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Regulatory Conflict? Environmental and Economic Regulation of Electricity Generation

Author

Listed:
  • Melinda Acutt

    (University of Liverpool)

  • Caroline Elliott

    (Lancaster University)

Abstract

Implementation of policies aimed at reducing atmospheric emissions has drawnattention to the need to integrate policies aimed at protection of the environment intoother policy areas such as energy. In this paper we are concerned with the interactionof environmental policies aimed at reducing pollution, and economic policies aimed atreducing market power, in the electricity generation industry. While our analysisfocuses on the post privatisation experiences in England and Wales, the analysis isintended to be of a wider applicability. In a theoretical model we find that there arewelfare gains to be made from a move from the current non-cooperative regulatoryregime to cooperative regulation between the environmental and economic regulators- a result that holds for the alternative environmental policies of a technology standardand an emissions tax.

Suggested Citation

  • Melinda Acutt & Caroline Elliott, 1999. "Regulatory Conflict? Environmental and Economic Regulation of Electricity Generation," Working Papers 1999.40, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:1999.40
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    References listed on IDEAS

    as
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    3. Buchanan, James M, 1969. "External Diseconomies, Corrective Taxes, and Market Structure," American Economic Review, American Economic Association, vol. 59(1), pages 174-177, March.
    4. Mark Armstrong & Simon Cowan & John Vickers, 1994. "Regulatory Reform: Economic Analysis and British Experience," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262510790, December.
    5. David P. Baron, 1985. "Noncooperative Regulation of a Nonlocalized Externality," RAND Journal of Economics, The RAND Corporation, vol. 16(4), pages 553-568, Winter.
    6. Levin, Dan, 1985. "Taxation within Cournot oligopoly," Journal of Public Economics, Elsevier, vol. 27(3), pages 281-290, August.
    7. 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.
    8. M Z Acutt & C F Elliott, 1998. "Hit and run regulation - regulatory contestability," Working Papers 539494, Lancaster University Management School, Economics Department.
    9. David M. Newbery & Michael G. Pollitt, 1997. "The Restructuring and Privatisation of Britain's CEGB—Was It Worth It?," Journal of Industrial Economics, Wiley Blackwell, vol. 45(3), pages 269-303, September.
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    Cited by:

    1. Varawala, Lamia & Hesamzadeh, Mohammad Reza & Dán, György & Bunn, Derek & Rosellón, Juan, 2023. "A pricing mechanism to jointly mitigate market power and environmental externalities in electricity markets," Energy Economics, Elsevier, vol. 121(C).
    2. Caputo, Michael R., 2014. "Comparative statics of a monopolistic firm facing price-cap and command-and-control environmental regulations," Energy Economics, Elsevier, vol. 46(C), pages 464-471.

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    More about this item

    Keywords

    Environmental regulation; Economic regulation; Electricity generation;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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