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Does regulation stimulate productivity? The effect of air quality policies on the efficiency of US power plants

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Author Info

  • Fleishman, Rachel
  • Alexander, Rob
  • Bretschneider, Stuart
  • Popp, David

Abstract

This research examines the effect of air quality regulations on the productivity of US power plants based on both economic and environmental outputs. Using data envelopment analysis (DEA) to estimate an efficiency measure incorporating both economic and environmental outcomes, we look at changes in efficiency in US power plants over an eleven-year time period (1994-2004) during which several different regulations were implemented for the control of nitrogen oxides (NOx) and sulfur dioxide (SO2). The paper then models how estimated efficiency behaves over time as a function of regulatory changes. Findings suggest mixed effects of regulations on power plant efficiency when pollution abatement and electricity generation are both included as outputs.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Policy.

Volume (Year): 37 (2009)
Issue (Month): 11 (November)
Pages: 4574-4582

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Handle: RePEc:eee:enepol:v:37:y:2009:i:11:p:4574-4582

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Web page: http://www.elsevier.com/locate/enpol

Related research

Keywords: Data envelopment analysis Air pollution Regulation;

References

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  1. Ronald Shadbegian & Wayne Gray, 2006. "Assessing multi-dimensional performance: environmental and economic outcomes," Journal of Productivity Analysis, Springer, vol. 26(3), pages 213-234, December.
  2. Aiken, Deborah Vaughn & Pasurka, Carl Jr., 2003. "Adjusting the measurement of US manufacturing productivity for air pollution emissions control," Resource and Energy Economics, Elsevier, vol. 25(4), pages 329-351, October.
  3. Gale Boyd & George Tolley & Joseph Pang, 2002. "Plant Level Productivity, Efficiency, and Environmental Performance of the Container Glass Industry," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 23(1), pages 29-43, September.
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  7. Ronald J. Shadbegian & Wayne B. Gray, 2003. "Pollution Abatement Expenditures and Plant-Level Productivity: A Production Function Approach," NCEE Working Paper Series 200305, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Aug 2003.
  8. Rolf Färe & Shawna Grosskopf & Carl A Pasurka, Jr., 2001. "Accounting for Air Pollution Emissions in Measures of State Manufacturing Productivity Growth," Journal of Regional Science, Wiley Blackwell, vol. 41(3), pages 381-409.
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  14. M. Murty & Surender Kumar & Kishore Dhavala, 2007. "Measuring environmental efficiency of industry: a case study of thermal power generation in India," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 38(1), pages 31-50, September.
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  16. Fare, R. & Grosskopf, S. & Hernandez-Sancho, F., 2004. "Environmental performance: an index number approach," Resource and Energy Economics, Elsevier, vol. 26(4), pages 343-352, December.
  17. Michael Greenstone, 1998. "The Impacts of Environmental Regulations on Industrial Activity: Evidence from the 1970 and 1977 Clean Air Act Amendments and the Census of Manufacturers," Working Papers 787, Princeton University, Department of Economics, Industrial Relations Section..
  18. Fare, Rolf & Grosskopf, Shawna & Pasurka, Carl Jr., 2007. "Pollution abatement activities and traditional productivity," Ecological Economics, Elsevier, vol. 62(3-4), pages 673-682, May.
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  20. Rolf Färe & Shawna Grosskopf & Carl Pasurka, 2006. "Social responsibility: U.S. power plants 1985–1998," Journal of Productivity Analysis, Springer, vol. 26(3), pages 259-267, December.
  21. Fare, Rolf & Grosskopf, Shawna & Tyteca, Daniel, 1996. "An activity analysis model of the environmental performance of firms--application to fossil-fuel-fired electric utilities," Ecological Economics, Elsevier, vol. 18(2), pages 161-175, August.
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Citations

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Cited by:
  1. Jaraite, Jurate & Di Maria, Corrado, 2011. "Efficiency, Productivity and Environmental Policy: A Case Study of Power Generation in the EU," CERE Working Papers 2011:3, CERE - the Center for Environmental and Resource Economics.
  2. Linn, Joshua & Mastrangelo, Erin & Burtraw, Dallas, 2013. "Regulating Greenhouse Gases from Coal Power Plants under the Clean Air Act," Discussion Papers dp-13-05, Resources For the Future.
  3. Zhou, Yan & Xing, Xinpeng & Fang, Kuangnan & Liang, Dapeng & Xu, Chunlin, 2013. "Environmental efficiency analysis of power industry in China based on an entropy SBM model," Energy Policy, Elsevier, vol. 57(C), pages 68-75.

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