7. Considine, Timothy J. & Larson, Donald F., 2006. "The environment as a factor of production," Journal of Environmental Economics and Management, Elsevier, vol. 52(3), pages 645-662, November.
    8. Burtraw, Dallas, 2000. "Innovation Under the Tradable Sulfur Dioxide Emission Permits Program in the U.S. Electricity Sector," Discussion Papers 10599, Resources for the Future.
    9. Fowlie, Meredith, 2005. "Emissions Trading, Electricity Industry Restructuring and Investment in Pollution Abatement," 2005 Annual meeting, July 24-27, Providence, RI 19265, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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