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A bottom-up method to develop pollution abatement cost curves for coal-fired utility boilers

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  • Vijay, Samudra
  • DeCarolis, Joseph F.
  • Srivastava, Ravi K.
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    Abstract

    This paper illustrates a new method to create supply curves for pollution abatement using boiler-level data that explicitly accounts for technology cost and performance. The Coal Utility Environmental Cost (CUECost) model is used to estimate retrofit costs for five different NOx control configurations on a large subset of the existing coal-fired, utility-owned boilers in the US. The resultant data are used to create technology-specific marginal abatement cost curves (MACCs) and also serve as input to an integer linear program, which minimizes system-wide control costs by finding the optimal distribution of NOx controls across the modeled boilers under an emission constraint. The result is a single optimized MACC that accounts for detailed, boiler-specific information related to NOx retrofits. Because the resultant MACCs do not take into account regional differences in air-quality standards or pre-existing NOx controls, the results should not be interpreted as a policy prescription. The general method as well as NOx-specific results presented here should be of significant value to modelers and policy analysts who must estimate the costs of pollution reduction.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 38 (2010)
    Issue (Month): 5 (May)
    Pages: 2255-2261

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    Handle: RePEc:eee:enepol:v:38:y:2010:i:5:p:2255-2261

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

    Related research

    Keywords: Air pollution control Nitrogen oxides Marginal abatement cost curves;

    References

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    1. JAY S. COGGINS & John R. Swinton, 1994. "The Price of Pollution: A Dual Approach to Valuing SO2 Allowances," Wisconsin-Madison Agricultural and Applied Economics Staff Papers 378, Wisconsin-Madison Agricultural and Applied Economics Department.
    2. Gollop, Frank M & Roberts, Mark J, 1985. "Cost-minimizing Regulation of Sulfur Emissions: Regional Gains in Electric Power," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 81-90, February.
    3. Klepper, Gernot & Peterson, Sonja, 2006. "Marginal abatement cost curves in general equilibrium: The influence of world energy prices," Open Access Publications from Kiel Institute for the World Economy 3775, Kiel Institute for the World Economy (IfW).
    4. Raymond Hartman & David Wheeler & Manjula Singh, 1997. "The cost of air pollution abatement," Applied Economics, Taylor & Francis Journals, vol. 29(6), pages 759-774.
    5. Kwon, Oh Sang & Yun, Won-Cheol, 1999. "Estimation of the marginal abatement costs of airborne pollutants in Korea's power generation sector," Energy Economics, Elsevier, vol. 21(6), pages 545-558, December.
    6. Hailu, Atakelty & Hailu, Atakelty, 2003. "Pollution abatement and productivity performance of regional Canadian pulp and paper industries," Journal of Forest Economics, Elsevier, vol. 9(1), pages 5-25.
    7. Fare, Rolf, et al, 1993. "Derivation of Shadow Prices for Undesirable Outputs: A Distance Function Approach," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 374-80, May.
    8. Hailu, Atakelty & Veeman, Terrence S., 2000. "Environmentally Sensitive Productivity Analysis of the Canadian Pulp and Paper Industry, 1959-1994: An Input Distance Function Approach," Journal of Environmental Economics and Management, Elsevier, vol. 40(3), pages 251-274, November.
    9. Randy Becker, 2001. "Air Pollution Abatement Costs Under the Clean Air Act: Evidence from the PACE Survey," Working Papers 01-12, Center for Economic Studies, U.S. Census Bureau.
    10. McKitrick, Ross, 1999. "A Derivation of the Marginal Abatement Cost Curve," Journal of Environmental Economics and Management, Elsevier, vol. 37(3), pages 306-314, May.
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