Environmental Policy Induced Input Substitution? The Case of Coking and Steam Coal
AbstractThe Clean Air Act of 1990 initiated a tradable permit program for emissions of sulfur dioxide from coal-fired power plants. The effect of this enlightened policy on the coal industry was a large increase in consumption of low-sulfur bituminous and subbituminous coals. Low-sulfur bituminous coal is most attractive to coal-fired power plants as they have higher heat content and require less alteration to the boiler to burn as effectively the coal previously in use. However, low-sulfur bituminous coal is also the ideal coal for coking. The analysis presented here will attempt to determine whether the increased consumption of low-sulfur bituminous coal for electricity generation caused a decrease in the quality and/or quantity of coking coal consumption. Most evidence suggests that the market for coking coal was unaffected, even as the consumption of low-sulfur bituminous coal for electricity generation increased substantially. Implications of potential greenhouse gas regulation on this market are also discussed.
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Bibliographic InfoPaper provided by National Center for Environmental Economics, U.S. Environmental Protection Agency in its series NCEE Working Paper Series with number 200710.
Length: 18 pages
Date of creation: Dec 2007
Date of revision: Dec 2007
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1990 Clean Air Act; coke; Input substitution;
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- Ellerman,A. Denny & Joskow,Paul L. & Schmalensee,Richard & Montero,Juan-Pablo & Bailey,Elizabeth M., 2005.
"Markets for Clean Air,"
Cambridge University Press, number 9780521023894, December.
- Crompton, Paul, 2001. "The diffusion of new steelmaking technology," Resources Policy, Elsevier, vol. 27(2), pages 87-95, June.
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