Costs of inefficient regulation: Evidence from the Bakken

Gabriel Lade () and Ivan Rudik

Journal of Environmental Economics and Management, 2020, vol. 102, issue C

Abstract: Efficient pollution regulation equalizes marginal abatement costs across sources. We study a new flaring regulation in North Dakota and document its efficiency. We attribute most of the observed flaring reductions at new wells in the state since late 2014 to the regulation. We construct firm-specific marginal abatement cost curves and find that the same quantity of flaring reductions could have been achieved at 44% lower cost by taxing flared gas instead of imposing firm-specific requirements. Taxing flared gas at the existing public lands royalty rate would achieve 99% of the flaring reductions at 46% lower cost.

Keywords: North Dakota; Bakken; Hydraulic fracturing; Flaring; Efficient regulation; Oil and gas (search for similar items in EconPapers)
JEL-codes: L71 Q3 Q4 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Costs of inefficient regulation: Evidence from the Bakken (2020)
Working Paper: Costs of Inefficient Regulation: Evidence from the Bakken (2018)
Working Paper: Costs of Inefficient Regulation: Evidence from the Bakken (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:102:y:2020:i:c:s0095069620300590

DOI: 10.1016/j.jeem.2020.102336

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