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Efficient Emission Fees in the U.S. Electricity Sector

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Author Info
Burtraw, Dallas () (Resources for the Future)
Palmer, Karen () (Resources for the Future)
Banzhaf, H. Spencer () (Resources for the Future)

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Abstract

This paper provides new estimates of efficient emission fees for sulfur dioxide (SO2) and nitrogen oxides (NOX) emissions in the U.S. electricity sector. The estimates are obtained by coupling a detailed simulation model of the U.S. electricity markets with an integrated assessment model that links changes in emissions with atmospheric transport, environmental endpoints, and valuation of impacts. Efficient fees are found by comparing incremental benefits with emission levels. National quantity caps that are equivalent to these fees also are computed, and found to approximate caps under consideration in the current multi-pollutant debate in the U.S. Congress and the recent proposals from the Bush administration for the electricity industry. We also explore whether regional differentiation of caps on different pollutants is likely to enhance efficiency.

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Paper provided by Resources For the Future in its series Discussion Papers with number dp-02-45.

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Date of creation: 01 Oct 2002
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Handle: RePEc:rff:dpaper:dp-02-45

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Related research
Keywords: emissions trading; emission fees; air pollution; cost-benefit analysis; electricity; particulates; nitrogen oxides; NOx; sulfur dioxide; SO2; health benefits;

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Find related papers by JEL classification:
Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Burtraw, Dallas & Palmer, Karen & Krupnick, Alan, 1995. ""Second-Best" Adjustments to Externality Estimates in Electricity Planning with Competition," Discussion Papers dp-96-04, Resources For the Future. [Downloadable!]
  2. Dallas Burtraw & Karen Palmer & Alan J. Krupnick, 1997. ""Second-Best" Adjustments to Externality Estimates in Electricity Planning with Competition," Land Economics, University of Wisconsin Press, vol. 73(2), pages 224-239. [Downloadable!] (restricted)
  3. Burtraw, Dallas & Krupnick, Alan, 1996. "The Social Cost of Electricity: Do the Numbers Add Up?," Discussion Papers dp-96-30, Resources For the Future. [Downloadable!]
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  4. Burtraw, Dallas & Palmer, Karen & Bharvirkar, Ranjit & Paul, Anthony, 2001. "Cost-Effective Reduction of NOx Emissions from Electricity Generation," Discussion Papers dp-00-55-rev, Resources For the Future. [Downloadable!]
  5. Holger Sieg & V. Kerry Smith & H. Spencer Banzhaf & Randy Walsh, . "Estimating the General Equilibrium Benefits of Large Changes in Spatially Delineated Public Goods," GSIA Working Papers 2003-07, Carnegie Mellon University, Tepper School of Business.
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  6. Kolstad, Charles D., 1987. "Uniformity versus differentiation in regulating externalities," Journal of Environmental Economics and Management, Elsevier, vol. 14(4), pages 386-399, December. [Downloadable!] (restricted)
  7. Chattopadhyay, Sudip, 2000. "The effectiveness of McFaddens's nested logit model in valuing amenity improvement," Regional Science and Urban Economics, Elsevier, vol. 30(1), pages 23-43, January. [Downloadable!] (restricted)
  8. Burtraw, Dallas & Krupnick, Alan & Austin, David & Farrell, Deirdre & Mansur, Erin, 1997. "The Costs and Benefits of Reducing Acid Rain," Discussion Papers dp-97-31-rev, Resources For the Future. [Downloadable!]
  9. Pizer, William A., 2002. "Combining price and quantity controls to mitigate global climate change," Journal of Public Economics, Elsevier, vol. 85(3), pages 409-434, September. [Downloadable!] (restricted)
  10. Krupnick, Alan & Cropper, Maureen & Alberini, Anna & Heintzelman, Martin & Simon, Nathalie & O'Brien, Bernie & Goeree, Ron, 2000. "Age, Health, and the Willingness to Pay for Mortality Risk Reductions: A Contingent Valuation Survey of Ontario Residents," Discussion Papers dp-00-37, Resources For the Future. [Downloadable!]
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  11. Burtraw, Dallas & Palmer, Karen & Bharvirkar, Ranjit & Paul, Anthony, 2001. "The Effect of Allowance Allocation on the Cost of Carbon Emission Trading," Discussion Papers dp-01-30-, Resources For the Future. [Downloadable!]
  12. Burtraw, Dallas & Krupnick, Alan J., 1996. "The second-best use of social cost estimates," Resource and Energy Economics, Elsevier, vol. 18(4), pages 467-489, December. [Downloadable!] (restricted)
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  13. repec:cup:cbooks:9780521023894 is not listed on IDEAS
  14. Boyd Roy & Krutilla Kerry & Viscusi W. Kip, 1995. "Energy Taxation as a Policy Instrument to Reduce CO2 Emissions: A Net Benefit Analysis," Journal of Environmental Economics and Management, Elsevier, vol. 29(1), pages 1-24, July. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Burtraw, Dallas & Palmer, Karen & Kahn, Danny, 2009. "A Symmetric Safety Valve," Discussion Papers dp-09-06, Resources For the Future. [Downloadable!]
  2. Debra Israel, 2007. "Environmental participation in the U.S. sulfur allowance auctions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 38(3), pages 373-390, November. [Downloadable!] (restricted)
  3. Bovenberg, A.L. & Goulder, L.H. & Gurney, D.J., 2003. "Efficiency costs of meeting industry-distributional constraints under environmental permits and taxes," Discussion Paper 86, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  4. Burtraw, Dallas & Evans, David, 2003. "The Evolution of NOx Control Policy for Coal-Fired Power Plants in the United States," Discussion Papers dp-03-23, Resources For the Future. [Downloadable!]
  5. Donald N Dewees, 2006. "Pollution and the Price of Power," Working Papers tecipa-246, University of Toronto, Department of Economics. [Downloadable!]
  6. Parry, Ian, 2003. "Are Emissions Permits Regressive?," Discussion Papers dp-03-21, Resources For the Future. [Downloadable!]
    Other versions:
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