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Modeling the Impacts of the 1990 Clean Air Act Amendments

Author

Listed:
  • Thanh Luong

    (Energy Information Administration, 1000 Independence Avenue, Washington, DC 20585)

  • Frederic H. Murphy

    (Temple University, Philadelphia, Pennsylvania 19122)

  • Reginald Sanders

    (OnLocation, Inc., 8100 Oak Street, Suite 300, Dunn Loring, Virginia 22102)

  • Susan H. Holte

    (Energy Information Administration, 1000 Independence Avenue, Washington, DC 20585)

  • Peter Whitman

    (Energy Information Administration, 1000 Independence Avenue, Washington, DC 20585)

Abstract

The Clean Air Act Amendments of 1990 changed the regulations for air pollution by replacing a set of mandated actions with a market mechanism for pollution rights, where electric utilities can buy or sell rights to emit sulphur dioxide (SO 2 ). We implemented the provisions related to the reduction in SO 2 in the National Energy Modeling System (NEMS) to assess their impacts on energy markets. Because of the decentralized design of NEMS, the implementation was quite complex. We had to use Lagrangian relaxation, which turned out to be more difficult than first envisioned, and other techniques to arrive at a consistent equilibrium among the relevant energy sectors. As a result of these difficulties, we revised the NEMS model. This exercise illustrates that often an organization should be ready to take a step back from what exists to take a step forward.

Suggested Citation

  • Thanh Luong & Frederic H. Murphy & Reginald Sanders & Susan H. Holte & Peter Whitman, 1998. "Modeling the Impacts of the 1990 Clean Air Act Amendments," Interfaces, INFORMS, vol. 28(2), pages 1-15, April.
    • Handle: RePEc:inm:orinte:v:28:y:1998:i:2:p:1-15
    DOI: 10.1287/inte.28.2.1
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    References listed on IDEAS

    as
    1. Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June.
    2. Hugh Everett, 1963. "Generalized Lagrange Multiplier Method for Solving Problems of Optimum Allocation of Resources," Operations Research, INFORMS, vol. 11(3), pages 399-417, June.
    3. Frederic H. Murphy & Susan H. Shaw, 1995. "The Evolution of Energy Modeling at the Federal Energy Administration and the Energy Information Administration," Interfaces, INFORMS, vol. 25(5), pages 173-193, October.
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    Cited by:

    1. Melinda Hobbs & Michael Mellish & Frederic H. Murphy & Richard Newcombe & Reginald Sanders & Peter Whitman, 2001. "Rebuilding the Coal Model in the Energy Information Administration's National Energy Modeling System," Interfaces, INFORMS, vol. 31(5), pages 24-42, October.
    2. Soyster, A.L. & Murphy, F.H., 2017. "Data driven matrix uncertainty for robust linear programming," Omega, Elsevier, vol. 70(C), pages 43-57.
    3. Cullenward, Danny & T. Wilkerson, Jordan & Wara, Michael & Weyant, John P., 2016. "Dynamically estimating the distributional impacts of U.S. climate policy with NEMS: A case study of the Climate Protection Act of 2013," Energy Economics, Elsevier, vol. 55(C), pages 303-318.
    4. Wilkerson, Jordan T. & Cullenward, Danny & Davidian, Danielle & Weyant, John P., 2013. "End use technology choice in the National Energy Modeling System (NEMS): An analysis of the residential and commercial building sectors," Energy Economics, Elsevier, vol. 40(C), pages 773-784.
    5. Steven A. Gabriel & Andy S. Kydes & Peter Whitman, 2001. "The National Energy Modeling System: A Large-Scale Energy-Economic Equilibrium Model," Operations Research, INFORMS, vol. 49(1), pages 14-25, February.

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