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The Benefits of Spatially Differentiated Regulation: The Response to Acid Rain by U.S. States Prior to the Acid Rain Program

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  • Grischa Perino
  • Olena Talavera

Abstract

Location is a crucial driver of both the marginal abatement and damage costs of sulfur dioxide emissions by U.S. coal-fired power plants. Before the start of the Acid Rain Program in 1995, old boilers were subject to emission rate standards set by individual states. We investigate how individual states adjusted their sulfur regulation laws in response to acid rain, and whether they accounted for differences in marginal abatement costs, vulnerability to agricultural damages, special industry interests, or inter-state externalities. The welfare gain compared to a uniform reduction in emission rate standards is estimated to be $21 million (in 1995 dollars) annually.

Suggested Citation

  • Grischa Perino & Olena Talavera, 2014. "The Benefits of Spatially Differentiated Regulation: The Response to Acid Rain by U.S. States Prior to the Acid Rain Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(1), pages 108-123.
    • Handle: RePEc:oup:ajagec:v:96:y:2014:i:1:p:108-123.
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    File URL: http://hdl.handle.net/10.1093/ajae/aat084
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    Cited by:

    1. Zhenhua Zhang & Guoxing Zhang & Shunfeng Song & Bin Su, 2020. "Spatial Heterogeneity Influences of Environmental Control and Informal Regulation on Air Pollutant Emissions in China," IJERPH, MDPI, vol. 17(13), pages 1-22, July.
    2. Millimet, Daniel L., 2013. "Environmental Federalism: A Survey of the Empirical Literature," IZA Discussion Papers 7831, Institute of Labor Economics (IZA).
    3. Bareille, F. & Zavalloni, M., 2018. "Agri-environmental policy decentralization: theoretical analysis and application to abandoned wetland in Brittany," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277109, International Association of Agricultural Economists.

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