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Does regulation stimulate productivity? The effect of air quality policies on the efficiency of US power plants

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  • Fleishman, Rachel
  • Alexander, Rob
  • Bretschneider, Stuart
  • Popp, David

Abstract

This research examines the effect of air quality regulations on the productivity of US power plants based on both economic and environmental outputs. Using data envelopment analysis (DEA) to estimate an efficiency measure incorporating both economic and environmental outcomes, we look at changes in efficiency in US power plants over an eleven-year time period (1994-2004) during which several different regulations were implemented for the control of nitrogen oxides (NOx) and sulfur dioxide (SO2). The paper then models how estimated efficiency behaves over time as a function of regulatory changes. Findings suggest mixed effects of regulations on power plant efficiency when pollution abatement and electricity generation are both included as outputs.

Suggested Citation

  • Fleishman, Rachel & Alexander, Rob & Bretschneider, Stuart & Popp, David, 2009. "Does regulation stimulate productivity? The effect of air quality policies on the efficiency of US power plants," Energy Policy, Elsevier, vol. 37(11), pages 4574-4582, November.
  • Handle: RePEc:eee:enepol:v:37:y:2009:i:11:p:4574-4582
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Seifert, Stefan, 2015. "Productivity Growth and its Sources - A StoNED Metafrontier Analyis of the German Electricity Generating Sector," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112975, Verein für Socialpolitik / German Economic Association.
    2. repec:spr:nathaz:v:90:y:2018:i:1:d:10.1007_s11069-017-3105-y is not listed on IDEAS
    3. Jaraitė, Jūratė & Di Maria, Corrado, 2012. "Efficiency, productivity and environmental policy: A case study of power generation in the EU," Energy Economics, Elsevier, vol. 34(5), pages 1557-1568.
    4. Sueyoshi, Toshiyuki & Goto, Mika, 2010. "Should the US clean air act include CO2 emission control?: Examination by data envelopment analysis," Energy Policy, Elsevier, vol. 38(10), pages 5902-5911, October.
    5. Sueyoshi, Toshiyuki & Yuan, Yan & Goto, Mika, 2017. "A literature study for DEA applied to energy and environment," Energy Economics, Elsevier, vol. 62(C), pages 104-124.
    6. Mamardashvili, Phatima & Jan, Pierrick, 2014. "Environmentally harmful by-products in efficiency analysis: An example of nitrogen surplus on Swiss dairy farms," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182910, European Association of Agricultural Economists.
    7. Bai-Chen, Xie & Ying, Fan & Qian-Qian, Qu, 2012. "Does generation form influence environmental efficiency performance? An analysis of China’s power system," Applied Energy, Elsevier, vol. 96(C), pages 261-271.
    8. repec:gam:jsusta:v:9:y:2017:i:12:p:2323-:d:122721 is not listed on IDEAS
    9. repec:eee:ejores:v:262:y:2017:i:2:p:733-743 is not listed on IDEAS
    10. Linn, Joshua & Mastrangelo, Erin & Burtraw, Dallas, 2013. "Regulating Greenhouse Gases from Coal Power Plants under the Clean Air Act," Discussion Papers dp-13-05, Resources For the Future.
    11. Zhou, Yan & Xing, Xinpeng & Fang, Kuangnan & Liang, Dapeng & Xu, Chunlin, 2013. "Environmental efficiency analysis of power industry in China based on an entropy SBM model," Energy Policy, Elsevier, vol. 57(C), pages 68-75.
    12. Bai-Chen Xie & Jie Gao & Shuang Zhang & ZhongXiang Zhang, 2017. "What Factors Affect the Competiveness of Power Generation Sector in China? An Analysis Based on Game Cross-efficiency," Working Papers 2017.12, Fondazione Eni Enrico Mattei.
    13. Zhou, Yishu & Huang, Ling, 2016. "Have U.S. power plants become less technically efficient? The impact of carbon emission regulation," Energy Economics, Elsevier, vol. 58(C), pages 105-115.

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