Enforcement of Vintage Differentiated Regulations: The Case of New Source Review

James Bushnell and Catherine Wolfram

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: This paper analyzes 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 with a grandfathering clause. Existing plants lost their grandfathering status if they made ``major modifications'' to their plants. We examine whether this caused firms to invest less in their old plants, possibly leading to lower efficiency and higher emissions. We find some evidence that the risk of NSR enforcement reduced capital expenditures at plants. However, we find no discernable effect on the operating costs, fuel efficiency or emissions of these plants.

Keywords: New Source Review; Environmental Regulations; productivity; and Electricity (search for similar items in EconPapers)
JEL-codes: L51 L94 Q52 Q58 (search for similar items in EconPapers)
Date: 2008-03-22
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Citations: View citations in EconPapers (6)

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http://www2.econ.iastate.edu/papers/p11185-2008-03-22.pdf (application/pdf)

Related works:
Working Paper: Enforcement of Vintage Differentiated Regulations: The Case of New Source Review (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:31185

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