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Technological Modifications in the Nitrogen Oxides Tradable Permit Program

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  • Joshua Linn

Abstract

Tradable permit programs allow firms greater flexibility in reducing emissions than command-and-control regulations and encourage firms to use low cost abatement options, including small-scale modifications to capital equipment. This paper shows that firms have extensively modified capital equipment in the Nitrogen Oxides Budget Trading Program, which covers power plants in the eastern United States. The empirical strategy uses geographic and temporal features of the program to estimate counterfactual emissions, finding that modifications have reduced emission rates by approximately 10-15 percent. The modifications would not have occurred under command-and-control regulation and have reduced regulatory costs.

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Bibliographic Info

Article provided by International Association for Energy Economics in its journal The Energy Journal.

Volume (Year): Volume 29 (2008)
Issue (Month): Number 3 ()
Pages: 153-176

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Handle: RePEc:aen:journl:2008v29-03-a08

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Cited by:
  1. Burtraw, Dallas & Szambelan, Sarah Jo, 2009. "U.S. Emissions Trading Markets for SO2 and NOx," Discussion Papers dp-09-40, Resources For the Future.
  2. Bonilla, Jorge & Coria, Jessica & Mohlin, Kristina & Sterner, Thomas, 2014. "Diffusion of NOx abatement technologies in Sweden," Working Papers in Economics 585, University of Gothenburg, Department of Economics.
  3. Castillo, Anya & Linn, Joshua, 2011. "Incentives of carbon dioxide regulation for investment in low-carbon electricity technologies in Texas," Energy Policy, Elsevier, vol. 39(3), pages 1831-1844, March.

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