Abatement Cost Heterogeneity in Phase I Electric Utilities

17 Pages Posted: 27 May 2006

See all articles by Jon Rezek

Jon Rezek

Mississippi State University - College of Business

n F. Blair

affiliation not provided to SSRN

Date Written: July 2005

Abstract

The market-based instruments embodied in the Acid Rain Program have been instrumental in the reduction of SO and NO emissions from electric utilities. Economic theory suggests that tradable pollution permit systems encourage polluters to reallocate pollution burdens to take advantage of any differences in marginal abatement costs. Such reallocations improve the efficiency of pollution reduction. This article evaluates the effectiveness of the first phase of the Acid Rain Program in achieving increased homogeneity of marginal abatement costs using an output distance function approach. The results indicate that plants have been successful in adapting to this more flexible regulatory framework. 2 x

Suggested Citation

Rezek, Jon and Blair, n F., Abatement Cost Heterogeneity in Phase I Electric Utilities (July 2005). Contemporary Economic Policy, Vol. 23, Issue 3, pp. 324-340, 2005, Available at SSRN: https://ssrn.com/abstract=904748

Jon Rezek (Contact Author)

Mississippi State University - College of Business ( email )

312 McCool Hall
Box 9580
Mississippi State, MS 39762-0964
United States
662-325-2341 (Phone)
662-325-1987 (Fax)

N F. Blair

affiliation not provided to SSRN

No Address Available

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