The impact of environmental regulation on productivity: the case of electricity generation under the CAAA-1990

Pedro Hancevic

No 211704, 2015 Conference, August 9-14, 2015, Milan, Italy from International Association of Agricultural Economists

Abstract: This paper measures the impact of the 1990 Clean Air Act Amendment on productivity and output of US coal-fired boilers. The Act led to power units adopting a number of different pollution abating strategies, one of which was an input change to lower SO2 emitting coal. A key feature is that each boiler is designed to burn a particular variety of coal, with significant deviations from the targeted coal characteristics resulting in productivity loss. The main innovation of the paper is to quantify the effect that switching to cleaner coal had on productivity and output. With data spanning over fifteen years, I incorporate the effect of this deviation directly into a production function to explicitly quantify the resulting productivity loss. Estimated output losses range from 0% to more than 6%, varying across regions, over time, and mainly depending on the proximity of generating units to low-sulfur sources.

Keywords: Environmental Economics and Policy; Production Economics; Productivity Analysis (search for similar items in EconPapers)
Pages: 38
Date: 2015
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:iaae15:211704

DOI: 10.22004/ag.econ.211704

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