Greenhouse Gas Emissions Effect on Cost Efficiencies of U.S. Electric Power Plants

Melissa Lynes, Brady Brewer and Allen Featherstone

No 235890, 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts from Agricultural and Applied Economics Association

Abstract: Nonparametric DEA models were ran to estimate cost and production frontiers of 503 electric generation plans in 2012. Preliminary results show that the relaxation of the greenhouse gas emission constraint for the constrained electric generation plants would reduce the cost for all greenhouse gas emissions in the study. However, it was found that when the model accounts for these greenhouse gas emissions as a bad output, the electric generation plants that were constrained were more efficient by most of the efficiency measures. This shows that the inclusion of a pollutant, in this case the greenhouse gas emissions of an electric generation plant, are accounted for in the production process, the efficiency scores and the frontier curves of the plant are affected and must be accounted for.

Keywords: Environmental Economics and Policy; Production Economics (search for similar items in EconPapers)
Pages: 26
Date: 2016
New Economics Papers: this item is included in nep-eff, nep-ene, nep-env and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea16:235890

DOI: 10.22004/ag.econ.235890

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