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Positive Spillovers from Infrastructure Investment: How Pipeline Expansions Encourage Fuel Switching

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  • Jonathan B. Scott

    (University of Texas, Dallas)

Abstract

This paper studies the role of the U.S. pipeline infrastructure in the country's transition from coal to natural gas energy. I leverage the Environmental Protection Agency's Mercury and Air Toxics Standards as a plausibly exogenous intervention, which encouraged many coal plants to convert to natural gas. Combining this quasi-experimental variation with a plant's preexisting proximity to the pipeline network, I isolate implied pipeline connection costs within a dynamic discrete choice model of plant conversions. Key model results indicate that infrastructure-related costs prevent $9 billion in emissions reductions from taking place, suggesting a $2.4 million per mile external benefit of pipeline expansions.

Suggested Citation

  • Jonathan B. Scott, 2023. "Positive Spillovers from Infrastructure Investment: How Pipeline Expansions Encourage Fuel Switching," The Review of Economics and Statistics, MIT Press, vol. 105(6), pages 1448-1464, November.
    • Handle: RePEc:tpr:restat:v:105:y:2023:i:6:p:1448-1464
    DOI: 10.1162/rest_a_01137
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