The Clean Air Act's sulfur dioxide emissions market: Estimating the costs of regulatory and legislative intervention

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Title: The Clean Air Act's sulfur dioxide emissions market: Estimating the costs of regulatory and legislative intervention
Author: Winebrake, James; Farrell, Alexander; Bernstein, Mark
Abstract: This paper explores the economic impacts of regulatory and legislative intervention in the Clean Air Act Amendment's sulfur dioxide (SO2) allowance trading market. This intervention is of two types: (1) direct intervention through laws or regulatory orders that constrain compliance options of market participants, and (2) indirect intervention, reflected in utility decision making, and caused by a lack of regulatory policies that clarify the treatment of allowance market transactions. The paper uses a dynamic, linear programming model to empirically estimate the economic impacts of this intervention. An example of direct intervention is explored by modeling actual legislative and/or regulatory proposals in New York and Wisconsin; indirect intervention is explored through the development of a cost-uncertainty tradeoff curve. The results indicate that both types of intervention are costly and these costs must be weighed against any expected social benefits.
Description: RIT community members may access full-text via RIT Libraries licensed databases: http://library.rit.edu/databases/
Record URI: http://hdl.handle.net/1850/8642
Publishers URL: http://dx.doi.org/10.1016/0928-7655(95)00006-J
Date: 1995

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