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The impact of trading on the costs and benefits of the Acid Rain Program

H. Ron Chan, B. Andrew Chupp, Maureen Cropper () and Nicholas Muller

Journal of Environmental Economics and Management, 2018, vol. 88, issue C, 180-209

Abstract: We quantify the cost savings from the Acid Rain Program (ARP) by comparing compliance costs for 761 coal-fired generating units under the ARP with compliance costs under a counterfactual uniform performance standard (UPS) that would have achieved the same aggregate emissions in 2002. In 2002, we find compliance costs to be $200 million (1995$) lower and health damages to be $170 million (1995$) lower under the ARP. We also compare health damages associated with observed SO2 emissions from all ARP units in 2002 with damages from a no-trade counterfactual. Damages under the ARP are $2.1 billion (1995$) higher than under the no-trade scenario, reflecting allowance transfers from units in the western US to units in the eastern US with larger exposed populations.

Keywords: Q51; Q52; Q58; Sulfur dioxide; Acid rain; Performance standards; Health effects; Pollution permits; Cap and trade (search for similar items in EconPapers)
Date: 2018
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Working Paper: The Impact of Trading on the Costs and Benefits of the Acid Rain Program (2015) Downloads
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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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