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Costs of inefficient regulation: Evidence from the Bakken

Gabriel Lade () and Ivan Rudik
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Ivan Rudik: Cornell University

No 3e9xk, SocArXiv from Center for Open Science

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.

Date: 2020-05-13
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
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Related works:
Journal Article: Costs of inefficient regulation: Evidence from the Bakken (2020) Downloads
Working Paper: Costs of Inefficient Regulation: Evidence from the Bakken (2018) Downloads
Working Paper: Costs of Inefficient Regulation: Evidence from the Bakken (2017) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:3e9xk

DOI: 10.31219/osf.io/3e9xk

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