TU Darmstadt / ULB / TUprints

Optimal Profits under Environmental Regulation: The Benefits from Emission Intensity Averaging

Hampf, Benjamin and Rødseth, Kenneth Løvold :
Optimal Profits under Environmental Regulation: The Benefits from Emission Intensity Averaging.
In: Darmstadt Discussion Papers in Economics (220) ISSN 1438-2733
[Article], (2014)

[img]
Preview
Text
ddpie_220.pdf
Available under Only rights of use according to UrhG.

Download (339kB) | Preview
Item Type: Article
Title: Optimal Profits under Environmental Regulation: The Benefits from Emission Intensity Averaging
Language: English
Abstract:

In this paper we analyze the economic effects of implementing EPA’s newly proposed regulations for carbon dioxide (CO2) on existing U.S. coal-fired power plants using nonparametric methods on a sample of 144 electricity generating units. Moreover, we develop an approach for evaluating the economic gains from averaging emission intensities among the utilities’ generating units, compared to implementing unit-specific performance standards. Our results show that the implementation of flexible standards leads to up to 2.7 billion dollars larger profits compared to the uniform standards. Moreover, we find that by adopting best practices, current profits can be maintained even if an intensity standard of 0.88 tons of CO2 per MWh is implemented. However, our results also indicate a trade-off between environmental and profit gains, since aggregate CO2 emissions are higher with emission intensity averaging than with uniform standards.

Journal or Publication Title: Darmstadt Discussion Papers in Economics
Series Name: Darmstadt Discussion Papers in Economics
Number: 220
Place of Publication: Darmstadt
Uncontrolled Keywords: JEL classification: D24, L50, Q54 Keywords: Environmental regulation, profit maximization, emission intensity averaging, nonparametric effciency analysis
Classification DDC: 300 Sozialwissenschaften > 330 Wirtschaft
Divisions: 01 Law and Economics > Volkswirtschaftliche Fachgebiete > Emprical Economics
01 Law and Economics > Volkswirtschaftliche Fachgebiete
01 Law and Economics
Date Deposited: 10 Dec 2014 16:08
Last Modified: 26 Jan 2016 14:41
URN: urn:nbn:de:tuda-tuprints-47056
URI: http://tuprints.ulb.tu-darmstadt.de/id/eprint/4705
Export:
Actions (login required)
View Item View Item

Downloads

Downloads per month over past year