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Impacts of Market-based Environmental and Generation Policy on Scrubber Electricity Usage

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  • Allen Bellas
  • Ian Lange

Abstract

The introduction of scrubbers as a means of controlling sulfur dioxide (SO2) emissions from stationary sources coincided with the implementation of the Clean Air Act of 1970. Since that time, there have been many policy changes affecting the electricity generation industry. These changes can be characterized as moving from direct regulation toward market-based incentives, both in deregulation or restructuring of power markets and adoption of market-based environmental regulation. These changes provide natural experiments for investigating whether the form of regulation can alter the rate of technological progress. This paper analyzes changes in scrubbersÕ use of electricity (also known as parasitic load) in relation to regulatory policy regimes. Results show that restructured electricity markets led to innovations that reduced parasitic load considerably (35-45%). Conversely, the change to a cap-and-trade system for SO2 has not led to similar reductions.

Suggested Citation

  • Allen Bellas & Ian Lange, 2008. "Impacts of Market-based Environmental and Generation Policy on Scrubber Electricity Usage," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 151-164.
    • Handle: RePEc:aen:journl:2008v29-02-a08
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    Cited by:

    1. Broadbent, Craig D. & Brookshire, David S. & Coursey, Don & Tidwell, Vince, 2014. "An experimental analysis of water leasing markets focusing on the agricultural sector," Agricultural Water Management, Elsevier, vol. 142(C), pages 88-98.
    2. Galloway, Emily & Johnson, Erik Paul, 2016. "Teaching an old dog new tricks: Firm learning from environmental regulation," Energy Economics, Elsevier, vol. 59(C), pages 1-10.
    3. Pickl, Matthias & Wirl, Franz, 2011. "Auction design for gas pipeline transportation capacity--The case of Nabucco and its open season," Energy Policy, Elsevier, vol. 39(4), pages 2143-2151, April.
    4. Chan, H. Ron & Chupp, B. Andrew & Cropper, Maureen L. & Muller, Nicholas Z., 2018. "The impact of trading on the costs and benefits of the Acid Rain Program," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 180-209.
    5. Craig D. Broadbent & David S. Brookshire & Don Coursey & Vince Tidwell, 2017. "Futures Contracts in Water Leasing: An Experimental Analysis Using Basin Characteristics of the Rio Grande, NM," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(3), pages 569-594, November.
    6. Streeter, Jialu Liu, 2016. "Adoption of SO2 emission control technologies - An application of survival analysis," Energy Policy, Elsevier, vol. 90(C), pages 16-23.
    7. Keith Brouhle & Brad Graham & Donna Ramirez Harrington, 2023. "Patents and P2: Innovation and Technology Adoption for Environmental Improvements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(2), pages 439-474, February.

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    JEL classification:

    • F0 - International Economics - - General

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