Enforcement of vintage differentiated regulations: The case of new source review

James B. Bushnell and Catherine D. Wolfram

Journal of Environmental Economics and Management, 2012, vol. 64, issue 2, 137-152

Abstract: We analyze the effects of the New Source Review (NSR) environmental regulations on coal-fired electric power plants. Regulations that grew out of the Clean Air Act of 1970 required new electric generating plants to install costly pollution control equipment but exempted existing plants. Plants lost their exemptions if they made “major modifications.” We examine whether this caused firms to invest less in grandfathered plants, possibly leading to lower efficiency and higher emissions. We find evidence that heightened NSR enforcement reduced capital investment at vulnerable plants. However, we find no discernible effect on other inputs or emissions.

Keywords: New Source Review; Environmental regulations; Productivity; Electricity (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:64:y:2012:i:2:p:137-152

DOI: 10.1016/j.jeem.2012.01.006

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Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates

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