How Did Air Quality Standards Affect Employment at US Power Plants? The Importance of Timing, Geography, and Stringency

Glenn Sheriff, Ann Ferris and Ronald J. Shadbegian

Journal of the Association of Environmental and Resource Economists, 2019, vol. 6, issue 1, 111 - 149

Abstract: We examine fossil-fuel power plant employment impacts of new nitrogen oxides (NOx) provisions under Title I of the 1990 Clean Air Act Amendments (CAAAs). These provisions required installation of reasonably available control technology (RACT) for NOx emissions for major stationary sources in the Ozone Transport Region and in more stringently classified ozone nonattainment areas. Standard approaches using nonattainment designation to identify regulatory impacts abstract from important implementation aspects such as when regulatory changes occur, where regulations are in effect, and which specific regulations apply. Omitting these factors can introduce bias by contaminating the control group, leading to underestimation of historical employment impacts and overestimation of projected impacts from tightening regulations. Our results indicate that the new NOx RACT requirements negatively impacted power plant employment. We find no significant impacts on generation, suggesting that installation of pollution controls may have contributed to labor-saving technical change at affected units.

Date: 2019
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